Net interestrnincome was $3.8 billion for the fourthrnquarter ofrn2013, compared to $4.3 billion for the third quarterrnof 2013 and $16.5 billion for the full year compared to $17.6 billionrnfor 2012.  Net interestrnyield was 76 basisrnpoints for the fourth quarter compared to 86 basis points for the third and 82 basis points for 2013 against 84 basis pointsrnfor 2012. The decreases in both net interestrnincome and net interestrnyield were primarily drivenrnby a decline in the balance of higher-yielding mortgage-related assets from continuedrnliquidations, partiallyrnoffset by lower funding costs.</p

There was a benefit for credit losses of $201 millionrnforrnthe fourth quarter of 2013,rncompared to a benefitrnof $1.1 billion forrnthe thirdrnquarter of 2013. The benefit forrncredit losses in the third andrnfourth quarters of 2013 was drivenrnby $0.9 billion and $0.8rnbillion of recoveries from settlements of representation and warrantyrnclaims, respectively. Moderation in home-price growth during thernfourth quarter led to arnsmaller benefitrnfor credit losses comparedrnto thernthird quarter.</p

There was also a benefit for credit losses ofrn$2.5 billion for the full-year 2013, compared to a provision for expense of $1.9 billionrnforrnthe full-year 2012. The improvement reflects a decrease in thernvolume of newly delinquent loans,rnincreases in national homernprices, and approximately $1.7 billionrnin recoveries from representationrnand warranty settlements during 2013. rnFreddie Mac’s loan lossrnreserves were $24.7 billion at year end compared to $25.0 billionrnas of September 30,rn2013 and $30.9 billion atrnDecember 31, 2012.</p

There was a gain of $1.0 billion from derivatives for the fourth quarterrnof 2013, comparedrnto a loss of $74 millionrnfor the third quarter of 2013. Derivative gainsrnwere $2.6 billion for the full-year 2013, compared to a lossrnof $2.4 billion for 2012. </p

Net impairment of AFS securities recognizedrnin earnings was $1.3 billion for thernfourth quarter of 2013, comparedrnto $126 million for thernthird quarter of 2013rnand the 2013/2012 numbers were $1.5 billion and $2.2 billion respectively.</p

Other non-interest income was $6.1 billion for the fourth quarterrnof 2013, compared to $1.9 billion forrnthe third quarter of 2013. For the full year other non-interest income was $7.4rnbillion, compared to $0.5rnbillion for 2012. The increase primarily reflects settlement proceedsrnof $5.5 billion related to PLSrnlitigation during the year, $4.3rnbillion of which occurred in thernfourth quarter.  .</p

Non-interest expense was $390rnmillion for the fourth quarterrnof 2013, compared torn$577 million for the thirdrnquarter and $2.1 billionrncompared to $2.2 billion forrnthe respective years. The decrease wasrnprimarily driven by the Lehmanrnbankruptcy settlement, partiallyrnoffset by higher REO holding period write-downsrnand lower disposition gains duringrnthe fourth quarter.</p

Freddie Mac’s operations consistrnof three segments, which are based onrnthe type ofrnbusiness activities each performs -rnSingle-family Guarantee,rnInvestments and Multifamily.   For the third quarterrnand full-year 2013, the All Otherrncategory primarily includes thernimpact of releasing the valuation allowancernagainst net deferred taxrnassets.</p

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Based on December 31, 2013 net worthrnof $12.8 billion, the company will pay a divided to Treasury of $10.4rnbillion in March, bringing the total cash dividends paid since the company wasrnput in federal conservatorship in 2008 to $81.8 billion.  Total draws from Treasury to support FreddiernMac’s operations are $71.34 billion. rnTreasury continues to hold $72.3 billion in senior preferred Freddie Macrnstock as dividend payments do not reduce the company’s Treasury debt.  In addition, since September 2012 the companyrnhas been remitting to Treasury proceeds from a 10 basis point increase in the guaranteernfee mandated by the TemporaryrnPayroll Tax Cut Continuation Act ofrn2011.  Payments under this requirement totaled $533 millionrnin 2013 and $108 million in 2012.</p

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At Decemberrn31, 2013, therncompany’s new single-family book (loansrnacquired after 2008, excluding HARPrnand other relief refinancernmortgages) accounted for 54rnpercent of the unpaidrnprincipal balance of Freddie Mac’srnsingle-family credit guarantee portfolio and HARP andrnother relief refinance loansrnrepresented 21 percent.  The 2005-2008 legacy single-family book continues to representrna declining portion of the company’s single-family credit guaranteernportfolio; 16 and 24 percent.at thernend of 20013 and 2012 respectively. rnHowever, this portion accounted forrn81 percent and 87 percent ofrnthe company’s single-family credit losses inrnthe two periods.  </p

Single-family serious delinquencies were at 2.39 percent at Decemberrn31, 2013, comparedrnto 2.58 percent at the end of Q3 and 3.25rnpercent at the end of 2012.  This is substantially below the industry rate, placed at 5.41 percent by the MortgagernBankers Association. The multifamilyrndelinquency rate (60+ days) was 0.09 percent at the end of December compared torn0.05 the previous quarter and 0.19 percent at the end of 2012.</p

Freddie Mac says it provided $453 billion inrnliquidity to the mortgage market in 2013 including refinancing 1.6 millionrnhomes, providing funds for 515,000 home purchases and 388,000 units ofrnmulti-family rental housing.  The companyrnalso assisted 168,000 borrowers to avoid foreclosure.

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