Citibank 2010 Annual Report Download - page 181

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179
3. DISCONTINUED OPERATIONS
Sale of The Student Loan Corporation
On September 17, 2010, the Company announced that The Student Loan
Corporation (SLC), an indirect subsidiary that was 80% owned by Citibank
and 20% owned by public shareholders, and which was part of the Citi
Holdings segment, entered into definitive agreements that resulted in
the divestiture of Citi’s private student loan business and approximately
$31 billion of its approximate $40 billion in assets to Discover Financial
Services (Discover) and SLM Corporation (Sallie Mae). The transaction
closed on December 31, 2010. As part of the transaction, Citi provided Sallie
Mae with $1.1 billion of seller-financing.
This sale was reported as discontinued operations for the third and
fourth quarters of 2010 only. Prior periods were not reclassified due to the
immateriality of the impact in those periods. The total 2010 impact from the
sale of SLC resulted in an overall after-tax loss of $427 million.
Additionally, as part of the transactions, Citibank, N.A. purchased
approximately $8.6 billion of assets from SLC prior to the sale of SLC.
The following is a summary as of December 31, 2010 of the assets and
liabilities for the operations related to the SLC business sold:
In millions of dollars 2010
Assets
Loans, net of unearned income $29,569
Allowance for loan losses (39)
Total loans, net 29,530
Other assets 1,726
Total assets $31,256
Liabilities
Long-term debt $28,797
Other liabilities 208
Total liabilities $29,005
Summarized financial information for discontinued operations, including cash flows, related to the sale of SLC follows:
In millions of dollars 2010 (1)
Total revenues, net of interest expense $(577) (2)
Income (loss) from discontinued operations $ 97
Loss on sale (825)
Benefit for income taxes (339)
Loss from discontinued operations, net of taxes $(389)
In millions of dollars 2010 (1)
Cash flows from operating activities $ 5,106
Cash flows from investing activities 1,532
Cash flows from financing activities (6,483)
Net cash provided by discontinued operations $ 155
(1) Amounts reflect activity from July 1, 2010 through December 31, 2010 only.
(2) Total revenues include gain or loss on sale, if applicable.