Sallie Mae 2005 Annual Report Download - page 153

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)
F-31
6. Goodwill and Acquired Intangible Assets
Intangible assets include the following:
As of December 31 , 2005
(Dollars in millions)
Average
Amortization Period Gross
Accumulated
Amortization Net
Intangible assets subject to amortization:
Customer, services, and lending relationships ........... 12 years $256 $ (76) $180
Tax exempt bond funding(1) ........................... 10years 67 (25) 42
Software andtechnology............................. 7 years 80 (51) 29
Non-compete agreements ............................ 2 years 11 (8) 3
Total .............................................. 414 (160) 254
Intangible assets not subject to amortization:
Trade name and trademark........................... Indefinite 78 — 78
Total acquired intangible assets ......................... $492 $(160) $332
As of December 31 , 2004
(Dollars in millions)
Average
Amortization Period Gross
Accumulated
Amortization Net
Intangible assets subject to amortization:
Customer, services, and lending relationships .......... 12 years $239 $ (48) $191
Tax exempt bond funding(1) .......................... 10years 64 (6) 58
Software andtechnology............................ 7 years 80 (39) 41
Non-compete agreements ........................... 2 years 9 (7) 2
Total ............................................. 392 (100) 292
Intangible assets not subject to amortization:
Trade name and trademark.......................... Indefinite 71 — 71
Total acquired intangible assets ........................ $463 $(100) $363
(1) In connection with the Company’s 2004 acquisition of Southwest Student Services Corporation (see Note 11,
“Acquisitions”), the Company acquired certain tax exempt bonds that enable the Company to earn a 9.5 percent
Special Allowance Payment (“SAP”) rate on student loans funded by those bonds in indentured trusts. If the
student loan is removed from the trust such that it is no longer funded by the bonds, it ceases earning the 9.5
percent SAP. A different student loan can be substituted in the trust and begin earning the 9.5 percent SAP. This
feature remains as long as the bonds are outstanding.
The Company recorded amortization of $61 million, $36 million, and $27 million for the years ended
December 31, 2005, 2004 and 2003, respectively. The Company will continue to amortize its intangible
assets with definite useful lives over their remaining estimated useful lives. The Company estimates
amortization expense associated with these intangible assets will be $55 million, $50 million, $40 million,
$25 million and $20 million for the years ended December 31, 2006, 2007, 2008, 2009, and 2010,
respectively.
During 2005, the Company completed its annual review of goodwill and intangible assets. This review
resulted in a non-cash pre-tax charge of approximately $1 million to write-off the value of the trade names