Sallie Mae 2005 Annual Report Download - page 173

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)
F-51
13. Commitments, Contingencies and Guarantees (Continued)
JPMorgan Chase will continue to sell all student loans to the Company (whether made under the
Chase or Bank One brand) that are originated or serviced on the Company’s platforms. In addition, the
agreement provides that substantially all Chase-branded education loans made for the July 1, 2005 to
June 30, 2006 academic year (and future loans made to these borrowers) will be sold to the Company,
including certain loans that are not originated or serviced on Sallie Mae platforms.
This agreement permits JPMorgan Chase to compete with the Company in the student loan
marketplace and releases the Company from its commitment to market the Bank One and Chase brands
on campus. The Company will continue to support its school customers through its comprehensive set of
products and services, including its loan origination and servicing platforms, its family of lending brands
and strategic lending partners.
The Company offers a line of credit to certain financial institutions and other institutions in the higher
education community for the purpose of buying or originating student loans. In the event that a line of
credit is drawn upon, the loan is collateralized by underlying student loans. The contractual amount of
these financial instruments represents the maximum possible credit risk should the counterparty draw
down the commitment, and the counterparty subsequently fails to perform according to the terms of its
contract with the Company.
Commitments outstanding are summarized below:
December 31,
2005 2004
Student loan purchase commitments(1)(2) .............. $50,701,995 $47,247,669
Lines ofcredit..................................... 1,489,403 887,790
Letters of credit ................................... — 157,674
$ 52,191,398 $ 48,293,133
The following schedule summarizes expirations of commitments to the earlier of call date or maturity
date outstanding at December 31, 2005.
Student Loan
Purchases(1)(2) Letters of Credit Total
2006................................... $11,296,871 $ 74,840 $11,371,711
2007................................... 11,780,738 497,786 12,278,524
2008................................... 23,523,186 663,579 24,186,765
2009................................... 1,409,210 153,215 1,562,425
2010-2022.............................. 2,691,990 99,983 2,791,973
Total.................................. $50,701,995 $1,489,403 $52,191,398
(1) Includes amounts committed at specified dates under forward contracts to purchase student loans and
estimated future requirements to acquire student loans from lending partners based on expected future
volumes at contractually committed rates.
(2) These commitments are not accounted for as derivatives under SFAS No. 133 as they do not meet the
definition of a derivative due to the lack of a fixed and determinable purchase amount.