Sallie Mae 2005 Annual Report Download - page 195

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)
F-73
19. Income Taxes (Continued)
At December 31, 2005 and 2004, the tax effect of temporary differences that give rise to deferred tax
assets and liabilities include the following:
December 31,
2005 2004
Deferred tax assets:
Loanreserves.......................................................... $208,343 $138,305
Market valueadjustments on investments................................. 184,313 267,383
Deferred revenue...................................................... 138,102 10,238
Accrued expenses not currently deductible ................................ 61,780 57,983
Warrantsissuance...................................................... 49,448 57,081
Partnershipincome..................................................... 35,568 35,853
Loanoriginationservices................................................ 17,706 22,835
In-substance defeasancetransactions..................................... 4,718 24,117
Other................................................................. 30,259 60,873
Total deferred tax assets ................................................ 730,237 674,668
Deferred tax liabilities:
Unrealized investment gains recorded toother comprehensiveincome........ 197,834 238,396
Leases................................................................ 155,889 206,559
Securitization transactions............................................... 132,879 98,174
Depreciation/amortization .............................................. 51,987 87,335
Contingent payment and debt instruments................................. 78,934 62,006
Other................................................................. 10,128 8,297
Total deferred tax liabilities ............................................. 627,651 700,767
Net deferred tax assets/(liabilities)........................................ $102,586 $(26,099)
In the above table, unrealized investment gains recorded to other comprehensive income and market
adjustments on investments are separately stated. Historically, these items have been presented on a
combined basis.
Also included in the other deferred tax assets is a valuation allowance of $0 and $1,831 as of
December 31, 2005 and 2004, respectively, against the Company’s state deferred tax assets. The ultimate
realization of the deferred tax assets is dependent upon the generation of future taxable income during the
period in which the temporary differences become deductible. Management primarily considers the
scheduled reversals of deferred tax liabilities and the history of positive taxable income in making this
determination. During 2005, it was determined that the subsidiary with the valuation allowance now has
sufficient taxable income to realize the benefit of its deferred tax assets and the existing allowance was
released.
As of December 31, 2005, the Company has apportioned state net operating loss carryforwards of
$133,593 which begin to expire in 2006.
In 2004, the Company and the IRS reached an agreement with respect to the one outstanding issue
associated with the review of the Company’s 1994 and 1995 income tax returns. In addition, during 2004,
the Company and the IRS reached an agreement with regard to all but one issue associated with the review