Sallie Mae 2005 Annual Report Download - page 92

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Contingency Inventory
The following table presents the outstanding inventory of receivables serviced through our DMO
business.
Years ended
December 31,
2005 2004 2003
Contingency:
Contingency—Studentloans ........................ $7,205 $6,869 $6,628
Contingency—Other............................... 2,178 1,756 589
Total............................................... $9,383 $8,625 $7,217
Operating Expenses
Operating expenses for the DMO business segment for the years ended December 31, 2005, 2004 and
2003 totaled:
Years ended
December 31,
2005 2004 2003
Total operating expenses.................................. $283 $159 $123
Operating expenses increased by $124 million, or 78 percent, to $283 million for the year ended
December 31, 2005. A significant portion of the 2005 increase is attributable to the inclusion of a full year
of AFS expenses and GRP expenses since the acquisition on August 31, 2005. The increase is also
attributable to the growth in contingency revenue and accounts serviced, as a high percentage of DMO
expenses are variable which contributes to our stable margins. We continue to make substantial
investments in the infrastructure of the DMO business to accommodate current and future growth, and we
believe this investment will provide significant operating efficiencies in the future.
At December 31, 2005, 2004 and 2003, the DMO operating segment had total assets of $1.1 billion,
$519 million, and $272 million, respectively.
CORPORATE AND OTHER BUSINESS SEGMENT
Our Corporate and Other reportable segment reflects the aggregate activity of our smaller operating
units including our Guarantor Servicing and Loan Servicing operating units, other products and services, as
well as corporate expenses that do not pertain directly to our operating segments.
In our Guarantor Servicing operating unit, we provide a full complement of administrative services to
FFELP guarantors including guarantee issuance, processing, account maintenance, and guarantee
fulfillment. In our Loan Servicing operating unit, we originate and service student loans on behalf of
lenders who are unrelated to SLM Corporation. Such activities include processing correspondence and
filing claims, originating and disbursing Consolidation Loans on behalf of the lender, and other
administrative activities required by ED.