Sallie Mae 2006 Annual Report Download - page 152

6. Goodwill and Acquired Intangible Assets
Intangible assets include the following:
Average
Amortization
Period Gross
Accumulated
Amortization Net
As of December 31, 2006
(Dollars in millions)
Intangible assets subject to amortization:
Customer, services, and lending relationships ...... 12years $367 $(115) $252
Tax exempt bond funding ..................... 10years 46 (37) 9
Software and technology ..................... 7years 94 (62) 32
Non-compete agreements ..................... 2years 12 (9) 3
Total .................................... 519 (223) 296
Intangible assets not subject to amortization:
Trade name and trademark .................... Indefinite 106 — 106
Total acquired intangible assets .................. $625 $(223) $402
Average
Amortization
Period Gross
Accumulated
Amortization Net
As of December 31, 2005
(Dollars in millions)
Intangible assets subject to amortization:
Customer, services, and lending relationships ...... 12years $256 $ (76) $180
Tax exempt bond funding ..................... 10years 67 (25) 42
Software and technology ..................... 7years 80 (51) 29
Non-compete agreements ..................... 2years 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
The Company recorded intangible amortization of acquired intangibles totaling $69 million, $61 million,
and $36 million for the years ended December 31, 2006, 2005 and 2004, 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 $74 million,
$53 million, $37 million, $31 million and $22 million for the years ended December 31, 2007, 2008, 2009,
2010 and 2011, respectively.
On August 22, 2006, the Company acquired Upromise for approximately $308 million including cash
consideration and certain acquisition costs. Upromise markets and administers saving-for-college plans and
also provides administration services for college savings plans. The excess purchase price over the fair value
of net assets acquired, or goodwill, is approximately $151 million.
In connection with the Company’s acquisition of Southwest Student Services Corporation and Washington
Transferee Corporation, the Company acquired certain tax exempt bonds that enable the Company to earn a
9.5 percent SAP rate on student loans funded by those bonds in indentured trusts. In 2006, the Company
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SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)