Sallie Mae 2006 Annual Report Download - page 153

6. Goodwill and Acquired Intangible Assets (Continued)
recognized an intangible impairment of $21 million due to changes in projected interest rates used to initially
value the intangible asset and to a regulatory change that restricts the loans on which the Company is entitled
to earn a 9.5 percent yield. This impairment charge was recorded to operating expense in the Lending
segment.
On August 31, 2005, the Company acquired 100 percent controlling interest in GRP/AG Holdings, LLC
and its subsidiaries (collectively, “GRP”) for a purchase price of approximately $137 million including cash
consideration and certain acquisition costs. GRP engages in the acquisition and resolution of distressed
residential mortgage loans and foreclosed residential properties. In the third quarter of 2006, the Company
finalized its purchase price allocation for GRP, which resulted in an excess purchase price over the fair value
of net assets acquired, or goodwill, of $53 million.
In 2005, the Company acquired one debt management company and closed on the second step of the
acquisitions of a majority owned debt management company and a majority owned student lending business as
described in Note 11, “Acquisitions.” During 2005, the Company also finalized the purchase price allocations
associated with its 2004 acquisitions, respectively, and adjusted goodwill for certain earn-out payments and
allocations associated with these prior acquisitions.
A summary of changes in the Company’s goodwill by reportable segment is as follows:
December 31,
2005 Acquisitions
December 31,
2006
(Dollars in millions)
Lending ..................................... $410 $ (4) $406
Debt Management Operations ..................... 299 50 349
Corporate and Other ............................ 64 151 215
Total ........................................ $773 $197 $970
December 31,
2004 Acquisitions
December 31,
2005
(Dollars in millions)
Lending ..................................... $440 $(30) $410
Debt Management Operations ..................... 206 93 299
Corporate and Other ............................ 57 7 64
Total ........................................ $703 $ 70 $773
7. Short-Term Borrowings
Short-term borrowings have a remaining term to maturity of one year or less. The following tables
summarize outstanding short-term borrowings at December 31, 2006 and 2005, the weighted average interest
F-34
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)