Sallie Mae 2006 Annual Report Download - page 193

18. Segment Reporting (Continued)
Segment Results and Reconciliations to GAAP
Lending DMO
Corporate
and Other
Total ‘‘Core
Earnings” Adjustments
(3)
Total
GAAP
Year Ended December 31, 2006
(Dollars in millions)
Interest income:
FFELP Stafford and Other Student Loans . . . . . . . $ 2,771 $ — $ — $ 2,771 $(1,362) $1,409
FFELP Consolidation Loans. . . . . . . . . . . . . . . . . 4,690 — — 4,690 (1,144) 3,546
Private Education Loans . . . . . . . . . . . . . . . . . . . 2,092 — — 2,092 (1,071) 1,021
Otherloans ............................ 98 — — 98 — 98
Cash and investments . . . . . . . . . . . . . . . . . . . . . 705 — 7 712 (209) 503
Total interest income . . . . . . . . . . . . . . . . . . . . . . . 10,356 — 7 10,363 (3,786) 6,577
Total interest expense . . . . . . . . . . . . . . . . . . . . . . . 7,877 23 12 7,912 (2,789) 5,123
Net interest income . . . . . . . . . . . . . . . . . . . . . . . . 2,479 (23) (5) 2,451 (997) 1,454
Less: provisions for losses . . . . . . . . . . . . . . . . . . . . 303 — — 303 (16) 287
Net interest income after provisions for losses . . . . . . 2,176 (23) (5) 2,148 (981) 1,167
Fee income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 397 132 529 — 529
Collections revenue . . . . . . . . . . . . . . . . . . . . . . . . — 239 — 239 1 240
Other income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 — 155 332 1,073 1,405
Total other income . . . . . . . . . . . . . . . . . . . . . . . . . 177 636 287 1,100 1,074 2,174
Operating expenses
(1)
....................... 645 358 250 1,253 93 1,346
Income before income taxes and minority interest in
net earnings of subsidiaries . . . . . . . . . . . . . . . . . 1,708 255 32 1,995 — 1,995
Income tax expense
(2)
....................... 632 94 12 738 96 834
Minority interest in net earnings of subsidiaries . . . . . — 4 — 4 — 4
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,076 $157 $ 20 $ 1,253 $ (96) $1,157
(1)
Operating expenses for the Lending, DMO, and Corporate and Other Business segments include $34 million, $12 million, and $17 mil-
lion, respectively, of stock-based compensation expense due to the implementation of SFAS No. 123(R) in the first quarter of 2006.
(2)
Income taxes are based on a percentage of net income before tax for the individual reportable segment.
(3)
“Core Earnings” adjustments to GAAP:
Net Impact of
Securitization
Accounting
Net Impact of
Derivative
Accounting
Net Impact of
Floor Income
Net Impact
of Acquired
Intangibles
(A)
Total
Year Ended December 31, 2006
(Dollars in millions)
Net interest income . . . ....................... $(897) $ 109 $(209) $ — $ (997)
Less: provisions for losses ...................... (16) — — — (16)
Net interest income after provisions for losses . ........ (881) 109 (209) — (981)
Fee income . . . ............................ — — — — —
Collections revenue . . . ....................... 1 — — — 1
Other income . . ............................ 1,411 (338) — — 1,073
Total other income ........................... 1,412 (338) — — 1,074
Operating expenses . . . ....................... (1) — — 94 93
Total pre-tax “Core Earnings” adjustments to GAAP . . . . . $ 532 $(229) $(209) $(94) —
Income tax expense . . . ....................... 96
Minority interest in net earnings of subsidiaries ........ —
Total “Core Earnings” adjustments to GAAP . . . ....... $ (96)
(A)
Represents goodwill and intangible impairment and the amortization of acquired intangibles.
F-74
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)