Sallie Mae 2007 Annual Report Download - page 158

6. Goodwill and Acquired Intangible Assets
Intangible assets include the following:
(Dollars in millions)
Average
Amortization
Period Gross
Accumulated
Amortization Net
As of December 31, 2007
Intangible assets subject to amortization:
Customer, services, and lending relationships ...... 13years $366 $(160) $206
Software and technology ..................... 7years 95 (77) 18
Non-compete agreements ..................... 2years 12 (10) 2
Total .................................... 473 (247) 226
Intangible assets not subject to amortization:
Trade name and trademark .................... Indefinite 110 — 110
Total acquired intangible assets .................. $583 $(247) $336
(Dollars in millions)
Average
Amortization
Period Gross
Accumulated
Amortization Net
As of December 31, 2006
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
The Company recorded intangible amortization of acquired intangibles totaling $67 million, $65 million,
and $60 million for the years ended December 31, 2007, 2006 and 2005, 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 $52 million,
$37 million, $31 million, $22 million and $16 million for the years ended December 31, 2008, 2009, 2010,
2011 and 2012, respectively.
The Company also recorded impairment of goodwill and certain acquired intangible assets of $45 million,
$29 million and $1 million, respectively, for the years ended December 31, 2007, 2006 and 2005. In 2007, the
Company recognized impairments related principally to its mortgage origination and mortgage purchased
paper businesses including approximately $20 million of goodwill and $10 million of value attributed to
certain banking relationships which amounts were recorded as operating expense in the Lending and APG
operating segments.
In connection with the Company’s acquisition of Southwest Student Services Corporation and Washington
Transferee Corporation, the Company acquired certain tax exempt bonds that enabled the Company to earn a
9.5 percent SAP rate on student loans funded by those bonds in indentured trusts. In 2007 and 2006, the
Company recognized intangible impairments of $9 million and $21 million, respectively, due to changes in
projected interest rates used to initially value the intangible asset and to a regulatory change that restricts the
F-37
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts, unless otherwise stated)