Sallie Mae 2007 Annual Report Download - page 201

20. Segment Reporting (Continued)
Segment Results and Reconciliations to GAAP
Lending APG
Corporate
and Other
Total “Core
Earnings” Adjustments
(3)
Total
GAAP
Year Ended December 31, 2007
(Dollars in millions)
Interest income:
FFELP Stafford and Other Student Loans . . . . . . . . $ 2,848 $ — $ — $ 2,848 $ (787) $2,061
FFELP Consolidation Loans . . . . . . . . . . . . . . . . . 5,522 — — 5,522 (1,179) 4,343
Private Education Loans . . . . . . . . . . . . . . . . . . . . 2,835 — — 2,835 (1,379) 1,456
Otherloans............................. 106 — — 106 — 106
Cash and investments . . . . . . . . . . . . . . . . . . . . . . 868 — 21 889 (181) 708
Total interest income . . . . . . . . . . . . . . . . . . . . . . . . 12,179 — 21 12,200 (3,526) 8,674
Total interest expense . . . . . . . . . . . . . . . . . . . . . . . 9,597 27 21 9,645 (2,559) 7,086
Net interest income (loss). . . . . . . . . . . . . . . . . . . . . 2,582 (27) — 2,555 (967) 1,588
Less: provisions for loan losses. . . . . . . . . . . . . . . . . 1,394 — 1 1,395 (380) 1,015
Net interest income (loss) after provisions for loan
losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,188 (27) (1) 1,160 (587) 573
Contingency fee revenue . . . . . . . . . . . . . . . . . . . . . — 336 — 336 — 336
Guarantor servicing fees . . . . . . . . . . . . . . . . . . . . . — — 156 156 — 156
Collections revenue . . . . . . . . . . . . . . . . . . . . . . . . . — 269 — 269 3 272
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 — 218 412 (679) (267)
Total other income . . . . . . . . . . . . . . . . . . . . . . . . . 194 605 374 1,173 (676) 497
Operating expenses
(1)
. . . . . . . . . . . . . . . . . . . . . . . 709 390 341 1,440 112 1,552
Income before income taxes and minority interest in
net earnings of subsidiaries . . . . . . . . . . . . . . . . . . 673 188 32 893 (1,375) (482)
Income tax expense
(2)
....................... 249 70 12 331 81 412
Minority interest in net earnings of subsidiaries . . . . . — 2 — 2 — 2
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . $ 424 $116 $ 20 $ 560 $(1,456) $ (896)
(1)
Operating expenses for the Lending, APG, and Corporate and Other reportable segments include $31 million, $11 million, and $15 mil-
lion, respectively, of stock option compensation expense, and $19 million, $2 million and $2 million, respectively, of severance
expense.
(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 Total
Year Ended December 31, 2007
(Dollars in millions)
Net interest income (loss) . . .................... $(816) $ 18 $(169) $ — $ (967)
Less: provisions for loan losses ................... (380) — — — (380)
Net interest income (loss) after provisions for loan losses . . (436) 18 (169) — (587)
Contingency fee revenue . . . .................... — — — — —
Guarantor servicing fees . . . .................... — — — — —
Collections revenue . ......................... — — — — —
Other income .............................. 683 (1,359) — — (676)
Total other income (loss) . . . .................... 683 (1,359) — — (676)
Operating expenses . . ......................... — — — 112 112
Total pre-tax “Core Earnings” adjustments to GAAP . . . . . $ 247 $(1,341) $(169) $(112) (1,375)
Income tax expense . ......................... 81
Minority interest in net earnings of subsidiaries . . . ..... —
Total “Core Earnings” adjustments to GAAP . . ........ $(1,456)
F-80
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts, unless otherwise stated)