Sallie Mae 2007 Annual Report Download - page 52

refer to these performance measures in our presentations with credit rating agencies and lenders. Accordingly,
information regarding the Company’s reportable segments is provided herein based on “Core Earnings,” which
are discussed in detail below.
Our “Core Earnings” are not defined terms within GAAP and may not be comparable to similarly titled
measures reported by other companies. “Core Earnings” net income reflects only current period adjustments to
GAAP net income as described below. Unlike financial accounting, there is no comprehensive, authoritative
guidance for management reporting and as a result, our management reporting is not necessarily comparable
with similar information for any other financial institution. Our operating segments are defined by the products
and services they offer or the types of customers they serve, and they reflect the manner in which financial
information is currently evaluated by management. Intersegment revenues and expenses are netted within the
appropriate financial statement line items consistent with the income statement presentation provided to
management. Changes in management structure or allocation methodologies and procedures may result in
changes in reported segment financial information.
“Core Earnings” are the primary financial performance measures used by management to develop the
Company’s financial plans, track results, and establish corporate performance targets and incentive compensa-
tion. While “Core Earnings” are not a substitute for reported results under GAAP, we rely on “Core Earnings”
in operating our business because “Core Earnings” permit management to make meaningful period-to-period
comparisons of the operational and performance indicators that are most closely assessed by management.
Management believes this information provides additional insight into the financial performance of the core
business activities of our operating segments. Accordingly, the tables presented below reflect “Core Earnings”
which are reviewed and utilized by management to manage the business for each of our reportable segments.
A further discussion regarding “Core Earnings” is included under “Limitations of ‘Core Earnings’” and “Pre-
tax Differences between ‘Core Earnings’ and GAAP by Business Segment.”
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