Sallie Mae 2008 Annual Report Download - page 162

6. Goodwill and Acquired Intangible Assets (Continued)
$8 million related to certain banking customer relationships. In 2007, the Company recognized impairments
related principally to its mortgage origination and mortgage purchased paper businesses including approx-
imately $10 million of value attributed to certain banking relationships which amount was recorded as
operating expense in the APG reportable segment.
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 loans on which the
Company is entitled to earn a 9.5 percent yield. These impairment charges were recorded to operating expense in
the Lending reportable segment.
7. Borrowings
Borrowings consist of secured borrowings issued through the Company’s securitization program, borrow-
ings through secured facilities and participation programs, unsecured notes issued by the Company, term
deposits at Sallie Mae Bank, as well as other interest bearing liabilities related primarily to obligations to
return cash collateral held. To match the interest rate and currency characteristics of its borrowings with the
interest rate and currency characteristics of its assets, the Company enters into interest rate and foreign
currency swaps with independent parties. Under these agreements, the Company makes periodic payments,
generally indexed to the related asset rates or rates which are highly correlated to the asset rates, in exchange
for periodic payments which generally match the Company’s interest obligations on fixed or variable rate
notes (see Note 9, “Derivative Financial Instruments”). Payments and receipts on the Company’s interest rate
and currency swaps are not reflected in the following tables.
During 2008, the Company repurchased approximately $1.9 billion of primarily short-term unsecured
borrowings and recognized a gain of $64 million, net of hedging-related gains and losses.
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 (secured and unsecured) at December 31, 2008 and 2007, the
weighted average interest rates at the end of each period, and the related average balances and weighted
average interest rates during the periods. A detailed discussion of secured borrowings follows in the “Secured
Borrowings” section of this note.
Ending Balance
Weighted Average
Interest Rate Average Balance
Weighted Average
Interest Rate
December 31, 2008
Year Ended
December 31, 2008
Term bank deposits ........ $ 1,147,825 3.34% $ 696,442 3.67%
ABCP borrowings ......... 24,767,825 3.05 24,692,143 3.16
ED Participation Program
Facility ............... 7,364,969 3.37 1,726,751 3.41
Short-term portion of long-
term borrowings ........ 6,821,846 3.60 6,879,459 3.69
Other interest bearing
liabilities .............. 1,830,578 0.55 2,064,547 2.35
Total short-term borrowings. . $41,933,043 3.09% $36,059,342 3.24%
Maximum outstanding at any
month end............. $41,933,043
F-42
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)