Sallie Mae 2008 Annual Report Download - page 194

15. Restructuring Activities (Continued)
The following table summarizes the restructuring expenses incurred to date.
2008 2007
Cumulative
Expense as of
December 31,
2008
Years Ended
December 31,
Severance costs .................................... $62,858 $22,505 $ 85,363
Lease and other contract termination costs ................ 9,081 — 9,081
Exit and other costs ................................. 11,834 — 11,834
Total
(1)(2)
......................................... $83,773 $22,505 $106,278
(1)
Aggregate restructuring expenses incurred across the Company’s reportable segments during the years ended December 31, 2008
and 2007 totaled $49 million and $19 million, respectively, in the Company’s Lending reportable segment, $12 million and
$2 million, respectively, in the Company’s APG reportable segment, and $23 million and $2 million, respectively, in the Compa-
ny’s Corporate and Other reportable segment.
(2)
As of December 31, 2008, the Company estimates an additional $8 million of restructuring expenses associated with its current
cost reduction efforts will be incurred in future periods primarily related to position eliminations and resulting employee termina-
tions in its Lending business segment.
As of December 31, 2008 and 2007, severance costs were incurred in conjunction with aggregate
completed and planned position eliminations of approximately 2,900 and 400 positions, respectively, across all
of the Company’s reportable segments, with position eliminations ranging from senior executives to servicing
center personnel. Lease and other contract termination costs and exit and other costs incurred during the year
ended December 31, 2008 related primarily to terminated or abandoned facility leases and consulting costs
incurred in conjunction with various cost reduction and exit strategies, respectively.
The following table summarizes the restructuring liability balance, which is included in other liabilities in
the accompanying consolidated balance sheet at December 31, 2008, and related activity during year ended
December 31, 2008.
Severance
Costs
Lease and
Other
Contract
Termination
Costs
Exit and
Other Costs Total
Balance at December 31, 2007 .............. $18,329 $ — $ — $ 18,329
Net accruals . ........................... 62,858 9,081 11,834 83,773
Cash paid . . . ........................... (66,063) (6,283) (11,774) (84,120)
Balance at December 31, 2008 .............. $15,124 $ 2,798 $ 60 $ 17,982
16. Fair Values of Financial Instruments
The Company uses estimates of fair value as defined by SFAS No. 157 in applying various accounting
standards for its financial statements. Under GAAP, fair value measurements are used in one of four ways:
• In the consolidated balance sheet with changes in fair value recorded in the consolidated statement of
income;
• In the consolidated balance sheet with changes in fair value recorded in the other comprehensive
income section of stockholders’ equity;
F-74
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)