Sallie Mae 2008 Annual Report Download - page 212

20. Segment Reporting (Continued)
loan marketplace through a broad array of default management services on a contingency fee or other
pay-for-performance basis to 14 FFELP guarantors and for campus-based programs.
In addition to collecting on its own purchased receivables and mortgage loans, the APG operating
segment provides receivable management and collection services for federal and state agencies, and other
holders of consumer debt.
The Company has also concluded that its APG operating segment’s purchased paper businesses no longer
produce a strategic fit. As a result, the Company has decided to wind down these businesses. In the first quarter
of 2009, the Company finalized the sale of its international purchased paper non-mortgage business. At
December 31, 2008, the net assets associated with this business were classified as held-for-sale. Accordingly, in
2008, the Company wrote down the net assets to the estimated fair value and recognized a $51 million loss,
which was included in the “collections revenue” line item in the accompanying consolidated statements of
income.
Corporate and Other
The Company’s Corporate and Other segment includes the aggregate activity of its smaller operating
segments, primarily its Guarantor Servicing, Loan Servicing, and Upromise operating segments. Corporate and
Other also includes several smaller products and services, as well as corporate overhead.
In the Guarantor Servicing operating segment, the Company provides a full complement of administrative
services to FFELP guarantors including guarantee issuance, account maintenance, and guarantee fulfillment. In
the Loan Servicing operating segment, the Company provides a full complement of activities required to
service student loans on behalf of lenders who are unrelated to the Company. Such servicing activities
generally commence once a loan has been fully disbursed and include sending out payment coupons to
borrowers, processing borrower payments, originating and disbursing FFELP Consolidation Loans on behalf of
the lender, and other administrative activities required by ED.
Upromise markets and administers a consumer savings network and also provides program management,
transfer and servicing agent services, and administration services for 529 college-savings plans. The
Company’s other products and services include comprehensive financing and loan delivery solutions that it
provides to college financial aid offices and students to streamline the financial aid process. Corporate
overhead includes all of the typical headquarter functions such as executive management, accounting and
finance, human resources and marketing.
Measure of Profitability
The tables below include the condensed operating results for each of the Company’s reportable segments.
Management, including the chief operating decision makers, evaluates the Company on certain performance
measures that the Company refers to as “Core Earnings” performance measures for each operating segment.
While “Core Earnings” results are not a substitute for reported results under GAAP, the Company relies on
“Core Earnings” performance measures to manage each operating segment because it believes these measures
provide additional information regarding the operational and performance indicators that are most closely
assessed by management.
“Core Earnings” performance measures 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
compensation. Management believes this information provides additional insight into the financial performance of
the core business activities of its operating segments. Accordingly, the tables presented below reflect “Core
Earnings” operating measures reviewed and utilized by management to manage the business. Reconciliation of the
“Core Earnings” segment totals to the Company’s consolidated operating results in accordance with GAAP is also
included in the tables below.
F-92
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)