Sallie Mae 2008 Annual Report Download - page 84

Purchased
Paper —
Non-
Mortgage
Purchased
Paper —
Mortgage/
Properties
Contingency
& Other Total APG
Year Ended December 31, 2007
Contingency fee income .................... $ 9 $— $327 $336
Collections revenue ....................... 217 52 — 269
Total income ............................ 226 52 327 605
Restructuring expenses ..................... 1 — 1 2
Operating expenses........................ 164 28 196 388
Total expenses ........................... 165 28 197 390
Net interest expense ....................... 13 5 9 27
Income before income taxes and minority interest
in net earnings of subsidiaries . . ............ 48 19 121 188
Income tax expense ....................... 18 7 45 70
Income before minority interest in net earnings of
subsidiaries............................ 30 12 76 118
Minority interest in net earnings of subsidiaries . . . 2 — — 2
“Core Earnings” net income ................. $ 28 $12 $ 76 $116
Purchased
Paper —
Non-
Mortgage
Purchased
Paper —
Mortgage/
Properties
Contingency
& Other Total APG
Year Ended December 31, 2006
Contingency fee income .................... $ 24 $— $373 $397
Collections revenue ....................... 199 40 — 239
Total income ............................ 223 40 373 636
Restructuring expenses ..................... — — — —
Operating expenses........................ 145 19 194 358
Total expenses ........................... 145 19 194 358
Net interest expense ....................... 10 4 9 23
Income before income taxes and minority interest
in net earnings of subsidiaries . . ............ 68 17 170 255
Income tax expense ....................... 25 6 63 94
Income before minority interest in net earnings of
subsidiaries............................ 43 11 107 161
Minority interest in net earnings of subsidiaries . . . 4 — — 4
“Core Earnings” net income ................. $ 39 $11 $107 $157
Collections Revenue
The Company has concluded that its APG purchased paper businesses no longer produce a mutual
strategic fit. The Company finalized the sale of its international Purchased Paper — Non-Mortgage business in
the first quarter of 2009. At December 31, 2008, the net assets of this business were classified as held-for-sale.
Accordingly, in 2008, the Company wrote down the net assets to their estimated fair value and recognized a
$51 million loss on the sale of this business in 2008.
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