Sallie Mae 2008 Annual Report Download - page 88

to December 31, 2007. These events did not occur prior to December 31, 2007, as stipulated in the negotiated
settlement. As a result, all such contingencies were removed, resulting in the recognition of this deferred
revenue in 2007. This amount is non-recurring in nature.
The increase in fees from Upromise for the year ended December 31, 2007 versus the year-ago period
was primarily due to 2007 having a full year of fees from Upromise, which was acquired in August 2006.
Operating Expenses — Corporate and Other Business Segment
The following table summarizes the components of operating expenses for our Corporate and Other
business segment.
2008 2007 2006
Years Ended
December 31,
Operating expenses ........................................... $ 90 $109 $148
Upromise .................................................. 91 94 33
General and administrative expenses .............................. 96 136 69
Total ...................................................... $277 $339 $250
Operating expenses for our Corporate and Other business segment include direct costs incurred to service
loans for unrelated third parties, perform guarantor servicing on behalf of guarantor agencies, and operate our
Upromise subsidiary, as well as information technology expenses related to these functions. Operating
expenses also include unallocated corporate overhead expenses for centralized headquarters functions.
2008 versus 2007
The decrease in operating expenses in 2008 compared to 2007 was primarily due to $56 million of non-
recurring Proposed Merger-related expenses in 2007, as well as the Company’s cost reduction initiatives.
2007 versus 2006
Operating expenses decreased $39 million in 2007 due primarily to the sale of the Noel Levitz subsidiary
in the second half of 2007. General and administrative expenses increased $67 million in 2007 compared to
the year-ago period, primarily due to Proposed Merger-related expenses of $56 million. The increase in
Upromise expenses from 2006 to 2007 was primarily due to 2007 having a full year of expenses for Upromise,
which was acquired in August 2006.
At December 31, 2008, 2007 and 2006, the Corporate and Other business segment had total assets of
$685 million, $780 million and $999 million, respectively.
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