Sallie Mae 2009 Annual Report Download - page 115

COMMON STOCK
The following table summarizes the Company’s common share repurchases and issuances for the years
ended December 31, 2009, 2008 and 2007. Equity forward activity for the year ended December 31, 2007 is
also reported.
(Shares in millions) 2009 2008 2007
Years Ended December 31,
Common shares repurchased:
Open market ............................................ — — 1.8
Equity forward contracts ................................... — — 4.2
Equity forward contracts agreed to be settled
(1)
.................. — — 44.0
Benefit plans
(2)
.......................................... .3 1.0 3.3
Total shares repurchased ................................... .3 1.0 53.3
Average purchase price per share ............................. $20.29 $24.51 $44.59
Common shares issued .................................... 17.8 1.9 109.2
Equity forward contracts:
Outstanding at beginning of period ........................... — — 48.2
New contracts ........................................... — — —
Settlements ............................................. — — (4.2)
Agreed to be settled
(1)
..................................... — — (44.0)
Outstanding at end of period ................................ — — —
Authority remaining at end of period for repurchases .............. 38.8 38.8 38.8
(1)
On December 31, 2007, the Company and Citibank agreed to physically settle the contract as detailed below. Consequently, the
common shares outstanding and shareholders’ equity on the Company’s year-end balance sheet reflect the physical settlement of
the equity forward contract. As of December 31, 2007, the 44 million shares under this equity forward contract are reflected in
treasury stock.
(2)
Shares withheld from stock option exercises and vesting of restricted stock for employees’ tax withholding obligations and shares
tendered by employees to satisfy option exercise costs.
Beginning on November 29, 2007, the Company amended or closed out certain equity forward contracts.
On December 19, 2007, the Company entered into a series of transactions with its equity forward
counterparties and Citibank to assign all of its remaining equity forward contracts, covering 44,039,890 shares,
to Citibank. In connection with the assignment of the equity forward contracts, the Company and Citibank
amended the terms of the equity forward contract to eliminate all stock price triggers (which had previously
allowed the counterparty to terminate the contracts prior to their scheduled maturity date) and termination
events based on the Company’s credit ratings. The strike price of the equity forward contract on December 19,
2007, was $45.25 with a maturity date of February 22, 2008. The new Citibank equity forward contract was
100 percent collateralized with cash. On December 31, 2007, the Company and Citibank agreed to physically
settle the contract and the Company paid Citibank approximately $1.1 billion, the difference between the
contract purchase price and the previous market closing price on the 44,039,890 shares. Consequently, the
common shares outstanding and shareholders’ equity on the Company’s year-end balance sheet reflect the
shares issued in the public offerings and the physical settlement of the equity forward contract. As of
December 31, 2007, the 44 million shares under this equity forward contract are reflected in treasury stock.
The Company paid Citibank the remaining balance of approximately $0.9 billion due under the contract on
January 9, 2008. The Company now has no outstanding equity forward positions.
On December 31, 2007, the Company issued 101,781,170 shares of its common stock at a price of $19.65
per share. Net proceeds from the sale were approximately $1.9 billion. The Company used approximately
$2.0 billion of the net proceeds from the sale of Series C Preferred Stock and the sale of its common stock to
114