Sallie Mae 2009 Annual Report Download - page 116

settle its outstanding equity forward contract (see Note 11, “Stockholders’ Equity,” to the consolidated
financial statements for a further discussion). The remaining proceeds were used for general corporate
purposes. The Company issued 9,781,170 shares of the 102 million share offering from its treasury stock.
These shares were removed from treasury stock at an average cost of $43.13, resulting in a $422 million
decrease to the balance of treasury stock with an offsetting $235 million decrease to retained earnings.
During 2009, the Company converted $339 million of its Series C Preferred Stock to common stock. As
part of this conversion, the Company delivered to the holders of the preferred stock: (1) approximately
17 million shares (the number of common shares they would most likely receive if the preferred stock they
held mandatorily converted to common shares in the fourth quarter of 2010) plus (2) a discounted amount of
the preferred stock dividends the holders of the preferred stock would have received if they held the preferred
stock through the mandatory conversion date. The accounting treatment for this conversion resulted in
additional expense recorded as part of preferred stock dividends for the year of approximately $53 million.
The closing price of the Company’s common stock on December 31, 2009 was $11.27.
RECENTLY ISSUED ACCOUNTING STANDARDS
See Note 2, “Significant Accounting Policies — Recently Issued Accounting Standards.” to the consoli-
dated financial statements.
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