Sallie Mae 2009 Annual Report Download - page 172

6. Goodwill and Acquired Intangible Assets (Continued)
The Company recorded impairment of certain acquired intangible assets from continuing operations of
$37 million, $32 million and $16 million, respectively, for the years ended December 31, 2009, 2008 and
2007. The Company recorded impairment of certain acquired intangible assets from discontinued operations of
$0, $5 million and $10 million, respectively, for the years ended December 31, 2009, 2008 and 2007.
In the fourth quarter of 2009, the Company recognized intangible impairments of $37 million primarily
related to the Company’s exclusive right to market under the USAF Guarantee. This intangible was impaired
as a result of the legislative uncertainty surrounding the role of Guarantors in the future. This impairment
charge was recorded to operating expense in the Corporate and Other reportable segment.
In 2008, as discussed in Note 20, “Segment Reporting,” the Company decided to wind down its
purchased paper businesses. As a result, in the third quarter of 2008, the Company recorded an aggregate
amount of $37 million of impairment of acquired intangible assets, of which $25 million and $3 million
related to the impairment of two trade names associated with continuing operations and discontinued
operations, respectively, and $7 million and $2 million related to certain banking customer relationships
associated with continuing operations and discontinued operations, respectively.
In 2007, the Company recognized intangible impairments of $10 million attributed to certain banking
relationships associated with its discontinued operations. The Company also recognized intangible impairments
of $7 million related to certain trade names and relationships in the Lending reporting segment. The Company
also recognized intangible impairments of $9 million related to certain tax exempt bonds that enabled the
Company to earn a 9.5 percent SAP rate on student loans funded by those bonds in indentured trusts acquired
with the Company’s acquisition of Southwest Student Services Corporation and Washington Transferee
Corporation. The impairment was recognized due to changes in projected interest rates used to initially value
the intangible asset and to a regulatory change that restricts the loans on which the Company is entitled to
earn a 9.5 percent yield. These impairment charges were recorded to operating expense in the Lending
reportable segment.
7. Borrowings
Borrowings consist of secured borrowings issued through the Company’s securitization program, borrow-
ings through secured facilities and participation programs, unsecured notes issued by the Company, term and
demand deposits at Sallie Mae Bank, and as other interest-bearing liabilities related primarily to obligations to
return cash collateral held. To match the interest rate and currency characteristics of its borrowings with the
interest rate and currency characteristics of its assets, the Company enters into interest rate and foreign
currency swaps with independent parties. Under these agreements, the Company makes periodic payments,
generally indexed to the related asset rates or rates which are highly correlated to the asset rates, in exchange
for periodic payments which generally match the Company’s interest obligations on fixed or variable rate
notes (see Note 9, “Derivative Financial Instruments”). Payments and receipts on the Company’s interest rate
and currency swaps are not reflected in the following tables.
F-45
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)