Sallie Mae 2009 Annual Report Download - page 200

12. Earnings (Loss) per Common Share
Basic earnings (loss) per common share (“EPS”) are calculated using the weighted average number of
shares of common stock outstanding during each period. A reconciliation of the numerators and denominators
of the basic and diluted EPS calculations follows for the years ended December 31, 2009, 2008 and 2007.
2009 2008 2007
Years Ended December 31,
Numerator:
Net income (loss) from continuing operations attributable to common
stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 335,992 $(180,613) $(939,815)
Adjusted for dividends of Series C Preferred Stock
(1)
............. — — —
Net income (loss) from continuing operations attributable to common
stock, adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335,992 (180,613) (939,815)
Net income (loss) from discontinued operations. . . . . . . . . . . . . . . . . . . (157,690) (143,219) 6,276
Net income (loss) attributable to common stock . . . . . . . . . . . . . . . . . . $ 178,302 $(323,832) $(933,539)
Denominator (shares in thousands):
Weighted average shares used to compute basic EPS . . . . . . . . . . . . . . . 470,858 466,642 412,233
Effect of dilutive securities:
Dilutive effect of Series C Preferred Stock
(1)
................... — — —
Dilutive effect of stock options, non-vested deferred compensation and
restricted stock, restricted stock units, Employee Stock Purchase
Plan (“ESPP”) and equity forwards
(2)
...................... 726 — —
Dilutive potential common shares
(3)
........................... 726 — —
Weighted average shares used to compute diluted EPS . . . . . . . . . . . . . . 471,584 466,642 412,233
Basic earnings (loss) per common share:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .71 $ (.39) $ (2.28)
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.33) (.30) .02
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .38 $ (.69) $ (2.26)
Diluted earnings (loss) per common share:
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .71 $ (.39) $ (2.28)
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (.33) (.30) .02
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ .38 $ (.69) $ (2.26)
(1)
The Company’s 7.25 percent Mandatory Convertible Preferred Stock Series C was issued on December 31, 2007. The mandatory
convertible preferred stock will automatically convert on December 15, 2010, into between approximately 34 million and
41 million shares of common stock, depending upon the Company’s stock price at that time. These instruments were anti-dilu-
tive for the years ended December 31, 2009, 2008 and 2007.
(2)
Includes the potential dilutive effect of additional common shares that are issuable upon exercise of outstanding stock options,
non-vested deferred compensation and restricted stock, restricted stock units, and the outstanding commitment to issue shares
under the ESPP, determined by the treasury stock method, and equity forward contracts determined by the reverse treasury stock
method. The Company settled all of its outstanding equity forward contracts in January 2008.
(3)
For the years ended December 31, 2009, 2008 and 2007, stock options covering approximately 42 million, 38 million and
37 million shares, respectively, were outstanding but not included in the computation of diluted earnings per share because they
were anti-dilutive.
13. Stock-Based Compensation Plans and Arrangements
As of December 31, 2009, the Company has two active stock-based compensation plans that provide for
grants of stock, stock options, restricted stock and restricted stock units to its employees and non-employee
directors. The Company also maintains the Employee Stock Purchase Plan (the “ESPP”). Shares issued under
these stock-based compensation plans may be either shares reacquired by the Company or shares that are
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SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)