Sallie Mae 2009 Annual Report Download - page 220

18. Benefit Plans (Continued)
employees receive a 1 percent core employer contribution. Between August 1, 2007 and September 30, 2008,
the match formula was up to 100 percent on the first 5 percent of contributions after one year of service.
The Company also maintains a non-qualified plan to ensure that designated participants receive benefits
not available under the 401(k) Plan due to compensation limits imposed by the Internal Revenue Code.
Total expenses related to the 401(k) plans were $15 million, $21 million and $22 million in 2009, 2008
and 2007, respectively.
19. Income Taxes
Reconciliations of the statutory U.S. federal income tax rates to the Company’s effective tax rate for
continuing operations follow:
2009 2008 2007
Years Ended
December 31,
Statutory rate ............................................... 35.0% 35.0% 35.0%
Equity forward contracts ....................................... — — (110.8)
State tax, net of federal benefit .................................. (.3) 3.7 (4.1)
Capitalized transaction costs .................................... — 8.6 (2.5)
Unrecognized tax benefits, U.S. federal and state, net of federal benefit .... (1.3) 6.0 (.2)
Corporate owned life insurance .................................. (.4) 2.4 1.3
Other, net .................................................. .1 (1.7) (1.7)
Effective tax rate ............................................ 33.1% 54.0% (83.0)%
The effective tax rates for discontinued operations for the years ended December 31, 2009, 2008 and
2007 are 27.4 percent, 38.8 percent, and 39.0 percent, respectively. The effective tax rate varies from the
statutory U.S. federal rate of 35 percent primarily due to the establishment of a valuation allowance against
tax attributes generated as a result of the sale of the assets in its Purchased Paper — Mortgage/Properties
business for the year ended December 31, 2009, and due to the impact of state taxes, net of federal benefit,
for the years ended December 31, 2009, 2008 and 2007.
F-93
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Dollars in thousands, except per share amounts, unless otherwise stated)