Sallie Mae 2009 Annual Report Download - page 87

ASSET PERFORMANCE GROUP (“APG”) BUSINESS SEGMENT
In our APG business segment, we provide a wide range of accounts receivable and collections services,
including student loan default aversion services, defaulted student loan portfolio management services,
contingency collections services for student loans and other asset classes, and accounts receivable management
and collection for purchased portfolios of receivables that are delinquent or have been charged off by their
original creditors as well as sub-performing and non-performing mortgage loans. In the purchased receivables
business, we focus on a variety of consumer debt types with emphasis on charged off credit card receivables
and distressed mortgage receivables. We purchase these portfolios at a discount to their face value and then
use both our internal collection operations, coupled with third-party collection agencies, to maximize the
recovery on these receivables.
An overview of this segment and recent developments that have significantly impacted this segment are
included in the “Item 1. Business” section of this document. The private sector collections industry is highly
fragmented with few large public companies and a large number of small scale privately-held companies. The
collections industry is highly competitive. We are responding to these competitive challenges through enhanced
servicing efficiencies and by continuing to build on customer relationships through value added services and
financings.
Condensed Statements of Income
The following tables include “Core Earnings” results of operations for our APG business segment.
Purchased
Paper —
Non-
Mortgage
Purchased
Paper —
Mortgage/
Properties
Contingency
& Other Total APG
Year Ended December 31, 2009
Contingency fee income .................... $ 2 $ — $294 $ 296
Collections revenue ....................... 50 — — 50
Total income ............................ 52 294 346
Restructuring expenses ..................... — — 1 1
Operating expenses........................ 138 — 177 315
Total expenses ........................... 138 178 316
Net interest expense ....................... 10 — 9 19
Income (loss) from continuing operations before
income tax expense (benefit) . . . ............ (96) — 107 11
Income tax expense (benefit) ................ (34) — 41 7
Net income (loss) from continuing operations .... (62) — 66 4
Loss from discontinued operations, net of tax .... — (157) — (157)
Net income (loss) ......................... (62) (157) 66 (153)
Less: net income attributable to noncontrolling
interest ............................... 1 — — 1
“Core Earnings” net income (loss) attributable to
SLM Corporation ....................... $(63) $(157) $ 66 $(154)
“Core Earnings” net income (loss) attributable to
SLM Corporation:
Continuing operations, net of tax . ............ $(63) $ — $ 66 $ 3
Discontinued operations, net of tax ............ — (157) — (157)
“Core Earnings” net income (loss) attributable to
SLM Corporation ....................... $(63) $(157) $ 66 $(154)
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