Sallie Mae 2009 Annual Report Download - page 89

Purchased
Paper —
Non-
Mortgage
Purchased
Paper —
Mortgage/
Properties
Contingency
& Other Total APG
Year Ended December 31, 2007
Contingency fee income .................... $ 9 $— $327 $336
Collections revenue ....................... 217 — — 217
Total income ............................ 226 — 327 553
Restructuring expenses ..................... 1 — 1 2
Operating expenses........................ 164 — 197 361
Total expenses ........................... 165 — 198 363
Net interest expense ....................... 13 — 14 27
Income from continuing operations before income
tax expense ........................... 48 — 115 163
Income tax expense ....................... 18 — 42 60
Net income from continuing operations ......... 30 — 73 103
Income from discontinued operations, net of tax . . — 15 — 15
Net income ............................. 30 15 73 118
Less: net income attributable to noncontrolling
interest ............................... 2 — — 2
“Core Earnings” net income attributable to SLM
Corporation ........................... $ 28 $15 $ 73 $116
“Core Earnings” net income attributable to SLM
Corporation:
Continuing operations, net of tax . ............ $ 28 $— $ 73 $101
Discontinued operations, net of tax ............ — 15 — 15
“Core Earnings” net income attributable to SLM
Corporation ........................... $ 28 $15 $ 73 $116
Collections Revenue
In 2008, the Company concluded that its APG purchased paper businesses were no longer a strategic fit.
The Company sold its international Purchased Paper — Non-Mortgage business in the first quarter of 2009. A
loss of $51 million was recognized in the fourth quarter of 2008 related to this sale as the net assets were held
for sale and carried at the lower of its book basis and fair value as of December 31, 2008. The Company sold
all of the assets in its Purchased Paper — Mortgage/Properties business in the fourth quarter of 2009 (which is
further discussed below), which resulted in an after-tax loss of $95 million. The Company continues to wind
down the domestic side of its Purchased Paper — Non-Mortgage business. The Company will continue to
consider opportunities to sell this business at acceptable prices in the future.
The Company’s domestic Purchased Paper — Non-Mortgage business had certain forward purchase obligations
under which the Company was committed to buy purchased paper through April 2009. The Company did not
purchase any additional purchased paper in excess of these obligations. The Company recognized $79 million,
$111 million and $17 million of impairments in the years ended December 31, 2009, 2008 and 2007, respectively.
The impairment is primarily a result of the impact of the economy on the ability to collect on these assets. The
impairment of $111 million in 2008 includes the $51 million loss on the sale of the Company’s international
Purchased Paper — Non-Mortgage business discussed above. Similar to the Purchased Paper — Mortgage/Properties
business discussion below, when the Purchased Paper — Non-Mortgage business either sells all of its remaining
assets or completely winds down its operations, its results will be shown as discontinued operations.
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