Sallie Mae 2011 Annual Report Download - page 184

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. Fair Value Measurements (Continued)
The following table summarizes the fair values of our financial assets and liabilities, including derivative
financial instruments.
December 31, 2011 December 31, 2010
(Dollars in millions)
Fair
Value
Carrying
Value Difference
Fair
Value
Carrying
Value Difference
Earning assets
FFELP Loans ..................... $134,196 $138,130 $ (3,934) $147,163 $148,649 $(1,486)
Private Education Loans ............. 33,968 36,290 (2,322) 30,949 35,656 (4,707)
Other loans ....................... 73 193 (120) 88 270 (182)
Cash and investments(1) .............. 9,789 9,789 — 11,553 11,553 —
Total earning assets ................... 178,026 184,402 (6,376) 189,753 196,128 (6,375)
Interest-bearing liabilities
Short-term borrowings ................ 29,547 29,573 26 33,604 33,616 12
Long-term borrowings ................ 141,605 154,393 12,788 154,355 163,544 9,189
Total interest-bearing liabilities ......... 171,152 183,966 12,814 187,959 197,160 9,201
Derivative financial instruments
Floor Income Contracts ............... (2,544) (2,544) — (1,315) (1,315) —
Interest rate swaps .................... 1,463 1,463 — 744 744 —
Cross currency interest rate swaps ....... 1,116 1,116 — 1,811 1,811 —
Other .............................. 1 1 — 25 25 —
Excess of net asset fair value over
carrying value .................... $ 6,438 $ 2,826
(1) “Cash and investments” includes available-for-sale investments that consist of investments that are primarily U.S. Treasury or U.S.
agency securities whose cost basis is $85 million and $137 million at December 31, 2011 and 2010, respectively, versus a fair value of
$90 million and $139 million at December 31, 2011 and 2010, respectively.
14. Commitments, Contingencies and Guarantees
In Re SLM Corporation Securities Litigation. On January 31, 2008, a putative class action lawsuit was filed
in the U.S. District Court for the Southern District of New York alleging that the Company and certain officers
violated federal securities laws by, among other things, issuing a series of materially false and misleading
statements with respect to our financial results for year-end 2006 and the first quarter of 2007. This case and
other actions arising out of the same circumstances and alleged acts have been consolidated and are now
identified as In Re SLM Corporation Securities Litigation. The case purports to be brought on behalf of those
who acquired our common stock between January 18, 2007 and January 23, 2008. On January 24, 2012, the court
certified a class, appointed class counsel and appointed a class representative. On February 10, 2012, the parties
entered into a settlement term sheet under which we agreed to pay $35 million, which amount includes all
attorneys’ fees, administration costs, expenses, class member benefits, and costs of any kind associated with the
resolution of this matter. We have denied vigorously all claims asserted against us, but agreed to settle to avoid
the burden, expense, risk and uncertainty of continued litigation. The entire settlement amount will be paid by
our insurers and the settlement is subject to us entering into a formal settlement agreement and Court approval.
As a result there are no loss accruals recorded related to this matter as of December 31, 2011.
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