Sallie Mae 2011 Annual Report Download - page 194

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. Segment Reporting (Continued)
Segment Results and Reconciliations to GAAP
Year Ended December 31, 2011
(Dollars in millions)
Consumer
Lending
Business
Services
FFELP
Loans Other Eliminations(1)
Total “Core
Earnings” Adjustments(2)
Total
GAAP
Interest income:
Student loans ...................... $2,429 $ — $2,914 $ — $ — $5,343 $ 547 $5,890
Other loans ........................ — — — 21 — 21 — 21
Cash and investments ................ 9 11 5 5 (11) 19 — 19
Total interest income .................. 2,438 11 2,919 26 (11) 5,383 547 5,930
Total interest expense .................. 804 — 1,472 54 (11) 2,319 82 2,401
Net interest income (loss) ............... 1,634 11 1,447 (28) — 3,064 465 3,529
Less: provisions for loan losses .......... 1,179 — 86 30 — 1,295 — 1,295
Net interest income after provisions for loan
losses ............................ 455 11 1,361 (58) — 1,769 465 2,234
Servicing revenue ................... 64 970 85 1 (739) 381 — 381
Contingency revenue ................ — 333 — — — 333 — 333
Gains on debt repurchases ............ — — — 64 — 64 (26) 38
Other income (loss) ................. (9) 70 1 (9) — 53 (979) (926)
Total other income (loss) ............... 55 1,373 86 56 (739) 831 (1,005) (174)
Expenses:
Direct operating expenses ............ 304 482 760 12 (739) 819 — 819
Overhead expenses .................. — — — 281 — 281 — 281
Operating expenses ................... 304 482 760 293 (739) 1,100 — 1,100
Goodwill and acquired intangible assets
impairment and amortization .......... — — — — — — 24 24
Restructuring expenses ................. 3 3 1 2 — 9 — 9
Total expenses ....................... 307 485 761 295 (739) 1,109 24 1,133
Income (loss) from continuing operations,
before income tax expense (benefit) .... 203 899 686 (297) — 1,491 (564) 927
Income tax expense (benefit)(3) .......... 75 330 252 (109) — 548 (220) 328
Net income (loss) from continuing
operations ......................... 128 569 434 (188) — 943 (344) 599
Income from discontinued operations, net of
taxes ............................. — — — 33 — 33 — 33
Net income (loss) ..................... 128 569 434 (155) — 976 (344) 632
Less: loss attributable to noncontrolling
interest ........................... — (1) — — — (1) — (1)
Net income (loss) attributable to SLM
Corporation ....................... $ 128 $ 570 $ 434 $(155) $ — $ 977 $ (344) $ 633
(1) The eliminations in servicing revenue and direct operating expense represent the elimination of intercompany servicing revenue where the
Business Services segment performs the loan servicing function for the FFELP Loans segment.
(2) “Core Earnings” adjustments to GAAP:
Year Ended December 31, 2011
(Dollars in millions)
Net Impact of
Derivative
Accounting
Net Impact of
Goodwill and
Acquired
Intangibles Total
Net interest income after provisions for loan losses ...................... $ 465 $— $ 465
Total other loss .................................................. (1,005) — (1,005)
Goodwill and acquired intangible assets impairment and amortization ....... — 24 24
Total “Core Earnings” adjustments to GAAP ........................... $ (540) $(24) (564)
Income tax benefit ................................................ (220)
Net loss ........................................................ $ (344)
(3) Income taxes are based on a percentage of net income before tax for the individual reportable segment.
F-85