Sallie Mae 2011 Annual Report Download - page 196

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. Segment Reporting (Continued)
Year Ended December 31, 2009
(Dollars in millions)
Consumer
Lending
Business
Services
FFELP
Loans Other Eliminations(1)
Total “Core
Earnings” Adjustments(2)
Total
GAAP
Interest income:
Student loans ...................... $2,254 $ — $3,252 $ — $ — $5,506 $(830) $4,676
Other loans ........................ — — — 56 — 56 — 56
Cash and investments ................ 13 20 26 (10) (20) 29 (3) 26
Total interest income .................. 2,267 20 3,278 46 (20) 5,591 (833) 4,758
Total interest expense .................. 721 — 2,238 66 (20) 3,005 30 3,035
Net interest income (loss) ............... 1,546 20 1,040 (20) — 2,586 (863) 1,723
Less: provisions for loan losses .......... 1,399 — 119 46 — 1,564 (445) 1,119
Net interest income (loss) after provisions
for loan losses ...................... 147 20 921 (66) — 1,022 (418) 604
Servicing revenue ................... 70 954 75 — (659) 440 — 440
Contingency revenue ................ — 294 — — — 294 — 294
Gains on debt repurchases ............ — — — 536 — 536 — 536
Other income ...................... — 55 292 1 — 348 (285) 63
Total other income .................... 70 1,303 367 537 (659) 1,618 (285) 1,333
Expenses:
Direct operating expenses ............ 265 440 754 6 (659) 806 — 806
Overhead expenses .................. — — — 237 — 237 — 237
Operating expenses ................... 265 440 754 243 (659) 1,043 — 1,043
Goodwill and acquired intangible assets
impairment and amortization .......... — — — — — — 76 76
Restructuring expenses ................. 2 2 8 (2) — 10 — 10
Total expenses ....................... 267 442 762 241 (659) 1,053 76 1,129
Income (loss) from continuing operations,
before income tax expense (benefit) .... (50) 881 526 230 — 1,587 (779) 808
Income tax expense (benefit)(3) .......... (18) 311 186 81 — 560 (296) 264
Net income (loss) from continuing
operations ......................... (32) 570 340 149 — 1,027 (483) 544
Loss from discontinued operations, net of
taxes ............................. — — — (220) — (220) — (220)
Net income (loss) ..................... $ (32) $ 570 $ 340 $ (71) $ — $ 807 $(483) $ 324
(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, 2009
(Dollars in millions)
Net Impact of
Derivative
Accounting
Net Impact of
Goodwill and
Acquired
Intangibles
Net Impact of
Securitization
Accounting Total
Net interest income (loss) ............................ $ 78 $— $(941) $(863)
Less: provisions for loan losses ....................... — — (445) (445)
Net interest income (loss) after provisions for loan losses . . . 78 — (496) (418)
Total other loss .................................... (580) — 295 (285)
Goodwill and acquired intangible assets impairment and
amortization .................................... — 76 — 76
Total “Core Earnings” adjustments to GAAP ............ $(502) $(76) $(201) (779)
Income tax benefit ................................. (296)
Net loss .......................................... $(483)
(3) Income taxes are based on a percentage of net income before tax for the individual reportable segment.
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