Sallie Mae 2011 Annual Report Download - page 208

GLOSSARY
Listed below are definitions of key terms that are used throughout this document. See also Appendix A
“Federal Family Education Loan Program” for a further discussion of the FFELP.
Consolidation Loan Rebate Fee — All holders of FFELP Consolidation Loans are required to pay to the
U.S. Department of Education (“ED”) an annual 105 basis point Consolidation Loan Rebate Fee on all
outstanding principal and accrued interest balances of FFELP Consolidation Loans purchased or originated after
October 1, 1993, except for loans for which consolidation applications were received between October 1, 1998
and January 31, 1999, where the Consolidation Loan Rebate Fee is 62 basis points.
Constant Prepayment Rate (“CPR”) — A variable in life-of-loan estimates that measures the rate at
which loans in the portfolio prepay before their stated maturity. The CPR is directly correlated to the average life
of the portfolio. CPR equals the percentage of loans that prepay annually as a percentage of the beginning of
period balance.
“Core Earnings” — We prepare financial statements in accordance with generally accepted accounting
principles in the United States of America (“GAAP”). In addition to evaluating our GAAP-based financial
information, management evaluates the business segments on a basis that, as allowed under the Financial
Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 280, “Segment
Reporting,” differs from GAAP. We refer to management’s basis of evaluating its segment results as “Core
Earnings” presentations for each business segment and refer to these performance measures in its presentations
with credit rating agencies and lenders. While “Core Earnings” results are not a substitute for reported results
under GAAP, we rely on “Core Earnings” performance measures in operating each business segment because we
believes these measures provide additional information regarding the operational and performance indicators that
are most closely assessed by management.
“Core Earnings” performance measures are the primary financial performance measures used by
management to evaluate performance and to allocate resources. Accordingly, financial information is reported to
management on a “Core Earnings” basis by reportable segment, as these are the measures used regularly by our
chief operating decision makers. “Core Earnings” performance measures are used in developing our financial
plans, tracking results, and establishing corporate performance targets and incentive compensation. Management
believes this information provides additional insight into the financial performance of our core business
activities. “Core Earnings” performance measures are not defined terms within GAAP and may not be
comparable to similarly titled measures reported by other companies. Our “Core Earnings” presentation does not
represent another comprehensive basis of accounting.
See “Note 16 — Segment Reporting” and Item 7 “Management’s Discussion and Analysis of Financial
Condition and Results of Operations — ‘Core Earnings’ — Definition and Limitations — Differences between
‘Core Earnings’ and GAAP” for further discussion of the differences between “Core Earnings” and GAAP, as
well as reconciliations between “Core Earnings” and GAAP.
In prior filings with the SEC of SLM Corporation’s annual reports on Form 10-K and quarterly reports on
Form 10-Q, “Core Earnings” has been labeled as “‘Core’ net income” or “Managed net income” in certain
instances.
Direct Loans — Educational loans provided by the DSLP (see definition below) to students and parent
borrowers directly through ED (see definition below) rather than through a bank or other lender.
DSLP — The William D. Ford Federal Direct Loan Program.
ED — The U.S. Department of Education.
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