Sallie Mae 2012 Annual Report Download - page 151

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. Goodwill and Acquired Intangible Assets (Continued)
the difference. In conjunction with the second step of the impairment analysis, the $9 million of goodwill
attributed to this reporting unit was fully impaired.
Continued weakness in the economy coupled with changes in legislation could adversely affect the
operating results of our reporting units. If the forecasted performance of our reporting units is not achieved, or if
our stock price declines to a depressed level resulting in deterioration in our total market capitalization, the fair
value of the FFELP Loans, Servicing, Private Education Loans and Contingency Services reporting units could
be significantly reduced, and we may be required to record a charge to our earnings, which could be material, for
an impairment of goodwill.
Acquired Intangible Assets
Acquired intangible assets include the following:
As of December 31, 2012 As of December 31, 2011
(Dollars in millions)
Cost
Basis(1)
Accumulated
Impairment and
Amortization(1) Net
Cost
Basis(1)
Accumulated
Impairment and
Amortization(1) Net
Intangible assets subject to amortization:
Customer, services and lending
relationships ......................... $303 $(270) $33 $303 $(253) $50
Software and technology ................. 93 (93) — 93 (93) —
Trade names and trademarks .............. 54 (34) 20 54 (31) 23
Total acquired intangible assets .............. $450 $(397) $53 $450 $(377) $73
(1) Accumulated impairment and amortization includes impairment amounts only if the acquired intangible asset has been deemed partially
impaired. When an acquired intangible asset is considered fully impaired, and no longer in use, the cost basis and any accumulated
amortization related to the asset is written off.
(2) Intangible assets not subject to amortization include tradenames and trademarks totaling $10 million, net of accumulated impairment and
amortization.
We recorded amortization of acquired intangible assets totaling $19 million, $24 million, and $39 million
for the years ended December 31, 2012, 2011 and 2010, respectively. We will continue to amortize our intangible
assets with definite useful lives over their remaining estimated useful lives. We estimate amortization expense
associated with these intangible assets will be $15 million, $12 million, $9 million, $5 million and $2 million for
the years ended December 31, 2013, 2014, 2015, 2016 and 2017, respectively.
As discussed in “Note 2 — Significant Accounting Policies,” we test our indefinite life intangible assets
annually as of October 1 or during the course of the year if an event occurs or circumstances change which
indicate potential impairment of these assets. As of October 1, 2012, the fair values of the indefinite life
intangible assets exceed their carrying values. Accordingly, we recorded no impairment. We also assess whether
an event or circumstance has occurred which may indicate impairment of our definite life (amortizing) intangible
assets quarterly. During 2012, no such events or circumstances occurred that indicated our definite life intangible
assets may be impaired.
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