Sallie Mae 2012 Annual Report Download - page 191

SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
16. Segment Reporting (Continued)
Segment Results and Reconciliations to GAAP
Year Ended December 31, 2012
(Dollars in millions)
Consumer
Lending
Business
Services
FFELP
Loans Other
Elimina-
tions(1)
Total
“Core
Earnings”
Adjustments
Total
GAAP
Reclassi-
fications
Additions/
(Subtractions)
Total
Adjustments(2)
Interest income:
Student loans ............... $2,481 $ — $2,744 $ — $ — $5,225 $ 858 $(351) $ 507 $5,732
Other loans ................. — — — 16 — 16 — — — 16
Cash and investments ........ 7 10 11 3 (10) 21 — — — 21
Total interest income ........... 2,488 10 2,755 19 (10) 5,262 858 (351) 507 5,769
Total interest expense .......... 825 — 1,591 38 (10) 2,444 115 2(4) 117 2,561
Net interest income (loss) ....... 1,663 10 1,164 (19) — 2,818 743 (353) 390 3,208
Less: provisions for loan losses . . . 1,008 — 72 — — 1,080 — — — 1,080
Net interest income (loss) after
provisions for loan losses ..... 655 10 1,092 (19) — 1,738 743 (353) 390 2,128
Servicing revenue ........... 46 910 90 — (670) 376 — — — 376
Contingency revenue ......... — 356 — — — 356 — — — 356
Gains on debt repurchases ..... — — — 145 — 145 — — — 145
Other income (loss) .......... — 33 — 15 — 48 (743) 159(5) (584) (536)
Total other income (loss) ........ 46 1,299 90 160 (670) 925 (743) 159 (584) 341
Expenses:
Direct operating expenses ..... 265 462 702 7 (670) 766 — — — 766
Overhead expenses .......... — — — 230 — 230 — — — 230
Operating expenses ............ 265 462 702 237 (670) 996 — — — 996
Goodwill and acquired intangible
assets impairment and
amortization ................ — — — — — — — 28 28 28
Restructuring expenses ......... 2 6 — 4 — 12 — — — 12
Total expenses ................ 267 468 702 241 (670) 1,008 — 28 28 1,036
Income (loss) from continuing
operations, before income tax
expense (benefit) ............ 434 841 480 (100) — 1,655 — (222) (222) 1,433
Income tax expense (benefit)(3) . . . 156 303 173 (36) — 596 — (99) (99) 497
Net income (loss) from continuing
operations ................. 278 538 307 (64) — 1,059 — (123) (123) 936
Income from discontinued
operations, net of tax
expense ................... — — — 1 — 1 — — — 1
Net income (loss) .............. 278 538 307 (63) — 1,060 — (123) (123) 937
Less: net loss attributable to
noncontrolling interest ........ — (2) — — — (2) — — — (2)
Net income (loss) attributable to
SLM Corporation ............ $ 278 $ 540 $ 307 $ (63) $ — $1,062 $ — $(123) $(123) $ 939
(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, 2012
(Dollars in millions)
Net Impact of
Derivative
Accounting
Net Impact of
Goodwill and
Acquired Intangibles Total
Net interest income after provisions for loan losses ............................ $390 $— $390
Total other loss ........................................................ (584) — (584)
Goodwill and acquired intangible assets impairment and amortization ............. — 28 28
Total “Core Earnings” adjustments to GAAP ................................. $(194) $(28) (222)
Income tax benefit ...................................................... (99)
Net loss .............................................................. $(123)
(3) Income taxes are based on a percentage of net income before tax for the individual reportable segment.
(4) Represents a portion of the $42 million of “other derivative accounting adjustments.”
(5) Represents the $115 million of “unrealized gains on derivative and hedging activities, net” as well as the remaining portion of the
$42 million of “other derivative accounting adjustments.”
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