Sallie Mae 2012 Annual Report Download - page 44

Year Ended December 31, 2011
(Dollars in millions)
Consumer
Lending
Business
Services
FFELP
Loans Other Eliminations(1)
Total
“Core
Earnings”
Adjustments
Total
GAAPReclassifications
Additions/
(Subtractions)
Total
Adjustments(2)
Interest income:
Student loans ............... $2,429 $ — $2,914 $ — $ — $5,343 $ 902 $(355) $ 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) 5,383 902 (355) 547 5,930
Total interest expense ........... 804 — 1,472 54 (11) 2,319 71 11(4) 82 2,401
Net interest income ............. 1,634 11 1,447 (28) — 3,064 831 (366) 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) — 1,769 831 (366) 465 2,234
Servicing revenue ............ 64 970 85 1 (739) 381 — — — 381
Contingency revenue ......... — 333 — — — 333 — — — 333
Gains on debt repurchases ..... — — — 64 — 64 (26) — (26) 38
Other income (loss) .......... (9) 70 1 (9) — 53 (805) (174)(5) (979) (926)
Total other income (loss) ........ 55 1,373 86 56 (739) 831 (831) (174) (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 24
Restructuring expenses .......... 3 3 1 2 — 9 — — — 9
Total expenses ................ 307 485 761 295 (739) 1,109 — 24 24 1,133
Income (loss) from continuing
operations, before income tax
expense (benefit) ............ 203 899 686 (297) — 1,491 — (564) (564) 927
Income tax expense (benefit)(3) . . . 75 330 252 (109) — 548 — (220) (220) 328
Net income (loss) from continuing
operations .................. 128 569 434 (188) — 943 — (344) (344) 599
Income from discontinued
operations, net of tax expense . . — — — 33 — 33 — — — 33
Net income (loss) .............. 128 569 434 (155) — 976 — (344) (344) 632
Less: loss attributable to
noncontrolling interest ........ — (1) — — — (1) — — — (1)
Net income (loss) attributable to
SLM Corporation ............ $ 128 $ 570 $ 434 $(155) $ — $ 977 $ — $(344) $ (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.
(4) Represents a portion of the $(32) million of “other derivative accounting adjustments.”
(5) Represents the $(153) million of “unrealized losses on derivative and hedging activities, net” as well as the remaining portion of the $(32) million of “other
derivative accounting adjustments.”
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