Sallie Mae 2012 Annual Report Download - page 45

Year Ended December 31, 2010
(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 ............... $2,353 $ — $2,766 $ — $ — $5,119 $ 888 $(309) $ 579 $5,698
Other loans ................. — — — 30 — 30 — — — 30
Cash and investments ......... 14 17 9 3 (17) 26 — — — 26
Total interest income ........... 2,367 17 2,775 33 (17) 5,175 888 (309) 579 5,754
Total interest expense ........... 758 — 1,407 45 (17) 2,193 69 13(4) 82 2,275
Net interest income ............. 1,609 17 1,368 (12) — 2,982 819 (322) 497 3,479
Less: provisions for loan losses . . . 1,298 — 98 23 — 1,419 — — — 1,419
Net interest income after provisions
for loan losses ............... 311 17 1,270 (35) — 1,563 819 (322) 497 2,060
Servicing revenue ............ 72 912 68 1 (648) 405 — — — 405
Contingency revenue ......... — 330 — — — 330 — — — 330
Gains on debt repurchases ..... — — — 317 — 317 — — — 317
Other income (loss) .......... — 51 320 13 — 384 (819) 405(5) (414) (30)
Total other income (loss) ........ 72 1,293 388 331 (648) 1,436 (819) 405 (414) 1,022
Expenses:
Direct operating expenses ..... 350 500 736 12 (648) 950 — — — 950
Overhead expenses ........... — — — 258 — 258 — — — 258
Operating expenses ............ 350 500 736 270 (648) 1,208 — — — 1,208
Goodwill and acquired intangible
assets impairment and
amortization ................ — — — — — — — 699 699 699
Restructuring expenses .......... 12 7 54 12 — 85 — — — 85
Total expenses ................ 362 507 790 282 (648) 1,293 — 699 699 1,992
Income (loss) from continuing
operations, before income tax
expense (benefit) ............ 21 803 868 14 — 1,706 — (616) (616) 1,090
Income tax expense (benefit)(3) . . . 8 288 311 4 — 611 — (118) (118) 493
Net income (loss) from continuing
operations .................. 13 515 557 10 — 1,095 — (498) (498) 597
Loss from discontinued operations,
net of tax benefit ............. — — — (67) — (67) — — — (67)
Net income (loss) .............. $ 13 $ 515 $ 557 $ (57) $ — $1,028 $ — $(498) $(498) $ 530
(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, 2010
(Dollars in millions)
Net Impact of
Derivative
Accounting
Net Impact of
Goodwill and
Acquired
Intangibles Total
Net interest income after provisions for loan losses ............................ $497 $— $497
Total other loss ........................................................ (414) — (414)
Goodwill and acquired intangible assets impairment and amortization ............. — 699 699
Total “Core Earnings” adjustments to GAAP ................................. $ 83 $(699) (616)
Income tax benefit ...................................................... (118)
Net loss .............................................................. $(498)
(3) Income taxes are based on a percentage of net income before tax for the individual reportable segment.
(4) Represents a portion of the $(54) million of “other derivative accounting adjustments.”
(5) Represents the $454 million of “unrealized gains on derivative and hedging activities, net” as well as the remaining portion of the $(54) million of “other
derivative accounting adjustments.”
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