Sallie Mae 2013 Annual Report Download - page 4

PART I.
Item 1. Business
Overview
SLM Corporation, more commonly known as Sallie Mae, is the nation’s leading saving, planning and
paying for education company. For 40 years, we have made a difference in students’ and families’ lives, helping
more than 31 million Americans pay for college. We recognize there is no single way to achieve this task, so we
provide a range of products to help families whether college is a long way off or right around the corner. We
promote responsible financial habits that help our customers dream, invest and succeed.
We were formed in 1972 as the Student Loan Marketing Association, a federally chartered government
sponsored enterprise (“GSE”), with the goal of furthering access to higher education by providing liquidity to the
student loan marketplace. On December 29, 2004, we terminated the federal charter, incorporated SLM Corporation
as a business corporation in the State of Delaware, and dissolved the GSE. Our principal executive offices are located
at 300 Continental Drive, Newark, Delaware 19713, and our telephone number is [phone].
On May 29, 2013, we announced our intent to separate into two distinct publicly-traded entities — an
education loan management business (“NewCo”) and a consumer banking business (“SLM BankCo”). It is our
intent to effect the separation through the distribution of the common stock of NewCo, which was formed to hold
the assets and liabilities associated with our education loan management business. In order to effect the
separation, we will first undergo an internal corporate reorganization, which is necessary for the contemplated
separation of NewCo from our consumer banking business. This internal corporate reorganization will be then
followed by a pro rata share distribution of all of the shares of NewCo common stock to our stockholders that
will implement the actual separation of NewCo. Throughout this Annual Report on Form 10-K, we sometimes
collectively refer to the proposed internal corporate reorganization and separation as the “Spin-Off.” “NewCo”
was incorporated under the temporary name “New Corporation.” The actual and brand name of NewCo will be
publicly disclosed prior to the Spin-Off in an amendment to New Corporation’s Form 10 registration statement.
For a discussion of the reasons for the Spin-Off, its mechanics and the businesses to be retained by or transferred
to and operated by NewCo and SLM BankCo, see the section titled “Reorganization and the Spin-Off.”
In this Annual Report on Form 10-K, we provide a review of our current business and operations as of and
for the fiscal year ended December 31, 2013, as well as information regarding the proposed separation of our
existing businesses in the event of the completion of the Spin-Off. Upon completion of the Spin-Off, SLM
BankCo, a newly incorporated, publicly-traded holding company, will succeed and continue to operate our
consumer banking business through Sallie Mae Bank, Upromise, Inc. (“Upromise”) and Sallie Mae Insurance
Services. SLM BankCo will continue to use the brand name “Sallie Mae” and trade under our symbol “SLM.”
NewCo, on the other hand, will hold the assets and liabilities related to our education loan management business,
which constitute substantially all of our assets and liabilities, and NewCo will trade under a new symbol on the
NASDAQ Global Select Market (the “NASDAQ”). Our historical financial statements prior to the Spin-Off will
become the historical financial statements of NewCo. As a result, the presentation of the financial results of the
business and operations of SLM BankCo, which will be the publicly-traded successor registrant to the Company,
for periods arising after the completion of the Spin-Off will be substantially different from the presentation of our
financial results in this Annual Report on Form 10-K and in our prior filings with the SEC. To provide additional
information to our investors regarding the anticipated impact of the Spin-Off, we have included in this Annual
Report on Form 10-K certain unaudited pro forma financial information of SLM BankCo, on a stand-alone basis
as of and for the year ended December 31, 2013, to provide some reference for SLM BankCo’s expected reissued
historical financial statements post Spin-Off and future manner of presentation of its financial condition and
results of operations. See the section titled “SLM BankCo Pro Forma Financial Information (Unaudited).”
For a discussion of the products and services to be offered by each of NewCo and SLM BankCo following
completion of the Spin-Off, see the sections titled “Business Segments,” “NewCo After the Spin-Off” and “SLM
BankCo After the Spin-Off.”
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