Sallie Mae 2013 Annual Report Download - page 47

certain growth and other business strategies or achieve certain business goals or objectives if cost reductions are
too dramatic. Alternatively, we may not be able to achieve our desired cost savings. In either case our business,
results of operations and financial condition could be adversely affected.
Incorrect estimates and assumptions by management in connection with the preparation of our consolidated
financial statements could adversely affect the reported assets, liabilities, income and expenses.
The preparation of our consolidated financial statements requires management to make critical accounting
estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses during the
reporting periods. Incorrect estimates and assumptions by management in connection with the preparation of our
consolidated financial statements could adversely affect the reported amounts of assets and liabilities and the
reported amounts of income and expenses. A description of our critical accounting estimates and assumptions
may be found in Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Critical Accounting Policies and Estimates” and in “Note 2 — Significant Accounting Policies” to
the audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. If we
make incorrect assumptions or estimates, we may under- or overstate reported financial results, which could
materially and adversely affect our business, financial condition and results of operations.
Acquisitions or strategic investments that we pursue may not be successful and could disrupt our business,
harm our financial condition or reduce our earnings.
We may consider or undertake strategic acquisitions of, or material investments in, businesses, products, or
portfolios of loans. We may not be able to identify suitable opportunities and, if not, some of our strategies could
fail. We may not be able to obtain necessary financing on satisfactory terms. We may not be able obtain
necessary regulatory approvals or complete the transactions on appropriate terms. If we pay the purchase price of
any acquisition or investment in cash, it may have an adverse effect on our financial condition; if the purchase
price is paid with our stock, it could be dilutive to our stockholders. We may assume liabilities, including
unrecorded liabilities that are not discovered at the time of the transaction, and the repayment of those liabilities
may have an adverse effect on our financial condition.
We may not be able to successfully integrate personnel, operations, businesses, products, or technologies of
an acquisition. There may be additional risks if we enter into a line of business in which we have limited
experience or the business operates in a legal, regulatory or competitive environment with which we are not
familiar. We may not have or be able to maintain the expertise needed to manage the new business. Acquisitions
and investments also may not perform to our expectations for various reasons, including the loss of key
personnel, customers or vendors. If we fail to integrate acquisitions or investments or realize the expected
benefits, we may lose the return on these acquisitions or investments or incur additional transaction costs, and
our business and financial condition may be harmed as a result.
Risks Related to the Spin-Off
The proposed Spin-Off of our current business into two, distinct, publicly-traded entities is contingent upon
the satisfaction of a number of conditions, which may not be consummated on the terms or timeline currently
contemplated or may not achieve the intended results.
We are currently pursuing a strategic plan to separate our existing organization into two publicly-traded
companies, an education loan management company and a consumer banking company. It is expected the Spin-
Off, if completed, will occur in the first half of 2014. Our ability to timely effect the Spin-Off is subject to
several conditions, including, among others, the receipt of a favorable private letter ruling from the Internal
Revenue Service and the SEC declaring effective a registration statement relating to the securities of the
separated entity. We cannot assure that the Spin-Off will be completed in a timely fashion, if at all. For these and
other reasons, the Spin-Off may not be completed on the terms or timeline contemplated. Further, if the Spin-Off
is completed, it may not achieve the intended results. Any such difficulties could adversely affect our business,
results of operations or financial condition.
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