Sallie Mae 2007 Annual Report Download - page 196

19. Income Taxes (Continued)
At December 31, 2007 and 2006, the tax effect of temporary differences that give rise to deferred tax
assets and liabilities include the following:
2007 2006
December 31,
Deferred tax assets:
Loan reserves ............................................ $ 867,840 $321,467
Market value adjustments on investments........................ 322,001 279,347
Deferred revenue ......................................... 61,780 59,825
Accrued expenses not currently deductible ....................... 60,821 57,863
Stock-based compensation plans .............................. 54,137 34,054
Operating loss and credit carryovers ........................... 43,600 57,125
Warrants issuance ......................................... 34,105 42,132
Partnership income ........................................ 15,433 21,629
Loan origination services ................................... 9,001 12,652
In-substance defeasance transactions ........................... 18,074 —
Other .................................................. 28,959 29,664
Total deferred tax assets .................................... 1,515,751 915,758
Deferred tax liabilities:
Securitization transactions ................................... 370,378 387,290
Unrealized investment gains recorded to other comprehensive income . . 124,459 183,684
Leases ................................................. 83,286 92,382
Depreciation/amortization ................................... 23,031 57,856
Contingent payment debt instruments .......................... — 100,632
In-substance defeasance transactions ........................... — 9,930
Other .................................................. 7,247 9,085
Total deferred tax liabilities .................................. 608,401 840,859
Net deferred tax assets ..................................... $ 907,350 $ 74,899
Included in other deferred tax assets is a valuation allowance of $7,635 and $3,778 as of December 31,
2007 and 2006, respectively, against a portion of the Company’s state and international deferred tax assets.
The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income
during the period in which the temporary differences become deductible. Management primarily considers the
scheduled reversals of deferred tax liabilities and the history of positive taxable income in making this
determination. The valuation allowance primarily relates to state deferred tax assets for which subsequently
recognized tax benefits will be allocated to goodwill.
As of December 31, 2007, the Company has federal net operating loss carryforwards of $89,052 which
begin to expire in 2022, apportioned state net operating loss carryforwards of $129,080 which begin to expire
in 2008, and federal and state credit carryovers of $1,921 which begin to expire in 2021.
Accounting for Uncertainty in Income Taxes
The Company adopted the provisions of the FASB’s FIN No. 48, “Accounting for Uncertainty in Income
Taxes,” on January 1, 2007. As a result of the implementation of FIN No. 48, the Company recognized a
$6 million increase in its liability for unrecognized tax benefits, which was accounted for as a reduction to the
F-75
SLM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts, unless otherwise stated)