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slm 206QTRS slm 206QTRS Document Transcript

  • SLM CORPORATION Segment Results and Reconciliations to GAAP (Dollars in millions, except per share amounts) Three Months Ended March 31, 2006 Corporate Total quot;Core Total Lending DMO and Other Earningsquot; Adjustments GAAP Interest Income: FFELP Stafford and Other Student Loans $650 $- $- $650 $(351) $299 Consolidation Loans 1,028 - - 1,028 (207) 821 Private Education Loans 429 - - 429 (188) 241 Other Loans 23 - - 23 - 23 Cash and investments 131 - 1 132 (36) 96 Total interest income 2,261 - 1 2,262 (782) 1,480 Total interest expense 1,660 5 1 1,666 (573) 1,093 Net interest income 601 (5) - 596 (209) 387 Less: provisions for losses 75 - - 75 (15) 60 Net interest income after provisions for losses 526 (5) - 521 (194) 327 Fee income - 92 27 119 - 119 Collections revenue - 56 - 56 - 56 Other income 40 - 30 70 41 111 Operating expenses(1) 161 89 59 309 14 323 Income (loss) before income taxes and minority interest 405 54 (2) 457 (167) 290 in net earnings of subsidiaries Income tax expense (benefit)(2) 150 20 (1) 169 (32) 137 Minority interest in net earnings of subsidiaries - 1 - 1 - 1 Net income (loss) $255 $33 $(1) $287 $(135) $152 (1) - Operating expenses for the Lending, DMO, and Corporate and Other Business segments include $10 million, $3 million and $5 million, respectively, of stock-based compensation expense due to the implementation of SFAS No. 123( R) in the first quarter of 2006. (2) - Income taxes are based on a percentage of net income before tax for the individual reportable segment. Three Months Ended June 30, 2006 Corporate Total quot;Core Total Lending DMO and Other Earningsquot; Adjustments GAAP Interest Income: FFELP Stafford and Other Student Loans $719 $- $- $719 $(382) $337 Consolidation Loans 1,114 - - 1,114 (273) 841 Private Education Loans 485 - - 485 (251) 234 Other Loans 24 - - 24 - 24 Cash and investments 170 - 1 171 (46) 125 Total interest income 2,512 - 1 2,513 (952) 1,561 Total interest expense 1,904 5 1 1,910 (706) 1,204 Net interest income 608 (5) - 603 (246) 357 Less: provisions for losses 60 - - 60 8 68 Net interest income after provisions for losses 548 (5) - 543 (254) 289 Fee income - 90 33 123 - 123 Collections revenue - 67 - 67 - 67 Other income 51 - 24 75 869 944 Operating expenses(1) 163 85 50 298 18 316 Income before income taxes and minority interest in net earnings of subsidiaries 436 67 7 510 597 1,107 Income tax expense(2) 161 26 2 189 193 382 Minority interest in net earnings of subsidiaries - 1 - 1 - 1 Net income $275 $40 $5 $320 $404 $724 (1) - Operating expenses for the Lending, DMO, and Corporate and Other Business segments include $8 million, $2 million and $4 million, respectively, of stock-based compensation expense due to the implementation of SFAS No. 123( R) in the first quarter of 2006. (2) - Income taxes are based on a percentage of net income before tax for the individual reportable segment. -1A-
  • SLM CORPORATION Segment Results and Reconciliations to GAAP (Dollars in millions, except per share amounts) Six Months Ended June 30, 2006 Corporate Total quot;Core Total Lending DMO and Other Earningsquot; Adjustments GAAP Interest Income: FFELP Stafford and Other Student Loans $1,369 $- $- $1,369 $(734) $635 Consolidation Loans 2,142 - - 2,142 (479) 1,663 Private Education Loans 914 - - 914 (439) 475 Other Loans 47 - - 47 - 47 Cash and investments 300 - 2 302 (81) 221 Total interest income 4,772 - 2 4,774 (1,733) 3,041 Total interest expense 3,562 11 3 3,576 (1,280) 2,296 Net interest income 1,210 (11) (1) 1,198 (453) 745 Less: provisions for losses 135 - - 135 (7) 128 Net interest income after provisions for losses 1,075 (11) (1) 1,063 (446) 617 Fee income - 182 60 242 - 242 Collections revenue - 124 - 124 - 124 Other income 92 - 55 147 907 1,054 Operating expenses(1) 324 175 109 608 32 640 Income before income taxes and minority interest in net earnings of subsidiaries 843 120 5 968 429 1,397 Income tax expense(2) 312 44 2 358 161 519 Minority interest in net earnings of subsidiaries - 3 - 3 - 3 Net income $531 $73 $3 $607 $268 $875 (1) - Operating expenses for the Lending, DMO, and Corporate and Other Business segments include $18 million, $5 million and $9 million, respectively, of stock-based compensation expense due to the implementation of SFAS No. 123( R) in the first quarter of 2006. (2) - Income taxes are based on a percentage of net income before tax for the individual reportable segment. -1B-
  • SLM CORPORATION Segment Results and Reconciliations to GAAP (Dollars in millions, except per share amounts) Three Months Ended March 31, 2005 Corporate Total quot;Core Total Lending (2) DMO(2) and Other(2) Earningsquot; Adjustments GAAP Interest Income: FFELP Stafford and Other Student Loans $510 $- $- $510 $(319) $191 Consolidation Loans 581 - - 581 (73) 508 Private Education Loans 227 - - 227 (97) 130 Other Loans 20 - - 20 - 20 Cash and investments 78 - 1 79 (17) 62 Total interest income 1,416 - 1 1,417 (506) 911 Total interest expense 918 4 1 923 (359) 564 Net interest income 498 (4) - 494 (147) 347 Less: provisions for losses 55 - - 55 (8) 47 Net interest income after provisions for losses 443 (4) - 439 (139) 300 Fee income - 86 33 119 - 119 Collections revenue - 35 - 35 - 35 Other income 35 - 32 67 153 220 Operating expenses 134 64 51 249 13 262 Income before income taxes and minority interest in net earnings of subsidiaries 344 53 14 411 1 412 Income tax expense (1) 127 20 6 153 34 187 Minority interest in net earnings of subsidiaries 1 1 - 2 - 2 Net income $216 $32 $8 $256 $(33) $223 Three Months Ended June 30, 2005 Corporate Total quot;Core Total Lending (2) DMO(2) and Other(2) Earningsquot; Adjustments GAAP Interest Income: FFELP Stafford and Other Student Loans $582 $- $- $582 $(343) $239 Consolidation Loans 667 - - 667 (113) 554 Private Education Loans 247 - - 247 (120) 127 Other Loans 20 - - 20 - 20 Cash and investments 77 - 1 78 (24) 54 Total interest income 1,593 - 1 1,594 (600) 994 Total interest expense 1,073 4 1 1,078 (414) 664 Net interest income 520 (4) - 516 (186) 330 Less: provisions for losses 14 - - 14 65 79 Net interest income after provisions for losses 506 (4) - 502 (251) 251 Fee income - 82 26 108 - 108 Collections revenue - 42 - 42 - 42 Other income 36 - 29 65 297 362 Operating expenses 141 67 63 271 17 288 Income (loss) before income taxes and minority interest in net earnings of subsidiaries 401 53 (8) 446 29 475 Income tax expense (benefit)(1) 148 20 (3) 165 11 176 Minority interest in net earnings of subsidiaries 1 1 - 2 - 2 Net income (loss) $252 $32 $(5) $279 $18 $297 (1) - Income taxes are based on a percentage of net income before tax for the individual reportable segment. (2) - In the first quarter of 2006, the Company changed its method for allocating certain Corporate and Other expenses to the other business segments. All periods presented have been updated to reflect the new allocation methodology. -1C-
  • SLM CORPORATION Segment Results and Reconciliations to GAAP (Dollars in millions, except per share amounts) -1D-
  • Three Months Ended September 30, 2005 Corporate Total quot;Core Total Earningsquot; Adjustments GAAP Lending (2) DMO(2) and Other(2) Interest Income: FFELP Stafford and Other Student Loans $586 $- $- $586 $(316) $270 Consolidation Loans 833 - - 833 (156) 677 Private Education Loans 312 - - 312 (138) 174 Other Loans 22 - - 22 - 22 Cash and investments 112 - 1 113 (43) 70 Total interest income 1,865 - 1 1,866 (653) 1,213 Total interest expense 1,299 6 1 1,306 (477) 829 Net interest income 566 (6) - 560 (176) 384 Less: provisions for losses - - - - 12 12 Net interest income after provisions for losses 566 (6) - 560 (188) 372 Fee income - 93 36 129 - 129 Collections revenue - 42 - 42 - 42 Other income - - 36 36 295 331 Operating expenses 134 72 65 271 21 292 Income before income taxes and minority interest in net earnings of subsidiaries 432 57 7 496 86 582 160 21 2 183 (33) 150 Income tax expense (benefit)(1) Minority interest in net earnings of subsidiaries - 1 - 1 - 1 Net income $272 $35 $5 $312 $119 $431 Three Months Ended December 31, 2005 Corporate Total quot;Core Total Lending (2) DMO(2) and Other(2) Earningsquot; Adjustments GAAP Interest Income: FFELP Stafford and Other Student Loans $620 $- $- $620 $(305) $315 Consolidation Loans 934 - - 934 (174) 760 Private Education Loans 374 - - 374 (170) 204 Other Loans 23 - - 23 - 23 Cash and investments 127 - 2 129 (39) 90 Total interest income 2,078 - 2 2,080 (688) 1,392 Total interest expense 1,507 5 2 1,514 (512) 1,002 Net interest income 571 (5) - 566 (176) 390 Less: provisions for losses 69 - - 69 (4) 65 Net interest income after provisions for losses 502 (5) - 497 (172) 325 Fee income - 99 21 120 - 120 Collections revenue - 48 - 48 - 48 Other income 38 - 28 66 386 452 Operating expenses 139 84 56 279 18 297 Income (loss) before income taxes and minority interest in net earnings of subsidiaries 401 58 (7) 452 196 648 Income tax expense (benefit)(1) 148 21 (2) 167 49 216 Minority interest in net earnings of subsidiaries - 1 - 1 - 1 Net income (loss) $253 $36 $(5) $284 $147 $431 (1) - Income taxes are based on a percentage of net income before tax for the individual reportable segment. (2) - In the first quarter of 2006, the Company changed its method for allocating certain Corporate and Other expenses to the other business segments. All periods presented have been updated to reflect the new allocation methodology. -1D-
  • SLM CORPORATION Segment Results and Reconciliations to GAAP (Dollars in millions, except per share amounts) -1E-
  • Year to Date 2005 Corporate Total quot;Core Total Earningsquot; Adjustments GAAP Lending (2) DMO(2) and Other(2) Interest Income: FFELP Stafford and Other Student Loans $2,298 $- $- $2,298 $(1,283) $1,015 Consolidation Loans 3,014 - - 3,014 (514) 2,500 Private Education Loans 1,160 - - 1,160 (526) 634 Other Loans 85 - - 85 - 85 Cash and investments 396 - 5 401 (125) 276 Total interest income 6,953 - 5 6,958 (2,448) 4,510 Total interest expense 4,799 19 5 4,823 (1,764) 3,059 Net interest income 2,154 (19) - 2,135 (684) 1,451 Less: provisions for losses 138 - - 138 65 203 Net interest income after provisions for losses 2,016 (19) - 1,997 (749) 1,248 Fee income - 360 115 475 - 475 Collections revenue - 167 - 167 - 167 Other income 110 - 126 236 1,129 1,365 Operating expenses 548 287 235 1,070 68 1,138 Income before income taxes and minority interest in net earnings of subsidiaries 1,578 221 6 1,805 312 2,117 583 82 3 668 61 729 Income tax expense(1) Minority interest in net earnings of subsidiaries 2 4 - 6 - 6 Net income $993 $135 $3 $1,131 $251 $1,382 (1) - Income taxes are based on a percentage of net income before tax for the individual reportable segment. (2) - In the first quarter of 2006, the Company changed its method for allocating certain Corporate and Other expenses to the other business segments. All periods presented have been updated to reflect the new allocation methodology. -1E-
  • SLM CORPORATION Reconciliations of quot;Core Earningsquot; Net Income to GAAP Net Income: (Dollars in millions, except per share amounts) Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2006 2006 2006 2006 To-Date quot;Core Earningsquot; net income(a) $287 $320 $- $- $607 quot;Core Earningsquot; adjustments: Net impact of securitization accounting (62) 502 - - 440 Net impact of derivative accounting (39) 165 - - 126 Net impact of Floor Income (52) (52) - - (105) Amortization of acquired intangibles (14) (18) - - (32) Total quot;Core Earningsquot; adjustments before income taxes (167) 597 - - 429 Net tax effect(b) 32 (193) - - (161) Total quot;Core Earningsquot; adjustments (135) 404 - - 268 GAAP net income $152 $724 $- $- $875 (c) GAAP diluted earnings per common share $0.34 $1.52 $- $- $1.96 (a)quot;Core Earningsquot; diluted earnings per common share $0.65 $0.72 $- $- $1.37 (b) Such tax effect is based upon the Company's quot;Core Earningsquot; effective tax rate for the respective period. The net tax effect results primarily from the exclusion of the permanent income tax impact of the equity forward contracts. (c) The second-quarter 2006 GAAP net income per diluted share figure of $1.52 reflects a change in the calculation of diluted shares under the reverse treasury stock method and corrects the $1.61 figure previously reported in the Company’s second-quarter 2006 press release issued on July 20, 2006 and filed on Form 8-K with the Securities and Exchange Commission (quot;SECquot;) on the same date. This change is described in Note 7 to the Notes to Consolidated Financial Statements in Part I Item I on pages 29-30 of the Company’s second-quarter 2006 Form 10-Q filed with the SEC on August 9, 2006. Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2005 2005 2005 2005 To-Date quot;Core Earningsquot; net income(a) $256 $279 $312 $284 $1,131 quot;Core Earningsquot; adjustments: Net impact of securitization accounting (33) 107 (253) 118 (60) Net impact of derivative accounting 90 (11) 409 150 637 Net impact of Floor Income (43) (51) (54) (56) (204) Amortization of acquired intangibles (13) (16) (16) (16) (61) Total quot;Core Earningsquot; adjustments before income taxes 1 29 86 196 312 Net tax effect(b) (34) (11) 33 (49) (61) Total quot;Core Earningsquot; adjustments (33) 18 119 147 251 GAAP net income $223 $297 $431 $431 $1,382 GAAP diluted earnings per common share $0.49 $0.66 $0.95 $0.96 $3.05 (a)quot;Core Earningsquot; diluted earnings per common share $0.57 $0.62 $0.69 $0.63 $2.51 (b) Such tax effect is based upon the Company's quot;Core Earningsquot; effective tax rate for the respective period. The net tax effect results primarily from the exclusion of the permanent income tax impact of the equity forward contracts. -2-
  • SLM CORPORATION Condensed Statements of Income (Dollars in millions, except per share amounts) Quarters Ended Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2006 2006 2006 2006 To-Date 2005 2005 2005 2005 To-Date Net interest income $387 $357 $- $- $745 $347 $330 $384 $390 $1,451 Less: provision for losses 60 68 - - 128 47 79 12 65 203 Net interest income after provision for losses 327 289 - - 617 300 251 372 325 1,248 Gains on student loan securitizations 30 671 - - 701 50 262 - 241 552 Servicing and securitization revenue 99 83 - - 182 143 150 (16) 80 357 Guarantor servicing fees 27 33 - - 60 33 26 36 21 115 Debt management fees 92 90 - - 182 86 82 93 99 360 Collections revenue 56 67 - - 124 35 42 42 48 167 Other income (loss) (18) 190 - - 171 27 (50) 347 131 456 Operating expenses 323 316 - - 640 262 288 292 297 1,138 Income taxes 137 382 - - 519 187 176 150 216 729 Minority interest in net earnings of subsidiaries 1 1 - - 3 2 2 1 1 6 Net income 152 724 - - 875 223 297 431 431 1,382 Preferred dividends 9 9 - - 17 3 4 7 8 22 Net income attributable to common stock $143 $715 $- $- $858 $220 $293 $424 $423 $1,360 Basic earnings per common share $ .35 $1 .74 $- $- $2 .08 $ .52 $ .70 $1.02 $1.02 $3.25 (a) Diluted earnings per common share $ .34 $1 .52 $- $- $1 .96 $ .49 $ .66 $ .95 $ .96 $3.05 Dividends per common share $ .22 $ .25 $- $- $ .47 $ .19 $ .22 $ .22 $ .22 $ .85 (a) The second-quarter 2006 GAAP net income per diluted share figure of $1.52 reflects a change in the calculation of diluted shares under the reverse treasury stock method and corrects the $1.61 figure previously reported in the Company’s second-quarter 2006 press release issued on July 20, 2006 and filed on Form 8-K with the Securities and Exchange Commission (quot;SECquot;) on the same date. This change is described in Note 7 to the Notes to Consolidated Financial Statements in Part I Item I on pages 29-30 of the Company’s second-quarter 2006 Form 10-Q filed with the SEC on August 9, 2006. -3-
  • SLM CORPORATION Contingently Convertible Debentures (In thousands) Quarters Ended Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2006(1) 2006 2006 2006 To-Date 2005 2005 2005 2005 To-Date CSE impact of Co-Cos (shares) 30,312 30,312 - - 30,312 30,312 30,312 30,312 30,312 30,312 Co-Cos after-tax interest expense $14,817 $16,460 $- $- $31,277 $8,619 $10,297 $11,971 $13,685 $44,572 (1) For the three months ended March 31, 2006 there is no impact from Co-Cos on GAAP diluted earnings per common share because the effect of the assumed conversion is antidilutive. -4-
  • SLM CORPORATION quot;Core Earningsquot; Basis Student Loan Spread Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2006 2006 2006 2006 To-Date quot;Core Earningsquot; basis student loan yield 7.60 % 8.04 % -% -% 7.82 % Consolidation Loan Rebate Fees (0.55) (0.54) - - (0.54) Borrower Benefits (0.07) (0.07) - - (0.07) Premium and discount amortization (0.14) (0.19) - - (0.17) quot;Core Earningsquot; basis student loan net yield 6.84 7.24 - - 7.04 quot;Core Earningsquot; basis student loan cost of funds (4.97) (5.38) - - (5.18) quot;Core Earningsquot; basis student loan spread 1.87 % 1.86 % -% -% 1.86 % Average Balances (in millions of dollars) On-balance sheet student loans $82,850 $80,724 $- $- $81,781 Off-balance sheet student loans 42,069 47,716 - - 44,909 Managed student loans $124,919 $128,440 $- $- $126,690 Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2005 2005 2005 2005 To-Date quot;Core Earningsquot; basis student loan yield 5.63 % 5.92 % 6.55 % 7.11 % 6.32 % Consolidation Loan Rebate Fees (0.48) (0.48) (0.52) (0.54) (0.50) Borrower Benefits (0.10) (0.04) (0.04) (0.09) (0.07) Premium and discount amortization (0.17) (0.16) (0.18) (0.18) (0.17) quot;Core Earningsquot; basis student loan net yield 4.88 5.24 5.81 6.30 5.58 quot;Core Earningsquot; basis student loan cost of funds (3.08) (3.50) (4.00) (4.53) (3.80) quot;Core Earningsquot; basis student loan spread 1.80 % 1.74 % 1.81 % 1.77 % 1.78 % Average Balances (in millions of dollars) On-balance sheet student loans $67,661 $70,580 $77,541 $82,914 $74,724 Off-balance sheet student loans 41,892 43,791 40,742 38,497 41,220 Managed student loans $109,553 $114,371 $118,283 $121,411 $115,944 -5-
  • SLM CORPORATION Student Loan Spread Analysis - GAAP Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year On-Balance Sheet 2006 2006 2006 2006 To-Date Student loan yield, before Floor Income 7.51 % 7.92 % -% -% 7.71 % Gross Floor Income 0.07 0.04 - - 0.05 Consolidation Loan Rebate Fees (0.68) (0.67) - - (0.67) Borrower benefits (0.11) (0.11) - - (0.11) Premium and discount amortization (0.12) (0.16) - - (0.14) Student loan net yield 6.67 7.02 - - 6.84 Student loan cost of funds (4.84) (5.27) - - (5.05) Student loan spread, GAAP 1.83 % 1.75 % -% -% 1.79 % Average Balances (in millions of dollars) On-balance sheet student loans $82,850 $80,724 $- $- $81,781 Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year On-Balance Sheet 2005 2005 2005 2005 To-Date Student loan yield, before Floor Income 5.54 % 5.79 % 6.39 % 6.97 % 6.22 % Gross Floor Income 0.40 0.32 0.20 0.12 0.25 Consolidation Loan Rebate Fees (0.66) (0.63) (0.65) (0.66) (0.65) Borrower benefits (0.17) (0.11) (0.04) (0.13) (0.11) Premium and discount amortization (0.15) (0.15) (0.16) (0.18) (0.16) Student loan net yield 4.96 5.22 5.74 6.12 5.55 Student loan cost of funds (2.94) (3.43) (3.85) (4.35) (3.69) Student loan spread, GAAP 2.02 % 1.79 % 1.89 % 1.77 % 1.86 % Average Balances (in millions of dollars) On-balance sheet student loans $67,661 $70,580 $77,541 $82,914 $74,724 -6-
  • SLM CORPORATION Servicing & Securitization Revenue (Dollars in thousands) Quarters Ended Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2006 2006 2006 2006 To-Date 2005 2005 2005 2005 To-Date Servicing revenue $79,451 $88,229 $- $- $167,680 $84,592 $86,357 $78,983 $72,834 $322,766 Securitization revenue 19,480 (5,386) - - 14,094 58,369 63,574 (95,177) 7,197 33,963 Total servicing & securitization revenue $98,931 $82,843 $- $- $181,774 $142,961 $149,931 $(16,194) $80,031 $356,729 Average Balance Managed Student Loans (Dollars in millions) Quarters Ended Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2006 2006 2006 2006 To-Date 2005 2005 2005 2005 To-Date Average on-balance sheet student loans $82,850 $80,724 $- $- $81,781 $67,661 $70,580 $77,541 $82,914 $74,724 Average off-balance sheet student loans 42,069 47,716 - - 44,909 41,892 43,791 40,742 38,497 41,220 Average Managed student loans $124,919 $128,440 $- $- $126,690 $109,553 $114,371 $118,283 $121,411 $115,944 Quarters Ended Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2006 2006 2006 2006 To-Date 2005 2005 2005 2005 To-Date Servicing and securitization revenue as a percentage of average off-balance sheet student loans (annualized) 0.95 % 0.70 % 0.00 % 0.00 % 0.82 % 1.38 % 1.37 % (0.16) % 0.82 % 0.87 % -7-
  • SLM CORPORATION Student Loan Purchases (Dollars in millions) Quarters Ended Year-to-date Mar. 31, Jun. 30, Sep. 30, Dec. 31, 2006 2006 2006 2006 FFELP Private Total Preferred Channel $6,896 $5,896 $- $- $9,411 $3,381 $12,792 Other commitment clients 116 89 - - 202 3 205 Spot purchases 59 404 - - 463 - 463 Consolidations from third parties 897 853 - - 1,741 9 1,750 Acquisitions from off-balance sheet securitized trusts, primarily consolidations 1,329 2,123 - - 3,436 16 3,452 Capitalized interest, premiums and discounts 369 405 - - 722 52 774 Total on-balance sheet student loan acquisitions 9,666 9,770 - - 15,975 3,461 19,436 Consolidations to SLM Corporation from off-balance sheet securitized trusts (1,329) (2,123) - - (3,436) (16) (3,452) Capitalized interest, premiums and discounts -off-balance sheet securitized trusts 214 287 - - 324 177 501 Total Managed student loan acquisitions $8,551 $7,934 $- $- $12,863 $3,622 $16,485 Quarters Ended Year-to-date Mar. 31, Jun. 30, Sep. 30, Dec. 31, 2005 2005 2005 2005 FFELP Private Total Preferred Channel $5,645 $5,692 $5,693 $3,863 $14,847 $6,046 $20,893 Other commitment clients 86 161 148 161 500 56 556 Spot purchases 419 480 669 312 1,880 - 1,880 Consolidations from third parties 913 926 1,306 1,527 4,671 1 4,672 Acquisitions from off-balance sheet securitized trusts, primarily consolidations 1,827 2,421 3,207 2,032 9,487 - 9,487 Acquisition of Idaho Transferee Corporation - - 43 - 43 43 Capitalized interest, premiums and discounts 334 321 320 379 1,364 (10) 1,354 Total on-balance sheet student loan acquisitions 9,224 10,001 11,386 8,274 32,792 6,093 38,885 Consolidations to SLM Corporation from off-balance sheet securitized trusts (1,827) (2,421) (3,207) (2,032) (9,487) - (9,487) Capitalized interest, premiums and discounts -off-balance sheet securitized trusts 152 206 173 277 533 275 808 Total Managed student loan acquisitions $7,549 $7,786 $8,352 $6,519 $23,838 $6,368 $30,206 -8-
  • SLM CORPORATION Managed Loans (Dollars in millions) Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2006 2006 2006 2006 To-Date Beginning balance $122,529 $126,870 $- $- $122,529 Acquisitions 7,997 7,274 - - 15,271 Capitalized interest 554 660 - - 1,214 Repayments, claims, other (2,674) (2,521) - - (5,195) Charge-offs to reserves and securitization trusts (33) (41) - - (74) Loan sales (9) (154) - - (163) Loans consolidated from SLM Corporation (1,494) (1,944) - - (3,438) Ending balance $126,870 $130,144 $- $- $130,144 Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2005 2005 2005 2005 To-Date Beginning balance $107,438 $111,699 $116,500 $120,634 $107,438 Acquisitions 7,088 7,297 7,892 5,872 28,149 Capitalized interest 461 489 460 647 2,057 Repayments, claims, other (2,659) (2,200) (2,715) (2,515) (10,089) Charge-offs to reserves and securitization trusts (31) (39) (49) (41) (160) Loan sales (15) (3) (149) (1) (168) Loans consolidated from SLM Corporation (583) (743) (1,305) (2,067) (4,698) Ending balance $111,699 $116,500 $120,634 $122,529 $122,529 -9-
  • SLM CORPORATION Floor Income (Dollars in thousands) Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2006 2006 2006 2006 To-Date Student Loan Income Variable rate $5 $2 $- $- $7 Fixed rate (192) (667) - - (859) Total student loan income (187) (665) - - (852) Securitization Revenue Securitization revenue $(3,822) $(2,143) $- $- $(5,965) Total floor income (4,009) (2,808) - - (6,817) Floor Income Excluded From quot;Core Earningsquot; (Dollars in thousands) Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2006 2006 2006 2006 To-Date Student Loan Income Variable rate $- $- $- $- $- Fixed rate - - - - - Total excluded quot;Core Earningsquot; floor income - - - - - -10A-
  • SLM CORPORATION Floor Income (Dollars in thousands) Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2005 2005 2005 2005 To-Date Student Loan Income Variable rate $57 $136 $40 $13 $246 Fixed rate 6,715 3,546 1,714 163 12,138 Total student loan income 6,772 3,682 1,754 176 12,384 Securitization Revenue Securitization revenue $(16,976) $(15,109) $(10,773) $(6,705) $(49,563) Total floor income (10,204) (11,427) (9,019) (6,529) (37,179) Floor Income Excluded From quot;Core Earningsquot; (Dollars in thousands) Quarters Ended Mar. 31, Jun. 30, Sep. 30, Dec. 31, Year 2005 2005 2005 2005 To-Date Student Loan Income Variable rate $64 $140 $60 $14 $278 Fixed rate 11,243 5,395 2,398 121 19,157 Total excluded quot;Core Earningsquot; floor income 11,307 5,535 2,458 135 19,435 -10B-
  • SLM CORPORATION Average Balance Sheets (Dollars in millions) Quarters Ended Mar. 31, 2006 Jun. 30, 2006 Sep. 30, 2006 Dec. 31, 2006 Year-to-Date Amount Rate Amount Rate Amount Rate Amount Rate Amount Rate Average Assets FFELP Stafford and Other Student Loans $19,522 6.20 % $20,562 6.58 % $- 0.00 % $- 0.00 % $20,045 6.39 % Consolidation Loans 54,312 6.13 52,201 6.47 - 0.00 - 0.00 53,251 6.30 Private Education Loans 9,016 10.86 7,961 11.77 - 0.00 - 0.00 8,485 11.29 Other loans 1,172 8.14 1,090 8.72 - 0.00 - 0.00 1,131 8.42 Cash and investments 7,042 5.52 8,867 5.67 - 0.00 - 0.00 7,959 5.61 Total interest earning assets 91,064 6.59 % 90,681 6.91 % - 0.00 % - 0.00 % 90,871 6.75 % Non-interest earning assets 7,963 8,648 - - 8,307 Total assets $99,027 $99,329 $- $- $99,178 Average Liabilities and Stockholders' Equity Short-term borrowings $4,174 4.78 % $4,393 5.07 % $- 0.00 % $- 0.00 % $4,284 4.93 % Long-term borrowings 87,327 4.85 87,364 5.27 - 0.00 - 0.00 87,346 5.06 Total interest bearing liabilities 91,501 4.84 % 91,757 5.26 % - 0.00 % - 0.00 % 91,630 5.05 % Non-interest bearing liabilities 3,703 3,501 - - 3,600 Stockholders' equity 3,823 4,071 - - 3,948 Total liabilities and stockholders' equity $99,027 $99,329 $- $- $99,178 Net interest margin 1.73 % 1.58 % 0.00 % 0.00 % 1.65 % -11A-
  • SLM CORPORATION Average Balance Sheets (Dollars in millions) Quarters Ended Mar. 31, 2005 Jun. 30, 2005 Sep. 30, 2005 Dec. 31, 2005 Year-to-Date Amount Rate Amount Rate Amount Rate Amount Rate Amount Rate Average Assets FFELP Stafford and Other Student Loans $18,522 4.18 % $20,673 4.63 % $21,574 4.97 % $22,062 5.67 % $20,720 4.90 % Consolidation Loans 42,873 4.81 43,531 5.11 48,774 5.51 53,020 5.69 47,082 5.31 Private Education Loans 6,266 8.39 6,376 7.98 7,193 9.57 7,832 10.33 6,922 9.16 Other loans 1,097 7.66 1,051 7.83 1,036 8.40 1,106 8.29 1,072 8.04 Cash and investments 7,756 3.26 5,206 4.24 6,621 4.26 7,075 5.19 6,662 4.22 Total interest earning assets 76,514 4.83 % 76,837 5.20 % 85,198 5.65 % 91,095 6.08 % $82,458 5.48 % Non-interest earning assets 6,385 6,627 6,898 8,031 6,990 Total assets $82,899 $83,464 $92,096 $99,126 $89,448 Average Liabilities and Stockholders' Equity Short-term borrowings $3,458 3.54 % $5,308 3.63 % $4,765 3.95 % $4,523 4.56 % $4,517 3.93 % Long-term borrowings 73,258 2.96 71,673 3.45 80,125 3.87 86,606 4.35 77,958 3.70 Total interest bearing liabilities 76,716 2.98 % 76,981 3.46 % 84,890 3.87 % 91,129 4.36 % 82,475 3.71 % Non-interest bearing liabilities 3,225 3,309 3,596 4,079 3,555 Stockholders' equity 2,958 3,174 3,610 3,918 3,418 Total liabilities and stockholders' equity $82,899 $83,464 $92,096 $99,126 $89,448 Net interest margin 1.84 % 1.73 % 1.80 % 1.71 % 1.77 % -11B-