SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 19, 2010
SLM CORPORATION
(Exact name of registrant as specified in its charter)
 	 	 	 	 	
DELAWARE	 	File No. 001-13251	 	52-2013874	
(State or other jurisdiction	 	(Commission File Number)	 	(IRS Employer	
of incorporation)	 	 	 	Identification No.)	
12061 Bluemont Way, Reston, Virginia 20190
(Address if principal executive offices)(zip code)
Registrant’s telephone number, including area code: (703) 810-3000
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 	 	 	
o	 	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

o	 	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

o	 	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

o	 	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 
Item 2.02 Results of Operations and Financial Condition
     On October 19, 2010, SLM Corporation (the “Company”) issued a press release with respect to its earnings for the fiscal quarter ended September 30, 2010, which is furnished as Exhibit 99.1 to this Current Report on Form 8-K. The Supplemental Financial Information Release for the Third Quarter 2010 is available on the Company’s Web site at www.salliemae.com/about/investors/stockholderinfo/earningsinfo . Presentation slides used during the Company’s investor conference call, set for October 20, 2010, at 8:00 a.m. EDT., may be accessed at www.salliemae.com/about/investors/stockholderinfo/webcast  no later than the starting time of the conference call.
2

 
SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 	 	 	 	 	
 	SLM CORPORATION
 	 	
 	By:  	/s/ JOHN F. REMONDI 	 	
 	 	Name:  	John F. Remondi 	 	
 	 	Title:  	Vice Chairman and Chief Financial Officer	 	
 	
Dated: October 19, 2010
3

 
SLM CORPORATION
Form 8-K
CURRENT REPORT
EXHIBIT INDEX
 	 	 	
Exhibit	 	 	
No.	 	Description	
99.1	 	Press Release dated October 19, 2010	
4

Exhibit 99.1

FOR IMMEDIATE RELEASE
SALLIE MAE REPORTS THIRD-QUARTER 2010 RESULTS
RESTON, Va., Oct. 19, 2010 — SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, reported core earnings net income of $189 million ($.35 diluted earnings per share) for the third-quarter 2010, compared to $164 million ($.26 diluted earnings per share) for the year-ago quarter.
“This quarter’s results are indicative of our current earnings power until we finish rightsizing the company in 2011,” said Albert L. Lord, vice chairman and CEO. “We recognize the magnitude of this task and are confident that we will achieve it.”
On a GAAP basis, the company reported a net loss of $495 million ($1.06 diluted loss per share), vs. $159 million net income ($.25 diluted earnings per share) in the same quarter last year, after writing off $660 million of goodwill and intangible assets and an unrealized, net loss from the mark to market on hedging activity. The former is primarily the result of new market data and the business impact of recent legislation: the company determined that goodwill and intangible assets within certain operating segments were impaired. The non-cash charge does not impact the company’s tangible capital or capital ratios.
Loan Originations and Servicing
During the quarter, the company originated $835 million in private education loans, 92 percent of which had cosigners.
In addition to its owned and serviced loans, the company serviced in the third quarter approximately 2.5 million accounts on behalf of the federal government and other third-party clients. Since quarter end, the servicing operation has added 1.3 million third-party accounts.
In September, the company announced an agreement to purchase an interest in $28 billion of securitized federal student loans and related assets from The Student Loan Corporation. The transaction is expected to close by year-end 2010.
Private Education Loan Portfolio Quality
The company had $25.8 billion of private education loans in repayment at Sept. 30, compared to $21.7 billion one year earlier. At the same time, third-quarter 2010 delinquencies as a percentage of private education loans in repayment (11.1 percent) declined from the previous quarter (11.9 percent) and the year-ago quarter (12.6 percent). This favorable trend reflects the improving quality of the portfolio.
The third-quarter 2010 private education loan loss provision was $330 million, down from both the previous and year-ago quarters. Net charge-offs were $348 million in the 2010 third quarter, an

 
expected seasonal increase from the second quarter’s $336 million related to the timing of graduates’ entry into repayment, and a decrease from the year-ago quarter’s $443 million.
Funding and Liquidity
In the third quarter, the company completed a $760 million federal student loan securitization and two private loan securitizations totaling $2.6 billion.
The company used the private loan transaction proceeds to redeem $1.5 billion of higher-priced issuances and to net approximately $1 billion.
Other Income and Operating Expenses
Core earnings fee income was $227 million in the third quarter, compared to the year-ago quarter’s $337 million that included a $74 million gain from debt repurchases.
Core earnings operating expenses excluding restructuring and related asset impairments were $319 million in the third-quarter 2010, compared to $331 million in the previous quarter and $303 million in the year-ago quarter.
GAAP
Sallie Mae reports financial results on a GAAP basis and also presents certain core earnings performance measures. The company’s management, equity investors, credit rating agencies and debt capital providers use these core earnings measures to monitor the company’s business performance. Both a description of the core earnings treatment and a full reconciliation to the GAAP income statement can be found at  www.SallieMae.com/investors  by clicking on Earnings.
The company adopted Financial Accounting Standards Board updates as of Jan. 1, 2010, and as a result, the company’s GAAP and core earnings presentations for securitization accounting are the same, and managed and on-balance sheet (GAAP) student loan portfolios are now the same size.
The primary difference between the company’s third-quarter 2010 core earnings and GAAP results is the impact of a $660 million goodwill and intangible asset pre-tax impairment and a $183 million unrealized, mark-to-market, pre-tax loss on certain derivative contracts, both of which are recognized in GAAP but not in core earnings results.
Presentation slides for the conference call discussed below may be accessed at www.SallieMae.com/investors under the Webcasts tab.
***
The company will host an earnings conference call tomorrow, Oct. 20, at 8 a.m. EDT. Sallie Mae executives will be on hand to discuss various highlights of the quarter and to answer questions related to the company’s performance. Individuals interested in participating in the call should dial (877) 356-5689 (USA and Canada) or dial (706) 679-0623 (international) and use access code 12880301 starting at 7:45 a.m. EDT. A live audio webcast of the conference call may be accessed at www.SallieMae.com/investors . Investors may access a replay of the conference call via the company’s website within one hour after the call’s conclusion. A telephone replay may be accessed two hours after the

 
call’s conclusion through Nov. 4 by dialing (800) 642-1687 (USA and Canada) or (706) 645-9291 (international) with access code 12880301.
This press release contains “forward-looking statements” based on management’s current expectations as of the date of this release . These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Because such statements inherently involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks include, among others, changes in the terms of student loans and the educational credit marketplace arising from the implementation of applicable laws and regulations, and from changes in such laws and regulations, adverse results in legal disputes, changes in the demand for educational financing or in financing preferences of educational institutions, students and their families, limited liquidity, increased financing costs and changes in the general interest rate environment. For more information, see the company’s filings with the Securities and Exchange Commission, including the forward-looking statements contained in the company’s Supplemental Financial Information Third Quarter 2010. All information in this release is as of Oct. 19, 2010. The company does not undertake any obligation to update or revise these forward-looking statements to conform the statement to actual results or changes in the company’s expectations.
***
SLM Corporation (NYSE: SLM), commonly known as Sallie Mae, is the nation’s leading saving, planning and paying for education company. Sallie Mae’s saving programs, planning resources and financing options have helped more than 31 million people make the investment in higher education. The company services $202 billion in education loans and serves 10 million student and parent customers. Its affiliate Upromise Investments, Inc., manages $27 billion in 529 college savings plans, and members of Upromise by Sallie Mae have earned more than $575 million in rewards to help pay for college. Sallie Mae offers services to a range of institutional clients, including colleges and universities, student loan guarantors and state and federal agencies. More information is available at www.SallieMae.com. SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.
# # #
CONTACTS:
 	 	 	
Media	 	Martha Holler, (703) 984-5178, martha.holler@SallieMae.com
Patricia Nash Christel, (703) 984-5382,  patricia.christel@SallieMae.com	

Investors	 	Steve McGarry, (703) 984-6746, steven.mcgarry@SallieMae.com
Joe Fisher, (703) 984-5755,  joe.fisher@SallieMae.com	

 
 
SLM CORPORATION

Supplemental Earnings Disclosure

September 30, 2010
(In millions, except per share amounts)
(Unaudited)

 	 	Quarters ended	 	 	Nine months ended	 	
 	 	September 30,
	 	 	June 30,
	 	 	September 30,
	 	 	September 30,
	 	 	September 30,
	 	
 	 	2010	 	 	2010	 	 	2009	 	 	2010	 	 	2009	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
SELECTED FINANCIAL INFORMATION AND RATIOS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
GAAP Basis(1)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation	 	$	(495	)	 	$	338	 	 	$	159	 	 	$	83	 	 	$	15	 	
Diluted earnings (loss) per common share attributable to SLM
Corporation common shareholders	 	$	(1.06	)	 	$	.63	 	 	$	.25	 	 	$	.06	 	 	$	(.17	)	
Return on assets	 	 	(1.00	)%	 	 	.68	%	 	 	.37	%	 	 	.06	%	 	 	.01	%	
“Core Earnings” Basis(1)(2)(3)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
“Core Earnings” net income attributable to SLM Corporation	 	$	189	 	 	$	209	 	 	$	164	 	 	$	611	 	 	$	348	 	
“Core Earnings” diluted earnings per common share attributable to SLM
Corporation common shareholders	 	$	.35	 	 	$	.39	 	 	$	.26	 	 	$	1.13	 	 	$	.54	 	
“Core Earnings” return on assets	 	 	.38	%	 	 	.42	%	 	 	.31	%	 	 	.42	%	 	 	.23	%	
OTHER OPERATING STATISTICS	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Average on-balance sheet student loans	 	$	184,139	 	 	$	184,571	 	 	$	157,530	 	 	$	183,424	 	 	$	153,622	 	
Average off-balance sheet student loans	 	 	—	 	 	 	—	 	 	 	33,929	 	 	 	—	 	 	 	34,797	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Average Managed student loans	 	$	184,139	 	 	$	184,571	 	 	$	191,459	 	 	$	183,424	 	 	$	188,419	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ending on-balance sheet student loans, net	 	$	182,135	 	 	$	183,643	 	 	$	158,846	 	 	 	 	 	 	 	 	 	
Ending off-balance sheet student loans, net	 	 	—	 	 	 	—	 	 	 	33,335	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ending Managed student loans, net	 	$	182,135	 	 	$	183,643	 	 	$	192,181	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ending Managed FFELP Stafford and Other Student Loans, net	 	$	66,681	 	 	$	67,457	 	 	$	73,040	 	 	 	 	 	 	 	 	 	
Ending Managed FFELP Consolidation Loans, net	 	 	79,912	 	 	 	81,035	 	 	 	84,235	 	 	 	 	 	 	 	 	 	
Ending Managed Private Education Loans, net	 	 	35,542	 	 	 	35,151	 	 	 	34,906	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Ending Managed student loans, net	 	$	182,135	 	 	$	183,643	 	 	$	192,181	 	 	 	 	 	 	 	 	 	

 
 	 	 	
(1)	 	Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders from continuing and discontinued operations on both a GAAP basis and “Core Earnings” basis for the quarters ended September 30, 2010, June 30, 2010 and September 30, 2009 and for the nine months ended September 30, 2010 and 2009 was:	

 	 	Quarters ended	 	 	Nine months ended	 	
 	 	September 30,
	 	 	June 30,
	 	 	September 30,
	 	 	September 30,
	 	 	September 30,
	 	
 	 	2010	 	 	2010	 	 	2009	 	 	2010	 	 	2009	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
GAAP Basis	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	(1.07	)	 	$	.63	 	 	$	.26	 	 	$	.05	 	 	$	(.04	)	
Discontinued operations	 	 	.01	 	 	 	—	 	 	 	(.01	)	 	 	.01	 	 	 	(.13	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	(1.06	)	 	$	.63	 	 	$	.25	 	 	$	.06	 	 	$	(.17	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
“Core Earnings” Basis(2)(3)	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	.34	 	 	$	.39	 	 	$	.27	 	 	$	1.12	 	 	$	.67	 	
Discontinued operations	 	 	.01	 	 	 	—	 	 	 	(.01	)	 	 	.01	 	 	 	(.13	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	.35	 	 	$	.39	 	 	$	.26	 	 	$	1.13	 	 	$	.54	 	

 	 	 	
(2)	 	“Core Earnings” are non-GAAP measures and do not represent a comprehensive basis of accounting. For a greater explanation of “Core Earnings,” see the section titled “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income” and subsequent sections.	
 	 	 	
(3)	 	“Core Earnings” does not include Floor Income unless it is Fixed Rate Floor Income that is economically hedged. The amount of this Economic Floor Income (net of tax) excluded from “Core Earnings” for the three months ended September 30, 2010, June 30, 2010 and September 30, 2009 and for the nine months ended September 30, 2010 and 2009 was:	

 	 	Quarters ended	 	 	Nine months ended	 	
 	 	September 30,
	 	 	June 30,
	 	 	September 30,
	 	 	September 30,
	 	 	September 30,
	 	
 	 	2010	 	 	2010	 	 	2009	 	 	2010	 	 	2009	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Economic Floor Income earned on Managed loans, not included in “Core Earnings” (net of tax)	 	$	12	 	 	$	1	 	 	$	23	 	 	$	16	 	 	$	191	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total Economic Floor Income earned, not included in “Core Earnings” (net of tax) per common share attributable to SLM Corporation common shareholders	 	$	.02	 	 	$	—	 	 	$	.05	 	 	$	.03	 	 	$	.41	 	

 
SLM CORPORATION

Consolidated Balance Sheets
(In thousands, except per share amounts)
(Unaudited)

 	 	September 30,
	 	 	June 30,
	 	 	September 30,
	 	
 	 	2010	 	 	2010	 	 	2009	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Assets	 	 	 	 	 	 	 	 	 	 	 	 	
FFELP Stafford and Other Student Loans (net of allowance for losses of $120,386; $122,192 and $101,343, respectively)	 	$	46,026,138	 	 	$	47,280,248	 	 	$	43,257,743	 	
FFELP Stafford Loans Held-for-Sale	 	 	20,655,561	 	 	 	20,177,860	 	 	 	23,846,566	 	
FFELP Consolidation Loans (net of allowance for losses of $68,880; $66,493; and $54,384, respectively)	 	 	79,911,599	 	 	 	81,034,596	 	 	 	69,246,231	 	
Private Education Loans (net of allowance for losses of $2,035,034; $2,042,413; and $1,401,496, respectively)	 	 	35,541,640	 	 	 	35,150,686	 	 	 	22,494,955	 	
Cash and investments	 	 	6,992,621	 	 	 	7,680,116	 	 	 	7,021,808	 	
Restricted cash and investments	 	 	5,837,546	 	 	 	6,252,914	 	 	 	5,760,583	 	
Retained Interest in off-balance sheet securitized loans	 	 	—	 	 	 	—	 	 	 	1,838,203	 	
Goodwill and acquired intangible assets, net	 	 	488,220	 	 	 	1,157,888	 	 	 	1,224,272	 	
Other assets	 	 	10,653,449	 	 	 	8,584,404	 	 	 	11,753,563	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total assets	 	$	206,106,774	 	 	$	207,318,712	 	 	$	186,443,924	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Liabilities	 	 	 	 	 	 	 	 	 	 	 	 	
Short-term borrowings	 	$	45,388,432	 	 	$	46,472,435	 	 	$	53,406,554	 	
Long-term borrowings	 	 	153,003,935	 	 	 	152,250,912	 	 	 	124,647,818	 	
Other liabilities	 	 	3,140,330	 	 	 	3,508,617	 	 	 	3,400,527	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities	 	 	201,532,697	 	 	 	202,231,964	 	 	 	181,454,899	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Commitments and contingencies	 	 	 	 	 	 	 	 	 	 	 	 	
Equity	 	 	 	 	 	 	 	 	 	 	 	 	
Preferred stock, par value $.20 per share, 20,000 shares authorized:	 	 	 	 	 	 	 	 	 	 	 	 	
Series A: 3,300; 3,300; and 3,300 shares, respectively, issued at stated value of $50 per share	 	 	165,000	 	 	 	165,000	 	 	 	165,000	 	
Series B: 4,000; 4,000; and 4,000 shares, respectively, issued at stated value of $100 per share	 	 	400,000	 	 	 	400,000	 	 	 	400,000	 	
Series C: 7.25% mandatory convertible preferred stock: 810; 810; and 1,012 shares, respectively, issued at liquidation preference of $1,000 per share	 	 	810,370	 	 	 	810,370	 	 	 	1,012,370	 	
Common stock, par value $.20 per share, 1,125,000 shares authorized:	 	 	 	 	 	 	 	 	 	 	 	 	
553,787; 553,571; and 541,849 shares, respectively, issued	 	 	110,758	 	 	 	110,715	 	 	 	108,362	 	
Additional paid-in capital	 	 	5,127,313	 	 	 	5,122,583	 	 	 	4,862,071	 	
Accumulated other comprehensive loss, net of tax benefit	 	 	(44,159	)	 	 	(43,333	)	 	 	(44,143	)	
Retained earnings (loss)	 	 	(122,565	)	 	 	391,169	 	 	 	346,347	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total SLM Corporation stockholders’ equity before treasury stock	 	 	6,446,717	 	 	 	6,956,504	 	 	 	6,850,007	 	
Common stock held in treasury: 68,011; 67,775 and 67,159 shares, respectively	 	 	1,872,640	 	 	 	1,869,760	 	 	 	1,860,989	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total SLM Corporation stockholders’ equity	 	 	4,574,077	 	 	 	5,086,744	 	 	 	4,989,018	 	
Noncontrolling interest	 	 	—	 	 	 	4	 	 	 	7	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total equity	 	 	4,574,077	 	 	 	5,086,748	 	 	 	4,989,025	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Total liabilities and equity	 	$	206,106,774	 	 	$	207,318,712	 	 	$	186,443,924	 	

 
Supplemental information — assets and liabilities of consolidated variable interest entities:

 	 	September 30,
	 	 	June 30,
	 	 	September 30,
	 	
 	 	2010	 	 	2010	 	 	2009	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
FFELP Stafford and Other Student Loans	 	$	65,557,473	 	 	$	66,130,975	 	 	$	64,993,570	 	
FFELP Consolidation Loans	 	 	78,396,367	 	 	 	79,558,032	 	 	 	68,696,728	 	
Private Education Loans	 	 	24,511,699	 	 	 	23,561,695	 	 	 	9,200,713	 	
Restricted cash and investments	 	 	5,522,584	 	 	 	5,881,972	 	 	 	4,658,009	 	
Other assets	 	 	4,373,606	 	 	 	2,856,872	 	 	 	4,334,239	 	
Short-term borrowings	 	 	36,806,456	 	 	 	37,014,277	 	 	 	46,553,608	 	
Long-term borrowings	 	 	128,473,542	 	 	 	127,904,461	 	 	 	92,222,000	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net assets of consolidated variable interest entities	 	$	13,081,731	 	 	$	13,070,808	 	 	$	13,107,651	 	

2

 
SLM CORPORATION

Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)

 	 	Quarters ended	 	 	Nine months ended	 	
 	 	September 30,
	 	 	June 30,
	 	 	September 30,
	 	 	September 30,
	 	 	September 30,
	 	
 	 	2010	 	 	2010	 	 	2009	 	 	2010	 	 	2009	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
FFELP Stafford and Other Student Loans	 	$	320,234	 	 	$	325,042	 	 	$	303,192	 	 	$	928,713	 	 	$	969,947	 	
FFELP Consolidation Loans	 	 	564,586	 	 	 	550,920	 	 	 	481,592	 	 	 	1,638,831	 	 	 	1,431,644	 	
Private Education Loans	 	 	610,893	 	 	 	575,340	 	 	 	396,339	 	 	 	1,751,387	 	 	 	1,176,399	 	
Other loans	 	 	7,190	 	 	 	7,254	 	 	 	11,042	 	 	 	23,440	 	 	 	45,930	 	
Cash and investments	 	 	7,630	 	 	 	6,299	 	 	 	6,881	 	 	 	18,878	 	 	 	19,896	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total interest income	 	 	1,510,533	 	 	 	1,464,855	 	 	 	1,199,046	 	 	 	4,361,249	 	 	 	3,643,816	 	
Total interest expense	 	 	638,599	 	 	 	568,933	 	 	 	673,870	 	 	 	1,738,916	 	 	 	2,519,876	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net interest income	 	 	871,934	 	 	 	895,922	 	 	 	525,176	 	 	 	2,622,333	 	 	 	1,123,940	 	
Less: provisions for loan losses	 	 	358,110	 	 	 	382,239	 	 	 	321,127	 	 	 	1,099,469	 	 	 	849,518	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net interest income after provisions for loan losses	 	 	513,824	 	 	 	513,683	 	 	 	204,049	 	 	 	1,522,864	 	 	 	274,422	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other income (loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Securitization servicing and Residual Interest revenue	 	 	—	 	 	 	—	 	 	 	155,065	 	 	 	—	 	 	 	147,248	 	
Gains (losses) on sales of loans and securities, net	 	 	1,607	 	 	 	(3,515	)	 	 	12,452	 	 	 	6,745	 	 	 	12,752	 	
Gains (losses) on derivative and hedging activities, net	 	 	(344,458	)	 	 	95,316	 	 	 	(111,556	)	 	 	(331,552	)	 	 	(569,326	)	
Contingency fee revenue	 	 	83,746	 	 	 	88,181	 	 	 	82,200	 	 	 	252,238	 	 	 	230,383	 	
Collections revenue	 	 	13,097	 	 	 	17,219	 	 	 	21,241	 	 	 	52,282	 	 	 	88,830	 	
Guarantor servicing fees	 	 	15,996	 	 	 	22,457	 	 	 	48,087	 	 	 	74,543	 	 	 	106,867	 	
Other	 	 	90,502	 	 	 	164,899	 	 	 	150,006	 	 	 	445,811	 	 	 	741,229	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other income (loss)	 	 	(139,510	)	 	 	384,557	 	 	 	357,495	 	 	 	500,067	 	 	 	757,983	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses	 	 	319,219	 	 	 	336,810	 	 	 	303,130	 	 	 	974,337	 	 	 	887,008	 	
Goodwill and acquired intangible assets impairment and amortization expense	 	 	669,668	 	 	 	9,710	 	 	 	9,774	 	 	 	689,090	 	 	 	29,176	 	
Restructuring expenses	 	 	11,082	 	 	 	17,666	 	 	 	2,492	 	 	 	55,030	 	 	 	9,598	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total expenses	 	 	999,969	 	 	 	364,186	 	 	 	315,396	 	 	 	1,718,457	 	 	 	925,782	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from continuing operations, before income tax expense (benefit)	 	 	(625,655	)	 	 	534,054	 	 	 	246,148	 	 	 	304,474	 	 	 	106,623	 	
Income tax expense (benefit)	 	 	(127,558	)	 	 	196,103	 	 	 	80,423	 	 	 	224,340	 	 	 	31,796	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) from continuing operations	 	 	(498,097	)	 	 	337,951	 	 	 	165,725	 	 	 	80,134	 	 	 	74,827	 	
Income (loss) from discontinued operations, net of tax	 	 	3,211	 	 	 	—	 	 	 	(6,417	)	 	 	3,211	 	 	 	(59,133	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	 	(494,886	)	 	 	337,951	 	 	 	159,308	 	 	 	83,345	 	 	 	15,694	 	
Less: net income attributable to noncontrolling interest	 	 	61	 	 	 	133	 	 	 	198	 	 	 	334	 	 	 	690	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation	 	 	(494,947	)	 	 	337,818	 	 	 	159,110	 	 	 	83,011	 	 	 	15,004	 	
Preferred stock dividends	 	 	18,787	 	 	 	18,711	 	 	 	42,627	 	 	 	56,176	 	 	 	94,822	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation common stock	 	$	(513,734	)	 	$	319,107	 	 	$	116,483	 	 	$	26,835	 	 	$	(79,818	)	

 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations, net of tax	 	$	(498,158	)	 	$	337,818	 	 	$	165,527	 	 	$	79,800	 	 	$	74,137	 	
Discontinued operations, net of tax	 	 	3,211	 	 	 	—	 	 	 	(6,417	)	 	 	3,211	 	 	 	(59,133	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation	 	$	(494,947	)	 	$	337,818	 	 	$	159,110	 	 	$	83,011	 	 	$	15,004	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Basic earnings (loss) per common share attributable to SLM Corporation common shareholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	(1.07	)	 	$	.66	 	 	$	.26	 	 	$	.05	 	 	$	(.04	)	
Discontinued operations	 	 	.01	 	 	 	—	 	 	 	(.01	)	 	 	.01	 	 	 	(.13	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	(1.06	)	 	$	.66	 	 	$	.25	 	 	$	.06	 	 	$	(.17	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Average common shares outstanding	 	 	484,936	 	 	 	484,832	 	 	 	470,280	 	 	 	484,678	 	 	 	467,960	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations	 	$	(1.07	)	 	$	.63	 	 	$	.26	 	 	$	.05	 	 	$	(.04	)	
Discontinued operations	 	 	.01	 	 	 	—	 	 	 	(.01	)	 	 	.01	 	 	 	(.13	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total	 	$	(1.06	)	 	$	.63	 	 	$	.25	 	 	$	.06	 	 	$	(.17	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Average common and common equivalent shares outstanding	 	 	484,936	 	 	 	527,391	 	 	 	471,058	 	 	 	486,209	 	 	 	467,960	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Dividends per common share attributable to SLM
Corporation common shareholders	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	 	$	—	 	

3

 
 
SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income
(In thousands)
(Unaudited)

 	 	Quarter ended September 30, 2010	 	
 	 	 	 	 	Asset
	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	Performance
	 	 	 	 	 	Total “Core
	 	 	 	 	 	Total
	 	
 	 	Lending	 	 	Group	 	 	Other	 	 	Earnings”(2)	 	 	Adjustments	 	 	GAAP	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
FFELP Stafford and Other Student Loans	 	$	319,153	 	 	$	—	 	 	$	—	 	 	$	319,153	 	 	$	1,081	 	 	$	320,234	 	
FFELP Consolidation Loans	 	 	409,973	 	 	 	—	 	 	 	—	 	 	 	409,973	 	 	 	154,613	 	 	 	564,586	 	
Private Education Loans	 	 	610,893	 	 	 	—	 	 	 	—	 	 	 	610,893	 	 	 	—	 	 	 	610,893	 	
Other loans	 	 	7,190	 	 	 	—	 	 	 	—	 	 	 	7,190	 	 	 	—	 	 	 	7,190	 	
Cash and investments	 	 	3,214	 	 	 	—	 	 	 	4,416	 	 	 	7,630	 	 	 	—	 	 	 	7,630	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total interest income	 	 	1,350,423	 	 	 	—	 	 	 	4,416	 	 	 	1,354,839	 	 	 	155,694	 	 	 	1,510,533	 	
Total interest expense	 	 	598,890	 	 	 	—	 	 	 	—	 	 	 	598,890	 	 	 	39,709	 	 	 	638,599	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net interest income	 	 	751,533	 	 	 	—	 	 	 	4,416	 	 	 	755,949	 	 	 	115,985	 	 	 	871,934	 	
Less: provisions for loan losses	 	 	358,110	 	 	 	—	 	 	 	—	 	 	 	358,110	 	 	 	—	 	 	 	358,110	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net interest income after provisions for loan losses	 	 	393,423	 	 	 	—	 	 	 	4,416	 	 	 	397,839	 	 	 	115,985	 	 	 	513,824	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other income (loss):	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contingency fee revenue	 	 	—	 	 	 	83,746	 	 	 	—	 	 	 	83,746	 	 	 	—	 	 	 	83,746	 	
Collections revenue	 	 	—	 	 	 	13,097	 	 	 	—	 	 	 	13,097	 	 	 	—	 	 	 	13,097	 	
Guarantor servicing fees	 	 	—	 	 	 	—	 	 	 	15,996	 	 	 	15,996	 	 	 	—	 	 	 	15,996	 	
Other income (loss)	 	 	57,869	 	 	 	—	 	 	 	55,928	 	 	 	113,797	 	 	 	(366,146	)	 	 	(252,349	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other income (loss)	 	 	57,869	 	 	 	96,843	 	 	 	71,924	 	 	 	226,636	 	 	 	(366,146	)	 	 	(139,510	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Direct operating expenses	 	 	165,133	 	 	 	65,922	 	 	 	61,017	 	 	 	292,072	 	 	 	—	 	 	 	292,072	 	
Overhead expenses	 	 	16,517	 	 	 	8,359	 	 	 	2,271	 	 	 	27,147	 	 	 	—	 	 	 	27,147	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses	 	 	181,650	 	 	 	74,281	 	 	 	63,288	 	 	 	319,219	 	 	 	—	 	 	 	319,219	 	
Goodwill and acquired intangible assets impairment and amortization expense	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	669,668	 	 	 	669,668	 	
Restructuring expenses	 	 	10,315	 	 	 	1,665	 	 	 	(898	)	 	 	11,082	 	 	 	—	 	 	 	11,082	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total expenses	 	 	191,965	 	 	 	75,946	 	 	 	62,390	 	 	 	330,301	 	 	 	669,668	 	 	 	999,969	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income (loss) from continuing operations, before income tax expense	 	 	259,327	 	 	 	20,897	 	 	 	13,950	 	 	 	294,174	 	 	 	(919,829	)	 	 	(625,655	)	
Income tax expense (benefit) (1)	 	 	95,069	 	 	 	7,704	 	 	 	5,115	 	 	 	107,888	 	 	 	(235,446	)	 	 	(127,558	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) from continuing operations	 	 	164,258	 	 	 	13,193	 	 	 	8,835	 	 	 	186,286	 	 	 	(684,383	)	 	 	(498,097	)	
Income from discontinued operations, net of tax	 	 	—	 	 	 	3,211	 	 	 	—	 	 	 	3,211	 	 	 	—	 	 	 	3,211	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	164,258	 	 	 	16,404	 	 	 	8,835	 	 	 	189,497	 	 	 	(684,383	)	 	 	(494,886	)	
Less: net income attributable to noncontrolling interest	 	 	—	 	 	 	61	 	 	 	—	 	 	 	61	 	 	 	—	 	 	 	61	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to SLM Corporation	 	$	164,258	 	 	$	16,343	 	 	$	8,835	 	 	$	189,436	 	 	$	(684,383	)	 	$	(494,947	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Economic Floor Income (net of tax) not included in “Core Earnings”	 	$	12,145	 	 	$	—	 	 	$	—	 	 	$	12,145	 	 	 	 	 	 	 	 	 	

 
 	 	 	
(1)	 	Income taxes are based on a percentage of net income before tax for the reportable segment.	
 	 	 	
(2)	 	“Core Earnings” are non-GAAP measures and do not represent a comprehensive basis of accounting. For a greater explanation of “Core Earnings,” see the section titled “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income” and subsequent sections.	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations, net of tax	 	$	164,258	 	 	$	13,132	 	 	$	8,835	 	 	$	186,225	 	 	$	(684,383	)	 	$	(498,158	)	
Discontinued operations, net of tax	 	 	—	 	 	 	3,211	 	 	 	—	 	 	 	3,211	 	 	 	—	 	 	 	3,211	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation	 	$	164,258	 	 	$	16,343	 	 	$	8,835	 	 	$	189,436	 	 	$	(684,383	)	 	$	(494,947	)	

4

 
SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income
(In thousands)
(Unaudited)

 	 	Quarter ended June 30, 2010	 	
 	 	 	 	 	Asset
	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	Performance
	 	 	 	 	 	Total “Core
	 	 	 	 	 	Total
	 	
 	 	Lending	 	 	Group	 	 	Other	 	 	Earnings”(2)	 	 	Adjustments	 	 	GAAP	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
FFELP Stafford and Other Student Loans	 	$	324,052	 	 	$	—	 	 	$	—	 	 	$	324,052	 	 	$	990	 	 	$	325,042	 	
FFELP Consolidation Loans	 	 	418,031	 	 	 	—	 	 	 	—	 	 	 	418,031	 	 	 	132,889	 	 	 	550,920	 	
Private Education Loans	 	 	575,340	 	 	 	—	 	 	 	—	 	 	 	575,340	 	 	 	—	 	 	 	575,340	 	
Other loans	 	 	7,254	 	 	 	—	 	 	 	—	 	 	 	7,254	 	 	 	—	 	 	 	7,254	 	
Cash and investments	 	 	2,554	 	 	 	—	 	 	 	3,745	 	 	 	6,299	 	 	 	—	 	 	 	6,299	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total interest income	 	 	1,327,231	 	 	 	—	 	 	 	3,745	 	 	 	1,330,976	 	 	 	133,879	 	 	 	1,464,855	 	
Total interest expense	 	 	571,952	 	 	 	—	 	 	 	—	 	 	 	571,952	 	 	 	(3,019	)	 	 	568,933	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net interest income	 	 	755,279	 	 	 	—	 	 	 	3,745	 	 	 	759,024	 	 	 	136,898	 	 	 	895,922	 	
Less: provisions for loan losses	 	 	382,239	 	 	 	—	 	 	 	—	 	 	 	382,239	 	 	 	—	 	 	 	382,239	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net interest income after provisions for loan losses	 	 	373,040	 	 	 	—	 	 	 	3,745	 	 	 	376,785	 	 	 	136,898	 	 	 	513,683	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contingency fee revenue	 	 	—	 	 	 	88,181	 	 	 	—	 	 	 	88,181	 	 	 	—	 	 	 	88,181	 	
Collections revenue	 	 	—	 	 	 	17,219	 	 	 	—	 	 	 	17,219	 	 	 	—	 	 	 	17,219	 	
Guarantor servicing fees	 	 	—	 	 	 	—	 	 	 	22,457	 	 	 	22,457	 	 	 	—	 	 	 	22,457	 	
Other income	 	 	127,587	 	 	 	—	 	 	 	53,009	 	 	 	180,596	 	 	 	76,104	 	 	 	256,700	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other income	 	 	127,587	 	 	 	105,400	 	 	 	75,466	 	 	 	308,453	 	 	 	76,104	 	 	 	384,557	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Direct operating expenses	 	 	166,761	 	 	 	75,256	 	 	 	52,872	 	 	 	294,889	 	 	 	—	 	 	 	294,889	 	
Overhead expenses	 	 	27,325	 	 	 	11,115	 	 	 	3,481	 	 	 	41,921	 	 	 	—	 	 	 	41,921	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses	 	 	194,086	 	 	 	86,371	 	 	 	56,353	 	 	 	336,810	 	 	 	—	 	 	 	336,810	 	
Goodwill and acquired intangible assets impairment and amortization expense	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	9,710	 	 	 	9,710	 	
Restructuring expenses	 	 	15,762	 	 	 	(109	)	 	 	2,013	 	 	 	17,666	 	 	 	—	 	 	 	17,666	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total expenses	 	 	209,848	 	 	 	86,262	 	 	 	58,366	 	 	 	354,476	 	 	 	9,710	 	 	 	364,186	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations, before income tax expense	 	 	290,779	 	 	 	19,138	 	 	 	20,845	 	 	 	330,762	 	 	 	203,292	 	 	 	534,054	 	
Income tax expense(1)	 	 	106,600	 	 	 	7,016	 	 	 	7,641	 	 	 	121,257	 	 	 	74,846	 	 	 	196,103	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income from continuing operations	 	 	184,179	 	 	 	12,122	 	 	 	13,204	 	 	 	209,505	 	 	 	128,446	 	 	 	337,951	 	
Loss from discontinued operations, net of tax	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	184,179	 	 	 	12,122	 	 	 	13,204	 	 	 	209,505	 	 	 	128,446	 	 	 	337,951	 	
Less: net income attributable to noncontrolling interest	 	 	—	 	 	 	133	 	 	 	—	 	 	 	133	 	 	 	—	 	 	 	133	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to SLM Corporation	 	$	184,179	 	 	$	11,989	 	 	$	13,204	 	 	$	209,372	 	 	$	128,446	 	 	$	337,818	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Economic Floor Income (net of tax) not included in “Core Earnings”	 	$	1,231	 	 	$	—	 	 	$	—	 	 	$	1,231	 	 	 	 	 	 	 	 	 	

 
 	 	 	
(1)	 	Income taxes are based on a percentage of net income before tax for the reportable segment.	
 	 	 	
(2)	 	“Core Earnings” are non-GAAP measures and do not represent a comprehensive basis of accounting. For a greater explanation of “Core Earnings,” see the section titled “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income” and subsequent sections.	

5

 
SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income
(In thousands)
(Unaudited)

 	 	Quarter ended September 30, 2009	 	
 	 	 	 	 	Asset
	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	Performance
	 	 	 	 	 	Total “Core
	 	 	 	 	 	Total
	 	
 	 	Lending	 	 	Group	 	 	Other	 	 	Earnings”(2)	 	 	Adjustments	 	 	GAAP	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
FFELP Stafford and Other Student Loans	 	$	340,652	 	 	$	—	 	 	$	—	 	 	$	340,652	 	 	$	(37,460	)	 	$	303,192	 	
FFELP Consolidation Loans	 	 	429,617	 	 	 	—	 	 	 	—	 	 	 	429,617	 	 	 	51,975	 	 	 	481,592	 	
Private Education Loans	 	 	560,791	 	 	 	—	 	 	 	—	 	 	 	560,791	 	 	 	(164,452	)	 	 	396,339	 	
Other loans	 	 	11,042	 	 	 	—	 	 	 	—	 	 	 	11,042	 	 	 	—	 	 	 	11,042	 	
Cash and investments	 	 	2,337	 	 	 	—	 	 	 	5,156	 	 	 	7,493	 	 	 	(612	)	 	 	6,881	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total interest income	 	 	1,344,439	 	 	 	—	 	 	 	5,156	 	 	 	1,349,595	 	 	 	(150,549	)	 	 	1,199,046	 	
Total interest expense	 	 	659,971	 	 	 	—	 	 	 	—	 	 	 	659,971	 	 	 	13,899	 	 	 	673,870	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net interest income	 	 	684,468	 	 	 	—	 	 	 	5,156	 	 	 	689,624	 	 	 	(164,448	)	 	 	525,176	 	
Less: provisions for loan losses	 	 	447,963	 	 	 	—	 	 	 	—	 	 	 	447,963	 	 	 	(126,836	)	 	 	321,127	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net interest income after provisions for loan losses	 	 	236,505	 	 	 	—	 	 	 	5,156	 	 	 	241,661	 	 	 	(37,612	)	 	 	204,049	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contingency fee revenue	 	 	—	 	 	 	82,200	 	 	 	—	 	 	 	82,200	 	 	 	—	 	 	 	82,200	 	
Collections revenue	 	 	—	 	 	 	21,241	 	 	 	—	 	 	 	21,241	 	 	 	—	 	 	 	21,241	 	
Guarantor servicing fees	 	 	—	 	 	 	—	 	 	 	48,087	 	 	 	48,087	 	 	 	—	 	 	 	48,087	 	
Other income	 	 	129,286	 	 	 	—	 	 	 	55,821	 	 	 	185,107	 	 	 	20,860	 	 	 	205,967	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other income	 	 	129,286	 	 	 	103,441	 	 	 	103,908	 	 	 	336,635	 	 	 	20,860	 	 	 	357,495	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Direct operating expenses	 	 	143,515	 	 	 	75,244	 	 	 	55,891	 	 	 	274,650	 	 	 	(83	)	 	 	274,567	 	
Overhead expenses	 	 	16,931	 	 	 	8,848	 	 	 	2,784	 	 	 	28,563	 	 	 	—	 	 	 	28,563	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses	 	 	160,446	 	 	 	84,092	 	 	 	58,675	 	 	 	303,213	 	 	 	(83	)	 	 	303,130	 	
Goodwill and acquired intangible assets impairment and amortization expense	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	9,774	 	 	 	9,774	 	
Restructuring expenses	 	 	1,823	 	 	 	340	 	 	 	329	 	 	 	2,492	 	 	 	—	 	 	 	2,492	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total expenses	 	 	162,269	 	 	 	84,432	 	 	 	59,004	 	 	 	305,705	 	 	 	9,691	 	 	 	315,396	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations, before income tax expense	 	 	203,522	 	 	 	19,009	 	 	 	50,060	 	 	 	272,591	 	 	 	(26,443	)	 	 	246,148	 	
Income tax expense(1)	 	 	75,113	 	 	 	8,502	 	 	 	18,483	 	 	 	102,098	 	 	 	(21,675	)	 	 	80,423	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income from continuing operations	 	 	128,409	 	 	 	10,507	 	 	 	31,577	 	 	 	170,493	 	 	 	(4,768	)	 	 	165,725	 	
Loss from discontinued operations, net of tax	 	 	—	 	 	 	(6,353	)	 	 	—	 	 	 	(6,353	)	 	 	(64	)	 	 	(6,417	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	128,409	 	 	 	4,154	 	 	 	31,577	 	 	 	164,140	 	 	 	(4,832	)	 	 	159,308	 	
Less: net income attributable to noncontrolling interest	 	 	—	 	 	 	198	 	 	 	—	 	 	 	198	 	 	 	—	 	 	 	198	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to SLM Corporation	 	$	128,409	 	 	$	3,956	 	 	$	31,577	 	 	$	163,942	 	 	$	(4,832	)	 	$	159,110	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Economic Floor Income (net of tax) not included in “Core Earnings”	 	$	22,607	 	 	$	—	 	 	$	—	 	 	$	22,607	 	 	 	 	 	 	 	 	 	

 	 	 	
(1)	 	Income taxes are based on a percentage of net income before tax for the reportable segment.	
 	 	 	
(2)	 	“Core Earnings” are non-GAAP measures and do not represent a comprehensive basis of accounting. For a greater explanation of “Core Earnings,” see the section titled “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income” and subsequent sections.	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations, net of tax	 	$	128,409	 	 	$	10,309	 	 	$	31,577	 	 	$	170,295	 	 	$	(4,768	)	 	$	165,527	 	
Discontinued operations, net of tax	 	 	—	 	 	 	(6,353	)	 	 	—	 	 	 	(6,353	)	 	 	(64	)	 	 	(6,417	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation	 	$	128,409	 	 	$	3,956	 	 	$	31,577	 	 	$	163,942	 	 	$	(4,832	)	 	$	159,110	 	

6

 
SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income
(In thousands)
(Unaudited)

 	 	Nine months ended September 30, 2010	 	
 	 	 	 	 	Asset
	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	Performance
	 	 	 	 	 	Total “Core
	 	 	 	 	 	Total
	 	
 	 	Lending	 	 	Group	 	 	Other	 	 	Earnings”(2)	 	 	Adjustments	 	 	GAAP	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
FFELP Stafford and Other Student Loans	 	$	917,552	 	 	$	—	 	 	$	—	 	 	$	917,552	 	 	$	11,161	 	 	$	928,713	 	
FFELP Consolidation Loans	 	 	1,191,759	 	 	 	—	 	 	 	—	 	 	 	1,191,759	 	 	 	447,072	 	 	 	1,638,831	 	
Private Education Loans	 	 	1,751,387	 	 	 	—	 	 	 	—	 	 	 	1,751,387	 	 	 	—	 	 	 	1,751,387	 	
Other loans	 	 	23,440	 	 	 	—	 	 	 	—	 	 	 	23,440	 	 	 	—	 	 	 	23,440	 	
Cash and investments	 	 	6,213	 	 	 	—	 	 	 	12,665	 	 	 	18,878	 	 	 	—	 	 	 	18,878	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total interest income	 	 	3,890,351	 	 	 	—	 	 	 	12,665	 	 	 	3,903,016	 	 	 	458,233	 	 	 	4,361,249	 	
Total interest expense	 	 	1,685,972	 	 	 	—	 	 	 	—	 	 	 	1,685,972	 	 	 	52,944	 	 	 	1,738,916	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net interest income	 	 	2,204,379	 	 	 	—	 	 	 	12,665	 	 	 	2,217,044	 	 	 	405,289	 	 	 	2,622,333	 	
Less: provisions for loan losses	 	 	1,099,469	 	 	 	—	 	 	 	—	 	 	 	1,099,469	 	 	 	—	 	 	 	1,099,469	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net interest income after provisions for loan losses	 	 	1,104,910	 	 	 	—	 	 	 	12,665	 	 	 	1,117,575	 	 	 	405,289	 	 	 	1,522,864	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contingency fee revenue	 	 	—	 	 	 	252,238	 	 	 	—	 	 	 	252,238	 	 	 	—	 	 	 	252,238	 	
Collections revenue	 	 	—	 	 	 	52,282	 	 	 	—	 	 	 	52,282	 	 	 	—	 	 	 	52,282	 	
Guarantor servicing fees	 	 	—	 	 	 	—	 	 	 	74,543	 	 	 	74,543	 	 	 	—	 	 	 	74,543	 	
Other income	 	 	326,773	 	 	 	—	 	 	 	165,458	 	 	 	492,231	 	 	 	(371,227	)	 	 	121,004	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other income	 	 	326,773	 	 	 	304,520	 	 	 	240,001	 	 	 	871,294	 	 	 	(371,227	)	 	 	500,067	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Direct operating expenses	 	 	477,652	 	 	 	216,735	 	 	 	176,107	 	 	 	870,494	 	 	 	—	 	 	 	870,494	 	
Overhead expenses	 	 	64,455	 	 	 	30,247	 	 	 	9,141	 	 	 	103,843	 	 	 	—	 	 	 	103,843	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses	 	 	542,107	 	 	 	246,982	 	 	 	185,248	 	 	 	974,337	 	 	 	—	 	 	 	974,337	 	
Goodwill and acquired intangible assets impairment and amortization expense	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	689,090	 	 	 	689,090	 	
Restructuring expenses	 	 	47,413	 	 	 	3,164	 	 	 	4,453	 	 	 	55,030	 	 	 	—	 	 	 	55,030	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total expenses	 	 	589,520	 	 	 	250,146	 	 	 	189,701	 	 	 	1,029,367	 	 	 	689,090	 	 	 	1,718,457	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations, before income tax expense	 	 	842,163	 	 	 	54,374	 	 	 	62,965	 	 	 	959,502	 	 	 	(655,028	)	 	 	304,474	 	
Income tax expense(1)	 	 	308,737	 	 	 	19,977	 	 	 	23,083	 	 	 	351,797	 	 	 	(127,457	)	 	 	224,340	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income from continuing operations	 	 	533,426	 	 	 	34,397	 	 	 	39,882	 	 	 	607,705	 	 	 	(527,571	)	 	 	80,134	 	
Income from discontinued operations, net of tax	 	 	—	 	 	 	3,211	 	 	 	—	 	 	 	3,211	 	 	 	—	 	 	 	3,211	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income	 	 	533,426	 	 	 	37,608	 	 	 	39,882	 	 	 	610,916	 	 	 	(527,571	)	 	 	83,345	 	
Less: net income attributable to noncontrolling interest	 	 	—	 	 	 	334	 	 	 	—	 	 	 	334	 	 	 	—	 	 	 	334	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to SLM Corporation	 	$	533,426	 	 	$	37,274	 	 	$	39,882	 	 	$	610,582	 	 	$	(527,571	)	 	$	83,011	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Economic Floor Income (net of tax) not included in “Core Earnings”	 	$	16,242	 	 	$	—	 	 	$	—	 	 	$	16,242	 	 	 	 	 	 	 	 	 	

 	 	 	
(1)	 	Income taxes are based on a percentage of net income before tax for the reportable segment.	
 	 	 	
(2)	 	“Core Earnings” are non-GAAP measures and do not represent a comprehensive basis of accounting. For a greater explanation of “Core Earnings,” see the section titled “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income” and subsequent sections.	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations, net of tax	 	$	533,426	 	 	$	34,063	 	 	$	39,882	 	 	$	607,371	 	 	$	(527,571	)	 	$	79,800	 	
Discontinued operations, net of tax	 	 	—	 	 	 	3,211	 	 	 	—	 	 	 	3,211	 	 	 	—	 	 	 	3,211	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation	 	$	533,426	 	 	$	37,274	 	 	$	39,882	 	 	$	610,582	 	 	$	(527,571	)	 	$	83,011	 	

7

 
SLM CORPORATION

Segment and “Core Earnings”

Consolidated Statements of Income
(In thousands)
(Unaudited)

 	 	Nine months ended September 30, 2009	 	
 	 	 	 	 	Asset
	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	Performance
	 	 	 	 	 	Total “Core
	 	 	 	 	 	Total
	 	
 	 	Lending	 	 	Group	 	 	Other	 	 	Earnings”(2)	 	 	Adjustments	 	 	GAAP	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Interest income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
FFELP Stafford and Other Student Loans	 	$	1,012,124	 	 	$	—	 	 	$	—	 	 	$	1,012,124	 	 	$	(42,177	)	 	$	969,947	 	
FFELP Consolidation Loans	 	 	1,262,801	 	 	 	—	 	 	 	—	 	 	 	1,262,801	 	 	 	168,843	 	 	 	1,431,644	 	
Private Education Loans	 	 	1,682,740	 	 	 	—	 	 	 	—	 	 	 	1,682,740	 	 	 	(506,341	)	 	 	1,176,399	 	
Other loans	 	 	45,930	 	 	 	—	 	 	 	—	 	 	 	45,930	 	 	 	—	 	 	 	45,930	 	
Cash and investments	 	 	8,199	 	 	 	—	 	 	 	14,603	 	 	 	22,802	 	 	 	(2,906	)	 	 	19,896	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total interest income	 	 	4,011,794	 	 	 	—	 	 	 	14,603	 	 	 	4,026,397	 	 	 	(382,581	)	 	 	3,643,816	 	
Total interest expense	 	 	2,450,880	 	 	 	—	 	 	 	—	 	 	 	2,450,880	 	 	 	68,996	 	 	 	2,519,876	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net interest income	 	 	1,560,914	 	 	 	—	 	 	 	14,603	 	 	 	1,575,517	 	 	 	(451,577	)	 	 	1,123,940	 	
Less: provisions for loan losses	 	 	1,198,839	 	 	 	—	 	 	 	—	 	 	 	1,198,839	 	 	 	(349,321	)	 	 	849,518	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net interest income after provisions for loan losses	 	 	362,075	 	 	 	—	 	 	 	14,603	 	 	 	376,678	 	 	 	(102,256	)	 	 	274,422	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Other income:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Contingency fee revenue	 	 	—	 	 	 	230,383	 	 	 	—	 	 	 	230,383	 	 	 	—	 	 	 	230,383	 	
Collections revenue	 	 	—	 	 	 	88,141	 	 	 	—	 	 	 	88,141	 	 	 	689	 	 	 	88,830	 	
Guarantor servicing fees	 	 	—	 	 	 	—	 	 	 	106,867	 	 	 	106,867	 	 	 	—	 	 	 	106,867	 	
Other income	 	 	591,017	 	 	 	—	 	 	 	151,875	 	 	 	742,892	 	 	 	(410,989	)	 	 	331,903	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total other income	 	 	591,017	 	 	 	318,524	 	 	 	258,742	 	 	 	1,168,283	 	 	 	(410,300	)	 	 	757,983	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Direct operating expenses	 	 	400,777	 	 	 	235,013	 	 	 	154,031	 	 	 	789,821	 	 	 	(39	)	 	 	789,782	 	
Overhead expenses	 	 	57,632	 	 	 	30,119	 	 	 	9,475	 	 	 	97,226	 	 	 	—	 	 	 	97,226	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Operating expenses	 	 	458,409	 	 	 	265,132	 	 	 	163,506	 	 	 	887,047	 	 	 	(39	)	 	 	887,008	 	
Goodwill and acquired intangible assets impairment and amortization expense	 	 	—	 	 	 	—	 	 	 	—	 	 	 	—	 	 	 	29,176	 	 	 	29,176	 	
Restructuring expenses	 	 	7,507	 	 	 	266	 	 	 	1,825	 	 	 	9,598	 	 	 	—	 	 	 	9,598	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total expenses	 	 	465,916	 	 	 	265,398	 	 	 	165,331	 	 	 	896,645	 	 	 	29,137	 	 	 	925,782	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Income from continuing operations, before income tax expense	 	 	487,176	 	 	 	53,126	 	 	 	108,014	 	 	 	648,316	 	 	 	(541,693	)	 	 	106,623	 	
Income tax expense(1)	 	 	180,207	 	 	 	20,255	 	 	 	39,954	 	 	 	240,416	 	 	 	(208,620	)	 	 	31,796	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income from continuing operations	 	 	306,969	 	 	 	32,871	 	 	 	68,060	 	 	 	407,900	 	 	 	(333,073	)	 	 	74,827	 	
Loss from discontinued operations, net of tax	 	 	—	 	 	 	(58,940	)	 	 	—	 	 	 	(58,940	)	 	 	(193	)	 	 	(59,133	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss)	 	 	306,969	 	 	 	(26,069	)	 	 	68,060	 	 	 	348,960	 	 	 	(333,266	)	 	 	15,694	 	
Less: net income attributable to noncontrolling interest	 	 	—	 	 	 	690	 	 	 	—	 	 	 	690	 	 	 	—	 	 	 	690	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation	 	$	306,969	 	 	$	(26,759	)	 	$	68,060	 	 	$	348,270	 	 	$	(333,266	)	 	$	15,004	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Economic Floor Income (net of tax) not included in “Core Earnings”	 	$	190,894	 	 	$	—	 	 	$	—	 	 	$	190,894	 	 	 	 	 	 	 	 	 	

 	 	 	
(1)	 	Income taxes are based on a percentage of net income before tax for the reportable segment.	
 	 	 	
(2)	 	“Core Earnings” are non-GAAP measures and do not represent a comprehensive basis of accounting. For a greater explanation of “Core Earnings,” see the section titled “Reconciliation of ‘Core Earnings’ Net Income to GAAP Net Income” and subsequent sections.	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Continuing operations, net of tax	 	$	306,969	 	 	$	32,181	 	 	$	68,060	 	 	$	407,210	 	 	$	(333,073	)	 	$	74,137	 	
Discontinued operations, net of tax	 	 	—	 	 	 	(58,940	)	 	 	—	 	 	 	(58,940	)	 	 	(193	)	 	 	(59,133	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income (loss) attributable to SLM Corporation	 	$	306,969	 	 	$	(26,759	)	 	$	68,060	 	 	$	348,270	 	 	$	(333,266	)	 	$	15,004	 	

8

 
SLM CORPORATION

Reconciliation of “Core Earnings” Net Income to GAAP Net Income
(In thousands, except per share amounts)
(Unaudited)

 	 	Quarters ended	 	 	Nine months ended	 	
 	 	September 30,
	 	 	June 30,
	 	 	September 30,
	 	 	September 30,
	 	 	September 30,
	 	
 	 	2010	 	 	2010	 	 	2009	 	 	2010	 	 	2009	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
“Core Earnings” net income attributable to SLM Corporation (1)(2)	 	$	189,436	 	 	$	209,372	 	 	$	163,942	 	 	$	610,582	 	 	$	348,270	 	
“Core Earnings” adjustments:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Net impact of securitization accounting	 	 	—	 	 	 	—	 	 	 	27,885	 	 	 	—	 	 	 	(196,566	)	
Net impact of derivative accounting	 	 	(182,708	)	 	 	301,421	 	 	 	(36,598	)	 	 	238,820	 	 	 	(477,169	)	
Net impact of Floor Income	 	 	(67,453	)	 	 	(88,419	)	 	 	(8,020	)	 	 	(204,758	)	 	 	161,025	 	
Net impact of goodwill and acquired intangibles	 	 	(669,668	)	 	 	(9,710	)	 	 	(9,774	)	 	 	(689,090	)	 	 	(29,176	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total “Core Earnings” adjustments before income tax effect	 	 	(919,829	)	 	 	203,292	 	 	 	(26,507	)	 	 	(655,028	)	 	 	(541,886	)	
Net income tax effect	 	 	235,446	 	 	 	(74,846	)	 	 	21,675	 	 	 	127,457	 	 	 	208,620	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Total “Core Earnings” adjustments	 	 	(684,383	)	 	 	128,446	 	 	 	(4,832	)	 	 	(527,571	)	 	 	(333,266	)	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
GAAP net income (loss) attributable to SLM Corporation	 	$	(494,947	)	 	$	337,818	 	 	$	159,110	 	 	$	83,011	 	 	$	15,004	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
GAAP diluted earnings (loss) per common share attributable to SLM
Corporation common shareholders	 	$	(1.06	)	 	$	.63	 	 	$	.25	 	 	$	.06	 	 	$	(.17	)	

 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(1)  “Core Earnings” diluted earnings per common share attributable to SLM Corporation common shareholders	 	$	.35	 	 	$	.39	 	 	$	.26	 	 	$	1.13	 	 	$	.54	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
(2)  Total Economic Floor Income earned on Managed loans, not included in “Core Earnings” (net of tax)	 	$	12,145	 	 	$	1,231	 	 	$	22,607	 	 	$	16,242	 	 	$	190,894	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
     Total Economic Floor Income earned, not included in “Core Earnings” (net of tax) per common share attributable to SLM Corporation common shareholders	 	$	.02	 	 	$	—	 	 	$	.05	 	 	$	.03	 	 	$	.41	 	

“Core Earnings”
 
In accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”), we prepare financial statements in accordance with GAAP. In addition to evaluating the Company’s GAAP-based financial information, management evaluates the Company’s business segments on a basis that, as allowed under the Financial Accounting Standards Board’s (“FASB’s”) Accounting Standards Codification (“ASC”) 280, “Segment Reporting,” differs from GAAP. We refer to management’s basis of evaluating our segment results as “Core Earnings” presentations for each business segment and we refer to this information in our presentations with credit rating agencies, lenders and investors. While “Core Earnings” are not a substitute for reported results under GAAP, we rely on “Core Earnings” to manage each operating segment because we believe these measures provide additional information regarding the operational and performance indicators that are most closely assessed by management.
 
Our “Core Earnings” are not defined terms within GAAP and may not be comparable to similarly titled measures reported by other companies. “Core Earnings” net income reflects only current period adjustments to GAAP net income as described below. Unlike financial accounting, there is no comprehensive, authoritative
9

 
guidance for management reporting and as a result, our management reporting is not necessarily comparable with similar information for any other financial institution. Our operating segments are defined by products and services or by types of customers, and reflect the manner in which financial information is currently evaluated by management. Intersegment revenues and expenses are netted within the appropriate financial statement line items consistent with the income statement presentation provided to management. Changes in management structure or allocation methodologies and procedures may result in changes in reported segment financial information.
 
Limitations of “Core Earnings”
 
While GAAP provides a uniform, comprehensive basis of accounting, for the reasons described above, management believes that “Core Earnings” are an important additional tool for providing a more complete understanding of the Company’s results of operations. Nevertheless, “Core Earnings” are subject to certain general and specific limitations that investors should carefully consider. For example, as stated above, unlike financial accounting, there is no comprehensive, authoritative guidance for management reporting. Our “Core Earnings” are not defined terms within GAAP and may not be comparable to similarly titled measures reported by other companies. Unlike GAAP, “Core Earnings” reflect only current period adjustments to GAAP. Accordingly, the Company’s “Core Earnings” presentation does not represent a comprehensive basis of accounting. Investors, therefore, may not compare our Company’s performance with that of other financial services companies based upon “Core Earnings.” “Core Earnings” results are only meant to supplement GAAP results by providing additional information regarding the operational and performance indicators that are most closely used by management, the Company’s board of directors, rating agencies, lenders and investors to assess performance.
 
Other limitations arise from the specific adjustments that management makes to GAAP results to derive “Core Earnings” results. For example, in reversing the unrealized gains and losses that result from ASC 815, “Derivatives and Hedging,” on derivatives that do not qualify for hedge accounting treatment, as well as on derivatives that do qualify but are in part ineffective because they are not perfect hedges, we focus on the long-term economic effectiveness of those instruments relative to the underlying hedged item and isolate the effects of interest rate volatility and changing credit spreads on the fair value of such instruments during the period. Under GAAP, the effects of these factors on the fair value of the derivative instruments (but often not on the underlying hedged item) tend to show more volatility in the short term. While presentation of our results on a “Core Earnings” basis provides important information regarding the performance of our Managed portfolio, a limitation of this presentation is that we are presenting the ongoing spread income on loans that have been sold off-balance sheet for GAAP purposes to a trust managed by us. While we believe that our “Core Earnings” presentation presents the economic substance of our Managed loan portfolio, it understates earnings volatility from securitization gains, securitization servicing income and Residual Interest Income. Our “Core Earnings” results exclude certain Floor Income, which is real cash income, from our reported results and therefore may understate earnings in certain periods. Management’s financial planning and valuation of operating results, however, does not take into account Floor Income because of its inherent uncertainty, except when it is Fixed Rate Floor Income that is economically hedged through Floor Income Contracts.
 
Pre-Tax Differences between “Core Earnings” and GAAP
 
Our “Core Earnings” are the primary financial performance measures used by management to evaluate performance and to allocate resources. Accordingly, financial information is reported to management on a “Core Earnings” basis by reportable segment, as these are the measures used regularly by our chief operating decision makers. Our “Core Earnings” are used in developing our financial plans and tracking results, and also in establishing corporate performance targets and incentive compensation. Management believes this information provides additional insight into the financial performance of the Company’s core business activities. “Core Earnings” net income reflects only current period adjustments to GAAP net income, as described in the more detailed discussion of the differences between “Core Earnings” and GAAP that follows, which includes further detail on each specific adjustment required to reconcile our “Core Earnings” segment presentation to our GAAP earnings.
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 	1) 	Securitization Accounting: Under GAAP, prior to the adoption of topic updates to ASC 810, “Consolidation,” certain securitization transactions in our Lending operating segment were accounted for as sales of assets. Under “Core Earnings” for the Lending operating segment, we presented all securitization transactions on a “Core Earnings” basis as long-term non-recourse financings. The upfront “gains” on sale from securitization transactions, as well as ongoing “securitization servicing and Residual Interest revenue (loss)” presented in accordance with GAAP, were excluded from “Core Earnings” and were replaced by interest income, provisions for loan losses, and interest expense as earned or incurred on the securitization loans. We also excluded transactions with our off-balance sheet trusts from “Core Earnings” as they were considered intercompany transactions on a “Core Earnings” basis. On January 1, 2010, the Company prospectively adopted the topic updates to ASC 810, which resulted in the consolidation of these off-balance sheet securitization trusts at their historical cost basis. As of January 1, 2010, there are no longer differences between the Company’s GAAP and “Core Earnings” presentation for securitization accounting. As a result, effective January 1, 2010, the Company’s Managed and on-balance sheet (GAAP) portfolios are the same.	
 
Upon the adoption of topic updates to ASC 810, the Company removed the $1.8 billion of Residual Interests (associated with its off-balance sheet securitization trusts as of December 31, 2009) from the consolidated balance sheet and the Company consolidated $35.0 billion of assets ($32.6 billion of which are student loans, net of a $550 million allowance for loan losses) and $34.4 billion of liabilities (primarily trust debt), which resulted in an approximate $750 million after-tax reduction of stockholders’ equity (recorded as a cumulative effect adjustment to retained earnings). After the adoption of topic updates to ASC 810, the Company’s results of operations no longer reflect securitization servicing and Residual Interest revenue (loss) related to these securitization trusts, but instead report interest income, provisions for loan losses associated with the securitized assets and interest expense associated with the debt issued from the securitization trusts to third parties, consistent with the Company’s accounting treatment of prior on-balance securitization trusts.

 	2) 	Derivative Accounting: “Core Earnings” exclude periodic unrealized gains and losses that are caused primarily by the mark-to-market derivative valuations prescribed by ASC 815 on derivatives that do not qualify for hedge accounting treatment under GAAP. These unrealized gains and losses occur in our Lending operating segment. In our “Core Earnings” presentation, we recognize the economic effect of these hedges, which generally results in any cash paid or received being recognized ratably as an expense or revenue over the hedged item’s life.	
 	 	 	
 	3) 	Floor Income: The timing and amount (if any) of Floor Income earned in our Lending operating segment is uncertain and in excess of expected spreads. Therefore, we only include such income in “Core Earnings” when it is Fixed Rate Floor Income that is economically hedged. We employ derivatives, primarily Floor Income Contracts and futures, to economically hedge Floor Income. As discussed above in “Derivative Accounting,” these derivatives do not qualify as effective accounting hedges, and therefore, under GAAP, they are marked-to-market through the “gains (losses) on derivative and hedging activities, net” line in the consolidated statement of income with no offsetting gain or loss recorded for the economically hedged items. For “Core Earnings,” we reverse the fair value adjustments on the Floor Income Contracts and futures economically hedging Floor Income and include in income the amortization of net premiums received on contracts economically hedging Fixed Rate Floor Income.	
 	 	 	
 	4) 	Goodwill and Acquired Intangibles: Our “Core Earnings” exclude goodwill and intangible impairment and the amortization of acquired intangibles.	

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