SLM (SLM) 10-Q 5 Aug 09 2009 Q2 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
In Billions, except Share data	6 Months Ended Jun. 30, 2009	Jun. 30, 2008
Document And Company Information [Abstract]
Entity Registrant Name	SLM Corporation
Entity Central Index Key	0001032033
Document Type	10-Q
Document Period End Date	2009-06-30
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float		8.9
Entity Common Stock, Shares Outstanding (actual number)	467,607,602

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Thousands	Jun. 30, 2009	Dec. 31, 2008
Assets
FFELP Stafford and Other Student Loans (net of allowance for losses of $102,857 and $90,906, respectively)	$44,044,636	$44,025,361
FFELP Stafford Loans Held-for-Sale	18,159,232	8,450,976
FFELP Consolidation Loans (net of allowance for losses of $50,181 and $46,637, respectively)	70,102,304	71,743,435
Private Education Loans (net of allowance for losses of $1,396,707 and $1,308,043, respectively)	21,850,688	20,582,298
Other loans (net of allowance for losses of $68,282 and $58,395, respectively)	489,180	729,380
Investments:
Available-for-sale	1,186,971	861,008
Other	885,511	180,397
Total investments	2,072,482	1,041,405
Cash and cash equivalents	6,139,957	4,070,002
Restricted cash and investments	5,245,702	3,535,286
Retained Interest in off-balance sheet securitized loans	1,820,614	2,200,298
Goodwill and acquired intangible assets, net	1,233,871	1,249,219
Other assets	10,025,129	11,140,777
Total assets	181,183,795	168,768,437
Liabilities
Short-term borrowings	47,331,576	41,933,043
Long-term borrowings	125,880,044	118,224,794
Other liabilities	3,120,636	3,604,260
Total liabilities	176,332,256	163,762,097
Preferred stock, par value $.20 per share, 20,000 shares authorized:
Common stock, par value $.20 per share, 1,125,000 shares authorized: 534,842 and 534,411 shares issued, respectively	106,969	106,883
Additional paid-in capital	4,709,053	4,684,112
Accumulated other comprehensive loss (net of tax benefit of $27,750 and $43,202, respectively)	(48,683)	(76,476)
Retained earnings	229,865	426,175
Total SLM Corporation stockholders' equity before treasury stock	6,711,974	6,855,464
Common stock held in treasury at cost: 67,128 and 66,958 shares, respectively	1,860,440	1,856,394
Total SLM Corporation stockholders' equity	4,851,534	4,999,070
Noncontrolling interest	5	7,270
Total equity	4,851,539	5,006,340
Total liabilities and equity	181,183,795	168,768,437
Preferred stock, series A
Preferred stock, par value $.20 per share, 20,000 shares authorized:
Preferred stock	165,000	165,000
Preferred stock, series B
Preferred stock, par value $.20 per share, 20,000 shares authorized:
Preferred stock	400,000	400,000
Preferred stock, series C
Preferred stock, par value $.20 per share, 20,000 shares authorized:
Preferred stock	$1,149,770	$1,149,770

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands	Jun. 30, 2009	Dec. 31, 2008
Allowance for other student loan losses	$102,857	$90,906
Allowance for consolidation loans losses	50,181	46,637
Allowance for private education loans losses	1,396,707	1,308,043
Allowance for other loans losses	68,282	58,395
Tax effect for accumulated other comprehensive income	$27,750	$43,202
Common stock held in treasury	67,128	66,958
Preferred stock, par value	0.2	0.2
Preferred stock, shares authorized	20,000	20,000
Common stock, par value	0.2	0.2
Common stock, shares authorized	1,125,000	1,125,000
Common stock, shares issued	534,842	534,411
Preferred stock, series A
Preferred stock, par value	50	50
Preferred stock, shares issued	3,300	3,300
Preferred stock, series B
Preferred stock, par value	100	100
Preferred stock, shares issued	4,000	4,000
Preferred stock, series C
Preferred stock Series C, par value	1,000	1,000
Preferred stock, shares issued	1,150	1,150

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Thousands, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Interest income:
FFELP Stafford and Other Student Loans	$323,939	$497,598	$666,755	$962,074
FFELP Consolidation Loans	460,690	769,664	950,052	1,606,320
Private Education Loans	393,019	409,323	780,060	852,845
Other loans	18,468	21,355	34,888	44,699
Cash and investments	7,044	70,521	13,015	194,337
Total interest income	1,203,160	1,768,461	2,444,770	3,660,275
Total interest expense	819,459	1,365,918	1,846,006	2,981,363
Net interest income	383,701	402,543	598,764	678,912
Less: provisions for loan losses	278,112	143,015	528,391	280,326
Net interest income after provisions for loan losses	105,589	259,528	70,373	398,586
Other income:
Servicing and securitization revenue (loss)	87,488	1,630	(7,817)	109,272
Losses on sales of loans and securities, net	0	(43,583)	0	(78,249)
Gains (losses) on derivative and hedging activities, net	(561,795)	362,043	(457,770)	89,247
Contingency fee revenue	73,368	83,790	148,183	169,096
Collections revenue	22,068	26,365	738	83,604
Guarantor servicing fees	24,772	23,663	58,780	58,316
Other	399,065	108,728	591,523	202,261
Total other income	44,966	562,636	333,637	633,547
Expenses:
Salaries and benefits	139,419	167,788	276,340	347,517
Other operating expenses	175,766	185,900	340,328	361,819
Restructuring expenses	4,430	46,740	9,203	67,418
Total expenses	319,615	400,428	625,871	776,754
Net income (loss) before income tax benefit	(169,060)	421,736	(221,861)	255,379
Income tax expense (benefit)	(46,551)	153,074	(78,247)	90,586
Net income (loss)	(122,509)	268,662	(143,614)	164,793
Less: net income attributable to noncontrolling interest	211	2,926	492	2,861
Net income (loss) attributable to SLM Corporation	(122,720)	265,736	(144,106)	161,932
Preferred stock dividends	25,800	27,391	52,195	56,416
Net income (loss) attributable to SLM Corporation common stock	($148,520)	$238,345	($196,301)	$105,516
Basic earnings (loss) per common share attributable to SLM Corporation common shareholders	-0.32	0.51	-0.42	0.23
Average common shares outstanding	466,799	466,649	466,780	466,615
Diluted earnings (loss) per common share attributable to SLM Corporation common shareholders	-0.32	0.5	-0.42	0.23
Average common and common equivalent shares outstanding	466,799	517,954	466,780	467,316
Dividends per common share attributable to SLM Corporation common shareholders	$0	$0	$0	$0

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity (USD $)
In Thousands, except Share data	Total Stockholders Equity Member		Additional Paid-In Capital	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interest	Common Stock	Preferred Stock	Total
Beginning Balance, Shares at Dec. 31, 2007		466,541,687		(65,951,394)				532,493,081	8,300,000
Beginning Balance at Dec. 31, 2007	$5,223,535		$4,590,174	($1,831,706)	$557,204	$236,364	$11,360	$106,499	$1,565,000	$5,234,895
Comprehensive income:
Net income (loss)	161,932				161,932		2,861			164,793
Noncontrolling interest - other							(386)			(386)
Acquisition of noncontrolling interest in Purchased Paper business							(4,355)			(4,355)
Other comprehensive income, net of tax:
Change in unrealized gains (losses) on investments, net of tax	(21,513)					(21,513)				(21,513)
Change in unrealized gains (losses) on derivatives, net of tax	42,270					42,270				42,270
Defined benefit pension plans adjustment	(472)					(472)				(472)
Comprehensive income	182,217						(1,880)			180,337
Cash dividends:
Preferred stock	(56,093)				(56,093)					(56,093)
Restricted stock dividend	(1,848)				(1,848)					(1,848)
Issuance of common shares	19,077		18,704	70				303		19,077
Issuance of common shares, shares		1,520,239		3,142				1,517,097
Issuance of preferred shares	145,345		(4,332)		(323)				150,000	145,345
Issuance of preferred shares, shares									150,000
Tax benefit related to employee stock option and purchase plans	(10,016)		(10,016)							(10,016)
Stock-based compensation cost	43,201		43,201							43,201
Cumulative effect of accounting change					194,655	(194,655)
Repurchase of common shares:
Benefit plans	(10,414)			(10,414)						(10,414)
Benefit plans, shares		(496,533)		(496,533)
Ending Balance at Jun. 30, 2008	5,535,004		4,637,731	(1,842,050)	855,527	61,994	9,480	106,802	1,715,000	5,544,484
Ending Balance, Shares at Jun. 30, 2008		467,565,393		(66,444,785)				534,010,178	8,450,000
Beginning Balance, Shares at Mar. 31, 2008		467,376,827		(66,301,201)				533,678,028	8,450,000
Beginning Balance at Mar. 31, 2008	5,208,167		4,610,278	(1,838,637)	617,184	(2,394)	6,608	106,736	1,715,000	5,214,775
Comprehensive income:
Net income (loss)	265,736				265,736		2,926			268,662
Noncontrolling interest - other							(54)			(54)
Other comprehensive income, net of tax:
Change in unrealized gains (losses) on investments, net of tax	(8,984)					(8,984)				(8,984)
Change in unrealized gains (losses) on derivatives, net of tax	73,844					73,844				73,844
Defined benefit pension plans adjustment	(472)					(472)				(472)
Comprehensive income	330,124						2,872			332,996
Cash dividends:
Preferred stock	(27,230)				(27,230)					(27,230)
Restricted stock dividend	(2)				(2)					(2)
Issuance of common shares	6,897		6,761	70				66		6,897
Issuance of common shares, shares		335,292		3,142				332,150
Issuance of preferred shares	0		161		(161)					0
Tax benefit related to employee stock option and purchase plans	(3,866)		(3,866)							(3,866)
Stock-based compensation cost	24,397		24,397							24,397
Repurchase of common shares:
Benefit plans	(3,483)			(3,483)						(3,483)
Benefit plans, shares		(146,726)		(146,726)
Beginning Balance, Shares at Dec. 31, 2008		467,452,871		(66,958,400)				534,411,271	8,449,770
Beginning Balance at Dec. 31, 2008	4,999,070		4,684,112	(1,856,394)	426,175	(76,476)	7,270	106,883	1,714,770	5,006,340
Comprehensive income:
Net income (loss)	(144,106)				(144,106)		492			(143,614)
Noncontrolling interest - other							(500)			(500)
Sale of international Purchased Paper - Non-Mortgage business							(7,257)			(7,257)
Other comprehensive income, net of tax:
Change in unrealized gains (losses) on investments, net of tax	2,269					2,269				2,269
Change in unrealized gains (losses) on derivatives, net of tax	26,015					26,015				26,015
Defined benefit pension plans adjustment	(491)					(491)				(491)
Comprehensive income	(116,313)						(7,265)			(123,578)
Cash dividends:
Preferred stock	(51,873)				(51,873)					(51,873)
Restricted stock dividend	(9)				(9)					(9)
Issuance of common shares	2,317		2,226	5				86		2,317
Issuance of common shares, shares		430,706		98				430,608
Issuance of preferred shares			322		(322)
Tax benefit related to employee stock option and purchase plans	(5,819)		(5,819)							(5,819)
Stock-based compensation cost	28,212		28,212							28,212
Repurchase of common shares:
Benefit plans	(4,051)			(4,051)						(4,051)
Benefit plans, shares		(169,897)		(169,897)
Ending Balance at Jun. 30, 2009	4,851,534		4,709,053	(1,860,440)	229,865	(48,683)	5	106,969	1,714,770	4,851,539
Ending Balance, Shares at Jun. 30, 2009		467,713,680		(67,128,199)				534,841,879	8,449,770
Beginning Balance, Shares at Mar. 31, 2009		467,592,757		(67,105,360)				534,698,117	8,449,770
Beginning Balance at Mar. 31, 2009	4,963,847		4,694,155	(1,859,955)	378,387	(70,450)	12	106,940	1,714,770	4,963,859
Comprehensive income:
Net income (loss)	(122,720)				(122,720)		211			(122,509)
Noncontrolling interest - other							(218)			(218)
Other comprehensive income, net of tax:
Change in unrealized gains (losses) on investments, net of tax	1,319					1,319				1,319
Change in unrealized gains (losses) on derivatives, net of tax	20,606					20,606				20,606
Defined benefit pension plans adjustment	(158)					(158)				(158)
Comprehensive income	(100,953)						(7)			(100,960)
Cash dividends:
Preferred stock	(25,638)				(25,638)					(25,638)
Restricted stock dividend	(2)				(2)					(2)
Issuance of common shares	210		181					29		210
Issuance of common shares, shares		143,762		0				143,762
Issuance of preferred shares			162		(162)					0
Tax benefit related to employee stock option and purchase plans	(1,324)		(1,324)							(1,324)
Stock-based compensation cost	15,879		15,879							15,879
Repurchase of common shares:
Benefit plans	(485)			(485)						(485)
Benefit plans, shares		(22,839)		(22,839)
Ending Balance at Jun. 30, 2009									$1,714,770
Ending Balance, Shares at Jun. 30, 2009									8,449,770

1_Consolidated Statements of Ch

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) (USD $)
	Total Stockholders Equity Member Preferred stock, series A	Total Stockholders Equity Member Preferred stock, series B	Total Stockholders Equity Member Preferred stock, series C	Retained Earnings Preferred stock, series A	Retained Earnings Preferred stock, series B	Retained Earnings Preferred stock, series C	Preferred stock, series A	Preferred stock, series B	Preferred stock, series C
Dividends per preferred share	1.74	2.31	33.23	1.74	2.31	33.23	1.74	2.31	33.23
Dividends per preferred share	0.87	0.88	18.13	0.87	0.88	18.13	0.87	0.88	18.13
Dividends per preferred share	1.74	1.17	36.25	1.74	1.17	36.25	1.74	1.17	36.25
Dividends per preferred share	0.87	0.51	18.13	0.87	0.51	18.13	0.87	0.51	18.13

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Thousands	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Operating activities
Net income (loss)	($143,614)	$164,793
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Losses on sales of loans and securities, net	0	78,249
Stock-based compensation cost	30,144	48,080
Unrealized (gains)/losses on derivative and hedging activities	497,361	(64,418)
Provisions for loan losses	528,391	280,326
Decrease in purchased paper mortgages, net	174,701	109,720
Student loans originated for sale	(10,171,363)	0
Decrease in restricted cash - other	52,552	1,050
Decrease in accrued interest receivable	481,791	52,020
(Decrease) in accrued interest payable	(409,109)	(166,484)
Adjustment for non-cash loss related to Retained Interest	351,331	279,900
(Increase) in other assets, goodwill and acquired intangible assets, net	(120,788)	(55,712)
(Decrease) in other liabilities	(150,321)	(346,220)
Total adjustments	(8,735,310)	216,511
Net cash (used in) provided by operating activities	(8,878,924)	381,304
Investing activities
Student loans acquired	(4,944,270)	(15,340,698)
Loans purchased from securitized trusts (primarily loan consolidations)	(3,698)	(555,024)
Reduction of student loans:
Installment payments, claims and other	5,148,780	5,268,996
Proceeds from sales of student loans	462,311	27,239
Other loans - originated	(2,817)	(931,752)
Other loans - repaid	217,557	1,183,672
Other investing activities, net	(736,002)	(58,287)
Purchases of available-for-sale securities	(66,062,442)	(72,071,580)
Proceeds from sales of available-for-sale securities	100,056	0
Proceeds from maturities of available-for-sale securities	65,615,526	72,279,652
Purchase of held-to-maturity and other securities	0	(400)
Proceeds from maturities of held-to-maturity securities and other securities	68,928	12,502
(Increase) decrease in restricted cash - on-balance sheet trusts	(663,658)	874,029
Return of investment from Retained Interest	16,361	217,391
Purchase of subsidiaries, net of cash acquired	0	(37,868)
Net cash used in investing activities	(783,368)	(9,132,128)
Financing activities
Borrowings collateralized by loans in trust - issued	9,040,986	11,590,919
Borrowings collateralized by loans in trust - repaid	(2,932,288)	(3,535,266)
Asset-backed commercial paper conduits - net activity	(12,454,223)	(161,576)
ED Participation Program	9,871,053	0
ED Conduit Program facility	11,094,745	0
Other short-term borrowings issued	298,294	1,304,509
Other short-term borrowings repaid	(990,720)	(333,397)
Other long-term borrowings issued	4,333,168	2,437,226
Other long-term borrowings repaid	(4,935,047)	(5,942,937)
Other financing activities, net	(1,533,226)	842,957
Excess tax benefit from the exercise of stock-based awards	0	282
Common stock issued	5	4,403
Preferred stock issued	0	145,345
Preferred dividends paid	(51,873)	(56,093)
Noncontrolling interest, net	(8,627)	(4,378)
Net cash provided by financing activities	11,732,247	6,291,994
Net increase (decrease) in cash and cash equivalents	2,069,955	(2,458,830)
Cash and cash equivalents at beginning of period	4,070,002	7,582,031
Cash and cash equivalents at end of period	6,139,957	5,123,201
Cash disbursement made for:
Interest	2,303,145	3,557,181
Income taxes	$177,478	$564,269

Significant Accounting Policies

Significant Accounting Policies
	6 Months Ended Jun. 30, 2009 USD / shares
Significant Accounting Policies [Abstract]
Significant Accounting Policies	1. Significant Accounting Policies Basis of Presentation The accompanying unaudited, consolidated financial statements of SLM Corporation (the Company or Sallie Mae) have been prepared in accordance with generally accepted accounting principles in the United States of America (GAAP) for interim financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete consolidated financial statements. In the opinion of management, all adjustments considered necessary for a fair statement of the results for the interim periods have been included. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three months ended June30, 2009 are not necessarily indicative of the results for the year ending December31, 2009. These unaudited financial statements should be read in conjunction with the audited financial statements and related notes included in the Companys 2008 Annual Report on Form10-K. Management has evaluated subsequent events, and the impact on the reported results and disclosures, through August 5, 2009, which is the date these financial statements were issued. Reclassifications Certain reclassifications have been made to the balances as of and for the three and six months ended June30, 2008 to be consistent with classifications adopted for 2009, and had no effect on net income, total assets, or total liabilities. Recently Issued Accounting Pronouncements Transfers of Financial Assets and the Variable Interest Entity (VIE) Consolidation Model In June 2009, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No.166, Accounting for Transfers of Financial Assets, an amendment to SFASNo.140, and SFASNo.167, Amendments to FASB Interpretation No.46(R). SFASNo.166, among other things, (1)eliminates the concept of a Qualifying Special Purpose Entity (QSPE), (2)changes the requirements for derecognizing financial assets, (3)changes the amount of the recognized gain/loss on a transfer accounted for as a sale when beneficial interests are received by the transferor, and (4)requires additional disclosure. SFASNo.166 is effective for fiscal years beginning after November15, 2009. SFASNo.167 significantly changes the consolidation model for Variable Interest Entities (VIEs). SFASNo.167 amends FINNo.46(R) and, among other things, (1)eliminates the exemption for QSPEs, (2)provides a new approach for determining who should consolidate a VIE which is more focused on control rather than economic interest, (3)changes when it is necessary to reassess who should consolidate a VIE and (4)requires additional disclosure. SFASNo.167 is effective for the first annual reporting period beginning after November15, 2009. The Company is currently evaluating the impact of these statements to its consolidated financial statements. Based on the Companys preliminary review,

Allowance for Loan Losses

Allowance for Loan Losses
	6 Months Ended Jun. 30, 2009 USD / shares
Allowance for Loan Losses [Abstract]
Allowance for Loan Losses	2. Allowance for Loan Losses The Companys provisions for loan losses represent the periodic expense of maintaining an allowance sufficient to absorb incurred losses, net of recoveries, in the held-for-investment loan portfolios. The evaluation of the provisions for loan losses is inherently subjective as it requires material estimates that may be susceptible to significant changes. The Company believes that the allowance for loan losses is appropriate to cover probable losses incurred in the loan portfolios. The following table summarizes the total loan provisions for the three and six months ended June30, 2009 and 2008. Three Months Ended Six Months Ended June30, June30, 2009 2008 2009 2008 Private Education Loans $ 241,759 $ 119,838 $ 445,304 $ 238,449 FFELP Stafford and Other Student Loans 25,595 19,295 59,993 35,398 Mortgage and consumer loans 10,758 3,882 23,094 6,479 Total provisions for loan losses $ 278,112 $ 143,015 $ 528,391 $ 280,326 Allowance for Private Education Loan Losses The following table summarizes changes in the allowance for loan losses for Private Education Loans for the three and six months ended June30, 2009 and 2008. Three Months Ended Six Months Ended June30, June30, 2009 2008 2009 2008 Allowance at beginning of period $ 1,384,454 $ 1,073,317 $ 1,308,043 $ 1,003,964 Provision for Private Education Loan losses 241,759 119,838 445,304 238,449 Charge-offs (238,943 ) (72,249 ) (377,758 ) (129,601 ) Reclassification of interest reserve(1) 9,437 8,094 21,118 16,188 Allowance at end of period $ 1,396,707 $ 1,129,000 $ 1,396,707 $ 1,129,000 Charge-offs as a percentage of average loans in repayment (annualized) 8.2 % 3.6 % 6.7 % 3.5 % Charge-offs as a percentage of average loans in repayment and forbearance (annualized) 7.6 % 3.2 % 6.2 % 3.0 % Allowance as a percentage of the ending total loan balance 5.9 % 5.8 % 5.9 % 5.8 % Allowance as a percentage of ending loans in repayment 11.5 % 13.1 % 11.5 % 13.1 % Allowance coverage of charge-offs (annualized) 1.5 3.9 1.8 4.3 Ending total loans(2) $ 23,784,039 $ 19,607,553 $ 23,784,039 $ 19,607,553

Investment

Investment
	6 Months Ended Jun. 30, 2009 USD / shares
Investment [Abstract]
Investment	3. Investments A summary of investments and restricted investments as of June30, 2009 and December31, 2008 follows: June30, 2009 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Investments Available-for-sale U.S. Treasury securities and other U.S. government agency obligations $ 9,061 $ 73 $ $ 9,134 Other securities: Asset-backed securities 115,114 (843 ) 114,271 Commercial paper and asset-backed commercial paper 1,049,988 1,049,988 Municipal bonds 10,298 2,048 12,346 Other 1,530 (298 ) 1,232 Total investment securities available-for-sale $ 1,185,991 $ 2,121 $ (1,141 ) $ 1,186,971 Restricted Investments Available-for sale U.S. Treasury securities and other U.S. government agency obligations $ 32,750 $ $ $ 32,750 Guaranteed investment contracts 25,189 25,189 Total restricted investments available-for-sale $ 57,939 $ $ $ 57,939 Held-to-maturity Guaranteed investment contracts $ 3,963 $ $ $ 3,963 Other 215 215 Total restricted investments held-to-maturity $ 4,178 $ $ $ 4,178 December31, 2008 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value Investments Available-for-sale U.S. Treasury securities and other U.S. government agency obligations $ 8,908 $ 195 $ $ 9,103 Other securities: Asset-backed securities 40,907 13 (4,299 ) 36,621 Commercial paper and asset-backed commercial paper 801,169 801,169 Municipal bonds 10,883 1,924 12,807 Other 1,673 (365 ) 1,308 Total investment securities available-for-

Goodwill and Acquired Intangibl

Goodwill and Acquired Intangible Assets
	6 Months Ended Jun. 30, 2009 USD / shares
Goodwill and Acquired Intangible Assets [Abstract]
Goodwill and Acquired Intangible Assets	4. Goodwill and Acquired Intangible Assets Goodwill In accordance with SFASNo.142, Goodwill and Other Intangible Assets, all acquisitions must be assigned to a reporting unit or units. A reporting unit is the same as or one level below an operating segment, as defined in SFASNo.131. The following table summarizes the Companys allocation of goodwill to its reporting units. As of June30, (Dollars in millions) 2009 2008 Lending $ 388 $ 388 Asset Performance Group 401 396 Guarantor services 62 62 Upromise 140 140 Total $ 991 $ 986 Impairment Testing In accordance with SFASNo.142, the Company performs goodwill impairment testing annually in the fourth quarter as of a September 30 valuation date or more frequently if an event occurs or circumstances change such that there is a potential that the fair value of a reporting unit or reporting units may be below their respective carrying values. On February26, 2009, the Obama Administration (the Administration) issued their 2010 budget request to Congress, which included provisions that could significantly impact the FFELP. In light of the potential implications of the Administrations 2010 budget proposal to the Companys business model, as well as continued uncertainty in the economy, the tight credit markets and the Companys decline in market capitalization during the first quarter of 2009, the Company assessed goodwill impairment as of March31, 2009. This assessment resulted in estimated fair values of the Companys reporting units in excess of their carrying values. Accordingly, no goodwill impairment was recorded in the first quarter. During the second quarter, no new unfavorable events or changes in circumstances occurred to warrant an impairment assessment as of June30, 2009. Nevertheless, in light of ongoing uncertainties associated with the Administrations proposed budget and the economic conditions described above, the Company continues to monitor the fair value of goodwill for each of its reporting units on a quarterly basis. Based on the Companys assessment that there have been no change in circumstances associated with any of its reporting units during the second quarter and based on its aforementioned monitoring process, the Company concluded that goodwill is not impaired as of June30, 2009. Acquired Intangible Assets Acquired intangible assets include the following: Average As of June30, 2009 Amortization Accumulated (Dollars in millions) Period Gross Amortization Net Intangible assets subject to amortization: Customer, services, and lending relationships 12years $ 332 $ (190 ) $ 142 Software and technology 7years 98 (88 ) 10 Non-compete agreements 2years

Borrowings

Borrowings
	6 Months Ended Jun. 30, 2009 USD / shares
Borrowings [Abstract]
Borrowings	5. Borrowings The following table summarizes the Companys borrowings as of June30, 2009 and December31, 2008. June30, 2009 December31, 2008 Short Long Short Long (Dollars in millions) Term Term Total Term Term Total Unsecured borrowings $ 4,249 $ 28,416 $ 32,665 $ 6,794 $ 31,182 $ 37,976 Term bank deposits 901 5,199 6,100 1,148 1,108 2,256 Indentured trusts 8 1,761 1,769 31 1,972 2,003 2008 Asset-Backed Financing Facilities 12,476 12,476 24,768 24,768 ED Participation Program facility 17,236 17,236 7,365 7,365 ED Conduit Program facility 11,095 11,095 On-balance sheet securitizations 87,386 87,386 80,601 80,601 Other 1,358 1,358 1,827 1,827 Total before fair value adjustments 47,323 122,762 170,085 41,933 114,863 156,796 SFASNo.133 fair value adjustments 9 3,118 3,127 3,362 3,362 Total $ 47,332 $ 125,880 $ 173,212 $ 41,933 $ 118,225 $ 160,158 As of June30, 2009, the Company had $3.5billion in unsecured revolving credit facilities which provide liquidity support for general corporate purposes. The Company has never drawn on these facilities. The facilities include a $1.9billion revolving credit facility maturing in October 2010 and $1.6billion maturing in October 2011. These figures do not include a $215million commitment from a subsidiary of Lehman Brothers Holding, Inc. On April24, 2009, in conjunction with the extension of the 2008 ABCP Facilities, a $1.4billion revolving credit facility maturing in October 2009 was retired and a $1.9billion revolving credit facility maturing in October 2011 was reduced to $1.6billion. In connection with the early termination of the unsecured revolving credit facilities, interest on these facilities, if drawn, increases to LIBOR plus 450basis points. The principal financial covenants in the unsecured revolving credit facilities require the Company to maintain tangible net worth of at least $1.38billion at all times. Consolidated tangible net worth as calculated for purposes of this covenant was $2.9billion as of June30, 2009. The covenants also require the Company to meet either a minimum interest coverage ratio or a minimum net adjusted revenue test based on the four

Student Loan Securitization

Student Loan Securitization
	6 Months Ended Jun. 30, 2009 USD / shares
Student Loan Securitization [Abstract]
Student Loan Securitization	6. Student Loan Securitization The Company securitizes its FFELP Stafford loans, FFELP Consolidation Loans and Private Education Loan assets and, for transactions qualifying as sales, retains a Residual Interest and servicing rights (as the Company retains the servicing responsibilities), all of which are referred to as the Companys Retained Interest in off-balance sheet securitized loans. The Residual Interest is the right to receive cash flows from the student loans and reserve accounts in excess of the amounts needed to pay servicing, derivative costs (if any), other fees, and the principal and interest on the bonds backed by the student loans. Securitization Activity The following table summarizes the Companys securitization activity for the three and six months ended June30, 2009 and 2008. Those securitizations listed as sales are off-balance sheet transactions and those listed as financings remain on-balance sheet. Three Months Ended June30, 2009 2008 Loan Pre- Loan Pre- No. of Amount Tax No. of Amount Tax (Dollars in millions) Transactions Securitized Gain Gain% Transactions Securitized Gain Gain% Securitizations sales: FFELP Stafford/PLUS loans $ $ % $ $ % FFELP Consolidation Loans Private Education Loans Total securitizations sales $ % $ % Securitizations financings: FFELP Stafford/PLUS Loans(1) 3 7,125 FFELP Consolidation Loans(1) 2 4,524 Private Education Loans(1) 1 3,527 Total securitizations financings 3 8,051 3 7,125 Total securitizations 3 $ 8,051 3 $ 7,125 Six Mo

Derivative Financial Instrument

Derivative Financial Instruments
	6 Months Ended Jun. 30, 2009 USD / shares
Derivative Financial Instruments [Abstract]
Derivative Financial Instruments	7. Derivative Financial Instruments Derivative instruments that are used as part of the Companys interest rate and foreign currency risk management strategy include interest rate swaps, basis swaps, cross-currency interest rate swaps, interest rate futures contracts, and interest rate floor and cap contracts with indices that relate to the pricing of specific balance sheet assets and liabilities including the Residual Interests from off-balance sheet securitizations. (For a full discussion of the Companys risk management strategy and use of derivatives, please see the Companys 2008 Form10-K, Note9, Derivative Financial Instruments, to the consolidated financial statements.) The Company accounts for its derivatives under SFASNo.133 which requires that every derivative instrument, including certain derivative instruments embedded in other contracts, be recorded in the balance sheet as either an asset or liability measured at its fair value. The Companys derivative instruments are classified and accounted for by the Company as fair value hedges, cash flow hedges or trading activities. Fair Value Hedges Fair value hedges are generally used by the Company to hedge the exposure to changes in fair value of a recognized fixed rate asset or liability. The Company enters into interest rate swaps to convert fixed rate assets into variable rate assets and fixed rate debt into variable rate debt. The Company also enters into cross-currency interest rate swaps to convert foreign currency denominated fixed and floating debt to U.S.dollar denominated variable debt. Changes in value for both the hedge and the hedged item are recorded to earnings. These amounts offset each other with the net amount representing the ineffectiveness of the relationship. Cash Flow Hedges Cash flow hedges are used by the Company to hedge the exposure to variability in cash flows for a forecasted debt issuance and for exposure to variability in cash flows of floating rate debt. This strategy is used primarily to minimize the exposure to volatility from future changes in interest rates. Gains and losses on the effective portion of a qualifying hedge are accumulated in other comprehensive income and ineffectiveness is recorded immediately to earnings. Trading Activities When instruments do not qualify as hedges under SFASNo.133, they are accounted for as trading where all changes in fair value of the derivatives are recorded through earnings. In general, derivative instruments included in trading activities include Floor Income Contracts, basis swaps and various other derivatives that do not qualify for hedge accounting under SFASNo.133. Summary of Derivative Financial Statement Impact The following tables summarize the fair values and notional amounts of all derivative instruments at June30, 2009 and December31, 2008, and their impact on other comprehensive income and earnings for the three and six months ended June30, 2009 and 2008. Impact of Derivatives on Consolidated Balance Sheet Cash Flow Fair Value Trading Total

Other Assets

Other Assets
	6 Months Ended Jun. 30, 2009 USD / shares
Other Assets [Abstract]
Other Assets	8. Other Assets The following table provides detail on the Companys other assets at June30, 2009 and December31, 2008. June30, December31, 2009 2008 Ending % of Ending % of Balance Balance Balance Balance Accrued interest receivable $ 2,993,603 30 % $ 3,466,404 31 % Derivatives at fair value 2,373,712 24 3,013,644 27 Income tax asset 1,895,199 19 1,661,039 15 APG purchased paper receivables and real estate owned 856,929 9 1,222,345 11 Benefit and insurance-related investments 475,780 5 472,899 4 Fixed assets, net 309,925 3 313,059 3 Accounts receivable general 652,036 7 712,854 6 Other 467,945 3 278,533 3 Total $ 10,025,129 100 % $ 11,140,777 100 % The Derivatives at fair value line in the above table includes the fair value of the Companys derivatives in a gain position by counterparty exclusive of accrued interest and collateral. At June30, 2009 and December31, 2008, these balances included cross-currency interest rate swaps and interest rate swaps designated as fair value hedges that were offset by an increase in interest-bearing liabilities related to the hedged debt. As of June30, 2009 and December31, 2008, the cumulative mark-to-market adjustment to the hedged debt was $(3.1)billion and $(3.4)billion, respectively.

Stockholders' Equity

Stockholders' Equity
	1/1/2009 - 6/30/2009 USD / shares
Shareholders' Equity [Abstract]
Stockholders' Equity	9. Stockholders Equity The following table summarizes the Companys common share repurchases and issuances for the three and six months ended June30, 2009 and 2008. Three Months Ended Six Months Ended June30, June30, (Shares in millions) 2009 2008 2009 2008 Common shares repurchased: Benefit plans(1) .2 .1 .5 Total shares repurchased .2 .1 .5 Average purchase price per share $ $ 23.74 $ 23.84 $ 20.98 Common shares issued .1 .3 .4 1.5 Authority remaining at end of period for repurchases 38.8 38.8 38.8 38.8 (1) Includes shares withheld from stock option exercises and vesting of restricted stock for employees tax withholding obligations and shares tendered by employees to satisfy option exercise costs. The closing price of the Companys common stock on June30, 2009 was $10.27. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) includes the after-tax change in unrealized gains and losses on available-for-sale investments, unrealized gains and losses on derivatives, and the defined benefit pension plans adjustment. The following table presents the cumulative balances of the components of other comprehensive income (loss) as of June30, 2009, December31, 2008 and June30, 2008. June30, December31, June30, 2009 2008 2008 Net unrealized gains (losses) on investments(1) $ 1,026 $ (1,243 ) $ 22,604 Net unrealized gains (losses) on derivatives(2) (67,971 ) (93,986 ) 19,696 Defined benefit pension plans: Net prior service cost Net gain 18,262 18,753 19,694 Total defined benefit pension plans(3) 18,262 18,753 19,694 Total accumulated other comprehensive income (loss) $ (48,683 ) $ (76,476 ) $ 61,994 (1) Net of tax expense of $560 as of June30, 2009, tax benefit of $750 as of December31, 2008, and tax expense of $12,707 as of June30, 2008. (2) Net of tax benefit of $39,086, and $53,419 as of June30, 2009 and December31, 2008, respectively, and tax expense of $11,118 as of June30, 2008. (3) Net of tax expense of $10,776, $10,967 and $11,425 as of June30, 2009, December31, 2008 and June30, 2008, respectively.

Earnings

Earnings (Loss) per Common Share
	6 Months Ended Jun. 30, 2009 USD / shares
Earnings (Loss) per Common Share [Abstract]
Earnings (Loss) per Common Share	10. Earnings (Loss) per Common Share Basic earnings (loss) per common share (EPS) are calculated using the weighted average number of shares of common stock outstanding during each period. A reconciliation of the numerators and denominators of the basic and diluted EPS calculations follows for the three and six months ended June30, 2009 and 2008. Three Months Ended Six Months Ended June30, June30, 2009 2008 2009 2008 Numerator: Net income (loss) attributable to common stock $ (148,520 ) $ 238,345 $ (196,301 ) $ 105,516 Adjusted for dividends of convertible preferred stock seriesC(1) 20,844 Net income (loss) attributable to common stock, adjusted $ (148,520 ) $ 259,189 $ (196,301 ) $ 105,516 Denominator (shares in thousands): Weighted average shares used to compute basic EPS 466,799 466,649 466,780 466,615 Effect of dilutive securities: Dilutive effect of convertible preferred stock seriesC(1) 50,568 Dilutive effect of stock options, nonvested deferred compensation, nonvested restricted stock, restricted stock units and Employee Stock Purchase Plan (ESPP)(2) 737 701 Dilutive potential common shares(3) 51,305 701 Weighted average shares used to compute diluted EPS 466,799 517,954 466,780 467,316 Net earnings (loss) per share: Basic earnings (loss) per common share $ (.32 ) $ .51 $ (.42 ) $ .23 Dilutive effect of convertible preferred stock seriesC(1) (.01 ) Dilutive effect of stock options, nonvested deferred compensation, nonvested restricted stock, restricted stock units, and ESPP(2) Diluted earnings (loss) per common share $ (.32 ) $ .50 $ (.42 ) $ .23 (1) The Companys 7.25percent mandatory convertible preferred stock seriesC was issued on December31, 2007. The mandatory convertible preferred stock will automatically convert on December15, 2010, into between approximately 48million shares and 59million shares of common stock, depending upon the Companys stock price at that time. Depending upon the amount of the mandatory convertible preferred stock outstanding as of that date, the actual number of shares of common stock issued may be le

Other Income

Other Income
	6 Months Ended Jun. 30, 2009 USD / shares
Other Income [Abstract]
Other Income	11. Other Income The following table summarizes the components of Other income in the consolidated statements of income for the three and six months ended June30, 2009 and 2008. Three Months Ended Six Months Ended June30, June30, 2009 2008 2009 2008 Gains on debt repurchases $ 325,294 $ 21,284 $ 389,049 $ 21,284 Late fees and forbearance fees 32,051 34,030 68,763 71,185 Asset servicing and other transaction fees 26,391 26,067 51,446 51,935 Loan servicing fees 8,687 5,616 18,733 12,268 Foreign currency translation gains (losses), net (5,692 ) 3,958 33,992 4,127 Other 12,334 17,773 29,540 41,462 Total $ 399,065 $ 108,728 $ 591,523 $ 202,261 The increase in other income for the three and six months ended June30, 2009 over the year-ago periods presented is primarily the result of the gains on debt repurchased. The Company began repurchasing its outstanding debt in the second quarter of 2008. In the second quarter of 2009, the Company repurchased $1.1billion face amount of its senior unsecured notes compared to $1.2billion in the second quarter of 2008. Since the second quarter of 2008, the Company has repurchased $3.2billion face amount of its senior unsecured notes in the aggregate, with maturity dates ranging from 2008 to 2014.

Restructuring Activities

Restructuring Activities
	6 Months Ended Jun. 30, 2009 USD / shares
Restructuring Activities [Abstract]
Restructuring Activities	12. Restructuring Activities During the fourth quarter of 2007, the Company initiated a restructuring program to reduce costs and improve operating efficiencies in response to the impacts of The College Cost Reduction and Access Act of 2007 (CCRAA) and challenges in the capital markets. As part of this restructuring program, the Company has refocused its lending activities, exited certain customer relationships and product lines and consolidated and exited certain facilities. Management estimates approximately $7million of additional restructuring expenses associated with the Companys current cost reduction efforts will be incurred. These estimated additional restructuring costs relate primarily to position eliminations and resulting employee terminations as well as lease termination costs in the Companys Asset Performance Group (APG) business segment. Management expects the Companys current restructuring program will be substantially complete by the end of 2009. However, management is continuing to review the Companys business to determine whether there are other opportunities to further streamline the business. The following table summarizes the restructuring expenses incurred during the quarters ended June30, 2009 and 2008 and cumulative restructuring expenses incurred through June30, 2009. Cumulative Expense as of Three Months Ended June30, Six Months Ended June30, June30, 2009 2008 2009 2008 2009 Severance costs $ 4,291 $ 34,214 $ 6,957 $ 49,083 $ 92,320 Lease and other contract termination costs 67 8,634 742 9,069 10,259 Exit and other costs 72 3,892 1,504 9,266 12,904 Total(1) $ 4,430 $ 46,740 $ 9,203 $ 67,418 $ 115,483 (1) Aggregate restructuring expenses incurred across the Companys reportable segments during the three months ended June30, 2009 and 2008 totaled $4million and $31million, respectively, in the Companys Lending reportable segment, $.4million and $5million, respectively, in the Companys APG reportable segment, and $(.2)million and $11million, respectively, in the Companys Corporate and Other reportable segment. As of June30, 2009 and 2008, severance costs were incurred in conjunction with aggregate completed and planned position eliminations of approximately 2,800 and 2,500 positions, respectively, across all of the Companys reportable segments, with position eliminations ranging from senior executives to clerical personnel. Lease and other contract termination costs and exit and other costs incurred during the three months ended June30, 2009 and 2008, respectively, related primarily to terminated or abandoned facility leases and consulting costs incurred in conjunction with various cost reduction and exit st

Fair Value Measurements

Fair Value Measurements
	6 Months Ended Jun. 30, 2009 USD / shares
Fair Value Measurements [Abstract]
Fair Value Measurements	13. Fair Value Measurements The Company uses estimates of fair value as defined by SFASNo.157 in applying various accounting standards for its financial statements. Under GAAP, fair value measurements are used in one of four ways: In the consolidated balance sheet with changes in fair value recorded in the consolidated statement of income; In the consolidated balance sheet with changes in fair value recorded in the accumulated other comprehensive income section of the consolidated statement of changes in stockholders equity; In the consolidated balance sheet for instruments carried at lower of cost or fair value with impairment charges recorded in the consolidated statement of income;and In the notes to the financial statements as required by SFASNo.107, Disclosures about Fair Value of Financial Instruments. Fair value under SFASNo.157 is defined as the price to sell an asset or transfer a liability in an orderly transaction between willing and able market participants. In general, the Companys policy in estimating fair values is to first look at observable market prices for identical assets and liabilities in active markets, where available. When these are not available, other inputs are used to model fair value such as prices of similar instruments, yield curves, volatilities, prepayment speeds, default rates and credit spreads (including for the Companys liabilities), relying first on observable data from active markets. Additional adjustments may be made for factors including liquidity, credit, bid/offer spreads, etc., depending on current market conditions. Transaction costs are not included in the determination of fair value. When possible, the Company seeks to validate the models output to market transactions. Depending on the availability of observable inputs and prices, different valuation models could produce materially different fair value estimates. The values presented may not represent future fair values and may not be realizable. Under SFASNo.157, the Company categorizes its fair value estimates based on a hierarchical framework associated with three levels of price transparency utilized in measuring financial instruments at fair value. Classification is based on the lowest level of input that is significant to the fair value of the instrument. The three levels are as follows: Level1 Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. The types of financial instruments included in level1 are highly liquid instruments with quoted prices; Level2 Inputs from active markets, other than quoted prices for identical instruments, are used to model fair value. Significant inputs are directly observable from active markets for substantially the full term of the asset or liability being valued;and Level3 Pricing inputs significant to the valuation are unobservable. Inputs are developed based on the best information available; however, significant judgment is required by management in developing the inputs.

Commitments and Contingencies

Commitments and Contingencies
	6 Months Ended Jun. 30, 2009 USD / shares
Contingencies [Abstract]
Commitments and Contingencies	14. Commitments and Contingencies On August3, 2009, the Company received the final audit report of EDs Office of the Inspector General (OIG) related to the Companys billing practices for special allowance payments. Among other things, the OIG recommended that ED instruct the Company to return approximately $22million in alleged special allowance overpayments. The Company continues to believe that its practices are consistent with longstanding ED guidance and all applicable rules and regulations and intends to continue disputing these findings. The OIG has audited other industry participants with regard to special allowance payments for loans funded by tax exempt obligations and in certain cases the Secretary of ED has disagreed with the OIGs recommendations. In the ordinary course of business, the Company and its subsidiaries are defendants in or parties to pending and threatened legal actions and proceedings including actions brought on behalf of various classes of claimants. These actions and proceedings may be based on alleged violations of consumer protection, securities, employment or other laws. In certain of these actions and proceedings, claims for substantial monetary damage are asserted against the Company and its subsidiaries. In the ordinary course of business, the Company and its subsidiaries also are subject to regulatory examinations, information gathering requests, inquiries and investigations. In connection with formal and informal inquiries in these cases, the Company and its subsidiaries receive numerous requests, subpoenas and orders for documents, testimony and information in connection with various aspects of the Companys regulated activities. In view of the inherent difficulty of predicting the outcome of such litigation and regulatory matters, the Company cannot predict what the eventual outcome of the pending matters will be, what the timing or the ultimate resolution of these matters will be, or what the eventual loss, fines or penalties related to each pending matter may be. In accordance with SFASNo.5, Accounting for Contingencies, the Company is required to establish reserves for litigation and regulatory matters when those matters present loss contingencies that are both probable and estimable. When loss contingencies are not both probable and estimable, the Company does not establish reserves. Based on current knowledge, no reserves have been established for any pending litigation or regulatory matters. Based on current knowledge, management does not believe that loss contingencies, if any, arising from pending litigation or regulatory matters will have a material adverse effect on the consolidated financial position or liquidity of the Company.

Income Taxes

Income Taxes
	6 Months Ended Jun. 30, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	15. Income Taxes For the six months ended June30, 2009 and 2008, the Company reported an income tax benefit of $78million and income tax expense of $91million, respectively, representing effective tax rates of 35percent and 35percent, respectively. Accounting for Uncertainty in Income Taxes The unrecognized tax benefits changed from $86million at December31, 2008 to $121million at June30, 2009, and there was no material change from December31, 2008 for the accrued interest and penalties. Included in the $121million are $32million of unrecognized tax benefits that if recognized, would favorably impact the effective tax rate. These changes result primarily from adding a new issue that was identified during the first quarter of 2009 while completing the 2008 U.S.federal income tax return as well as adjusting the 2005 and 2006 unrecognized tax benefits to incorporate the net impact of the IRS examination of the Companys 2005 and 2006 U.S.federal income tax returns. New information was received from the IRS during the first quarter as part of that IRS examination and the examination was ultimately concluded during the second quarter. Several other less significant amounts of uncertain tax benefits were also added during the quarter.

Segment Reporting

Segment Reporting
	6 Months Ended Jun. 30, 2009 USD / shares
Segment Reporting [Abstract]
Segment Reporting	16. Segment Reporting The Company has two primary operating segments as defined in SFASNo.131, Disclosures about Segments of an Enterprise and Related Information the Lending operating segment and the APG, formerly known as DMO, operating segment. The Lending and APG operating segments meet the quantitative thresholds for reportable segments identified in SFASNo.131. Accordingly, the results of operations of the Companys Lending and APG segments are presented below. The Company has smaller operating segments including the Guarantor Servicing, Loan Servicing, and Upromise operating segments, as well as certain other products and services provided to colleges and universities which do not meet the quantitative thresholds identified in SFASNo.131. Therefore, the results of operations for these operating segments and the revenues and expenses associated with these other products and services are combined with corporate overhead and other corporate activities within the Corporate and Other reportable segment. The management reporting process measures the performance of the Companys operating segments based on the management structure of the Company as well as the methodology used by management to evaluate performance and allocate resources. Management, including the Companys chief operating decision makers, evaluates the performance of the Companys operating segments based on their profitability. As discussed further below, management measures the profitability of the Companys operating segments based on Core Earnings net income. Accordingly, information regarding the Companys reportable segments is provided based on a Core Earnings basis. The Companys Core Earnings performance measures 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 guidance for management reporting. The management reporting process measures the performance of the operating segments based on the management structure of the Company and is not necessarily comparable with similar information for any other financial institution. The Companys operating segments are defined by the products and services they offer or the types of customers they serve, and they 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. The Companys principal operations are located in the United States, and its results of operations and long-lived assets in geographic regions outside of the United States are not significant. In the Lending segment, no individual customer accounted for more than 10percent of its total revenue during the three months ended June30, 2009 and 2008. United Student Aid Fu