Exhibit 12.1
SLM CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
(Dollars in thousands)
Years Ended | Nine Months Ended | |||||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | Sept. 30, 2011 | |||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | 1,901,944 | $ | (553,888 | ) | $ | (34,213 | ) | $ | 807,878 | $ | 1,090,299 | $ | 133,063 | ||||||||||
Add: Fixed charges | 5,128,460 | 7,091,177 | 5,909,338 | 3,037,524 | 2,279,139 | 1,780,132 | ||||||||||||||||||
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Total earnings | $ | 7,030,404 | $ | 6,537,289 | $ | 5,875,125 | $ | 3,845,402 | $ | 3,369,438 | $ | 1,913,195 | ||||||||||||
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Interest expense | $ | 5,122,855 | $ | 7,085,772 | $ | 5,905,418 | $ | 3,035,639 | $ | 2,274,771 | $ | 1,777,481 | ||||||||||||
Rental expense, net of income | 5,605 | 5,405 | 3,920 | 1,885 | 4,368 | 2,651 | ||||||||||||||||||
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Total fixed charges | 5,128,460 | 7,091,177 | 5,909,338 | 3,037,524 | 2,279,139 | 1,780,132 | ||||||||||||||||||
Preferred stock dividends | 60,207 | 36,497 | 110,556 | 172,799 | 130,635 | 19,121 | ||||||||||||||||||
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Total fixed charges and preferred stock dividends | $ | 5,188,667 | $ | 7,127,674 | $ | 6,019,894 | $ | 3,210,323 | $ | 2,409,774 | $ | 1,799,253 | ||||||||||||
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Ratio of earnings to fixed charges(1)(2) | 1.37 | — | — | 1.27 | 1.48 | 1.07 | ||||||||||||||||||
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Ratio of earnings to fixed charges and preferred stock dividends(1)(3) | 1.35 | — | — | 1.20 | 1.40 | 1.06 | ||||||||||||||||||
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(1) | For purposes of computing these ratios, earnings represent income (loss) from continuing operations before income tax expense plus fixed charges. Fixed charges represent interest expensed and capitalized plus one-third (the proportion deemed representative of the interest factor) of rents, net of income from subleases. |
(2) | Due to pre-tax losses from continuing operations of $554 million and $34 million for the years ended December 31, 2007 and 2008, respectively, the ratio coverage was less than 1:1. We would have needed to generate $554 million and $34 million of additional earnings in the years ended December 31, 2007 and 2008, respectively, for the ratio coverage to equal 1:1. |
(3) | Due to pre-tax losses from continuing operations of $554 million and $34 million for the years ended December 31, 2007 and 2008, respectively, the ratio coverage was less than 1:1. We would have needed to generate $590 million and $145 million of additional earnings in the years ended December 31, 2007 and 2008, respectively, for the ratio coverage to equal 1:1. |