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Segment Reporting (Tables) | 6 Months Ended
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Jun. 30, 2016
Segment Results and Reconciliations to GAAP | Segment Results and Reconciliations to GAAP
|  | Three Months Ended June 30, 2016 |
(Dollars in millions) |  | FFELP Loans |  |  | Private Education Loans |  |  | Business Services |  |  | Other |  |  | Elimina- tions(1) |  |  | Total “Core Earnings” |  |  | Adjustments |  |  | Total GAAP |
|  |  |  |  |  |  | Reclassi- fications |  |  | Additions/ (Subtractions) |  |  | Total Adjustments(2) |  |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Education loans |  | $ | 588 |  |  | $ | 402 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 990 |  |  | $ | 56 |  |  | $ | (26 | ) |  | $ | 30 |  |  | $ | 1,020 |
Other loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |
Cash and investments |  |  | 5 |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | 6 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6 |
Total interest income |  |  | 593 |  |  |  | 402 |  |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 998 |  |  |  | 56 |  |  |  | (26 | ) |  |  | 30 |  |  |  | 1,028 |
Total interest expense |  |  | 388 |  |  |  | 173 |  |  |  | — |  |  |  | 29 |  |  |  | — |  |  |  | 590 |  |  |  | 9 |  |  |  | — |  |  |  | 9 |  |  |  | 599 |
Net interest income (loss) |  |  | 205 |  |  |  | 229 |  |  |  | — |  |  |  | (26 | ) |  |  | — |  |  |  | 408 |  |  |  | 47 |  |  |  | (26 | ) |  |  | 21 |  |  |  | 429 |
Less: provisions for loan losses |  |  | 10 |  |  |  | 100 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 110 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 110 |
Net interest income (loss) after provisions for loan losses |  |  | 195 |  |  |  | 129 |  |  |  | — |  |  |  | (26 | ) |  |  | — |  |  |  | 298 |  |  |  | 47 |  |  |  | (26 | ) |  |  | 21 |  |  |  | 319 |
Other income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicing revenue |  |  | 14 |  |  |  | 3 |  |  |  | 153 |  |  |  | — |  |  |  | (99 | ) |  |  | 71 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 71 |
Asset recovery and business processing revenue |  |  | — |  |  |  | — |  |  |  | 101 |  |  |  | — |  |  |  | — |  |  |  | 101 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 101 |
Other income (loss) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | 4 |  |  |  | (47 | ) |  |  | (6 | ) |  |  | (53 | ) |  |  | (49 | )
Gains on sales of loans and investments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Gains on debt repurchases |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total other income (loss) |  |  | 14 |  |  |  | 3 |  |  |  | 254 |  |  |  | 4 |  |  |  | (99 | ) |  |  | 176 |  |  |  | (47 | ) |  |  | (6 | ) |  |  | (53 | ) |  |  | 123 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct operating expenses |  |  | 101 |  |  |  | 41 |  |  |  | 125 |  |  |  | 7 |  |  |  | (99 | ) |  |  | 175 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 175 |
Overhead expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 55 |  |  |  | — |  |  |  | 55 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 55 |
Operating expenses |  |  | 101 |  |  |  | 41 |  |  |  | 125 |  |  |  | 62 |  |  |  | (99 | ) |  |  | 230 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 230 |
Goodwill and acquired intangible asset impairment and amortization |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6 |  |  |  | 6 |  |  |  | 6 |
Restructuring and other reorganization expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total expenses |  |  | 101 |  |  |  | 41 |  |  |  | 125 |  |  |  | 62 |  |  |  | (99 | ) |  |  | 230 |  |  |  | — |  |  |  | 6 |  |  |  | 6 |  |  |  | 236 |
Income (loss) from continuing operations, before income tax expense (benefit) |  |  | 108 |  |  |  | 91 |  |  |  | 129 |  |  |  | (84 | ) |  |  | — |  |  |  | 244 |  |  |  | — |  |  |  | (38 | ) |  |  | (38 | ) |  |  | 206 |
Income tax expense (benefit)(3) |  |  | 40 |  |  |  | 34 |  |  |  | 48 |  |  |  | (32 | ) |  |  | — |  |  |  | 90 |  |  |  | — |  |  |  | (9 | ) |  |  | (9 | ) |  |  | 81 |
Net income (loss) from continuing operations |  |  | 68 |  |  |  | 57 |  |  |  | 81 |  |  |  | (52 | ) |  |  | — |  |  |  | 154 |  |  |  | — |  |  |  | (29 | ) |  |  | (29 | ) |  |  | 125 |
Income (loss) from discontinued operations, net of tax expense (benefit) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net income (loss) |  | $ | 68 |  |  | $ | 57 |  |  | $ | 81 |  |  | $ | (52 | ) |  | $ | — |  |  | $ | 154 |  |  | $ | — |  |  | $ | (29 | ) |  | $ | (29 | ) |  | $ | 125 |
(1) | The eliminations in servicing revenue and direct operating expense represent the elimination of intercompany servicing revenue where the Business Services segment performs the loan servicing function for the FFELP Loans segment.
(2) | “Core Earnings” adjustments to GAAP:
|  | Three Months Ended June 30, 2016 |
(Dollars in millions) |  | Net Impact from Spin-Off of SLM BankCo |  |  | Net Impact of Derivative Accounting |  |  | Net Impact of Acquired Intangibles |  |  | Total |
Net interest income after provisions for loan losses |  | $ | — |  |  | $ | 21 |  |  | $ | — |  |  | $ | 21 |
Total other income (loss) |  |  | — |  |  |  | (53 | ) |  |  | — |  |  |  | (53 | )
Operating expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Goodwill and acquired intangible asset impairment and amortization |  |  | — |  |  |  | — |  |  |  | 6 |  |  |  | 6 |
Restructuring and other reorganization expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total “Core Earnings” adjustments to GAAP |  | $ | — |  |  | $ | (32 | ) |  | $ | (6 | ) |  |  | (38 | )
Income tax expense (benefit) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (9 | )
Net income (loss) |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | (29 | )
(3) | Income taxes are based on a percentage of net income before tax for the individual reportable segment.
|  | Three Months Ended June 30, 2015 |
(Dollars in millions) |  | FFELP Loans |  |  | Private Education Loans |  |  | Business Services |  |  | Other |  |  | Elimina- tions(1) |  |  | Total “Core Earnings” |  |  | Adjustments |  |  | Total GAAP |
|  |  |  |  |  |  | Reclassi- fications |  |  | Additions/ (Subtractions) |  |  | Total Adjustments(2) |  |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Education loans |  | $ | 522 |  |  | $ | 434 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 956 |  |  | $ | 163 |  |  | $ | (59 | ) |  | $ | 104 |  |  | $ | 1,060 |
Other loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |
Cash and investments |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |
Total interest income |  |  | 523 |  |  |  | 434 |  |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 960 |  |  |  | 163 |  |  |  | (59 | ) |  |  | 104 |  |  |  | 1,064 |
Total interest expense |  |  | 309 |  |  |  | 171 |  |  |  | — |  |  |  | 28 |  |  |  | — |  |  |  | 508 |  |  |  | 7 |  |  |  | — |  |  |  | 7 |  |  |  | 515 |
Net interest income (loss) |  |  | 214 |  |  |  | 263 |  |  |  | — |  |  |  | (25 | ) |  |  | — |  |  |  | 452 |  |  |  | 156 |  |  |  | (59 | ) |  |  | 97 |  |  |  | 549 |
Less: provisions for loan losses |  |  | 7 |  |  |  | 191 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 198 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 198 |
Net interest income (loss) after provisions for loan losses |  |  | 207 |  |  |  | 72 |  |  |  | — |  |  |  | (25 | ) |  |  | — |  |  |  | 254 |  |  |  | 156 |  |  |  | (59 | ) |  |  | 97 |  |  |  | 351 |
Other income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicing revenue |  |  | 45 |  |  |  | 6 |  |  |  | 163 |  |  |  | — |  |  |  | (108 | ) |  |  | 106 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 106 |
Asset recovery and business processing revenue |  |  | — |  |  |  | — |  |  |  | 99 |  |  |  | — |  |  |  | — |  |  |  | 99 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 99 |
Other income (loss) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 3 |  |  |  | (156 | ) |  |  | 142 |  |  |  | (14 | ) |  |  | (11 | )
Gains on sales of loans and investments |  |  | 7 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7 |
Gains on debt repurchases |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total other income (loss) |  |  | 52 |  |  |  | 6 |  |  |  | 262 |  |  |  | 3 |  |  |  | (108 | ) |  |  | 215 |  |  |  | (156 | ) |  |  | 142 |  |  |  | (14 | ) |  |  | 201 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct operating expenses |  |  | 112 |  |  |  | 43 |  |  |  | 117 |  |  |  | 6 |  |  |  | (108 | ) |  |  | 170 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 170 |
Overhead expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 55 |  |  |  | — |  |  |  | 55 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 55 |
Operating expenses |  |  | 112 |  |  |  | 43 |  |  |  | 117 |  |  |  | 61 |  |  |  | (108 | ) |  |  | 225 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 225 |
Goodwill and acquired intangible asset impairment and amortization |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 3 |  |  |  | 3 |
Restructuring and other reorganization expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 29 |  |  |  | 29 |  |  |  | 29 |
Total expenses |  |  | 112 |  |  |  | 43 |  |  |  | 117 |  |  |  | 61 |  |  |  | (108 | ) |  |  | 225 |  |  |  | — |  |  |  | 32 |  |  |  | 32 |  |  |  | 257 |
Income (loss) from continuing operations, before income tax expense (benefit) |  |  | 147 |  |  |  | 35 |  |  |  | 145 |  |  |  | (83 | ) |  |  | — |  |  |  | 244 |  |  |  | — |  |  |  | 51 |  |  |  | 51 |  |  |  | 295 |
Income tax expense (benefit)(3) |  |  | 54 |  |  |  | 13 |  |  |  | 54 |  |  |  | (31 | ) |  |  | — |  |  |  | 90 |  |  |  | — |  |  |  | 23 |  |  |  | 23 |  |  |  | 113 |
Net income (loss) from continuing operations |  | $ | 93 |  |  | $ | 22 |  |  | $ | 91 |  |  | $ | (52 | ) |  | $ | — |  |  | $ | 154 |  |  | $ | — |  |  | $ | 28 |  |  | $ | 28 |  |  | $ | 182 |
Income (loss) from discontinued operations, net of tax expense (benefit) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net income (loss) |  | $ | 93 |  |  | $ | 22 |  |  | $ | 91 |  |  | $ | (52 | ) |  | $ | — |  |  | $ | 154 |  |  | $ | — |  |  | $ | 28 |  |  | $ | 28 |  |  | $ | 182 |
(1) | The eliminations in servicing revenue and direct operating expense represent the elimination of intercompany servicing revenue where the Business Services segment performs the loan servicing function for the FFELP Loans segment.
(2) | “Core Earnings” adjustments to GAAP:
|  | Three Months Ended June 30, 2015 |
(Dollars in millions) |  | Net Impact from Spin-Off of SLM BankCo |  |  | Net Impact of Derivative Accounting |  |  | Net Impact of Acquired Intangibles |  |  | Total |
Net interest income after provisions for loan losses |  | $ | — |  |  | $ | 97 |  |  | $ | — |  |  | $ | 97 |
Total other income (loss) |  |  | — |  |  |  | (14 | ) |  |  | — |  |  |  | (14 | )
Operating expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Goodwill and acquired intangible asset impairment and amortization |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | 3 |
Restructuring and other reorganization expenses |  |  | 29 |  |  |  | — |  |  |  | — |  |  |  | 29 |
Total “Core Earnings” adjustments to GAAP |  | $ | (29 | ) |  | $ | 83 |  |  | $ | (3 | ) |  |  | 51 |
Income tax expense (benefit) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 23 |
Net income (loss) |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 28 |
(3) | Income taxes are based on a percentage of net income before tax for the individual reportable segment.
|  | Six Months Ended June 30, 2016 |
(Dollars in millions) |  | FFELP Loans |  |  | Private Education Loans |  |  | Business Services |  |  | Other |  |  | Elimina- tions(1) |  |  | Total “Core Earnings” |  |  | Adjustments |  |  | Total GAAP |
|  |  |  |  |  |  | Reclassi- fications |  |  | Additions/ (Subtractions) |  |  | Total Adjustments(2) |  |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Education loans |  | $ | 1,143 |  |  | $ | 813 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,956 |  |  | $ | 195 |  |  | $ | (86 | ) |  | $ | 109 |  |  | $ | 2,065 |
Other loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3 |
Cash and investments |  |  | 8 |  |  |  | 1 |  |  |  | — |  |  |  | 3 |  |  |  | — |  |  |  | 12 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 12 |
Total interest income |  |  | 1,151 |  |  |  | 814 |  |  |  | — |  |  |  | 6 |  |  |  | — |  |  |  | 1,971 |  |  |  | 195 |  |  |  | (86 | ) |  |  | 109 |  |  |  | 2,080 |
Total interest expense |  |  | 746 |  |  |  | 345 |  |  |  | — |  |  |  | 56 |  |  |  | — |  |  |  | 1,147 |  |  |  | 18 |  |  |  | — |  |  |  | 18 |  |  |  | 1,165 |
Net interest income (loss) |  |  | 405 |  |  |  | 469 |  |  |  | — |  |  |  | (50 | ) |  |  | — |  |  |  | 824 |  |  |  | 177 |  |  |  | (86 | ) |  |  | 91 |  |  |  | 915 |
Less: provisions for loan losses |  |  | 17 |  |  |  | 204 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 221 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 221 |
Net interest income (loss) after provisions for loan losses |  |  | 388 |  |  |  | 265 |  |  |  | — |  |  |  | (50 | ) |  |  | — |  |  |  | 603 |  |  |  | 177 |  |  |  | (86 | ) |  |  | 91 |  |  |  | 694 |
Other income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicing revenue |  |  | 31 |  |  |  | 8 |  |  |  | 315 |  |  |  | — |  |  |  | (200 | ) |  |  | 154 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 154 |
Asset recovery and business processing revenue |  |  | — |  |  |  | — |  |  |  | 191 |  |  |  | — |  |  |  | — |  |  |  | 191 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 191 |
Other income (loss) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7 |  |  |  | — |  |  |  | 7 |  |  |  | (177 | ) |  |  | 108 |  |  |  | (69 | ) |  |  | (62 | )
Gains on sales of loans and investments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Gains on debt repurchases |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total other income (loss) |  |  | 31 |  |  |  | 8 |  |  |  | 506 |  |  |  | 7 |  |  |  | (200 | ) |  |  | 352 |  |  |  | (177 | ) |  |  | 108 |  |  |  | (69 | ) |  |  | 283 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct operating expenses |  |  | 206 |  |  |  | 84 |  |  |  | 258 |  |  |  | 14 |  |  |  | (200 | ) |  |  | 362 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 362 |
Overhead expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 116 |  |  |  | — |  |  |  | 116 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 116 |
Operating expenses |  |  | 206 |  |  |  | 84 |  |  |  | 258 |  |  |  | 130 |  |  |  | (200 | ) |  |  | 478 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 478 |
Goodwill and acquired intangible asset impairment and amortization |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10 |  |  |  | 10 |  |  |  | 10 |
Restructuring and other reorganization expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total expenses |  |  | 206 |  |  |  | 84 |  |  |  | 258 |  |  |  | 130 |  |  |  | (200 | ) |  |  | 478 |  |  |  | — |  |  |  | 10 |  |  |  | 10 |  |  |  | 488 |
Income (loss) from continuing operations, before income tax expense (benefit) |  |  | 213 |  |  |  | 189 |  |  |  | 248 |  |  |  | (173 | ) |  |  | — |  |  |  | 477 |  |  |  | — |  |  |  | 12 |  |  |  | 12 |  |  |  | 489 |
Income tax expense (benefit)(3) |  |  | 79 |  |  |  | 70 |  |  |  | 91 |  |  |  | (64 | ) |  |  | — |  |  |  | 176 |  |  |  | — |  |  |  | 8 |  |  |  | 8 |  |  |  | 184 |
Net income (loss) from continuing operations |  |  | 134 |  |  |  | 119 |  |  |  | 157 |  |  |  | (109 | ) |  |  | — |  |  |  | 301 |  |  |  | — |  |  |  | 4 |  |  |  | 4 |  |  |  | 305 |
Income (loss) from discontinued operations, net of tax expense (benefit) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net income (loss) |  | $ | 134 |  |  | $ | 119 |  |  | $ | 157 |  |  | $ | (109 | ) |  | $ | — |  |  | $ | 301 |  |  | $ | — |  |  | $ | 4 |  |  | $ | 4 |  |  | $ | 305 |
(1) | The eliminations in servicing revenue and direct operating expense represent the elimination of intercompany servicing revenue where the Business Services segment performs the loan servicing function for the FFELP Loans segment.
(2) | “Core Earnings” adjustments to GAAP:
|  | Six Months Ended June 30, 2016 |
(Dollars in millions) |  | Net Impact from Spin-Off of SLM BankCo |  |  | Net Impact of Derivative Accounting |  |  | Net Impact of Acquired Intangibles |  |  | Total |
Net interest income after provisions for loan losses |  | $ | — |  |  | $ | 91 |  |  | $ | — |  |  | $ | 91 |
Total other income (loss) |  |  | — |  |  |  | (69 | ) |  |  | — |  |  |  | (69 | )
Operating expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Goodwill and acquired intangible asset impairment and amortization |  |  | — |  |  |  | — |  |  |  | 10 |  |  |  | 10 |
Restructuring and other reorganization expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total “Core Earnings” adjustments to GAAP |  | $ | — |  |  | $ | 22 |  |  | $ | (10 | ) |  |  | 12 |
Income tax expense (benefit) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 8 |
Net income (loss) |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 4 |
(3) | Income taxes are based on a percentage of net income before tax for the individual reportable segment.
|  | Six Months Ended June 30, 2015 |
(Dollars in millions) |  | FFELP Loans |  |  | Private Education Loans |  |  | Business Services |  |  | Other |  |  | Elimina- tions(1) |  |  | Total “Core Earnings” |  |  | Adjustments |  |  | Total GAAP |
|  |  |  |  |  |  | Reclassi- fications |  |  | Additions/ (Subtractions) |  |  | Total Adjustments(2) |  |
Interest income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Education loans |  | $ | 1,055 |  |  | $ | 891 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,946 |  |  | $ | 325 |  |  | $ | (118 | ) |  | $ | 207 |  |  | $ | 2,153 |
Other loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4 |
Cash and investments |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4 |
Total interest income |  |  | 1,058 |  |  |  | 891 |  |  |  | — |  |  |  | 5 |  |  |  | — |  |  |  | 1,954 |  |  |  | 325 |  |  |  | (118 | ) |  |  | 207 |  |  |  | 2,161 |
Total interest expense |  |  | 611 |  |  |  | 345 |  |  |  | — |  |  |  | 57 |  |  |  | — |  |  |  | 1,013 |  |  |  | 16 |  |  |  | — |  |  |  | 16 |  |  |  | 1,029 |
Net interest income (loss) |  |  | 447 |  |  |  | 546 |  |  |  | — |  |  |  | (52 | ) |  |  | — |  |  |  | 941 |  |  |  | 309 |  |  |  | (118 | ) |  |  | 191 |  |  |  | 1,132 |
Less: provisions for loan losses |  |  | 12 |  |  |  | 311 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 323 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 323 |
Net interest income (loss) after provisions for loan losses |  |  | 435 |  |  |  | 235 |  |  |  | — |  |  |  | (52 | ) |  |  | — |  |  |  | 618 |  |  |  | 309 |  |  |  | (118 | ) |  |  | 191 |  |  |  | 809 |
Other income (loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Servicing revenue |  |  | 63 |  |  |  | 12 |  |  |  | 326 |  |  |  | — |  |  |  | (219 | ) |  |  | 182 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 182 |
Asset recovery and business processing revenue |  |  | — |  |  |  | — |  |  |  | 188 |  |  |  | — |  |  |  | — |  |  |  | 188 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 188 |
Other income (loss) |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 8 |  |  |  | — |  |  |  | 10 |  |  |  | (309 | ) |  |  | 367 |  |  |  | 58 |  |  |  | 68 |
Gains on sales of loans and investments |  |  | 12 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 12 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 12 |
Gains on debt repurchases |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total other income (loss) |  |  | 75 |  |  |  | 12 |  |  |  | 516 |  |  |  | 8 |  |  |  | (219 | ) |  |  | 392 |  |  |  | (309 | ) |  |  | 367 |  |  |  | 58 |  |  |  | 450 |
Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct operating expenses |  |  | 227 |  |  |  | 89 |  |  |  | 233 |  |  |  | 8 |  |  |  | (219 | ) |  |  | 338 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 338 |
Overhead expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 118 |  |  |  | — |  |  |  | 118 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 118 |
Operating expenses |  |  | 227 |  |  |  | 89 |  |  |  | 233 |  |  |  | 126 |  |  |  | (219 | ) |  |  | 456 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 456 |
Goodwill and acquired intangible asset impairment and amortization |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4 |  |  |  | 4 |  |  |  | 4 |
Restructuring and other reorganization expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 32 |  |  |  | 32 |  |  |  | 32 |
Total expenses |  |  | 227 |  |  |  | 89 |  |  |  | 233 |  |  |  | 126 |  |  |  | (219 | ) |  |  | 456 |  |  |  | — |  |  |  | 36 |  |  |  | 36 |  |  |  | 492 |
Income (loss) from continuing operations, before income tax expense (benefit) |  |  | 283 |  |  |  | 158 |  |  |  | 283 |  |  |  | (170 | ) |  |  | — |  |  |  | 554 |  |  |  | — |  |  |  | 213 |  |  |  | 213 |  |  |  | 767 |
Income tax expense (benefit)(3) |  |  | 106 |  |  |  | 58 |  |  |  | 106 |  |  |  | (64 | ) |  |  | — |  |  |  | 206 |  |  |  | — |  |  |  | 87 |  |  |  | 87 |  |  |  | 293 |
Net income (loss) from continuing operations |  | $ | 177 |  |  | $ | 100 |  |  | $ | 177 |  |  | $ | (106 | ) |  | $ | — |  |  | $ | 348 |  |  | $ | — |  |  | $ | 126 |  |  | $ | 126 |  |  | $ | 474 |
Income (loss) from discontinued operations, net of tax expense (benefit) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Net income (loss) |  | $ | 177 |  |  | $ | 100 |  |  | $ | 177 |  |  | $ | (106 | ) |  | $ | — |  |  | $ | 348 |  |  | $ | — |  |  | $ | 126 |  |  | $ | 126 |  |  | $ | 474 |
(1) | The eliminations in servicing revenue and direct operating expense represent the elimination of intercompany servicing revenue where the Business Services segment performs the loan servicing function for the FFELP Loans segment.
(2) | “Core Earnings” adjustments to GAAP:
|  | Six Months Ended June 30, 2015 |
(Dollars in millions) |  | Net Impact from Spin-Off of SLM BankCo |  |  | Net Impact of Derivative Accounting |  |  | Net Impact of Acquired Intangibles |  |  | Total |
Net interest income after provisions for loan losses |  | $ | — |  |  | $ | 191 |  |  | $ | — |  |  | $ | 191 |
Total other income (loss) |  |  | — |  |  |  | 58 |  |  |  | — |  |  |  | 58 |
Operating expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Goodwill and acquired intangible asset impairment and amortization |  |  | — |  |  |  | — |  |  |  | 4 |  |  |  | 4 |
Restructuring and other reorganization expenses |  |  | 32 |  |  |  | — |  |  |  | — |  |  |  | 32 |
Total “Core Earnings” adjustments to GAAP |  | $ | (32 | ) |  | $ | 249 |  |  | $ | (4 | ) |  |  | 213 |
Income tax expense (benefit) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 87 |
Net income (loss) |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 126 |
(3) | Income taxes are based on a percentage of net income before tax for the individual reportable segment.
Core Earnings Adjustments to GAAP | Summary of “Core Earnings” Adjustments to GAAP
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(Dollars in millions) |  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
“Core Earnings” adjustments to GAAP: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net impact of the removal of SLM BankCo’s operations and restructuring and reorganization expense in connection with the Spin-Off(1) |  | $ | — |  |  | $ | (29 | ) |  | $ | — |  |  | $ | (32 | )
Net impact of derivative accounting(2) |  |  | (32 | ) |  |  | 83 |  |  |  | 22 |  |  |  | 249 |
Net impact of goodwill and acquired intangibles assets(3) |  |  | (6 | ) |  |  | (3 | ) |  |  | (10 | ) |  |  | (4 | )
Net tax effect(4) |  |  | 9 |  |  |  | (23 | ) |  |  | (8 | ) |  |  | (87 | )
Total “Core Earnings” adjustments to GAAP |  | $ | (29 | ) |  | $ | 28 |  |  | $ | 4 |  |  | $ | 126 |
(1) | SLM BankCo’s operations and restructuring and other reorganization expense in connection with the Spin-Off: For “Core Earnings,” we have assumed the consumer banking business (SLM BankCo) was never a part of Navient’s historical results prior to the deemed distribution of SLM BankCo on April 30, 2014 and we have removed the restructuring and other reorganization expense incurred in connection with the Spin-Off, including the restructuring expenses related to the restructuring initiative launched in second-quarter 2015 to simplify and streamline the Company’s management structure post-Spin-Off. Excluding these items provides management with a useful basis from which to better evaluate results from ongoing operations against results from prior periods. The adjustment relates to the exclusion of the consumer banking business and represents the operations, assets, liabilities and equity of SLM BankCo, which is comprised of Sallie Mae Bank, Upromise Rewards, the Insurance Business, and the Private Education Loan origination functions. Included in these amounts are also certain general corporate overhead expenses related to the consumer banking business. General corporate overhead consists of costs primarily associated with accounting, finance, legal, human resources, certain information technology costs, stock compensation, and executive management and the board of directors. These costs were generally allocated to the consumer banking business based on the proportionate level of effort provided to the consumer banking business relative to SLM Corporation using a relevant allocation driver (e.g., in proportion to the number of employees by function that were being transferred to SLM BankCo as opposed to remaining at Navient). All intercompany transactions between SLM BankCo and Navient have been eliminated. In addition, all preferred stock dividends have been removed as SLM BankCo succeeded SLM Corporation as the issuer of the preferred stock in connection with the Spin-Off. The restructuring and other reorganization expense incurred in connection with the Spin-Off includes the restructuring expenses related to the restructuring initiative launched in second-quarter 2015 to simplify and streamline the Company’s management structure post-Spin-Off.
(2) | Derivative accounting: “Core Earnings” exclude periodic unrealized gains and losses that are caused by the mark-to-market valuations on derivatives that do not qualify for hedge accounting treatment under GAAP as well as the periodic unrealized gains and losses that are a result of ineffectiveness recognized related to effective hedges under GAAP. These unrealized gains and losses occur in our FFELP Loans, Private Education Loans and Other business segments. Under GAAP, for our derivatives that are held to maturity, the cumulative net unrealized gain or loss over the life of the contract will equal $0 except for Floor Income Contracts where the cumulative unrealized gain will equal the amount for which we sold the contract. In our “Core Earnings” presentation, we recognize the economic effect of these hedges, which generally results in any net settlement cash paid or received being recognized ratably as an interest expense or revenue over the hedged item’s life.
(3) | Goodwill and acquired intangible assets: Our “Core Earnings” exclude goodwill and intangible asset impairment and amortization of acquired intangible assets.
(4) | Net tax effect: Such tax effect is based upon our “Core Earnings” effective tax rate for the year.
Assets [Member] | FFELP Loans Segment [Member] |
Asset Information for Loans Segment | The following table includes GAAP basis asset information for our FFELP Loans segment.
(Dollars in millions) |  | June 30, 2016 |  |  | December 31, 2015 |
FFELP Loans, net |  | $ | 92,618 |  |  | $ | 96,498 |
Cash and investments(1) |  |  | 3,263 |  |  |  | 3,572 |
Other |  |  | 1,983 |  |  |  | 2,015 |
Total assets |  | $ | 97,864 |  |  | $ | 102,085 |
| (1) | Includes restricted cash and investments.
Assets [Member] | Private Education Loans Segment [Member] |
Asset Information for Loans Segment | The following table includes GAAP basis asset information for our Private Education Loans segment.
(Dollars in millions) |  | June 30, 2016 |  |  | December 31, 2015 |
Private Education Loans, net |  | $ | 24,741 |  |  | $ | 26,394 |
Cash and investments(1) |  |  | 787 |  |  |  | 596 |
Other |  |  | 2,140 |  |  |  | 1,988 |
Total assets |  | $ | 27,668 |  |  | $ | 28,978 |
| (1) | Includes restricted cash and investments.

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