EX-12.1 3 d255877dex121.htm EXHIBIT 12.1 Exhibit 12.1

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   
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

Total earnings

    $ 7,030,404       $ 6,537,289      $ 5,875,125      $ 3,845,402       $ 3,369,438       $ 1,913,195   
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

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   
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

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   
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

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   
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

Ratio of earnings to fixed charges(1)(2)

      1.37         —          —          1.27         1.48         1.07   
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

Ratio of earnings to fixed charges and preferred stock dividends(1)(3)

      1.35         —          —          1.20         1.40         1.06   
  

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

 

(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.