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Forward-Looking Statements; Non-GAAP
Financial Measures The following information is current as of August 4, 2015 (unless otherwise noted) and should be read in connection with Navient
Corporations (Navient) Annual Report on Form 10-K for the year
ended December 31, 2014 (the 2014 Form 10-K), filed by Navient with the Securities and Exchange Commission (the SEC) on February 27, 2015 and subsequent reports filed by Navient with the SEC. Definitions for capitalized terms in this presentation not defined herein can be found in the
companys 2014 Form 10-K. This presentation contains
forward-looking statements and information based on managements current expectations as of the date of this presentation. Statements that are not historical facts, including statements about the companys beliefs, opinions or expectations and statements that assume or are dependent upon future events, are
forward-looking statements. Forward-looking statements are
subject to risks, uncertainties, assumptions and other factors that may cause actual results to be materially different from those reflected in such forward-looking statements. These factors include, among others, the risks and uncertainties set forth in Item 1A Risk Factors and elsewhere in
Navients 2014 Form 10-K and subsequent filings with the
SEC; increases in financing costs; limits on liquidity; increases in costs associated with compliance with laws and regulations; changes in accounting standards and the impact of
related changes in significant accounting estimates; any adverse outcomes in any
significant litigation to which the company is a party; credit risk associated with the companys exposure to third parties, including counterparties to the companys derivative transactions; risks inherent in the government contracting
environment, including the possible loss of government contracts and
potential civil and criminal penalties as a result of governmental investigations or audits; and changes in the terms of student loans and the educational credit marketplace (including changes resulting from new laws and the implementation of existing laws). The company could also be affected by,
among other things: changes in its funding costs and availability;
reductions to its credit ratings or the credit ratings of the United States of America; failures of its operating systems or infrastructure, or those of third- party vendors; risks related to cybersecurity including the potential disruption of its systems or potential disclosure of confidential customer
information; damage to its reputation; failures to successfully implement
cost-cutting initiatives and adverse effects of such initiatives on its business; failures or delays in the planned conversion to its servicing platform of the recently acquired Wells Fargo portfolio of Federal Family Education Loan Program (FFELP) loans or any other FFELP or Private
Education Loan portfolio acquisitions; risks associated with
restructuring initiatives; risks associated with the April 30, 2014 separation of Navient and SLM Corporation into two distinct, publicly traded companies, including failure to achieve the expected benefits of the separation; changes in the demand for educational financing or in financing preferences of
lenders, educational institutions, students and their families; changes in
law and regulations with respect to the student lending business and financial institutions generally; increased competition including from banks, other consumer lenders and other loan servicers; the creditworthiness of its customers; changes in the general interest rate environment, including the
rate relationships among relevant money-market instruments and those
of its earning assets vs. its funding arrangements; changes in general economic conditions; the companys ability to successfully effectuate any acquisitions and other strategic initiatives; and changes in the demand for debt management services.
The preparation of the companys consolidated financial statements also requires
management to make certain estimates and assumptions including estimates and assumptions about future events. These estimates or assumptions may prove to be incorrect. All forward-looking statements contained in this presentation are
qualified by these cautionary statements and are made only as of the date
of this presentation. The company does not undertake any obligation to update or revise these forward-looking statements to conform the statement to actual results or changes in its expectations.
Navient reports financial results on a GAAP basis and also
provides certain non-GAAP core earnings performance measures. When compared to GAAP results, core earnings exclude the impact of: (1) the financial results of the consumer banking business for historical periods prior to the April 30, 2014
spin-off as well as related restructuring and reorganization expenses
incurred in connection with the spin-off, including the restructuring initiated in the second quarter of 2015; (2) unrealized, mark-to-market gains/losses on derivatives; and (3) goodwill and acquired intangible asset amortization and impairment. Navient provides core earnings measures because
this is what management uses when making management decisions regarding
Navients performance and the allocation of corporate resources. Navient core earnings is not a defined term within GAAP and may not be comparable to similarly titled measures reported by other companies. For additional information, see Core Earnings Definition
and Limitations in Navients second quarter earnings release
for a further discussion and a complete reconciliation between GAAP net income and core earnings. |