Navient Corporation · NASDAQ:NAVI
Navient — Q2 2016 Earnings Presentation
72 slides from Navient's earnings presentation, Jul 25, 2016
Slide 1: 2016 2nd Quarter Investor Deck
2016 2nd Quarter Investor Deck July 25, 2016
Slide 2: Forward-Looking Statements; Non-GAAP Financial Measures
Forward-Looking Statements; Non-GAAP Financial Measures The following information is current as of June 30, 2016 (unless otherwise noted) and should be read in connection with Navient Corporation’s (Navient) Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”), file
Slide 3: Leading loan management, servicing and asset recovery company
• We are the leading loan management, servicing and asset recovery company - $117 billion education loan portfolio, of which 79% is insured or guaranteed - Servicing more than $300 billion in student loans, the company supports the educational and economic achievements of more than 12 million Americ
Slide 4: Operating Results “Core Earnings” Basis
Operating Results “Core Earnings” Basis (In millions, except per share amounts) Q2 16 Q1 16 Q2 15 Adjusted Core EPS before regulatory-related costs $0.48 $0.44 $0.40 Regulatory-related costs ($0.01) ($0.01) ($0.00) Reported Core EPS $0.47 $0.43 $0.40 Operating expenses (excluding regulatory-related
Slide 5: High Quality Education Loan Portfolio
High Quality Education Loan Portfolio FFELP Portfolio Private Education Portfolio • Largest holder of FFELP loans • Largest holder of Private Education loans • 97-98% of portfolio is government • Seasoned portfolio with 95% of loans in guaranteed repayment status having made more than 12 payments •
Slide 6: FFELP Loans Segment “Core Earnings” Basis
FFELP Loans Segment “Core Earnings” Basis (In millions) Q2 16 Q1 16 Q2 15 Net income $68 $66 $93 Average FFELP Loans $93,900 $95,721 $101,305 Net interest margin 0.85% 0.81% 0.81% Annualized charge-off rate 0.10% 0.08% 0.05% Greater than 90-day delinquency rate 7.2% 7.0% 8.4% Confidential and propri
Slide 7: FFELP Loans Segment Credit Quality
FFELP Loans Segment Credit Quality “Core Earnings” Basis ($'s in millions) FFELP Education Loan Portfolio June 30, 2016 June 30, 2015 Balance % Balance % Loans in-school/grace/deferment (1) $7,149 $9,760 Loans in forbearance(2) 12,512 14,203 Loans in repayment and percentage of each status Loans cur
Slide 8: Private Education Loans Segment “Core Earnings” Basis
Private Education Loans Segment “Core Earnings” Basis (In millions) Q2 16 Q1 16 Q2 15 Net income $57 $61 $22 Average Private Education Loans $25,700 $26,577 $29,207 Net interest margin 3.50% 3.56% 3.55% Provision for loan losses $100 $104 $191 Charge-offs1 $127 $144 $179 Annualized charge-off rate1
Slide 9: Private Education Loans Credit Quality
Private Education Loans Segment Credit Quality “Core Earnings” Basis ($'s in millions) Private Education Loan Portfolio June 30, 2016 June 30, 2015 Balance % Balance % Loans in-school/grace/deferment (1) $1,636 $2,439 Loans in forbearance(2) 892 998 Loans in repayment and percentage of each status L
Slide 10: Continued Improving Credit Quality
Private Education Loans Segment Continued Improving Credit Quality Private Education Loan Charge-Off Rate by Segment Private Education Loan Total Delinquencies by Segment 12% 30% 9.9% 25.8% Total Delinquency Rate 10% 9.2% 25% 20.2% Charge-off Rate 8% 6.8% 6.9% 20% 16.2% 15.1% 5.3% 12.5% 6% 15% 11.2%
Slide 11: Private Education Loans Default Performance
Private Education Loans Segment Default Performance Private Education Loan Historical Defaults by Payments Made Private Education Loans Outstanding by Payments Made 98% 99%100% 100% 95% 97% $16 $15.2 93% 94% 88% 90% 91% 86% $14.1 $14 Percent of Total Defaults 82% 77% $11.9 68% $12 $’s in billions 56
Slide 12: Loan Seasoning – June 30, 2016
Loan Seasoning – “Core Earnings” Basis June 30, 2016 Traditional Portfolio Monthly Scheduled Payments Received Loan Status 0-12 payments 13-24 payments 25-36 payments 37-48 payments More than 48 payments Total Not Yet in Repayment 1,489 Loans in Forbearance 252 19.8% 103 7.3% 103 4.6% 99 3.1% 235 1.
Slide 13: Loan Seasoning – June 30, 2015
Loan Seasoning – “Core Earnings” Basis June 30, 2015 Traditional Portfolio Monthly Scheduled Payments Received Loan Status 0-12 payments 13-24 payments 25-36 payments 37-48 payments More than 48 payments Total Not Yet in Repayment 2,218 Loans in Forbearance 332 17.3% 131 5.6% 122 3.5% 108 2.9% 187 1
Slide 14: Business Services Segment “Core Earnings” Basis
Business Services Segment “Core Earnings” Basis (In millions) Q2 16 Q1 16 Q2 15 Net income $81 $75 $91 Intercompany loan servicing revenue $99 $101 $108 Third-Party Loan servicing revenue $51 $54 $47 Asset recovery & business processing revenue $101 $90 $99 Federal Loans serviced ($ ’ s in billions)
Slide 15: Federal Loan Servicing
Business Services Segment Federal Loan Servicing Total Federal Loans Serviced $300 $275 $250 $’s in billions $225 $200 $175 $150 2011 2012 2013 2014 2015 Q2 2016 Confidential and proprietary information © 2016 Navient Solutions, Inc. All rights reserved. 15
Slide 16: Top Performing Asset Recovery & Business Processing Business
Top Performing Asset Recovery & Business Processing Business Key Characteristics Non Federal Student Loan Related Revenues • Strong business franchise $140 - Large sophisticated operating infrastructure - Compliance focused $120 - Industry leading performance $100 • Total 2015 revenues of $367 milli
Slide 17: Higher Education Industry
Higher Education Industry Confidential and proprietary information © 2016 Navient Solutions, Inc. All rights reserved. 17
Slide 18: Navient’s Role is to Help Student Borrowers Successfully Repay
Navient’s Role is to Help Student Borrowers Successfully Repay Their Loans Confidential and proprietary information © 2016 Navient Solutions, Inc. All rights reserved. 18
Slide 19: Majority of Student Loan Balances Are Less Than $25,000
The Majority of Student Loan Balances Are Less Than $25,000 Distribution Of Student Loan Balances, 4Q 2014 1% Less than $5,000 3% 2% $5,001-$10,000 7% 1% 21% $10,001-$25,000 $25,001-$50,000 $50,001-$75,000 $75,001-$100,000 19% $100,001-$150,000 $150,001-$200,000 18% Over $200,000 29% Federal Reserve
Slide 20: On an Individual Basis, Student Debt is More Reasonable
On an Individual Basis, Student Debt is More Reasonable Than May Be Evident The average debt of bachelor's degree … This translates to an increase holders is now around $27,000 in real in monthly payments of about $50 terms … compared to 1999-00 graduates. Average Debt Of 4-Year Bachelor's Monthly P
Slide 21: Defaults Are a Bigger Problem For Students Who Drop Out
Defaults Are a Bigger Problem For Students Who Drop Out Than For Degree Holders Federal Loan Default Rates By Attainment +354% 18% 16.8% • One of the strongest Percent Of Students In Default 16% indicators of whether 14% a borrower will default is whether 12% they make it to 10% graduation 8% • Drop
Slide 22: Recent College Graduates Have Seen Wages Increase
Recent College Graduates Have Seen Wages Increase Substantially Since the Great Recession Median Wages For Recent Graduates By Degree Type Bachelor’s degree High school diploma • Median wages for recent +7.1% college graduates have 45,000 continued to rise since the 40,000 Great Recession, increasin
Slide 23: Class of 2015 student loan delinquency rates lower than Class of 2010
Class of 2015 student loan delinquency rates approximately 3 times lower than Class of 2010 Federal Loan Delinquency Rates Six Months After End of Grace Period and Unemployment for Bachelor's Degree Holders Unemployment 30 29 6.5 31+ Days Delinquent 27 6.0 25 91+ Days Delinquent Unemployment Rate (%
Slide 24: Navient’s Default Prevention Expertise and National Default Rate
Navient’s Default Prevention Expertise Was a Key Factor in the Decline of the National Default Rate • The cohort default rate (CDR) measures the percent of borrowers 2012 Three-Year Cohort Default Rate who defaulted on a student loan 11.8 within three years of entering repayment. Navient CDR is • In
Slide 25: Benefits of a College Degree Outweigh the Costs
The Benefits of Obtaining a College Degree Outweigh the Costs by a Wide Margin Cumulative Earnings Net Of College Repayment Costs High School Diploma Bachelor’s Degree "Having some postsecondary education, $ 1.2 M even without earning a Cumulative Earnings (2011 USD) degree, adds nearly one- $ 1.0 M
Slide 26: College Completion: The Key to Financial Health
College Completion: The Key to Financial Health "Money Under 35," a recent study from Navient and Ipsos, highlighted the importance of college completion given the difficulties that borrowers face Borrowing whenofthey do not complete a Status degree.Non-completers Educational Attainment and Borrowin
Slide 27: More Bachelor’s and Advanced Degree Holders Have Paid Off College Debt
More Bachelor’s and Advanced Degree Holders Have Paid Off College Debt Even Though Borrowing is Higher Those without a degree have borrowed less but fewer have paid off their borrowing (ages 22-35) 90% $45,000 $42,703 80% 85% $40,000 81% 70% 73% 72% $35,000 60% $30,000 $27,791 50% $25,000 40% $20,00
Slide 28: Program Complexity Can Be Streamlined
Program Complexity Can Be Streamlined Deferment Forbearance • School (1) Discretionary Forbearance • School Full-Time (2) • Hardship Forbearance • School Half-Time (2) Mandatory Forbearance • Post Enrollment (1) • Medical or Dental Internship Residency • Graduate Fellowship (3) • Department of Defen
Slide 29: Funding and Liquidity
Funding and Liquidity Confidential and proprietary information © 2016 Navient Solutions, Inc. All rights reserved. 29
Slide 30: YTD 2016 Capital Markets Summary
YTD 2016 Capital Markets Summary • Acquired $2.2 billion of student loans • Issued $2.9 billion of FFELP ABS • Extended FFELP ABCP facility to 2018 - Current maximum financing capacity of $7.5 billion in this facility • Extended Private Education Loan ABCP facility one year - Current maximum financi
Slide 31: Secured Funding
Secured Funding 2016 YTD Issuance ($mm)1 1 Ford 7,415 Auto / Floorplans • Navient is among the largest issuers 2 AmeriCredit / GM Financial 5,572 Auto / Floorplans of ABS globally, having issued over 3 Santander2 5,182 Auto 4 Chase 3,825 Credit Card $275 billion of Private Education and 5 Nissan 3,6
Slide 32: Recent FFELP ABS Transactions
Recent FFELP ABS Transactions NAVSL 2016-4 NAVSL 2016-3 Pricing Date: June 24, 2016 June 7, 2016 Settlement Date: June 29, 2016 June 16, 2016 Issuance Amount: $520M $761M US Govt. Guaranteed US Govt. Guaranteed Collateral: FFELP Stafford, Plus and Consolidation Loans; FFELP Stafford, Plus and Consol
Slide 33: Recent Private Education Loan ABS Transactions
Recent Private Education Loan ABS Transactions NAVSL Trust 2016-A NAVSL Trust 2015-C Priced: January 28, 2016 December 1, 2015 Settled: February 4, 2016 December 10, 2015 Issuance Amount: $488M $359M Collateral: Private Education Loans Private Education Loans Prepayment Speed(1): 4% Constant Prepaym
Slide 34: Managing Unsecured Debt Maturities
Managing Unsecured Debt Maturities (par value, $ in billions) $3.2 $3.1 $2.8 $2.5 $2.5 $2.4 $1.8 $2.1 $2.1 $1.2 $1.4 $1.0 $1.0 $0.6 $0.6 $0.8 $0.8 $0.1 2016 2017 2018 2019 2020 2021 2022 2023 2024+ As of June 30, 2015 As of June 30, 2016 Long Term Conservative Funding Approach • Important to maintai
Slide 35: Conservative Unsecured Debt Profile
Conservative Unsecured Debt Profile $70 Years Ending December 31 1.35 (par value, $ in billions) $60 1.30 $51.7 $48.7 $47.2 $50 $45.1 1.25 $38.0$39.4 $40 1.20 $30.2 $28.0 $30 1.15 $24.0 $22.4 $23.0 $21.8 $22.1 $20.1 $18.8 $17.0 $17.8 $18.3 $17.5 $17.4 $20 $15.1 1.10 $13.9 $10 1.05 $0 1.00 2006 2007
Slide 36: Education Loan Portfolio Generates Significant Cash Flows
Education Loan Portfolio Generates Significant Cash Flows Projected Life of Loan Cash Flows over ~20 Years Enhancing Cash Flows1 • Reduced unsecured debt by $1.2 billion and returned $ ’ s in Billions $0.5 billion to shareholders through share repurchases FFELP Cash Flows 6/30/16 12/31/15 and divide
Slide 37: FFELP Cash Flows Highly Predictable
FFELP Cash Flows Highly Predictable $’s in millions Jul - Dec as of 6/30/2016 2016 2017 2018 2019 2020 2021 2022 2023 Projected FFELP Average Balance $89,366 $83,945 $76,288 $68,655 $61,416 $54,248 $47,270 $40,546 Projected Excess Spread $410 $819 $757 $685 $626 $564 $509 $453 Projected Servicing Re
Slide 38: Secured Cash Flow
Secured Cash Flow $ in Millions 2Q16YTD 2015 2014 2013 2012 FFELP Term Securitized Servicing (Cash Paid) $ 175 $ 387 $ 407 $ 507 $ 526 Net Residual1 (Excess Distributions) 234 724 680 476 628 Other Secured FFELP Net Cash Flow 40 173 216 1,199 934 Total FFELP 2 $ 449 $ 1,284 $ 1,302 $ 2,182 $ 2,088 P
Slide 39: FFELP ABS
FFELP ABS Confidential and proprietary information © 2016 Navient Solutions, Inc. All rights reserved. 39
Slide 40: Legal Final Maturity Date Update Sponsor Support Activities
Legal Final Maturity Date Update Sponsor Support Activities • Exercise Optional Servicer Clean-Up Calls: In 2015, Navient exercised cleanup call options related to 12 FFELP ABS trusts totaling $1.1 billion of bonds outstanding • Exercise Optional Servicer Purchases: We amended the servicing agreemen
Slide 41: Legal Final Maturity Date Update Sponsor Support Activities
Legal Final Maturity Date Update Sponsor Support Activities • Disclosure of Loan Performance Data: - Enhanced our quarterly reporting spreadsheets for Navient-sponsored FFELP ABS trusts to provide additional information on: • The level of enrollment in the IDR program • The payments owed by FFELP lo
Slide 42: Recent FFELP ABS Issuance Characteristics
Recent FFELP ABS Issuance Characteristics FFELP ABS Transaction Features Collateral Characteristics • Issue size of $500M to $1.5B • Insurance or guarantee of underlying collateral insulates bondholders from • Tranches or pass-through denominated in virtually any loss of principal(1) US$ • Triple-A
Slide 43: FFELP Loan Program Characteristics
FFELP Loan Program Characteristics Unsubsidized Parameter Subsidized Stafford Unsubsidized Stafford PLUS/Grad PLUS Subsidized Consolidation Consolidation Parents or Graduate Borrower Student Student Student or Parents Student or Parents Students Needs Based Yes No No N/A N/A Federal Guarantee of Pri
Slide 44: Navient Stafford & PLUS Loan Prepayments
Navient Stafford & PLUS Loan Prepayments • Annualized CPRs for Stafford/PLUS ABS trusts have decreased from pre-2008 levels as incentives for borrowers to consolidate have declined • Higher prepayment activity in mid 2012 was related to the short term availability of the Special Direct Consolidation
Slide 45: Navient Consolidation Loan Prepayments
Navient Consolidation Loan Prepayments • CPRs for Consolidation ABS trusts declined significantly following legislation effective in 2006 that prevented in-school and re-consolidation of borrowers’ loans • Higher prepayment activity in mid 2012 was related to the short term availability of the Speci
Slide 46: Private Education Loan ABS
Private Education Loan ABS Confidential and proprietary information © 2016 Navient Solutions, Inc. All rights reserved. 46
Slide 47: Recent Private Education Loan ABS Issuance Characteristics
Recent Private Education Loan ABS Issuance Characteristics Private Education Loan ABS Transaction Features Collateral Characteristics • Issue size of $500M to $1.5B • Collateralized by loans made to students and parents to fund college tuition, room • Triple-A rated senior notes, Single-A rated and
Slide 48: Navient Private Education Loan Programs
Navient Private Education Loan Programs Undergraduate/Graduate/ Smart Option Direct-to-Consumer (DTC) Consolidation Career Training Med/Law/MBA Origination Channel School School Direct-to-Consumer Lender School Typical Borrower Student Student Student College Graduates Student Typical Co-signer Pare
Slide 49: Navient Private Education Trusts Summary Information
Navient Private Education Trusts Summary Information 2011 - 2016YTD Sallie Mae Navient SLM SLM SLM SLM SLM SLM SLM SLM SLM SLM SLM SLM NAV NAV NAV NAV NAV NAV Issuance Program 11-A 11-B 11-C 12-A 12-B 12-C 12-D 12-E 13-A 13-B 13-C 14-A 14-CT 14-A 15-A 15-B 15-C 16-A Bond Amount ($mil) 562 825 721 54
Slide 50: Navient Portfolio Transition to Seasoned Collateral
Navient Portfolio Transition to Seasoned Collateral • Securitized collateral will continue to season given the company transitioned from originations to portfolio acquisition and management • Most defaults occur early in repayment; loan performance improves as loans season • As of June 2016, the pri
Slide 51: Private Education Loan Trusts – Prepayment Analysis
Navient Private Education Loan Trusts – Prepayment Analysis • Constant prepayment rates increased in 2007 due to the introduction of Private Education Consolidation loans, then declined following our decision to suspend our consolidation loan program in 2008 14 Constant Prepayment Rate (CPR) 12 10 8
Slide 52: Cohort Default Triangles
Cohort Default Triangles • The following cohort default triangles provide loan performance information for certain Private Education Loans of Navient Corporation and its consolidated subsidiaries that meet such subsidiaries’ securitization criteria (including those criteria listed below): - Program
Slide 53: Cohort Default Triangles
Cohort Default Triangles • The cohort default triangles featured on subsequent slides are segmented by loan program type, FICO score, cosigner status, and school type • Terms and calculations used in the cohort default triangles are defined below: - Repayment Year – The calendar year loans entered r
Slide 54: Cohort Default Triangles
Cohort Default Triangles Undergraduate/Graduate(1) Disbursed Principal Entering Periodic Defaults by Years in Repayment (2),(3) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total 1998 $11 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.4% 0.8% 0.4% 0.2% 1.5% 0.8% 0.4% 0.4% 0.0% 0.1% 5.2% 1999
Slide 55: Cohort Default Triangles
Cohort Default Triangles Undergraduate/Graduate(1) With Co-signer Disbursed Principal Entering Periodic Defaults by Years in Repayment (2),(3) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total 1998 $6 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 0.6% 1.0% 0.4% 0.0% 0.2% 1.1% 0.1% 0.0% 0.0%
Slide 56: Cohort Default Triangles
Cohort Default Triangles Undergraduate/Graduate(1) Without Co-signer Disbursed Principal Entering Periodic Defaults by Years in Repayment (2),(3) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total 1998 $5 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 0.2% 0.6% 0.4% 0.4% 3.1% 0.5% 0.8% 0.9% 0.
Slide 57: Cohort Default Triangles
Cohort Default Triangles Undergraduate/Graduate(1) Non-Profit Disbursed Principal Entering Periodic Defaults by Years in Repayment (2),(3) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total 1998 $11 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 0.4% 0.4% 0.4% 0.2% 1.1% 0.7% 0.3% 0.4% 0.0% 0.1
Slide 58: Cohort Default Triangles
Cohort Default Triangles Undergraduate/Graduate(1) For-Profit Disbursed Principal Entering Periodic Defaults by Years in Repayment (2),(3) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total 1998 $0.41 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 11.7% 0.0% 0.0% 10.9% 3.5% 4.4% 0.0% 0.3%
Slide 59: Cohort Default Triangles
Cohort Default Triangles Undergraduate/Graduate(1) Loans, FICO 740-850(2) Disbursed Principal Entering Periodic Defaults by Years in Repayment (3),(4) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total 1998 $3 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.2% 0.0% 0.4% 0.4% 0.9% 0.9% 0.0% 0.
Slide 60: Cohort Default Triangles
Cohort Default Triangles Undergraduate/Graduate(1) Loans, FICO 700-739(2) Disbursed Principal Entering Periodic Defaults by Years in Repayment (3),(4) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total 1998 $3 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% 2.2% 0.0% 0.0% 0.0% 0.0% 0.1% 0.
Slide 61: Cohort Default Triangles
Cohort Default Triangles Undergraduate/Graduate(1) Loans, FICO 670-699(2) Disbursed Principal Entering Periodic Defaults by Years in Repayment (3),(4) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total 1998 $3 0.0% 0.0% 0.0% 0.0% 0.0% 0.6% 0.6% 0.3% 0.5% 0.3% 2.8% 0.0% 0.5% 0.
Slide 62: Cohort Default Triangles
Cohort Default Triangles Undergraduate/Graduate(1) Loans, FICO 640-669(2) Disbursed Principal Entering Periodic Defaults by Years in Repayment (3),(4) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total 1998 $2 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.3% 0.5% 0.8% 0.0% 2.9% 2.8% 1.3% 0.
Slide 63: Cohort Default Triangles
Cohort Default Triangles Private Consolidation Loans With Co-signer Disbursed Principal Entering Periodic Defaults by Years in Repayment (1),(2) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 Total 2006 $249 0.0% 0.1% 0.1% 0.5% 0.6% 0.6% 0.4% 0.3% 0.4% 0.4% 0.3% 3.7% 2007 $675 0.0% 0.0% 0.2% 0
Slide 64: Cohort Default Triangles
Cohort Default Triangles DTC With Co-signer Disbursed Principal Entering Periodic Defaults by Years in Repayment (1),(2) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 Total 2004 $10 0.0% 0.0% 0.1% 0.1% 0.4% 1.3% 0.6% 0.6% 0.0% 0.1% 0.0% 0.2% 0.1% 3.5% 2005 $90 0.0% 0.2% 1.2% 0.9% 2.1% 2
Slide 65: Cohort Default Triangles
Cohort Default Triangles DTC Loans, FICO 740-850(1) Disbursed Principal Entering Periodic Defaults by Years in Repayment (2),(3) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 Total 2004 $5 0.0% 0.0% 0.1% 0.0% 0.0% 0.2% 0.4% 1.0% 0.0% 0.0% 0.0% 0.2% 0.0% 1.8% 2005 $39 0.0% 0.2% 0.7% 1.1%
Slide 66: Cohort Default Triangles
Cohort Default Triangles DTC Loans, FICO 670-699(1) Disbursed Principal Entering Periodic Defaults by Years in Repayment (2),(3) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 Total 2004 $3 0.0% 0.0% 0.2% 0.9% 0.4% 3.0% 1.2% 1.7% 0.1% 0.5% 0.0% 0.0% 0.0% 8.1% 2005 $25 0.0% 0.4% 2.0% 1.8%
Slide 67: Cohort Default Triangles
Cohort Default Triangles Career Training Loans (1) Disbursed Principal Entering Periodic Defaults by Years in Repayment (2),(3) Repayment Year Repayment ($m) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 Total 2003 $389 0.0% 0.6% 1.9% 2.1% 2.3% 1.7% 1.6% 1.2% 0.9% 0.6% 0.4% 0.3% 0.2% 0.1% 14.0% 2004 $510 0.0% 0.5
Slide 68: Navient Corporation Appendix
Navient Corporation Appendix Confidential and proprietary information © 2016 Navient Solutions, Inc. All rights reserved. 68
Slide 69: GAAP Results
GAAP Results (In millions, except per share amounts) Q2 16 Q1 16 Q2 15 Net income $125 $181 $182 EPS $0.38 $0.53 $0.47 Operating expenses $230 $247 $225 Provision $110 $111 $198 Average Student Loans $119,600 $122,298 $130,512 Confidential and proprietary information © 2016 Navient Solutions, Inc. A
Slide 70: Differences between “Core Earnings” and GAAP
Differences between “Core Earnings” and GAAP Quarters Ended June 30, March 31, June 30, “Core Earnings ” adjustments to GAAP: 2016 2016 2015 GAAP net income $ 125 $181 $182 Net impact of derivative accounting 32 (54) (83) Net impact of goodwill and acquired intangible assets 6 4 3 Net impact from sp
Slide 71: Investor Relations Website
Investor Relations Website www.navient.com/investors www.navient.com/abs • SLM / NAVI student loan trust data (Debt/asset backed securities – SLM / NAVI Student Loan Trusts) - Static pool information – detailed portfolio stratifications by trust as of the cutoff date - Accrued interest factors - Qua
Slide 72: NAVIENT.
NAVIENT.