##### 



Exhibit 99.2
  Collegiate Funding Services, Inc.
 Consolidated Statements of Income
(dollars in thousands, except per share amounts)
(unaudited except for year-to-date 2004)
 Quarters Ended
    
    
    
    
    
    Quarters EndedMar. 31,
    
    Jun. 30,
    
    Sep. 30,
    
    Dec. 31,
    
    Year-
    
    Mar. 31,
    
    Jun. 30,
    
    Sep. 30,
    
    Dec. 31,
    
    Year-2005
    
    2005
    
    2005
    
    2005
    
    to-Date
    
    2004
    
    2004
    
    2004
    
    2004
    
    to-DateNet RevenueInterest income
    
    $
    54,074
    
    
    $
    63,830
    
    
    $
    
    
    
    $
    
    
    
    $
    117,904
    
    
    $
    26,864
    
    
    $
    31,194
    
    
    $
    36,738
    
    
    $
    44,721
    
    
    $
    139,517Interest expense
    
    
    37,114
    
    
    
    46,743
    
    
    
    
    
    
    
    
    
    
    
    83,857
    
    
    
    13,078
    
    
    
    15,518
    
    
    
    20,242
    
    
    
    27,773
    
    
    
    76,611Net interest income
    
    
    16,960
    
    
    
    17,087
    
    
    
    
    
    
    
    
    
    
    
    34,047
    
    
    
    13,786
    
    
    
    15,676
    
    
    
    16,496
    
    
    
    16,948
    
    
    
    62,906Provision for (reversal of) loan losses
    
    
    583
    
    
    
    2,205
    
    
    
    
    
    
    
    
    
    
    
    2,788
    
    
    
    927
    
    
    
    (1,467
    )
    
    
    726
    
    
    
    769
    
    
    
    955Net interest income after provision for (reversal of) loan losses
    
    
    16,377
    
    
    
    14,882
    
    
    
    
    
    
    
    
    
    
    
    31,259
    
    
    
    12,859
    
    
    
    17,143
    
    
    
    15,770
    
    
    
    16,179
    
    
    
    61,951Fee income
    
    
    30,626
    
    
    
    38,747
    
    
    
    
    
    
    
    
    
    
    
    69,373
    
    
    
    21,773
    
    
    
    20,976
    
    
    
    43,310
    
    
    
    50,376
    
    
    
    136,435Net revenue
    
    
    47,003
    
    
    
    53,629
    
    
    
    
    
    
    
    
    
    
    
    100,632
    
    
    
    34,632
    
    
    
    38,119
    
    
    
    59,080
    
    
    
    66,555
    
    
    
    198,386ExpensesSalaries and related benefits
    
    
    16,011
    
    
    
    17,269
    
    
    
    
    
    
    
    
    
    
    
    33,280
    
    
    
    13,981
    
    
    
    16,172
    
    
    
    17,423
    
    
    
    16,390
    
    
    
    63,966Other selling, general and administrative expenses:Marketing and mailing costs
    
    
    10,560
    
    
    
    14,126
    
    
    
    
    
    
    
    
    
    
    
    24,686
    
    
    
    6,425
    
    
    
    10,887
    
    
    
    17,501
    
    
    
    11,646
    
    
    
    46,459Communications and data processing
    
    
    1,931
    
    
    
    2,115
    
    
    
    
    
    
    
    
    
    
    
    4,046
    
    
    
    1,708
    
    
    
    1,799
    
    
    
    2,274
    
    
    
    2,271
    
    
    
    8,052Management and consulting fees
    
    
    600
    
    
    
    360
    
    
    
    
    
    
    
    
    
    
    
    960
    
    
    
    938
    
    
    
    799
    
    
    
    600
    
    
    
    600
    
    
    
    2,937Professional fees
    
    
    1,673
    
    
    
    2,155
    
    
    
    
    
    
    
    
    
    
    
    3,828
    
    
    
    1,055
    
    
    
    1,374
    
    
    
    1,637
    
    
    
    2,034
    
    
    
    6,100Depreciation and amortization
    
    
    1,829
    
    
    
    1,916
    
    
    
    
    
    
    
    
    
    
    
    3,745
    
    
    
    1,250
    
    
    
    1,347
    
    
    
    1,702
    
    
    
    1,715
    
    
    
    6,014Other general and administrative
    
    
    2,739
    
    
    
    4,296
    
    
    
    
    
    
    
    
    
    
    
    7,035
    
    
    
    2,409
    
    
    
    2,645
    
    
    
    3,499
    
    
    
    2,919
    
    
    
    11,472Total selling, general and administrative expenses
    
    
    19,332
    
    
    
    24,968
    
    
    
    
    
    
    
    
    
    
    
    44,300
    
    
    
    13,785
    
    
    
    18,851
    
    
    
    27,213
    
    
    
    21,185
    
    
    
    81,034Swap interest (income) expense
    
    
    (1,121
    )
    
    
    (290
    )
    
    
    
    
    
    
    
    
    
    
    (1,411
    )
    
    
    1,582
    
    
    
    2,023
    
    
    
    643
    
    
    
    (874
    )
    
    
    3,374Derivative and investment mark-to-market (income) expense
    
    
    (306
    )
    
    
    819
    
    
    
    
    
    
    
    
    
    
    
    513
    
    
    
    (226
    )
    
    
    (5,888
    )
    
    
    245
    
    
    
    422
    
    
    
    (5,447
    )Total expenses
    
    
    33,916
    
    
    
    42,766
    
    
    
    
    
    
    
    
    
    
    
    76,682
    
    
    
    29,122
    
    
    
    31,158
    
    
    
    45,524
    
    
    
    37,123
    
    
    
    142,927Income before income tax provision and accretion of dividends on preferred stock
    
    
    13,087
    
    
    
    10,863
    
    
    
    
    
    
    
    
    
    
    
    23,950
    
    
    
    5,510
    
    
    
    6,961
    
    
    
    13,556
    
    
    
    29,432
    
    
    
    55,459Income tax provision
    
    
    5,218
    
    
    
    4,260
    
    
    
    
    
    
    
    
    
    
    
    9,478
    
    
    
    2,204
    
    
    
    2,705
    
    
    
    5,405
    
    
    
    11,702
    
    
    
    22,016Income before accretion of dividends
    
    
    7,869
    
    
    
    6,603
    
    
    
    
    
    
    
    
    
    
    
    14,472
    
    
    
    3,306
    
    
    
    4,256
    
    
    
    8,151
    
    
    
    17,730
    
    
    
    33,443Accretion of dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,116
    
    
    
    2,192
    
    
    
    507
    
    
    
    
    
    
    
    4,815Net income
    
    $
    7,869
    
    
    $
    6,603
    
    
    $
    
    
    
    $
    
    
    
    $
    14,472
    
    
    $
    1,190
    
    
    $
    2,064
    
    
    $
    7,644
    
    
    $
    17,730
    
    
    $
    28,628Weighted average common shares outstanding, diluted
    
    
    32,379,960
    
    
    
    32,413,322
    
    
    
    
    
    
    
    
    
    
    
    32,413,187
    
    
    
    22,912,108
    
    
    
    22,925,616
    
    
    
    30,710,055
    
    
    
    32,351,370
    
    
    
    27,254,317Earnings per common share, diluted
    
    $
    0.24
    
    
    $
    0.20
    
    
    
    
    
    
    
    
    
    
    $
    0.45
    
    
    $
    0.05
    
    
    $
    0.09
    
    
    $
    0.25
    
    
    $
    0.55
    
    
    $
    1.05




---



##### 



Quarter endedMarch 31, 2005
    
    
    June 30, 2005
    
    
    September 30, 2005
    
    
    December 31, 2005
    
    
    Year-to-date 2005(unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Average
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    

    
    

    
    
    AverageInterest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    Rate
    
    
    
    
    
    
    
    
    
    
    Interest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    RateAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Dollars in thousands
    
    Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    

    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    PaidInterest-earning assets:Cash and cash equivalents
    
    $
    20,762
    
    
    $
    330
    
    
    
    6.45
    %
    
    $
    18,218
    
    
    $
    346
    
    
    
    7.62
    %
    
    $
    
    
    
    $
    
    
    
    
    
    %
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    
    
    %
    
    $
    18,848
    
    
    $
    676
    
    
    
    7.23
    %Restricted cash
    
    
    139,503
    
    
    
    905
    
    
    
    2.63
    
    
    
    178,645
    
    
    
    1,455
    
    
    
    3.27
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    159,452
    
    
    
    2,360
    
    
    
    2.98Student loans
    
    
    4,881,930
    
    
    
    67,075
    
    
    
    5.57
    
    
    
    5,264,156
    
    
    
    77,420
    
    
    
    5.90
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,066,749
    
    
    
    144,495
    
    
    
    5.75Department of Education rebate (1)
    
    
    
    
    
    
    (12,904
    )
    
    
    (1.07
    )
    
    
    
    
    
    
    (13,827
    )
    
    
    (1.05
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,731
    )
    
    
    (1.06
    )Amortization (2)
    
    
    
    
    
    
    (1,332
    )
    
    
    (0.11
    )
    
    
    
    
    
    
    (1,586
    )
    
    
    (0.12
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,918
    )
    
    
    (0.12
    )Student loans after Dept of Education rebate and amortization
    
    
    4,881,930
    
    
    
    52,839
    
    
    
    4.39
    
    
    
    5,264,156
    
    
    
    62,007
    
    
    
    4.73
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,066,749
    
    
    
    114,846
    
    
    
    4.57Total interest-earning assets
    
    $
    5,042,195
    
    
    $
    54,074
    
    
    
    4.35
    
    
    $
    5,461,019
    
    
    $
    63,808
    
    
    
    4.69
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    

    
    
    
    $
    5,245,049
    
    
    $
    117,882
    
    
    
    4.53Interest-bearing liabilities:Asset-backed notes and lines of credit
    
    $
    5,055,096
    
    
    $
    36,649
    
    
    
    2.94
    
    
    $
    5,471,068
    
    
    $
    46,279
    
    
    
    3.39
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    
    
    
    
    $
    5,255,826
    
    
    $
    82,928
    
    
    
    3.18Other debt obligations, net
    
    
    14,512
    
    
    
    436
    
    
    
    12.18
    
    
    
    14,564
    
    
    
    437
    
    
    
    12.04
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,538
    
    
    
    873
    
    
    
    12.11Capital lease obligations
    
    
    1,689
    
    
    
    29
    
    
    
    6.96
    
    
    
    1,568
    
    
    
    27
    
    
    
    6.91
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,629
    
    
    
    56
    
    
    
    6.93Total interest-bearing liabilities
    
    $
    5,071,297
    
    
    $
    37,114
    
    
    
    2.97
    %
    
    $
    5,487,200
    
    
    $
    46,743
    
    
    
    3.42
    %
    
    $
    
    
    
    $
    
    
    
    
    %
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    
    %
    
    
    $
    5,271,993
    
    
    $
    83,857
    
    
    
    3.21
    %Net interest income and margin
    
    
    
    
    
    $
    16,960
    
    
    
    1.36
    %(3)
    
    
    
    
    
    $
    17,065
    
    
    
    1.26
    %(3)
    
    
    
    
    
    $
    
    
    
    
    
    %
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    
    %
    
    
    
    
    
    $
    34,025
    
    
    
    1.31
    %(3)
 
 (1)
    
    Reflects the 1.05% per annum rebate fee on FFELP consolidation loans that is paid monthly divided by the average balance of student loans.(2)
    
    Represents the amortization of capitalized origination costs and purchase accounting adjustments, including the 0.50% fee payable to the Department of Education on the origination of FFELP loans.(3)
    
    Net interest margin is net interest income divided by the average total interest-earning assets.




---



##### 



Quarter endedMarch 31, 2004
    
    
    June 30, 2004
    
    
    September 30, 2004
    
    
    December 31, 2004
    
    
    Year-to-date 2004(dollars in thousands)
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Average
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    AverageInterest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    Rate
    
    
    
    
    
    
    Interest
    
    
    RateAverage
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/
    
    
    Average
    
    
    Income/
    
    
    Earned/Balance
    
    
    Expense
    
    
    Paid

    
    
    
    Balance
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    Paid
    
    
    Balance
    
    
    Expense
    
    
    PaidInterest-earning assets:Cash and cash equivalents
    
    $
    14,745
    
    
    $
    185
    
    
    
    5.05
    %
    
    $
    11,994
    
    
    $
    120
    
    
    
    4.02
    %
    
    $
    7,389
    
    
    $
    139
    
    
    
    7.48
    %
    
    $
    8,865
    
    
    $
    338
    
    
    
    15.17
    %
    
    $
    11,302
    
    
    $
    782
    
    
    
    6.92
    %Restricted cash
    
    
    92,122
    
    
    
    226
    
    
    
    0.99
    
    
    
    189,097
    
    
    
    348
    
    
    
    0.74
    
    
    
    141,298
    
    
    
    586
    
    
    
    1.65
    
    
    
    115,105
    
    
    
    687
    
    
    
    2.37
    
    
    
    140,213
    
    
    
    1,847
    
    
    
    1.32Student loans
    
    
    3,153,154
    
    
    
    35,605
    
    
    
    4.54
    
    
    
    3,613,439
    
    
    
    41,243
    
    
    
    4.59
    
    
    
    3,923,198
    
    
    
    47,367
    
    
    
    4.80
    
    
    
    4,342,261
    
    
    
    56,364
    
    
    
    5.16
    
    
    
    3,758,153
    
    
    
    180,579
    
    
    
    4.80Department of Education rebate (1)
    
    
    
    
    
    
    (8,487
    )
    
    
    (1.08
    )
    
    
    
    
    
    
    (9,581
    )
    
    
    (1.07
    )
    
    
    
    
    
    
    (10,411
    )
    
    
    (1.05
    )
    
    
    
    
    
    
    (11,535
    )
    
    
    (1.06
    )
    
    
    
    
    
    
    (40,014
    )
    
    
    (1.06
    )Amortization (2)
    
    
    
    
    
    
    (665
    )
    
    
    (0.08
    )
    
    
    
    
    
    
    (936
    )
    
    
    (0.10
    )
    
    
    
    
    
    
    (943
    )
    
    
    (0.10
    )
    
    
    
    
    
    
    (1,133
    )
    
    
    (0.10
    )
    
    
    
    
    
    
    (3,677
    )
    
    
    (0.10
    )Student loans after Department of Education rebate and amortization
    
    
    3,153,154
    
    
    
    26,453
    
    
    
    3.38
    
    
    
    3,613,439
    
    
    
    30,726
    
    
    
    3.43
    
    
    
    3,923,198
    
    
    
    36,013
    
    
    
    3.65
    
    
    
    4,342,261
    
    
    
    43,696
    
    
    
    4.00
    
    
    
    3,758,153
    
    
    
    136,888
    
    
    
    3.64Total interest-earning assets
    
    $
    3,260,021
    
    
    $
    26,864
    
    
    
    3.31
    
    
    $
    3,814,530
    
    
    $
    31,194
    
    
    
    3.29
    
    
    $
    4,071,885
    
    
    $
    36,738
    
    
    
    3.59
    
    
    $
    4,466,231
    
    

    $
    44,721
    
    
    
    3.98
    
    
    $
    3,909,668
    
    
    $
    139,517
    
    
    
    3.57Interest-bearing liabilities:Asset-backed notes and lines of credit
    
    $
    3,283,244
    
    
    $
    12,406
    
    
    
    1.52
    
    
    $
    3,845,178
    
    
    $
    14,546
    
    
    
    1.52
    
    
    $
    4,103,620
    
    
    $
    19,511
    
    
    
    1.89
    
    
    $
    4,491,591
    
    
    $
    27,199
    
    
    
    2.41
    
    
    $
    3,936,086
    
    
    $
    73,662
    
    
    
    1.87Other debt obligations, net
    
    
    39,606
    
    
    
    639
    
    
    
    6.49
    
    
    
    60,858
    
    
    
    931
    
    
    
    6.15
    
    
    
    37,328
    
    
    
    703
    
    
    
    7.49
    
    
    
    20,809
    
    
    
    542
    
    
    
    10.36
    
    
    
    38,605
    
    
    
    2,815
    
    
    
    7.29Capital lease obligations
    
    
    1,871
    
    
    
    33
    
    
    
    7.09
    
    
    
    1,752
    
    
    
    41
    
    
    
    9.41
    
    
    
    1,709
    
    
    
    28
    
    
    
    6.52
    
    
    
    1,808
    
    
    
    32
    
    
    
    7.04
    
    
    
    1,782
    
    
    
    134
    
    
    
    7.52Total interest-bearing liabilities
    
    $
    3,324,721
    
    
    $
    13,078
    
    
    
    1.58
    %
    
    $
    3,907,788
    
    
    $
    15,518
    
    
    
    1.60
    %
    
    $
    4,142,657
    
    
    $
    20,242
    
    
    
    1.94
    %
    
    $
    4,514,208
    
    
    $
    27,773
    
    
    
    2.45
    %
    
    $
    3,976,473
    
    
    $
    76,611
    
    
    
    1.93
    %Net interest income and margin
    
    
    
    
    
    $
    13,786
    
    
    
    1.70
    %(3)
    
    
    
    
    
    $
    15,676
    
    
    
    1.65
    %(3)
    
    
    
    
    
    $
    16,496
    
    
    
    1.61
    %(3)
    
    
    
    
    
    $
    16,948
    
    
    
    1.51
    %(3)
    
    
    

    
    
    $
    62,906
    
    
    
    1.61
    %(3)
 
 (1)
    
    Reflects the 1.05% per annum rebate fee on FFELP consolidation loans that is paid monthly divided by the average balance of student loans.(2)
    
    Represents the amortization of capitalized origination costs and purchase accounting adjustments, including the 0.50% fee payable to the Department of Education on the origination of FFELP loans.(3)
    
    Net interest margin is net interest income divided by the average total interest-earning assets.




---



##### 



Net Portfolio Margin Analysis
  Non-GAAP
 Quarter endedMarch 31, 2005
    
    
    June 30, 2005
    
    
    September 30, 2005
    
    
    December 31, 2005
    
    
    Year-to-Date 2005Dollars
    
    
    %
    
    
    Dollars
    
    
    %
    
    
    Dollars
    
    
    %
    
    
    Dollars
    
    
    %
    
    
    Dollars
    
    
    %(dollars in thousands)
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Student loan and restricted
cash yield
    
    $
    67,980
    
    
    
    5.49
    %
    
    $
    78,875
    
    
    
    5.81
    %
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    146,855
    
    
    
    5.66
    %Department of Education rebate (1)
    
    
    (12,904
    )
    
    
    (1.04
    )
    
    
    (13,827
    )
    
    
    (1.02
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,731
    )
    
    
    (1.03
    )Amortization (2)
    
    
    (1,332
    )
    
    
    (0.11
    )
    
    
    (1,586
    )
    
    
    (0.11
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,918
    )
    
    
    (0.11
    )Net student loan and
restricted cash yield
    
    
    53,744
    
    
    
    4.34
    
    
    
    63,462
    
    
    
    4.68
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    117,206
    
    
    
    4.52Asset-backed notes and lines
of credit
    
    
    (36,649
    )
    
    
    (2.96
    )
    
    
    (46,279
    )
    
    
    (3.41
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (82,928
    )
    
    
    (3.20
    )Net portfolio margin
    
    
    17,095
    
    
    
    1.38
    
    
    
    17,183
    
    
    
    1.27
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,278
    
    
    
    1.32Floor income
    
    
    (2,076
    )
    
    
    (0.17
    )
    
    
    (759
    )
    
    
    (0.06
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,835
    )
    
    
    (0.11
    )Net portfolio margin net of floor income
    
    $
    15,019
    
    
    
    1.21
    %
    
    $
    16,424
    
    
    
    1.21
    %
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    31,443
    
    
    
    1.21
    %Reconciliation to net interest income:Net portfolio margin net of floor income
    
    $
    15,019
    
    
    
    
    
    
    $
    16,424
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    31,443Plus: interest income on cash and cash equivalents
    
    
    330
    
    
    
    
    
    
    
    346
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    676Less: interest expense on other debt obligations, net
    
    
    (436
    )
    
    
    
    
    
    
    (437
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (873
    )Less: interest expense on capital lease obligations
    
    
    (29
    )
    
    
    
    
    
    
    (27
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (56
    )Plus: floor income
    
    
    2,076
    
    
    
    
    
    
    
    759
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,835Net interest income
    
    $
    16,960
    
    
    
    
    
    
    $
    17,065
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    34,025Average balance of student
loans and restricted cash
    
    $
    5,021,433
    
    
    
    
    
    
    $
    5,442,801
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    5,226,201
 
 (1)
    
    Reflects the 1.05% per annum rebate fee on FFELP consolidation loans that is paid monthly divided by the average balance of
students loans and restricted cash.(2)
    
    Represents the amortization of capitalized origination costs and purchase accounting adjustments, including the 0.50% fee payable
to the Department of Education on the origination of FFELP loans.




---



##### 



Net Portfolio Margin Analysis
  Non-GAAP
 Quarter endedMarch 31, 2004
    
    
    June 30, 2004
    
    
    September 30, 2004
    
    
    December 31, 2004
    
    
    Year-to-Date 2004Dollars
    
    
    %
    
    
    Dollars
    
    
    %
    
    
    Dollars
    
    
    %
    
    
    Dollars
    
    
    %
    
    
    Dollars
    
    
    %(dollars in thousands)
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)
    
    
    (unaudited)Student loan and restricted
cash yield
    
    $
    35,831
    
    
    
    4.44
    %
    
    $
    41,591
    
    
    
    4.40
    %
    
    $
    47,953
    
    
    
    4.69

    %
    
    $
    57,051
    
    
    
    5.09
    %
    
    $
    182,426
    
    
    
    4.68
    %Department of Education rebate (1)
    
    
    (8,487
    )
    
    
    (1.05
    )
    
    
    (9,581
    )
    
    
    (1.01
    )
    
    
    (10,411
    )
    
    
    (1.02
    )
    
    
    (11,535
    )
    
    
    (1.03
    )
    
    
    (40,014
    )
    
    
    (1.03
    )Amortization (2)
    
    
    (665
    )
    
    
    (0.08
    )
    
    
    (936
    )
    
    
    (0.10
    )
    
    
    (943
    )
    
    
    (0.09
    )
    
    
    (1,133
    )
    
    
    (0.10
    )
    
    
    (3,677
    )
    
    
    (0.09
    )Net student loan and
restricted cash yield
    
    
    26,679
    
    
    
    3.31
    
    
    
    31,074
    
    
    
    3.29
    
    
    
    36,599
    
    
    
    3.58
    
    
    
    44,383
    
    
    
    3.96
    
    
    
    138,735
    
    
    
    3.56Asset-backed notes and lines
of credit
    
    
    (12,406
    )
    
    
    (1.54
    )
    
    
    (14,546
    )
    
    
    (1.54
    )
    
    
    (19,511
    )
    
    
    (1.91
    )
    
    
    (27,199
    )
    
    
    (2.43
    )
    
    
    (73,662
    )
    
    
    (1.89
    )Net portfolio margin
    
    
    14,273
    
    
    
    1.77
    
    
    
    16,528
    
    
    
    1.75
    
    
    
    17,088
    
    
    
    1.67
    
    
    
    17,184
    
    
    
    1.53
    
    
    
    65,073
    
    
    
    1.67Floor income
    
    
    (6,537
    )
    
    
    (0.81
    )
    
    
    (6,358
    )
    
    
    (0.67
    )
    
    
    (5,038
    )
    
    
    (0.49
    )
    
    
    (4,103
    )
    
    
    (0.37
    )
    
    
    (22,036
    )
    
    
    (0.57
    )Net portfolio margin net of floor income
    
    $
    7,736
    
    
    
    0.96
    %
    
    $
    10,170
    
    
    
    1.08
    %
    
    $
    12,050
    
    
    
    1.18
    %
    
    $
    13,081
    
    
    
    1.16
    %
    
    $
    43,037
    
    
    
    1.10
    %Reconciliation to net interest income:Net portfolio margin net of floor income
    
    $
    7,736
    
    
    
    
    
    
    $
    10,170
    
    
    
    
    
    
    $
    12,050
    
    
    
    
    
    
    $
    13,081
    
    
    
    
    
    
    $
    43,037Plus: interest income on cash and cash equivalents
    
    
    185
    
    
    
    
    
    
    
    120
    
    
    
    
    
    
    
    139
    
    
    
    
    
    
    
    338
    
    
    
    
    
    
    
    782Less: interest expense on other debt obligations, net
    
    
    (639
    )
    
    
    
    
    
    
    (931
    )
    
    
    
    
    
    
    (703
    )
    
    
    
    
    
    
    (542
    )
    
    
    
    
    
    
    (2,815
    )Less: interest expense on capital lease obligations
    
    
    (33
    )
    
    
    
    
    
    
    (41
    )
    
    
    
    
    
    
    (28
    )
    
    
    
    
    
    
    (32
    )
    
    
    
    
    
    
    (134
    )Plus: floor income
    
    
    6,537
    
    
    
    
    
    
    
    6,358
    
    
    
    
    
    
    
    5,038
    
    
    
    
    
    
    
    4,103
    
    
    
    
    
    
    
    22,036Net interest income
    
    $
    13,786
    
    
    
    
    
    
    $
    15,676
    
    
    
    
    
    
    $
    16,496
    
    
    
    
    
    
    $
    16,948
    
    
    
    
    
    
    $
    62,906Average balance of student
loans and restricted cash
    
    $
    3,245,276
    
    
    
    
    
    
    $
    3,802,536
    
    
    
    
    
    
    $
    4,064,496
    
    
    
    
    
    
    $
    4,457,366
    
    
    
    
    
    
    $
    3,898,366
 
 (1)
    
    Reflects the 1.05% per annum rebate fee on FFELP consolidation loans that is paid monthly divided by the average balance ofstudents loans and restricted cash.(2)
    
    Represents the amortization of capitalized origination costs and purchase accounting adjustments, including the 0.50% fee payableto the Department of Education on the origination of FFELP loans.