Navient : 2020 Third-Quarter Investor Presentation (PDF, 2 MB)

2020 3rd Quarter Investor Deck

November 2, 2020

Forward-Looking Statements; Non-GAAP Financial Measures

The following information is current as of September 30, 2020 (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, 2019 (the "2019 Form 10-K"), filed by Navient with the Securities and Exchange Commission (the "SEC") on February 27, 2020 and subsequent reports filed by Navient with the SEC. Definitions for capitalized terms in this presentation not defined herein can be found in the 2019 Form 10-K. This presentation contains "forward-looking statements", within the meaning of the federal securities laws, about our business, and other information that is based on management's current expectations as of the date of this presentation. Statements that are not historical facts, including statements about the company's beliefs, opinions or expectations and statements that assume or are dependent upon future events, are forward-looking statements and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," "may," "could," "should," "goal," or "target." 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.

For Navient, these factors include, among others, the risks and uncertainties associated with:

• the severity, magnitude and duration of the COVID-19 pandemic, including changes in the macroeconomic environment, restrictions on business, individual or travel activities intended to slow the spread of the pandemic and volatility in market conditions resulting from the pandemic including interest rates, the value of equities and other financial assets;
• the risks and uncertainties associated with increases in financing costs;
• unanticipated increases in costs associated with compliance with federal, state or local laws and regulations;
• changes in the demand for asset management and business processing solutions or other changes in marketplaces in which we compete (including increased competition);
• changes in accounting standards including but not limited to changes pertaining to loan loss reserves and estimates or other accounting standards that may impact our operations;
• adverse outcomes in any significant litigation to which the company is a party;
• credit risk associated with the company's underwriting standards or exposure to third parties, including counterparties to hedging transactions; and
• changes in the terms of education loans and the educational credit marketplace (including changes resulting from the CARES Act or other new laws and the implementation of existing laws).

The company could also be affected by, among other things:

• unanticipated repayment trends on loans including prepayments or deferrals in our securitization trusts that could accelerate or delay repayment of the bonds;
• reductions to our credit ratings, the credit ratings of asset-backed securitizations we sponsor or the credit ratings of the United States of America;
• failures of our operating systems or infrastructure or those of third-party vendors;
• risks related to cybersecurity including the potential disruption of our systems or those of our third-party vendors or customers or potential disclosure of confidential customer information;
• damage to our reputation resulting from cyber-breaches, litigation, the politicization of student loan servicing or other actions or factors;
• failure to successfully implement cost-cutting initiatives and adverse effects of such initiatives on our business;
• failure to adequately integrate acquisitions or realize anticipated benefits from acquisitions including delays or errors in converting portfolio acquisitions to our servicing platform;
• changes in law and regulations whether new laws or regulations or new interpretations of existing laws and regulations applicable to any of our businesses or activities or those of our vendors, suppliers or customers;
• changes in the general interest rate environment, including the availability of any relevant money-market index rate, including LIBOR, or the relationship between the relevant money-market index rate and the rate at which our assets are priced;
• our ability to successfully effectuate any acquisitions and other strategic initiatives;
• activities by shareholder activists, including a proxy contest or any unsolicited takeover proposal;
• changes in general economic conditions; and
• the other factors that are described in the "Risk Factors" section of the 2019 Form 10-K and in our other reports filed with the Securities and Exchange Commission.

The preparation of the company's 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 and actual results could differ materially. All forward-looking statements contained in this release are qualified by these cautionary statements and are made only as of the date of this release. The company does not undertake any obligation to update or revise these forward-looking statements except as required by law.

Navient reports financial results on a GAAP basis and also provides certain non-GAAP performance measures, including Core Earnings, Adjusted Tangible Equity Ratio, and various other non-GAAP financial measures derived from Core Earnings. When compared to GAAP results, Core Earnings exclude the impact of: (1) mark-to-market gains/losses on derivatives; and (2) goodwill and acquired intangible asset amortization and impairment. Navient provides Core Earnings measures because this is what management uses when making management decisions regarding Navient's performance and the allocation of corporate

resources. Navient Core Earnings are not defined terms within GAAP and may not be comparable to similarly titled measures reported by other companies. For additional information, see Core Earnings in Navient's third-quarter earnings release and pages 49 - 51 of this presentation for a further discussion and a complete reconciliation between GAAP net income and Core Earnings.

© 2020 Navient Solutions, LLC. All rights reserved.

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We are the leader in education loan management and business processing solutions for education, healthcare and government clients at the federal, state and local levels

We help our clients and millions of Americans achieve financial success through our services and support, leveraging our 45+ years of data, analytics and processing experience and excellence

• Scaled, efficient industry-leading servicing platform
• • Navient-servicedborrowers are 26% less likely to default
• Executing our long-termvalue-creation strategy and utilizing our core strengths
• • Stable cash flow generation from our legacy portfolio of government-guaranteed Education Loans
  • Originating attractive, high credit quality education loans utilizing our scale and expertise
  • Generating fee income by providing processing services that leverage our existing infrastructure
• Disciplined expense management
• • Consistent cost efficiency and continuous expense rationalization
• Prudent capital allocation
• • Maintaining dividend and returning excess capital to shareholders
• Continuously evaluating alternatives to optimize capital structure and efficiency

Focused on delivering best-in-class service to our clients and maximizing long-term shareholder value

© 2020 Navient Solutions, LLC. All rights reserved.

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We Leverage Our Core Servicing Expertise in Education Finance and Business Processing

Federal Education Loans		Consumer Lending Segment		Business Processing Segment
Segment

Own and Service		Originate and Refinance		Provide Processing Services for
Education Loans		Education Loans		Healthcare & Government Clients

• Manage Navient's $60 billion portfolio of federally-guaranteed (FFELP) education loans
• Highly predictable cash flows with limited credit risk, estimated at ~$8.6 billion over the next 20 years
• Provide education loan servicing to the U.S. Department of Education

• Manage Navient's $21 billion portfolio of Private Education Loans
• Using our data and expertise to deploy capital at mid-teensROEs by originating Private Education Refinance Loans
• Originate In-School Education Loans with a recently launched innovative product, targeting high-teensROEs

• Leverage Navient's existing infrastructure and 45+ years of data, analytics and processing experience
• Capital-efficientfee-based provider of business processing services for 500+ government & healthcare clients
• Integrated end-to-end technology solutions to help governments and healthcare systems achieve efficiencies

3Q Net Income: $137 million

3Q Net Income: $110 million

Metrics shown on a "Core Earnings" basis, and are non-GAAP financial measures. See note 1 on slide 49.

© 2020 Navient Solutions, LLC. All rights reserved.

3Q EBITDA: $23 million

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