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As of | As of | |||||
March 31, 2013 | December 31, 2012 | |||||
Federally insured loans | ||||||
Stafford and other | $ | 7,145,693 | 7,261,114 | |||
Consolidation | 17,852,598 | 17,708,732 | ||||
Total | 24,998,291 | 24,969,846 | ||||
Non-federally insured loans | 32,306 | 26,034 | ||||
25,030,597 | 24,995,880 | |||||
Loan discount, net of unamortized loan premiums and deferred origination costs | (95,872 | ) | (113,357 | ) | ||
Allowance for loan losses – federally insured loans | (37,913 | ) | (40,120 | ) | ||
Allowance for loan losses – non-federally insured loans | (11,496 | ) | (11,782 | ) | ||
$ | 24,885,316 | 24,830,621 | ||||
Allowance for federally insured loans as a percentage of such loans | 0.15 | % | 0.16 | % | ||
Allowance for non-federally insured loans as a percentage of such loans | 35.59 | % | 45.26 | % |
Three months ended March 31, | ||||||
2013 | 2012 | |||||
Balance at beginning of period | $ | 51,902 | 48,482 | |||
Provision for loan losses: | ||||||
Federally insured loans | 6,000 | 6,000 | ||||
Non-federally insured loans | (1,000 | ) | — | |||
Total provision for loan losses | 5,000 | 6,000 | ||||
Charge-offs: | ||||||
Federally insured loans | (5,990 | ) | (5,495 | ) | ||
Non-federally insured loans | (772 | ) | (769 | ) | ||
Total charge-offs | (6,762 | ) | (6,264 | ) | ||
Recoveries - non-federally insured loans | 368 | 351 | ||||
Purchase (sale) of federally insured loans and other, net | (2,218 | ) | (927 | ) | ||
Transfer from repurchase obligation related to non-federally insured loans purchased, net | 1,119 | 793 | ||||
Balance at end of period | $ | 49,409 | 48,435 | |||
Allocation of the allowance for loan losses: | ||||||
Federally insured loans | $ | 37,913 | 36,783 | |||
Non-federally insured loans | 11,496 | 11,652 | ||||
Total allowance for loan losses | $ | 49,409 | 48,435 |
Three months ended March 31, | ||||||
2013 | 2012 | |||||
Beginning balance | $ | 16,130 | 19,223 | |||
Repurchase obligation transferred to the allowance for loan losses related to loans purchased, net | (1,119 | ) | (793 | ) | ||
Ending balance | $ | 15,011 | 18,430 |
As of March 31, 2013 | As of December 31, 2012 | As of March 31, 2012 | ||||||||||||||||||
Federally insured loans, excluding rehabilitation loans purchased: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 2,933,416 | $ | 2,949,320 | $ | 3,568,310 | ||||||||||||||
Loans in forbearance | 2,890,574 | 2,992,023 | 3,279,854 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 14,501,802 | 87.8 | % | 14,583,044 | 87.6 | % | 14,456,472 | 87.5 | % | |||||||||||
Loans delinquent 31-60 days | 621,296 | 3.8 | 652,351 | 3.9 | 531,045 | 3.2 | ||||||||||||||
Loans delinquent 61-90 days | 409,209 | 2.5 | 330,885 | 2.0 | 320,817 | 1.9 | ||||||||||||||
Loans delinquent 91-120 days | 241,113 | 1.5 | 247,381 | 1.5 | 201,811 | 1.2 | ||||||||||||||
Loans delinquent 121-270 days | 512,875 | 3.1 | 603,942 | 3.6 | 712,173 | 4.3 | ||||||||||||||
Loans delinquent 271 days or greater | 211,461 | 1.3 | 220,798 | 1.4 | 306,970 | 1.9 | ||||||||||||||
Total loans in repayment | 16,497,756 | 100.0 | % | 16,638,401 | 100.0 | % | 16,529,288 | 100.0 | % | |||||||||||
Total federally insured loans, excluding rehabilitation loans purchased | $ | 22,321,746 | $ | 22,579,744 | $ | 23,377,452 | ||||||||||||||
Rehabilitation loans purchased: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 213,101 | $ | 150,317 | $ | 57,321 | ||||||||||||||
Loans in forbearance | 394,733 | 330,278 | 83,773 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 877,800 | 42.4 | % | 670,205 | 35.1 | % | 240,435 | 66.2 | % | |||||||||||
Loans delinquent 31-60 days | 138,249 | 6.7 | 113,795 | 6.0 | 26,431 | 7.3 | ||||||||||||||
Loans delinquent 61-90 days | 109,129 | 5.3 | 79,691 | 4.2 | 16,973 | 4.7 | ||||||||||||||
Loans delinquent 91-120 days | 121,468 | 5.9 | 186,278 | 9.8 | 14,026 | 3.9 | ||||||||||||||
Loans delinquent 121-270 days | 573,054 | 27.7 | 633,001 | 33.1 | 45,396 | 12.5 | ||||||||||||||
Loans delinquent 271 days or greater | 249,011 | 12.0 | 226,537 | 11.8 | 19,676 | 5.4 | ||||||||||||||
Total loans in repayment | 2,068,711 | 100.0 | % | 1,909,507 | 100.0 | % | 362,937 | 100.0 | % | |||||||||||
Total rehabilitation loans purchased | 2,676,545 | 2,390,102 | 504,031 | |||||||||||||||||
Total federally insured loans | $ | 24,998,291 | $ | 24,969,846 | $ | 23,881,483 |
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As of March 31, 2013 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 22,116,616 | 0.30% - 6.90% | 11/25/15 - 8/25/52 | |||
Bonds and notes based on auction or remarketing | 962,200 | 0.14% - 2.18% | 5/1/28 - 5/25/42 | ||||
Total variable-rate bonds and notes | 23,078,816 | ||||||
FFELP warehouse facilities | 1,942,239 | 0.20% - 0.28% | 4/2/15 - 2/28/16 | ||||
Unsecured line of credit | 115,000 | 1.70% | 3/28/18 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 99,232 | 3.66% | 9/15/61 | ||||
Other borrowings | 61,878 | 1.70% - 5.10% | 11/14/13 - 11/11/15 | ||||
25,297,165 | |||||||
Discount on bonds and notes payable | (171,988 | ) | |||||
Total | $ | 25,125,177 |
As of December 31, 2012 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 21,185,140 | 0.32% - 6.90% | 11/25/15 - 8/25/52 | |||
Bonds and notes based on auction or remarketing | 969,925 | 0.15% - 2.14% | 5/1/28 - 5/25/42 | ||||
Total variable-rate bonds and notes | 22,155,065 | ||||||
FFELP warehouse facilities | 1,554,151 | 0.21% - 0.29% | 1/31/15 - 6/30/15 | ||||
Department of Education Conduit | 1,344,513 | 0.82% | 1/19/14 | ||||
Unsecured line of credit | 55,000 | 1.71% | 2/17/16 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 99,232 | 3.68% | 9/15/61 | ||||
Other borrowings | 62,904 | 1.50% - 5.10% | 11/14/13 - 11/11/15 | ||||
25,270,865 | |||||||
Discount on bonds and notes payable | (172,030 | ) | |||||
Total | $ | 25,098,835 |
NHELP-I | NFSLW-I | NHELP-III (a) | NHELP-II | Total | ||||||||||||
Maximum financing amount | $ | 500,000 | 500,000 | 500,000 | 500,000 | 2,000,000 | ||||||||||
Amount outstanding | 487,584 | 499,196 | 477,033 | 478,426 | 1,942,239 | |||||||||||
Amount available | $ | 12,416 | 804 | 22,967 | 21,574 | 57,761 | ||||||||||
Expiration of liquidity provisions | October 2, 2013 | June 28, 2013 | January 14, 2014 | February 28, 2014 | ||||||||||||
Final maturity date | April 2, 2015 | June 30, 2015 | January 17, 2016 | February 28, 2016 | ||||||||||||
Maximum advance rates | 80.0 - 100.0% | 90.0 - 98.0% | 92.2 - 95.0% | 88.5 - 93.5% | ||||||||||||
Minimum advance rates | 80.0 - 95.0% | 84.5 - 90.0% | 92.2 - 95.0% | 88.5 - 93.5% | ||||||||||||
Advanced as equity support | $ | 18,986 | 39,363 | 26,429 | 45,904 | 130,682 |
(a) | The Company entered into this facility on January 16, 2013. |
2013-1 | 2013-2 (a) | Total | |||||||||
Date securities issued | 1/31/13 | 2/28/13 | |||||||||
Total original principal amount | $ | 437,500 | 1,122,000 | $ | 1,559,500 | ||||||
Class A: | |||||||||||
Total original principal amount | $ | 428,000 | 1,122,000 | 1,550,000 | |||||||
Bond discount | — | (3,325 | ) | (3,325 | ) | ||||||
Issue price | $ | 428,000 | 1,118,675 | 1,546,675 | |||||||
Cost of funds (1-month LIBOR plus:) | 0.60 | % | 0.50 | % | |||||||
Final maturity date | 6/25/41 | 7/25/40 | |||||||||
Class B: | |||||||||||
Total original principal amount | $ | 9,500 | 9,500 | ||||||||
Bond discount | (1,525 | ) | (1,525 | ) | |||||||
Issue price | $ | 7,975 | 7,975 | ||||||||
Cost of funds (1-month LIBOR plus:) | 1.50 | % | |||||||||
Final maturity date | 3/25/48 |
(a) | Total original principal amount excludes the Class B subordinated tranche that was retained at issuance totaling $34.0 million. These notes are not included in the Company's consolidated balance sheet. If the Company sells these notes to third parties, the Company would obtain cash proceeds equal to the market value of the notes on the date of such sale. Upon sale, these notes would be shown as “bonds and notes payable” in the Company's consolidated balance sheet. The Company believes the market value of such notes is currently less than par value. Any excess of the par value over the market value on the date of sale would be recognized by the Company as interest expense over the life of the bonds. |
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As of March 31, 2013 | As of December 31, 2012 | ||||||||||
Maturity | Notional amount | Notional amount | |||||||||
2021 | $ | 250,000 | $ | 250,000 | |||||||
2022 | 1,900,000 | 1,900,000 | |||||||||
2023 | 3,650,000 | 3,150,000 | |||||||||
2024 | 250,000 | 250,000 | |||||||||
2026 | 800,000 | 800,000 | |||||||||
2028 | 100,000 | 100,000 | |||||||||
2036 | 700,000 | 700,000 | |||||||||
2039 | (a) | 150,000 | 150,000 | ||||||||
2040 | (b) | 200,000 | 200,000 | ||||||||
$ | 8,000,000 | (c) | $ | 7,500,000 | (c) |
(c) | The weighted average rate paid by the Company on the 1:3 Basis Swaps as of March 31, 2013 and December 31, 2012, was one-month LIBOR plus 3.5 basis points and one-month LIBOR plus 3.3 basis points, respectively. |
Maturity | Notional amount | Weighted average fixed rate paid by the Company (a) | |||||
2013 | $ | 3,150,000 | 0.71 | % | |||
2014 | 1,750,000 | 0.71 | |||||
2015 | 1,100,000 | 0.89 | |||||
2016 | 750,000 | 0.85 | |||||
2017 | 750,000 | 0.99 | |||||
$ | 7,500,000 | 0.78 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
As of March 31, 2013 | As of December 31, 2012 | |||||||||||||
Maturity | Notional amount | Weighted average fixed rate paid by the Company (a) | Notional amount | Weighted average fixed rate paid by the Company (a) | ||||||||||
2036 | $ | 65,000 | 4.29 | % | $ | 75,000 | 4.28 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
Three months ended March 31, | ||||||
2013 | 2012 | |||||
Re-measurement of Euro Notes | $ | 28,763 | (32,242 | ) | ||
Change in fair value of cross currency interest rate swaps | (34,844 | ) | 13,026 | |||
Total impact to consolidated statements of income - income (expense) (a) | $ | (6,081 | ) | (19,216 | ) |
(a) | The financial statement impact of the above items is included in "Derivative market value and foreign currency adjustments and derivative settlements, net" in the Company's consolidated statements of income. |
Fair value of asset derivatives | Fair value of liability derivatives | |||||||||||
As of | As of | As of | As of | |||||||||
March 31, 2013 | December 31, 2012 | March 31, 2013 | December 31, 2012 | |||||||||
1:3 basis swaps | $ | 13,201 | 12,239 | 244 | 1,215 | |||||||
Interest rate swaps - floor income hedges | — | — | 36,491 | 45,913 | ||||||||
Interest rate swaps - hybrid debt hedges | — | — | 17,262 | 23,762 | ||||||||
Cross-currency interest rate swaps | 47,997 | (a) | 82,841 | — | — | |||||||
Other | — | 2,361 | — | — | ||||||||
Total | $ | 61,198 | 97,441 | 53,997 | (b) | 70,890 |
(a) | As of March 31, 2013, the trustee for certain of the Company's asset-backed securities transactions held $19.5 million of collateral from the counterparty on the cross-currency interest rate swaps. |
(b) | As of March 31, 2013, the Company had $47.1 million posted as collateral to derivative counterparties, which is included in “restricted cash and investments” in the Company's consolidated balance sheet. |
Gross amounts not offset in the consolidated balance sheet | |||||||||||||
Derivative assets | Gross amounts of recognized assets presented in the consolidated balance sheet | Derivatives subject to enforceable master netting arrangement | Cash collateral received | Net amount | |||||||||
Balance as of March 31, 2013 | $ | 61,198 | (1,321 | ) | (19,473 | ) | 40,404 | ||||||
Balance as of December 31, 2012 | 97,441 | (1,803 | ) | (19,993 | ) | 75,645 |
Gross amounts not offset in the consolidated balance sheet | |||||||||||||
Derivative liabilities | Gross amounts of recognized liabilities presented in the consolidated balance sheet | Derivatives subject to enforceable master netting arrangement | Cash collateral pledged | Net amount | |||||||||
Balance as of March 31, 2013 | $ | 53,997 | (1,321 | ) | (47,148 | ) | 5,528 | ||||||
Balance as of December 31, 2012 | 70,890 | (1,803 | ) | (63,128 | ) | 5,959 |
Three months ended March 31, | ||||||
2013 | 2012 | |||||
Settlements: | ||||||
1:3 basis swaps | $ | 911 | 1,381 | |||
Interest rate swaps - floor income hedges | (8,304 | ) | (3,137 | ) | ||
Interest rate swaps - hybrid debt hedges | (645 | ) | — | |||
Cross-currency interest rate swaps | (146 | ) | 2,109 | |||
Other | — | (126 | ) | |||
Total settlements - income (expense) | (8,184 | ) | 227 | |||
Change in fair value: | ||||||
1:3 basis swaps | 1,933 | 3,002 | ||||
Interest rate swaps - floor income hedges | 9,422 | (5,634 | ) | |||
Interest rate swaps - hybrid debt hedges | 3,640 | 6,197 | ||||
Cross-currency interest rate swaps | (34,844 | ) | 13,026 | |||
Other | 342 | 244 | ||||
Total change in fair value - income (expense) | (19,507 | ) | 16,835 | |||
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense) | 28,763 | (32,242 | ) | |||
Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense) | $ | 1,072 | (15,180 | ) |
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As of March 31, 2013 | As of December 31, 2012 | ||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses (a) | Fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||||||||
Investments: | |||||||||||||||||||||||||
Available-for-sale investments: | |||||||||||||||||||||||||
Student loan asset-backed and other debt securities (b) | $ | 139,544 | 7,703 | (1,060 | ) | 146,187 | 64,970 | 3,187 | (179 | ) | 67,978 | ||||||||||||||
Equity securities | 1,389 | 1,377 | (4 | ) | 2,762 | 3,449 | 1,604 | (180 | ) | 4,873 | |||||||||||||||
Total available-for-sale investments | $ | 140,933 | 9,080 | (1,064 | ) | 148,949 | 68,419 | 4,791 | (359 | ) | 72,851 | ||||||||||||||
Trading investments: | |||||||||||||||||||||||||
Student loan asset-backed and other debt securities (b) | 10,549 | 10,461 | |||||||||||||||||||||||
Total available-for-sale and trading investments | $ | 159,498 | 83,312 | ||||||||||||||||||||||
Restricted Investments (c): | |||||||||||||||||||||||||
Guaranteed investment contracts - held-to-maturity | $ | 8,166 | 8,830 |
(a) | As of March 31, 2013, the Company considered the decline in market value of its available-for-sale investments to be temporary in nature and did not consider any of its investments other-than-temporarily impaired. |
(b) | As of March 31, 2013, the stated maturities of the majority of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years. |
(c) | Restricted investments are included in "restricted cash and investments" in the Company's consolidated balance sheets. |
Three months ended March 31, | |||||||
Affected line item in the consolidated statements of income - income (expense): | 2013 | 2012 | |||||
Other income | $ | 957 | 1,248 | ||||
Income tax expense | (354 | ) | (440 | ) | |||
Net | $ | 603 | 808 |
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• | The operating results of Whitetail Rock Capital Management, LLC ("WRCM"), the Company's SEC-registered investment advisory subsidiary |
• | Income earned on certain investment activities |
• | Interest expense incurred on unsecured debt transactions |
• | Other product and service offerings that are not considered operating segments |
Three months ended March 31, 2013 | ||||||||||||||||||||||||
Fee-Based | ||||||||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Total Fee- Based | Asset Generation and Management | Corporate Activity and Overhead | Eliminations | Total | |||||||||||||||||
Total interest income | $ | 10 | — | — | 10 | 155,654 | 2,311 | (819 | ) | 157,156 | ||||||||||||||
Interest expense | — | — | — | — | 57,482 | 1,695 | (819 | ) | 58,358 | |||||||||||||||
Net interest income | 10 | — | — | 10 | 98,172 | 616 | — | 98,798 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 5,000 | — | — | 5,000 | ||||||||||||||||
Net interest income after provision for loan losses | 10 | — | — | 10 | 93,172 | 616 | — | 93,798 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 55,601 | — | — | 55,601 | — | — | — | 55,601 | ||||||||||||||||
Intersegment servicing revenue | 14,953 | — | — | 14,953 | — | — | (14,953 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 23,411 | — | 23,411 | — | — | — | 23,411 | ||||||||||||||||
Enrollment services revenue | — | — | 28,957 | 28,957 | — | — | — | 28,957 | ||||||||||||||||
Other income | — | — | — | — | 4,196 | 5,220 | — | 9,416 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 1,407 | — | — | 1,407 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | 5,275 | 3,981 | — | 9,256 | ||||||||||||||||
Derivative settlements, net | — | — | — | — | (7,539 | ) | (645 | ) | — | (8,184 | ) | |||||||||||||
Total other income (expense) | 70,554 | 23,411 | 28,957 | 122,922 | 3,339 | 8,556 | (14,953 | ) | 119,864 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 28,444 | 9,359 | 5,767 | 43,570 | 562 | 3,773 | — | 47,905 | ||||||||||||||||
Cost to provide enrollment services | — | — | 19,642 | 19,642 | — | — | — | 19,642 | ||||||||||||||||
Depreciation and amortization | 2,789 | 1,138 | 61 | 3,988 | — | 389 | — | 4,377 | ||||||||||||||||
Other | 18,390 | 2,287 | 1,651 | 22,328 | 7,513 | 5,100 | — | 34,941 | ||||||||||||||||
Intersegment expenses, net | 935 | 1,425 | 1,149 | 3,509 | 15,142 | (3,698 | ) | (14,953 | ) | — | ||||||||||||||
Total operating expenses | 50,558 | 14,209 | 28,270 | 93,037 | 23,217 | 5,564 | (14,953 | ) | 106,865 | |||||||||||||||
Income before income taxes and corporate overhead allocation | 20,006 | 9,202 | 687 | 29,895 | 73,294 | 3,608 | — | 106,797 | ||||||||||||||||
Corporate overhead allocation | (997 | ) | (332 | ) | (332 | ) | (1,661 | ) | (712 | ) | 2,373 | — | — | |||||||||||
Income before income taxes | 19,009 | 8,870 | 355 | 28,234 | 72,582 | 5,981 | — | 106,797 | ||||||||||||||||
Income tax expense | (7,223 | ) | (3,371 | ) | (135 | ) | (10,729 | ) | (27,581 | ) | (137 | ) | — | (38,447 | ) | |||||||||
Net income | 11,786 | 5,499 | 220 | 17,505 | 45,001 | 5,844 | — | 68,350 | ||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 271 | — | 271 | ||||||||||||||||
Net income attributable to Nelnet, Inc. | $ | 11,786 | 5,499 | 220 | 17,505 | 45,001 | 5,573 | — | 68,079 | |||||||||||||||
Three months ended March 31, 2012 | ||||||||||||||||||||||||
Fee-Based | ||||||||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Total Fee- Based | Asset Generation and Management | Corporate Activity and Overhead | Eliminations | Total | |||||||||||||||||
Total interest income | $ | 20 | 4 | — | 24 | 153,512 | 1,588 | (971 | ) | 154,153 | ||||||||||||||
Interest expense | — | — | — | — | 68,829 | 1,439 | (971 | ) | 69,297 | |||||||||||||||
Net interest income | 20 | 4 | — | 24 | 84,683 | 149 | — | 84,856 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 6,000 | — | — | 6,000 | ||||||||||||||||
Net interest income after provision for loan losses | 20 | 4 | — | 24 | 78,683 | 149 | — | 78,856 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 49,488 | — | — | 49,488 | — | — | — | 49,488 | ||||||||||||||||
Intersegment servicing revenue | 16,954 | — | — | 16,954 | — | — | (16,954 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 21,913 | — | 21,913 | — | — | — | 21,913 | ||||||||||||||||
Enrollment services revenue | — | — | 31,664 | 31,664 | — | — | — | 31,664 | ||||||||||||||||
Other income | — | — | — | — | 5,000 | 5,954 | — | 10,954 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | — | — | — | — | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | (21,604 | ) | 6,197 | — | (15,407 | ) | ||||||||||||||
Derivative settlements, net | — | — | — | — | 227 | — | — | 227 | ||||||||||||||||
Total other income (expense) | 66,442 | 21,913 | 31,664 | 120,019 | (16,377 | ) | 12,151 | (16,954 | ) | 98,839 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 29,042 | 8,618 | 6,279 | 43,939 | 719 | 4,437 | — | 49,095 | ||||||||||||||||
Cost to provide enrollment services | — | — | 21,678 | 21,678 | — | — | — | 21,678 | ||||||||||||||||
Depreciation and amortization | 4,413 | 1,740 | 1,617 | 7,770 | — | 366 | — | 8,136 | ||||||||||||||||
Other | 18,666 | 2,816 | 1,956 | 23,438 | 3,632 | 5,193 | — | 32,263 | ||||||||||||||||
Intersegment expenses, net | 1,385 | 1,333 | 848 | 3,566 | 17,143 | (3,755 | ) | (16,954 | ) | — | ||||||||||||||
Total operating expenses | 53,506 | 14,507 | 32,378 | 100,391 | 21,494 | 6,241 | (16,954 | ) | 111,172 | |||||||||||||||
Income (loss) before income taxes and corporate overhead allocation | 12,956 | 7,410 | (714 | ) | 19,652 | 40,812 | 6,059 | — | 66,523 | |||||||||||||||
Corporate overhead allocation | (1,503 | ) | (501 | ) | (501 | ) | (2,505 | ) | (1,392 | ) | 3,897 | — | — | |||||||||||
Income (loss) before income taxes | 11,453 | 6,909 | (1,215 | ) | 17,147 | 39,420 | 9,956 | — | 66,523 | |||||||||||||||
Income tax (expense) benefit | (4,352 | ) | (2,625 | ) | 462 | (6,515 | ) | (14,979 | ) | (1,736 | ) | — | (23,230 | ) | ||||||||||
Net income (loss) | 7,101 | 4,284 | (753 | ) | 10,632 | 24,441 | 8,220 | — | 43,293 | |||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 152 | — | 152 | ||||||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 7,101 | 4,284 | (753 | ) | 10,632 | 24,441 | 8,068 | — | 43,141 | ||||||||||||||
|
|
As of March 31, 2013 | As of December 31, 2012 | |||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||
Assets: | ||||||||||||||||||
Investments: | ||||||||||||||||||
Student loan asset-backed securities | $ | — | 155,978 | 155,978 | — | 77,652 | 77,652 | |||||||||||
Equity securities | 2,762 | — | 2,762 | 4,873 | — | 4,873 | ||||||||||||
Debt securities | 758 | — | 758 | 787 | — | 787 | ||||||||||||
Total investments | 3,520 | 155,978 | 159,498 | 5,660 | 77,652 | 83,312 | ||||||||||||
Fair value of derivative instruments | — | 61,198 | 61,198 | — | 97,441 | 97,441 | ||||||||||||
Total assets | $ | 3,520 | 217,176 | 220,696 | 5,660 | 175,093 | 180,753 | |||||||||||
Liabilities: | ||||||||||||||||||
Fair value of derivative instruments: | $ | — | 53,997 | 53,997 | — | 70,890 | 70,890 | |||||||||||
Total liabilities | $ | — | 53,997 | 53,997 | — | 70,890 | 70,890 |
As of March 31, 2013 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 25,718,774 | 24,885,316 | — | — | 25,718,774 | |||||||||
Cash and cash equivalents | 50,066 | 50,066 | 50,066 | — | — | ||||||||||
Investments | 159,498 | 159,498 | 3,520 | 155,978 | — | ||||||||||
Restricted cash | 806,601 | 806,601 | 806,601 | — | — | ||||||||||
Restricted cash – due to customers | 47,445 | 47,445 | 47,445 | — | — | ||||||||||
Restricted investments | 8,166 | 8,166 | 8,166 | — | — | ||||||||||
Accrued interest receivable | 305,177 | 305,177 | — | 305,177 | — | ||||||||||
Derivative instruments | 61,198 | 61,198 | — | 61,198 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 24,653,806 | 25,125,177 | — | 24,653,806 | — | ||||||||||
Accrued interest payable | 15,861 | 15,861 | — | 15,861 | — | ||||||||||
Due to customers | 47,445 | 47,445 | 47,445 | — | — | ||||||||||
Derivative instruments | 53,997 | 53,997 | — | 53,997 | — |
As of December 31, 2012 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 25,418,623 | 24,830,621 | — | — | 25,418,623 | |||||||||
Cash and cash equivalents | 66,031 | 66,031 | 66,031 | — | — | ||||||||||
Investments | 83,312 | 83,312 | 5,660 | 77,652 | — | ||||||||||
Restricted cash | 806,632 | 806,632 | 806,632 | — | — | ||||||||||
Restricted cash – due to customers | 96,516 | 96,516 | 96,516 | — | — | ||||||||||
Restricted investments | 8,830 | 8,830 | 8,830 | — | — | ||||||||||
Accrued interest receivable | 307,518 | 307,518 | — | 307,518 | — | ||||||||||
Derivative instruments | 97,441 | 97,441 | — | 97,441 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 24,486,008 | 25,098,835 | — | 24,486,008 | — | ||||||||||
Accrued interest payable | 14,770 | 14,770 | — | 14,770 | — | ||||||||||
Due to customers | 96,516 | 96,516 | 96,516 | — | — | ||||||||||
Derivative instruments | 70,890 | 70,890 | — | 70,890 | — |
|
|
|
As of | As of | |||||
March 31, 2013 | December 31, 2012 | |||||
Federally insured loans | ||||||
Stafford and other | $ | 7,145,693 | 7,261,114 | |||
Consolidation | 17,852,598 | 17,708,732 | ||||
Total | 24,998,291 | 24,969,846 | ||||
Non-federally insured loans | 32,306 | 26,034 | ||||
25,030,597 | 24,995,880 | |||||
Loan discount, net of unamortized loan premiums and deferred origination costs | (95,872 | ) | (113,357 | ) | ||
Allowance for loan losses – federally insured loans | (37,913 | ) | (40,120 | ) | ||
Allowance for loan losses – non-federally insured loans | (11,496 | ) | (11,782 | ) | ||
$ | 24,885,316 | 24,830,621 | ||||
Allowance for federally insured loans as a percentage of such loans | 0.15 | % | 0.16 | % | ||
Allowance for non-federally insured loans as a percentage of such loans | 35.59 | % | 45.26 | % |
Three months ended March 31, | ||||||
2013 | 2012 | |||||
Balance at beginning of period | $ | 51,902 | 48,482 | |||
Provision for loan losses: | ||||||
Federally insured loans | 6,000 | 6,000 | ||||
Non-federally insured loans | (1,000 | ) | — | |||
Total provision for loan losses | 5,000 | 6,000 | ||||
Charge-offs: | ||||||
Federally insured loans | (5,990 | ) | (5,495 | ) | ||
Non-federally insured loans | (772 | ) | (769 | ) | ||
Total charge-offs | (6,762 | ) | (6,264 | ) | ||
Recoveries - non-federally insured loans | 368 | 351 | ||||
Purchase (sale) of federally insured loans and other, net | (2,218 | ) | (927 | ) | ||
Transfer from repurchase obligation related to non-federally insured loans purchased, net | 1,119 | 793 | ||||
Balance at end of period | $ | 49,409 | 48,435 | |||
Allocation of the allowance for loan losses: | ||||||
Federally insured loans | $ | 37,913 | 36,783 | |||
Non-federally insured loans | 11,496 | 11,652 | ||||
Total allowance for loan losses | $ | 49,409 | 48,435 |
Three months ended March 31, | ||||||
2013 | 2012 | |||||
Beginning balance | $ | 16,130 | 19,223 | |||
Repurchase obligation transferred to the allowance for loan losses related to loans purchased, net | (1,119 | ) | (793 | ) | ||
Ending balance | $ | 15,011 | 18,430 |
As of March 31, 2013 | As of December 31, 2012 | As of March 31, 2012 | ||||||||||||||||||
Federally insured loans, excluding rehabilitation loans purchased: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 2,933,416 | $ | 2,949,320 | $ | 3,568,310 | ||||||||||||||
Loans in forbearance | 2,890,574 | 2,992,023 | 3,279,854 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 14,501,802 | 87.8 | % | 14,583,044 | 87.6 | % | 14,456,472 | 87.5 | % | |||||||||||
Loans delinquent 31-60 days | 621,296 | 3.8 | 652,351 | 3.9 | 531,045 | 3.2 | ||||||||||||||
Loans delinquent 61-90 days | 409,209 | 2.5 | 330,885 | 2.0 | 320,817 | 1.9 | ||||||||||||||
Loans delinquent 91-120 days | 241,113 | 1.5 | 247,381 | 1.5 | 201,811 | 1.2 | ||||||||||||||
Loans delinquent 121-270 days | 512,875 | 3.1 | 603,942 | 3.6 | 712,173 | 4.3 | ||||||||||||||
Loans delinquent 271 days or greater | 211,461 | 1.3 | 220,798 | 1.4 | 306,970 | 1.9 | ||||||||||||||
Total loans in repayment | 16,497,756 | 100.0 | % | 16,638,401 | 100.0 | % | 16,529,288 | 100.0 | % | |||||||||||
Total federally insured loans, excluding rehabilitation loans purchased | $ | 22,321,746 | $ | 22,579,744 | $ | 23,377,452 | ||||||||||||||
Rehabilitation loans purchased: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 213,101 | $ | 150,317 | $ | 57,321 | ||||||||||||||
Loans in forbearance | 394,733 | 330,278 | 83,773 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 877,800 | 42.4 | % | 670,205 | 35.1 | % | 240,435 | 66.2 | % | |||||||||||
Loans delinquent 31-60 days | 138,249 | 6.7 | 113,795 | 6.0 | 26,431 | 7.3 | ||||||||||||||
Loans delinquent 61-90 days | 109,129 | 5.3 | 79,691 | 4.2 | 16,973 | 4.7 | ||||||||||||||
Loans delinquent 91-120 days | 121,468 | 5.9 | 186,278 | 9.8 | 14,026 | 3.9 | ||||||||||||||
Loans delinquent 121-270 days | 573,054 | 27.7 | 633,001 | 33.1 | 45,396 | 12.5 | ||||||||||||||
Loans delinquent 271 days or greater | 249,011 | 12.0 | 226,537 | 11.8 | 19,676 | 5.4 | ||||||||||||||
Total loans in repayment | 2,068,711 | 100.0 | % | 1,909,507 | 100.0 | % | 362,937 | 100.0 | % | |||||||||||
Total rehabilitation loans purchased | 2,676,545 | 2,390,102 | 504,031 | |||||||||||||||||
Total federally insured loans | $ | 24,998,291 | $ | 24,969,846 | $ | 23,881,483 |
|
As of March 31, 2013 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 22,116,616 | 0.30% - 6.90% | 11/25/15 - 8/25/52 | |||
Bonds and notes based on auction or remarketing | 962,200 | 0.14% - 2.18% | 5/1/28 - 5/25/42 | ||||
Total variable-rate bonds and notes | 23,078,816 | ||||||
FFELP warehouse facilities | 1,942,239 | 0.20% - 0.28% | 4/2/15 - 2/28/16 | ||||
Unsecured line of credit | 115,000 | 1.70% | 3/28/18 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 99,232 | 3.66% | 9/15/61 | ||||
Other borrowings | 61,878 | 1.70% - 5.10% | 11/14/13 - 11/11/15 | ||||
25,297,165 | |||||||
Discount on bonds and notes payable | (171,988 | ) | |||||
Total | $ | 25,125,177 |
As of December 31, 2012 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 21,185,140 | 0.32% - 6.90% | 11/25/15 - 8/25/52 | |||
Bonds and notes based on auction or remarketing | 969,925 | 0.15% - 2.14% | 5/1/28 - 5/25/42 | ||||
Total variable-rate bonds and notes | 22,155,065 | ||||||
FFELP warehouse facilities | 1,554,151 | 0.21% - 0.29% | 1/31/15 - 6/30/15 | ||||
Department of Education Conduit | 1,344,513 | 0.82% | 1/19/14 | ||||
Unsecured line of credit | 55,000 | 1.71% | 2/17/16 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 99,232 | 3.68% | 9/15/61 | ||||
Other borrowings | 62,904 | 1.50% - 5.10% | 11/14/13 - 11/11/15 | ||||
25,270,865 | |||||||
Discount on bonds and notes payable | (172,030 | ) | |||||
Total | $ | 25,098,835 |
NHELP-I | NFSLW-I | NHELP-III (a) | NHELP-II | Total | ||||||||||||
Maximum financing amount | $ | 500,000 | 500,000 | 500,000 | 500,000 | 2,000,000 | ||||||||||
Amount outstanding | 487,584 | 499,196 | 477,033 | 478,426 | 1,942,239 | |||||||||||
Amount available | $ | 12,416 | 804 | 22,967 | 21,574 | 57,761 | ||||||||||
Expiration of liquidity provisions | October 2, 2013 | June 28, 2013 | January 14, 2014 | February 28, 2014 | ||||||||||||
Final maturity date | April 2, 2015 | June 30, 2015 | January 17, 2016 | February 28, 2016 | ||||||||||||
Maximum advance rates | 80.0 - 100.0% | 90.0 - 98.0% | 92.2 - 95.0% | 88.5 - 93.5% | ||||||||||||
Minimum advance rates | 80.0 - 95.0% | 84.5 - 90.0% | 92.2 - 95.0% | 88.5 - 93.5% | ||||||||||||
Advanced as equity support | $ | 18,986 | 39,363 | 26,429 | 45,904 | 130,682 |
(a) | The Company entered into this facility on January 16, 2013. |
|
As of March 31, 2013 | As of December 31, 2012 | ||||||||||
Maturity | Notional amount | Notional amount | |||||||||
2021 | $ | 250,000 | $ | 250,000 | |||||||
2022 | 1,900,000 | 1,900,000 | |||||||||
2023 | 3,650,000 | 3,150,000 | |||||||||
2024 | 250,000 | 250,000 | |||||||||
2026 | 800,000 | 800,000 | |||||||||
2028 | 100,000 | 100,000 | |||||||||
2036 | 700,000 | 700,000 | |||||||||
2039 | (a) | 150,000 | 150,000 | ||||||||
2040 | (b) | 200,000 | 200,000 | ||||||||
$ | 8,000,000 | (c) | $ | 7,500,000 | (c) |
(c) | The weighted average rate paid by the Company on the 1:3 Basis Swaps as of March 31, 2013 and December 31, 2012, was one-month LIBOR plus 3.5 basis points |
Maturity | Notional amount | Weighted average fixed rate paid by the Company (a) | |||||
2013 | $ | 3,150,000 | 0.71 | % | |||
2014 | 1,750,000 | 0.71 | |||||
2015 | 1,100,000 | 0.89 | |||||
2016 | 750,000 | 0.85 | |||||
2017 | 750,000 | 0.99 | |||||
$ | 7,500,000 | 0.78 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR |
As of March 31, 2013 | As of December 31, 2012 | |||||||||||||
Maturity | Notional amount | Weighted average fixed rate paid by the Company (a) | Notional amount | Weighted average fixed rate paid by the Company (a) | ||||||||||
2036 | $ | 65,000 | 4.29 | % | $ | 75,000 | 4.28 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
Three months ended March 31, | ||||||
2013 | 2012 | |||||
Re-measurement of Euro Notes | $ | 28,763 | (32,242 | ) | ||
Change in fair value of cross currency interest rate swaps | (34,844 | ) | 13,026 | |||
Total impact to consolidated statements of income - income (expense) (a) | $ | (6,081 | ) | (19,216 | ) |
(a) | The financial statement impact of the above items is included in "Derivative market value and foreign currency adjustments and derivative settlements, net" in the Company's consolidated statements of income. |
Fair value of asset derivatives | Fair value of liability derivatives | |||||||||||
As of | As of | As of | As of | |||||||||
March 31, 2013 | December 31, 2012 | March 31, 2013 | December 31, 2012 | |||||||||
1:3 basis swaps | $ | 13,201 | 12,239 | 244 | 1,215 | |||||||
Interest rate swaps - floor income hedges | — | — | 36,491 | 45,913 | ||||||||
Interest rate swaps - hybrid debt hedges | — | — | 17,262 | 23,762 | ||||||||
Cross-currency interest rate swaps | 47,997 | (a) | 82,841 | — | — | |||||||
Other | — | 2,361 | — | — | ||||||||
Total | $ | 61,198 | 97,441 | 53,997 | (b) | 70,890 |
Three months ended March 31, | ||||||
2013 | 2012 | |||||
Settlements: | ||||||
1:3 basis swaps | $ | 911 | 1,381 | |||
Interest rate swaps - floor income hedges | (8,304 | ) | (3,137 | ) | ||
Interest rate swaps - hybrid debt hedges | (645 | ) | — | |||
Cross-currency interest rate swaps | (146 | ) | 2,109 | |||
Other | — | (126 | ) | |||
Total settlements - income (expense) | (8,184 | ) | 227 | |||
Change in fair value: | ||||||
1:3 basis swaps | 1,933 | 3,002 | ||||
Interest rate swaps - floor income hedges | 9,422 | (5,634 | ) | |||
Interest rate swaps - hybrid debt hedges | 3,640 | 6,197 | ||||
Cross-currency interest rate swaps | (34,844 | ) | 13,026 | |||
Other | 342 | 244 | ||||
Total change in fair value - income (expense) | (19,507 | ) | 16,835 | |||
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense) | 28,763 | (32,242 | ) | |||
Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense) | $ | 1,072 | (15,180 | ) |
|
As of March 31, 2013 | As of December 31, 2012 | ||||||||||||||||||||||||
Amortized cost | Gross unrealized gains | Gross unrealized losses (a) | Fair value | Amortized cost | Gross unrealized gains | Gross unrealized losses | Fair value | ||||||||||||||||||
Investments: | |||||||||||||||||||||||||
Available-for-sale investments: | |||||||||||||||||||||||||
Student loan asset-backed and other debt securities (b) | $ | 139,544 | 7,703 | (1,060 | ) | 146,187 | 64,970 | 3,187 | (179 | ) | 67,978 | ||||||||||||||
Equity securities | 1,389 | 1,377 | (4 | ) | 2,762 | 3,449 | 1,604 | (180 | ) | 4,873 | |||||||||||||||
Total available-for-sale investments | $ | 140,933 | 9,080 | (1,064 | ) | 148,949 | 68,419 | 4,791 | (359 | ) | 72,851 | ||||||||||||||
Trading investments: | |||||||||||||||||||||||||
Student loan asset-backed and other debt securities (b) | 10,549 | 10,461 | |||||||||||||||||||||||
Total available-for-sale and trading investments | $ | 159,498 | 83,312 | ||||||||||||||||||||||
Restricted Investments (c): | |||||||||||||||||||||||||
Guaranteed investment contracts - held-to-maturity | $ | 8,166 | 8,830 |
(a) | As of March 31, 2013, the Company considered the decline in market value of its available-for-sale investments to be temporary in nature and did not consider any of its investments other-than-temporarily impaired. |
(b) | As of March 31, 2013, the stated maturities of the majority of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years. |
(c) | Restricted investments are included in "restricted cash and investments" in the Company's consolidated balance sheets. |
|
Three months ended March 31, | |||||||
Affected line item in the consolidated statements of income - income (expense): | 2013 | 2012 | |||||
Other income | $ | 957 | 1,248 | ||||
Income tax expense | (354 | ) | (440 | ) | |||
Net | $ | 603 | 808 |
|
Three months ended March 31, 2013 | ||||||||||||||||||||||||
Fee-Based | ||||||||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Total Fee- Based | Asset Generation and Management | Corporate Activity and Overhead | Eliminations | Total | |||||||||||||||||
Total interest income | $ | 10 | — | — | 10 | 155,654 | 2,311 | (819 | ) | 157,156 | ||||||||||||||
Interest expense | — | — | — | — | 57,482 | 1,695 | (819 | ) | 58,358 | |||||||||||||||
Net interest income | 10 | — | — | 10 | 98,172 | 616 | — | 98,798 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 5,000 | — | — | 5,000 | ||||||||||||||||
Net interest income after provision for loan losses | 10 | — | — | 10 | 93,172 | 616 | — | 93,798 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 55,601 | — | — | 55,601 | — | — | — | 55,601 | ||||||||||||||||
Intersegment servicing revenue | 14,953 | — | — | 14,953 | — | — | (14,953 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 23,411 | — | 23,411 | — | — | — | 23,411 | ||||||||||||||||
Enrollment services revenue | — | — | 28,957 | 28,957 | — | — | — | 28,957 | ||||||||||||||||
Other income | — | — | — | — | 4,196 | 5,220 | — | 9,416 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 1,407 | — | — | 1,407 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | 5,275 | 3,981 | — | 9,256 | ||||||||||||||||
Derivative settlements, net | — | — | — | — | (7,539 | ) | (645 | ) | — | (8,184 | ) | |||||||||||||
Total other income (expense) | 70,554 | 23,411 | 28,957 | 122,922 | 3,339 | 8,556 | (14,953 | ) | 119,864 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 28,444 | 9,359 | 5,767 | 43,570 | 562 | 3,773 | — | 47,905 | ||||||||||||||||
Cost to provide enrollment services | — | — | 19,642 | 19,642 | — | — | — | 19,642 | ||||||||||||||||
Depreciation and amortization | 2,789 | 1,138 | 61 | 3,988 | — | 389 | — | 4,377 | ||||||||||||||||
Other | 18,390 | 2,287 | 1,651 | 22,328 | 7,513 | 5,100 | — | 34,941 | ||||||||||||||||
Intersegment expenses, net | 935 | 1,425 | 1,149 | 3,509 | 15,142 | (3,698 | ) | (14,953 | ) | — | ||||||||||||||
Total operating expenses | 50,558 | 14,209 | 28,270 | 93,037 | 23,217 | 5,564 | (14,953 | ) | 106,865 | |||||||||||||||
Income before income taxes and corporate overhead allocation | 20,006 | 9,202 | 687 | 29,895 | 73,294 | 3,608 | — | 106,797 | ||||||||||||||||
Corporate overhead allocation | (997 | ) | (332 | ) | (332 | ) | (1,661 | ) | (712 | ) | 2,373 | — | — | |||||||||||
Income before income taxes | 19,009 | 8,870 | 355 | 28,234 | 72,582 | 5,981 | — | 106,797 | ||||||||||||||||
Income tax expense | (7,223 | ) | (3,371 | ) | (135 | ) | (10,729 | ) | (27,581 | ) | (137 | ) | — | (38,447 | ) | |||||||||
Net income | 11,786 | 5,499 | 220 | 17,505 | 45,001 | 5,844 | — | 68,350 | ||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 271 | — | 271 | ||||||||||||||||
Net income attributable to Nelnet, Inc. | $ | 11,786 | 5,499 | 220 | 17,505 | 45,001 | 5,573 | — | 68,079 | |||||||||||||||
Three months ended March 31, 2012 | ||||||||||||||||||||||||
Fee-Based | ||||||||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Enrollment Services | Total Fee- Based | Asset Generation and Management | Corporate Activity and Overhead | Eliminations | Total | |||||||||||||||||
Total interest income | $ | 20 | 4 | — | 24 | 153,512 | 1,588 | (971 | ) | 154,153 | ||||||||||||||
Interest expense | — | — | — | — | 68,829 | 1,439 | (971 | ) | 69,297 | |||||||||||||||
Net interest income | 20 | 4 | — | 24 | 84,683 | 149 | — | 84,856 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 6,000 | — | — | 6,000 | ||||||||||||||||
Net interest income after provision for loan losses | 20 | 4 | — | 24 | 78,683 | 149 | — | 78,856 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 49,488 | — | — | 49,488 | — | — | — | 49,488 | ||||||||||||||||
Intersegment servicing revenue | 16,954 | — | — | 16,954 | — | — | (16,954 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 21,913 | — | 21,913 | — | — | — | 21,913 | ||||||||||||||||
Enrollment services revenue | — | — | 31,664 | 31,664 | — | — | — | 31,664 | ||||||||||||||||
Other income | — | — | — | — | 5,000 | 5,954 | — | 10,954 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | — | — | — | — | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | (21,604 | ) | 6,197 | — | (15,407 | ) | ||||||||||||||
Derivative settlements, net | — | — | — | — | 227 | — | — | 227 | ||||||||||||||||
Total other income (expense) | 66,442 | 21,913 | 31,664 | 120,019 | (16,377 | ) | 12,151 | (16,954 | ) | 98,839 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 29,042 | 8,618 | 6,279 | 43,939 | 719 | 4,437 | — | 49,095 | ||||||||||||||||
Cost to provide enrollment services | — | — | 21,678 | 21,678 | — | — | — | 21,678 | ||||||||||||||||
Depreciation and amortization | 4,413 | 1,740 | 1,617 | 7,770 | — | 366 | — | 8,136 | ||||||||||||||||
Other | 18,666 | 2,816 | 1,956 | 23,438 | 3,632 | 5,193 | — | 32,263 | ||||||||||||||||
Intersegment expenses, net | 1,385 | 1,333 | 848 | 3,566 | 17,143 | (3,755 | ) | (16,954 | ) | — | ||||||||||||||
Total operating expenses | 53,506 | 14,507 | 32,378 | 100,391 | 21,494 | 6,241 | (16,954 | ) | 111,172 | |||||||||||||||
Income (loss) before income taxes and corporate overhead allocation | 12,956 | 7,410 | (714 | ) | 19,652 | 40,812 | 6,059 | — | 66,523 | |||||||||||||||
Corporate overhead allocation | (1,503 | ) | (501 | ) | (501 | ) | (2,505 | ) | (1,392 | ) | 3,897 | — | — | |||||||||||
Income (loss) before income taxes | 11,453 | 6,909 | (1,215 | ) | 17,147 | 39,420 | 9,956 | — | 66,523 | |||||||||||||||
Income tax (expense) benefit | (4,352 | ) | (2,625 | ) | 462 | (6,515 | ) | (14,979 | ) | (1,736 | ) | — | (23,230 | ) | ||||||||||
Net income (loss) | 7,101 | 4,284 | (753 | ) | 10,632 | 24,441 | 8,220 | — | 43,293 | |||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 152 | — | 152 | ||||||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 7,101 | 4,284 | (753 | ) | 10,632 | 24,441 | 8,068 | — | 43,141 | ||||||||||||||
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As of March 31, 2013 | As of December 31, 2012 | |||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||
Assets: | ||||||||||||||||||
Investments: | ||||||||||||||||||
Student loan asset-backed securities | $ | — | 155,978 | 155,978 | — | 77,652 | 77,652 | |||||||||||
Equity securities | 2,762 | — | 2,762 | 4,873 | — | 4,873 | ||||||||||||
Debt securities | 758 | — | 758 | 787 | — | 787 | ||||||||||||
Total investments | 3,520 | 155,978 | 159,498 | 5,660 | 77,652 | 83,312 | ||||||||||||
Fair value of derivative instruments | — | 61,198 | 61,198 | — | 97,441 | 97,441 | ||||||||||||
Total assets | $ | 3,520 | 217,176 | 220,696 | 5,660 | 175,093 | 180,753 | |||||||||||
Liabilities: | ||||||||||||||||||
Fair value of derivative instruments: | $ | — | 53,997 | 53,997 | — | 70,890 | 70,890 | |||||||||||
Total liabilities | $ | — | 53,997 | 53,997 | — | 70,890 | 70,890 |
As of March 31, 2013 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 25,718,774 | 24,885,316 | — | — | 25,718,774 | |||||||||
Cash and cash equivalents | 50,066 | 50,066 | 50,066 | — | — | ||||||||||
Investments | 159,498 | 159,498 | 3,520 | 155,978 | — | ||||||||||
Restricted cash | 806,601 | 806,601 | 806,601 | — | — | ||||||||||
Restricted cash – due to customers | 47,445 | 47,445 | 47,445 | — | — | ||||||||||
Restricted investments | 8,166 | 8,166 | 8,166 | — | — | ||||||||||
Accrued interest receivable | 305,177 | 305,177 | — | 305,177 | — | ||||||||||
Derivative instruments | 61,198 | 61,198 | — | 61,198 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 24,653,806 | 25,125,177 | — | 24,653,806 | — | ||||||||||
Accrued interest payable | 15,861 | 15,861 | — | 15,861 | — | ||||||||||
Due to customers | 47,445 | 47,445 | 47,445 | — | — | ||||||||||
Derivative instruments | 53,997 | 53,997 | — | 53,997 | — |
As of December 31, 2012 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 25,418,623 | 24,830,621 | — | — | 25,418,623 | |||||||||
Cash and cash equivalents | 66,031 | 66,031 | 66,031 | — | — | ||||||||||
Investments | 83,312 | 83,312 | 5,660 | 77,652 | — | ||||||||||
Restricted cash | 806,632 | 806,632 | 806,632 | — | — | ||||||||||
Restricted cash – due to customers | 96,516 | 96,516 | 96,516 | — | — | ||||||||||
Restricted investments | 8,830 | 8,830 | 8,830 | — | — | ||||||||||
Accrued interest receivable | 307,518 | 307,518 | — | 307,518 | — | ||||||||||
Derivative instruments | 97,441 | 97,441 | — | 97,441 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 24,486,008 | 25,098,835 | — | 24,486,008 | — | ||||||||||
Accrued interest payable | 14,770 | 14,770 | — | 14,770 | — | ||||||||||
Due to customers | 96,516 | 96,516 | 96,516 | — | — | ||||||||||
Derivative instruments | 70,890 | 70,890 | — | 70,890 | — |
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