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As of | As of | ||||||||
September 30, 2013 | December 31, 2012 | ||||||||
Held for investment | Held for sale | Held for investment | |||||||
Federally insured loans | |||||||||
Stafford and other | $ | 6,884,348 | — | 7,261,114 | |||||
Consolidation | 17,908,229 | — | 17,708,732 | ||||||
Total | 24,792,577 | — | 24,969,846 | ||||||
Non-federally insured loans | 66,283 | 28,480 | 26,034 | ||||||
24,858,860 | 28,480 | 24,995,880 | |||||||
Loan discount, net of unamortized loan premiums and deferred origination costs | (103,551 | ) | — | (113,357 | ) | ||||
Allowance for loan losses – federally insured loans | (42,406 | ) | — | (40,120 | ) | ||||
Allowance for loan losses – non-federally insured loans | (11,791 | ) | — | (11,782 | ) | ||||
$ | 24,701,112 | 28,480 | 24,830,621 | ||||||
Allowance for federally insured loans as a percentage of such loans | 0.17 | % | 0.16 | % | |||||
Allowance for non-federally insured loans as a percentage of such loans | 17.79 | % | 45.26 | % |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Balance at beginning of period | $ | 51,611 | 49,657 | 51,902 | 48,482 | |||||||
Provision for loan losses: | ||||||||||||
Federally insured loans | 5,000 | 5,000 | 16,000 | 18,000 | ||||||||
Non-federally insured loans | — | — | (1,000 | ) | — | |||||||
Total provision for loan losses | 5,000 | 5,000 | 15,000 | 18,000 | ||||||||
Charge-offs: | ||||||||||||
Federally insured loans | (3,142 | ) | (5,449 | ) | (12,472 | ) | (16,943 | ) | ||||
Non-federally insured loans | (906 | ) | (1,058 | ) | (2,270 | ) | (2,355 | ) | ||||
Total charge-offs | (4,048 | ) | (6,507 | ) | (14,742 | ) | (19,298 | ) | ||||
Recoveries - non-federally insured loans | 363 | 399 | 1,173 | 1,104 | ||||||||
Purchase (sale) of federally insured loans, net | 700 | (928 | ) | (1,243 | ) | (2,647 | ) | |||||
Transfer from repurchase obligation related to non-federally insured loans repurchased, net | 571 | 588 | 2,107 | 2,568 | ||||||||
Balance at end of period | $ | 54,197 | 48,209 | 54,197 | 48,209 | |||||||
Allocation of the allowance for loan losses: | ||||||||||||
Federally insured loans | $ | 42,406 | 35,614 | 42,406 | 35,614 | |||||||
Non-federally insured loans | 11,791 | 12,595 | 11,791 | 12,595 | ||||||||
Total allowance for loan losses | $ | 54,197 | 48,209 | 54,197 | 48,209 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Beginning balance | $ | 14,594 | 17,243 | 16,130 | 19,223 | |||||||
Repurchase obligation transferred to the allowance for loan losses related to loans repurchased, net | (571 | ) | (588 | ) | (2,107 | ) | (2,568 | ) | ||||
Ending balance | $ | 14,023 | 16,655 | 14,023 | 16,655 |
As of September 30, 2013 | As of December 31, 2012 | As of September 30, 2012 | ||||||||||||||||||
Federally insured loans, excluding rehabilitation loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 2,780,442 | $ | 2,949,320 | $ | 3,163,918 | ||||||||||||||
Loans in forbearance | 2,953,119 | 2,992,023 | 2,868,168 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 14,157,330 | 87.2 | % | 14,583,044 | 87.6 | % | 13,673,217 | 87.2 | % | |||||||||||
Loans delinquent 31-60 days | 662,814 | 4.1 | 652,351 | 3.9 | 586,021 | 3.7 | ||||||||||||||
Loans delinquent 61-90 days | 354,975 | 2.2 | 330,885 | 2.0 | 308,377 | 2.0 | ||||||||||||||
Loans delinquent 91-120 days | 235,681 | 1.5 | 247,381 | 1.5 | 237,941 | 1.5 | ||||||||||||||
Loans delinquent 121-270 days | 624,042 | 3.8 | 603,942 | 3.6 | 628,697 | 4.0 | ||||||||||||||
Loans delinquent 271 days or greater | 195,853 | 1.2 | 220,798 | 1.4 | 253,438 | 1.6 | ||||||||||||||
Total loans in repayment | 16,230,695 | 100.0 | % | 16,638,401 | 100.0 | % | 15,687,691 | 100.0 | % | |||||||||||
Total federally insured loans, excluding rehabilitation loans | $ | 21,964,256 | $ | 22,579,744 | $ | 21,719,777 | ||||||||||||||
Rehabilitation loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 259,377 | $ | 150,317 | $ | 90,836 | ||||||||||||||
Loans in forbearance | 443,629 | 330,278 | 129,257 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 1,078,730 | 50.7 | % | 670,205 | 35.1 | % | 418,584 | 61.9 | % | |||||||||||
Loans delinquent 31-60 days | 188,583 | 8.9 | 113,795 | 6.0 | 52,053 | 7.7 | ||||||||||||||
Loans delinquent 61-90 days | 125,310 | 5.9 | 79,691 | 4.2 | 35,104 | 5.2 | ||||||||||||||
Loans delinquent 91-120 days | 137,016 | 6.4 | 186,278 | 9.8 | 33,931 | 5.0 | ||||||||||||||
Loans delinquent 121-270 days | 354,192 | 16.7 | 633,001 | 33.1 | 99,041 | 14.7 | ||||||||||||||
Loans delinquent 271 days or greater | 241,484 | 11.4 | 226,537 | 11.8 | 37,025 | 5.5 | ||||||||||||||
Total loans in repayment | 2,125,315 | 100.0 | % | 1,909,507 | 100.0 | % | 675,738 | 100.0 | % | |||||||||||
Total rehabilitation loans | 2,828,321 | 2,390,102 | 895,831 | |||||||||||||||||
Total federally insured loans | $ | 24,792,577 | $ | 24,969,846 | $ | 22,615,608 |
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As of September 30, 2013 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 22,632,522 | 0.27% - 6.90% | 11/25/15 - 8/26/52 | |||
Bonds and notes based on auction or remarketing | 890,500 | 0.08% - 2.13% | 5/1/28 - 5/25/42 | ||||
Total variable-rate bonds and notes | 23,523,022 | ||||||
FFELP warehouse facilities | 1,277,650 | 0.18% - 0.28% | 1/17/16 - 6/12/16 | ||||
Unsecured line of credit | 75,000 | 1.68% | 3/28/18 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 99,232 | 3.62% | 9/15/61 | ||||
Other borrowings | 61,828 | 1.68% - 5.10% | 11/14/13 - 11/11/15 | ||||
25,036,732 | |||||||
Discount on bonds and notes payable | (178,277 | ) | |||||
Total | $ | 24,858,455 |
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 - 8/26/52 | |||
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 (a) | NHELP-III (b) | NHELP-II (c) | NFSLW-I (d) | Total | ||||||||||||
Maximum financing amount | $ | 500,000 | 750,000 | 500,000 | 500,000 | 2,250,000 | ||||||||||
Amount outstanding | — | 637,770 | 373,258 | 266,622 | 1,277,650 | |||||||||||
Amount available | $ | 500,000 | 112,230 | 126,742 | 233,378 | 972,350 | ||||||||||
Expiration of liquidity provisions | January 16, 2014 | February 28, 2014 | June 12, 2014 | |||||||||||||
Final maturity date | January 17, 2016 | February 28, 2016 | June 12, 2016 | |||||||||||||
Maximum advance rates | 92.2 - 95% | 84.5 - 94.5% | 92 - 98% | |||||||||||||
Minimum advance rates | 92.2 - 95% | 84.5 - 94.5% | 84 - 90% | |||||||||||||
Advanced as equity support | $ | — | 36,926 | 33,863 | 11,647 | 82,436 |
(a) | On October 1, 2013, the Company terminated this facility. All loans previously financed in this facility were financed in other warehouse facilities during the third quarter of 2013. |
(b) | The Company entered into this facility on January 16, 2013. On September 16, 2013, the Company amended this facility to increase the maximum financing amount from $500 million to $750 million. |
(c) | On June 3, 2013, the Company amended this facility to change the terms of the advance rates. |
(d) | On June 13, 2013, the Company amended this facility to change the terms of the advance rates and extend the expiration of the liquidity provisions and its final maturity date. |
2013-1 | 2013-2 (a) | 2013-3 | 2013-4 | 2013-5 (a) | Total | |||||||||||||||
Date securities issued | 1/31/13 | 2/28/13 | 4/30/13 | 6/21/13 | 9/30/13 | |||||||||||||||
Total original principal amount | $ | 437,500 | 1,122,000 | 765,000 | 453,000 | 399,000 | $ | 3,176,500 | ||||||||||||
Class A senior notes: | ||||||||||||||||||||
Total original principal amount | $ | 428,000 | 1,122,000 | 745,000 | 440,000 | 399,000 | 3,134,000 | |||||||||||||
Bond discount | — | (3,325 | ) | — | (1,690 | ) | (4,881 | ) | (9,896 | ) | ||||||||||
Issue price | $ | 428,000 | 1,118,675 | 745,000 | 438,310 | 394,119 | 3,124,104 | |||||||||||||
Cost of funds (1-month LIBOR plus:) | 0.60 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.63 | % | ||||||||||
Final maturity date | 6/25/41 | 7/25/40 | 2/25/37 | 12/26/42 | 1/25/37 | |||||||||||||||
Class B subordinated notes: | ||||||||||||||||||||
Total original principal amount | $ | 9,500 | 20,000 | 13,000 | 42,500 | |||||||||||||||
Bond discount | (1,525 | ) | (1,762 | ) | (1,804 | ) | (5,091 | ) | ||||||||||||
Issue price | $ | 7,975 | 18,238 | 11,196 | 37,409 | |||||||||||||||
Cost of funds (1-month LIBOR plus:) | 1.50 | % | 1.50 | % | 1.50 | % | ||||||||||||||
Final maturity date | 3/25/48 | 7/25/47 | 1/25/47 |
(a) | Total original principal amount excludes the Class B subordinated tranches for the 2013-2 and 2013-5 transactions totaling $34.0 million and $9.0 million, respectively, that were retained at issuance. As of September 30, 2013, the Company has a total of $85.5 million (face amount) of its own Class B subordinated notes remaining from prior completed asset-backed securitizations that are not included in the Company's consolidated balance sheet. |
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As of September 30, 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 September 30, 2013 and December 31, 2012, was one-month LIBOR plus 3.5 basis points and one-month LIBOR plus 3.3 basis points, respectively. |
As of September 30, 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) | ||||||||||
2013 | $ | — | — | % | $ | 3,150,000 | 0.71 | % | ||||||
2014 | 1,750,000 | 0.71 | 1,750,000 | 0.71 | ||||||||||
2015 | 1,100,000 | 0.89 | 1,100,000 | 0.89 | ||||||||||
2016 | 750,000 | 0.85 | 750,000 | 0.85 | ||||||||||
2017 | 1,250,000 | 0.86 | 750,000 | 0.99 | ||||||||||
$ | 4,850,000 | 0.81 | % | $ | 7,500,000 | 0.78 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
As of September 30, 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 | $ | 25,000 | 4.28 | % | $ | 75,000 | 4.28 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Re-measurement of Euro Notes | $ | (39,974 | ) | (20,799 | ) | (25,902 | ) | 6,186 | ||||
Change in fair value of cross-currency interest rate swaps | 39,074 | 24,586 | 18,978 | (24,934 | ) | |||||||
Total impact to consolidated statements of income - income (expense) (a) | $ | (900 | ) | 3,787 | (6,924 | ) | (18,748 | ) |
(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 | |||||||||
September 30, 2013 | December 31, 2012 | September 30, 2013 | December 31, 2012 | |||||||||
1:3 basis swaps | $ | 20,425 | 12,239 | — | 1,215 | |||||||
Interest rate swaps - floor income hedges | 6,032 | — | 18,186 | 45,913 | ||||||||
Interest rate swaps - hybrid debt hedges | — | — | 3,327 | 23,762 | ||||||||
Cross-currency interest rate swaps | 101,819 | 82,841 | — | — | ||||||||
Other | — | 2,361 | — | — | ||||||||
Total | $ | 128,276 | 97,441 | 21,513 | 70,890 |
Gross amounts not offset in the consolidated balance sheets | |||||||||||||
Derivative assets | Gross amounts of recognized assets presented in the consolidated balance sheets | Derivatives subject to enforceable master netting arrangement | Cash collateral received (a) | Net asset (liability) | |||||||||
Balance as of September 30, 2013 | $ | 128,276 | (17,991 | ) | (73,734 | ) | 36,551 | ||||||
Balance as of December 31, 2012 | 97,441 | (13,234 | ) | (19,993 | ) | 64,214 |
Gross amounts not offset in the consolidated balance sheets | |||||||||||||
Derivative liabilities | Gross amounts of recognized liabilities presented in the consolidated balance sheets | Derivatives subject to enforceable master netting arrangement | Cash collateral pledged (b) | Net asset (liability) | |||||||||
Balance as of September 30, 2013 | $ | (21,513 | ) | 17,991 | 4,000 | 478 | |||||||
Balance as of December 31, 2012 | (70,890 | ) | 13,234 | 63,128 | 5,472 |
(a) | As of September 30, 2013 and December 31, 2012, the trustee for certain of the Company's asset-backed securitization transactions held $73.7 million and $20.0 million, respectively, of collateral from the counterparty on the cross-currency interest rate swaps. |
(b) | As of September 30, 2013 and December 31, 2012, the Company had $4.0 million and $63.1 million, respectively, posted as collateral to derivative counterparties, which is included in “restricted cash and investments” in the Company's consolidated balance sheet. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Settlements: | ||||||||||||
1:3 basis swaps | $ | 781 | 1,100 | 2,474 | 3,651 | |||||||
Interest rate swaps - floor income hedges | (7,178 | ) | (5,595 | ) | (24,017 | ) | (12,237 | ) | ||||
Interest rate swaps - hybrid debt hedges | (256 | ) | (733 | ) | (1,413 | ) | (1,479 | ) | ||||
Cross-currency interest rate swaps | (35 | ) | 227 | (273 | ) | 3,390 | ||||||
Other | — | (50 | ) | — | (235 | ) | ||||||
Total settlements - income (expense) | (6,688 | ) | (5,051 | ) | (23,229 | ) | (6,910 | ) | ||||
Change in fair value: | ||||||||||||
1:3 basis swaps | (2,161 | ) | (4,578 | ) | 9,402 | (2,005 | ) | |||||
Interest rate swaps - floor income hedges | (9,599 | ) | (29,903 | ) | 33,231 | (41,681 | ) | |||||
Interest rate swaps - hybrid debt hedges | 2,700 | 1,695 | 11,790 | (890 | ) | |||||||
Cross-currency interest rate swaps | 39,074 | 24,586 | 18,978 | (24,934 | ) | |||||||
Other | — | 2,775 | 342 | 2,161 | ||||||||
Total change in fair value - income (expense) | 30,014 | (5,425 | ) | 73,743 | (67,349 | ) | ||||||
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense) | (39,974 | ) | (20,799 | ) | (25,902 | ) | 6,186 | |||||
Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense) | $ | (16,648 | ) | (31,275 | ) | 24,612 | (68,073 | ) |
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As of September 30, 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) | $ | 211,548 | 8,535 | (968 | ) | 219,115 | 64,970 | 3,187 | (179 | ) | 67,978 | ||||||||||||||
Equity securities | 1,550 | 1,519 | (5 | ) | 3,064 | 3,449 | 1,604 | (180 | ) | 4,873 | |||||||||||||||
Total available-for-sale investments | $ | 213,098 | 10,054 | (973 | ) | 222,179 | 68,419 | 4,791 | (359 | ) | 72,851 | ||||||||||||||
Trading investments: | |||||||||||||||||||||||||
Student loan asset-backed and other debt securities | 10,484 | 10,461 | |||||||||||||||||||||||
Total available-for-sale and trading investments | $ | 232,663 | 83,312 | ||||||||||||||||||||||
Restricted Investments (c): | |||||||||||||||||||||||||
Guaranteed investment contracts - held-to-maturity | $ | 6,724 | 8,830 |
(a) | As of September 30, 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 September 30, 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 September 30, | Nine months ended September 30, | ||||||||||||
Affected line item in the consolidated statements of income - income (expense): | 2013 | 2012 | 2013 | 2012 | |||||||||
Other income | $ | 730 | 2,618 | 2,246 | 4,848 | ||||||||
Income tax expense | (270 | ) | (969 | ) | (831 | ) | (1,794 | ) | |||||
Net | $ | 460 | 1,649 | 1,415 | 3,054 |
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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 September 30, 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 | 158,793 | 2,201 | (767 | ) | 160,237 | ||||||||||||||
Interest expense | — | — | — | — | 56,100 | (18 | ) | (767 | ) | 55,315 | ||||||||||||||
Net interest income (loss) | 10 | — | — | 10 | 102,693 | 2,219 | — | 104,922 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 5,000 | — | — | 5,000 | ||||||||||||||||
Net interest income (loss) after provision for loan losses | 10 | — | — | 10 | 97,693 | 2,219 | — | 99,922 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 64,582 | — | — | 64,582 | — | — | — | 64,582 | ||||||||||||||||
Intersegment servicing revenue | 13,519 | — | — | 13,519 | — | — | (13,519 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 19,927 | — | 19,927 | — | — | — | 19,927 | ||||||||||||||||
Enrollment services revenue | — | — | 22,563 | 22,563 | — | — | — | 22,563 | ||||||||||||||||
Other income | — | — | — | — | 3,981 | 4,632 | — | 8,613 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 2,138 | — | — | 2,138 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | (12,660 | ) | 2,700 | — | (9,960 | ) | ||||||||||||||
Derivative settlements, net | — | — | — | — | (6,432 | ) | (256 | ) | — | (6,688 | ) | |||||||||||||
Total other income (expense) | 78,101 | 19,927 | 22,563 | 120,591 | (12,973 | ) | 7,076 | (13,519 | ) | 101,175 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 29,719 | 9,229 | 4,491 | 43,439 | 555 | 4,718 | — | 48,712 | ||||||||||||||||
Cost to provide enrollment services | — | — | 14,668 | 14,668 | — | — | — | 14,668 | ||||||||||||||||
Depreciation and amortization | 2,677 | 1,117 | 57 | 3,851 | — | 489 | — | 4,340 | ||||||||||||||||
Other | 19,752 | 1,908 | 1,556 | 23,216 | 7,939 | 8,732 | — | 39,887 | ||||||||||||||||
Intersegment expenses, net | 1,457 | 1,431 | 1,139 | 4,027 | 13,705 | (4,213 | ) | (13,519 | ) | — | ||||||||||||||
Total operating expenses | 53,605 | 13,685 | 21,911 | 89,201 | 22,199 | 9,726 | (13,519 | ) | 107,607 | |||||||||||||||
Income (loss) before income taxes and corporate overhead allocation | 24,506 | 6,242 | 652 | 31,400 | 62,521 | (431 | ) | — | 93,490 | |||||||||||||||
Corporate overhead allocation | (1,822 | ) | (607 | ) | (607 | ) | (3,036 | ) | (1,302 | ) | 4,338 | — | — | |||||||||||
Income (loss) before income taxes | 22,684 | 5,635 | 45 | 28,364 | 61,219 | 3,907 | — | 93,490 | ||||||||||||||||
Income tax (expense) benefit | (8,620 | ) | (2,141 | ) | (17 | ) | (10,778 | ) | (23,263 | ) | 3,597 | — | (30,444 | ) | ||||||||||
Net income (loss) | 14,064 | 3,494 | 28 | 17,586 | 37,956 | 7,504 | — | 63,046 | ||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 216 | — | 216 | ||||||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 14,064 | 3,494 | 28 | 17,586 | 37,956 | 7,288 | — | 62,830 | |||||||||||||||
Three months ended September 30, 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 | $ | 12 | 3 | — | 15 | 150,661 | 1,891 | (899 | ) | 151,668 | ||||||||||||||
Interest expense | — | — | — | — | 64,829 | 2,472 | (899 | ) | 66,402 | |||||||||||||||
Net interest income (loss) | 12 | 3 | — | 15 | 85,832 | (581 | ) | — | 85,266 | |||||||||||||||
Less provision for loan losses | — | — | — | — | 5,000 | — | — | 5,000 | ||||||||||||||||
Net interest income (loss) after provision for loan losses | 12 | 3 | — | 15 | 80,832 | (581 | ) | — | 80,266 | |||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 53,285 | — | — | 53,285 | — | — | — | 53,285 | ||||||||||||||||
Intersegment servicing revenue | 15,855 | — | — | 15,855 | — | — | (15,855 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 17,928 | — | 17,928 | — | — | — | 17,928 | ||||||||||||||||
Enrollment services revenue | — | — | 30,661 | 30,661 | — | — | — | 30,661 | ||||||||||||||||
Other income | — | — | — | — | 5,834 | 6,865 | — | 12,699 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 195 | — | — | 195 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | (30,694 | ) | 4,470 | — | (26,224 | ) | ||||||||||||||
Derivative settlements, net | — | — | — | — | (4,319 | ) | (732 | ) | — | (5,051 | ) | |||||||||||||
Total other income (expense) | 69,140 | 17,928 | 30,661 | 117,729 | (28,984 | ) | 10,603 | (15,855 | ) | 83,493 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 27,716 | 8,578 | 5,147 | 41,441 | 462 | 4,492 | — | 46,395 | ||||||||||||||||
Cost to provide enrollment services | — | — | 20,151 | 20,151 | — | — | — | 20,151 | ||||||||||||||||
Depreciation and amortization | 4,691 | 1,703 | 1,633 | 8,027 | — | 375 | — | 8,402 | ||||||||||||||||
Other | 16,775 | 2,285 | 1,782 | 20,842 | 3,451 | 5,696 | — | 29,989 | ||||||||||||||||
Intersegment expenses, net | 1,262 | 1,379 | 1,000 | 3,641 | 16,064 | (3,850 | ) | (15,855 | ) | — | ||||||||||||||
Total operating expenses | 50,444 | 13,945 | 29,713 | 94,102 | 19,977 | 6,713 | (15,855 | ) | 104,937 | |||||||||||||||
Income (loss) before income taxes and corporate overhead allocation | 18,708 | 3,986 | 948 | 23,642 | 31,871 | 3,309 | — | 58,822 | ||||||||||||||||
Corporate overhead allocation | (1,337 | ) | (446 | ) | (446 | ) | (2,229 | ) | (909 | ) | 3,138 | — | — | |||||||||||
Income (loss) before income taxes | 17,371 | 3,540 | 502 | 21,413 | 30,962 | 6,447 | — | 58,822 | ||||||||||||||||
Income tax (expense) benefit | (6,601 | ) | (1,345 | ) | (191 | ) | (8,137 | ) | (11,765 | ) | (1,968 | ) | — | (21,870 | ) | |||||||||
Net income (loss) | 10,770 | 2,195 | 311 | 13,276 | 19,197 | 4,479 | — | 36,952 | ||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 124 | — | 124 | ||||||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 10,770 | 2,195 | 311 | 13,276 | 19,197 | 4,355 | — | 36,828 | |||||||||||||||
Nine months ended September 30, 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 | $ | 29 | — | — | 29 | 472,622 | 6,708 | (2,420 | ) | 476,939 | ||||||||||||||
Interest expense | — | — | — | — | 170,502 | 3,718 | (2,420 | ) | 171,800 | |||||||||||||||
Net interest income (loss) | 29 | — | — | 29 | 302,120 | 2,990 | — | 305,139 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 15,000 | — | — | 15,000 | ||||||||||||||||
Net interest income (loss) after provision for loan losses | 29 | — | — | 29 | 287,120 | 2,990 | — | 290,139 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 180,261 | — | — | 180,261 | — | — | — | 180,261 | ||||||||||||||||
Intersegment servicing revenue | 42,375 | — | — | 42,375 | — | — | (42,375 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 61,694 | — | 61,694 | — | — | — | 61,694 | ||||||||||||||||
Enrollment services revenue | — | — | 76,343 | 76,343 | — | — | — | 76,343 | ||||||||||||||||
Other income | — | — | — | — | 11,207 | 19,110 | — | 30,317 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 10,900 | — | — | 10,900 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | 35,711 | 12,130 | — | 47,841 | ||||||||||||||||
Derivative settlements, net | — | — | — | — | (21,816 | ) | (1,413 | ) | — | (23,229 | ) | |||||||||||||
Total other income (expense) | 222,636 | 61,694 | 76,343 | 360,673 | 36,002 | 29,827 | (42,375 | ) | 384,127 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 86,254 | 28,015 | 15,067 | 129,336 | 1,709 | 13,004 | — | 144,049 | ||||||||||||||||
Cost to provide enrollment services | — | — | 51,097 | 51,097 | — | — | — | 51,097 | ||||||||||||||||
Depreciation and amortization | 8,197 | 3,387 | 179 | 11,763 | — | 1,274 | — | 13,037 | ||||||||||||||||
Other | 56,173 | 6,387 | 4,450 | 67,010 | 23,375 | 18,808 | — | 109,193 | ||||||||||||||||
Intersegment expenses, net | 3,243 | 4,350 | 3,418 | 11,011 | 42,955 | (11,591 | ) | (42,375 | ) | — | ||||||||||||||
Total operating expenses | 153,867 | 42,139 | 74,211 | 270,217 | 68,039 | 21,495 | (42,375 | ) | 317,376 | |||||||||||||||
Income (loss) before income taxes and corporate overhead allocation | 68,798 | 19,555 | 2,132 | 90,485 | 255,083 | 11,322 | — | 356,890 | ||||||||||||||||
Corporate overhead allocation | (4,332 | ) | (1,443 | ) | (1,443 | ) | (7,218 | ) | (3,095 | ) | 10,313 | — | — | |||||||||||
Income (loss) before income taxes | 64,466 | 18,112 | 689 | 83,267 | 251,988 | 21,635 | — | 356,890 | ||||||||||||||||
Income tax (expense) benefit | (24,498 | ) | (6,882 | ) | (261 | ) | (31,641 | ) | (95,755 | ) | 3,759 | — | (123,637 | ) | ||||||||||
Net income (loss) | 39,968 | 11,230 | 428 | 51,626 | 156,233 | 25,394 | — | 233,253 | ||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 1,101 | — | 1,101 | ||||||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 39,968 | 11,230 | 428 | 51,626 | 156,233 | 24,293 | — | 232,152 | |||||||||||||||
Nine months ended September 30, 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 | $ | 44 | 8 | — | 52 | 455,413 | 5,226 | (2,827 | ) | 457,864 | ||||||||||||||
Interest expense | — | — | — | — | 199,675 | 6,327 | (2,827 | ) | 203,175 | |||||||||||||||
Net interest income (loss) | 44 | 8 | — | 52 | 255,738 | (1,101 | ) | — | 254,689 | |||||||||||||||
Less provision for loan losses | — | — | — | — | 18,000 | — | — | 18,000 | ||||||||||||||||
Net interest income (loss) after provision for loan losses | 44 | 8 | — | 52 | 237,738 | (1,101 | ) | — | 236,689 | |||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 155,164 | — | — | 155,164 | — | — | — | 155,164 | ||||||||||||||||
Intersegment servicing revenue | 49,210 | — | — | 49,210 | — | — | (49,210 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 56,675 | — | 56,675 | — | — | — | 56,675 | ||||||||||||||||
Enrollment services revenue | — | — | 92,035 | 92,035 | — | — | — | 92,035 | ||||||||||||||||
Other income | — | — | — | — | 14,415 | 18,038 | — | 32,453 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 1,130 | — | — | 1,130 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | (62,351 | ) | 1,188 | — | (61,163 | ) | ||||||||||||||
Derivative settlements, net | — | — | — | — | (5,431 | ) | (1,479 | ) | — | (6,910 | ) | |||||||||||||
Total other income (expense) | 204,374 | 56,675 | 92,035 | 353,084 | (52,237 | ) | 17,747 | (49,210 | ) | 269,384 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 85,663 | 25,771 | 17,587 | 129,021 | 1,723 | 13,449 | — | 144,193 | ||||||||||||||||
Cost to provide enrollment services | — | — | 62,203 | 62,203 | — | — | — | 62,203 | ||||||||||||||||
Depreciation and amortization | 13,629 | 5,174 | 4,867 | 23,670 | — | 1,094 | — | 24,764 | ||||||||||||||||
Other | 52,980 | 7,557 | 5,483 | 66,020 | 10,203 | 16,937 | — | 93,160 | ||||||||||||||||
Intersegment expenses, net | 3,832 | 4,042 | 2,824 | 10,698 | 49,842 | (11,330 | ) | (49,210 | ) | — | ||||||||||||||
Total operating expenses | 156,104 | 42,544 | 92,964 | 291,612 | 61,768 | 20,150 | (49,210 | ) | 324,320 | |||||||||||||||
Income (loss) before income taxes and corporate overhead allocation | 48,314 | 14,139 | (929 | ) | 61,524 | 123,733 | (3,504 | ) | — | 181,753 | ||||||||||||||
Corporate overhead allocation | (4,115 | ) | (1,372 | ) | (1,372 | ) | (6,859 | ) | (3,701 | ) | 10,560 | — | — | |||||||||||
Income (loss) before income taxes | 44,199 | 12,767 | (2,301 | ) | 54,665 | 120,032 | 7,056 | — | 181,753 | |||||||||||||||
Income tax (expense) benefit | (16,796 | ) | (4,851 | ) | 874 | (20,773 | ) | (45,610 | ) | 6,405 | — | (59,978 | ) | |||||||||||
Net income (loss) | 27,403 | 7,916 | (1,427 | ) | 33,892 | 74,422 | 13,461 | — | 121,775 | |||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 412 | — | 412 | ||||||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 27,403 | 7,916 | (1,427 | ) | 33,892 | 74,422 | 13,049 | — | 121,363 | ||||||||||||||
|
|
|
As of September 30, 2013 | As of December 31, 2012 | |||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||
Assets: | ||||||||||||||||||
Investments: | ||||||||||||||||||
Student loan asset-backed securities | $ | — | 229,095 | 229,095 | — | 77,652 | 77,652 | |||||||||||
Equity securities | 3,064 | — | 3,064 | 4,873 | — | 4,873 | ||||||||||||
Debt securities | 504 | — | 504 | 787 | — | 787 | ||||||||||||
Total investments | 3,568 | 229,095 | 232,663 | 5,660 | 77,652 | 83,312 | ||||||||||||
Fair value of derivative instruments | — | 128,276 | 128,276 | — | 97,441 | 97,441 | ||||||||||||
Total assets | $ | 3,568 | 357,371 | 360,939 | 5,660 | 175,093 | 180,753 | |||||||||||
Liabilities: | ||||||||||||||||||
Fair value of derivative instruments | $ | — | 21,513 | 21,513 | — | 70,890 | 70,890 | |||||||||||
Total liabilities | $ | — | 21,513 | 21,513 | — | 70,890 | 70,890 |
As of September 30, 2013 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 25,287,320 | 24,701,112 | — | — | 25,287,320 | |||||||||
Non-federally insured student loans receivable - held for sale | 28,480 | 28,480 | — | — | 28,480 | ||||||||||
Cash and cash equivalents | 51,391 | 51,391 | 51,391 | — | — | ||||||||||
Investments | 232,663 | 232,663 | 3,568 | 229,095 | — | ||||||||||
Restricted cash | 668,202 | 668,202 | 668,202 | — | — | ||||||||||
Restricted cash – due to customers | 93,695 | 93,695 | 93,695 | — | — | ||||||||||
Restricted investments | 6,724 | 6,724 | 6,724 | — | — | ||||||||||
Accrued interest receivable | 303,350 | 303,350 | — | 303,350 | — | ||||||||||
Derivative instruments | 128,276 | 128,276 | — | 128,276 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 24,376,185 | 24,858,455 | — | 24,376,185 | — | ||||||||||
Accrued interest payable | 14,218 | 14,218 | — | 14,218 | — | ||||||||||
Due to customers | 93,695 | 93,695 | 93,695 | — | — | ||||||||||
Derivative instruments | 21,513 | 21,513 | — | 21,513 | — |
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 | — |
|
• | Bais Yaakov of Spring Valley v. Peterson's Nelnet, LLC |
• | Than Zaw v. Nelnet, Inc. |
• | Grant Keating v. Peterson's Nelnet, LLC et al |
|
|
|
As of | As of | ||||||||
September 30, 2013 | December 31, 2012 | ||||||||
Held for investment | Held for sale | Held for investment | |||||||
Federally insured loans | |||||||||
Stafford and other | $ | 6,884,348 | — | 7,261,114 | |||||
Consolidation | 17,908,229 | — | 17,708,732 | ||||||
Total | 24,792,577 | — | 24,969,846 | ||||||
Non-federally insured loans | 66,283 | 28,480 | 26,034 | ||||||
24,858,860 | 28,480 | 24,995,880 | |||||||
Loan discount, net of unamortized loan premiums and deferred origination costs | (103,551 | ) | — | (113,357 | ) | ||||
Allowance for loan losses – federally insured loans | (42,406 | ) | — | (40,120 | ) | ||||
Allowance for loan losses – non-federally insured loans | (11,791 | ) | — | (11,782 | ) | ||||
$ | 24,701,112 | 28,480 | 24,830,621 | ||||||
Allowance for federally insured loans as a percentage of such loans | 0.17 | % | 0.16 | % | |||||
Allowance for non-federally insured loans as a percentage of such loans | 17.79 | % | 45.26 | % |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Balance at beginning of period | $ | 51,611 | 49,657 | 51,902 | 48,482 | |||||||
Provision for loan losses: | ||||||||||||
Federally insured loans | 5,000 | 5,000 | 16,000 | 18,000 | ||||||||
Non-federally insured loans | — | — | (1,000 | ) | — | |||||||
Total provision for loan losses | 5,000 | 5,000 | 15,000 | 18,000 | ||||||||
Charge-offs: | ||||||||||||
Federally insured loans | (3,142 | ) | (5,449 | ) | (12,472 | ) | (16,943 | ) | ||||
Non-federally insured loans | (906 | ) | (1,058 | ) | (2,270 | ) | (2,355 | ) | ||||
Total charge-offs | (4,048 | ) | (6,507 | ) | (14,742 | ) | (19,298 | ) | ||||
Recoveries - non-federally insured loans | 363 | 399 | 1,173 | 1,104 | ||||||||
Purchase (sale) of federally insured loans, net | 700 | (928 | ) | (1,243 | ) | (2,647 | ) | |||||
Transfer from repurchase obligation related to non-federally insured loans repurchased, net | 571 | 588 | 2,107 | 2,568 | ||||||||
Balance at end of period | $ | 54,197 | 48,209 | 54,197 | 48,209 | |||||||
Allocation of the allowance for loan losses: | ||||||||||||
Federally insured loans | $ | 42,406 | 35,614 | 42,406 | 35,614 | |||||||
Non-federally insured loans | 11,791 | 12,595 | 11,791 | 12,595 | ||||||||
Total allowance for loan losses | $ | 54,197 | 48,209 | 54,197 | 48,209 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Beginning balance | $ | 14,594 | 17,243 | 16,130 | 19,223 | |||||||
Repurchase obligation transferred to the allowance for loan losses related to loans repurchased, net | (571 | ) | (588 | ) | (2,107 | ) | (2,568 | ) | ||||
Ending balance | $ | 14,023 | 16,655 | 14,023 | 16,655 |
As of September 30, 2013 | As of December 31, 2012 | As of September 30, 2012 | ||||||||||||||||||
Federally insured loans, excluding rehabilitation loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 2,780,442 | $ | 2,949,320 | $ | 3,163,918 | ||||||||||||||
Loans in forbearance | 2,953,119 | 2,992,023 | 2,868,168 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 14,157,330 | 87.2 | % | 14,583,044 | 87.6 | % | 13,673,217 | 87.2 | % | |||||||||||
Loans delinquent 31-60 days | 662,814 | 4.1 | 652,351 | 3.9 | 586,021 | 3.7 | ||||||||||||||
Loans delinquent 61-90 days | 354,975 | 2.2 | 330,885 | 2.0 | 308,377 | 2.0 | ||||||||||||||
Loans delinquent 91-120 days | 235,681 | 1.5 | 247,381 | 1.5 | 237,941 | 1.5 | ||||||||||||||
Loans delinquent 121-270 days | 624,042 | 3.8 | 603,942 | 3.6 | 628,697 | 4.0 | ||||||||||||||
Loans delinquent 271 days or greater | 195,853 | 1.2 | 220,798 | 1.4 | 253,438 | 1.6 | ||||||||||||||
Total loans in repayment | 16,230,695 | 100.0 | % | 16,638,401 | 100.0 | % | 15,687,691 | 100.0 | % | |||||||||||
Total federally insured loans, excluding rehabilitation loans | $ | 21,964,256 | $ | 22,579,744 | $ | 21,719,777 | ||||||||||||||
Rehabilitation loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 259,377 | $ | 150,317 | $ | 90,836 | ||||||||||||||
Loans in forbearance | 443,629 | 330,278 | 129,257 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 1,078,730 | 50.7 | % | 670,205 | 35.1 | % | 418,584 | 61.9 | % | |||||||||||
Loans delinquent 31-60 days | 188,583 | 8.9 | 113,795 | 6.0 | 52,053 | 7.7 | ||||||||||||||
Loans delinquent 61-90 days | 125,310 | 5.9 | 79,691 | 4.2 | 35,104 | 5.2 | ||||||||||||||
Loans delinquent 91-120 days | 137,016 | 6.4 | 186,278 | 9.8 | 33,931 | 5.0 | ||||||||||||||
Loans delinquent 121-270 days | 354,192 | 16.7 | 633,001 | 33.1 | 99,041 | 14.7 | ||||||||||||||
Loans delinquent 271 days or greater | 241,484 | 11.4 | 226,537 | 11.8 | 37,025 | 5.5 | ||||||||||||||
Total loans in repayment | 2,125,315 | 100.0 | % | 1,909,507 | 100.0 | % | 675,738 | 100.0 | % | |||||||||||
Total rehabilitation loans | 2,828,321 | 2,390,102 | 895,831 | |||||||||||||||||
Total federally insured loans | $ | 24,792,577 | $ | 24,969,846 | $ | 22,615,608 |
|
As of September 30, 2013 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 22,632,522 | 0.27% - 6.90% | 11/25/15 - 8/26/52 | |||
Bonds and notes based on auction or remarketing | 890,500 | 0.08% - 2.13% | 5/1/28 - 5/25/42 | ||||
Total variable-rate bonds and notes | 23,523,022 | ||||||
FFELP warehouse facilities | 1,277,650 | 0.18% - 0.28% | 1/17/16 - 6/12/16 | ||||
Unsecured line of credit | 75,000 | 1.68% | 3/28/18 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 99,232 | 3.62% | 9/15/61 | ||||
Other borrowings | 61,828 | 1.68% - 5.10% | 11/14/13 - 11/11/15 | ||||
25,036,732 | |||||||
Discount on bonds and notes payable | (178,277 | ) | |||||
Total | $ | 24,858,455 |
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 - 8/26/52 | |||
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 (a) | NHELP-III (b) | NHELP-II (c) | NFSLW-I (d) | Total | ||||||||||||
Maximum financing amount | $ | 500,000 | 750,000 | 500,000 | 500,000 | 2,250,000 | ||||||||||
Amount outstanding | — | 637,770 | 373,258 | 266,622 | 1,277,650 | |||||||||||
Amount available | $ | 500,000 | 112,230 | 126,742 | 233,378 | 972,350 | ||||||||||
Expiration of liquidity provisions | January 16, 2014 | February 28, 2014 | June 12, 2014 | |||||||||||||
Final maturity date | January 17, 2016 | February 28, 2016 | June 12, 2016 | |||||||||||||
Maximum advance rates | 92.2 - 95% | 84.5 - 94.5% | 92 - 98% | |||||||||||||
Minimum advance rates | 92.2 - 95% | 84.5 - 94.5% | 84 - 90% | |||||||||||||
Advanced as equity support | $ | — | 36,926 | 33,863 | 11,647 | 82,436 |
(a) | On October 1, 2013, the Company terminated this facility. All loans previously financed in this facility were financed in other warehouse facilities during the third quarter of 2013. |
(b) | The Company entered into this facility on January 16, 2013. On September 16, 2013, the Company amended this facility to increase the maximum financing amount from $500 million to $750 million. |
(c) | On June 3, 2013, the Company amended this facility to change the terms of the advance rates. |
(d) | On June 13, 2013, the Company amended this facility to change the terms of the advance rates and extend the expiration of the liquidity provisions and its final maturity date. |
2013-1 | 2013-2 (a) | 2013-3 | 2013-4 | 2013-5 (a) | Total | |||||||||||||||
Date securities issued | 1/31/13 | 2/28/13 | 4/30/13 | 6/21/13 | 9/30/13 | |||||||||||||||
Total original principal amount | $ | 437,500 | 1,122,000 | 765,000 | 453,000 | 399,000 | $ | 3,176,500 | ||||||||||||
Class A senior notes: | ||||||||||||||||||||
Total original principal amount | $ | 428,000 | 1,122,000 | 745,000 | 440,000 | 399,000 | 3,134,000 | |||||||||||||
Bond discount | — | (3,325 | ) | — | (1,690 | ) | (4,881 | ) | (9,896 | ) | ||||||||||
Issue price | $ | 428,000 | 1,118,675 | 745,000 | 438,310 | 394,119 | 3,124,104 | |||||||||||||
Cost of funds (1-month LIBOR plus:) | 0.60 | % | 0.50 | % | 0.50 | % | 0.50 | % | 0.63 | % | ||||||||||
Final maturity date | 6/25/41 | 7/25/40 | 2/25/37 | 12/26/42 | 1/25/37 | |||||||||||||||
Class B subordinated notes: | ||||||||||||||||||||
Total original principal amount | $ | 9,500 | 20,000 | 13,000 | 42,500 | |||||||||||||||
Bond discount | (1,525 | ) | (1,762 | ) | (1,804 | ) | (5,091 | ) | ||||||||||||
Issue price | $ | 7,975 | 18,238 | 11,196 | 37,409 | |||||||||||||||
Cost of funds (1-month LIBOR plus:) | 1.50 | % | 1.50 | % | 1.50 | % | ||||||||||||||
Final maturity date | 3/25/48 | 7/25/47 | 1/25/47 |
(a) | Total original principal amount excludes the Class B subordinated tranches for the 2013-2 and 2013-5 transactions totaling $34.0 million and $9.0 million, respectively, that were retained at issuance. As of September 30, 2013, the Company has a total of $85.5 million (face amount) of its own Class B subordinated notes remaining from prior completed asset-backed securitizations that are not included in the Company's consolidated balance sheet. |
|
As of September 30, 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 September 30, 2013 and December 31, 2012, was one-month LIBOR plus 3.5 basis points and one-month LIBOR plus 3.3 basis points, respectively. |
As of September 30, 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) | ||||||||||
2013 | $ | — | — | % | $ | 3,150,000 | 0.71 | % | ||||||
2014 | 1,750,000 | 0.71 | 1,750,000 | 0.71 | ||||||||||
2015 | 1,100,000 | 0.89 | 1,100,000 | 0.89 | ||||||||||
2016 | 750,000 | 0.85 | 750,000 | 0.85 | ||||||||||
2017 | 1,250,000 | 0.86 | 750,000 | 0.99 | ||||||||||
$ | 4,850,000 | 0.81 | % | $ | 7,500,000 | 0.78 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
As of September 30, 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 | $ | 25,000 | 4.28 | % | $ | 75,000 | 4.28 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Re-measurement of Euro Notes | $ | (39,974 | ) | (20,799 | ) | (25,902 | ) | 6,186 | ||||
Change in fair value of cross-currency interest rate swaps | 39,074 | 24,586 | 18,978 | (24,934 | ) | |||||||
Total impact to consolidated statements of income - income (expense) (a) | $ | (900 | ) | 3,787 | (6,924 | ) | (18,748 | ) |
(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 | |||||||||
September 30, 2013 | December 31, 2012 | September 30, 2013 | December 31, 2012 | |||||||||
1:3 basis swaps | $ | 20,425 | 12,239 | — | 1,215 | |||||||
Interest rate swaps - floor income hedges | 6,032 | — | 18,186 | 45,913 | ||||||||
Interest rate swaps - hybrid debt hedges | — | — | 3,327 | 23,762 | ||||||||
Cross-currency interest rate swaps | 101,819 | 82,841 | — | — | ||||||||
Other | — | 2,361 | — | — | ||||||||
Total | $ | 128,276 | 97,441 | 21,513 | 70,890 |
Gross amounts not offset in the consolidated balance sheets | |||||||||||||
Derivative assets | Gross amounts of recognized assets presented in the consolidated balance sheets | Derivatives subject to enforceable master netting arrangement | Cash collateral received (a) | Net asset (liability) | |||||||||
Balance as of September 30, 2013 | $ | 128,276 | (17,991 | ) | (73,734 | ) | 36,551 | ||||||
Balance as of December 31, 2012 | 97,441 | (13,234 | ) | (19,993 | ) | 64,214 |
Gross amounts not offset in the consolidated balance sheets | |||||||||||||
Derivative liabilities | Gross amounts of recognized liabilities presented in the consolidated balance sheets | Derivatives subject to enforceable master netting arrangement | Cash collateral pledged (b) | Net asset (liability) | |||||||||
Balance as of September 30, 2013 | $ | (21,513 | ) | 17,991 | 4,000 | 478 | |||||||
Balance as of December 31, 2012 | (70,890 | ) | 13,234 | 63,128 | 5,472 |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Settlements: | ||||||||||||
1:3 basis swaps | $ | 781 | 1,100 | 2,474 | 3,651 | |||||||
Interest rate swaps - floor income hedges | (7,178 | ) | (5,595 | ) | (24,017 | ) | (12,237 | ) | ||||
Interest rate swaps - hybrid debt hedges | (256 | ) | (733 | ) | (1,413 | ) | (1,479 | ) | ||||
Cross-currency interest rate swaps | (35 | ) | 227 | (273 | ) | 3,390 | ||||||
Other | — | (50 | ) | — | (235 | ) | ||||||
Total settlements - income (expense) | (6,688 | ) | (5,051 | ) | (23,229 | ) | (6,910 | ) | ||||
Change in fair value: | ||||||||||||
1:3 basis swaps | (2,161 | ) | (4,578 | ) | 9,402 | (2,005 | ) | |||||
Interest rate swaps - floor income hedges | (9,599 | ) | (29,903 | ) | 33,231 | (41,681 | ) | |||||
Interest rate swaps - hybrid debt hedges | 2,700 | 1,695 | 11,790 | (890 | ) | |||||||
Cross-currency interest rate swaps | 39,074 | 24,586 | 18,978 | (24,934 | ) | |||||||
Other | — | 2,775 | 342 | 2,161 | ||||||||
Total change in fair value - income (expense) | 30,014 | (5,425 | ) | 73,743 | (67,349 | ) | ||||||
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense) | (39,974 | ) | (20,799 | ) | (25,902 | ) | 6,186 | |||||
Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense) | $ | (16,648 | ) | (31,275 | ) | 24,612 | (68,073 | ) |
|
As of September 30, 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) | $ | 211,548 | 8,535 | (968 | ) | 219,115 | 64,970 | 3,187 | (179 | ) | 67,978 | ||||||||||||||
Equity securities | 1,550 | 1,519 | (5 | ) | 3,064 | 3,449 | 1,604 | (180 | ) | 4,873 | |||||||||||||||
Total available-for-sale investments | $ | 213,098 | 10,054 | (973 | ) | 222,179 | 68,419 | 4,791 | (359 | ) | 72,851 | ||||||||||||||
Trading investments: | |||||||||||||||||||||||||
Student loan asset-backed and other debt securities | 10,484 | 10,461 | |||||||||||||||||||||||
Total available-for-sale and trading investments | $ | 232,663 | 83,312 | ||||||||||||||||||||||
Restricted Investments (c): | |||||||||||||||||||||||||
Guaranteed investment contracts - held-to-maturity | $ | 6,724 | 8,830 |
(a) | As of September 30, 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 September 30, 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 September 30, | Nine months ended September 30, | ||||||||||||
Affected line item in the consolidated statements of income - income (expense): | 2013 | 2012 | 2013 | 2012 | |||||||||
Other income | $ | 730 | 2,618 | 2,246 | 4,848 | ||||||||
Income tax expense | (270 | ) | (969 | ) | (831 | ) | (1,794 | ) | |||||
Net | $ | 460 | 1,649 | 1,415 | 3,054 |
|
Three months ended September 30, 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 | 158,793 | 2,201 | (767 | ) | 160,237 | ||||||||||||||
Interest expense | — | — | — | — | 56,100 | (18 | ) | (767 | ) | 55,315 | ||||||||||||||
Net interest income (loss) | 10 | — | — | 10 | 102,693 | 2,219 | — | 104,922 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 5,000 | — | — | 5,000 | ||||||||||||||||
Net interest income (loss) after provision for loan losses | 10 | — | — | 10 | 97,693 | 2,219 | — | 99,922 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 64,582 | — | — | 64,582 | — | — | — | 64,582 | ||||||||||||||||
Intersegment servicing revenue | 13,519 | — | — | 13,519 | — | — | (13,519 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 19,927 | — | 19,927 | — | — | — | 19,927 | ||||||||||||||||
Enrollment services revenue | — | — | 22,563 | 22,563 | — | — | — | 22,563 | ||||||||||||||||
Other income | — | — | — | — | 3,981 | 4,632 | — | 8,613 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 2,138 | — | — | 2,138 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | (12,660 | ) | 2,700 | — | (9,960 | ) | ||||||||||||||
Derivative settlements, net | — | — | — | — | (6,432 | ) | (256 | ) | — | (6,688 | ) | |||||||||||||
Total other income (expense) | 78,101 | 19,927 | 22,563 | 120,591 | (12,973 | ) | 7,076 | (13,519 | ) | 101,175 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 29,719 | 9,229 | 4,491 | 43,439 | 555 | 4,718 | — | 48,712 | ||||||||||||||||
Cost to provide enrollment services | — | — | 14,668 | 14,668 | — | — | — | 14,668 | ||||||||||||||||
Depreciation and amortization | 2,677 | 1,117 | 57 | 3,851 | — | 489 | — | 4,340 | ||||||||||||||||
Other | 19,752 | 1,908 | 1,556 | 23,216 | 7,939 | 8,732 | — | 39,887 | ||||||||||||||||
Intersegment expenses, net | 1,457 | 1,431 | 1,139 | 4,027 | 13,705 | (4,213 | ) | (13,519 | ) | — | ||||||||||||||
Total operating expenses | 53,605 | 13,685 | 21,911 | 89,201 | 22,199 | 9,726 | (13,519 | ) | 107,607 | |||||||||||||||
Income (loss) before income taxes and corporate overhead allocation | 24,506 | 6,242 | 652 | 31,400 | 62,521 | (431 | ) | — | 93,490 | |||||||||||||||
Corporate overhead allocation | (1,822 | ) | (607 | ) | (607 | ) | (3,036 | ) | (1,302 | ) | 4,338 | — | — | |||||||||||
Income (loss) before income taxes | 22,684 | 5,635 | 45 | 28,364 | 61,219 | 3,907 | — | 93,490 | ||||||||||||||||
Income tax (expense) benefit | (8,620 | ) | (2,141 | ) | (17 | ) | (10,778 | ) | (23,263 | ) | 3,597 | — | (30,444 | ) | ||||||||||
Net income (loss) | 14,064 | 3,494 | 28 | 17,586 | 37,956 | 7,504 | — | 63,046 | ||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 216 | — | 216 | ||||||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 14,064 | 3,494 | 28 | 17,586 | 37,956 | 7,288 | — | 62,830 | |||||||||||||||
Three months ended September 30, 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 | $ | 12 | 3 | — | 15 | 150,661 | 1,891 | (899 | ) | 151,668 | ||||||||||||||
Interest expense | — | — | — | — | 64,829 | 2,472 | (899 | ) | 66,402 | |||||||||||||||
Net interest income (loss) | 12 | 3 | — | 15 | 85,832 | (581 | ) | — | 85,266 | |||||||||||||||
Less provision for loan losses | — | — | — | — | 5,000 | — | — | 5,000 | ||||||||||||||||
Net interest income (loss) after provision for loan losses | 12 | 3 | — | 15 | 80,832 | (581 | ) | — | 80,266 | |||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 53,285 | — | — | 53,285 | — | — | — | 53,285 | ||||||||||||||||
Intersegment servicing revenue | 15,855 | — | — | 15,855 | — | — | (15,855 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 17,928 | — | 17,928 | — | — | — | 17,928 | ||||||||||||||||
Enrollment services revenue | — | — | 30,661 | 30,661 | — | — | — | 30,661 | ||||||||||||||||
Other income | — | — | — | — | 5,834 | 6,865 | — | 12,699 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 195 | — | — | 195 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | (30,694 | ) | 4,470 | — | (26,224 | ) | ||||||||||||||
Derivative settlements, net | — | — | — | — | (4,319 | ) | (732 | ) | — | (5,051 | ) | |||||||||||||
Total other income (expense) | 69,140 | 17,928 | 30,661 | 117,729 | (28,984 | ) | 10,603 | (15,855 | ) | 83,493 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 27,716 | 8,578 | 5,147 | 41,441 | 462 | 4,492 | — | 46,395 | ||||||||||||||||
Cost to provide enrollment services | — | — | 20,151 | 20,151 | — | — | — | 20,151 | ||||||||||||||||
Depreciation and amortization | 4,691 | 1,703 | 1,633 | 8,027 | — | 375 | — | 8,402 | ||||||||||||||||
Other | 16,775 | 2,285 | 1,782 | 20,842 | 3,451 | 5,696 | — | 29,989 | ||||||||||||||||
Intersegment expenses, net | 1,262 | 1,379 | 1,000 | 3,641 | 16,064 | (3,850 | ) | (15,855 | ) | — | ||||||||||||||
Total operating expenses | 50,444 | 13,945 | 29,713 | 94,102 | 19,977 | 6,713 | (15,855 | ) | 104,937 | |||||||||||||||
Income (loss) before income taxes and corporate overhead allocation | 18,708 | 3,986 | 948 | 23,642 | 31,871 | 3,309 | — | 58,822 | ||||||||||||||||
Corporate overhead allocation | (1,337 | ) | (446 | ) | (446 | ) | (2,229 | ) | (909 | ) | 3,138 | — | — | |||||||||||
Income (loss) before income taxes | 17,371 | 3,540 | 502 | 21,413 | 30,962 | 6,447 | — | 58,822 | ||||||||||||||||
Income tax (expense) benefit | (6,601 | ) | (1,345 | ) | (191 | ) | (8,137 | ) | (11,765 | ) | (1,968 | ) | — | (21,870 | ) | |||||||||
Net income (loss) | 10,770 | 2,195 | 311 | 13,276 | 19,197 | 4,479 | — | 36,952 | ||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 124 | — | 124 | ||||||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 10,770 | 2,195 | 311 | 13,276 | 19,197 | 4,355 | — | 36,828 | |||||||||||||||
Nine months ended September 30, 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 | $ | 29 | — | — | 29 | 472,622 | 6,708 | (2,420 | ) | 476,939 | ||||||||||||||
Interest expense | — | — | — | — | 170,502 | 3,718 | (2,420 | ) | 171,800 | |||||||||||||||
Net interest income (loss) | 29 | — | — | 29 | 302,120 | 2,990 | — | 305,139 | ||||||||||||||||
Less provision for loan losses | — | — | — | — | 15,000 | — | — | 15,000 | ||||||||||||||||
Net interest income (loss) after provision for loan losses | 29 | — | — | 29 | 287,120 | 2,990 | — | 290,139 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 180,261 | — | — | 180,261 | — | — | — | 180,261 | ||||||||||||||||
Intersegment servicing revenue | 42,375 | — | — | 42,375 | — | — | (42,375 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 61,694 | — | 61,694 | — | — | — | 61,694 | ||||||||||||||||
Enrollment services revenue | — | — | 76,343 | 76,343 | — | — | — | 76,343 | ||||||||||||||||
Other income | — | — | — | — | 11,207 | 19,110 | — | 30,317 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 10,900 | — | — | 10,900 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | 35,711 | 12,130 | — | 47,841 | ||||||||||||||||
Derivative settlements, net | — | — | — | — | (21,816 | ) | (1,413 | ) | — | (23,229 | ) | |||||||||||||
Total other income (expense) | 222,636 | 61,694 | 76,343 | 360,673 | 36,002 | 29,827 | (42,375 | ) | 384,127 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 86,254 | 28,015 | 15,067 | 129,336 | 1,709 | 13,004 | — | 144,049 | ||||||||||||||||
Cost to provide enrollment services | — | — | 51,097 | 51,097 | — | — | — | 51,097 | ||||||||||||||||
Depreciation and amortization | 8,197 | 3,387 | 179 | 11,763 | — | 1,274 | — | 13,037 | ||||||||||||||||
Other | 56,173 | 6,387 | 4,450 | 67,010 | 23,375 | 18,808 | — | 109,193 | ||||||||||||||||
Intersegment expenses, net | 3,243 | 4,350 | 3,418 | 11,011 | 42,955 | (11,591 | ) | (42,375 | ) | — | ||||||||||||||
Total operating expenses | 153,867 | 42,139 | 74,211 | 270,217 | 68,039 | 21,495 | (42,375 | ) | 317,376 | |||||||||||||||
Income (loss) before income taxes and corporate overhead allocation | 68,798 | 19,555 | 2,132 | 90,485 | 255,083 | 11,322 | — | 356,890 | ||||||||||||||||
Corporate overhead allocation | (4,332 | ) | (1,443 | ) | (1,443 | ) | (7,218 | ) | (3,095 | ) | 10,313 | — | — | |||||||||||
Income (loss) before income taxes | 64,466 | 18,112 | 689 | 83,267 | 251,988 | 21,635 | — | 356,890 | ||||||||||||||||
Income tax (expense) benefit | (24,498 | ) | (6,882 | ) | (261 | ) | (31,641 | ) | (95,755 | ) | 3,759 | — | (123,637 | ) | ||||||||||
Net income (loss) | 39,968 | 11,230 | 428 | 51,626 | 156,233 | 25,394 | — | 233,253 | ||||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 1,101 | — | 1,101 | ||||||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 39,968 | 11,230 | 428 | 51,626 | 156,233 | 24,293 | — | 232,152 | |||||||||||||||
Nine months ended September 30, 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 | $ | 44 | 8 | — | 52 | 455,413 | 5,226 | (2,827 | ) | 457,864 | ||||||||||||||
Interest expense | — | — | — | — | 199,675 | 6,327 | (2,827 | ) | 203,175 | |||||||||||||||
Net interest income (loss) | 44 | 8 | — | 52 | 255,738 | (1,101 | ) | — | 254,689 | |||||||||||||||
Less provision for loan losses | — | — | — | — | 18,000 | — | — | 18,000 | ||||||||||||||||
Net interest income (loss) after provision for loan losses | 44 | 8 | — | 52 | 237,738 | (1,101 | ) | — | 236,689 | |||||||||||||||
Other income (expense): | ||||||||||||||||||||||||
Loan and guaranty servicing revenue | 155,164 | — | — | 155,164 | — | — | — | 155,164 | ||||||||||||||||
Intersegment servicing revenue | 49,210 | — | — | 49,210 | — | — | (49,210 | ) | — | |||||||||||||||
Tuition payment processing and campus commerce revenue | — | 56,675 | — | 56,675 | — | — | — | 56,675 | ||||||||||||||||
Enrollment services revenue | — | — | 92,035 | 92,035 | — | — | — | 92,035 | ||||||||||||||||
Other income | — | — | — | — | 14,415 | 18,038 | — | 32,453 | ||||||||||||||||
Gain on sale of loans and debt repurchases | — | — | — | — | 1,130 | — | — | 1,130 | ||||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | — | (62,351 | ) | 1,188 | — | (61,163 | ) | ||||||||||||||
Derivative settlements, net | — | — | — | — | (5,431 | ) | (1,479 | ) | — | (6,910 | ) | |||||||||||||
Total other income (expense) | 204,374 | 56,675 | 92,035 | 353,084 | (52,237 | ) | 17,747 | (49,210 | ) | 269,384 | ||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries and benefits | 85,663 | 25,771 | 17,587 | 129,021 | 1,723 | 13,449 | — | 144,193 | ||||||||||||||||
Cost to provide enrollment services | — | — | 62,203 | 62,203 | — | — | — | 62,203 | ||||||||||||||||
Depreciation and amortization | 13,629 | 5,174 | 4,867 | 23,670 | — | 1,094 | — | 24,764 | ||||||||||||||||
Other | 52,980 | 7,557 | 5,483 | 66,020 | 10,203 | 16,937 | — | 93,160 | ||||||||||||||||
Intersegment expenses, net | 3,832 | 4,042 | 2,824 | 10,698 | 49,842 | (11,330 | ) | (49,210 | ) | — | ||||||||||||||
Total operating expenses | 156,104 | 42,544 | 92,964 | 291,612 | 61,768 | 20,150 | (49,210 | ) | 324,320 | |||||||||||||||
Income (loss) before income taxes and corporate overhead allocation | 48,314 | 14,139 | (929 | ) | 61,524 | 123,733 | (3,504 | ) | — | 181,753 | ||||||||||||||
Corporate overhead allocation | (4,115 | ) | (1,372 | ) | (1,372 | ) | (6,859 | ) | (3,701 | ) | 10,560 | — | — | |||||||||||
Income (loss) before income taxes | 44,199 | 12,767 | (2,301 | ) | 54,665 | 120,032 | 7,056 | — | 181,753 | |||||||||||||||
Income tax (expense) benefit | (16,796 | ) | (4,851 | ) | 874 | (20,773 | ) | (45,610 | ) | 6,405 | — | (59,978 | ) | |||||||||||
Net income (loss) | 27,403 | 7,916 | (1,427 | ) | 33,892 | 74,422 | 13,461 | — | 121,775 | |||||||||||||||
Net income attributable to noncontrolling interest | — | — | — | — | — | 412 | — | 412 | ||||||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 27,403 | 7,916 | (1,427 | ) | 33,892 | 74,422 | 13,049 | — | 121,363 | ||||||||||||||
|
As of September 30, 2013 | As of December 31, 2012 | |||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||
Assets: | ||||||||||||||||||
Investments: | ||||||||||||||||||
Student loan asset-backed securities | $ | — | 229,095 | 229,095 | — | 77,652 | 77,652 | |||||||||||
Equity securities | 3,064 | — | 3,064 | 4,873 | — | 4,873 | ||||||||||||
Debt securities | 504 | — | 504 | 787 | — | 787 | ||||||||||||
Total investments | 3,568 | 229,095 | 232,663 | 5,660 | 77,652 | 83,312 | ||||||||||||
Fair value of derivative instruments | — | 128,276 | 128,276 | — | 97,441 | 97,441 | ||||||||||||
Total assets | $ | 3,568 | 357,371 | 360,939 | 5,660 | 175,093 | 180,753 | |||||||||||
Liabilities: | ||||||||||||||||||
Fair value of derivative instruments | $ | — | 21,513 | 21,513 | — | 70,890 | 70,890 | |||||||||||
Total liabilities | $ | — | 21,513 | 21,513 | — | 70,890 | 70,890 |
As of September 30, 2013 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 25,287,320 | 24,701,112 | — | — | 25,287,320 | |||||||||
Non-federally insured student loans receivable - held for sale | 28,480 | 28,480 | — | — | 28,480 | ||||||||||
Cash and cash equivalents | 51,391 | 51,391 | 51,391 | — | — | ||||||||||
Investments | 232,663 | 232,663 | 3,568 | 229,095 | — | ||||||||||
Restricted cash | 668,202 | 668,202 | 668,202 | — | — | ||||||||||
Restricted cash – due to customers | 93,695 | 93,695 | 93,695 | — | — | ||||||||||
Restricted investments | 6,724 | 6,724 | 6,724 | — | — | ||||||||||
Accrued interest receivable | 303,350 | 303,350 | — | 303,350 | — | ||||||||||
Derivative instruments | 128,276 | 128,276 | — | 128,276 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 24,376,185 | 24,858,455 | — | 24,376,185 | — | ||||||||||
Accrued interest payable | 14,218 | 14,218 | — | 14,218 | — | ||||||||||
Due to customers | 93,695 | 93,695 | 93,695 | — | — | ||||||||||
Derivative instruments | 21,513 | 21,513 | — | 21,513 | — |
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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