NELNET INC, 10-Q filed on 11/7/2017
Quarterly Report
Document and Entity Information Document
9 Months Ended
Sep. 30, 2017
Oct. 31, 2017
Common Class A [Member]
Oct. 31, 2017
Common Class B [Member]
Document Information [Line Items]
 
 
 
Entity Registrant Name
NELNET INC 
 
 
Document Type
10-Q 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Common Stock, Shares Outstanding
 
29,370,343 
11,476,932 
Amendment Flag
false 
 
 
Entity Central Index Key
0001258602 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Period End Date
Sep. 30, 2017 
 
 
Document Fiscal Year Focus
2017 
 
 
Document Fiscal Period Focus
Q3 
 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Assets:
 
 
Student loans receivable (net of allowance for loan losses of $51,964 and $51,842, respectively)
$ 22,528,845 
$ 24,903,724 
Cash and cash equivalents:
 
 
Cash and cash equivalents - not held at a related party
11,313 
7,841 
Cash and cash equivalents - held at a related party
243,078 
61,813 
Total cash and cash equivalents
254,391 
69,654 
Investments and other receivables
276,536 
254,144 
Restricted cash
725,463 
980,961 
Restricted cash – due to customers
105,299 
119,702 
Accrued interest receivable
396,827 
391,264 
Accounts receivable (net of allowance for doubtful accounts of $1,905 and $1,549, respectively)
70,628 
43,972 
Goodwill
147,312 
147,312 
Intangible assets, net
40,742 
47,813 
Property and equipment, net
208,441 
123,786 
Other assets
13,230 
10,245 
Fair value of derivative instruments
996 
87,531 
Total assets
24,768,710 
27,180,108 
Liabilities:
 
 
Bonds and notes payable
(22,240,279)
(24,668,490)
Accrued interest payable
47,824 
45,677 
Other liabilities
(214,763)
(197,488)
Due to customers
105,299 
119,702 
Fair value of derivative instruments
(30,105)
(77,826)
Total liabilities
22,638,270 
25,109,183 
Commitments and contingencies
   
   
Nelnet, Inc. shareholders' equity:
 
 
Preferred stock
0 
0 
Additional paid-in capital
360 
420 
Retained earnings
2,106,895 
2,056,084 
Accumulated other comprehensive earnings
4,187 
4,730 
Total Nelnet, Inc. shareholders' equity
2,111,851 
2,061,655 
Noncontrolling interests
18,589 
9,270 
Total equity
2,130,440 
2,070,925 
Total liabilities and equity
24,768,710 
27,180,108 
Common Class A [Member]
 
 
Nelnet, Inc. shareholders' equity:
 
 
Common stock
294 
306 
Common Class B [Member]
 
 
Nelnet, Inc. shareholders' equity:
 
 
Common stock
115 
115 
Supplemental information - assets and liabilities of concolidated education lending variable interest entities: [Member]
 
 
Assets:
 
 
Student loans receivable (net of allowance for loan losses of $51,964 and $51,842, respectively)
22,704,085 
25,090,530 
Cash and cash equivalents:
 
 
Restricted cash
687,666 
970,306 
Other assets
397,093 
390,504 
Liabilities:
 
 
Bonds and notes payable
(22,459,091)
(25,105,704)
Other liabilities
(282,441)
(290,996)
Fair value of derivative instruments
(22,773)
(66,453)
Nelnet, Inc. shareholders' equity:
 
 
Net assets of consolidated education lending variable interest entities
$ 1,024,539 
$ 988,187 
Consolidated Balance Sheets (Parentheticals) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Allowance for loan losses
$ 51,964 
$ 51,842 
Allowance for doubtful accounts
$ 1,905 
$ 1,549 
Preferred stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Preferred stock, authorized shares (in shares)
50,000,000 
50,000,000 
Preferred stock, issued shares (in shares)
0 
0 
Preferred stock, outstanding shares (in shares)
0 
0 
Common Class A [Member]
 
 
Par Value (in dollars per share)
$ 0.01 
$ 0.01 
Shares Authorized (in shares)
600,000,000 
600,000,000 
Shares Issued (in shares)
29,436,022 
30,628,112 
Shares Outstanding (in shares)
29,436,022 
30,628,112 
Common Class B [Member]
 
 
Par Value (in dollars per share)
$ 0.01 
$ 0.01 
Shares Authorized (in shares)
60,000,000 
60,000,000 
Shares Issued (in shares)
11,476,932 
11,476,932 
Shares Outstanding (in shares)
11,476,932 
11,476,932 
Consolidated Statements of Income (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Interest income:
 
 
 
 
Loan interest
$ 191,755 
$ 193,721 
$ 562,451 
$ 567,775 
Investment interest
5,129 
2,460 
11,335 
6,674 
Total interest income
196,884 
196,181 
573,786 
574,449 
Interest expense:
 
 
 
 
Interest on bonds and notes payable
121,650 
96,386 
341,787 
280,847 
Net interest income
75,234 
99,795 
231,999 
293,602 
Less provision for loan losses
6,000 
6,000 
9,000 
10,500 
Net interest income (loss) after provision for loan losses
69,234 
93,795 
222,999 
283,102 
Other income:
 
 
 
 
Loan systems and servicing revenue
55,950 
54,350 
167,079 
161,082 
Tuition payment processing, school information, and campus commerce revenue
35,450 
33,071 
113,293 
102,211 
Communications revenue
6,751 
4,343 
17,577 
13,167 
Enrollment services revenue
0 
0 
0 
4,326 
Other income
19,756 
15,150 
44,874 
38,711 
Gain from debt repurchases
116 
2,160 
5,537 
2,260 
Derivative market value and foreign currency transaction adjustments and derivative settlements, net
7,173 
36,001 
(25,568)
(33,391)
Total other income
125,196 
145,075 
322,792 
288,366 
Operating expenses:
 
 
 
 
Salaries and benefits
74,193 
63,743 
220,684 
187,907 
Depreciation and amortization
10,051 
8,994 
27,687 
24,817 
Loan servicing fees
7,939 
5,880 
19,584 
20,024 
Cost to provide communications services
2,632 
1,784 
6,789 
5,169 
Cost to provide enrollment services
0 
0 
0 
3,623 
Other expenses
30,518 
26,391 
84,593 
84,174 
Total operating expenses
125,333 
106,792 
359,337 
325,714 
Income before income taxes
69,097 
132,078 
186,454 
245,754 
Income tax expense
25,562 
47,715 
70,349 
87,184 
Net income (loss)
43,535 
84,363 
116,105 
158,570 
Net loss (income) attributable to noncontrolling interests
2,768 
(69)
8,960 
(165)
Net income (loss) attributable to Nelnet, Inc.
$ 46,303 
$ 84,294 
$ 125,065 
$ 158,405 
Earnings per common share:
 
 
 
 
Net income attributable to Nelnet, Inc. shareholders - basic and diluted (in dollars per share)
$ 1.11 
$ 1.98 
$ 2.97 
$ 3.70 
Weighted average common shares outstanding - basic and diluted (in shares)
41,553,316 
42,642,213 
42,054,532 
42,788,133 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 43,535 
$ 84,363 
$ 116,105 
$ 158,570 
Available-for-sale securities:
 
 
 
 
Unrealized holding gains (losses) arising during period, net
405 
3,431 
383 
(4,217)
Reclassification adjustment for gains recognized in net income, net of losses
(504)
(491)
(1,244)
(82)
Income tax effect
35 
(1,087)
318 
1,591 
Total other comprehensive (loss) income
(64)
1,853 
(543)
(2,708)
Comprehensive income
43,471 
86,216 
115,562 
155,862 
Comprehensive loss (income) attributable to noncontrolling interests
2,768 
(69)
8,960 
(165)
Comprehensive income attributable to Nelnet, Inc.
$ 46,239 
$ 86,147 
$ 124,522 
$ 155,697 
Consolidated Statements of Shareholders' Equity (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Preferred Stock [Member]
Common Stock [Member]
Common Class A [Member]
Common Stock [Member]
Common Class B [Member]
Additional paid-in capital [Member]
Retained earnings [Member]
Accumulated other comprehensive earnings [Member]
Noncontrolling interests [Member]
Balance at Jun. 30, 2016
$ 1,906,216 
$ 0 
$ 310 
$ 115 
$ 4,601 
$ 1,894,551 
$ (2,277)
$ 8,916 
Balance (in shares) at Jun. 30, 2016
 
0 
31,024,230 
11,476,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interests
26 
 
 
 
 
 
 
26 
Net income
84,363 
 
 
 
 
84,294 
 
 
Net (loss) income attributable to noncontrolling interests
(69)
 
 
 
 
 
 
69 
Other comprehensive income
1,853 
 
 
 
 
 
1,853 
 
Cash dividend on Class A and Class B common stock
(5,101)
 
 
 
 
(5,101)
 
 
Issuance of common stock, net of forfeitures (in shares)
 
 
16,662 
 
 
 
 
 
Issuance of common stock, net of forfeitures
282 
 
 
 
282 
 
 
 
Compensation expense for stock based awards
1,132 
 
 
 
1,132 
 
 
 
Repurchase of common stock (in shares)
 
 
(201,551)
 
 
 
 
 
Repurchase of common stock
(7,675)
 
(2)
 
(5,791)
(1,882)
 
 
Balance at Sep. 30, 2016
1,981,096 
0 
308 
115 
224 
1,971,862 
(424)
9,011 
Balance (in shares) at Sep. 30, 2016
 
0 
30,839,341 
11,476,932 
 
 
 
 
Balance at Dec. 31, 2015
1,892,158 
0 
325 
115 
0 
1,881,708 
2,284 
7,726 
Balance (in shares) at Dec. 31, 2015
 
0 
32,476,528 
11,476,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interests
1,339 
 
 
 
 
 
 
1,339 
Net income
158,570 
 
 
 
 
158,405 
 
 
Net (loss) income attributable to noncontrolling interests
(165)
 
 
 
 
 
 
165 
Other comprehensive income
(2,708)
 
 
 
 
 
(2,708)
 
Distribution to noncontrolling interests
(219)
 
 
 
 
 
 
(219)
Cash dividend on Class A and Class B common stock
(15,293)
 
 
 
 
(15,293)
 
 
Issuance of common stock, net of forfeitures (in shares)
 
 
175,405 
 
 
 
 
 
Issuance of common stock, net of forfeitures
3,944 
 
1 
 
3,943 
 
 
 
Compensation expense for stock based awards
3,448 
 
 
 
3,448 
 
 
 
Repurchase of common stock (in shares)
 
 
(1,812,592)
 
 
 
 
 
Repurchase of common stock
(60,143)
 
(18)
 
(7,167)
(52,958)
 
 
Balance at Sep. 30, 2016
1,981,096 
0 
308 
115 
224 
1,971,862 
(424)
9,011 
Balance (in shares) at Sep. 30, 2016
 
0 
30,839,341 
11,476,932 
 
 
 
 
Balance at Dec. 31, 2016
2,070,925 
0 
306 
115 
420 
2,056,084 
4,730 
9,270 
Balance (in shares) at Dec. 31, 2016
 
0 
30,628,112 
11,476,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interests
19,553 
 
 
 
 
 
 
19,553 
Net income
116,105 
 
 
 
 
125,065 
 
 
Net (loss) income attributable to noncontrolling interests
8,960 
 
 
 
 
 
 
(8,960)
Other comprehensive income
(543)
 
 
 
 
 
(543)
 
Distribution to noncontrolling interests
(1,274)
 
 
 
 
 
 
(1,274)
Cash dividend on Class A and Class B common stock
(17,569)
 
 
 
 
(17,569)
 
 
Issuance of common stock, net of forfeitures (in shares)
 
 
171,481 
 
 
 
 
 
Issuance of common stock, net of forfeitures
3,361 
 
2 
 
3,359 
 
 
 
Compensation expense for stock based awards
3,213 
 
 
 
3,213 
 
 
 
Repurchase of common stock (in shares)
 
 
(1,363,571)
 
 
 
 
 
Repurchase of common stock
(63,331)
 
(14)
 
(6,632)
(56,685)
 
 
Balance at Sep. 30, 2017
2,130,440 
0 
294 
115 
360 
2,106,895 
4,187 
18,589 
Balance (in shares) at Sep. 30, 2017
 
0 
29,436,022 
11,476,932 
 
 
 
 
Balance at Jun. 30, 2017
2,130,409 
0 
304 
115 
366 
2,110,158 
4,251 
15,215 
Balance (in shares) at Jun. 30, 2017
 
0 
30,373,691 
11,476,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interests
6,901 
 
 
 
 
 
 
6,901 
Net income
43,535 
 
 
 
 
46,303 
 
 
Net (loss) income attributable to noncontrolling interests
2,768 
 
 
 
 
 
 
(2,768)
Other comprehensive income
(64)
 
 
 
 
 
(64)
 
Distribution to noncontrolling interests
(759)
 
 
 
 
 
 
(759)
Cash dividend on Class A and Class B common stock
(5,766)
 
 
 
 
(5,766)
 
 
Issuance of common stock, net of forfeitures (in shares)
 
 
10,125 
 
 
 
 
 
Issuance of common stock, net of forfeitures
278 
 
 
 
278 
 
 
 
Compensation expense for stock based awards
1,042 
 
 
 
1,042 
 
 
 
Repurchase of common stock (in shares)
 
 
(947,794)
 
 
 
 
 
Repurchase of common stock
(45,136)
 
(10)
 
(1,326)
(43,800)
 
 
Balance at Sep. 30, 2017
$ 2,130,440 
$ 0 
$ 294 
$ 115 
$ 360 
$ 2,106,895 
$ 4,187 
$ 18,589 
Balance (in shares) at Sep. 30, 2017
 
0 
29,436,022 
11,476,932 
 
 
 
 
Consolidated Statements of Shareholders' Equity (Parentheticals)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Common Class A [Member]
 
 
 
 
Dividends paid per common share (in dollars per share)
$ 0.14 
$ 0.12 
$ 0.42 
$ 0.36 
Common Class B [Member]
 
 
 
 
Dividends paid per common share (in dollars per share)
$ 0.14 
$ 0.12 
$ 0.42 
$ 0.36 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Statement of Cash Flows [Abstract]
 
 
Net income (loss) attributable to Nelnet, Inc.
$ 125,065 
$ 158,405 
Net (loss) income attributable to noncontrolling interests
8,960 
(165)
Net income
116,105 
158,570 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization, including debt discounts and student loan premiums and deferred origination costs
99,826 
83,988 
Student loan discount accretion
(32,820)
(30,439)
Less provision for loan losses
9,000 
10,500 
Derivative market value adjustment
(22,381)
1,556 
Unrealized foreign currency transaction adjustment
45,635 
13,543 
Proceeds from termination of derivative instruments
3,013 
2,830 
Payments to enter into derivative instruments
(929)
0 
Proceeds from clearinghouse to settle variation margin, net
37,744 
0 
Gain from debt repurchases
(5,537)
(2,260)
Gain from sales of available-for-sale securities, net of losses
(1,244)
(82)
Proceeds related to trading securities, net
23 
1,192 
Deferred income tax benefit
(15,012)
(7,633)
Non-cash compensation expense
3,370 
3,563 
Other
4,288 
1,681 
(Increase) decrease in accrued interest receivable
(5,572)
2,021 
Increase in accounts receivable
(26,656)
(1,982)
Increase in other assets
(1,213)
(1,141)
Increase in accrued interest payable
2,147 
11,333 
Increase in other liabilities
20,548 
11,587 
Net cash provided by operating activities
230,335 
258,827 
Cash flows from investing activities:
 
 
Purchases of student loans
(137,158)
(234,270)
Net proceeds from student loan repayments, claims, capitalized interest, and other
2,515,850 
2,908,738 
Proceeds from sale of student loans
0 
44,760 
Purchases of available-for-sale securities
(109,666)
(66,733)
Proceeds from sales of available-for-sale securities
141,206 
100,423 
Purchases of investments and loans receivable and issuance of notes receivable
(68,131)
(14,912)
Proceeds from investments and other receivables
10,521 
12,169 
Purchases of property and equipment
(106,656)
(46,821)
Decrease (increase) in restricted cash, net
276,654 
(39,400)
Net cash provided by investing activities
2,522,620 
2,663,954 
Cash flows from financing activities:
 
 
Payments on bonds and notes payable
(3,679,592)
(2,998,017)
Proceeds from issuance of bonds and notes payable
1,178,027 
154,619 
Payments of debt issuance costs
(4,411)
(2,098)
Dividends paid
(17,569)
(15,293)
Repurchases of common stock
(63,331)
(60,143)
Proceeds from issuance of common stock
457 
656 
Issuance of noncontrolling interests
19,475 
1,339 
Distribution to noncontrolling interests
(1,274)
(219)
Net cash used in financing activities
(2,568,218)
(2,919,156)
Net increase in cash and cash equivalents
184,737 
3,625 
Cash and cash equivalents, beginning of period
69,654 
63,529 
Cash and cash equivalents, end of period
254,391 
67,154 
Cash disbursements made for:
 
 
Interest
287,265 
219,672 
Income taxes, net of refunds
$ 71,431 
$ 87,633 
Basis of Financial Reporting
Basis of Financial Reporting
Basis of Financial Reporting

The accompanying unaudited consolidated financial statements of Nelnet, Inc. and subsidiaries (the “Company”) as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2016 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results for the year ending December 31, 2017. The unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the "2016 Annual Report").

Consolidation

The consolidated financial statements include the accounts of Nelnet, Inc. and its consolidated subsidiaries. In addition, the accounts of all variable interest entities (“VIEs”) of which the Company has determined that it is the primary beneficiary are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.

Variable Interest Entities
The following entities are VIEs of which the Company has determined that it is the primary beneficiary. The primary beneficiary is the entity which has both: (1) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance, and (2) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.
The Company's education lending subsidiaries are engaged in the securitization of education finance assets. These education lending subsidiaries hold beneficial interests in eligible loans, subject to creditors with specific interests. The liabilities of the Company's education lending subsidiaries are not the direct obligations of Nelnet, Inc. or any of its other subsidiaries. Each education lending subsidiary is structured to be bankruptcy remote, meaning that it should not be consolidated in the event of bankruptcy of the parent company or any other subsidiary. The Company is generally the administrator and master servicer of the securitized assets held in its education lending subsidiaries and owns the residual interest of the securitization trusts. As a result, for accounting purposes, the transfers of student loans to the securitization trusts do not qualify as sales. Accordingly, all the financial activities and related assets and liabilities, including debt, of the securitizations are reflected in the Company's consolidated financial statements and are summarized as supplemental information on the balance sheet.
The Company owns 91.5 percent of the economic rights of Allo Communications LLC ("Allo") and has a disproportional 80 percent of the voting rights related to all operating decisions for Allo's business. Allo management, as current minority members, has the opportunity to earn an additional 11.5 percent of the total ownership interests based on the financial performance of Allo. In addition to the Company’s equity investment, Nelnet, Inc. (the parent) issued a $200.0 million line of credit to Allo on December 30, 2015. On September 30, 2017, the line of credit was increased by $70.0 million to a total of $270.0 million. As of September 30, 2017, the outstanding balance and accrued interest on the line of credit was $144.5 million and $4.6 million, respectively. Nelnet, Inc.’s maximum exposure to loss as a result of its involvement with Allo is equal to its equity investment and the outstanding balance and accrued interest on the line of credit. The amounts owed by Allo to Nelnet, Inc., including the interest costs incurred by Allo and interest earnings recognized by Nelnet, Inc., are not reflected in the Company’s consolidated balance sheet as they were eliminated in consolidation. All of Allo’s financial activities and related assets and liabilities, excluding the line of credit, are reflected in the Company’s consolidated financial statements. See note 10, "Segment Reporting," for disclosure of Allo's total assets and results of operations (included in the "Communications" operating segment), note 7, "Goodwill," for disclosure of Allo's goodwill, and note 8, “Property and Equipment,” for disclosure of Allo’s fixed assets. Allo's goodwill and property and equipment comprise the majority of its assets. The assets recognized as a result of consolidating Allo are the property of Allo and are not available for any other purpose, other than to Nelnet, Inc. as a secured lender under Allo's line of credit.
Noncontrolling Interest

Nelnet Servicing, LLC ("Nelnet Servicing"), a subsidiary of the Company, and Great Lakes Educational Loan Services, Inc. ("Great Lakes") created a joint venture to respond to the initiative announced by the U.S. Department of Education (the "Department") in April 2016 for the procurement of a contract for federal student loan servicing to acquire a single servicing platform to manage all loans owned by the Department.  The joint venture operates as a new legal entity called GreatNet Solutions, LLC (“GreatNet”).  Nelnet Servicing and Great Lakes each own 50 percent of the ownership interests in GreatNet.  See note 11 for additional information on the contract procurement process. 

During the first and third quarters of 2017, Nelnet Servicing and Great Lakes each contributed $12.6 million and $6.5 million, respectively, to GreatNet and during the first quarter of 2017 GreatNet began to incur certain operating costs. For financial reporting purposes, the balance sheet and operating results of GreatNet are included in the Company’s consolidated financial statements and presented in the Company’s Loan Systems and Servicing operating segment.  The proportionate share of membership interest (equity) and net loss of GreatNet that is attributable to Great Lakes is reflected as noncontrolling interests in the consolidated financial statements.

On October 18, 2017, the Company entered into an agreement to purchase 100 percent of the outstanding stock of Great Lakes. See note 14, "Subsequent Events" for additional information on this business acquisition agreement.

For a description of other entities in which the Company reflects noncontrolling interests in its consolidated financial statements, see note 2 of the notes to consolidated financial statements included in the 2016 Annual Report.
Student Loans Receivable and Allowance for Loan Losses
Student Loans Receivable and Allowance for Loan Losses
Student Loans Receivable and Allowance for Loan Losses

Student loans receivable consisted of the following:
 
As of
 
As of
 
September 30, 2017
 
December 31, 2016
Federally insured loans:
 
 
 
 
Stafford and other
$
4,534,588

 
 
5,186,047

Consolidation
17,952,696

 
 
19,643,937

Total
22,487,284

 
 
24,829,984

Private education loans
226,629

 
 
273,659

 
22,713,913


 
25,103,643

Loan discount, net of unamortized loan premiums and deferred origination costs
(119,572
)
 
 
(129,507
)
Non-accretable discount (a)
(13,532
)
 
 
(18,570
)
Allowance for loan losses – federally insured loans
(39,398
)
 
 
(37,268
)
Allowance for loan losses – private education loans
(12,566
)
 
 
(14,574
)
 
$
22,528,845

 
 
24,903,724



(a)
For loans purchased where there is evidence of credit deterioration since the origination of the loan, the Company records a credit discount, separate from the allowance for loan losses, which is non-accretable to interest income.

The Company recognizes student loan interest income as earned, net of amortization of loan premiums and deferred origination costs and the accretion of loan discounts. Loan interest income is recognized based upon the expected yield of the loan after giving effect to interest rate reductions resulting from borrower utilization of incentives such as timely payments ("borrower benefits") and other yield adjustments. Loan premiums or discounts, deferred origination costs, and borrower benefits are amortized/accreted over the estimated life of the loans, which includes an estimate of forecasted payments in excess of contractually required payments. The Company periodically evaluates the assumptions used to estimate the life of the loans and prepayment rates. In instances where there are changes to the assumptions, amortization/accretion is adjusted on a cumulative basis to reflect the change since the acquisition of the loan.
  
In the third quarter of 2016, the Company revised its policy to correct for an error in its method of applying the interest method used to amortize premiums and deferred origination costs and accrete discounts on its student loan portfolio. Previously, the Company amortized premiums and deferred origination costs and accreted discounts by including in its prepayment assumption forecasted payments in excess of contractually required payments as well as forecasted defaults. The Company has determined that only payments in excess of contractually required payments (excluding forecasted defaults) should be included in the prepayment assumption. Under the Company's revised policy, as of September 30, 2016, the constant prepayment rate used by the Company to amortize/accrete student loan premiums/discounts was decreased. The constant prepayment rates under the Company's revised policy are 5 percent for Stafford loans and 3 percent for Consolidation loans. The constant prepayment rates under the Company's prior policy in effect before this correction were 6 percent and 4 percent, respectively. During the third quarter of 2016, the Company recorded an adjustment to reflect the cumulative net impact on prior periods for the correction of this error that resulted in an $8.2 million reduction to the Company's net loan discount balance and a corresponding pre-tax increase to interest income. The Company concluded this error had an immaterial impact on 2016 results as well as the results for prior periods.

Activity in the Allowance for Loan Losses

The provision for loan losses represents the periodic expense of maintaining an allowance sufficient to absorb losses, net of recoveries, inherent in the portfolio of student loans. Activity in the allowance for loan losses is shown below.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Balance at beginning of period
$
49,708

 
48,753

 
51,842

 
50,498

Provision for loan losses:
 
 
 
 
 
 
 
Federally insured loans
7,000

 
7,000

 
11,000

 
11,000

Private education loans
(1,000
)
 
(1,000
)
 
(2,000
)
 
(500
)
Total provision for loan losses
6,000

 
6,000

 
9,000

 
10,500

Charge-offs:
 

 
 

 
 
 
 
Federally insured loans
(3,464
)
 
(3,196
)
 
(8,870
)
 
(9,462
)
Private education loans
(491
)
 
(320
)
 
(861
)
 
(1,235
)
Total charge-offs
(3,955
)
 
(3,516
)
 
(9,731
)
 
(10,697
)
Recoveries - private education loans
161

 
243

 
603

 
769

Purchase of private education loans
—

 
30

 
—

 
290

Transfer from repurchase obligation related to private education loans repurchased
50

 
60

 
250

 
210

Balance at end of period
$
51,964

 
51,570

 
51,964

 
$
51,570

 
 
 
 
 
 
 
 
Allocation of the allowance for loan losses:
 
 
 

 
 
 
 
Federally insured loans
$
39,398

 
37,028

 
39,398

 
37,028

Private education loans
12,566

 
14,542

 
12,566

 
14,542

Total allowance for loan losses
$
51,964

 
51,570

 
51,964

 
51,570





Student Loan Status and Delinquencies

Delinquencies have the potential to adversely impact the Company’s earnings through increased servicing and collection costs and account charge-offs.  The table below shows the Company’s loan delinquency amounts.

 
As of September 30, 2017
 
As of December 31, 2016
 
As of September 30, 2016
Federally insured loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
1,448,172

 
 
 
$
1,606,468

 
 
 
$
1,864,323

 
 
Loans in forbearance
2,406,346

 
 
 
2,295,367

 
 
 
2,403,504

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
16,534,795

 
88.7
%
 
18,125,768

 
86.6
%
 
18,445,728

 
86.8
%
Loans delinquent 31-60 days
579,665

 
3.1

 
818,976

 
3.9

 
825,905

 
3.9

Loans delinquent 61-90 days
334,085

 
1.8

 
487,647

 
2.3

 
491,395

 
2.3

Loans delinquent 91-120 days
255,567

 
1.4

 
335,291

 
1.6

 
326,020

 
1.5

Loans delinquent 121-270 days
700,319

 
3.8

 
854,432

 
4.1

 
835,250

 
3.9

Loans delinquent 271 days or greater
228,335

 
1.2

 
306,035

 
1.5

 
350,808

 
1.6

Total loans in repayment
18,632,766

 
100.0
%
 
20,928,149

 
100.0
%
 
21,275,106

 
100.0
%
Total federally insured loans
$
22,487,284

 
 

 
$
24,829,984

 
 

 
$
25,542,933

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private education loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
27,188

 
 
 
$
35,146

 
 
 
$
51,042

 
 
Loans in forbearance
2,904

 
 
 
3,448

 
 
 
1,770

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
190,153

 
96.8
%
 
228,612

 
97.2
%
 
217,108

 
97.1
%
Loans delinquent 31-60 days
1,200

 
0.6

 
1,677

 
0.7

 
1,357

 
0.6

Loans delinquent 61-90 days
1,195

 
0.6

 
1,110

 
0.5

 
1,228

 
0.5

Loans delinquent 91 days or greater
3,989

 
2.0

 
3,666

 
1.6

 
3,927

 
1.8

Total loans in repayment
196,537

 
100.0
%
 
235,065

 
100.0
%
 
223,620

 
100.0
%
Total private education loans
$
226,629

 
 

 
$
273,659

 
 

 
$
276,432

 
 
Bonds and Notes Payable
Bonds and Notes Payable
Bonds and Notes Payable

The following tables summarize the Company’s outstanding debt obligations by type of instrument:
 
As of September 30, 2017
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
20,675,881

 
0.22% - 6.90%
 
8/25/21 - 9/25/65
Bonds and notes based on auction
781,276

 
1.97% - 2.61%
 
3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes
21,457,157

 
 
 
 
FFELP warehouse facilities
745,107

 
1.23% - 1.37%
 
11/19/19 - 4/27/20
Variable-rate bonds and notes issued in private education loan asset-backed securitization
84,881

 
2.99%
 
12/26/40
Fixed-rate bonds and notes issued in private education loan asset-backed securitization
90,896

 
3.60% / 5.35%
 
12/26/40 / 12/28/43
Unsecured line of credit
210,000

 
2.74%
 
12/12/21
Unsecured debt - Junior Subordinated Hybrid Securities
20,526

 
4.71%
 
9/15/61
Other borrowings
18,355

 
3.38%
 
3/31/23 / 12/15/45
 
22,626,922

 
 
 
 
Discount on bonds and notes payable and debt issuance costs
(386,643
)
 
 
 
 
Total
$
22,240,279

 
 
 
 
 
As of December 31, 2016
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
22,130,063

 
0.24% - 6.90%
 
6/25/21 - 9/25/65
Bonds and notes based on auction
998,415

 
1.61% - 2.28%
 
3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes
23,128,478

 
 
 
 
FFELP warehouse facilities
1,677,443

 
0.63% - 1.09%
 
9/7/18 - 12/13/19
Variable-rate bonds and notes issued in private education loan asset-backed securitization
112,582

 
2.60%
 
12/26/40
Fixed-rate bonds and notes issued in private education loan asset-backed securitization
113,378

 
3.60% / 5.35%
 
12/26/40 / 12/28/43
Unsecured line of credit
—

 
—
 
12/12/21
Unsecured debt - Junior Subordinated Hybrid Securities
50,184

 
4.37%
 
9/15/61
Other borrowings
18,355

 
3.38%
 
3/31/23 / 12/15/45
 
25,100,420

 
 
 
 
Discount on bonds and notes payable and debt issuance costs
(431,930
)
 
 
 
 
Total
$
24,668,490

 
 
 
 



Asset-Backed Securitizations

The following table summarizes the asset-backed securitization transactions completed during the first nine months of 2017.
 
 
NSLT 2017-1
 
NSLT 2017-2
 
Total
Date securities issued
 
5/24/17
 
7/26/17
 
 
Total original principal amount
 
$
535,000

 
399,390

 
934,390

Bond discount
 
—

 
(2,002
)
 
(2,002
)
Issue price
 
$
535,000

 
397,388

 
932,388

Cost of funds
 
1-month LIBOR plus 0.78%
 
1-month LIBOR plus 0.77%
 
 
Final maturity date
 
6/25/65
 
9/25/65
 
 


FFELP Warehouse Facilities

The Company funds a portion of its FFELP loan acquisitions using its FFELP warehouse facilities. Student loan warehousing allows the Company to buy and manage student loans prior to transferring them into more permanent financing arrangements.

As of September 30, 2017, the Company had three FFELP warehouse facilities as summarized below.
 
 
NFSLW-I (a)
 
NHELP-II
 
NHELP-III (b)
 
Total
Maximum financing amount
 
$
500,000

 
500,000

 
200,000

 
1,200,000

Amount outstanding
 
307,425

 
288,969

 
148,713

 
745,107

Amount available
 
$
192,575

 
211,031

 
51,287

 
454,893

Expiration of liquidity provisions
 
September 20, 2019

 
December 15, 2017

 
April 27, 2018

 
 
Final maturity date
 
November 19, 2019

 
December 13, 2019

 
April 27, 2020

 
 
Maximum advance rates
 
92.0 - 98.0%

 
85.0 - 95.0%

 
92.2 - 95.0%

 
 
Minimum advance rates
 
84.0 - 90.0%

 
85.0 - 95.0%

 
92.2 - 95.0%

 
 
Advanced as equity support
 
$
4,747

 
20,531

 
3,163

 
28,441



(a)
On May 25, 2017 and August 18, 2017, the Company decreased the maximum financing amount for this warehouse facility by $175.0 million and $200.0 million, respectively. As of September 30, 2017, the maximum financing amount for this warehouse facility was $500.0 million, as reflected in this table. On September 22, 2017, the Company amended the agreement for this warehouse facility, which changed the expiration date for the liquidity provisions to September 20, 2019 and changed the final maturity date to November 19, 2019.

(b)
On April 3, 2017, the Company entered into a letter agreement for this warehouse facility to decrease the maximum financing amount from $750.0 million to $600.0 million. On April 28, 2017, the Company amended the agreement for this warehouse facility, which changed the expiration date for the liquidity provisions to April 27, 2018 and changed the final maturity date to April 27, 2020. On May 5, 2017, May 25, 2017, and June 2, 2017, the Company decreased the maximum financing amount for this warehouse facility by $200.0 million, $100.0 million, and $100.0 million, respectively. As of September 30, 2017, the maximum financing amount for this warehouse facility was $200.0 million, as reflected in this table.

Unsecured Line of Credit

The Company has a $350.0 million unsecured line of credit that has a maturity date of December 12, 2021.  As of September 30, 2017, $210.0 million was outstanding on the line of credit and $140.0 million was available for future use.
Debt Repurchases

The following table summarizes the Company's repurchases of its own debt. Gains recorded by the Company from the repurchase of debt are included in "gain from debt repurchases" on the Company's consolidated statements of income.
 
Par value
 
Purchase price
 
Gain
 
Par value
 
Purchase price
 
Gain
 
Three months ended
 
September 30, 2017
 
September 30, 2016
   Asset-backed securities
$
14,702

 
14,586

 
116

 
10,965

 
8,805

 
2,160

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended
 
September 30, 2017
 
September 30, 2016
Unsecured debt - Hybrid Securities (a)
$
29,658

 
25,241

 
4,417

 
—

 
—

 
—

   Asset-backed securities
18,790

 
17,670

 
1,120

 
11,362

 
9,102

 
2,260

 
$
48,448

 
42,911

 
5,537

 
11,362

 
9,102

 
2,260


(a)
During the three months ended March 31, 2017, the Company initiated a cash tender offer to purchase any and all of its outstanding Hybrid Securities, including a related consent solicitation to effect certain amendments to the indenture governing the notes to eliminate a provision requiring a minimum principal amount of the notes to remain outstanding after a partial redemption. After the completion of this tender offer, the Company has $20.5 million of Hybrid Securities that remain outstanding. In addition, the amendments described above have been made to the indenture.
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments

The Company uses derivative financial instruments primarily to manage interest rate risk and foreign currency exchange risk. Derivative instruments used as part of the Company's risk management strategy are further described in note 5 of the notes to consolidated financial statements included in the 2016 Annual Report. A tabular presentation of such derivatives outstanding as of September 30, 2017 and December 31, 2016 is presented below.

Basis Swaps

The following table summarizes the Company’s outstanding basis swaps in which the Company receives three-month LIBOR set discretely in advance and pays one-month LIBOR plus or minus a spread as defined in the agreements (the "1:3 Basis Swaps").
 
 
 
As of September 30,
 
As of December 31,
 
 
2017
 
2016
Maturity
 
Notional amount
 
Notional amount
2018
 
$
4,000,000

 
$
—

2019
 
3,000,000

 
—

2024
 
250,000

 
—

2026
 
1,150,000

 
1,150,000

2027
 
375,000

 
—

2028
 
325,000

 
325,000

2029
 
100,000

 
—

2031
 
300,000

 
300,000

 
 
$
9,500,000

 
$
1,775,000


The weighted average rate paid by the Company on the 1:3 Basis Swaps as of September 30, 2017 and December 31, 2016 was one-month LIBOR plus 13.4 basis points and 10.1 basis points, respectively.
Interest Rate Swaps – Floor Income Hedges

The following table summarizes the outstanding derivative instruments used by the Company to economically hedge loans earning fixed rate floor income.
 
 
As of September 30, 2017
 
As of December 31, 2016
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
 
 
 
2017
 
$
—

 
—
%
 
$
750,000

 
0.99
%
2018
 
1,350,000

 
1.07

 
1,350,000

 
1.07

2019
 
3,250,000

 
0.97

 
3,250,000

 
0.97

2020
 
1,500,000

 
1.01

 
1,500,000

 
1.01

2025
 
100,000

 
2.32

 
100,000

 
2.32

 
 
$
6,200,000

 
1.02
%
 
$
6,950,000

 
1.02
%

(a)
For all interest rate derivatives, the Company receives discrete three-month LIBOR.

On August 20, 2014, the Company paid $9.1 million for an interest rate swap option to economically hedge loans earning fixed rate floor income. The interest rate swap option gives the Company the right, but not the obligation, to enter into a $250.0 million notional interest rate swap in which the Company would pay a fixed amount of 3.30% and receive discrete one-month LIBOR. If the interest rate swap option is exercised, the swap would become effective in 2019 and mature in 2024.

Interest Rate Caps

In June 2015, in conjunction with the entry into a $275.0 million private education loan warehouse facility, the Company paid $2.9 million for two interest rate cap contracts with a total notional amount of $275.0 million. The first interest rate cap had a notional amount of $125.0 million and a one-month LIBOR strike rate of 2.50%, and the second interest rate cap had a notional amount of $150.0 million and a one-month LIBOR strike rate of 4.99%. In the event that the one-month LIBOR rate rose above the applicable strike rate, the Company would receive monthly payments related to the spread difference. Both interest rate cap contracts had a maturity date of July 15, 2020. The private education loan warehouse facility was terminated by the Company on December 21, 2016. During the first quarter of 2017, the Company received $913,000 to terminate the interest rate cap contracts that were held in the private education loan warehouse legal entity and paid $929,000 to enter into new interest rate cap contracts with identical terms at Nelnet, Inc. (the parent company). The Company currently intends to keep these derivatives outstanding to partially mitigate a rise in interest rates and its impact on earnings related to its student loan portfolio earning a fixed rate.

Interest Rate Swaps – Unsecured Debt Hedges

As of September 30, 2017 and December 31, 2016, the Company had $20.5 million and $50.2 million, respectively, of unsecured Hybrid Securities outstanding. The interest rate on the Hybrid Securities through September 29, 2036 is equal to three-month LIBOR plus 3.375%, payable quarterly. The Company had the following derivatives outstanding as of September 30, 2017 and December 31, 2016 that are used to effectively convert the variable interest rate on a designated notional amount with respect to the Hybrid Securities to a fixed rate of 7.66%.
 
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
2036
 
$
25,000

 
4.28
%

(a)
For all interest rate derivatives, the Company receives discrete three-month LIBOR.

Foreign Currency Exchange Risk

In 2006, the Company issued €352.7 million of student loan asset-backed Euro Notes (the "Euro Notes") with an interest rate based on a spread to the EURIBOR index. As a result of the Euro Notes, the Company was exposed to market risk related to fluctuations in foreign currency exchange rates between the U.S. dollar and Euro. The principal and accrued interest on these notes have been re-measured at each reporting period and recorded in the Company’s consolidated balance sheet in U.S. dollars based on the foreign currency exchange rate on that date. Changes in the principal and accrued interest amounts as a result of foreign currency exchange rate fluctuations have been included in the Company’s consolidated statements of income.

The Company entered into a cross-currency interest rate swap in connection with the issuance of the Euro Notes. Under the terms of the cross-currency interest rate swap, the Company has received from the counterparty a spread to the EURIBOR index based on a notional amount of €352.7 million and has paid a spread to the LIBOR index based on a notional amount of $450.0 million.

The following table shows the unrealized income statement impact as a result of the re-measurement of the Euro Notes and the change in the fair value of the related derivative instrument.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Re-measurement of Euro Notes
$
(13,683
)
 
(4,831
)
 
(45,635
)
 
(13,543
)
Change in fair value of cross-currency interest rate swap
16,257

 
5,501

 
44,831

 
26,194

Total impact to consolidated statements of income - income (expense) (a)
$
2,574

 
670

 
(804
)
 
12,651

(a)
The financial statement impact of the above items is included in "Derivative market value and foreign currency transaction adjustments and derivative settlements, net" in the Company's consolidated statements of income.
Management structured the cross-currency interest rate swap to economically hedge the Euro Notes to effectively convert the notes to U.S. dollars and pay a spread on these notes based on the LIBOR index. However, the cross-currency interest rate swap did not qualify for hedge accounting. The re-measurement of the Euro-denominated bonds generally correlated with the change in the fair value of the corresponding cross-currency interest rate swap. However, the Company experienced unrealized gains and losses between these financial instruments due to the principal and accrued interest on the Euro Notes being re-measured to U.S. dollars at each reporting date based on the foreign currency exchange rate on that date, while the cross-currency interest rate swap was measured at fair value at each reporting date with the change in fair value recognized in the current period earnings.
On October 25, 2017, the Company completed a remarketing of the Euro Notes which reset the principal amount outstanding on the Euro Notes to $450.0 million U.S. dollars, with an interest rate based on the 3-month LIBOR index, and resulted in the termination of the cross-currency interest rate swap. See note 14, “Subsequent Events” for additional information on this remarketing.

Consolidated Financial Statement Impact Related to Derivatives

Effective June 10, 2013, all over-the-counter derivative contracts executed by the Company are cleared post-execution at the Chicago Mercantile Exchange (“CME”), a regulated clearinghouse.  Clearing is a process by which a third-party, the clearinghouse, steps in between the original counterparties and guarantees the performance of both, by requiring that each post liquid collateral on an initial (initial margin) and mark-to-market (variation margin) basis to cover the clearinghouse’s potential future exposure in the event of default. 

Prior to January 3, 2017, the Company accounted for variation margin payments to the CME as collateral against its derivative position.  As such, these payments were treated as a separate unit of account from the derivative instrument and reported as a liability for cash collateral received and an asset (restricted cash) for cash collateral paid.  Effective January 3, 2017, the CME amended its rulebooks to legally characterize variation margin payments for over-the-counter derivatives they clear as settlements of the derivatives’ exposure rather than collateral against the exposure.  Based on these rulebook changes, for accounting and presentation purposes, the Company considers variation margin and the corresponding derivative instrument as a single unit of account.  As such, effective January 3, 2017, the variation margin received or paid is no longer accounted for separately as a liability or asset ("collateralized-to-market").  Instead, these payments are considered in determining the fair value of the centrally cleared derivative portfolio ("settled-to-market").  The principal difference for accounting and presentation purposes is that prior to January 3, 2017, the Company recorded the fair value of collateralized-to-market derivative contracts on its balance sheet as "fair value of derivative instruments" with an equal amount of variation margin collateral accounted for separately as an asset or liability. Subsequent to January 3, 2017, the Company records settled-to-market derivative contracts on its balance sheet with a fair value of zero and no collateral posted due to the payment or receipt of variation margin between the Company and the CME settling the outstanding mark-to-market exposure on such derivatives to a balance of zero on a daily basis, and records the underlying daily changes in the market value of such derivative contracts that result in such receipts or payments on its income statement as realized derivative market value adjustments in "Derivative market value and foreign currency transaction adjustments and derivative settlements, net."

The new clearinghouse requirements did not alter or affect the accounting and presentation of the Company’s derivative instruments executed prior to June 10, 2013 and those derivatives that are not required to be cleared at a clearinghouse (non-centrally cleared derivatives). The Company records these derivative instruments in the consolidated balance sheets on a gross basis as either an asset or liability measured at its fair value. Certain non-centrally cleared derivatives are subject to right of offset provisions with counterparties.  For these derivatives, the Company does not offset fair value amounts executed with the same counterparty under a master netting arrangement. In addition, the Company does not offset fair value amounts recognized for derivative instruments with respect to the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable).

Balance Sheet

The following table summarizes the fair value of the Company’s derivatives as reflected in the consolidated balance sheets:
 
Fair value of asset derivatives
 
Fair value of liability derivatives
 
As of
 
As of
 
As of
 
As of
 
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
1:3 basis swaps
$
—

 
—

 
—

 
2,624

Interest rate swaps - floor income hedges
—

 
81,159

 
—

 
256

Interest rate swap option - floor income hedge
765

 
2,977

 
—

 
—

Interest rate caps
231

 
1,152

 
—

 
—

Interest rate swaps - hybrid debt hedges
—

 
—

 
7,332

 
7,341

Cross-currency interest rate swap
—


—

 
22,773

 
67,605

Other
—

 
2,243

 
—

 
—

Total
$
996

 
87,531

 
30,105

 
77,826



During the second quarter of 2017, the Company received proceeds of $2.1 million from the termination of derivatives that were included in "other" in the preceding table.

Offsetting of Derivative Assets/Liabilities

The following tables include the gross amounts related to the Company's derivative portfolio recognized in the consolidated balance sheets, reconciled to the net amount when excluding derivatives subject to enforceable master netting arrangements and cash collateral received/pledged.
 
 
 
 
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 pledged
 
Net asset
Balance as of
September 30, 2017
 
$
996

 
—

 
—

 
996

Balance as of
December 31, 2016
 
87,531

 
(2,880
)
 
475

 
85,126


 
 
 
 
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
 
Net liability
Balance as of
September 30, 2017
 
$
(30,105
)
 
—

 
8,470

 
(21,635
)
Balance as of
December 31, 2016
 
(77,826
)
 
2,880

 
7,292

 
(67,654
)


Income Statement Impact

The following table summarizes the components of "derivative market value and foreign currency transaction adjustments and derivative settlements, net" included in the consolidated statements of income.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Settlements:
 

 
 

 
 
 
 
1:3 basis swaps
$
(2,172
)
 
523

 
(1,836
)
 
938

Interest rate swaps - floor income hedges
3,883

 
(5,157
)
 
5,877

 
(15,241
)
Interest rate swaps - hybrid debt hedges
(191
)
 
(233
)
 
(593
)
 
(696
)
Cross-currency interest rate swap
(2,093
)
 
(1,394
)
 
(5,762
)
 
(3,293
)
Total settlements - (expense) income
(573
)
 
(6,261
)
 
(2,314
)
 
(18,292
)
Change in fair value:
 

 
 

 
 
 
 
1:3 basis swaps
5,916

 
140

 
(5,499
)
 
323

Interest rate swaps - floor income hedges
(185
)
 
42,073

 
(13,670
)
 
(17,913
)
Interest rate swap option - floor income hedge
(500
)
 
(269
)
 
(2,212
)
 
(2,541
)
Interest rate caps
(103
)
 
(68
)
 
(936
)
 
(1,283
)
Interest rate swaps - hybrid debt hedges
44

 
13

 
10

 
(4,000
)
Cross-currency interest rate swap
16,257

 
5,501

 
44,831

 
26,194

Other
—

 
(297
)
 
(143
)
 
(2,336
)
Total change in fair value - income (expense)
21,429

 
47,093

 
22,381

 
(1,556
)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - (expense) income
(13,683
)
 
(4,831
)
 
(45,635
)
 
(13,543
)
Derivative market value and foreign currency transaction adjustments and derivative settlements, net - income (expense)
$
7,173

 
36,001

 
(25,568
)
 
(33,391
)
Investments and Other Receivables
Investments and Other Receivables
Investments and Other Receivables

A summary of the Company's investments and other receivables follows:
 
As of September 30, 2017
 
As of December 31, 2016
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses (a)
 
Fair value
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
 
 
 
 
 
 
 
 
Investments (at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities (b)
$
68,010

 
4,768

 
(240
)
 
72,538

 
98,260

 
6,280

 
(641
)
 
103,899

Equity securities
756

 
2,140

 
(21
)
 
2,875

 
720

 
1,930

 
(61
)
 
2,589

Total available-for-sale investments
$
68,766

 
6,908

 
(261
)
 
75,413

 
98,980

 
8,210

 
(702
)
 
106,488

Trading investments - equity securities
 
 
 
 
 
 
—

 
 
 
 
 
 
 
105

Total available-for-sale and trading investments
 
 
 
 
 
 
75,413

 
 
 
 
 
 
 
106,593

Other Investments and Other Receivables (not measured at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
Venture capital and funds
 
 
 
 
 
 
84,903

 
 
 
 
 
 
 
69,789

Notes and loans receivable
 
 
 
 
 
 
56,732

 
 
 
 
 
 
 
17,031

Real estate
 
 
 
 
 
 
49,567

 
 
 
 
 
 
 
48,379

Tax liens and affordable housing
 
 
 
 
 
 
9,921

 
 
 
 
 
 
 
12,352

Total investments and other receivables
 
 
 
 
 
 
$
276,536

 
 
 
 
 
 
 
254,144


    
(a)
As of September 30, 2017, the aggregate fair value of available-for-sale investments with unrealized losses was $2.7 million, of which $0.4 million had been in a continuous unrealized loss position for greater than 12 months. Because the Company currently has the intent and ability to retain these investments for an anticipated recovery in fair value, as of September 30, 2017, 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, 2017, the stated maturities of substantially all of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years.
Intangible Assets, net Intangible Assets, net
Intangible Assets, net
Intangible Assets, net

Intangible assets consist of the following:
 
 
Weighted average remaining useful life as of September 30, 2017 (months)
 
As of September 30, 2017
 
As of December 31, 2016
 
 
Amortizable intangible assets, net:
 
 
 
 
Customer relationships (net of accumulated amortization of $11,704 and $8,548, respectively)
162
 
$
25,179

 
28,335

 
Trade names (net of accumulated amortization of $2,287 and $1,653, respectively)
180
 
9,285

 
9,919

 
Computer software (net of accumulated amortization of $8,929 and $5,675, respectively)
17
 
6,042

 
9,296

 
Covenants not to compete (net of accumulated amortization of $118 and $91, respectively)
80
 
236

 
263

 
Total - amortizable intangible assets, net
144
 
$
40,742

 
47,813



The Company recorded amortization expense on its intangible assets of $2.3 million and $3.2 million during the three months ended September 30, 2017 and 2016, respectively, and $7.1 million and $8.4 million during the nine months ended September 30, 2017 and 2016, respectively. The Company will continue to amortize intangible assets over their remaining useful lives. As of September 30, 2017, the Company estimates it will record amortization expense as follows:

2017 (October 1 - December 31)
$
2,315

2018
8,605

2019
5,147

2020
4,231

2021
3,480

2022 and thereafter
16,964

 
$
40,742

Goodwill
Goodwill
Goodwill

The carrying amount of goodwill as of December 31, 2016 and September 30, 2017 by reportable operating segment was as follows:
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset Generation and Management
 
Corporate and Other Activities
 
Total
Goodwill balance
$
8,596

 
67,168

 
21,112

 
41,883

 
8,553

 
147,312

Property and Equipment Property and Equipment
Property and Equipment
Property and Equipment

Property and equipment consisted of the following:
 
 
 
As of
September 30, 2017
 
As of
December 31, 2016
 
Useful life
 
 
Non-communications:
 
 
 
 
 
Computer equipment and software
1-5 years
 
$
108,430

 
97,317

Building and building improvements
5-39 years
 
25,283

 
13,363

Office furniture and equipment
3-7 years
 
14,357

 
12,344

Leasehold improvements
5-20 years
 
6,496

 
3,579

Transportation equipment
4-10 years
 
3,813

 
3,809

Land
—
 
2,605

 
1,682

Construction in progress
—
 
14,025

 
16,346

 
 
 
175,009

 
148,440

Accumulated depreciation - non-communications
 
 
104,430

 
91,285

Non-communications, net property and equipment
 
 
70,579

 
57,155

 
 
 
 
 
 
Communications:
 
 
 
 
 
Network plant and fiber
5-15 years
 
83,870

 
40,844

Customer located property
5-10 years
 
10,987

 
5,138

Central office
5-15 years
 
8,476

 
6,448

Transportation equipment
4-10 years
 
5,011

 
2,966

Computer equipment and software
1-5 years
 
3,318

 
2,026

Other
1-39 years
 
2,285

 
1,268

Land
—
 
70

 
70

Construction in progress
—
 
35,709

 
12,537

 
 
 
149,726

 
71,297

Accumulated depreciation - communications
 
 
11,864

 
4,666

Communications, net property and equipment
 
 
137,862

 
66,631

Total property and equipment, net
 
 
$
208,441

 
123,786



The Company recorded depreciation expense on its property and equipment of $7.7 million and $5.8 million during the three months ended September 30, 2017 and 2016, respectively, and $20.6 million and $16.4 million during the nine months ended September 30, 2017 and 2016, respectively.
Earnings per Common Share
Earnings per Common Share
Earnings per Common Share

Presented below is a summary of the components used to calculate basic and diluted earnings per share. The Company applies the two-class method in computing both basic and diluted earnings per share, which requires the calculation of separate earnings per share amounts for common stock and unvested share-based awards. Unvested share-based awards that contain nonforfeitable rights to dividends are considered securities which participate in undistributed earnings with common stock.
 
Three months ended September 30,
 
2017
 
2016
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
45,850

 
453

 
46,303

 
83,419

 
875

 
84,294

 
 
 
 
 


 
 
 
 
 
 
Denominator:


 


 


 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
41,146,424

 
406,892

 
41,553,316

 
42,199,580

 
442,633

 
42,642,213

Earnings per share - basic and diluted
$
1.11

 
1.11

 
1.11

 
1.98

 
1.98

 
1.98



 
Nine months ended September 30,
 
2017
 
2016
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
123,816

 
1,249

 
125,065

 
156,749

 
1,656

 
158,405

 
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
41,634,578

 
419,954

 
42,054,532

 
42,340,867

 
447,266

 
42,788,133

Earnings per share - basic and diluted
$
2.97

 
2.97

 
2.97

 
3.70

 
3.70

 
3.70

Segment Reporting
Segment Reporting
Segment Reporting

See note 14 of the notes to consolidated financial statements included in the 2016 Annual Report for a description of the Company's operating segments. The following tables include the results of each of the Company's operating segments reconciled to the consolidated financial statements.
 
Three months ended September 30, 2017
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
147

 
5

 
1

 
194,968

 
3,903

 
(2,139
)
 
196,884

Interest expense
—

 
—

 
1,551

 
121,074

 
1,165

 
(2,139
)
 
121,650

Net interest income
147

 
5

 
(1,550
)
 
73,894

 
2,738

 
—

 
75,234

Less provision for loan losses
—

 
—

 
—

 
6,000

 
—

 
—

 
6,000

Net interest income (loss) after provision for loan losses
147


5

 
(1,550
)
 
67,894

 
2,738

 
—

 
69,234

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
55,950

 
—

 
—

 
—

 
—

 
—

 
55,950

Intersegment servicing revenue
10,563

 
—

 
—

 
—

 
—

 
(10,563
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
35,450

 
—

 
—

 
—

 
—

 
35,450

Communications revenue
—

 
—

 
6,751

 
—

 
—

 
—

 
6,751

Other income
—

 
—

 
—

 
2,753

 
17,003

 
—

 
19,756

Gain from debt repurchases
—

 
—

 
—

 
116

 
—

 
—

 
116

Derivative settlements, net
—

 
—

 
—

 
(382
)
 
(191
)
 
—

 
(573
)
Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
7,702

 
44

 
—

 
7,746

Total other income
66,513

 
35,450

 
6,751

 
10,189

 
16,856

 
(10,563
)
 
125,196

Operating expenses:
 

 
 

 
 
 
 
 
 

 
 
 
 

Salaries and benefits
38,435

 
17,432

 
4,099

 
392

 
13,834

 
—

 
74,193

Depreciation and amortization
549

 
2,316

 
3,145

 
—

 
4,040

 
—

 
10,051

Loan servicing fees
—

 
—

 
—

 
7,939

 
—

 
—

 
7,939

Cost to provide communications services
—

 
—

 
2,632

 
—

 
—

 
—

 
2,632

Other expenses
10,317

 
4,224

 
2,278

 
1,451

 
12,248

 
—

 
30,518

Intersegment expenses, net
7,774

 
2,219

 
470

 
10,659

 
(10,559
)
 
(10,563
)
 
—

Total operating expenses
57,075

 
26,191

 
12,624

 
20,441

 
19,563

 
(10,563
)
 
125,333

Income (loss) before income taxes
9,585

 
9,264

 
(7,423
)
 
57,642

 
31

 
—

 
69,097

Income tax (expense) benefit
(4,937
)
 
(3,520
)
 
2,821

 
(21,904
)
 
1,978

 
—

 
(25,562
)
Net income (loss)
4,648

 
5,744

 
(4,602
)
 
35,738

 
2,009

 
—

 
43,535

  Net loss (income) attributable to noncontrolling interests
3,408

 
—

 
—

 
—

 
(640
)
 
—

 
2,768

Net income (loss) attributable to Nelnet, Inc.
$
8,056

 
5,744

 
(4,602
)
 
35,738

 
1,369

 
—

 
46,303

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of September 30, 2017
$
98,555

 
208,290

 
179,206

 
23,724,413

 
863,700

 
(305,454
)
 
24,768,710

 
Three months ended September 30, 2016
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other
Activities
 
Eliminations
 
Total
Total interest income
$
37

 
2

 
—

 
194,701

 
2,370

 
(930
)
 
196,181

Interest expense
—

 
—

 
318

 
95,383

 
1,615

 
(930
)
 
96,386

Net interest income
37

 
2

 
(318
)
 
99,318

 
755

 
—

 
99,795

Less provision for loan losses
—

 
—

 
—

 
6,000

 
—

 
—

 
6,000

Net interest income (loss) after provision for loan losses
37

 
2

 
(318
)
 
93,318

 
755

 
—

 
93,795

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
54,350

 
—

 
—

 
—

 
—

 
—

 
54,350

Intersegment servicing revenue
11,021

 
—

 
—

 
—

 
—

 
(11,021
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
33,071

 
—

 
—

 
—

 
—

 
33,071

Communications revenue
—

 
—

 
4,343

 
—

 
—

 
—

 
4,343

Enrollment services revenue
—

 
—

 
—

 
—

 
—

 
—

 
—

Other income
—

 
—

 
—

 
4,265

 
10,886

 
—

 
15,150

Gain from debt repurchases
—

 
—

 
—

 
2,160

 
—

 
—

 
2,160

Derivative settlements, net
—

 
—

 
—

 
(6,028
)
 
(233
)
 
—

 
(6,261
)
Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
42,546

 
(284
)
 
—

 
42,262

Total other income
65,371

 
33,071

 
4,343

 
42,943

 
10,369

 
(11,021
)
 
145,075

Operating expenses:
 

 
 

 
 
 
 

 
 

 
.

 
 

Salaries and benefits
32,505

 
15,979

 
2,325

 
486

 
12,448

 
—

 
63,743

Depreciation and amortization
557

 
2,929

 
1,630

 
—

 
3,878

 
—

 
8,994

Loan servicing fees
—

 
—

 
—

 
5,880

 
—

 
—

 
5,880

Cost to provide communications services
—

 
—

 
1,784

 
—

 
—

 
—

 
1,784

Cost to provide enrollment services
—

 
—

 
—

 
—

 
—

 
—

 
—

Other expenses
8,784

 
4,149

 
1,545

 
1,769

 
10,143

 
—

 
26,391

Intersegment expenses, net
5,825

 
1,616

 
279

 
11,146

 
(7,845
)
 
(11,021
)
 
—

Total operating expenses
47,671

 
24,673

 
7,563

 
19,281

 
18,624

 
(11,021
)
 
106,792

Income (loss) before income taxes
17,737

 
8,400

 
(3,538
)
 
116,980

 
(7,500
)
 
—

 
132,078

Income tax (expense) benefit
(6,740
)
 
(3,192
)
 
1,344

 
(44,571
)
 
5,443

 
—

 
(47,715
)
Net income (loss)
10,997

 
5,208

 
(2,194
)
 
72,409

 
(2,057
)
 
—

 
84,363

  Net loss (income) attributable to noncontrolling interests
—

 
—

 
—

 
—

 
(69
)
 
—

 
(69
)
Net income (loss) attributable to Nelnet, Inc.
$
10,997

 
5,208

 
(2,194
)
 
72,409

 
(2,126
)
 
—

 
84,294

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of September 30, 2016
$
79,418

 
190,682

 
90,361

 
26,888,950

 
687,347

 
(267,147
)
 
27,669,611




 
Nine months ended September 30, 2017
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
361

 
10

 
2

 
568,661

 
10,026

 
(5,274
)
 
573,786

Interest expense
—

 
—

 
3,367

 
340,898

 
2,794

 
(5,274
)
 
341,787

Net interest income
361

 
10

 
(3,365
)
 
227,763

 
7,232

 
—

 
231,999

Less provision for loan losses
—

 
—

 
—

 
9,000

 
—

 
—

 
9,000

Net interest income (loss) after provision for loan losses
361


10

 
(3,365
)
 
218,763

 
7,232

 
—

 
222,999

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
167,079

 
—

 
—

 
—

 
—

 
—

 
167,079

Intersegment servicing revenue
30,839

 
—

 
—

 
—

 
—

 
(30,839
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
113,293

 
—

 
—

 
—

 
—

 
113,293

Communications revenue
—

 
—

 
17,577

 
—

 
—

 
—

 
17,577

Other income
—

 
—

 
—

 
9,152

 
35,722

 
—

 
44,874

Gain from debt repurchases
—

 
—

 
—

 
1,097

 
4,440

 
—

 
5,537

Derivative settlements, net
—

 
—

 
—

 
(1,721
)
 
(593
)
 
—

 
(2,314
)
Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
(23,121
)
 
(133
)
 
—

 
(23,254
)
Total other income
197,918

 
113,293

 
17,577

 
(14,593
)
 
39,436

 
(30,839
)
 
322,792

Operating expenses:
 

 
 

 
 
 
 
 
 

 
 
 
 

Salaries and benefits
116,932

 
50,986

 
10,489

 
1,156

 
41,121

 
—

 
220,684

Depreciation and amortization
1,644

 
7,053

 
7,880

 
—

 
11,109

 
—

 
27,687

Loan servicing fees
—

 
—

 
—

 
19,584

 
—

 
—

 
19,584

Cost to provide communications services
—

 
—

 
6,789

 
—

 
—

 
—

 
6,789

Other expenses
28,333

 
14,072

 
5,422

 
4,269

 
32,497

 
—

 
84,593

Intersegment expenses, net
23,496

 
6,430

 
1,472

 
31,114

 
(31,673
)
 
(30,839
)
 
—

Total operating expenses
170,405

 
78,541

 
32,052

 
56,123

 
53,054

 
(30,839
)
 
359,337

Income (loss) before income taxes
27,874

 
34,762

 
(17,840
)
 
148,047

 
(6,386
)
 
—

 
186,454

Income tax (expense) benefit
(14,410
)
 
(13,210
)
 
6,779

 
(56,258
)
 
6,749

 
—

 
(70,349
)
Net income (loss)
13,464

 
21,552

 
(11,061
)
 
91,789

 
363

 
—

 
116,105

  Net loss (income) attributable to noncontrolling interests
10,050

 
—

 
—

 
—

 
(1,090
)
 
—

 
8,960

Net income (loss) attributable to Nelnet, Inc.
$
23,514

 
21,552

 
(11,061
)
 
91,789

 
(727
)
 
—

 
125,065

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of September 30, 2017
$
98,555

 
208,290

 
179,206

 
23,724,413

 
863,700

 
(305,454
)
 
24,768,710



 
Nine months ended September 30, 2016
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
80

 
7

 
1

 
570,390

 
6,527

 
(2,556
)
 
574,449

Interest expense
—

 
—

 
671

 
278,029

 
4,702

 
(2,556
)
 
280,847

Net interest income
80

 
7

 
(670
)
 
292,361

 
1,825

 
—

 
293,602

Less provision for loan losses
—

 
—

 
—

 
10,500

 
—

 
—

 
10,500

Net interest income (loss) after provision for loan losses
80


7

 
(670
)
 
281,861

 
1,825

 
—

 
283,102

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
161,082

 
—

 
—

 
—

 
—

 
—

 
161,082

Intersegment servicing revenue
34,436

 
—

 
—

 
—

 
—

 
(34,436
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
102,211

 
—

 
—

 
—

 
—

 
102,211

Communications revenue
—

 
—

 
13,167

 
—

 
—

 
—

 
13,167

Enrollment services revenue
—

 
—

 
—

 
—

 
4,326

 
—

 
4,326

Other income
—

 
—

 
—

 
12,362

 
26,349

 
—

 
38,711

Gain from debt repurchases
—

 
—

 
—

 
2,260

 
—

 
—

 
2,260

Derivative settlements, net
—

 
—

 
—

 
(17,596
)
 
(696
)
 
—

 
(18,292
)
Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
(8,763
)
 
(6,336
)
 
—

 
(15,099
)
Total other income
195,518

 
102,211

 
13,167

 
(11,737
)
 
23,643

 
(34,436
)
 
288,366

Operating expenses:
 

 
 

 
 
 
 
 
 

 
 
 
 

Salaries and benefits
96,851

 
45,859

 
4,792

 
1,504

 
38,902

 
—

 
187,907

Depreciation and amortization
1,440

 
7,711

 
4,137

 
—

 
11,528

 
—

 
24,817

Loan servicing fees
—

 
—

 
—

 
20,024

 
—

 
—

 
20,024

Cost to provide communications services
—

 
—

 
5,169

 
—

 
—

 
—

 
5,169

Cost to provide enrollment services
—

 
—

 
—

 
—

 
3,623

 
—

 
3,623

Other expenses
31,635

 
13,122

 
3,110

 
4,766

 
31,540

 
—

 
84,174

Intersegment expenses, net
18,168

 
4,690

 
610

 
34,791

 
(23,823
)
 
(34,436
)
 
—

Total operating expenses
148,094

 
71,382

 
17,818

 
61,085

 
61,770

 
(34,436
)
 
325,714

Income (loss) before income taxes
47,504

 
30,836

 
(5,321
)
 
209,039

 
(36,302
)
 
—

 
245,754

Income tax (expense) benefit
(18,052
)
 
(11,718
)
 
2,022

 
(79,434
)
 
19,998

 
—

 
(87,184
)
Net income (loss)
29,452

 
19,118

 
(3,299
)
 
129,605

 
(16,304
)
 
—

 
158,570

  Net loss (income) attributable to noncontrolling interests
—

 
—

 
—

 
—

 
(165
)
 
—

 
(165
)
Net income (loss) attributable to Nelnet, Inc.
$
29,452

 
19,118

 
(3,299
)
 
129,605

 
(16,469
)
 
—

 
158,405

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of September 30, 2016
$
79,418

 
190,682

 
90,361

 
26,888,950

 
687,347

 
(267,147
)
 
27,669,611

Major Customer
Major Customer
Major Customer
The Company earns loan servicing revenue from a servicing contract with the Department that currently is set to expire on June 16, 2019. Revenue earned by the Company's Loan Systems and Servicing operating segment related to this contract was $38.6 million and $40.2 million for the three months ended September 30, 2017 and 2016, respectively, and $117.4 million and $112.5 million for the nine months ended September 30, 2017 and 2016, respectively. In April 2016, the Department announced a new contract procurement process for the Department to acquire a single servicing platform to manage all student loans owned by the Department.

In May 2016, Nelnet Servicing, a subsidiary of the Company, and Great Lakes submitted a joint response to the procurement as part of a newly created joint venture to respond to the contract solicitation process and to provide services under a new contract in the event that the Department selects it for a contract award. The joint venture operates as a new legal entity called GreatNet. Nelnet Servicing and Great Lakes each own 50 percent of the ownership interests of GreatNet. In addition to Nelnet Servicing, Great Lakes is currently one of four large private sector companies (referred to as Title IV Additional Servicers, or "TIVAS") that has a student loan servicing contract with the Department to provide servicing for loans owned by the Department. On May 19, 2017, the Department announced it had amended the contract procurement process, which required another response by the participants, and on July 7, 2017, GreatNet submitted its response to the Department.

On August 1, 2017, the Department announced it was canceling the current procurement process for a single servicing platform and that it intends to develop a new contract procurement proposal. The Department indicated that its new approach is expected to require separate contract acquisitions for database housing, system processing, and customer account servicing.

On October 18, 2017, the Company entered into an agreement to purchase 100 percent of the outstanding stock of Great Lakes. See note 14, "Subsequent Events" for additional information on this business acquisition agreement.
Fair Value
Fair Value
Fair Value

The following tables present the Company’s financial assets and liabilities that are measured at fair value on a recurring basis. There were no transfers into or out of level 1, level 2, or level 3 for the nine months ended September 30, 2017.
 
As of September 30, 2017
 
As of December 31, 2016
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
Investments (available-for-sale and trading):
 
 
 
 


 
 
 
 
 
 
Student loan and other asset-backed securities
$
—

 
72,427

 
72,427

 
—

 
103,780

 
103,780

Equity securities
2,875

 
—

 
2,875

 
2,694

 
—

 
2,694

Debt securities
111

 
—

 
111

 
119

 
—

 
119

Total investments (available-for-sale and trading)
2,986

 
72,427

 
75,413

 
2,813

 
103,780

 
106,593

Derivative instruments
—

 
996

 
996

 
—

 
87,531

 
87,531

Total assets
$
2,986

 
73,423

 
76,409

 
2,813

 
191,311

 
194,124

Liabilities:
 

 
 

 
 

 
 
 
 
 
 
Derivative instruments
$
—

 
30,105

 
30,105

 
—

 
77,826

 
77,826

Total liabilities
$
—

 
30,105

 
30,105

 
—

 
77,826

 
77,826



The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:
 
As of September 30, 2017
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
23,635,887

 
22,528,845

 
—

 
—

 
23,635,887

Cash and cash equivalents
254,391

 
254,391

 
254,391

 
—

 
—

Investments (available-for-sale)
75,413

 
75,413

 
2,986

 
72,427

 
—

Notes receivable
16,393

 
16,393

 
—

 
16,393

 
—

Loans receivable
42,006

 
40,339

 
—

 
—

 
42,006

Restricted cash
725,463

 
725,463

 
725,463

 
—

 
—

Restricted cash – due to customers
105,299

 
105,299

 
105,299

 
—

 
—

Accrued interest receivable
396,827

 
396,827

 
—

 
396,827

 
—

Derivative instruments
996

 
996

 
—

 
996

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
22,319,439

 
22,240,279

 
—

 
22,319,439

 
—

Accrued interest payable
47,824

 
47,824

 
—

 
47,824

 
—

Due to customers
105,299

 
105,299

 
105,299

 
—

 
—

Derivative instruments
30,105

 
30,105

 
—

 
30,105

 
—

 
As of December 31, 2016
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
25,653,581

 
24,903,724

 
—

 
—

 
25,653,581

Cash and cash equivalents
69,654

 
69,654

 
69,654

 
—

 
—

Investments (available-for-sale and trading)
106,593

 
106,593

 
2,813

 
103,780

 
—

Notes receivable
17,031

 
17,031

 
—

 
17,031

 
—

Restricted cash
980,961

 
980,961

 
980,961

 
—

 
—

Restricted cash – due to customers
119,702

 
119,702

 
119,702

 
—

 
—

Accrued interest receivable
391,264

 
391,264

 
—

 
391,264

 
—

Derivative instruments
87,531

 
87,531

 
—

 
87,531

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
24,220,996

 
24,668,490

 
—

 
24,220,996

 
—

Accrued interest payable
45,677

 
45,677

 
—

 
45,677

 
—

Due to customers
119,702

 
119,702

 
119,702

 
—

 
—

Derivative instruments
77,826

 
77,826

 
—

 
77,826

 
—


 
The methodologies for estimating the fair value of financial assets and liabilities are described in note 20 of the notes to consolidated financial statements included in the 2016 Annual Report.
Subsequent Event
Subsequent Event
Subsequent Events

On October 18, 2017, the Company entered into an agreement to purchase 100 percent of the outstanding stock of Great Lakes for a purchase price of $150.0 million in cash. The transaction is scheduled to close on January 1, 2018, subject to customary closing conditions.

On October 25, 2017, the Company completed a remarketing of its Euro Notes which reset the principal amount outstanding on the Euro Notes from €352.7 million to $450.0 million U.S. dollars and reset the interest rate from an interest rate based on a spread to the EURIBOR index to an interest rate based on the 3-month LIBOR index. As a result of the remarketing, the Company terminated its cross-currency interest rate swap associated with the Euro Notes. The pre-tax GAAP income statement impact of this remarketing and swap termination was a non-cash expense of $10.6 million that will be included in “Derivative market value and foreign currency transaction adjustments and derivative settlements, net” on the consolidated statements of income.
Basis of Financial Reporting - Significant Accounting Policies (Policies)
Basis of Financial Reporting 
Basis of Financial Reporting

The accompanying unaudited consolidated financial statements of Nelnet, Inc. and subsidiaries (the “Company”) as of September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2016 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and nine months ended September 30, 2017 are not necessarily indicative of the results for the year ending December 31, 2017. The unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the "2016 Annual Report").

Consolidation 
Consolidation

The consolidated financial statements include the accounts of Nelnet, Inc. and its consolidated subsidiaries. In addition, the accounts of all variable interest entities (“VIEs”) of which the Company has determined that it is the primary beneficiary are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.
Variable Interest Entities 
Variable Interest Entities
The following entities are VIEs of which the Company has determined that it is the primary beneficiary. The primary beneficiary is the entity which has both: (1) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance, and (2) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.
The Company's education lending subsidiaries are engaged in the securitization of education finance assets. These education lending subsidiaries hold beneficial interests in eligible loans, subject to creditors with specific interests. The liabilities of the Company's education lending subsidiaries are not the direct obligations of Nelnet, Inc. or any of its other subsidiaries. Each education lending subsidiary is structured to be bankruptcy remote, meaning that it should not be consolidated in the event of bankruptcy of the parent company or any other subsidiary. The Company is generally the administrator and master servicer of the securitized assets held in its education lending subsidiaries and owns the residual interest of the securitization trusts. As a result, for accounting purposes, the transfers of student loans to the securitization trusts do not qualify as sales. Accordingly, all the financial activities and related assets and liabilities, including debt, of the securitizations are reflected in the Company's consolidated financial statements and are summarized as supplemental information on the balance sheet.
The Company owns 91.5 percent of the economic rights of Allo Communications LLC ("Allo") and has a disproportional 80 percent of the voting rights related to all operating decisions for Allo's business. Allo management, as current minority members, has the opportunity to earn an additional 11.5 percent of the total ownership interests based on the financial performance of Allo. In addition to the Company’s equity investment, Nelnet, Inc. (the parent) issued a $200.0 million line of credit to Allo on December 30, 2015. On September 30, 2017, the line of credit was increased by $70.0 million to a total of $270.0 million. As of September 30, 2017, the outstanding balance and accrued interest on the line of credit was $144.5 million and $4.6 million, respectively. Nelnet, Inc.’s maximum exposure to loss as a result of its involvement with Allo is equal to its equity investment and the outstanding balance and accrued interest on the line of credit. The amounts owed by Allo to Nelnet, Inc., including the interest costs incurred by Allo and interest earnings recognized by Nelnet, Inc., are not reflected in the Company’s consolidated balance sheet as they were eliminated in consolidation. All of Allo’s financial activities and related assets and liabilities, excluding the line of credit, are reflected in the Company’s consolidated financial statements. See note 10, "Segment Reporting," for disclosure of Allo's total assets and results of operations (included in the "Communications" operating segment), note 7, "Goodwill," for disclosure of Allo's goodwill, and note 8, “Property and Equipment,” for disclosure of Allo’s fixed assets. Allo's goodwill and property and equipment comprise the majority of its assets. The assets recognized as a result of consolidating Allo are the property of Allo and are not available for any other purpose, other than to Nelnet, Inc. as a secured lender under Allo's line of credit.
Noncontrolling Interest Disclosure 
Noncontrolling Interest

Nelnet Servicing, LLC ("Nelnet Servicing"), a subsidiary of the Company, and Great Lakes Educational Loan Services, Inc. ("Great Lakes") created a joint venture to respond to the initiative announced by the U.S. Department of Education (the "Department") in April 2016 for the procurement of a contract for federal student loan servicing to acquire a single servicing platform to manage all loans owned by the Department.  The joint venture operates as a new legal entity called GreatNet Solutions, LLC (“GreatNet”).  Nelnet Servicing and Great Lakes each own 50 percent of the ownership interests in GreatNet.  See note 11 for additional information on the contract procurement process. 

During the first and third quarters of 2017, Nelnet Servicing and Great Lakes each contributed $12.6 million and $6.5 million, respectively, to GreatNet and during the first quarter of 2017 GreatNet began to incur certain operating costs. For financial reporting purposes, the balance sheet and operating results of GreatNet are included in the Company’s consolidated financial statements and presented in the Company’s Loan Systems and Servicing operating segment.  The proportionate share of membership interest (equity) and net loss of GreatNet that is attributable to Great Lakes is reflected as noncontrolling interests in the consolidated financial statements.

On October 18, 2017, the Company entered into an agreement to purchase 100 percent of the outstanding stock of Great Lakes. See note 14, "Subsequent Events" for additional information on this business acquisition agreement.

For a description of other entities in which the Company reflects noncontrolling interests in its consolidated financial statements, see note 2 of the notes to consolidated financial statements included in the 2016 Annual Report.

Student Loan Interest Income 
The Company recognizes student loan interest income as earned, net of amortization of loan premiums and deferred origination costs and the accretion of loan discounts. Loan interest income is recognized based upon the expected yield of the loan after giving effect to interest rate reductions resulting from borrower utilization of incentives such as timely payments ("borrower benefits") and other yield adjustments. Loan premiums or discounts, deferred origination costs, and borrower benefits are amortized/accreted over the estimated life of the loans, which includes an estimate of forecasted payments in excess of contractually required payments. The Company periodically evaluates the assumptions used to estimate the life of the loans and prepayment rates. In instances where there are changes to the assumptions, amortization/accretion is adjusted on a cumulative basis to reflect the change since the acquisition of the loan.
  
In the third quarter of 2016, the Company revised its policy to correct for an error in its method of applying the interest method used to amortize premiums and deferred origination costs and accrete discounts on its student loan portfolio. Previously, the Company amortized premiums and deferred origination costs and accreted discounts by including in its prepayment assumption forecasted payments in excess of contractually required payments as well as forecasted defaults. The Company has determined that only payments in excess of contractually required payments (excluding forecasted defaults) should be included in the prepayment assumption. Under the Company's revised policy, as of September 30, 2016, the constant prepayment rate used by the Company to amortize/accrete student loan premiums/discounts was decreased. The constant prepayment rates under the Company's revised policy are 5 percent for Stafford loans and 3 percent for Consolidation loans. The constant prepayment rates under the Company's prior policy in effect before this correction were 6 percent and 4 percent, respectively.
Student Loans Receivable and Allowance for Loan Losses (Tables)
Schedule of Accounts, Notes, Loans and Financing Receivable 
Student loans receivable consisted of the following:
 
As of
 
As of
 
September 30, 2017
 
December 31, 2016
Federally insured loans:
 
 
 
 
Stafford and other
$
4,534,588

 
 
5,186,047

Consolidation
17,952,696

 
 
19,643,937

Total
22,487,284

 
 
24,829,984

Private education loans
226,629

 
 
273,659

 
22,713,913


 
25,103,643

Loan discount, net of unamortized loan premiums and deferred origination costs
(119,572
)
 
 
(129,507
)
Non-accretable discount (a)
(13,532
)
 
 
(18,570
)
Allowance for loan losses – federally insured loans
(39,398
)
 
 
(37,268
)
Allowance for loan losses – private education loans
(12,566
)
 
 
(14,574
)
 
$
22,528,845

 
 
24,903,724



(a)
For loans purchased where there is evidence of credit deterioration since the origination of the loan, the Company records a credit discount, separate from the allowance for loan losses, which is non-accretable to interest income.
Allowance for Credit Losses on Financing Receivables 
The provision for loan losses represents the periodic expense of maintaining an allowance sufficient to absorb losses, net of recoveries, inherent in the portfolio of student loans. Activity in the allowance for loan losses is shown below.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Balance at beginning of period
$
49,708

 
48,753

 
51,842

 
50,498

Provision for loan losses:
 
 
 
 
 
 
 
Federally insured loans
7,000

 
7,000

 
11,000

 
11,000

Private education loans
(1,000
)
 
(1,000
)
 
(2,000
)
 
(500
)
Total provision for loan losses
6,000

 
6,000

 
9,000

 
10,500

Charge-offs:
 

 
 

 
 
 
 
Federally insured loans
(3,464
)
 
(3,196
)
 
(8,870
)
 
(9,462
)
Private education loans
(491
)
 
(320
)
 
(861
)
 
(1,235
)
Total charge-offs
(3,955
)
 
(3,516
)
 
(9,731
)
 
(10,697
)
Recoveries - private education loans
161

 
243

 
603

 
769

Purchase of private education loans
—

 
30

 
—

 
290

Transfer from repurchase obligation related to private education loans repurchased
50

 
60

 
250

 
210

Balance at end of period
$
51,964

 
51,570

 
51,964

 
$
51,570

 
 
 
 
 
 
 
 
Allocation of the allowance for loan losses:
 
 
 

 
 
 
 
Federally insured loans
$
39,398

 
37,028

 
39,398

 
37,028

Private education loans
12,566

 
14,542

 
12,566

 
14,542

Total allowance for loan losses
$
51,964

 
51,570

 
51,964

 
51,570





Financing Receivable Credit Quality Indicators 
Delinquencies have the potential to adversely impact the Company’s earnings through increased servicing and collection costs and account charge-offs.  The table below shows the Company’s loan delinquency amounts.

 
As of September 30, 2017
 
As of December 31, 2016
 
As of September 30, 2016
Federally insured loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
1,448,172

 
 
 
$
1,606,468

 
 
 
$
1,864,323

 
 
Loans in forbearance
2,406,346

 
 
 
2,295,367

 
 
 
2,403,504

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
16,534,795

 
88.7
%
 
18,125,768

 
86.6
%
 
18,445,728

 
86.8
%
Loans delinquent 31-60 days
579,665

 
3.1

 
818,976

 
3.9

 
825,905

 
3.9

Loans delinquent 61-90 days
334,085

 
1.8

 
487,647

 
2.3

 
491,395

 
2.3

Loans delinquent 91-120 days
255,567

 
1.4

 
335,291

 
1.6

 
326,020

 
1.5

Loans delinquent 121-270 days
700,319

 
3.8

 
854,432

 
4.1

 
835,250

 
3.9

Loans delinquent 271 days or greater
228,335

 
1.2

 
306,035

 
1.5

 
350,808

 
1.6

Total loans in repayment
18,632,766

 
100.0
%
 
20,928,149

 
100.0
%
 
21,275,106

 
100.0
%
Total federally insured loans
$
22,487,284

 
 

 
$
24,829,984

 
 

 
$
25,542,933

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private education loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
27,188

 
 
 
$
35,146

 
 
 
$
51,042

 
 
Loans in forbearance
2,904

 
 
 
3,448

 
 
 
1,770

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
190,153

 
96.8
%
 
228,612

 
97.2
%
 
217,108

 
97.1
%
Loans delinquent 31-60 days
1,200

 
0.6

 
1,677

 
0.7

 
1,357

 
0.6

Loans delinquent 61-90 days
1,195

 
0.6

 
1,110

 
0.5

 
1,228

 
0.5

Loans delinquent 91 days or greater
3,989

 
2.0

 
3,666

 
1.6

 
3,927

 
1.8

Total loans in repayment
196,537

 
100.0
%
 
235,065

 
100.0
%
 
223,620

 
100.0
%
Total private education loans
$
226,629

 
 

 
$
273,659

 
 

 
$
276,432

 
 
Bonds and Notes payable (Tables)
Schedule of Debt 
The following tables summarize the Company’s outstanding debt obligations by type of instrument:
 
As of September 30, 2017
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
20,675,881

 
0.22% - 6.90%
 
8/25/21 - 9/25/65
Bonds and notes based on auction
781,276

 
1.97% - 2.61%
 
3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes
21,457,157

 
 
 
 
FFELP warehouse facilities
745,107

 
1.23% - 1.37%
 
11/19/19 - 4/27/20
Variable-rate bonds and notes issued in private education loan asset-backed securitization
84,881

 
2.99%
 
12/26/40
Fixed-rate bonds and notes issued in private education loan asset-backed securitization
90,896

 
3.60% / 5.35%
 
12/26/40 / 12/28/43
Unsecured line of credit
210,000

 
2.74%
 
12/12/21
Unsecured debt - Junior Subordinated Hybrid Securities
20,526

 
4.71%
 
9/15/61
Other borrowings
18,355

 
3.38%
 
3/31/23 / 12/15/45
 
22,626,922

 
 
 
 
Discount on bonds and notes payable and debt issuance costs
(386,643
)
 
 
 
 
Total
$
22,240,279

 
 
 
 
 
As of December 31, 2016
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
22,130,063

 
0.24% - 6.90%
 
6/25/21 - 9/25/65
Bonds and notes based on auction
998,415

 
1.61% - 2.28%
 
3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes
23,128,478

 
 
 
 
FFELP warehouse facilities
1,677,443

 
0.63% - 1.09%
 
9/7/18 - 12/13/19
Variable-rate bonds and notes issued in private education loan asset-backed securitization
112,582

 
2.60%
 
12/26/40
Fixed-rate bonds and notes issued in private education loan asset-backed securitization
113,378

 
3.60% / 5.35%
 
12/26/40 / 12/28/43
Unsecured line of credit
—

 
—
 
12/12/21
Unsecured debt - Junior Subordinated Hybrid Securities
50,184

 
4.37%
 
9/15/61
Other borrowings
18,355

 
3.38%
 
3/31/23 / 12/15/45
 
25,100,420

 
 
 
 
Discount on bonds and notes payable and debt issuance costs
(431,930
)
 
 
 
 
Total
$
24,668,490

 
 
 
 
Schedule of Asset-Backed Securitizations 
The following table summarizes the asset-backed securitization transactions completed during the first nine months of 2017.
 
 
NSLT 2017-1
 
NSLT 2017-2
 
Total
Date securities issued
 
5/24/17
 
7/26/17
 
 
Total original principal amount
 
$
535,000

 
399,390

 
934,390

Bond discount
 
—

 
(2,002
)
 
(2,002
)
Issue price
 
$
535,000

 
397,388

 
932,388

Cost of funds
 
1-month LIBOR plus 0.78%
 
1-month LIBOR plus 0.77%
 
 
Final maturity date
 
6/25/65
 
9/25/65
 
 
Schedule of Line of Credit Facilities 
As of September 30, 2017, the Company had three FFELP warehouse facilities as summarized below.
 
 
NFSLW-I (a)
 
NHELP-II
 
NHELP-III (b)
 
Total
Maximum financing amount
 
$
500,000

 
500,000

 
200,000

 
1,200,000

Amount outstanding
 
307,425

 
288,969

 
148,713

 
745,107

Amount available
 
$
192,575

 
211,031

 
51,287

 
454,893

Expiration of liquidity provisions
 
September 20, 2019

 
December 15, 2017

 
April 27, 2018

 
 
Final maturity date
 
November 19, 2019

 
December 13, 2019

 
April 27, 2020

 
 
Maximum advance rates
 
92.0 - 98.0%

 
85.0 - 95.0%

 
92.2 - 95.0%

 
 
Minimum advance rates
 
84.0 - 90.0%

 
85.0 - 95.0%

 
92.2 - 95.0%

 
 
Advanced as equity support
 
$
4,747

 
20,531

 
3,163

 
28,441



(a)
On May 25, 2017 and August 18, 2017, the Company decreased the maximum financing amount for this warehouse facility by $175.0 million and $200.0 million, respectively. As of September 30, 2017, the maximum financing amount for this warehouse facility was $500.0 million, as reflected in this table. On September 22, 2017, the Company amended the agreement for this warehouse facility, which changed the expiration date for the liquidity provisions to September 20, 2019 and changed the final maturity date to November 19, 2019.

(b)
On April 3, 2017, the Company entered into a letter agreement for this warehouse facility to decrease the maximum financing amount from $750.0 million to $600.0 million. On April 28, 2017, the Company amended the agreement for this warehouse facility, which changed the expiration date for the liquidity provisions to April 27, 2018 and changed the final maturity date to April 27, 2020. On May 5, 2017, May 25, 2017, and June 2, 2017, the Company decreased the maximum financing amount for this warehouse facility by $200.0 million, $100.0 million, and $100.0 million, respectively. As of September 30, 2017, the maximum financing amount for this warehouse facility was $200.0 million, as reflected in this table.

Schedule of Debt Repurchases 
The following table summarizes the Company's repurchases of its own debt. Gains recorded by the Company from the repurchase of debt are included in "gain from debt repurchases" on the Company's consolidated statements of income.
 
Par value
 
Purchase price
 
Gain
 
Par value
 
Purchase price
 
Gain
 
Three months ended
 
September 30, 2017
 
September 30, 2016
   Asset-backed securities
$
14,702

 
14,586

 
116

 
10,965

 
8,805

 
2,160

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended
 
September 30, 2017
 
September 30, 2016
Unsecured debt - Hybrid Securities (a)
$
29,658

 
25,241

 
4,417

 
—

 
—

 
—

   Asset-backed securities
18,790

 
17,670

 
1,120

 
11,362

 
9,102

 
2,260

 
$
48,448

 
42,911

 
5,537

 
11,362

 
9,102

 
2,260


(a)
During the three months ended March 31, 2017, the Company initiated a cash tender offer to purchase any and all of its outstanding Hybrid Securities, including a related consent solicitation to effect certain amendments to the indenture governing the notes to eliminate a provision requiring a minimum principal amount of the notes to remain outstanding after a partial redemption. After the completion of this tender offer, the Company has $20.5 million of Hybrid Securities that remain outstanding. In addition, the amendments described above have been made to the indenture.
Derivative Financial Instruments (Tables)
Interest Rate Swaps - 1:3 Basis swaps 
The following table summarizes the Company’s outstanding basis swaps in which the Company receives three-month LIBOR set discretely in advance and pays one-month LIBOR plus or minus a spread as defined in the agreements (the "1:3 Basis Swaps").
 
 
 
As of September 30,
 
As of December 31,
 
 
2017
 
2016
Maturity
 
Notional amount
 
Notional amount
2018
 
$
4,000,000

 
$
—

2019
 
3,000,000

 
—

2024
 
250,000

 
—

2026
 
1,150,000

 
1,150,000

2027
 
375,000

 
—

2028
 
325,000

 
325,000

2029
 
100,000

 
—

2031
 
300,000

 
300,000

 
 
$
9,500,000

 
$
1,775,000

Interest Rate Swaps - Floor Income Hedges 
The following table summarizes the outstanding derivative instruments used by the Company to economically hedge loans earning fixed rate floor income.
 
 
As of September 30, 2017
 
As of December 31, 2016
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
 
 
 
2017
 
$
—

 
—
%
 
$
750,000

 
0.99
%
2018
 
1,350,000

 
1.07

 
1,350,000

 
1.07

2019
 
3,250,000

 
0.97

 
3,250,000

 
0.97

2020
 
1,500,000

 
1.01

 
1,500,000

 
1.01

2025
 
100,000

 
2.32

 
100,000

 
2.32

 
 
$
6,200,000

 
1.02
%
 
$
6,950,000

 
1.02
%

(a)
For all interest rate derivatives, the Company receives discrete three-month LIBOR.
Interest Rate Swaps - Unsecured Debt Hedges 
The Company had the following derivatives outstanding as of September 30, 2017 and December 31, 2016 that are used to effectively convert the variable interest rate on a designated notional amount with respect to the Hybrid Securities to a fixed rate of 7.66%.
 
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
2036
 
$
25,000

 
4.28
%

(a)
For all interest rate derivatives, the Company receives discrete three-month LIBOR.
Impact of Remeasurement of Euro Bonds and Foreign Exchange Contracts on the Statement of Income 
The following table shows the unrealized income statement impact as a result of the re-measurement of the Euro Notes and the change in the fair value of the related derivative instrument.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Re-measurement of Euro Notes
$
(13,683
)
 
(4,831
)
 
(45,635
)
 
(13,543
)
Change in fair value of cross-currency interest rate swap
16,257

 
5,501

 
44,831

 
26,194

Total impact to consolidated statements of income - income (expense) (a)
$
2,574

 
670

 
(804
)
 
12,651

(a)
The financial statement impact of the above items is included in "Derivative market value and foreign currency transaction adjustments and derivative settlements, net" in the Company's consolidated statements of income.
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value 
The following table summarizes the fair value of the Company’s derivatives as reflected in the consolidated balance sheets:
 
Fair value of asset derivatives
 
Fair value of liability derivatives
 
As of
 
As of
 
As of
 
As of
 
September 30,
2017
 
December 31,
2016
 
September 30,
2017
 
December 31,
2016
1:3 basis swaps
$
—

 
—

 
—

 
2,624

Interest rate swaps - floor income hedges
—

 
81,159

 
—

 
256

Interest rate swap option - floor income hedge
765

 
2,977

 
—

 
—

Interest rate caps
231

 
1,152

 
—

 
—

Interest rate swaps - hybrid debt hedges
—

 
—

 
7,332

 
7,341

Cross-currency interest rate swap
—


—

 
22,773

 
67,605

Other
—

 
2,243

 
—

 
—

Total
$
996

 
87,531

 
30,105

 
77,826

Offsetting Assets and Liabilities 
The following tables include the gross amounts related to the Company's derivative portfolio recognized in the consolidated balance sheets, reconciled to the net amount when excluding derivatives subject to enforceable master netting arrangements and cash collateral received/pledged.
 
 
 
 
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 pledged
 
Net asset
Balance as of
September 30, 2017
 
$
996

 
—

 
—

 
996

Balance as of
December 31, 2016
 
87,531

 
(2,880
)
 
475

 
85,126


 
 
 
 
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
 
Net liability
Balance as of
September 30, 2017
 
$
(30,105
)
 
—

 
8,470

 
(21,635
)
Balance as of
December 31, 2016
 
(77,826
)
 
2,880

 
7,292

 
(67,654
)


Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance 
The following table summarizes the components of "derivative market value and foreign currency transaction adjustments and derivative settlements, net" included in the consolidated statements of income.
 
Three months ended September 30,
 
Nine months ended September 30,
 
2017
 
2016
 
2017
 
2016
Settlements:
 

 
 

 
 
 
 
1:3 basis swaps
$
(2,172
)
 
523

 
(1,836
)
 
938

Interest rate swaps - floor income hedges
3,883

 
(5,157
)
 
5,877

 
(15,241
)
Interest rate swaps - hybrid debt hedges
(191
)
 
(233
)
 
(593
)
 
(696
)
Cross-currency interest rate swap
(2,093
)
 
(1,394
)
 
(5,762
)
 
(3,293
)
Total settlements - (expense) income
(573
)
 
(6,261
)
 
(2,314
)
 
(18,292
)
Change in fair value:
 

 
 

 
 
 
 
1:3 basis swaps
5,916

 
140

 
(5,499
)
 
323

Interest rate swaps - floor income hedges
(185
)
 
42,073

 
(13,670
)
 
(17,913
)
Interest rate swap option - floor income hedge
(500
)
 
(269
)
 
(2,212
)
 
(2,541
)
Interest rate caps
(103
)
 
(68
)
 
(936
)
 
(1,283
)
Interest rate swaps - hybrid debt hedges
44

 
13

 
10

 
(4,000
)
Cross-currency interest rate swap
16,257

 
5,501

 
44,831

 
26,194

Other
—

 
(297
)
 
(143
)
 
(2,336
)
Total change in fair value - income (expense)
21,429

 
47,093

 
22,381

 
(1,556
)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - (expense) income
(13,683
)
 
(4,831
)
 
(45,635
)
 
(13,543
)
Derivative market value and foreign currency transaction adjustments and derivative settlements, net - income (expense)
$
7,173

 
36,001

 
(25,568
)
 
(33,391
)
Investments and Other Receivables (Tables)
Summary Investment Holdings
A summary of the Company's investments and other receivables follows:
 
As of September 30, 2017
 
As of December 31, 2016
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses (a)
 
Fair value
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
 
 
 
 
 
 
 
 
Investments (at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities (b)
$
68,010

 
4,768

 
(240
)
 
72,538

 
98,260

 
6,280

 
(641
)
 
103,899

Equity securities
756

 
2,140

 
(21
)
 
2,875

 
720

 
1,930

 
(61
)
 
2,589

Total available-for-sale investments
$
68,766

 
6,908

 
(261
)
 
75,413

 
98,980

 
8,210

 
(702
)
 
106,488

Trading investments - equity securities
 
 
 
 
 
 
—

 
 
 
 
 
 
 
105

Total available-for-sale and trading investments
 
 
 
 
 
 
75,413

 
 
 
 
 
 
 
106,593

Other Investments and Other Receivables (not measured at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
Venture capital and funds
 
 
 
 
 
 
84,903

 
 
 
 
 
 
 
69,789

Notes and loans receivable
 
 
 
 
 
 
56,732

 
 
 
 
 
 
 
17,031

Real estate
 
 
 
 
 
 
49,567

 
 
 
 
 
 
 
48,379

Tax liens and affordable housing
 
 
 
 
 
 
9,921

 
 
 
 
 
 
 
12,352

Total investments and other receivables
 
 
 
 
 
 
$
276,536

 
 
 
 
 
 
 
254,144


    
(a)
As of September 30, 2017, the aggregate fair value of available-for-sale investments with unrealized losses was $2.7 million, of which $0.4 million had been in a continuous unrealized loss position for greater than 12 months. Because the Company currently has the intent and ability to retain these investments for an anticipated recovery in fair value, as of September 30, 2017, 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, 2017, the stated maturities of substantially all of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years.

Intangible Assets, net (Tables)
Schedule of Intangible Assets 
Intangible assets consist of the following:
 
 
Weighted average remaining useful life as of September 30, 2017 (months)
 
As of September 30, 2017
 
As of December 31, 2016
 
 
Amortizable intangible assets, net:
 
 
 
 
Customer relationships (net of accumulated amortization of $11,704 and $8,548, respectively)
162
 
$
25,179

 
28,335

 
Trade names (net of accumulated amortization of $2,287 and $1,653, respectively)
180
 
9,285

 
9,919

 
Computer software (net of accumulated amortization of $8,929 and $5,675, respectively)
17
 
6,042

 
9,296

 
Covenants not to compete (net of accumulated amortization of $118 and $91, respectively)
80
 
236

 
263

 
Total - amortizable intangible assets, net
144
 
$
40,742

 
47,813

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense 
As of September 30, 2017, the Company estimates it will record amortization expense as follows:

2017 (October 1 - December 31)
$
2,315

2018
8,605

2019
5,147

2020
4,231

2021
3,480

2022 and thereafter
16,964

 
$
40,742

Goodwil (Tables)
Schedule of Goodwill
The carrying amount of goodwill as of December 31, 2016 and September 30, 2017 by reportable operating segment was as follows:
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset Generation and Management
 
Corporate and Other Activities
 
Total
Goodwill balance
$
8,596

 
67,168

 
21,112

 
41,883

 
8,553

 
147,312

Property and Equipment (Tables)
Property and Equipment
Property and equipment consisted of the following:
 
 
 
As of
September 30, 2017
 
As of
December 31, 2016
 
Useful life
 
 
Non-communications:
 
 
 
 
 
Computer equipment and software
1-5 years
 
$
108,430

 
97,317

Building and building improvements
5-39 years
 
25,283

 
13,363

Office furniture and equipment
3-7 years
 
14,357

 
12,344

Leasehold improvements
5-20 years
 
6,496

 
3,579

Transportation equipment
4-10 years
 
3,813

 
3,809

Land
—
 
2,605

 
1,682

Construction in progress
—
 
14,025

 
16,346

 
 
 
175,009

 
148,440

Accumulated depreciation - non-communications
 
 
104,430

 
91,285

Non-communications, net property and equipment
 
 
70,579

 
57,155

 
 
 
 
 
 
Communications:
 
 
 
 
 
Network plant and fiber
5-15 years
 
83,870

 
40,844

Customer located property
5-10 years
 
10,987

 
5,138

Central office
5-15 years
 
8,476

 
6,448

Transportation equipment
4-10 years
 
5,011

 
2,966

Computer equipment and software
1-5 years
 
3,318

 
2,026

Other
1-39 years
 
2,285

 
1,268

Land
—
 
70

 
70

Construction in progress
—
 
35,709

 
12,537

 
 
 
149,726

 
71,297

Accumulated depreciation - communications
 
 
11,864

 
4,666

Communications, net property and equipment
 
 
137,862

 
66,631

Total property and equipment, net
 
 
$
208,441

 
123,786

Earnings per Common Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted
Unvested share-based awards that contain nonforfeitable rights to dividends are considered securities which participate in undistributed earnings with common stock.
 
Three months ended September 30,
 
2017
 
2016
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
45,850

 
453

 
46,303

 
83,419

 
875

 
84,294

 
 
 
 
 


 
 
 
 
 
 
Denominator:


 


 


 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
41,146,424

 
406,892

 
41,553,316

 
42,199,580

 
442,633

 
42,642,213

Earnings per share - basic and diluted
$
1.11

 
1.11

 
1.11

 
1.98

 
1.98

 
1.98



 
Nine months ended September 30,
 
2017
 
2016
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
123,816

 
1,249

 
125,065

 
156,749

 
1,656

 
158,405

 
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
41,634,578

 
419,954

 
42,054,532

 
42,340,867

 
447,266

 
42,788,133

Earnings per share - basic and diluted
$
2.97

 
2.97

 
2.97

 
3.70

 
3.70

 
3.70

Segment Reporting (Tables)
Schedule of Segment Reporting Information, by Segment

See note 14 of the notes to consolidated financial statements included in the 2016 Annual Report for a description of the Company's operating segments. The following tables include the results of each of the Company's operating segments reconciled to the consolidated financial statements.
 
Three months ended September 30, 2017
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
147

 
5

 
1

 
194,968

 
3,903

 
(2,139
)
 
196,884

Interest expense
—

 
—

 
1,551

 
121,074

 
1,165

 
(2,139
)
 
121,650

Net interest income
147

 
5

 
(1,550
)
 
73,894

 
2,738

 
—

 
75,234

Less provision for loan losses
—

 
—

 
—

 
6,000

 
—

 
—

 
6,000

Net interest income (loss) after provision for loan losses
147


5

 
(1,550
)
 
67,894

 
2,738

 
—

 
69,234

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
55,950

 
—

 
—

 
—

 
—

 
—

 
55,950

Intersegment servicing revenue
10,563

 
—

 
—

 
—

 
—

 
(10,563
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
35,450

 
—

 
—

 
—

 
—

 
35,450

Communications revenue
—

 
—

 
6,751

 
—

 
—

 
—

 
6,751

Other income
—

 
—

 
—

 
2,753

 
17,003

 
—

 
19,756

Gain from debt repurchases
—

 
—

 
—

 
116

 
—

 
—

 
116

Derivative settlements, net
—

 
—

 
—

 
(382
)
 
(191
)
 
—

 
(573
)
Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
7,702

 
44

 
—

 
7,746

Total other income
66,513

 
35,450

 
6,751

 
10,189

 
16,856

 
(10,563
)
 
125,196

Operating expenses:
 

 
 

 
 
 
 
 
 

 
 
 
 

Salaries and benefits
38,435

 
17,432

 
4,099

 
392

 
13,834

 
—

 
74,193

Depreciation and amortization
549

 
2,316

 
3,145

 
—

 
4,040

 
—

 
10,051

Loan servicing fees
—

 
—

 
—

 
7,939

 
—

 
—

 
7,939

Cost to provide communications services
—

 
—

 
2,632

 
—

 
—

 
—

 
2,632

Other expenses
10,317

 
4,224

 
2,278

 
1,451

 
12,248

 
—

 
30,518

Intersegment expenses, net
7,774

 
2,219

 
470

 
10,659

 
(10,559
)
 
(10,563
)
 
—

Total operating expenses
57,075

 
26,191

 
12,624

 
20,441

 
19,563

 
(10,563
)
 
125,333

Income (loss) before income taxes
9,585

 
9,264

 
(7,423
)
 
57,642

 
31

 
—

 
69,097

Income tax (expense) benefit
(4,937
)
 
(3,520
)
 
2,821

 
(21,904
)
 
1,978

 
—

 
(25,562
)
Net income (loss)
4,648

 
5,744

 
(4,602
)
 
35,738

 
2,009

 
—

 
43,535

  Net loss (income) attributable to noncontrolling interests
3,408

 
—

 
—

 
—

 
(640
)
 
—

 
2,768

Net income (loss) attributable to Nelnet, Inc.
$
8,056

 
5,744

 
(4,602
)
 
35,738

 
1,369

 
—

 
46,303

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of September 30, 2017
$
98,555

 
208,290

 
179,206

 
23,724,413

 
863,700

 
(305,454
)
 
24,768,710

 
Three months ended September 30, 2016
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other
Activities
 
Eliminations
 
Total
Total interest income
$
37

 
2

 
—

 
194,701

 
2,370

 
(930
)
 
196,181

Interest expense
—

 
—

 
318

 
95,383

 
1,615

 
(930
)
 
96,386

Net interest income
37

 
2

 
(318
)
 
99,318

 
755

 
—

 
99,795

Less provision for loan losses
—

 
—

 
—

 
6,000

 
—

 
—

 
6,000

Net interest income (loss) after provision for loan losses
37

 
2

 
(318
)
 
93,318

 
755

 
—

 
93,795

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
54,350

 
—

 
—

 
—

 
—

 
—

 
54,350

Intersegment servicing revenue
11,021

 
—

 
—

 
—

 
—

 
(11,021
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
33,071

 
—

 
—

 
—

 
—

 
33,071

Communications revenue
—

 
—

 
4,343

 
—

 
—

 
—

 
4,343

Enrollment services revenue
—

 
—

 
—

 
—

 
—

 
—

 
—

Other income
—

 
—

 
—

 
4,265

 
10,886

 
—

 
15,150

Gain from debt repurchases
—

 
—

 
—

 
2,160

 
—

 
—

 
2,160

Derivative settlements, net
—

 
—

 
—

 
(6,028
)
 
(233
)
 
—

 
(6,261
)
Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
42,546

 
(284
)
 
—

 
42,262

Total other income
65,371

 
33,071

 
4,343

 
42,943

 
10,369

 
(11,021
)
 
145,075

Operating expenses:
 

 
 

 
 
 
 

 
 

 
.

 
 

Salaries and benefits
32,505

 
15,979

 
2,325

 
486

 
12,448

 
—

 
63,743

Depreciation and amortization
557

 
2,929

 
1,630

 
—

 
3,878

 
—

 
8,994

Loan servicing fees
—

 
—

 
—

 
5,880

 
—

 
—

 
5,880

Cost to provide communications services
—

 
—

 
1,784

 
—

 
—

 
—

 
1,784

Cost to provide enrollment services
—

 
—

 
—

 
—

 
—

 
—

 
—

Other expenses
8,784

 
4,149

 
1,545

 
1,769

 
10,143

 
—

 
26,391

Intersegment expenses, net
5,825

 
1,616

 
279

 
11,146

 
(7,845
)
 
(11,021
)
 
—

Total operating expenses
47,671

 
24,673

 
7,563

 
19,281

 
18,624

 
(11,021
)
 
106,792

Income (loss) before income taxes
17,737

 
8,400

 
(3,538
)
 
116,980

 
(7,500
)
 
—

 
132,078

Income tax (expense) benefit
(6,740
)
 
(3,192
)
 
1,344

 
(44,571
)
 
5,443

 
—

 
(47,715
)
Net income (loss)
10,997

 
5,208

 
(2,194
)
 
72,409

 
(2,057
)
 
—

 
84,363

  Net loss (income) attributable to noncontrolling interests
—

 
—

 
—

 
—

 
(69
)
 
—

 
(69
)
Net income (loss) attributable to Nelnet, Inc.
$
10,997

 
5,208

 
(2,194
)
 
72,409

 
(2,126
)
 
—

 
84,294

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of September 30, 2016
$
79,418

 
190,682

 
90,361

 
26,888,950

 
687,347

 
(267,147
)
 
27,669,611




 
Nine months ended September 30, 2017
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
361

 
10

 
2

 
568,661

 
10,026

 
(5,274
)
 
573,786

Interest expense
—

 
—

 
3,367

 
340,898

 
2,794

 
(5,274
)
 
341,787

Net interest income
361

 
10

 
(3,365
)
 
227,763

 
7,232

 
—

 
231,999

Less provision for loan losses
—

 
—

 
—

 
9,000

 
—

 
—

 
9,000

Net interest income (loss) after provision for loan losses
361


10

 
(3,365
)
 
218,763

 
7,232

 
—

 
222,999

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
167,079

 
—

 
—

 
—

 
—

 
—

 
167,079

Intersegment servicing revenue
30,839

 
—

 
—

 
—

 
—

 
(30,839
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
113,293

 
—

 
—

 
—

 
—

 
113,293

Communications revenue
—

 
—

 
17,577

 
—

 
—

 
—

 
17,577

Other income
—

 
—

 
—

 
9,152

 
35,722

 
—

 
44,874

Gain from debt repurchases
—

 
—

 
—

 
1,097

 
4,440

 
—

 
5,537

Derivative settlements, net
—

 
—

 
—

 
(1,721
)
 
(593
)
 
—

 
(2,314
)
Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
(23,121
)
 
(133
)
 
—

 
(23,254
)
Total other income
197,918

 
113,293

 
17,577

 
(14,593
)
 
39,436

 
(30,839
)
 
322,792

Operating expenses:
 

 
 

 
 
 
 
 
 

 
 
 
 

Salaries and benefits
116,932

 
50,986

 
10,489

 
1,156

 
41,121

 
—

 
220,684

Depreciation and amortization
1,644

 
7,053

 
7,880

 
—

 
11,109

 
—

 
27,687

Loan servicing fees
—

 
—

 
—

 
19,584

 
—

 
—

 
19,584

Cost to provide communications services
—

 
—

 
6,789

 
—

 
—

 
—

 
6,789

Other expenses
28,333

 
14,072

 
5,422

 
4,269

 
32,497

 
—

 
84,593

Intersegment expenses, net
23,496

 
6,430

 
1,472

 
31,114

 
(31,673
)
 
(30,839
)
 
—

Total operating expenses
170,405

 
78,541

 
32,052

 
56,123

 
53,054

 
(30,839
)
 
359,337

Income (loss) before income taxes
27,874

 
34,762

 
(17,840
)
 
148,047

 
(6,386
)
 
—

 
186,454

Income tax (expense) benefit
(14,410
)
 
(13,210
)
 
6,779

 
(56,258
)
 
6,749

 
—

 
(70,349
)
Net income (loss)
13,464

 
21,552

 
(11,061
)
 
91,789

 
363

 
—

 
116,105

  Net loss (income) attributable to noncontrolling interests
10,050

 
—

 
—

 
—

 
(1,090
)
 
—

 
8,960

Net income (loss) attributable to Nelnet, Inc.
$
23,514

 
21,552

 
(11,061
)
 
91,789

 
(727
)
 
—

 
125,065

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of September 30, 2017
$
98,555

 
208,290

 
179,206

 
23,724,413

 
863,700

 
(305,454
)
 
24,768,710



 
Nine months ended September 30, 2016
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
80

 
7

 
1

 
570,390

 
6,527

 
(2,556
)
 
574,449

Interest expense
—

 
—

 
671

 
278,029

 
4,702

 
(2,556
)
 
280,847

Net interest income
80

 
7

 
(670
)
 
292,361

 
1,825

 
—

 
293,602

Less provision for loan losses
—

 
—

 
—

 
10,500

 
—

 
—

 
10,500

Net interest income (loss) after provision for loan losses
80


7

 
(670
)
 
281,861

 
1,825

 
—

 
283,102

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
161,082

 
—

 
—

 
—

 
—

 
—

 
161,082

Intersegment servicing revenue
34,436

 
—

 
—

 
—

 
—

 
(34,436
)
 
—

Tuition payment processing, school information, and campus commerce revenue
—

 
102,211

 
—

 
—

 
—

 
—

 
102,211

Communications revenue
—

 
—

 
13,167

 
—

 
—

 
—

 
13,167

Enrollment services revenue
—

 
—

 
—

 
—

 
4,326

 
—

 
4,326

Other income
—

 
—

 
—

 
12,362

 
26,349

 
—

 
38,711

Gain from debt repurchases
—

 
—

 
—

 
2,260

 
—

 
—

 
2,260

Derivative settlements, net
—

 
—

 
—

 
(17,596
)
 
(696
)
 
—

 
(18,292
)
Derivative market value and foreign currency transaction adjustments, net
—

 
—

 
—

 
(8,763
)
 
(6,336
)
 
—

 
(15,099
)
Total other income
195,518

 
102,211

 
13,167

 
(11,737
)
 
23,643

 
(34,436
)
 
288,366

Operating expenses:
 

 
 

 
 
 
 
 
 

 
 
 
 

Salaries and benefits
96,851

 
45,859

 
4,792

 
1,504

 
38,902

 
—

 
187,907

Depreciation and amortization
1,440

 
7,711

 
4,137

 
—

 
11,528

 
—

 
24,817

Loan servicing fees
—

 
—

 
—

 
20,024

 
—

 
—

 
20,024

Cost to provide communications services
—

 
—

 
5,169

 
—

 
—

 
—

 
5,169

Cost to provide enrollment services
—

 
—

 
—

 
—

 
3,623

 
—

 
3,623

Other expenses
31,635

 
13,122

 
3,110

 
4,766

 
31,540

 
—

 
84,174

Intersegment expenses, net
18,168

 
4,690

 
610

 
34,791

 
(23,823
)
 
(34,436
)
 
—

Total operating expenses
148,094

 
71,382

 
17,818

 
61,085

 
61,770

 
(34,436
)
 
325,714

Income (loss) before income taxes
47,504

 
30,836

 
(5,321
)
 
209,039

 
(36,302
)
 
—

 
245,754

Income tax (expense) benefit
(18,052
)
 
(11,718
)
 
2,022

 
(79,434
)
 
19,998

 
—

 
(87,184
)
Net income (loss)
29,452

 
19,118

 
(3,299
)
 
129,605

 
(16,304
)
 
—

 
158,570

  Net loss (income) attributable to noncontrolling interests
—

 
—

 
—

 
—

 
(165
)
 
—

 
(165
)
Net income (loss) attributable to Nelnet, Inc.
$
29,452

 
19,118

 
(3,299
)
 
129,605

 
(16,469
)
 
—

 
158,405

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of September 30, 2016
$
79,418

 
190,682

 
90,361

 
26,888,950

 
687,347

 
(267,147
)
 
27,669,611

Fair Value (Tables)
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis 
The following tables present the Company’s financial assets and liabilities that are measured at fair value on a recurring basis. There were no transfers into or out of level 1, level 2, or level 3 for the nine months ended September 30, 2017.
 
As of September 30, 2017
 
As of December 31, 2016
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
 
Total
Assets:
 
 
 
 
 
 
 
 
 
 
 
Investments (available-for-sale and trading):
 
 
 
 


 
 
 
 
 
 
Student loan and other asset-backed securities
$
—

 
72,427

 
72,427

 
—

 
103,780

 
103,780

Equity securities
2,875

 
—

 
2,875

 
2,694

 
—

 
2,694

Debt securities
111

 
—

 
111

 
119

 
—

 
119

Total investments (available-for-sale and trading)
2,986

 
72,427

 
75,413

 
2,813

 
103,780

 
106,593

Derivative instruments
—

 
996

 
996

 
—

 
87,531

 
87,531

Total assets
$
2,986

 
73,423

 
76,409

 
2,813

 
191,311

 
194,124

Liabilities:
 

 
 

 
 

 
 
 
 
 
 
Derivative instruments
$
—

 
30,105

 
30,105

 
—

 
77,826

 
77,826

Total liabilities
$
—

 
30,105

 
30,105

 
—

 
77,826

 
77,826



Fair Value, by Balance Sheet Grouping 
The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:
 
As of September 30, 2017
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
23,635,887

 
22,528,845

 
—

 
—

 
23,635,887

Cash and cash equivalents
254,391

 
254,391

 
254,391

 
—

 
—

Investments (available-for-sale)
75,413

 
75,413

 
2,986

 
72,427

 
—

Notes receivable
16,393

 
16,393

 
—

 
16,393

 
—

Loans receivable
42,006

 
40,339

 
—

 
—

 
42,006

Restricted cash
725,463

 
725,463

 
725,463

 
—

 
—

Restricted cash – due to customers
105,299

 
105,299

 
105,299

 
—

 
—

Accrued interest receivable
396,827

 
396,827

 
—

 
396,827

 
—

Derivative instruments
996

 
996

 
—

 
996

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
22,319,439

 
22,240,279

 
—

 
22,319,439

 
—

Accrued interest payable
47,824

 
47,824

 
—

 
47,824

 
—

Due to customers
105,299

 
105,299

 
105,299

 
—

 
—

Derivative instruments
30,105

 
30,105

 
—

 
30,105

 
—

 
As of December 31, 2016
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
25,653,581

 
24,903,724

 
—

 
—

 
25,653,581

Cash and cash equivalents
69,654

 
69,654

 
69,654

 
—

 
—

Investments (available-for-sale and trading)
106,593

 
106,593

 
2,813

 
103,780

 
—

Notes receivable
17,031

 
17,031

 
—

 
17,031

 
—

Restricted cash
980,961

 
980,961

 
980,961

 
—

 
—

Restricted cash – due to customers
119,702

 
119,702

 
119,702

 
—

 
—

Accrued interest receivable
391,264

 
391,264

 
—

 
391,264

 
—

Derivative instruments
87,531

 
87,531

 
—

 
87,531

 
—

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
24,220,996

 
24,668,490

 
—

 
24,220,996

 
—

Accrued interest payable
45,677

 
45,677

 
—

 
45,677

 
—

Due to customers
119,702

 
119,702

 
119,702

 
—

 
—

Derivative instruments
77,826

 
77,826

 
—

 
77,826

 
—

Basis of Financial Reporting - Noncontrolling Interest (Details) (USD $)
9 Months Ended 3 Months Ended 0 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2017
Allo Communications [Member]
Sep. 30, 2017
GreatNet, LLC [Member]
Mar. 31, 2017
GreatNet, LLC [Member]
Sep. 30, 2017
Line of Credit [Member]
Allo Communications [Member]
Sep. 30, 2017
Line of Credit [Member]
Allo Communications [Member]
Dec. 30, 2015
Line of Credit [Member]
Allo Communications [Member]
Oct. 18, 2017
Subsequent Event [Member]
Great Lakes Higher Education Corporation [Member]
Noncontrolling Interest [Line Items]
 
 
 
 
 
 
 
 
 
Percent ownership in VIE
 
 
91.50% 
 
 
 
 
 
 
Percent of operating decision voting power
 
 
80.00% 
 
 
 
 
 
 
Potential additional percent earned by VIE management
 
 
11.50% 
 
 
 
 
 
 
Line of credit issued to VIE
 
 
 
 
 
 
$ 270,000,000.0 
$ 200,000,000.0 
 
Increase to line of credit maximum borrowing capacity
 
 
 
 
 
70,000,000 
 
 
 
VIE line of credit amount outstanding
 
 
 
 
 
 
144,500,000 
 
 
Accrued interest payable
47,824,000 
45,677,000 
 
 
 
 
4,600,000 
 
 
Noncontolling interest, parent ownership percentage
 
 
 
50.00% 
 
 
 
 
 
Contribution to non-controlling interest
 
 
 
$ 6,500,000 
$ 12,600,000 
 
 
 
 
Percent of outstanding stock acquired
 
 
 
 
 
 
 
 
100.00% 
Student Loans Receivable and Allowance for Loan Losses - Student Loans Receivable (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Jun. 30, 2017
Dec. 31, 2016
Sep. 30, 2016
Jun. 30, 2016
Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
$ 22,713,913 
 
$ 25,103,643 
 
 
 
Loan discount, net of unamortized loan premiums and deferred origination costs
(119,572)
 
(129,507)
 
 
 
Allowance for loan losses
(51,964)
(49,708)
(51,842)
(51,570)
(48,753)
(50,498)
Student loans receivable
22,528,845 
 
24,903,724 
 
 
 
Non-accretable discount [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Loan discount, net of unamortized loan premiums and deferred origination costs
(13,532)
 
(18,570)
 
 
 
Consumer Portfolio Segment, Federally Insured [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
22,487,284 
 
24,829,984 
 
 
 
Allowance for loan losses
(39,398)
 
(37,268)
(37,028)
 
 
Consumer Portfolio Segment, Federally Insured [Member] |
Student Loan, Stafford And Other [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
4,534,588 
 
5,186,047 
 
 
 
Consumer Portfolio Segment, Federally Insured [Member] |
Student Loan, Consolidation Loan [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
17,952,696 
 
19,643,937 
 
 
 
Consumer Portfolio Segment, Private Education Loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
226,629 
 
273,659 
 
 
 
Allowance for loan losses
$ (12,566)
 
$ (14,574)
$ (14,542)
 
 
Student Loans Receivable and Allowance for Loan Losses - Narrative (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Sep. 30, 2016
Restatement Adjustment [Member]
Sep. 30, 2017
Consumer Portfolio Segment, Federally Insured [Member]
Student Loan, Stafford And Other [Member]
Sep. 29, 2016
Consumer Portfolio Segment, Federally Insured [Member]
Student Loan, Stafford And Other [Member]
Sep. 30, 2017
Consumer Portfolio Segment, Federally Insured [Member]
Student Loan, Consolidation Loan [Member]
Sep. 29, 2016
Consumer Portfolio Segment, Federally Insured [Member]
Student Loan, Consolidation Loan [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
 
 
 
 
Constant prepayment rate
 
 
 
 
 
 
5.00% 
6.00% 
3.00% 
4.00% 
Loan discount, net of unamortized loan premiums and deferred origination costs
$ (119,572)
 
$ (119,572)
 
$ (129,507)
$ 8,200 
 
 
 
 
Loan interest
$ 191,755 
$ 193,721 
$ 562,451 
$ 567,775 
 
$ 8,200 
 
 
 
 
Student Loans Receivable and Allowance for Loan Losses - Allowance for Loan Losses (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
Allowance for loan losses - balance
$ 49,708 
$ 48,753 
$ 51,842 
$ 50,498 
Less provision for loan losses
(6,000)
(6,000)
(9,000)
(10,500)
Charge-offs
(3,955)
(3,516)
(9,731)
(10,697)
Allowance for loan losses - balance
51,964 
51,570 
51,964 
51,570 
Consumer Portfolio Segment, Federally Insured [Member]
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
Allowance for loan losses - balance
 
 
37,268 
 
Less provision for loan losses
(7,000)
(7,000)
(11,000)
(11,000)
Charge-offs
(3,464)
(3,196)
(8,870)
(9,462)
Allowance for loan losses - balance
39,398 
37,028 
39,398 
37,028 
Consumer Portfolio Segment, Private Education Loans [Member]
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
Allowance for loan losses - balance
 
 
14,574 
 
Less provision for loan losses
(1,000)
(1,000)
(2,000)
(500)
Charge-offs
(491)
(320)
(861)
(1,235)
Recoveries - private education loans
161 
243 
603 
769 
Purchase of private education loans
0 
30 
0 
290 
Transfer from repurchase obligation related to private education loans repurchased
50 
60 
250 
210 
Allowance for loan losses - balance
$ 12,566 
$ 14,542 
$ 12,566 
$ 14,542 
Student Loans Receivable and Allowance for Loan Losses - Student Loan Status and Delinquency (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2016
Financing Receivable, Recorded Investment [Line Items]
 
 
 
Student loans receivable, gross
$ 22,713,913 
$ 25,103,643 
 
Consumer Portfolio Segment, Federally Insured [Member]
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
Student loans receivable, gross
22,487,284 
24,829,984 
 
Consumer Portfolio Segment, Federally Insured [Member] |
Federally insured loans [Member]
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
Loans in-school/grace/deferment
1,448,172 
1,606,468 
1,864,323 
Loans in forbearance
2,406,346 
2,295,367 
2,403,504 
Student loans receivable, gross
22,487,284 
24,829,984 
25,542,933 
Loans in repayment status:
 
 
 
Loans current
16,534,795 
18,125,768 
18,445,728 
Loans current, percentage
88.70% 
86.60% 
86.80% 
Total loans in repayment
18,632,766 
20,928,149 
21,275,106 
Total loans in repayment, percentage
100.00% 
100.00% 
100.00% 
Consumer Portfolio Segment, Federally Insured [Member] |
Financing Receivables, 31 to 60 Days Past Due [Member] [Member] |
Federally insured loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
579,665 
818,976 
825,905 
Loans past due, percentage
3.10% 
3.90% 
3.90% 
Consumer Portfolio Segment, Federally Insured [Member] |
Financing Receivables, 61 to 90 Days Past Due [Member] |
Federally insured loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
334,085 
487,647 
491,395 
Loans past due, percentage
1.80% 
2.30% 
2.30% 
Consumer Portfolio Segment, Federally Insured [Member] |
Financing receivables, 91-120 days past due [Member] |
Federally insured loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
255,567 
335,291 
326,020 
Loans past due, percentage
1.40% 
1.60% 
1.50% 
Consumer Portfolio Segment, Federally Insured [Member] |
Financing receivables, 121-270 days past due [Member] |
Federally insured loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
700,319 
854,432 
835,250 
Loans past due, percentage
3.80% 
4.10% 
3.90% 
Consumer Portfolio Segment, Federally Insured [Member] |
Financing receivables, 271 days or greater past due [Member] |
Federally insured loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
228,335 
306,035 
350,808 
Loans past due, percentage
1.20% 
1.50% 
1.60% 
Consumer Portfolio Segment, Private Education Loans [Member]
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
Student loans receivable, gross
226,629 
273,659 
 
Consumer Portfolio Segment, Private Education Loans [Member] |
Private education loans [Member]
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
Loans in-school/grace/deferment
27,188 
35,146 
51,042 
Loans in forbearance
2,904 
3,448 
1,770 
Student loans receivable, gross
226,629 
273,659 
276,432 
Loans in repayment status:
 
 
 
Loans current
190,153 
228,612 
217,108 
Loans current, percentage
96.80% 
97.20% 
97.10% 
Total loans in repayment
196,537 
235,065 
223,620 
Total loans in repayment, percentage
100.00% 
100.00% 
100.00% 
Consumer Portfolio Segment, Private Education Loans [Member] |
Financing Receivables, 31 to 60 Days Past Due [Member] [Member] |
Private education loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
1,200 
1,677 
1,357 
Loans past due, percentage
0.60% 
0.70% 
0.60% 
Consumer Portfolio Segment, Private Education Loans [Member] |
Financing Receivables, 61 to 90 Days Past Due [Member] |
Private education loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
1,195 
1,110 
1,228 
Loans past due, percentage
0.60% 
0.50% 
0.50% 
Consumer Portfolio Segment, Private Education Loans [Member] |
Financing Receivables, Equal to Greater than 91 Days Past Due [Member] |
Private education loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Loans past due
$ 3,989 
$ 3,666 
$ 3,927 
Loans past due, percentage
2.00% 
1.60% 
1.80% 
- Outstanding Debt Obligations (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Bonds and notes payable
$ 22,240,279 
$ 24,668,490 
Discount on bonds and notes payable and debt issuance costs
(386,643)
(431,930)
Variable-rate bonds and notes [Member] |
Private education [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
 
112,582 
Warehouse facilities [Member] |
FFELP Warehouse Total [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
745,107 
1,677,443 
Unsecured line of credit
745,107 
 
Warehouse facilities [Member] |
FFELP Warehouse Total [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
1.23% 
0.63% 
Warehouse facilities [Member] |
FFELP Warehouse Total [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
1.37% 
1.09% 
Line of Credit [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
 
0 
Line of Credit [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
2.74% 
0.00% 
Line of Credit [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
2.74% 
0.00% 
Junior Subordinated Debt [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
20,526 
50,184 
Junior Subordinated Debt [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
4.709% 
4.373% 
Junior Subordinated Debt [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
4.709% 
4.373% 
Other borrowings [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
18,355 
18,355 
Other borrowings [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
3.38% 
3.38% 
Other borrowings [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
3.38% 
3.38% 
Bonds and notes payable, gross [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
22,626,922 
25,100,420 
Federally insured [Member] |
Bonds and notes based on indices [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
20,675,881 
22,130,063 
Federally insured [Member] |
Bonds and notes based on indices [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
0.22% 
0.24% 
Federally insured [Member] |
Bonds and notes based on indices [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
6.90% 
6.90% 
Federally insured [Member] |
Bonds and notes based on auction or remarketing [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
781,276 
998,415 
Federally insured [Member] |
Bonds and notes based on auction or remarketing [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
1.97% 
1.61% 
Federally insured [Member] |
Bonds and notes based on auction or remarketing [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
2.61% 
2.28% 
Federally insured [Member] |
Variable-rate bonds and notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
21,457,157 
23,128,478 
Private education [Member] |
Variable-rate bonds and notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
84,881 
 
Private education [Member] |
Variable-rate bonds and notes [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
2.99% 
2.60% 
Private education [Member] |
Variable-rate bonds and notes [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
2.99% 
2.60% 
Private education [Member] |
fixed rate bonds and notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
$ 90,896 
$ 113,378 
Private education [Member] |
fixed rate bonds and notes [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
3.60% 
3.60% 
Private education [Member] |
fixed rate bonds and notes [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Interest rate range
5.35% 
5.35% 
Bonds and Notes Payable - Schedule of Asset-Backed Securitizations (Details) (Secured Debt [Member], Asset Backed Securitization [Member], USD $)
In Thousands, unless otherwise specified
0 Months Ended
Sep. 30, 2017
Jul. 26, 2017
May 24, 2017
Jul. 26, 2017
London Interbank Offered Rate (LIBOR) [Member]
May 24, 2017
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
 
 
 
 
 
Total original principal amount
$ 934,390 
$ 399,390 
$ 535,000 
 
 
Bond discount
2,002 
2,002 
 
 
 
Issue price
$ 932,388 
$ 397,388 
$ 535,000 
 
 
Variable interest rate on asset backed security
 
 
 
0.77% 
0.78% 
Bonds and Notes Payable - Outstanding Lines of Credit (Details) (USD $)
Sep. 30, 2017
Unsecured Line of Credit [Member]
Sep. 30, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
Sep. 30, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
Jun. 2, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
May 25, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
May 5, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
Apr. 3, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
Apr. 2, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
Sep. 30, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NFSLW-I Warehouse [Member]
Aug. 18, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NFSLW-I Warehouse [Member]
May 25, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NFSLW-I Warehouse [Member]
Sep. 30, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-II Warehouse [Member]
Sep. 30, 2017
FFELP Warehouse Total [Member]
Minimum [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
Sep. 30, 2017
FFELP Warehouse Total [Member]
Minimum [Member]
Warehouse facilities [Member]
NFSLW-I Warehouse [Member]
Sep. 30, 2017
FFELP Warehouse Total [Member]
Minimum [Member]
Warehouse facilities [Member]
NHELP-II Warehouse [Member]
Sep. 30, 2017
FFELP Warehouse Total [Member]
Maximum [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
Sep. 30, 2017
FFELP Warehouse Total [Member]
Maximum [Member]
Warehouse facilities [Member]
NFSLW-I Warehouse [Member]
Sep. 30, 2017
FFELP Warehouse Total [Member]
Maximum [Member]
Warehouse facilities [Member]
NHELP-II Warehouse [Member]
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum financing amount
$ 350,000,000 
$ 1,200,000,000 
$ 200,000,000.0 
 
 
 
$ 600,000,000.0 
$ 750,000,000.0 
$ 500,000,000 
 
 
$ 500,000,000 
 
 
 
 
 
 
Amount outstanding
210,000,000 
745,107,000 
148,713,000 
 
 
 
 
 
307,425,000 
 
 
288,969,000 
 
 
 
 
 
 
Amount available
140,000,000 
454,893,000 
51,287,000 
 
 
 
 
 
192,575,000 
 
 
211,031,000 
 
 
 
 
 
 
Minimum advance rates
 
 
 
 
 
 
 
 
 
 
 
 
92.20% 
84.00% 
85.00% 
95.00% 
90.00% 
95.00% 
Maximum advance rates
 
 
 
 
 
 
 
 
 
 
 
 
92.20% 
92.00% 
85.00% 
95.00% 
98.00% 
95.00% 
Advanced as equity support
 
28,441,000 
3,163,000 
 
 
 
 
 
4,747,000 
 
 
20,531,000 
 
 
 
 
 
 
Decrease to maximum borrowing capacity
 
 
 
$ 100,000,000.0 
$ 100,000,000.0 
$ 200,000,000.0 
 
 
 
$ 200,000,000 
$ 175,000,000.0 
 
 
 
 
 
 
 
Bonds and Notes Payable - Schedule of Debt Repurchases (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Sep. 30, 2017
Junior Subordinated Debt [Member]
Sep. 30, 2016
Junior Subordinated Debt [Member]
Dec. 31, 2016
Junior Subordinated Debt [Member]
Sep. 30, 2017
Asset-backed Securities [Member]
Sep. 30, 2016
Asset-backed Securities [Member]
Sep. 30, 2017
Asset-backed Securities [Member]
Sep. 30, 2016
Asset-backed Securities [Member]
Extinguishment of Debt [Line Items]
 
 
 
 
 
 
 
 
 
 
Par value
$ 48,448 
$ 11,362 
 
$ 29,658 
$ 0 
 
$ 14,702 
$ 10,965 
$ 18,790 
$ 11,362 
Purchase price
42,911 
9,102 
 
25,241 
0 
 
14,586 
8,805 
17,670 
9,102 
Gain
5,537 
2,260 
 
4,417 
0 
 
116 
2,160 
1,120 
2,260 
Debt outstanding after extinguishment
$ 22,240,279 
 
$ 24,668,490 
$ 20,526 
 
$ 50,184 
 
 
 
 
Derivative Financial Instruments - Basis Swap (Details) (1:3 basis swaps [Member], USD $)
Sep. 30, 2017
Dec. 31, 2016
Derivative [Line Items]
 
 
Notional amount
$ 9,500,000,000 
$ 1,775,000,000 
Maturity 2018
 
 
Derivative [Line Items]
 
 
Notional amount
4,000,000,000 
 
Maturity 2019
 
 
Derivative [Line Items]
 
 
Notional amount
3,000,000,000 
 
Maturity 2024
 
 
Derivative [Line Items]
 
 
Notional amount
250,000,000 
 
Maturity 2026
 
 
Derivative [Line Items]
 
 
Notional amount
1,150,000,000 
1,150,000,000 
Maturity 2027
 
 
Derivative [Line Items]
 
 
Notional amount
375,000,000 
 
Maturity 2028
 
 
Derivative [Line Items]
 
 
Notional amount
325,000,000 
325,000,000 
Maturity 2029
 
 
Derivative [Line Items]
 
 
Notional amount
100,000,000 
 
Maturity 2031
 
 
Derivative [Line Items]
 
 
Notional amount
$ 300,000,000 
$ 300,000,000 
- Derivative Financial Instruments Outstanding (Details) (USD $)
9 Months Ended 1 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Sep. 30, 2017
1:3 basis swaps [Member]
Dec. 31, 2016
1:3 basis swaps [Member]
Jun. 30, 2015
Interest Rate Cap [Member]
contract
Mar. 31, 2017
Interest Rate Cap [Member]
Aug. 20, 2014
Swaption [Member]
Sep. 30, 2017
Swaption [Member]
Sep. 30, 2017
Junior Subordinated Debt [Member]
Dec. 31, 2016
Junior Subordinated Debt [Member]
Sep. 30, 2017
Junior Subordinated Debt [Member]
Interest Rate Swap [Member]
Unsecured debt hedges [Member]
Maturity 2036 [Member]
Dec. 31, 2016
Junior Subordinated Debt [Member]
Interest Rate Swap [Member]
Unsecured debt hedges [Member]
Maturity 2036 [Member]
Jun. 30, 2015
Private Loan Warehouse Total [Member]
Interest Rate Cap [Member]
Jun. 30, 2015
2015 Interest Rate Cap 1 [Member]
Interest Rate Cap [Member]
Jun. 30, 2015
2015 Interest Rate Cap 2 [Member]
Interest Rate Cap [Member]
Mar. 31, 2017
2017 Interest Rate Cap [Member]
Interest Rate Cap [Member]
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basis point spread
 
 
 
0.134% 
0.101% 
 
 
 
 
 
 
 
 
 
 
 
 
Payments to enter into derivative instruments
$ 929,000 
$ 0 
 
 
 
$ 2,900,000 
 
$ 9,100,000 
 
 
 
 
 
 
 
 
$ 929,000 
Notional amount
 
 
 
9,500,000,000 
1,775,000,000 
275,000,000.0 
 
 
250,000,000 
 
 
25,000,000 
25,000,000 
 
125,000,000.0 
150,000,000.0 
 
Fixed interest rate of swap option
 
 
 
 
 
 
 
 
3.30% 
 
 
 
 
 
 
 
 
Bonds and notes payable
22,240,279,000 
 
24,668,490,000 
 
 
 
 
 
 
20,526,000 
50,184,000 
20,500,000 
50,200,000 
275,000,000 
 
 
 
Number of interest rate cap contracts purchased
 
 
 
 
 
2 
 
 
 
 
 
 
 
 
 
 
 
Interest rate cap strike rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.50% 
4.99% 
 
Proceeds (payments) to terminate and or amend derivative instruments
 
 
 
 
 
 
$ 913,000 
 
 
 
 
 
 
 
 
 
 
Weighted average basis spread on variable rate paid on swap
 
 
 
 
 
 
 
 
 
 
 
3.375% 
 
 
 
 
 
Fixed interest rate on derivatives and debt, net
 
 
 
 
 
 
 
 
 
 
 
7.66% 
7.66% 
 
 
 
 
Weighted average fixed rate paid by the Company
 
 
 
 
 
 
 
 
 
 
 
4.28% 
4.28% 
 
 
 
 
Derivative Financial Instruments - Interest Rate Swaps, Floor Income Hedge (Details) (Interest rate swaps - floor income hedges [Member], Interest Rate Swap [Member], USD $)
Sep. 30, 2017
Dec. 31, 2016
Derivative [Line Items]
 
 
Notional amount
$ 6,200,000,000 
$ 6,950,000,000 
Weighted average fixed rate paid by the Company
1.02% 
1.02% 
Maturity 2017 [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
0 
750,000,000 
Weighted average fixed rate paid by the Company
0.00% 
0.99% 
Maturity 2018 [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
1,350,000,000 
1,350,000,000 
Weighted average fixed rate paid by the Company
1.07% 
1.07% 
Maturity 2019 [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
3,250,000,000 
3,250,000,000 
Weighted average fixed rate paid by the Company
0.97% 
0.97% 
Maturity 2020 [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
1,500,000,000 
1,500,000,000 
Weighted average fixed rate paid by the Company
1.01% 
1.01% 
Maturity 2025 [Member]
 
 
Derivative [Line Items]
 
 
Notional amount
$ 100,000,000 
$ 100,000,000 
Weighted average fixed rate paid by the Company
2.32% 
2.32% 
Derivative Financial Instruments - Cross-currency Interest Rate Swaps (Details)
9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2017
USD ($)
Sep. 30, 2016
USD ($)
Dec. 31, 2006
Student Loan Asset Backed Securities Euro Note [Member]
EUR (€)
Sep. 30, 2017
Currency Swap [Member]
USD ($)
Sep. 30, 2017
Currency Swap [Member]
EUR (€)
Sep. 30, 2017
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
USD ($)
Sep. 30, 2016
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
USD ($)
Sep. 30, 2017
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
USD ($)
Sep. 30, 2016
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
USD ($)
Sep. 30, 2017
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
Student Loan Asset Backed Securities Euro Note [Member]
USD ($)
Sep. 30, 2016
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
Student Loan Asset Backed Securities Euro Note [Member]
USD ($)
Sep. 30, 2017
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
Student Loan Asset Backed Securities Euro Note [Member]
USD ($)
Sep. 30, 2016
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
Student Loan Asset Backed Securities Euro Note [Member]
USD ($)
Sep. 30, 2017
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
Currency Swap [Member]
USD ($)
Sep. 30, 2016
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
Currency Swap [Member]
USD ($)
Sep. 30, 2017
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
Currency Swap [Member]
USD ($)
Sep. 30, 2016
Currency Swap And Student Loan Asset Backed Euro Notes [Member]
Currency Swap [Member]
USD ($)
Oct. 25, 2017
Subsequent Event [Member]
Student Loan Asset Backed Securities Euro Note [Member]
USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notes payable
 
 
€ 352,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 450,000,000 
Notional amount
 
 
 
450,000,000 
352,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Re-measurement of Euro Notes
 
 
 
 
 
 
 
 
 
(13,683,000)
(4,831,000)
(45,635,000)
(13,543,000)
 
 
 
 
 
Change in fair value of cross currency interest rate swaps
22,381,000 
(1,556,000)
 
 
 
 
 
 
 
 
 
 
 
16,257,000 
5,501,000 
44,831,000 
26,194,000 
 
Total impact to statements of income - income (expense)
 
 
 
 
 
$ 2,574,000 
$ 670,000 
$ (804,000)
$ 12,651,000 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments - Fair Value of Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended 3 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Sep. 30, 2017
Derivative Financial Instruments, Assets [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Sep. 30, 2017
Derivative Financial Instruments, Assets [Member]
1:3 basis swaps [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
1:3 basis swaps [Member]
Sep. 30, 2017
Derivative Financial Instruments, Assets [Member]
Interest rate swaps - floor income hedges [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Interest rate swaps - floor income hedges [Member]
Sep. 30, 2017
Derivative Financial Instruments, Assets [Member]
Swaption [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Swaption [Member]
Sep. 30, 2017
Derivative Financial Instruments, Assets [Member]
Interest Rate Cap [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Interest Rate Cap [Member]
Sep. 30, 2017
Derivative Financial Instruments, Assets [Member]
Interest rate swaps - hybrid debt hedges [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Interest rate swaps - hybrid debt hedges [Member]
Sep. 30, 2017
Derivative Financial Instruments, Assets [Member]
Cross-currency interest rate swap [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Cross-currency interest rate swap [Member]
Sep. 30, 2017
Derivative Financial Instruments, Assets [Member]
Other Contract [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Other Contract [Member]
Sep. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Sep. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
1:3 basis swaps [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
1:3 basis swaps [Member]
Sep. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Interest rate swaps - floor income hedges [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Interest rate swaps - floor income hedges [Member]
Sep. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Swaption [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Swaption [Member]
Sep. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Interest Rate Cap [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Interest Rate Cap [Member]
Sep. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Interest rate swaps - hybrid debt hedges [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Interest rate swaps - hybrid debt hedges [Member]
Sep. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Cross-currency interest rate swap [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Cross-currency interest rate swap [Member]
Sep. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Other Contract [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Other Contract [Member]
Derivatives, Fair Value [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of asset derivatives
$ 996 
 
$ 87,531 
$ 996 
$ 87,531 
$ 0 
$ 0 
$ 0 
$ 81,159 
$ 765 
$ 2,977 
$ 231 
$ 1,152 
$ 0 
$ 0 
$ 0 
$ 0 
$ 0 
$ 2,243 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value of liability derivatives
30,105 
 
77,826 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
30,105 
77,826 
0 
2,624 
0 
256 
0 
0 
0 
0 
7,332 
7,341 
22,773 
67,605 
0 
0 
Proceeds from termination of derivative instruments
$ (3,013)
$ (2,830)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,100 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments - Gross/Net (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Derivatives, Fair Value [Line Items]
 
 
Net asset
$ 996 
$ 85,126 
Net liability
(21,635)
(67,654)
Derivative Financial Instruments, Assets [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Gross amounts of recognized assets presented in the consolidated balance sheets
996 
87,531 
Derivatives subject to enforceable master netting arrangement
0 
(2,880)
Cash collateral pledged
0 
 
Cash collateral (received) pledged, net
 
475 
Derivative Financial Instruments, Liabilities [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Cash collateral pledged
8,470 
 
Cash collateral (received) pledged, net
 
7,292 
Gross amounts of recognized liabilities presented in the consolidated balance sheets
(30,105)
(77,826)
Derivatives subject to enforceable master netting arrangement
$ 0 
$ 2,880 
Derivative Financial Instruments - Income Statement Effect of Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
$ (573)
$ (6,261)
$ (2,314)
$ (18,292)
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(573)
(6,261)
(2,314)
(18,292)
Change in fair value
21,429 
47,093 
22,381 
(1,556)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - (expense) income
(13,683)
(4,831)
(45,635)
(13,543)
Derivative market value and foreign currency transaction adjustments and derivative settlements, net - income (expense)
7,173 
36,001 
(25,568)
(33,391)
1:3 basis swaps [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(2,172)
523 
(1,836)
938 
Change in fair value
5,916 
140 
(5,499)
323 
Interest rate swaps - floor income hedges [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
3,883 
(5,157)
5,877 
(15,241)
Change in fair value
(185)
42,073 
(13,670)
(17,913)
Interest rate swap option - floor income hedges [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Change in fair value
(500)
(269)
(2,212)
(2,541)
Interest rate swaps - hybrid debt hedges [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(191)
(233)
(593)
(696)
Change in fair value
44 
13 
10 
(4,000)
Interest Rate Cap [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Change in fair value
(103)
(68)
(936)
(1,283)
Cross-currency interest rate swap [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(2,093)
(1,394)
(5,762)
(3,293)
Change in fair value
16,257 
5,501 
44,831 
26,194 
Other Contract [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Change in fair value
$ 0 
$ (297)
$ (143)
$ (2,336)
Investments and Other Receivables Summary (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2017
Investments [Member]
Dec. 31, 2016
Investments [Member]
Sep. 30, 2017
Investments [Member]
Available-for-sale investments [Member]
Dec. 31, 2016
Investments [Member]
Available-for-sale investments [Member]
Sep. 30, 2017
Investments [Member]
Available-for-sale investments [Member]
Aggregate fair value of available-for-sale investments with unrealized losses [Member]
Sep. 30, 2017
Investments [Member]
Available-for-sale investments [Member]
Aggregate fair value of available-for-sale investments with unrealized losses in a continuous unrealized loss position for greater than 12 months [Member]
Sep. 30, 2017
Investments [Member]
Available-for-sale investments [Member]
Student Loan Asset-Backed and Other Debt Securities [Member]
Dec. 31, 2016
Investments [Member]
Available-for-sale investments [Member]
Student Loan Asset-Backed and Other Debt Securities [Member]
Sep. 30, 2017
Investments [Member]
Available-for-sale investments [Member]
Equity securities [Member]
Dec. 31, 2016
Investments [Member]
Available-for-sale investments [Member]
Equity securities [Member]
Sep. 30, 2017
Investments [Member]
Trading investments [Member]
Equity securities [Member]
Dec. 31, 2016
Investments [Member]
Trading investments [Member]
Equity securities [Member]
Sep. 30, 2017
Other Investments and Notes Receivable (not measured at fair value) [Member]
Venture Capital and Funds [Member]
Dec. 31, 2016
Other Investments and Notes Receivable (not measured at fair value) [Member]
Venture Capital and Funds [Member]
Sep. 30, 2017
Other Investments and Notes Receivable (not measured at fair value) [Member]
Notes Receivable [Member]
Dec. 31, 2016
Other Investments and Notes Receivable (not measured at fair value) [Member]
Notes Receivable [Member]
Sep. 30, 2017
Other Investments and Notes Receivable (not measured at fair value) [Member]
Real Estate Investment [Member]
Dec. 31, 2016
Other Investments and Notes Receivable (not measured at fair value) [Member]
Real Estate Investment [Member]
Sep. 30, 2017
Other Investments and Notes Receivable (not measured at fair value) [Member]
Tax liens and affordable housing investments [Member]
Dec. 31, 2016
Other Investments and Notes Receivable (not measured at fair value) [Member]
Tax liens and affordable housing investments [Member]
Sep. 30, 2017
Minimum [Member]
Student Asset Backed And Other Debt Securities [Member]
Available-for-sale investments [Member]
Investment Holdings [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortized cost
 
 
 
 
$ 68,766 
$ 98,980 
 
 
$ 68,010 
$ 98,260 
$ 756 
$ 720 
 
 
 
 
 
 
 
 
 
 
 
Gross unrealized gains
 
 
 
 
6,908 
8,210 
 
 
4,768 
6,280 
2,140 
1,930 
 
 
 
 
 
 
 
 
 
 
 
Gross unrealized losses
 
 
 
 
(261)
(702)
 
 
(240)
(641)
(21)
(61)
 
 
 
 
 
 
 
 
 
 
 
Fair value
 
 
75,413 
106,593 
75,413 
106,488 
2,700 
400 
72,538 
103,899 
2,875 
2,589 
0 
105 
 
 
 
 
 
 
 
 
 
Other Investments and Other Receivables (not measured at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
84,903 
69,789 
56,732 
17,031 
49,567 
48,379 
9,921 
12,352 
 
Total investments and other receivables
$ 276,536 
$ 254,144 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available for sale securities maturity term
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10 years 
Intangible Assets, net - Schedule of Intangible Assets (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Weighted average remaining useful life as of September 30, 2017 (months)
 
 
144 months 
 
 
Finite-lived intangible assets, net
$ 40,742,000 
 
$ 40,742,000 
 
$ 47,813,000 
Amortization of intangible assets
2,300,000 
3,200,000 
7,100,000 
8,400,000 
 
Customer Relationships [Member]
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Weighted average remaining useful life as of September 30, 2017 (months)
 
 
162 months 
 
 
Finite-lived intangible assets, net
25,179,000 
 
25,179,000 
 
28,335,000 
Accumulated intangible asset amortization
11,704,000 
 
11,704,000 
 
8,548,000 
Trade Names [Member]
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Weighted average remaining useful life as of September 30, 2017 (months)
 
 
180 months 
 
 
Finite-lived intangible assets, net
9,285,000 
 
9,285,000 
 
9,919,000 
Accumulated intangible asset amortization
2,287,000 
 
2,287,000 
 
1,653,000 
Computer Software, Intangible Asset [Member]
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Weighted average remaining useful life as of September 30, 2017 (months)
 
 
17 months 
 
 
Finite-lived intangible assets, net
6,042,000 
 
6,042,000 
 
9,296,000 
Accumulated intangible asset amortization
8,929,000 
 
8,929,000 
 
5,675,000 
Covenants not to compete [Member]
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Weighted average remaining useful life as of September 30, 2017 (months)
 
 
80 months 
 
 
Finite-lived intangible assets, net
236,000 
 
236,000 
 
263,000 
Accumulated intangible asset amortization
$ 118,000 
 
$ 118,000 
 
$ 91,000 
Intangible Assets, net - Amortization Expense (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Intangible Assets, Net (Excluding Goodwill) [Abstract]
 
 
2017 (October 1 - December 31)
$ 2,315 
 
2018
8,605 
 
2019
5,147 
 
2020
4,231 
 
2021
3,480 
 
2022 and thereafter
16,964 
 
Finite-lived intangible assets, net
$ 40,742 
$ 47,813 
Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Goodwill [Line Items]
 
 
Goodwill
$ 147,312 
$ 147,312 
Loan Systems and Servicing [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
8,596 
8,596 
Tuition Payment Processing and Campus Commerce [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
67,168 
67,168 
Communications [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
21,112 
21,112 
Asset Generation and Management [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
41,883 
41,883 
Corporate and Other Activities [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
$ 8,553 
$ 8,553 
Property and Equipment (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, net
$ 208,441,000 
 
$ 208,441,000 
 
$ 123,786,000 
Depreciation
7,700,000 
5,800,000 
20,600,000 
16,400,000 
 
Non-communications [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
175,009,000 
 
175,009,000 
 
148,440,000 
Accumulated depreciation
104,430,000 
 
104,430,000 
 
91,285,000 
Property and equipment, net
70,579,000 
 
70,579,000 
 
57,155,000 
Non-communications [Member] |
Computer Equipment and Software [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
108,430,000 
 
108,430,000 
 
97,317,000 
Non-communications [Member] |
Computer Equipment and Software [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
1 year 
 
 
Non-communications [Member] |
Computer Equipment and Software [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
5 years 
 
 
Non-communications [Member] |
Building [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
25,283,000 
 
25,283,000 
 
13,363,000 
Non-communications [Member] |
Building [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
5 years 
 
 
Non-communications [Member] |
Building [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
39 years 
 
 
Non-communications [Member] |
Furniture and Fixtures [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
14,357,000 
 
14,357,000 
 
12,344,000 
Non-communications [Member] |
Furniture and Fixtures [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
3 years 
 
 
Non-communications [Member] |
Furniture and Fixtures [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
7 years 
 
 
Non-communications [Member] |
Leasehold Improvements [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
6,496,000 
 
6,496,000 
 
3,579,000 
Non-communications [Member] |
Leasehold Improvements [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
5 years 
 
 
Non-communications [Member] |
Leasehold Improvements [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
20 years 
 
 
Non-communications [Member] |
Transportation Equipment [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
3,813,000 
 
3,813,000 
 
3,809,000 
Non-communications [Member] |
Transportation Equipment [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
4 years 
 
 
Non-communications [Member] |
Transportation Equipment [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
10 years 
 
 
Non-communications [Member] |
Land [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
2,605,000 
 
2,605,000 
 
1,682,000 
Non-communications [Member] |
Construction in Progress [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
14,025,000 
 
14,025,000 
 
16,346,000 
Communications [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
149,726,000 
 
149,726,000 
 
71,297,000 
Accumulated depreciation
11,864,000 
 
11,864,000 
 
4,666,000 
Property and equipment, net
137,862,000 
 
137,862,000 
 
66,631,000 
Communications [Member] |
Computer Equipment and Software [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
3,318,000 
 
3,318,000 
 
2,026,000 
Communications [Member] |
Computer Equipment and Software [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
1 year 
 
 
Communications [Member] |
Computer Equipment and Software [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
5 years 
 
 
Communications [Member] |
Transportation Equipment [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
5,011,000 
 
5,011,000 
 
2,966,000 
Communications [Member] |
Transportation Equipment [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
4 years 
 
 
Communications [Member] |
Transportation Equipment [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
10 years 
 
 
Communications [Member] |
Land [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
70,000 
 
70,000 
 
70,000 
Communications [Member] |
Construction in Progress [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
35,709,000 
 
35,709,000 
 
12,537,000 
Communications [Member] |
Network plant and fiber [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
83,870,000 
 
83,870,000 
 
40,844,000 
Communications [Member] |
Network plant and fiber [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
5 years 
 
 
Communications [Member] |
Network plant and fiber [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
15 years 
 
 
Communications [Member] |
Customer located property [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
10,987,000 
 
10,987,000 
 
5,138,000 
Communications [Member] |
Customer located property [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
5 years 
 
 
Communications [Member] |
Customer located property [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
10 years 
 
 
Communications [Member] |
Central office [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
8,476,000 
 
8,476,000 
 
6,448,000 
Communications [Member] |
Central office [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
5 years 
 
 
Communications [Member] |
Central office [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
15 years 
 
 
Communications [Member] |
Other Capitalized Property Plant and Equipment [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property and equipment, gross
$ 2,285,000 
 
$ 2,285,000 
 
$ 1,268,000 
Communications [Member] |
Other Capitalized Property Plant and Equipment [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
1 year 
 
 
Communications [Member] |
Other Capitalized Property Plant and Equipment [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Useful life
 
 
39 years 
 
 
Earnings per Common Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Net income attributable to Nelnet, Inc.
$ 46,303 
$ 84,294 
$ 125,065 
$ 158,405 
Weighted average common shares outstanding - basic and diluted (in shares)
41,553,316 
42,642,213 
42,054,532 
42,788,133 
Earnings per share - basic and diluted (in dollars per share)
$ 1.11 
$ 1.98 
$ 2.97 
$ 3.70 
Common shareholders [Member]
 
 
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Net income attributable to Nelnet, Inc.
45,850 
83,419 
123,816 
156,749 
Weighted average common shares outstanding - basic and diluted (in shares)
41,146,424 
42,199,580 
41,634,578 
42,340,867 
Earnings per share - basic and diluted (in dollars per share)
$ 1.11 
$ 1.98 
$ 2.97 
$ 3.70 
Unvested restricted stock shareholders [Member]
 
 
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Net income attributable to Nelnet, Inc.
$ 453 
$ 875 
$ 1,249 
$ 1,656 
Weighted average common shares outstanding - basic and diluted (in shares)
406,892 
442,633 
419,954 
447,266 
Earnings per share - basic and diluted (in dollars per share)
$ 1.11 
$ 1.98 
$ 2.97 
$ 3.70 
Segment Reporting (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Dec. 31, 2016
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
$ 196,884 
$ 196,181 
$ 573,786 
$ 574,449 
 
Interest expense
121,650 
96,386 
341,787 
280,847 
 
Net interest income
75,234 
99,795 
231,999 
293,602 
 
Less provision for loan losses
6,000 
6,000 
9,000 
10,500 
 
Net interest income (loss) after provision for loan losses
69,234 
93,795 
222,999 
283,102 
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
55,950 
54,350 
167,079 
161,082 
 
Intersegment servicing revenue
0 
0 
0 
0 
 
Tuition payment processing, school information, and campus commerce revenue
35,450 
33,071 
113,293 
102,211 
 
Communications revenue
6,751 
4,343 
17,577 
13,167 
 
Enrollment services revenue
0 
0 
0 
4,326 
 
Other income
19,756 
15,150 
44,874 
38,711 
 
Gain from debt repurchases
116 
2,160 
5,537 
2,260 
 
Derivative settlements, net
(573)
(6,261)
(2,314)
(18,292)
 
Derivative market value and foreign currency transaction adjustments, net
7,746 
42,262 
(23,254)
(15,099)
 
Total other income
125,196 
145,075 
322,792 
288,366 
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
74,193 
63,743 
220,684 
187,907 
 
Depreciation and amortization
10,051 
8,994 
27,687 
24,817 
 
Loan servicing fees
7,939 
5,880 
19,584 
20,024 
 
Cost to provide communications services
2,632 
1,784 
6,789 
5,169 
 
Cost to provide enrollment services
 
0 
 
3,623 
 
Other expenses
30,518 
26,391 
84,593 
84,174 
 
Intersegment expenses, net
0 
0 
0 
0 
 
Total operating expenses
125,333 
106,792 
359,337 
325,714 
 
Income (loss) before income taxes
69,097 
132,078 
186,454 
245,754 
 
Income tax (expense) benefit
(25,562)
(47,715)
(70,349)
(87,184)
 
Net income (loss)
43,535 
84,363 
116,105 
158,570 
 
Net loss (income) attributable to noncontrolling interests
2,768 
(69)
8,960 
(165)
 
Net income (loss) attributable to Nelnet, Inc.
46,303 
84,294 
125,065 
158,405 
 
Total assets
24,768,710 
27,669,611 
24,768,710 
27,669,611 
27,180,108 
Operating Segments [Member] |
Loan Systems and Servicing [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
147 
37 
361 
80 
 
Interest expense
0 
0 
0 
0 
 
Net interest income
147 
37 
361 
80 
 
Less provision for loan losses
0 
0 
0 
0 
 
Net interest income (loss) after provision for loan losses
147 
37 
361 
80 
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
55,950 
54,350 
167,079 
161,082 
 
Intersegment servicing revenue
10,563 
11,021 
30,839 
34,436 
 
Tuition payment processing, school information, and campus commerce revenue
0 
0 
0 
0 
 
Communications revenue
0 
0 
0 
0 
 
Enrollment services revenue
 
0 
 
0 
 
Other income
0 
0 
0 
0 
 
Gain from debt repurchases
0 
0 
0 
0 
 
Derivative settlements, net
0 
0 
0 
0 
 
Derivative market value and foreign currency transaction adjustments, net
0 
0 
0 
0 
 
Total other income
66,513 
65,371 
197,918 
195,518 
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
38,435 
32,505 
116,932 
96,851 
 
Depreciation and amortization
549 
557 
1,644 
1,440 
 
Loan servicing fees
0 
0 
0 
0 
 
Cost to provide communications services
0 
0 
0 
0 
 
Cost to provide enrollment services
 
0 
 
0 
 
Other expenses
10,317 
8,784 
28,333 
31,635 
 
Intersegment expenses, net
7,774 
5,825 
23,496 
18,168 
 
Total operating expenses
57,075 
47,671 
170,405 
148,094 
 
Income (loss) before income taxes
9,585 
17,737 
27,874 
47,504 
 
Income tax (expense) benefit
(4,937)
(6,740)
(14,410)
(18,052)
 
Net income (loss)
4,648 
10,997 
13,464 
29,452 
 
Net loss (income) attributable to noncontrolling interests
3,408 
0 
10,050 
0 
 
Net income (loss) attributable to Nelnet, Inc.
8,056 
10,997 
23,514 
29,452 
 
Total assets
98,555 
79,418 
98,555 
79,418 
 
Operating Segments [Member] |
Tuition Payment Processing and Campus Commerce [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
5 
2 
10 
7 
 
Interest expense
0 
0 
0 
0 
 
Net interest income
5 
2 
10 
7 
 
Less provision for loan losses
0 
0 
0 
0 
 
Net interest income (loss) after provision for loan losses
5 
2 
10 
7 
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
0 
0 
0 
0 
 
Intersegment servicing revenue
0 
0 
0 
0 
 
Tuition payment processing, school information, and campus commerce revenue
35,450 
33,071 
113,293 
102,211 
 
Communications revenue
0 
0 
0 
0 
 
Enrollment services revenue
 
0 
 
0 
 
Other income
0 
0 
0 
0 
 
Gain from debt repurchases
0 
0 
0 
0 
 
Derivative settlements, net
0 
0 
0 
0 
 
Derivative market value and foreign currency transaction adjustments, net
0 
0 
0 
0 
 
Total other income
35,450 
33,071 
113,293 
102,211 
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
17,432 
15,979 
50,986 
45,859 
 
Depreciation and amortization
2,316 
2,929 
7,053 
7,711 
 
Loan servicing fees
0 
0 
0 
0 
 
Cost to provide communications services
0 
0 
0 
0 
 
Cost to provide enrollment services
 
0 
 
0 
 
Other expenses
4,224 
4,149 
14,072 
13,122 
 
Intersegment expenses, net
2,219 
1,616 
6,430 
4,690 
 
Total operating expenses
26,191 
24,673 
78,541 
71,382 
 
Income (loss) before income taxes
9,264 
8,400 
34,762 
30,836 
 
Income tax (expense) benefit
(3,520)
(3,192)
(13,210)
(11,718)
 
Net income (loss)
5,744 
5,208 
21,552 
19,118 
 
Net loss (income) attributable to noncontrolling interests
0 
0 
0 
0 
 
Net income (loss) attributable to Nelnet, Inc.
5,744 
5,208 
21,552 
19,118 
 
Total assets
208,290 
190,682 
208,290 
190,682 
 
Operating Segments [Member] |
Communications [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
1 
0 
2 
1 
 
Interest expense
1,551 
318 
3,367 
671 
 
Net interest income
(1,550)
(318)
(3,365)
(670)
 
Less provision for loan losses
0 
0 
0 
0 
 
Net interest income (loss) after provision for loan losses
(1,550)
(318)
(3,365)
(670)
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
0 
0 
0 
0 
 
Intersegment servicing revenue
0 
0 
0 
0 
 
Tuition payment processing, school information, and campus commerce revenue
0 
0 
0 
0 
 
Communications revenue
6,751 
4,343 
17,577 
13,167 
 
Enrollment services revenue
 
0 
 
0 
 
Other income
0 
0 
0 
0 
 
Gain from debt repurchases
0 
0 
0 
0 
 
Derivative settlements, net
0 
0 
0 
0 
 
Derivative market value and foreign currency transaction adjustments, net
0 
0 
0 
0 
 
Total other income
6,751 
4,343 
17,577 
13,167 
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
4,099 
2,325 
10,489 
4,792 
 
Depreciation and amortization
3,145 
1,630 
7,880 
4,137 
 
Loan servicing fees
0 
0 
0 
0 
 
Cost to provide communications services
2,632 
1,784 
6,789 
5,169 
 
Cost to provide enrollment services
 
0 
 
0 
 
Other expenses
2,278 
1,545 
5,422 
3,110 
 
Intersegment expenses, net
470 
279 
1,472 
610 
 
Total operating expenses
12,624 
7,563 
32,052 
17,818 
 
Income (loss) before income taxes
(7,423)
(3,538)
(17,840)
(5,321)
 
Income tax (expense) benefit
2,821 
1,344 
6,779 
2,022 
 
Net income (loss)
(4,602)
(2,194)
(11,061)
(3,299)
 
Net loss (income) attributable to noncontrolling interests
0 
0 
0 
0 
 
Net income (loss) attributable to Nelnet, Inc.
(4,602)
(2,194)
(11,061)
(3,299)
 
Total assets
179,206 
90,361 
179,206 
90,361 
 
Operating Segments [Member] |
Asset Generation and Management [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
194,968 
194,701 
568,661 
570,390 
 
Interest expense
121,074 
95,383 
340,898 
278,029 
 
Net interest income
73,894 
99,318 
227,763 
292,361 
 
Less provision for loan losses
6,000 
6,000 
9,000 
10,500 
 
Net interest income (loss) after provision for loan losses
67,894 
93,318 
218,763 
281,861 
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
0 
0 
0 
0 
 
Intersegment servicing revenue
0 
0 
0 
0 
 
Tuition payment processing, school information, and campus commerce revenue
0 
0 
0 
0 
 
Communications revenue
0 
0 
0 
0 
 
Enrollment services revenue
 
0 
 
0 
 
Other income
2,753 
4,265 
9,152 
12,362 
 
Gain from debt repurchases
116 
2,160 
1,097 
2,260 
 
Derivative settlements, net
(382)
(6,028)
(1,721)
(17,596)
 
Derivative market value and foreign currency transaction adjustments, net
7,702 
42,546 
(23,121)
(8,763)
 
Total other income
10,189 
42,943 
(14,593)
(11,737)
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
392 
486 
1,156 
1,504 
 
Depreciation and amortization
0 
0 
0 
0 
 
Loan servicing fees
7,939 
5,880 
19,584 
20,024 
 
Cost to provide communications services
0 
0 
0 
0 
 
Cost to provide enrollment services
 
0 
 
0 
 
Other expenses
1,451 
1,769 
4,269 
4,766 
 
Intersegment expenses, net
10,659 
11,146 
31,114 
34,791 
 
Total operating expenses
20,441 
19,281 
56,123 
61,085 
 
Income (loss) before income taxes
57,642 
116,980 
148,047 
209,039 
 
Income tax (expense) benefit
(21,904)
(44,571)
(56,258)
(79,434)
 
Net income (loss)
35,738 
72,409 
91,789 
129,605 
 
Net loss (income) attributable to noncontrolling interests
0 
0 
0 
0 
 
Net income (loss) attributable to Nelnet, Inc.
35,738 
72,409 
91,789 
129,605 
 
Total assets
23,724,413 
26,888,950 
23,724,413 
26,888,950 
 
Operating Segments [Member] |
Corporate and Other Activities [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
3,903 
2,370 
10,026 
6,527 
 
Interest expense
1,165 
1,615 
2,794 
4,702 
 
Net interest income
2,738 
755 
7,232 
1,825 
 
Less provision for loan losses
0 
0 
0 
0 
 
Net interest income (loss) after provision for loan losses
2,738 
755 
7,232 
1,825 
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
0 
0 
0 
0 
 
Intersegment servicing revenue
0 
0 
0 
0 
 
Tuition payment processing, school information, and campus commerce revenue
0 
0 
0 
0 
 
Communications revenue
0 
0 
0 
0 
 
Enrollment services revenue
 
0 
 
4,326 
 
Other income
17,003 
10,886 
35,722 
26,349 
 
Gain from debt repurchases
0 
0 
4,440 
0 
 
Derivative settlements, net
(191)
(233)
(593)
(696)
 
Derivative market value and foreign currency transaction adjustments, net
44 
(284)
(133)
(6,336)
 
Total other income
16,856 
10,369 
39,436 
23,643 
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
13,834 
12,448 
41,121 
38,902 
 
Depreciation and amortization
4,040 
3,878 
11,109 
11,528 
 
Loan servicing fees
0 
0 
0 
0 
 
Cost to provide communications services
0 
0 
0 
0 
 
Cost to provide enrollment services
 
0 
 
3,623 
 
Other expenses
12,248 
10,143 
32,497 
31,540 
 
Intersegment expenses, net
(10,559)
(7,845)
(31,673)
(23,823)
 
Total operating expenses
19,563 
18,624 
53,054 
61,770 
 
Income (loss) before income taxes
31 
(7,500)
(6,386)
(36,302)
 
Income tax (expense) benefit
1,978 
5,443 
6,749 
19,998 
 
Net income (loss)
2,009 
(2,057)
363 
(16,304)
 
Net loss (income) attributable to noncontrolling interests
(640)
(69)
(1,090)
(165)
 
Net income (loss) attributable to Nelnet, Inc.
1,369 
(2,126)
(727)
(16,469)
 
Total assets
863,700 
687,347 
863,700 
687,347 
 
Intersegment Eliminations [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
(2,139)
(930)
(5,274)
(2,556)
 
Interest expense
(2,139)
(930)
(5,274)
(2,556)
 
Net interest income
0 
0 
0 
0 
 
Less provision for loan losses
0 
0 
0 
0 
 
Net interest income (loss) after provision for loan losses
0 
0 
0 
0 
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
0 
0 
0 
0 
 
Intersegment servicing revenue
(10,563)
(11,021)
(30,839)
(34,436)
 
Tuition payment processing, school information, and campus commerce revenue
0 
0 
0 
0 
 
Communications revenue
0 
0 
0 
0 
 
Enrollment services revenue
 
0 
 
0 
 
Other income
0 
0 
0 
0 
 
Gain from debt repurchases
0 
0 
0 
0 
 
Derivative settlements, net
0 
0 
0 
0 
 
Derivative market value and foreign currency transaction adjustments, net
0 
0 
0 
0 
 
Total other income
(10,563)
(11,021)
(30,839)
(34,436)
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
0 
0 
0 
0 
 
Depreciation and amortization
0 
0 
0 
0 
 
Loan servicing fees
0 
0 
0 
0 
 
Cost to provide communications services
0 
0 
0 
0 
 
Cost to provide enrollment services
 
0 
 
0 
 
Other expenses
0 
0 
0 
0 
 
Intersegment expenses, net
(10,563)
(11,021)
(30,839)
(34,436)
 
Total operating expenses
(10,563)
(11,021)
(30,839)
(34,436)
 
Income (loss) before income taxes
0 
0 
0 
0 
 
Income tax (expense) benefit
0 
0 
0 
0 
 
Net income (loss)
0 
0 
0 
0 
 
Net loss (income) attributable to noncontrolling interests
0 
0 
0 
0 
 
Net income (loss) attributable to Nelnet, Inc.
0 
0 
0 
0 
 
Total assets
$ (305,454)
$ (267,147)
$ (305,454)
$ (267,147)
 
Major Customer (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Concentration Risk Dollar Value [Member]
Sep. 30, 2016
Concentration Risk Dollar Value [Member]
Sep. 30, 2017
Concentration Risk Dollar Value [Member]
Sep. 30, 2016
Concentration Risk Dollar Value [Member]
Sep. 30, 2017
GreatNet [Member]
Oct. 18, 2017
Great Lakes Higher Education Corporation [Member]
Subsequent Event [Member]
Concentration Risk [Line Items]
 
 
 
 
 
 
Loan systems and servicing revenue
$ 38.6 
$ 40.2 
$ 117.4 
$ 112.5 
 
 
Noncontolling interest, parent ownership percentage
 
 
 
 
50.00% 
 
Percent of outstanding stock acquired
 
 
 
 
 
100.00% 
Assets and Liabilities that are Measured at Fair Value (Details) (Fair Value, Measurements, Recurring [Member], USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Financial assets:
 
 
Fair value
$ 75,413 
$ 106,593 
Fair value of derivative instruments
996 
87,531 
Total assets
76,409 
194,124 
Financial liabilities:
 
 
Fair value of derivative instruments
30,105 
77,826 
Total liabilities
30,105 
77,826 
Student loan asset-backed securities [Member]
 
 
Financial assets:
 
 
Fair value
72,427 
103,780 
Equity securities [Member]
 
 
Financial assets:
 
 
Fair value
2,875 
2,694 
Debt securities [Member]
 
 
Financial assets:
 
 
Fair value
111 
119 
Level 1 [Member]
 
 
Financial assets:
 
 
Fair value
2,986 
2,813 
Fair value of derivative instruments
0 
0 
Total assets
2,986 
2,813 
Financial liabilities:
 
 
Fair value of derivative instruments
0 
0 
Total liabilities
0 
0 
Level 1 [Member] |
Student loan asset-backed securities [Member]
 
 
Financial assets:
 
 
Fair value
0 
0 
Level 1 [Member] |
Equity securities [Member]
 
 
Financial assets:
 
 
Fair value
2,875 
2,694 
Level 1 [Member] |
Debt securities [Member]
 
 
Financial assets:
 
 
Fair value
111 
119 
Level 2 [Member]
 
 
Financial assets:
 
 
Fair value
72,427 
103,780 
Fair value of derivative instruments
996 
87,531 
Total assets
73,423 
191,311 
Financial liabilities:
 
 
Fair value of derivative instruments
30,105 
77,826 
Total liabilities
30,105 
77,826 
Level 2 [Member] |
Student loan asset-backed securities [Member]
 
 
Financial assets:
 
 
Fair value
72,427 
103,780 
Level 2 [Member] |
Equity securities [Member]
 
 
Financial assets:
 
 
Fair value
0 
0 
Level 2 [Member] |
Debt securities [Member]
 
 
Financial assets:
 
 
Fair value
$ 0 
$ 0 
Fair Value of Financial Instruments (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2016
Dec. 31, 2015
Financial assets:
 
 
 
 
Student loans receivable
$ 22,528,845 
$ 24,903,724 
 
 
Cash and cash equivalents
254,391 
69,654 
67,154 
63,529 
Restricted cash
725,463 
980,961 
 
 
Restricted cash – due to customers
105,299 
119,702 
 
 
Accrued interest receivable
396,827 
391,264 
 
 
Derivative instruments
996 
87,531 
 
 
Financial liabilities:
 
 
 
 
Bonds and notes payable
22,240,279 
24,668,490 
 
 
Accrued interest payable
47,824 
45,677 
 
 
Due to customers
105,299 
119,702 
 
 
Derivative instruments
30,105 
77,826 
 
 
Fair value [Member]
 
 
 
 
Financial assets:
 
 
 
 
Student loans receivable
23,635,887 
25,653,581 
 
 
Cash and cash equivalents
254,391 
69,654 
 
 
Investments (available-for-sale)
75,413 
106,593 
 
 
Notes receivable
16,393 
17,031 
 
 
Loans receivable
42,006 
 
 
 
Restricted cash
 
980,961 
 
 
Restricted cash – due to customers
105,299 
119,702 
 
 
Accrued interest receivable
396,827 
391,264 
 
 
Derivative instruments
996 
87,531 
 
 
Financial liabilities:
 
 
 
 
Bonds and notes payable
22,319,439 
24,220,996 
 
 
Accrued interest payable
47,824 
45,677 
 
 
Due to customers
105,299 
119,702 
 
 
Derivative instruments
30,105 
77,826 
 
 
Fair value [Member] |
Level 1 [Member]
 
 
 
 
Financial assets:
 
 
 
 
Student loans receivable
0 
0 
 
 
Cash and cash equivalents
254,391 
69,654 
 
 
Investments (available-for-sale)
2,986 
2,813 
 
 
Notes receivable
0 
0 
 
 
Loans receivable
0 
 
 
 
Restricted cash
725,463 
980,961 
 
 
Restricted cash – due to customers
105,299 
119,702 
 
 
Accrued interest receivable
0 
0 
 
 
Derivative instruments
0 
0 
 
 
Financial liabilities:
 
 
 
 
Bonds and notes payable
0 
0 
 
 
Accrued interest payable
0 
0 
 
 
Due to customers
105,299 
119,702 
 
 
Derivative instruments
0 
0 
 
 
Fair value [Member] |
Level 2 [Member]
 
 
 
 
Financial assets:
 
 
 
 
Student loans receivable
0 
0 
 
 
Cash and cash equivalents
0 
0 
 
 
Investments (available-for-sale)
72,427 
103,780 
 
 
Notes receivable
16,393 
17,031 
 
 
Loans receivable
0 
 
 
 
Restricted cash
0 
0 
 
 
Restricted cash – due to customers
0 
0 
 
 
Accrued interest receivable
396,827 
391,264 
 
 
Derivative instruments
996 
87,531 
 
 
Financial liabilities:
 
 
 
 
Bonds and notes payable
22,319,439 
24,220,996 
 
 
Accrued interest payable
47,824 
45,677 
 
 
Due to customers
0 
0 
 
 
Derivative instruments
30,105 
77,826 
 
 
Fair value [Member] |
Level 3 [Member]
 
 
 
 
Financial assets:
 
 
 
 
Student loans receivable
23,635,887 
25,653,581 
 
 
Cash and cash equivalents
0 
0 
 
 
Investments (available-for-sale)
0 
0 
 
 
Notes receivable
0 
0 
 
 
Loans receivable
42,006 
 
 
 
Restricted cash
0 
0 
 
 
Restricted cash – due to customers
0 
0 
 
 
Accrued interest receivable
0 
0 
 
 
Derivative instruments
0 
0 
 
 
Financial liabilities:
 
 
 
 
Bonds and notes payable
0 
0 
 
 
Accrued interest payable
0 
0 
 
 
Due to customers
0 
0 
 
 
Derivative instruments
0 
0 
 
 
Carrying value [Member]
 
 
 
 
Financial assets:
 
 
 
 
Student loans receivable
22,528,845 
24,903,724 
 
 
Cash and cash equivalents
254,391 
69,654 
 
 
Investments (available-for-sale)
75,413 
106,593 
 
 
Notes receivable
16,393 
17,031 
 
 
Loans receivable
40,339 
 
 
 
Restricted cash
725,463 
980,961 
 
 
Restricted cash – due to customers
105,299 
119,702 
 
 
Accrued interest receivable
396,827 
391,264 
 
 
Derivative instruments
996 
87,531 
 
 
Financial liabilities:
 
 
 
 
Bonds and notes payable
22,240,279 
24,668,490 
 
 
Accrued interest payable
47,824 
45,677 
 
 
Due to customers
105,299 
119,702 
 
 
Derivative instruments
$ 30,105 
$ 77,826 
 
 
Subsequent Events (Details)
3 Months Ended 9 Months Ended 0 Months Ended 0 Months Ended
Sep. 30, 2017
USD ($)
Sep. 30, 2016
USD ($)
Sep. 30, 2017
USD ($)
Sep. 30, 2016
USD ($)
Oct. 18, 2017
Great Lakes Higher Education Corporation [Member]
Subsequent Event [Member]
USD ($)
Oct. 18, 2017
Great Lakes Higher Education Corporation [Member]
Subsequent Event [Member]
Dec. 31, 2006
Student Loan Asset Backed Securities Euro Note [Member]
EUR (€)
Oct. 25, 2017
Student Loan Asset Backed Securities Euro Note [Member]
Subsequent Event [Member]
USD ($)
Oct. 25, 2017
Student Loan Asset Backed Securities Euro Note [Member]
Subsequent Event [Member]
USD ($)
Subsequent Event [Line Items]
 
 
 
 
 
 
 
 
 
Percent of outstanding stock acquired
 
 
 
 
 
100.00% 
 
 
 
Payments to acquire business
 
 
 
 
$ 150,000,000 
 
 
 
 
Notes payable
 
 
 
 
 
 
352,700,000 
 
450,000,000 
Non-cash expense impact of remarketing and swap termination
$ 7,173,000 
$ 36,001,000 
$ (25,568,000)
$ (33,391,000)
 
 
 
$ 10,600,000