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As of | As of | |||||
March 31, 2017 | December 31, 2016 | |||||
Federally insured loans: | ||||||
Stafford and other | $ | 4,927,541 | 5,186,047 | |||
Consolidation | 19,012,552 | 19,643,937 | ||||
Total | 23,940,093 | 24,829,984 | ||||
Private education loans | 256,816 | 273,659 | ||||
24,196,909 | 25,103,643 | |||||
Loan discount, net of unamortized loan premiums and deferred origination costs (a) | (142,997 | ) | (148,077 | ) | ||
Allowance for loan losses – federally insured loans | (36,687 | ) | (37,268 | ) | ||
Allowance for loan losses – private education loans | (13,839 | ) | (14,574 | ) | ||
$ | 24,003,386 | 24,903,724 |
(a) | As of March 31, 2017 and December 31, 2016, "loan discount, net of unamortized loan premiums and deferred origination costs" included $16.6 million and $18.6 million, respectively, of non-accretable discount associated with purchased loans of $8.0 billion and $8.3 billion, respectively. |
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Balance at beginning of period | $ | 51,842 | 50,498 | |||
Provision for loan losses: | ||||||
Federally insured loans | 2,000 | 2,000 | ||||
Private education loans | (1,000 | ) | 500 | |||
Total provision for loan losses | 1,000 | 2,500 | ||||
Charge-offs: | ||||||
Federally insured loans | (2,581 | ) | (3,049 | ) | ||
Private education loans | (82 | ) | (401 | ) | ||
Total charge-offs | (2,663 | ) | (3,450 | ) | ||
Recoveries - private education loans | 197 | 276 | ||||
Purchase of private education loans | — | 160 | ||||
Transfer from repurchase obligation related to private education loans repurchased | 150 | 100 | ||||
Balance at end of period | $ | 50,526 | 50,084 | |||
Allocation of the allowance for loan losses: | ||||||
Federally insured loans | $ | 36,687 | 34,441 | |||
Private education loans | 13,839 | 15,643 | ||||
Total allowance for loan losses | $ | 50,526 | 50,084 |
As of March 31, 2017 | As of December 31, 2016 | As of March 31, 2016 | ||||||||||||||||||
Federally insured loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 1,604,494 | $ | 1,606,468 | $ | 2,198,559 | ||||||||||||||
Loans in forbearance | 2,125,344 | 2,295,367 | 2,736,472 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 17,690,083 | 87.5 | % | 18,125,768 | 86.6 | % | 19,375,813 | 86.0 | % | |||||||||||
Loans delinquent 31-60 days | 732,433 | 3.6 | 818,976 | 3.9 | 866,207 | 3.8 | ||||||||||||||
Loans delinquent 61-90 days | 493,876 | 2.4 | 487,647 | 2.3 | 538,284 | 2.4 | ||||||||||||||
Loans delinquent 91-120 days | 275,711 | 1.4 | 335,291 | 1.6 | 329,425 | 1.5 | ||||||||||||||
Loans delinquent 121-270 days | 763,030 | 3.8 | 854,432 | 4.1 | 1,008,157 | 4.5 | ||||||||||||||
Loans delinquent 271 days or greater | 255,122 | 1.3 | 306,035 | 1.5 | 396,280 | 1.8 | ||||||||||||||
Total loans in repayment | 20,210,255 | 100.0 | % | 20,928,149 | 100.0 | % | 22,514,166 | 100.0 | % | |||||||||||
Total federally insured loans | $ | 23,940,093 | $ | 24,829,984 | $ | 27,449,197 | ||||||||||||||
Private education loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 34,138 | $ | 35,146 | $ | 55,668 | ||||||||||||||
Loans in forbearance | 3,811 | 3,448 | 722 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 213,081 | 97.4 | % | 228,612 | 97.2 | % | 231,556 | 97.2 | % | |||||||||||
Loans delinquent 31-60 days | 1,355 | 0.6 | 1,677 | 0.7 | 968 | 0.4 | ||||||||||||||
Loans delinquent 61-90 days | 1,402 | 0.6 | 1,110 | 0.5 | 1,144 | 0.5 | ||||||||||||||
Loans delinquent 91 days or greater | 3,029 | 1.4 | 3,666 | 1.6 | 4,563 | 1.9 | ||||||||||||||
Total loans in repayment | 218,867 | 100.0 | % | 235,065 | 100.0 | % | 238,231 | 100.0 | % | |||||||||||
Total private education loans | $ | 256,816 | $ | 273,659 | $ | 294,621 |
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As of March 31, 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 | $ | 21,316,429 | 0.22% - 6.90% | 6/25/21 - 9/25/65 | |||
Bonds and notes based on auction | 800,065 | 1.69% - 2.32% | 3/22/32 - 11/26/46 | ||||
Total FFELP variable-rate bonds and notes | 22,116,494 | ||||||
FFELP warehouse facilities | 1,608,569 | 0.83% - 1.17% | 9/7/18 - 12/13/19 | ||||
Variable-rate bonds and notes issued in private education loan asset-backed securitization | 102,585 | 2.73% | 12/26/40 | ||||
Fixed-rate bonds and notes issued in private education loan asset-backed securitization | 105,264 | 3.60% / 5.35% | 12/26/40 / 12/28/43 | ||||
Unsecured line of credit | 35,000 | 2.29% | 12/12/21 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 20,526 | 4.52% | 9/15/61 | ||||
Other borrowings | 20,871 | 1.78% - 3.38% | 4/27/17 - 12/15/45 | ||||
24,009,309 | |||||||
Discount on bonds and notes payable and debt issuance costs | (414,793 | ) | |||||
Total | $ | 23,594,516 |
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 |
NFSLW-I | NHELP-III (a) | NHELP-II | Total | |||||||||||
Maximum financing amount | $ | 875,000 | 750,000 | 500,000 | 2,125,000 | |||||||||
Amount outstanding | 619,249 | 587,741 | 401,579 | 1,608,569 | ||||||||||
Amount available | $ | 255,751 | 162,259 | 98,421 | 516,431 | |||||||||
Expiration of liquidity provisions | July 10, 2018 | April 28, 2017 | December 15, 2017 | |||||||||||
Final maturity date | September 7, 2018 | April 26, 2019 | December 13, 2019 | |||||||||||
Maximum advance rates | 92.0 - 98.0% | 92.2 - 95.0% | 85.0 - 95.0% | |||||||||||
Minimum advance rates | 84.0 - 90.0% | 92.2 - 95.0% | 85.0 - 95.0% | |||||||||||
Advanced as equity support | $ | 18,177 | 30,052 | 29,689 | 77,918 |
(a) | On April 3, 2017, the Company entered into a letter agreement for this warehouse facility to decrease the maximum financing amount 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, the Company decreased the maximum financing amount on this warehouse facility to $400.0 million. |
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As of March 31, | As of December 31, | ||||||
2017 | 2016 | ||||||
Maturity | Notional amount | Notional amount | |||||
2018 | $ | 4,000,000 | — | ||||
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 | |||||
$ | 6,500,000 | 1,775,000 |
Maturity | Notional amount | Weighted average fixed rate paid by the Company (a) | |||||
2017 | $ | 750,000 | 0.99 | % | |||
2018 | 1,350,000 | 1.07 | |||||
2019 | 3,250,000 | 0.97 | |||||
2020 | 1,500,000 | 1.01 | |||||
2025 | 100,000 | 2.32 | |||||
$ | 6,950,000 | 1.02 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
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. |
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Re-measurement of Euro Notes | $ | (4,690 | ) | (18,480 | ) | |
Change in fair value of cross-currency interest rate swap | 935 | 32,701 | ||||
Total impact to consolidated statements of income - (expense) income (a) | $ | (3,755 | ) | 14,221 |
(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. |
Fair value of asset derivatives | Fair value of liability derivatives | |||||||||||
As of | As of | As of | As of | |||||||||
March 31, 2017 | December 31, 2016 | March 31, 2017 | December 31, 2016 | |||||||||
1:3 basis swaps | $ | — | — | 5,198 | 2,624 | |||||||
Interest rate swaps - floor income hedges | 85,533 | 81,159 | 304 | 256 | ||||||||
Interest rate swap option - floor income hedge | 2,092 | 2,977 | — | — | ||||||||
Interest rate swaps - hybrid debt hedges | — | — | 6,923 | 7,341 | ||||||||
Interest rate caps | 646 | 1,152 | — | — | ||||||||
Cross-currency interest rate swap | — | — | 66,670 | 67,605 | ||||||||
Other | 1,782 | 2,243 | — | — | ||||||||
Centrally cleared variation margin (a) | (50,401 | ) | — | — | — | |||||||
Total | $ | 39,652 | 87,531 | 79,095 | 77,826 |
(a) | As of March 31, 2017, the $50.4 million in variation margin due from the CME is included in "other assets" in the Company's consolidated balance sheet. |
Gross amounts not offset in the consolidated balance sheets | |||||||||||||
Gross amounts of recognized assets/liabilities presented in the consolidated balance sheets | Derivatives subject to enforceable master netting arrangement | Cash collateral pledged | Net asset (liability) | ||||||||||
As of March 31, 2017 | |||||||||||||
Derivative assets: | |||||||||||||
Non-centrally cleared derivative assets | $ | 3,058 | — | — | 3,058 | ||||||||
Centrally cleared derivative assets | 36,594 | — | — | 36,594 | |||||||||
$ | 39,652 | — | — | 39,652 | |||||||||
Derivative liabilities: | |||||||||||||
Non-centrally cleared derivative liabilities | $ | (73,593 | ) | — | 7,892 | (65,701 | ) | ||||||
Centrally cleared derivative liabilities | (5,502 | ) | — | — | (5,502 | ) | |||||||
$ | (79,095 | ) | — | 7,892 | (71,203 | ) |
As of December 31, 2016 | |||||||||||||
Derivative assets | $ | 87,531 | (2,880 | ) | 475 | 85,126 | |||||||
Derivative liabilities | $ | (77,826 | ) | 2,880 | 7,292 | (67,654 | ) |
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Settlements: | ||||||
1:3 basis swaps | $ | 698 | (329 | ) | ||
Interest rate swaps - floor income hedges | (120 | ) | (5,243 | ) | ||
Interest rate swaps - hybrid debt hedges | (205 | ) | (232 | ) | ||
Cross-currency interest rate swap | (1,751 | ) | (733 | ) | ||
Centrally cleared variation margin settlements | 50,401 | — | ||||
Total settlements - income (expense) | 49,023 | (6,537 | ) | |||
Change in fair value: | ||||||
1:3 basis swaps | (2,574 | ) | 768 | |||
Interest rate swaps - floor income hedges | 4,324 | (32,709 | ) | |||
Interest rate swap option - floor income hedge | (884 | ) | (1,415 | ) | ||
Interest rate swaps - hybrid debt hedges | 419 | (2,549 | ) | |||
Interest rate caps | (522 | ) | (763 | ) | ||
Cross-currency interest rate swap | 935 | 32,701 | ||||
Centrally cleared variation margin | (50,401 | ) | — | |||
Other | (460 | ) | 293 | |||
Total change in fair value - income (expense) | (49,163 | ) | (3,674 | ) | ||
Re-measurement of Euro Notes (foreign currency transaction adjustment) - (expense) income | (4,690 | ) | (18,480 | ) | ||
Derivative market value and foreign currency transaction adjustments and derivative settlements, net - (expense) income | $ | (4,830 | ) | (28,691 | ) |
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As of March 31, 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) | $ | 114,315 | 7,028 | (622 | ) | 120,721 | 98,260 | 6,280 | (641 | ) | 103,899 | ||||||||||||||
Equity securities | 720 | 2,081 | (54 | ) | 2,747 | 720 | 1,930 | (61 | ) | 2,589 | |||||||||||||||
Total available-for-sale investments | $ | 115,035 | 9,109 | (676 | ) | 123,468 | 98,980 | 8,210 | (702 | ) | 106,488 | ||||||||||||||
Trading investments - equity securities | 98 | 105 | |||||||||||||||||||||||
Total available-for-sale and trading investments | 123,566 | 106,593 | |||||||||||||||||||||||
Other Investments and Notes Receivable (not measured at fair value): | |||||||||||||||||||||||||
Venture capital and funds | 73,800 | 69,789 | |||||||||||||||||||||||
Real estate | 48,480 | 48,379 | |||||||||||||||||||||||
Notes receivable | 16,563 | 17,031 | |||||||||||||||||||||||
Tax liens and affordable housing | 11,409 | 12,352 | |||||||||||||||||||||||
Total investments and notes receivable | $ | 273,818 | 254,144 |
(a) | As of March 31, 2017, the aggregate fair value of available-for-sale investments with unrealized losses was $34.8 million, of which $11.0 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 March 31, 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 March 31, 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. |
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Weighted average remaining useful life as of March 31, 2017 (months) | As of March 31, 2017 | As of December 31, 2016 | |||||||
Amortizable intangible assets: | |||||||||
Customer relationships (net of accumulated amortization of $9,623 and $8,548, respectively) | 166 | $ | 27,261 | 28,335 | |||||
Trade names (net of accumulated amortization of $1,864 and $1,653, respectively) | 186 | 9,708 | 9,919 | ||||||
Computer software (net of accumulated amortization of $6,760 and $5,675, respectively) | 23 | 8,211 | 9,296 | ||||||
Covenants not to compete (net of accumulated amortization of $100 and $91, respectively) | 86 | 254 | 263 | ||||||
Total - amortizable intangible assets | 144 | $ | 45,434 | 47,813 |
2017 (April 1 - December 31) | $ | 7,007 | |
2018 | 8,605 | ||
2019 | 5,147 | ||
2020 | 4,231 | ||
2021 | 3,480 | ||
2022 and thereafter | 16,964 | ||
$ | 45,434 |
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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 |
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As of March 31, 2017 | As of December 31, 2016 | |||||||
Useful life | ||||||||
Non-communications: | ||||||||
Computer equipment and software | 1-5 years | $ | 103,109 | 97,317 | ||||
Office furniture and equipment | 3-7 years | 12,376 | 12,344 | |||||
Building and building improvements | 5-39 years | 13,383 | 13,363 | |||||
Transportation equipment | 4-10 years | 3,813 | 3,809 | |||||
Leasehold improvements | 5-20 years | 3,605 | 3,579 | |||||
Land | — | 1,682 | 1,682 | |||||
Construction in progress | — | 19,284 | 16,346 | |||||
157,252 | 148,440 | |||||||
Accumulated depreciation - non-communications | 95,575 | 91,285 | ||||||
Non-communications, net property and equipment | 61,677 | 57,155 | ||||||
Communications: | ||||||||
Network plant and fiber | 5-15 years | 51,868 | 40,844 | |||||
Central office | 5-15 years | 7,388 | 6,448 | |||||
Customer located property | 5-10 years | 7,385 | 5,138 | |||||
Transportation equipment | 4-10 years | 3,805 | 2,966 | |||||
Computer equipment and software | 1-5 years | 2,344 | 2,026 | |||||
Other | 1-39 years | 1,411 | 1,268 | |||||
Land | — | 70 | 70 | |||||
Construction in progress | — | 13,695 | 12,537 | |||||
87,966 | 71,297 | |||||||
Accumulated depreciation - communications | 6,581 | 4,666 | ||||||
Communications, net property and equipment | 81,385 | 66,631 | ||||||
Total property and equipment, net | $ | 143,062 | 123,786 |
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Three months ended March 31, 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 | $ | 94 | 2 | 1 | 182,326 | 2,761 | (1,359 | ) | 183,824 | ||||||||||||
Interest expense | — | — | 712 | 106,751 | 795 | (1,359 | ) | 106,899 | |||||||||||||
Net interest income | 94 | 2 | (711 | ) | 75,575 | 1,966 | — | 76,925 | |||||||||||||
Less provision for loan losses | — | — | — | 1,000 | — | — | 1,000 | ||||||||||||||
Net interest income (loss) after provision for loan losses | 94 | 2 | (711 | ) | 74,575 | 1,966 | — | 75,925 | |||||||||||||
Other income: | |||||||||||||||||||||
Loan systems and servicing revenue | 54,229 | — | — | — | — | — | 54,229 | ||||||||||||||
Intersegment servicing revenue | 10,323 | — | — | — | — | (10,323 | ) | — | |||||||||||||
Tuition payment processing, school information, and campus commerce revenue | — | 43,620 | — | — | — | — | 43,620 | ||||||||||||||
Communications revenue | — | — | 5,106 | — | — | — | 5,106 | ||||||||||||||
Other income | — | — | — | 3,342 | 9,290 | — | 12,632 | ||||||||||||||
Gain from debt repurchases | — | — | — | 540 | 4,440 | — | 4,980 | ||||||||||||||
Derivative settlements, net | — | — | — | (1,173 | ) | (205 | ) | — | (1,378 | ) | |||||||||||
Derivative market value and foreign currency transaction adjustments, net | — | — | — | (53,811 | ) | (42 | ) | — | (53,853 | ) | |||||||||||
Centrally cleared variation margin settlements, net | — | — | — | 50,401 | — | — | 50,401 | ||||||||||||||
Total other income | 64,552 | 43,620 | 5,106 | (701 | ) | 13,483 | (10,323 | ) | 115,737 | ||||||||||||
Operating expenses: | |||||||||||||||||||||
Salaries and benefits | 37,992 | 16,652 | 2,979 | 400 | 13,839 | — | 71,863 | ||||||||||||||
Depreciation and amortization | 549 | 2,391 | 2,135 | — | 3,523 | — | 8,598 | ||||||||||||||
Loan servicing fees | — | — | — | 6,025 | — | — | 6,025 | ||||||||||||||
Cost to provide communications services | — | — | 1,954 | — | — | — | 1,954 | ||||||||||||||
Other expenses | 9,136 | 4,995 | 1,372 | 991 | 10,054 | — | 26,547 | ||||||||||||||
Intersegment expenses, net | 7,398 | 2,075 | 506 | 10,412 | (10,068 | ) | (10,323 | ) | — | ||||||||||||
Total operating expenses | 55,075 | 26,113 | 8,946 | 17,828 | 17,348 | (10,323 | ) | 114,987 | |||||||||||||
Income (loss) before income taxes | 9,571 | 17,509 | (4,551 | ) | 56,046 | (1,899 | ) | — | 76,675 | ||||||||||||
Income tax (expense) benefit | (4,555 | ) | (6,653 | ) | 1,730 | (21,297 | ) | 2,021 | — | (28,755 | ) | ||||||||||
Net income (loss) | 5,016 | 10,856 | (2,821 | ) | 34,749 | 122 | — | 47,920 | |||||||||||||
Net loss (income) attributable to noncontrolling interests | 2,415 | — | — | — | (309 | ) | — | 2,106 | |||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 7,431 | 10,856 | (2,821 | ) | 34,749 | (187 | ) | — | 50,026 |
Three months ended March 31, 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 | $ | 21 | 3 | — | 190,723 | 2,093 | (823 | ) | 192,017 | ||||||||||||
Interest expense | — | — | 147 | 89,877 | 1,206 | (823 | ) | 90,408 | |||||||||||||
Net interest income | 21 | 3 | (147 | ) | 100,846 | 887 | — | 101,609 | |||||||||||||
Less provision for loan losses | — | — | — | 2,500 | — | — | 2,500 | ||||||||||||||
Net interest income (loss) after provision for loan losses | 21 | 3 | (147 | ) | 98,346 | 887 | — | 99,109 | |||||||||||||
Other income: | |||||||||||||||||||||
Loan systems and servicing revenue | 52,330 | — | — | — | — | — | 52,330 | ||||||||||||||
Intersegment servicing revenue | 12,007 | — | — | — | — | (12,007 | ) | — | |||||||||||||
Tuition payment processing, school information, and campus commerce revenue | — | 38,657 | — | — | — | — | 38,657 | ||||||||||||||
Communications revenue | — | — | 4,346 | — | — | — | 4,346 | ||||||||||||||
Enrollment services revenue | — | — | — | — | 4,326 | — | 4,326 | ||||||||||||||
Other income | — | — | — | 4,263 | 9,532 | — | 13,796 | ||||||||||||||
Gain from debt repurchases | — | — | — | 101 | — | — | 101 | ||||||||||||||
Derivative settlements, net | — | — | — | (6,304 | ) | (232 | ) | — | (6,537 | ) | |||||||||||
Derivative market value and foreign currency transaction adjustments, net | — | — | — | (19,897 | ) | (2,256 | ) | — | (22,154 | ) | |||||||||||
Total other income | 64,337 | 38,657 | 4,346 | (21,837 | ) | 11,370 | (12,007 | ) | 84,865 | ||||||||||||
Operating expenses: | . | ||||||||||||||||||||
Salaries and benefits | 32,967 | 14,435 | 1,089 | 519 | 14,231 | — | 63,242 | ||||||||||||||
Depreciation and amortization | 438 | 2,271 | 1,129 | — | 3,802 | — | 7,640 | ||||||||||||||
Loan servicing fees | — | — | — | 6,928 | — | — | 6,928 | ||||||||||||||
Cost to provide communications services | — | — | 1,703 | — | — | — | 1,703 | ||||||||||||||
Cost to provide enrollment services | — | — | — | — | 3,623 | — | 3,623 | ||||||||||||||
Other expenses | 11,470 | 4,159 | 753 | 1,516 | 10,477 | — | 28,376 | ||||||||||||||
Intersegment expenses, net | 6,241 | 1,512 | 144 | 12,107 | (7,997 | ) | (12,007 | ) | — | ||||||||||||
Total operating expenses | 51,116 | 22,377 | 4,818 | 21,070 | 24,136 | (12,007 | ) | 111,512 | |||||||||||||
Income (loss) before income taxes | 13,242 | 16,283 | (619 | ) | 55,439 | (11,879 | ) | — | 72,462 | ||||||||||||
Income tax (expense) benefit | (5,032 | ) | (6,188 | ) | 235 | (21,066 | ) | 7,617 | — | (24,433 | ) | ||||||||||
Net income (loss) | 8,210 | 10,095 | (384 | ) | 34,373 | (4,262 | ) | — | 48,029 | ||||||||||||
Net loss (income) attributable to noncontrolling interests | — | — | — | — | (68 | ) | — | (68 | ) | ||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 8,210 | 10,095 | (384 | ) | 34,373 | (4,330 | ) | — | 47,961 |
|
|
As of March 31, 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 asset-backed securities | $ | — | 120,506 | 120,506 | — | 103,780 | 103,780 | |||||||||||
Equity securities | 2,845 | — | 2,845 | 2,694 | — | 2,694 | ||||||||||||
Debt securities | 215 | — | 215 | 119 | — | 119 | ||||||||||||
Total investments (available-for-sale and trading) | 3,060 | 120,506 | 123,566 | 2,813 | 103,780 | 106,593 | ||||||||||||
Derivative instruments | — | 39,652 | 39,652 | — | 87,531 | 87,531 | ||||||||||||
Total assets | $ | 3,060 | 160,158 | 163,218 | 2,813 | 191,311 | 194,124 | |||||||||||
Liabilities: | ||||||||||||||||||
Derivative instruments | $ | — | 79,095 | 79,095 | — | 77,826 | 77,826 | |||||||||||
Total liabilities | $ | — | 79,095 | 79,095 | — | 77,826 | 77,826 |
As of March 31, 2017 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 25,036,613 | 24,003,386 | — | — | 25,036,613 | |||||||||
Cash and cash equivalents | 108,160 | 108,160 | 108,160 | — | — | ||||||||||
Investments (available-for-sale and trading) | 123,566 | 123,566 | 3,060 | 120,506 | — | ||||||||||
Notes receivable | 16,563 | 16,563 | — | 16,563 | — | ||||||||||
Restricted cash | 787,635 | 787,635 | 787,635 | — | — | ||||||||||
Restricted cash – due to customers | 93,699 | 93,699 | 93,699 | — | — | ||||||||||
Accrued interest receivable | 392,754 | 392,754 | — | 392,754 | — | ||||||||||
Derivative instruments | 39,652 | 39,652 | — | 39,652 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 23,526,104 | 23,594,516 | — | 23,526,104 | — | ||||||||||
Accrued interest payable | 46,427 | 46,427 | — | 46,427 | — | ||||||||||
Due to customers | 93,699 | 93,699 | 93,699 | — | — | ||||||||||
Derivative instruments | 79,095 | 79,095 | — | 79,095 | — |
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 | — |
|
|
As of | As of | |||||
March 31, 2017 | December 31, 2016 | |||||
Federally insured loans: | ||||||
Stafford and other | $ | 4,927,541 | 5,186,047 | |||
Consolidation | 19,012,552 | 19,643,937 | ||||
Total | 23,940,093 | 24,829,984 | ||||
Private education loans | 256,816 | 273,659 | ||||
24,196,909 | 25,103,643 | |||||
Loan discount, net of unamortized loan premiums and deferred origination costs (a) | (142,997 | ) | (148,077 | ) | ||
Allowance for loan losses – federally insured loans | (36,687 | ) | (37,268 | ) | ||
Allowance for loan losses – private education loans | (13,839 | ) | (14,574 | ) | ||
$ | 24,003,386 | 24,903,724 |
(a) | As of March 31, 2017 and December 31, 2016, "loan discount, net of unamortized loan premiums and deferred origination costs" included $16.6 million and $18.6 million, respectively, of non-accretable discount associated with purchased loans of $8.0 billion and $8.3 billion, respectively. |
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Balance at beginning of period | $ | 51,842 | 50,498 | |||
Provision for loan losses: | ||||||
Federally insured loans | 2,000 | 2,000 | ||||
Private education loans | (1,000 | ) | 500 | |||
Total provision for loan losses | 1,000 | 2,500 | ||||
Charge-offs: | ||||||
Federally insured loans | (2,581 | ) | (3,049 | ) | ||
Private education loans | (82 | ) | (401 | ) | ||
Total charge-offs | (2,663 | ) | (3,450 | ) | ||
Recoveries - private education loans | 197 | 276 | ||||
Purchase of private education loans | — | 160 | ||||
Transfer from repurchase obligation related to private education loans repurchased | 150 | 100 | ||||
Balance at end of period | $ | 50,526 | 50,084 | |||
Allocation of the allowance for loan losses: | ||||||
Federally insured loans | $ | 36,687 | 34,441 | |||
Private education loans | 13,839 | 15,643 | ||||
Total allowance for loan losses | $ | 50,526 | 50,084 |
As of March 31, 2017 | As of December 31, 2016 | As of March 31, 2016 | ||||||||||||||||||
Federally insured loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 1,604,494 | $ | 1,606,468 | $ | 2,198,559 | ||||||||||||||
Loans in forbearance | 2,125,344 | 2,295,367 | 2,736,472 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 17,690,083 | 87.5 | % | 18,125,768 | 86.6 | % | 19,375,813 | 86.0 | % | |||||||||||
Loans delinquent 31-60 days | 732,433 | 3.6 | 818,976 | 3.9 | 866,207 | 3.8 | ||||||||||||||
Loans delinquent 61-90 days | 493,876 | 2.4 | 487,647 | 2.3 | 538,284 | 2.4 | ||||||||||||||
Loans delinquent 91-120 days | 275,711 | 1.4 | 335,291 | 1.6 | 329,425 | 1.5 | ||||||||||||||
Loans delinquent 121-270 days | 763,030 | 3.8 | 854,432 | 4.1 | 1,008,157 | 4.5 | ||||||||||||||
Loans delinquent 271 days or greater | 255,122 | 1.3 | 306,035 | 1.5 | 396,280 | 1.8 | ||||||||||||||
Total loans in repayment | 20,210,255 | 100.0 | % | 20,928,149 | 100.0 | % | 22,514,166 | 100.0 | % | |||||||||||
Total federally insured loans | $ | 23,940,093 | $ | 24,829,984 | $ | 27,449,197 | ||||||||||||||
Private education loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 34,138 | $ | 35,146 | $ | 55,668 | ||||||||||||||
Loans in forbearance | 3,811 | 3,448 | 722 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 213,081 | 97.4 | % | 228,612 | 97.2 | % | 231,556 | 97.2 | % | |||||||||||
Loans delinquent 31-60 days | 1,355 | 0.6 | 1,677 | 0.7 | 968 | 0.4 | ||||||||||||||
Loans delinquent 61-90 days | 1,402 | 0.6 | 1,110 | 0.5 | 1,144 | 0.5 | ||||||||||||||
Loans delinquent 91 days or greater | 3,029 | 1.4 | 3,666 | 1.6 | 4,563 | 1.9 | ||||||||||||||
Total loans in repayment | 218,867 | 100.0 | % | 235,065 | 100.0 | % | 238,231 | 100.0 | % | |||||||||||
Total private education loans | $ | 256,816 | $ | 273,659 | $ | 294,621 |
|
As of March 31, 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 | $ | 21,316,429 | 0.22% - 6.90% | 6/25/21 - 9/25/65 | |||
Bonds and notes based on auction | 800,065 | 1.69% - 2.32% | 3/22/32 - 11/26/46 | ||||
Total FFELP variable-rate bonds and notes | 22,116,494 | ||||||
FFELP warehouse facilities | 1,608,569 | 0.83% - 1.17% | 9/7/18 - 12/13/19 | ||||
Variable-rate bonds and notes issued in private education loan asset-backed securitization | 102,585 | 2.73% | 12/26/40 | ||||
Fixed-rate bonds and notes issued in private education loan asset-backed securitization | 105,264 | 3.60% / 5.35% | 12/26/40 / 12/28/43 | ||||
Unsecured line of credit | 35,000 | 2.29% | 12/12/21 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 20,526 | 4.52% | 9/15/61 | ||||
Other borrowings | 20,871 | 1.78% - 3.38% | 4/27/17 - 12/15/45 | ||||
24,009,309 | |||||||
Discount on bonds and notes payable and debt issuance costs | (414,793 | ) | |||||
Total | $ | 23,594,516 |
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 |
NFSLW-I | NHELP-III (a) | NHELP-II | Total | |||||||||||
Maximum financing amount | $ | 875,000 | 750,000 | 500,000 | 2,125,000 | |||||||||
Amount outstanding | 619,249 | 587,741 | 401,579 | 1,608,569 | ||||||||||
Amount available | $ | 255,751 | 162,259 | 98,421 | 516,431 | |||||||||
Expiration of liquidity provisions | July 10, 2018 | April 28, 2017 | December 15, 2017 | |||||||||||
Final maturity date | September 7, 2018 | April 26, 2019 | December 13, 2019 | |||||||||||
Maximum advance rates | 92.0 - 98.0% | 92.2 - 95.0% | 85.0 - 95.0% | |||||||||||
Minimum advance rates | 84.0 - 90.0% | 92.2 - 95.0% | 85.0 - 95.0% | |||||||||||
Advanced as equity support | $ | 18,177 | 30,052 | 29,689 | 77,918 |
(a) | On April 3, 2017, the Company entered into a letter agreement for this warehouse facility to decrease the maximum financing amount 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, the Company decreased the maximum financing amount on this warehouse facility to $400.0 million. |
|
As of March 31, | As of December 31, | ||||||
2017 | 2016 | ||||||
Maturity | Notional amount | Notional amount | |||||
2018 | $ | 4,000,000 | — | ||||
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 | |||||
$ | 6,500,000 | 1,775,000 |
Maturity | Notional amount | Weighted average fixed rate paid by the Company (a) | |||||
2017 | $ | 750,000 | 0.99 | % | |||
2018 | 1,350,000 | 1.07 | |||||
2019 | 3,250,000 | 0.97 | |||||
2020 | 1,500,000 | 1.01 | |||||
2025 | 100,000 | 2.32 | |||||
$ | 6,950,000 | 1.02 | % |
(a) | For all interest rate derivatives, the Company receives discrete three-month LIBOR. |
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. |
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Re-measurement of Euro Notes | $ | (4,690 | ) | (18,480 | ) | |
Change in fair value of cross-currency interest rate swap | 935 | 32,701 | ||||
Total impact to consolidated statements of income - (expense) income (a) | $ | (3,755 | ) | 14,221 |
(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. |
Fair value of asset derivatives | Fair value of liability derivatives | |||||||||||
As of | As of | As of | As of | |||||||||
March 31, 2017 | December 31, 2016 | March 31, 2017 | December 31, 2016 | |||||||||
1:3 basis swaps | $ | — | — | 5,198 | 2,624 | |||||||
Interest rate swaps - floor income hedges | 85,533 | 81,159 | 304 | 256 | ||||||||
Interest rate swap option - floor income hedge | 2,092 | 2,977 | — | — | ||||||||
Interest rate swaps - hybrid debt hedges | — | — | 6,923 | 7,341 | ||||||||
Interest rate caps | 646 | 1,152 | — | — | ||||||||
Cross-currency interest rate swap | — | — | 66,670 | 67,605 | ||||||||
Other | 1,782 | 2,243 | — | — | ||||||||
Centrally cleared variation margin (a) | (50,401 | ) | — | — | — | |||||||
Total | $ | 39,652 | 87,531 | 79,095 | 77,826 |
(a) | As of March 31, 2017, the $50.4 million in variation margin due from the CME is included in "other assets" in the Company's consolidated balance sheet. |
Gross amounts not offset in the consolidated balance sheets | |||||||||||||
Gross amounts of recognized assets/liabilities presented in the consolidated balance sheets | Derivatives subject to enforceable master netting arrangement | Cash collateral pledged | Net asset (liability) | ||||||||||
As of March 31, 2017 | |||||||||||||
Derivative assets: | |||||||||||||
Non-centrally cleared derivative assets | $ | 3,058 | — | — | 3,058 | ||||||||
Centrally cleared derivative assets | 36,594 | — | — | 36,594 | |||||||||
$ | 39,652 | — | — | 39,652 | |||||||||
Derivative liabilities: | |||||||||||||
Non-centrally cleared derivative liabilities | $ | (73,593 | ) | — | 7,892 | (65,701 | ) | ||||||
Centrally cleared derivative liabilities | (5,502 | ) | — | — | (5,502 | ) | |||||||
$ | (79,095 | ) | — | 7,892 | (71,203 | ) |
As of December 31, 2016 | |||||||||||||
Derivative assets | $ | 87,531 | (2,880 | ) | 475 | 85,126 | |||||||
Derivative liabilities | $ | (77,826 | ) | 2,880 | 7,292 | (67,654 | ) |
Three months ended March 31, | ||||||
2017 | 2016 | |||||
Settlements: | ||||||
1:3 basis swaps | $ | 698 | (329 | ) | ||
Interest rate swaps - floor income hedges | (120 | ) | (5,243 | ) | ||
Interest rate swaps - hybrid debt hedges | (205 | ) | (232 | ) | ||
Cross-currency interest rate swap | (1,751 | ) | (733 | ) | ||
Centrally cleared variation margin settlements | 50,401 | — | ||||
Total settlements - income (expense) | 49,023 | (6,537 | ) | |||
Change in fair value: | ||||||
1:3 basis swaps | (2,574 | ) | 768 | |||
Interest rate swaps - floor income hedges | 4,324 | (32,709 | ) | |||
Interest rate swap option - floor income hedge | (884 | ) | (1,415 | ) | ||
Interest rate swaps - hybrid debt hedges | 419 | (2,549 | ) | |||
Interest rate caps | (522 | ) | (763 | ) | ||
Cross-currency interest rate swap | 935 | 32,701 | ||||
Centrally cleared variation margin | (50,401 | ) | — | |||
Other | (460 | ) | 293 | |||
Total change in fair value - income (expense) | (49,163 | ) | (3,674 | ) | ||
Re-measurement of Euro Notes (foreign currency transaction adjustment) - (expense) income | (4,690 | ) | (18,480 | ) | ||
Derivative market value and foreign currency transaction adjustments and derivative settlements, net - (expense) income | $ | (4,830 | ) | (28,691 | ) |
|
As of March 31, 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) | $ | 114,315 | 7,028 | (622 | ) | 120,721 | 98,260 | 6,280 | (641 | ) | 103,899 | ||||||||||||||
Equity securities | 720 | 2,081 | (54 | ) | 2,747 | 720 | 1,930 | (61 | ) | 2,589 | |||||||||||||||
Total available-for-sale investments | $ | 115,035 | 9,109 | (676 | ) | 123,468 | 98,980 | 8,210 | (702 | ) | 106,488 | ||||||||||||||
Trading investments - equity securities | 98 | 105 | |||||||||||||||||||||||
Total available-for-sale and trading investments | 123,566 | 106,593 | |||||||||||||||||||||||
Other Investments and Notes Receivable (not measured at fair value): | |||||||||||||||||||||||||
Venture capital and funds | 73,800 | 69,789 | |||||||||||||||||||||||
Real estate | 48,480 | 48,379 | |||||||||||||||||||||||
Notes receivable | 16,563 | 17,031 | |||||||||||||||||||||||
Tax liens and affordable housing | 11,409 | 12,352 | |||||||||||||||||||||||
Total investments and notes receivable | $ | 273,818 | 254,144 |
(a) | As of March 31, 2017, the aggregate fair value of available-for-sale investments with unrealized losses was $34.8 million, of which $11.0 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 March 31, 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 March 31, 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. |
|
Weighted average remaining useful life as of March 31, 2017 (months) | As of March 31, 2017 | As of December 31, 2016 | |||||||
Amortizable intangible assets: | |||||||||
Customer relationships (net of accumulated amortization of $9,623 and $8,548, respectively) | 166 | $ | 27,261 | 28,335 | |||||
Trade names (net of accumulated amortization of $1,864 and $1,653, respectively) | 186 | 9,708 | 9,919 | ||||||
Computer software (net of accumulated amortization of $6,760 and $5,675, respectively) | 23 | 8,211 | 9,296 | ||||||
Covenants not to compete (net of accumulated amortization of $100 and $91, respectively) | 86 | 254 | 263 | ||||||
Total - amortizable intangible assets | 144 | $ | 45,434 | 47,813 |
2017 (April 1 - December 31) | $ | 7,007 | |
2018 | 8,605 | ||
2019 | 5,147 | ||
2020 | 4,231 | ||
2021 | 3,480 | ||
2022 and thereafter | 16,964 | ||
$ | 45,434 |
|
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 |
|
As of March 31, 2017 | As of December 31, 2016 | |||||||
Useful life | ||||||||
Non-communications: | ||||||||
Computer equipment and software | 1-5 years | $ | 103,109 | 97,317 | ||||
Office furniture and equipment | 3-7 years | 12,376 | 12,344 | |||||
Building and building improvements | 5-39 years | 13,383 | 13,363 | |||||
Transportation equipment | 4-10 years | 3,813 | 3,809 | |||||
Leasehold improvements | 5-20 years | 3,605 | 3,579 | |||||
Land | — | 1,682 | 1,682 | |||||
Construction in progress | — | 19,284 | 16,346 | |||||
157,252 | 148,440 | |||||||
Accumulated depreciation - non-communications | 95,575 | 91,285 | ||||||
Non-communications, net property and equipment | 61,677 | 57,155 | ||||||
Communications: | ||||||||
Network plant and fiber | 5-15 years | 51,868 | 40,844 | |||||
Central office | 5-15 years | 7,388 | 6,448 | |||||
Customer located property | 5-10 years | 7,385 | 5,138 | |||||
Transportation equipment | 4-10 years | 3,805 | 2,966 | |||||
Computer equipment and software | 1-5 years | 2,344 | 2,026 | |||||
Other | 1-39 years | 1,411 | 1,268 | |||||
Land | — | 70 | 70 | |||||
Construction in progress | — | 13,695 | 12,537 | |||||
87,966 | 71,297 | |||||||
Accumulated depreciation - communications | 6,581 | 4,666 | ||||||
Communications, net property and equipment | 81,385 | 66,631 | ||||||
Total property and equipment, net | $ | 143,062 | 123,786 |
|
Three months ended March 31, 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 | $ | 94 | 2 | 1 | 182,326 | 2,761 | (1,359 | ) | 183,824 | ||||||||||||
Interest expense | — | — | 712 | 106,751 | 795 | (1,359 | ) | 106,899 | |||||||||||||
Net interest income | 94 | 2 | (711 | ) | 75,575 | 1,966 | — | 76,925 | |||||||||||||
Less provision for loan losses | — | — | — | 1,000 | — | — | 1,000 | ||||||||||||||
Net interest income (loss) after provision for loan losses | 94 | 2 | (711 | ) | 74,575 | 1,966 | — | 75,925 | |||||||||||||
Other income: | |||||||||||||||||||||
Loan systems and servicing revenue | 54,229 | — | — | — | — | — | 54,229 | ||||||||||||||
Intersegment servicing revenue | 10,323 | — | — | — | — | (10,323 | ) | — | |||||||||||||
Tuition payment processing, school information, and campus commerce revenue | — | 43,620 | — | — | — | — | 43,620 | ||||||||||||||
Communications revenue | — | — | 5,106 | — | — | — | 5,106 | ||||||||||||||
Other income | — | — | — | 3,342 | 9,290 | — | 12,632 | ||||||||||||||
Gain from debt repurchases | — | — | — | 540 | 4,440 | — | 4,980 | ||||||||||||||
Derivative settlements, net | — | — | — | (1,173 | ) | (205 | ) | — | (1,378 | ) | |||||||||||
Derivative market value and foreign currency transaction adjustments, net | — | — | — | (53,811 | ) | (42 | ) | — | (53,853 | ) | |||||||||||
Centrally cleared variation margin settlements, net | — | — | — | 50,401 | — | — | 50,401 | ||||||||||||||
Total other income | 64,552 | 43,620 | 5,106 | (701 | ) | 13,483 | (10,323 | ) | 115,737 | ||||||||||||
Operating expenses: | |||||||||||||||||||||
Salaries and benefits | 37,992 | 16,652 | 2,979 | 400 | 13,839 | — | 71,863 | ||||||||||||||
Depreciation and amortization | 549 | 2,391 | 2,135 | — | 3,523 | — | 8,598 | ||||||||||||||
Loan servicing fees | — | — | — | 6,025 | — | — | 6,025 | ||||||||||||||
Cost to provide communications services | — | — | 1,954 | — | — | — | 1,954 | ||||||||||||||
Other expenses | 9,136 | 4,995 | 1,372 | 991 | 10,054 | — | 26,547 | ||||||||||||||
Intersegment expenses, net | 7,398 | 2,075 | 506 | 10,412 | (10,068 | ) | (10,323 | ) | — | ||||||||||||
Total operating expenses | 55,075 | 26,113 | 8,946 | 17,828 | 17,348 | (10,323 | ) | 114,987 | |||||||||||||
Income (loss) before income taxes | 9,571 | 17,509 | (4,551 | ) | 56,046 | (1,899 | ) | — | 76,675 | ||||||||||||
Income tax (expense) benefit | (4,555 | ) | (6,653 | ) | 1,730 | (21,297 | ) | 2,021 | — | (28,755 | ) | ||||||||||
Net income (loss) | 5,016 | 10,856 | (2,821 | ) | 34,749 | 122 | — | 47,920 | |||||||||||||
Net loss (income) attributable to noncontrolling interests | 2,415 | — | — | — | (309 | ) | — | 2,106 | |||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 7,431 | 10,856 | (2,821 | ) | 34,749 | (187 | ) | — | 50,026 |
Three months ended March 31, 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 | $ | 21 | 3 | — | 190,723 | 2,093 | (823 | ) | 192,017 | ||||||||||||
Interest expense | — | — | 147 | 89,877 | 1,206 | (823 | ) | 90,408 | |||||||||||||
Net interest income | 21 | 3 | (147 | ) | 100,846 | 887 | — | 101,609 | |||||||||||||
Less provision for loan losses | — | — | — | 2,500 | — | — | 2,500 | ||||||||||||||
Net interest income (loss) after provision for loan losses | 21 | 3 | (147 | ) | 98,346 | 887 | — | 99,109 | |||||||||||||
Other income: | |||||||||||||||||||||
Loan systems and servicing revenue | 52,330 | — | — | — | — | — | 52,330 | ||||||||||||||
Intersegment servicing revenue | 12,007 | — | — | — | — | (12,007 | ) | — | |||||||||||||
Tuition payment processing, school information, and campus commerce revenue | — | 38,657 | — | — | — | — | 38,657 | ||||||||||||||
Communications revenue | — | — | 4,346 | — | — | — | 4,346 | ||||||||||||||
Enrollment services revenue | — | — | — | — | 4,326 | — | 4,326 | ||||||||||||||
Other income | — | — | — | 4,263 | 9,532 | — | 13,796 | ||||||||||||||
Gain from debt repurchases | — | — | — | 101 | — | — | 101 | ||||||||||||||
Derivative settlements, net | — | — | — | (6,304 | ) | (232 | ) | — | (6,537 | ) | |||||||||||
Derivative market value and foreign currency transaction adjustments, net | — | — | — | (19,897 | ) | (2,256 | ) | — | (22,154 | ) | |||||||||||
Total other income | 64,337 | 38,657 | 4,346 | (21,837 | ) | 11,370 | (12,007 | ) | 84,865 | ||||||||||||
Operating expenses: | . | ||||||||||||||||||||
Salaries and benefits | 32,967 | 14,435 | 1,089 | 519 | 14,231 | — | 63,242 | ||||||||||||||
Depreciation and amortization | 438 | 2,271 | 1,129 | — | 3,802 | — | 7,640 | ||||||||||||||
Loan servicing fees | — | — | — | 6,928 | — | — | 6,928 | ||||||||||||||
Cost to provide communications services | — | — | 1,703 | — | — | — | 1,703 | ||||||||||||||
Cost to provide enrollment services | — | — | — | — | 3,623 | — | 3,623 | ||||||||||||||
Other expenses | 11,470 | 4,159 | 753 | 1,516 | 10,477 | — | 28,376 | ||||||||||||||
Intersegment expenses, net | 6,241 | 1,512 | 144 | 12,107 | (7,997 | ) | (12,007 | ) | — | ||||||||||||
Total operating expenses | 51,116 | 22,377 | 4,818 | 21,070 | 24,136 | (12,007 | ) | 111,512 | |||||||||||||
Income (loss) before income taxes | 13,242 | 16,283 | (619 | ) | 55,439 | (11,879 | ) | — | 72,462 | ||||||||||||
Income tax (expense) benefit | (5,032 | ) | (6,188 | ) | 235 | (21,066 | ) | 7,617 | — | (24,433 | ) | ||||||||||
Net income (loss) | 8,210 | 10,095 | (384 | ) | 34,373 | (4,262 | ) | — | 48,029 | ||||||||||||
Net loss (income) attributable to noncontrolling interests | — | — | — | — | (68 | ) | — | (68 | ) | ||||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 8,210 | 10,095 | (384 | ) | 34,373 | (4,330 | ) | — | 47,961 |
|
As of March 31, 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 asset-backed securities | $ | — | 120,506 | 120,506 | — | 103,780 | 103,780 | |||||||||||
Equity securities | 2,845 | — | 2,845 | 2,694 | — | 2,694 | ||||||||||||
Debt securities | 215 | — | 215 | 119 | — | 119 | ||||||||||||
Total investments (available-for-sale and trading) | 3,060 | 120,506 | 123,566 | 2,813 | 103,780 | 106,593 | ||||||||||||
Derivative instruments | — | 39,652 | 39,652 | — | 87,531 | 87,531 | ||||||||||||
Total assets | $ | 3,060 | 160,158 | 163,218 | 2,813 | 191,311 | 194,124 | |||||||||||
Liabilities: | ||||||||||||||||||
Derivative instruments | $ | — | 79,095 | 79,095 | — | 77,826 | 77,826 | |||||||||||
Total liabilities | $ | — | 79,095 | 79,095 | — | 77,826 | 77,826 |
As of March 31, 2017 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 25,036,613 | 24,003,386 | — | — | 25,036,613 | |||||||||
Cash and cash equivalents | 108,160 | 108,160 | 108,160 | — | — | ||||||||||
Investments (available-for-sale and trading) | 123,566 | 123,566 | 3,060 | 120,506 | — | ||||||||||
Notes receivable | 16,563 | 16,563 | — | 16,563 | — | ||||||||||
Restricted cash | 787,635 | 787,635 | 787,635 | — | — | ||||||||||
Restricted cash – due to customers | 93,699 | 93,699 | 93,699 | — | — | ||||||||||
Accrued interest receivable | 392,754 | 392,754 | — | 392,754 | — | ||||||||||
Derivative instruments | 39,652 | 39,652 | — | 39,652 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 23,526,104 | 23,594,516 | — | 23,526,104 | — | ||||||||||
Accrued interest payable | 46,427 | 46,427 | — | 46,427 | — | ||||||||||
Due to customers | 93,699 | 93,699 | 93,699 | — | — | ||||||||||
Derivative instruments | 79,095 | 79,095 | — | 79,095 | — |
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 | — |
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