|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
• | In April 2015, the Financial Accounting Standards Board ("FASB") issued accounting guidance regarding the presentation of debt issuance costs. The new guidance requires that entities present debt issuance costs related to a debt liability as a direct deduction from that liability on the balance sheet. This guidance became effective for the Company beginning January 1, 2016. As a result of this standard, the Company reclassified its debt issuance costs, which were previously included in "other assets" on the consolidated balance sheet, to "bonds and notes payable." |
• | On February 1, 2016, the Company sold 100 percent of the membership interests in Sparkroom LLC, which includes the majority of the Company's inquiry management products and services within Nelnet Enrollment Solutions. The Company retained the digital marketing and content solution products and services under the brand name Peterson's within the Nelnet Enrollment Solutions business, which include test preparation study guides, school directories and databases, career exploration guides, on-line courses, scholarship search and selection data, career planning information and guides, and on-line information about colleges and universities. The Company reclassified the revenue and cost of goods sold attributable to the Peterson's products and services from "enrollment services revenue" and "cost to provide enrollment services" to "other income" and "other expenses," respectively, on the consolidated statements of income. After this reclassification, "enrollment services revenue" and "cost to provide enrollment services" include the operating results of the products and services sold as part of the Sparkroom disposition for all periods presented. These reclassifications had no effect on consolidated net income. |
|
As of | As of | |||||
September 30, 2016 | December 31, 2015 | |||||
Federally insured loans: | ||||||
Stafford and other | $ | 5,353,052 | 6,202,064 | |||
Consolidation | 20,189,881 | 22,086,043 | ||||
Total | 25,542,933 | 28,288,107 | ||||
Private education loans | 276,432 | 267,642 | ||||
25,819,365 | 28,555,749 | |||||
Loan discount, net of unamortized loan premiums and deferred origination costs (a) | (152,361 | ) | (180,699 | ) | ||
Allowance for loan losses – federally insured loans | (37,028 | ) | (35,490 | ) | ||
Allowance for loan losses – private education loans | (14,542 | ) | (15,008 | ) | ||
$ | 25,615,434 | 28,324,552 |
(a) | As of September 30, 2016 and December 31, 2015, "loan discount, net of unamortized loan premiums and deferred origination costs" included $20.8 million and $33.0 million, respectively, of non-accretable discount associated with purchased loans of $8.5 billion and $10.8 billion, respectively. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Balance at beginning of period | $ | 48,753 | 50,024 | 50,498 | 48,900 | |||||||
Provision for loan losses: | ||||||||||||
Federally insured loans | 7,000 | 2,000 | 11,000 | 6,000 | ||||||||
Private education loans | (1,000 | ) | 1,000 | (500 | ) | 1,150 | ||||||
Total provision for loan losses | 6,000 | 3,000 | 10,500 | 7,150 | ||||||||
Charge-offs: | ||||||||||||
Federally insured loans | (3,196 | ) | (2,817 | ) | (9,462 | ) | (9,225 | ) | ||||
Private education loans | (320 | ) | (357 | ) | (1,235 | ) | (1,479 | ) | ||||
Total charge-offs | (3,516 | ) | (3,174 | ) | (10,697 | ) | (10,704 | ) | ||||
Recoveries - private education loans | 243 | 250 | 769 | 742 | ||||||||
Purchase (sale) of federally insured and private education loans, net | 30 | 30 | 290 | (200 | ) | |||||||
Transfer from repurchase obligation related to private education loans repurchased, net | 60 | 250 | 210 | 4,492 | ||||||||
Balance at end of period | $ | 51,570 | 50,380 | 51,570 | 50,380 | |||||||
Allocation of the allowance for loan losses: | ||||||||||||
Federally insured loans | $ | 37,028 | 35,945 | 37,028 | 35,945 | |||||||
Private education loans | 14,542 | 14,435 | 14,542 | 14,435 | ||||||||
Total allowance for loan losses | $ | 51,570 | 50,380 | 51,570 | 50,380 |
As of September 30, 2016 | As of December 31, 2015 | As of September 30, 2015 | ||||||||||||||||||
Federally insured loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 1,864,323 | $ | 2,292,941 | $ | 2,638,639 | ||||||||||||||
Loans in forbearance | 2,403,504 | 2,979,357 | 2,993,844 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 18,445,728 | 86.8 | % | 19,447,541 | 84.4 | % | 19,681,517 | 84.4 | % | |||||||||||
Loans delinquent 31-60 days | 825,905 | 3.9 | 1,028,396 | 4.5 | 1,021,515 | 4.4 | ||||||||||||||
Loans delinquent 61-90 days | 491,395 | 2.3 | 566,953 | 2.5 | 638,037 | 2.7 | ||||||||||||||
Loans delinquent 91-120 days | 326,020 | 1.5 | 415,747 | 1.8 | 465,261 | 2.0 | ||||||||||||||
Loans delinquent 121-270 days | 835,250 | 3.9 | 1,166,940 | 5.1 | 1,139,864 | 4.9 | ||||||||||||||
Loans delinquent 271 days or greater | 350,808 | 1.6 | 390,232 | 1.7 | 376,702 | 1.6 | ||||||||||||||
Total loans in repayment | 21,275,106 | 100.0 | % | 23,015,809 | 100.0 | % | 23,322,896 | 100.0 | % | |||||||||||
Total federally insured loans | $ | 25,542,933 | $ | 28,288,107 | $ | 28,955,379 | ||||||||||||||
Private education loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 51,042 | $ | 30,795 | $ | 7,724 | ||||||||||||||
Loans in forbearance | 1,770 | 350 | 16 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 217,108 | 97.1 | % | 228,464 | 96.7 | % | 216,502 | 96.2 | % | |||||||||||
Loans delinquent 31-60 days | 1,357 | 0.6 | 1,771 | 0.7 | 1,999 | 0.9 | ||||||||||||||
Loans delinquent 61-90 days | 1,228 | 0.5 | 1,283 | 0.5 | 1,206 | 0.5 | ||||||||||||||
Loans delinquent 91 days or greater | 3,927 | 1.8 | 4,979 | 2.1 | 5,377 | 2.4 | ||||||||||||||
Total loans in repayment | 223,620 | 100.0 | % | 236,497 | 100.0 | % | 225,084 | 100.0 | % | |||||||||||
Total private education loans | $ | 276,432 | $ | 267,642 | $ | 232,824 |
|
As of September 30, 2016 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 22,550,964 | 0.25% - 6.90% | 8/26/19 - 9/25/56 | |||
Bonds and notes based on auction | 1,156,615 | 1.36% - 2.20% | 3/22/32 - 11/26/46 | ||||
Total variable-rate bonds and notes | 23,707,579 | ||||||
FFELP warehouse facilities | 1,706,546 | 0.52% - 0.98% | 9/7/18 - 4/26/19 | ||||
Private education loan warehouse facility | 206,632 | 0.98% | 4/28/17 | ||||
Unsecured line of credit | — | — | 10/30/20 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 57,184 | 4.21% | 9/15/61 | ||||
Other borrowings | 93,355 | 2.03% - 3.38% | 10/31/16 - 12/15/45 | ||||
25,771,296 | |||||||
Discount on bonds and notes payable and debt issuance costs, net | (450,418 | ) | |||||
Total | $ | 25,320,878 |
As of December 31, 2015 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 25,155,336 | 0.05% - 6.90% | 8/26/19 - 8/26/52 | |||
Bonds and notes based on auction | 1,160,365 | 0.88% - 2.17% | 3/22/32 - 11/26/46 | ||||
Total variable-rate bonds and notes | 26,315,701 | ||||||
FFELP warehouse facilities | 1,855,907 | 0.27% - 0.56% | 4/29/18 - 12/14/18 | ||||
Private education loan warehouse facility | 181,184 | 0.57% | 12/26/16 | ||||
Unsecured line of credit | 100,000 | 1.79% - 1.92% | 10/30/20 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 57,184 | 3.99% | 9/15/61 | ||||
Other borrowings | 93,355 | 1.93% - 3.38% | 10/31/16 - 12/15/45 | ||||
28,603,331 | |||||||
Discount on bonds and notes payable and debt issuance costs, net | (497,410 | ) | |||||
Total | $ | 28,105,921 |
NFSLW-I (a) | NHELP-II | NHELP-III | Total | |||||||||||
Maximum financing amount | $ | 875,000 | 500,000 | 750,000 | 2,125,000 | |||||||||
Amount outstanding | 815,550 | 407,535 | 483,461 | 1,706,546 | ||||||||||
Amount available | $ | 59,450 | 92,465 | 266,539 | 418,454 | |||||||||
Expiration of liquidity provisions | July 10, 2018 | December 16, 2016 | April 28, 2017 | |||||||||||
Final maturity date | September 7, 2018 | December 14, 2018 | April 26, 2019 | |||||||||||
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 | $ | 33,898 | 33,561 | 28,830 | 96,289 |
(a) | On July 10, 2015, the Company amended the agreement for this warehouse facility to temporarily increase the maximum financing amount to $875.0 million. The maximum financing amount was scheduled to decrease by $125.0 million on March 31, 2016. On January 26, 2016, the Company amended the agreement for this warehouse facility to extend the scheduled decrease of the maximum financing amount by $125.0 million to July 8, 2016. On July 7, 2016, the Company amended the agreement for this warehouse facility to permanently set the maximum financing amount at $875.0 million, and changed the expiration of liquidity provisions to July 10, 2018 and the final maturity date to September 7, 2018. |
Par value | Purchase price | Gain | Par value | Purchase price | Gain | |||||||||||||
Three months ended | ||||||||||||||||||
September 30, 2016 | September 30, 2015 | |||||||||||||||||
Asset-backed securities | $ | 10,965 | 8,805 | 2,160 | 9,650 | 9,053 | 597 | |||||||||||
$ | 10,965 | 8,805 | 2,160 | 9,650 | 9,053 | 597 | ||||||||||||
Nine months ended | ||||||||||||||||||
September 30, 2016 | September 30, 2015 | |||||||||||||||||
Unsecured debt - Hybrid Securities | $ | — | — | — | 14,106 | 11,108 | 2,998 | |||||||||||
Asset-backed securities | 11,362 | 9,102 | 2,260 | 31,800 | 30,162 | 1,638 | ||||||||||||
$ | 11,362 | 9,102 | 2,260 | 45,906 | 41,270 | 4,636 |
|
As of September 30, | As of December 31, | |||||||
2016 | 2015 | |||||||
Maturity | Notional amount | Notional amount | ||||||
2016 | $ | 1,000,000 | $ | 7,500,000 | ||||
2028 | 125,000 | — |
As of September 30, 2016 | As of December 31, 2015 | |||||||||||||
Maturity | Notional amount | Weighted average fixed rate paid by the Company (a) | Notional amount | Weighted average fixed rate paid by the Company (a) | ||||||||||
2016 | $ | — | — | % | $ | 1,000,000 | 0.76 | % | ||||||
2017 | 750,000 | 0.99 | 2,100,000 | 0.84 | ||||||||||
2018 | 1,350,000 | 1.07 | 1,600,000 | 1.08 | ||||||||||
2019 | 3,250,000 | 0.97 | 500,000 | 1.12 | ||||||||||
2020 | 1,500,000 | 1.01 | — | — | ||||||||||
2025 | 100,000 | 2.32 | 100,000 | 2.32 | ||||||||||
2026 | 50,000 | 1.52 | — | — | ||||||||||
$ | 7,000,000 | 1.02 | % | $ | 5,300,000 | 0.95 | % |
(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 September 30, | Nine months ended September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Re-measurement of Euro Notes | $ | (4,831 | ) | (1,058 | ) | (13,543 | ) | 32,480 | ||||
Change in fair value of cross-currency interest rate swap | 5,501 | 666 | 26,194 | (35,207 | ) | |||||||
Total impact to consolidated statements of income - income (expense) (a) | $ | 670 | (392 | ) | 12,651 | (2,727 | ) |
(a) | The financial statement impact of the above items is included in "Derivative market value and foreign currency adjustments and derivative settlements, net" in the Company's consolidated statements of income. |
Fair value of asset derivatives | Fair value of liability derivatives | |||||||||||
As of | As of | As of | As of | |||||||||
September 30, 2016 | December 31, 2015 | September 30, 2016 | December 31, 2015 | |||||||||
1:3 basis swaps | $ | 637 | 724 | — | 410 | |||||||
Interest rate swaps - floor income hedges | 11,149 | 21,408 | 11,148 | 1,175 | ||||||||
Interest rate swap option - floor income hedge | 716 | 3,257 | — | — | ||||||||
Interest rate swaps - hybrid debt hedges | — | — | 11,646 | 7,646 | ||||||||
Interest rate caps | 287 | 1,570 | — | — | ||||||||
Cross-currency interest rate swap | — | — | 39,456 | 65,650 | ||||||||
Other | 1,687 | 1,731 | 2,803 | — | ||||||||
Total | $ | 14,476 | 28,690 | 65,053 | 74,881 |
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 (liability) | |||||||||
Balance as of September 30, 2016 | $ | 14,476 | (13,944 | ) | 1,800 | 2,332 | |||||||
Balance as of December 31, 2015 | 28,690 | (851 | ) | 1,632 | 29,471 |
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/(received), net (a) | Net asset (liability) | |||||||||
Balance as of September 30, 2016 | $ | (65,053 | ) | 13,944 | 30,596 | (20,513 | ) | ||||||
Balance as of December 31, 2015 | (74,881 | ) | 851 | 13,168 | (60,862 | ) |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Settlements: | ||||||||||||
1:3 basis swaps | $ | 523 | 179 | 938 | 568 | |||||||
Interest rate swaps - floor income hedges | (5,157 | ) | (5,456 | ) | (15,241 | ) | (15,490 | ) | ||||
Interest rate swaps - hybrid debt hedges | (233 | ) | (255 | ) | (696 | ) | (760 | ) | ||||
Cross-currency interest rate swap | (1,394 | ) | (346 | ) | (3,293 | ) | (853 | ) | ||||
Total settlements - expense | (6,261 | ) | (5,878 | ) | (18,292 | ) | (16,535 | ) | ||||
Change in fair value: | ||||||||||||
1:3 basis swaps | 140 | (1,886 | ) | 323 | 10,513 | |||||||
Interest rate swaps - floor income hedges | 42,073 | (18,935 | ) | (17,913 | ) | (16,273 | ) | |||||
Interest rate swap option - floor income hedge | (269 | ) | (2,205 | ) | (2,541 | ) | (1,736 | ) | ||||
Interest rate swaps - hybrid debt hedges | 13 | (1,948 | ) | (4,000 | ) | (861 | ) | |||||
Interest rate caps | (68 | ) | (939 | ) | (1,283 | ) | (1,140 | ) | ||||
Cross-currency interest rate swap | 5,501 | 666 | 26,194 | (35,207 | ) | |||||||
Other | (297 | ) | 1,525 | (2,336 | ) | 1,525 | ||||||
Total change in fair value - income (expense) | 47,093 | (23,722 | ) | (1,556 | ) | (43,179 | ) | |||||
Re-measurement of Euro Notes (foreign currency transaction adjustment) - (expense) income | (4,831 | ) | (1,058 | ) | (13,543 | ) | 32,480 | |||||
Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense) | $ | 36,001 | (30,658 | ) | (33,391 | ) | (27,234 | ) |
|
As of September 30, 2016 | As of December 31, 2015 | ||||||||||||||||||||||||
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) | $ | 112,324 | 2,128 | (4,547 | ) | 109,905 | 139,970 | 3,402 | (1,362 | ) | 142,010 | ||||||||||||||
Equity securities | 720 | 1,811 | (65 | ) | 2,466 | 846 | 1,686 | (100 | ) | 2,432 | |||||||||||||||
Total available-for-sale investments | $ | 113,044 | 3,939 | (4,612 | ) | 112,371 | 140,816 | 5,088 | (1,462 | ) | 144,442 | ||||||||||||||
Trading investments: | |||||||||||||||||||||||||
Student loan asset-backed securities | — | 6,045 | |||||||||||||||||||||||
Equity securities | 253 | 4,905 | |||||||||||||||||||||||
Total trading investments | 253 | 10,950 | |||||||||||||||||||||||
Total available-for-sale and trading investments | 112,624 | 155,392 | |||||||||||||||||||||||
Other Investments and Notes Receivable (not measured at fair value): | |||||||||||||||||||||||||
Venture capital and funds | 64,481 | 63,323 | |||||||||||||||||||||||
Real estate | 50,246 | 50,463 | |||||||||||||||||||||||
Notes receivable | 17,031 | 18,473 | |||||||||||||||||||||||
Tax liens and affordable housing | 13,146 | 16,030 | |||||||||||||||||||||||
Total investments and notes receivable | $ | 257,528 | 303,681 |
(a) | As of September 30, 2016, 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, 2016, the stated maturities of the majority of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years. |
|
Cash and cash equivalents | $ | 334 | ||
Restricted cash and investments | 850 | |||
Accounts receivable | 1,935 | |||
Property and equipment | 32,479 | |||
Other assets | 371 | |||
Intangible assets | 11,410 | |||
Excess cost over fair value of net assets acquired (goodwill) | 21,112 | |||
Other liabilities | (4,587 | ) | ||
Bonds and notes payable | (13,904 | ) | ||
Net assets acquired | 50,000 | |||
Minority interest | (3,750 | ) | ||
Total consideration paid by the Company | $ | 46,250 |
|
Weighted average remaining useful life as of September 30, 2016 (months) | As of September 30, 2016 | As of December 31, 2015 | ||||||
Amortizable intangible assets: | ||||||||
Customer relationships (net of accumulated amortization of $7,261 and $4,028, respectively) | 170 | $ | 29,623 | 27,576 | ||||
Computer software (net of accumulated amortization of $8,236 and $4,397, respectively) | 28 | 10,712 | 11,601 | |||||
Trade names (net of accumulated amortization of $1,439 and $795, respectively) | 192 | 10,133 | 10,687 | |||||
Content (net of accumulated amortization of $1,575 and $900, respectively) | 3 | 225 | 900 | |||||
Covenants not to compete (net of accumulated amortization of $83 and $56, respectively) | 92 | 271 | 298 | |||||
Total - amortizable intangible assets | 143 | $ | 50,964 | 51,062 |
2016 (October 1 - December 31) | $ | 3,151 | |
2017 | 9,386 | ||
2018 | 8,605 | ||
2019 | 5,147 | ||
2020 | 4,231 | ||
2021 and thereafter | 20,444 | ||
$ | 50,964 |
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Communications | Asset Generation and Management | Corporate and Other Activities | Total | |||||||||||||
Balance as of December 31, 2015 | $ | 8,596 | 67,168 | 19,800 | 41,883 | 8,553 | 146,000 | |||||||||||
Allo purchase price adjustment | — | — | 1,312 | — | — | 1,312 | ||||||||||||
Balance as of September 30, 2016 | $ | 8,596 | 67,168 | 21,112 | 41,883 | 8,553 | 147,312 | |||||||||||
|
As of September 30, 2016 | As of December 31, 2015 | |||||||
Useful life | ||||||||
Non-communications: | ||||||||
Computer equipment and software | 1-5 years | $ | 96,871 | 89,093 | ||||
Office furniture and equipment | 3-7 years | 12,349 | 12,638 | |||||
Building and building improvements | 5-39 years | 13,515 | 12,239 | |||||
Transportation equipment | 4-10 years | 3,817 | 3,868 | |||||
Leasehold improvements | 5-20 years | 3,614 | 3,545 | |||||
Land | — | 1,704 | 700 | |||||
Construction in progress | — | 10,124 | 1,210 | |||||
141,994 | 123,293 | |||||||
Accumulated depreciation - non-communications | 88,523 | 77,188 | ||||||
Non-communications, net property and equipment | 53,471 | 46,105 | ||||||
Communications: | ||||||||
Network plant and fiber | 5-15 years | 33,053 | 25,669 | |||||
Central office | 5-15 years | 5,806 | 909 | |||||
Customer located property | 5-10 years | 4,723 | 6,912 | |||||
Transportation equipment | 4-10 years | 2,258 | 470 | |||||
Computer equipment and software | 1-5 years | 1,772 | 74 | |||||
Other | 1-20 years | 866 | 343 | |||||
Land | — | 70 | — | |||||
Construction in progress | — | 8,578 | — | |||||
57,126 | 34,377 | |||||||
Accumulated depreciation - communications | 3,092 | — | ||||||
Communications, net property and equipment | 54,034 | 34,377 | ||||||
Total property and equipment, net | $ | 107,505 | 80,482 |
|
Three months ended September 30, 2016 | |||||||||||||||||||||
Student Loan and Guaranty 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 and guaranty 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 | ||||||||||||||
Other income | — | — | — | 4,265 | 10,886 | — | 15,150 | ||||||||||||||
Gain on sale of loans and debt repurchases, net | — | — | — | 2,160 | — | — | 2,160 | ||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | 42,546 | (284 | ) | — | 42,262 | |||||||||||||
Derivative settlements, net | — | — | — | (6,028 | ) | (233 | ) | — | (6,261 | ) | |||||||||||
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 | ||||||||||||||
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 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 |
Three months ended September 30, 2015 (a) | ||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Asset Generation and Management | Corporate and Other Activities | Eliminations | Total | |||||||||||||
Total interest income | $ | 14 | — | 188,197 | 1,385 | (439 | ) | 189,157 | ||||||||||
Interest expense | — | — | 76,040 | 1,563 | (439 | ) | 77,164 | |||||||||||
Net interest income | 14 | — | 112,157 | (178 | ) | — | 111,993 | |||||||||||
Less provision for loan losses | — | — | 3,000 | — | — | 3,000 | ||||||||||||
Net interest income (loss) after provision for loan losses | 14 | — | 109,157 | (178 | ) | — | 108,993 | |||||||||||
Other income: | ||||||||||||||||||
Loan and guaranty servicing revenue | 61,900 | — | — | — | (380 | ) | 61,520 | |||||||||||
Intersegment servicing revenue | 12,027 | — | — | — | (12,027 | ) | — | |||||||||||
Tuition payment processing, school information, and campus commerce revenue | — | 30,439 | — | — | — | 30,439 | ||||||||||||
Enrollment services revenue | — | — | — | 13,741 | — | 13,741 | ||||||||||||
Other income | — | — | 3,312 | 8,970 | — | 12,282 | ||||||||||||
Gain (loss) on sale of loans and debt repurchases, net | — | — | 608 | (11 | ) | — | 597 | |||||||||||
Derivative market value and foreign currency adjustments, net | — | — | (24,357 | ) | (423 | ) | — | (24,780 | ) | |||||||||
Derivative settlements, net | — | — | (5,623 | ) | (255 | ) | — | (5,878 | ) | |||||||||
Total other income | 73,927 | 30,439 | (26,060 | ) | 22,022 | (12,407 | ) | 87,921 | ||||||||||
Operating expenses: | . | |||||||||||||||||
Salaries and benefits | 34,525 | 13,983 | 558 | 14,149 | — | 63,215 | ||||||||||||
Depreciation and amortization | 484 | 2,202 | — | 4,291 | — | 6,977 | ||||||||||||
Loan servicing fees | — | — | 7,793 | — | — | 7,793 | ||||||||||||
Cost to provide enrollment services | — | — | — | 11,349 | — | 11,349 | ||||||||||||
Other expenses | 14,602 | 3,579 | 1,421 | 12,002 | — | 31,604 | ||||||||||||
Intersegment expenses, net | 7,513 | 2,246 | 12,544 | (9,895 | ) | (12,407 | ) | — | ||||||||||
Total operating expenses | 57,124 | 22,010 | 22,316 | 31,896 | (12,407 | ) | 120,938 | |||||||||||
Income (loss) before income taxes | 16,817 | 8,429 | 60,781 | (10,052 | ) | — | 75,976 | |||||||||||
Income tax (expense) benefit | (6,390 | ) | (3,204 | ) | (23,096 | ) | 5,691 | — | (26,999 | ) | ||||||||
Net income (loss) | 10,427 | 5,225 | 37,685 | (4,361 | ) | — | 48,977 | |||||||||||
Net income attributable to noncontrolling interests | (5 | ) | — | — | 27 | — | 22 | |||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 10,432 | 5,225 | 37,685 | (4,388 | ) | — | 48,955 |
(a) | Does not include the Communications segment, which was initiated as a result of the acquisition of Allo on December 31, 2015. |
Nine months ended September 30, 2016 | |||||||||||||||||||||
Student Loan and Guaranty 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 and guaranty 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 on sale of loans and debt repurchases, net | — | — | — | 2,260 | — | — | 2,260 | ||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | (8,763 | ) | (6,336 | ) | — | (15,099 | ) | |||||||||||
Derivative settlements, net | — | — | — | (17,596 | ) | (696 | ) | — | (18,292 | ) | |||||||||||
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 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 |
Nine months ended September 30, 2015 (a) | ||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Asset Generation and Management | Corporate and Other Activities | Eliminations | Total | |||||||||||||
Total interest income | $ | 34 | 3 | 536,899 | 5,352 | (1,260 | ) | 541,028 | ||||||||||
Interest expense | — | — | 218,021 | 4,583 | (1,260 | ) | 221,344 | |||||||||||
Net interest income | 34 | 3 | 318,878 | 769 | — | 319,684 | ||||||||||||
Less provision for loan losses | — | — | 7,150 | — | — | 7,150 | ||||||||||||
Net interest income after provision for loan losses | 34 | 3 | 311,728 | 769 | — | 312,534 | ||||||||||||
Other income: | ||||||||||||||||||
Loan and guaranty servicing revenue | 183,544 | — | — | — | (380 | ) | 183,164 | |||||||||||
Intersegment servicing revenue | 37,121 | — | — | — | (37,121 | ) | — | |||||||||||
Tuition payment processing, school information, and campus commerce revenue | — | 92,805 | — | — | — | 92,805 | ||||||||||||
Enrollment services revenue | — | — | — | 39,794 | — | 39,794 | ||||||||||||
Other income | — | — | 11,838 | 23,837 | — | 35,675 | ||||||||||||
Gain on sale of loans and debt repurchases, net | — | — | 2,000 | 2,987 | — | 4,987 | ||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | (11,363 | ) | 664 | — | (10,699 | ) | ||||||||||
Derivative settlements, net | — | — | (15,775 | ) | (760 | ) | — | (16,535 | ) | |||||||||
Total other income | 220,665 | 92,805 | (13,300 | ) | 66,522 | (37,501 | ) | 329,191 | ||||||||||
Operating expenses: | ||||||||||||||||||
Salaries and benefits | 99,813 | 40,887 | 1,623 | 40,729 | — | 183,052 | ||||||||||||
Depreciation and amortization | 1,457 | 6,592 | — | 11,091 | — | 19,140 | ||||||||||||
Loan servicing fees | — | — | 22,829 | — | — | 22,829 | ||||||||||||
Cost to provide enrollment services | — | — | — | 32,543 | — | 32,543 | ||||||||||||
Other expenses | 44,578 | 11,493 | 3,828 | 34,531 | — | 94,430 | ||||||||||||
Intersegment expenses, net | 22,200 | 6,444 | 37,913 | (29,056 | ) | (37,501 | ) | — | ||||||||||
Total operating expenses | 168,048 | 65,416 | 66,193 | 89,838 | (37,501 | ) | 351,994 | |||||||||||
Income (loss) before income taxes | 52,651 | 27,392 | 232,235 | (22,547 | ) | — | 289,731 | |||||||||||
Income tax (expense) benefit | (20,007 | ) | (10,410 | ) | (88,248 | ) | 13,680 | — | (104,985 | ) | ||||||||
Net income (loss) | 32,644 | 16,982 | 143,987 | (8,867 | ) | — | 184,746 | |||||||||||
Net income attributable to noncontrolling interests | (5 | ) | — | — | 122 | — | 117 | |||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 32,649 | 16,982 | 143,987 | (8,989 | ) | — | 184,629 |
(a) | Does not include the Communications segment, which was initiated as a result of the acquisition of Allo on December 31, 2015. |
|
|
As of September 30, 2016 | As of December 31, 2015 | |||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||
Assets: | ||||||||||||||||||
Investments (available-for-sale and trading): | ||||||||||||||||||
Student loan asset-backed securities | $ | — | 109,783 | 109,783 | — | 147,925 | 147,925 | |||||||||||
Equity securities | 2,719 | — | 2,719 | 7,337 | — | 7,337 | ||||||||||||
Debt securities | 122 | — | 122 | 130 | — | 130 | ||||||||||||
Total investments (available-for-sale and trading) | 2,841 | 109,783 | 112,624 | 7,467 | 147,925 | 155,392 | ||||||||||||
Fair value of derivative instruments | — | 14,476 | 14,476 | — | 28,690 | 28,690 | ||||||||||||
Total assets | $ | 2,841 | 124,259 | 127,100 | 7,467 | 176,615 | 184,082 | |||||||||||
Liabilities: | ||||||||||||||||||
Fair value of derivative instruments | $ | — | 65,053 | 65,053 | — | 74,881 | 74,881 | |||||||||||
Total liabilities | $ | — | 65,053 | 65,053 | — | 74,881 | 74,881 |
As of September 30, 2016 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 26,145,847 | 25,615,434 | — | — | 26,145,847 | |||||||||
Cash and cash equivalents | 67,154 | 67,154 | 67,154 | — | — | ||||||||||
Investments (available-for-sale and trading) | 112,624 | 112,624 | 2,841 | 109,783 | — | ||||||||||
Notes receivable | 17,031 | 17,031 | — | 17,031 | — | ||||||||||
Restricted cash | 866,582 | 866,582 | 866,582 | — | — | ||||||||||
Restricted cash – due to customers | 91,505 | 91,505 | 91,505 | — | — | ||||||||||
Restricted investments | 6,292 | 6,292 | 6,292 | — | — | ||||||||||
Accrued interest receivable | 381,804 | 381,804 | — | 381,804 | — | ||||||||||
Derivative instruments | 14,476 | 14,476 | — | 14,476 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 24,750,721 | 25,320,878 | — | 24,750,721 | — | ||||||||||
Accrued interest payable | 42,840 | 42,840 | — | 42,840 | — | ||||||||||
Due to customers | 91,505 | 91,505 | 91,505 | — | — | ||||||||||
Derivative instruments | 65,053 | 65,053 | — | 65,053 | — |
As of December 31, 2015 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 28,611,350 | 28,324,552 | — | — | 28,611,350 | |||||||||
Cash and cash equivalents | 63,529 | 63,529 | 63,529 | — | — | ||||||||||
Investments (available-for-sale and trading) | 155,392 | 155,392 | 7,467 | 147,925 | — | ||||||||||
Notes receivable | 18,067 | 18,473 | — | 18,067 | — | ||||||||||
Restricted cash | 823,450 | 823,450 | 823,450 | — | — | ||||||||||
Restricted cash – due to customers | 144,771 | 144,771 | 144,771 | — | — | ||||||||||
Restricted investments | 9,174 | 9,174 | 9,174 | — | — | ||||||||||
Accrued interest receivable | 383,825 | 383,825 | — | 383,825 | — | ||||||||||
Derivative instruments | 28,690 | 28,690 | — | 28,690 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 27,150,775 | 28,105,921 | — | 27,150,775 | — | ||||||||||
Accrued interest payable | 31,507 | 31,507 | — | 31,507 | — | ||||||||||
Due to customers | 144,771 | 144,771 | 144,771 | — | — | ||||||||||
Derivative instruments | 74,881 | 74,881 | — | 74,881 | — |
|
|
|
As of | As of | |||||
September 30, 2016 | December 31, 2015 | |||||
Federally insured loans: | ||||||
Stafford and other | $ | 5,353,052 | 6,202,064 | |||
Consolidation | 20,189,881 | 22,086,043 | ||||
Total | 25,542,933 | 28,288,107 | ||||
Private education loans | 276,432 | 267,642 | ||||
25,819,365 | 28,555,749 | |||||
Loan discount, net of unamortized loan premiums and deferred origination costs (a) | (152,361 | ) | (180,699 | ) | ||
Allowance for loan losses – federally insured loans | (37,028 | ) | (35,490 | ) | ||
Allowance for loan losses – private education loans | (14,542 | ) | (15,008 | ) | ||
$ | 25,615,434 | 28,324,552 |
(a) | As of September 30, 2016 and December 31, 2015, "loan discount, net of unamortized loan premiums and deferred origination costs" included $20.8 million and $33.0 million, respectively, of non-accretable discount associated with purchased loans of $8.5 billion and $10.8 billion, respectively. |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Balance at beginning of period | $ | 48,753 | 50,024 | 50,498 | 48,900 | |||||||
Provision for loan losses: | ||||||||||||
Federally insured loans | 7,000 | 2,000 | 11,000 | 6,000 | ||||||||
Private education loans | (1,000 | ) | 1,000 | (500 | ) | 1,150 | ||||||
Total provision for loan losses | 6,000 | 3,000 | 10,500 | 7,150 | ||||||||
Charge-offs: | ||||||||||||
Federally insured loans | (3,196 | ) | (2,817 | ) | (9,462 | ) | (9,225 | ) | ||||
Private education loans | (320 | ) | (357 | ) | (1,235 | ) | (1,479 | ) | ||||
Total charge-offs | (3,516 | ) | (3,174 | ) | (10,697 | ) | (10,704 | ) | ||||
Recoveries - private education loans | 243 | 250 | 769 | 742 | ||||||||
Purchase (sale) of federally insured and private education loans, net | 30 | 30 | 290 | (200 | ) | |||||||
Transfer from repurchase obligation related to private education loans repurchased, net | 60 | 250 | 210 | 4,492 | ||||||||
Balance at end of period | $ | 51,570 | 50,380 | 51,570 | 50,380 | |||||||
Allocation of the allowance for loan losses: | ||||||||||||
Federally insured loans | $ | 37,028 | 35,945 | 37,028 | 35,945 | |||||||
Private education loans | 14,542 | 14,435 | 14,542 | 14,435 | ||||||||
Total allowance for loan losses | $ | 51,570 | 50,380 | 51,570 | 50,380 |
As of September 30, 2016 | As of December 31, 2015 | As of September 30, 2015 | ||||||||||||||||||
Federally insured loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 1,864,323 | $ | 2,292,941 | $ | 2,638,639 | ||||||||||||||
Loans in forbearance | 2,403,504 | 2,979,357 | 2,993,844 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 18,445,728 | 86.8 | % | 19,447,541 | 84.4 | % | 19,681,517 | 84.4 | % | |||||||||||
Loans delinquent 31-60 days | 825,905 | 3.9 | 1,028,396 | 4.5 | 1,021,515 | 4.4 | ||||||||||||||
Loans delinquent 61-90 days | 491,395 | 2.3 | 566,953 | 2.5 | 638,037 | 2.7 | ||||||||||||||
Loans delinquent 91-120 days | 326,020 | 1.5 | 415,747 | 1.8 | 465,261 | 2.0 | ||||||||||||||
Loans delinquent 121-270 days | 835,250 | 3.9 | 1,166,940 | 5.1 | 1,139,864 | 4.9 | ||||||||||||||
Loans delinquent 271 days or greater | 350,808 | 1.6 | 390,232 | 1.7 | 376,702 | 1.6 | ||||||||||||||
Total loans in repayment | 21,275,106 | 100.0 | % | 23,015,809 | 100.0 | % | 23,322,896 | 100.0 | % | |||||||||||
Total federally insured loans | $ | 25,542,933 | $ | 28,288,107 | $ | 28,955,379 | ||||||||||||||
Private education loans: | ||||||||||||||||||||
Loans in-school/grace/deferment | $ | 51,042 | $ | 30,795 | $ | 7,724 | ||||||||||||||
Loans in forbearance | 1,770 | 350 | 16 | |||||||||||||||||
Loans in repayment status: | ||||||||||||||||||||
Loans current | 217,108 | 97.1 | % | 228,464 | 96.7 | % | 216,502 | 96.2 | % | |||||||||||
Loans delinquent 31-60 days | 1,357 | 0.6 | 1,771 | 0.7 | 1,999 | 0.9 | ||||||||||||||
Loans delinquent 61-90 days | 1,228 | 0.5 | 1,283 | 0.5 | 1,206 | 0.5 | ||||||||||||||
Loans delinquent 91 days or greater | 3,927 | 1.8 | 4,979 | 2.1 | 5,377 | 2.4 | ||||||||||||||
Total loans in repayment | 223,620 | 100.0 | % | 236,497 | 100.0 | % | 225,084 | 100.0 | % | |||||||||||
Total private education loans | $ | 276,432 | $ | 267,642 | $ | 232,824 |
|
As of September 30, 2016 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 22,550,964 | 0.25% - 6.90% | 8/26/19 - 9/25/56 | |||
Bonds and notes based on auction | 1,156,615 | 1.36% - 2.20% | 3/22/32 - 11/26/46 | ||||
Total variable-rate bonds and notes | 23,707,579 | ||||||
FFELP warehouse facilities | 1,706,546 | 0.52% - 0.98% | 9/7/18 - 4/26/19 | ||||
Private education loan warehouse facility | 206,632 | 0.98% | 4/28/17 | ||||
Unsecured line of credit | — | — | 10/30/20 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 57,184 | 4.21% | 9/15/61 | ||||
Other borrowings | 93,355 | 2.03% - 3.38% | 10/31/16 - 12/15/45 | ||||
25,771,296 | |||||||
Discount on bonds and notes payable and debt issuance costs, net | (450,418 | ) | |||||
Total | $ | 25,320,878 |
As of December 31, 2015 | |||||||
Carrying amount | Interest rate range | Final maturity | |||||
Variable-rate bonds and notes issued in asset-backed securitizations: | |||||||
Bonds and notes based on indices | $ | 25,155,336 | 0.05% - 6.90% | 8/26/19 - 8/26/52 | |||
Bonds and notes based on auction | 1,160,365 | 0.88% - 2.17% | 3/22/32 - 11/26/46 | ||||
Total variable-rate bonds and notes | 26,315,701 | ||||||
FFELP warehouse facilities | 1,855,907 | 0.27% - 0.56% | 4/29/18 - 12/14/18 | ||||
Private education loan warehouse facility | 181,184 | 0.57% | 12/26/16 | ||||
Unsecured line of credit | 100,000 | 1.79% - 1.92% | 10/30/20 | ||||
Unsecured debt - Junior Subordinated Hybrid Securities | 57,184 | 3.99% | 9/15/61 | ||||
Other borrowings | 93,355 | 1.93% - 3.38% | 10/31/16 - 12/15/45 | ||||
28,603,331 | |||||||
Discount on bonds and notes payable and debt issuance costs, net | (497,410 | ) | |||||
Total | $ | 28,105,921 |
NFSLW-I (a) | NHELP-II | NHELP-III | Total | |||||||||||
Maximum financing amount | $ | 875,000 | 500,000 | 750,000 | 2,125,000 | |||||||||
Amount outstanding | 815,550 | 407,535 | 483,461 | 1,706,546 | ||||||||||
Amount available | $ | 59,450 | 92,465 | 266,539 | 418,454 | |||||||||
Expiration of liquidity provisions | July 10, 2018 | December 16, 2016 | April 28, 2017 | |||||||||||
Final maturity date | September 7, 2018 | December 14, 2018 | April 26, 2019 | |||||||||||
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 | $ | 33,898 | 33,561 | 28,830 | 96,289 |
(a) | On July 10, 2015, the Company amended the agreement for this warehouse facility to temporarily increase the maximum financing amount to $875.0 million. The maximum financing amount was scheduled to decrease by $125.0 million on March 31, 2016. On January 26, 2016, the Company amended the agreement for this warehouse facility to extend the scheduled decrease of the maximum financing amount by $125.0 million to July 8, 2016 |
Par value | Purchase price | Gain | Par value | Purchase price | Gain | |||||||||||||
Three months ended | ||||||||||||||||||
September 30, 2016 | September 30, 2015 | |||||||||||||||||
Asset-backed securities | $ | 10,965 | 8,805 | 2,160 | 9,650 | 9,053 | 597 | |||||||||||
$ | 10,965 | 8,805 | 2,160 | 9,650 | 9,053 | 597 | ||||||||||||
Nine months ended | ||||||||||||||||||
September 30, 2016 | September 30, 2015 | |||||||||||||||||
Unsecured debt - Hybrid Securities | $ | — | — | — | 14,106 | 11,108 | 2,998 | |||||||||||
Asset-backed securities | 11,362 | 9,102 | 2,260 | 31,800 | 30,162 | 1,638 | ||||||||||||
$ | 11,362 | 9,102 | 2,260 | 45,906 | 41,270 | 4,636 |
|
As of September 30, | As of December 31, | |||||||
2016 | 2015 | |||||||
Maturity | Notional amount | Notional amount | ||||||
2016 | $ | 1,000,000 | $ | 7,500,000 | ||||
2028 | 125,000 | — |
As of September 30, 2016 | As of December 31, 2015 | |||||||||||||
Maturity | Notional amount | Weighted average fixed rate paid by the Company (a) | Notional amount | Weighted average fixed rate paid by the Company (a) | ||||||||||
2016 | $ | — | — | % | $ | 1,000,000 | 0.76 | % | ||||||
2017 | 750,000 | 0.99 | 2,100,000 | 0.84 | ||||||||||
2018 | 1,350,000 | 1.07 | 1,600,000 | 1.08 | ||||||||||
2019 | 3,250,000 | 0.97 | 500,000 | 1.12 | ||||||||||
2020 | 1,500,000 | 1.01 | — | — | ||||||||||
2025 | 100,000 | 2.32 | 100,000 | 2.32 | ||||||||||
2026 | 50,000 | 1.52 | — | — | ||||||||||
$ | 7,000,000 | 1.02 | % | $ | 5,300,000 | 0.95 | % |
(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 September 30, | Nine months ended September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Re-measurement of Euro Notes | $ | (4,831 | ) | (1,058 | ) | (13,543 | ) | 32,480 | ||||
Change in fair value of cross-currency interest rate swap | 5,501 | 666 | 26,194 | (35,207 | ) | |||||||
Total impact to consolidated statements of income - income (expense) (a) | $ | 670 | (392 | ) | 12,651 | (2,727 | ) |
(a) | The financial statement impact of the above items is included in "Derivative market value and foreign currency adjustments and derivative settlements, net" in the Company's consolidated statements of income. |
Fair value of asset derivatives | Fair value of liability derivatives | |||||||||||
As of | As of | As of | As of | |||||||||
September 30, 2016 | December 31, 2015 | September 30, 2016 | December 31, 2015 | |||||||||
1:3 basis swaps | $ | 637 | 724 | — | 410 | |||||||
Interest rate swaps - floor income hedges | 11,149 | 21,408 | 11,148 | 1,175 | ||||||||
Interest rate swap option - floor income hedge | 716 | 3,257 | — | — | ||||||||
Interest rate swaps - hybrid debt hedges | — | — | 11,646 | 7,646 | ||||||||
Interest rate caps | 287 | 1,570 | — | — | ||||||||
Cross-currency interest rate swap | — | — | 39,456 | 65,650 | ||||||||
Other | 1,687 | 1,731 | 2,803 | — | ||||||||
Total | $ | 14,476 | 28,690 | 65,053 | 74,881 |
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 (liability) | |||||||||
Balance as of September 30, 2016 | $ | 14,476 | (13,944 | ) | 1,800 | 2,332 | |||||||
Balance as of December 31, 2015 | 28,690 | (851 | ) | 1,632 | 29,471 |
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/(received), net (a) | Net asset (liability) | |||||||||
Balance as of September 30, 2016 | $ | (65,053 | ) | 13,944 | 30,596 | (20,513 | ) | ||||||
Balance as of December 31, 2015 | (74,881 | ) | 851 | 13,168 | (60,862 | ) |
Three months ended September 30, | Nine months ended September 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
Settlements: | ||||||||||||
1:3 basis swaps | $ | 523 | 179 | 938 | 568 | |||||||
Interest rate swaps - floor income hedges | (5,157 | ) | (5,456 | ) | (15,241 | ) | (15,490 | ) | ||||
Interest rate swaps - hybrid debt hedges | (233 | ) | (255 | ) | (696 | ) | (760 | ) | ||||
Cross-currency interest rate swap | (1,394 | ) | (346 | ) | (3,293 | ) | (853 | ) | ||||
Total settlements - expense | (6,261 | ) | (5,878 | ) | (18,292 | ) | (16,535 | ) | ||||
Change in fair value: | ||||||||||||
1:3 basis swaps | 140 | (1,886 | ) | 323 | 10,513 | |||||||
Interest rate swaps - floor income hedges | 42,073 | (18,935 | ) | (17,913 | ) | (16,273 | ) | |||||
Interest rate swap option - floor income hedge | (269 | ) | (2,205 | ) | (2,541 | ) | (1,736 | ) | ||||
Interest rate swaps - hybrid debt hedges | 13 | (1,948 | ) | (4,000 | ) | (861 | ) | |||||
Interest rate caps | (68 | ) | (939 | ) | (1,283 | ) | (1,140 | ) | ||||
Cross-currency interest rate swap | 5,501 | 666 | 26,194 | (35,207 | ) | |||||||
Other | (297 | ) | 1,525 | (2,336 | ) | 1,525 | ||||||
Total change in fair value - income (expense) | 47,093 | (23,722 | ) | (1,556 | ) | (43,179 | ) | |||||
Re-measurement of Euro Notes (foreign currency transaction adjustment) - (expense) income | (4,831 | ) | (1,058 | ) | (13,543 | ) | 32,480 | |||||
Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense) | $ | 36,001 | (30,658 | ) | (33,391 | ) | (27,234 | ) |
|
As of September 30, 2016 | As of December 31, 2015 | ||||||||||||||||||||||||
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) | $ | 112,324 | 2,128 | (4,547 | ) | 109,905 | 139,970 | 3,402 | (1,362 | ) | 142,010 | ||||||||||||||
Equity securities | 720 | 1,811 | (65 | ) | 2,466 | 846 | 1,686 | (100 | ) | 2,432 | |||||||||||||||
Total available-for-sale investments | $ | 113,044 | 3,939 | (4,612 | ) | 112,371 | 140,816 | 5,088 | (1,462 | ) | 144,442 | ||||||||||||||
Trading investments: | |||||||||||||||||||||||||
Student loan asset-backed securities | — | 6,045 | |||||||||||||||||||||||
Equity securities | 253 | 4,905 | |||||||||||||||||||||||
Total trading investments | 253 | 10,950 | |||||||||||||||||||||||
Total available-for-sale and trading investments | 112,624 | 155,392 | |||||||||||||||||||||||
Other Investments and Notes Receivable (not measured at fair value): | |||||||||||||||||||||||||
Venture capital and funds | 64,481 | 63,323 | |||||||||||||||||||||||
Real estate | 50,246 | 50,463 | |||||||||||||||||||||||
Notes receivable | 17,031 | 18,473 | |||||||||||||||||||||||
Tax liens and affordable housing | 13,146 | 16,030 | |||||||||||||||||||||||
Total investments and notes receivable | $ | 257,528 | 303,681 |
(a) | As of September 30, 2016, 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, 2016, the stated maturities of the majority of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years. |
|
Cash and cash equivalents | $ | 334 | ||
Restricted cash and investments | 850 | |||
Accounts receivable | 1,935 | |||
Property and equipment | 32,479 | |||
Other assets | 371 | |||
Intangible assets | 11,410 | |||
Excess cost over fair value of net assets acquired (goodwill) | 21,112 | |||
Other liabilities | (4,587 | ) | ||
Bonds and notes payable | (13,904 | ) | ||
Net assets acquired | 50,000 | |||
Minority interest | (3,750 | ) | ||
Total consideration paid by the Company | $ | 46,250 |
As of September 30, 2016 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 26,145,847 | 25,615,434 | — | — | 26,145,847 | |||||||||
Cash and cash equivalents | 67,154 | 67,154 | 67,154 | — | — | ||||||||||
Investments (available-for-sale and trading) | 112,624 | 112,624 | 2,841 | 109,783 | — | ||||||||||
Notes receivable | 17,031 | 17,031 | — | 17,031 | — | ||||||||||
Restricted cash | 866,582 | 866,582 | 866,582 | — | — | ||||||||||
Restricted cash – due to customers | 91,505 | 91,505 | 91,505 | — | — | ||||||||||
Restricted investments | 6,292 | 6,292 | 6,292 | — | — | ||||||||||
Accrued interest receivable | 381,804 | 381,804 | — | 381,804 | — | ||||||||||
Derivative instruments | 14,476 | 14,476 | — | 14,476 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 24,750,721 | 25,320,878 | — | 24,750,721 | — | ||||||||||
Accrued interest payable | 42,840 | 42,840 | — | 42,840 | — | ||||||||||
Due to customers | 91,505 | 91,505 | 91,505 | — | — | ||||||||||
Derivative instruments | 65,053 | 65,053 | — | 65,053 | — |
As of December 31, 2015 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 28,611,350 | 28,324,552 | — | — | 28,611,350 | |||||||||
Cash and cash equivalents | 63,529 | 63,529 | 63,529 | — | — | ||||||||||
Investments (available-for-sale and trading) | 155,392 | 155,392 | 7,467 | 147,925 | — | ||||||||||
Notes receivable | 18,067 | 18,473 | — | 18,067 | — | ||||||||||
Restricted cash | 823,450 | 823,450 | 823,450 | — | — | ||||||||||
Restricted cash – due to customers | 144,771 | 144,771 | 144,771 | — | — | ||||||||||
Restricted investments | 9,174 | 9,174 | 9,174 | — | — | ||||||||||
Accrued interest receivable | 383,825 | 383,825 | — | 383,825 | — | ||||||||||
Derivative instruments | 28,690 | 28,690 | — | 28,690 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 27,150,775 | 28,105,921 | — | 27,150,775 | — | ||||||||||
Accrued interest payable | 31,507 | 31,507 | — | 31,507 | — | ||||||||||
Due to customers | 144,771 | 144,771 | 144,771 | — | — | ||||||||||
Derivative instruments | 74,881 | 74,881 | — | 74,881 | — |
|
Weighted average remaining useful life as of September 30, 2016 (months) | As of September 30, 2016 | As of December 31, 2015 | ||||||
Amortizable intangible assets: | ||||||||
Customer relationships (net of accumulated amortization of $7,261 and $4,028, respectively) | 170 | $ | 29,623 | 27,576 | ||||
Computer software (net of accumulated amortization of $8,236 and $4,397, respectively) | 28 | 10,712 | 11,601 | |||||
Trade names (net of accumulated amortization of $1,439 and $795, respectively) | 192 | 10,133 | 10,687 | |||||
Content (net of accumulated amortization of $1,575 and $900, respectively) | 3 | 225 | 900 | |||||
Covenants not to compete (net of accumulated amortization of $83 and $56, respectively) | 92 | 271 | 298 | |||||
Total - amortizable intangible assets | 143 | $ | 50,964 | 51,062 |
2016 (October 1 - December 31) | $ | 3,151 | |
2017 | 9,386 | ||
2018 | 8,605 | ||
2019 | 5,147 | ||
2020 | 4,231 | ||
2021 and thereafter | 20,444 | ||
$ | 50,964 |
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Communications | Asset Generation and Management | Corporate and Other Activities | Total | |||||||||||||
Balance as of December 31, 2015 | $ | 8,596 | 67,168 | 19,800 | 41,883 | 8,553 | 146,000 | |||||||||||
Allo purchase price adjustment | — | — | 1,312 | — | — | 1,312 | ||||||||||||
Balance as of September 30, 2016 | $ | 8,596 | 67,168 | 21,112 | 41,883 | 8,553 | 147,312 | |||||||||||
|
As of September 30, 2016 | As of December 31, 2015 | |||||||
Useful life | ||||||||
Non-communications: | ||||||||
Computer equipment and software | 1-5 years | $ | 96,871 | 89,093 | ||||
Office furniture and equipment | 3-7 years | 12,349 | 12,638 | |||||
Building and building improvements | 5-39 years | 13,515 | 12,239 | |||||
Transportation equipment | 4-10 years | 3,817 | 3,868 | |||||
Leasehold improvements | 5-20 years | 3,614 | 3,545 | |||||
Land | — | 1,704 | 700 | |||||
Construction in progress | — | 10,124 | 1,210 | |||||
141,994 | 123,293 | |||||||
Accumulated depreciation - non-communications | 88,523 | 77,188 | ||||||
Non-communications, net property and equipment | 53,471 | 46,105 | ||||||
Communications: | ||||||||
Network plant and fiber | 5-15 years | 33,053 | 25,669 | |||||
Central office | 5-15 years | 5,806 | 909 | |||||
Customer located property | 5-10 years | 4,723 | 6,912 | |||||
Transportation equipment | 4-10 years | 2,258 | 470 | |||||
Computer equipment and software | 1-5 years | 1,772 | 74 | |||||
Other | 1-20 years | 866 | 343 | |||||
Land | — | 70 | — | |||||
Construction in progress | — | 8,578 | — | |||||
57,126 | 34,377 | |||||||
Accumulated depreciation - communications | 3,092 | — | ||||||
Communications, net property and equipment | 54,034 | 34,377 | ||||||
Total property and equipment, net | $ | 107,505 | 80,482 |
|
Three months ended September 30, 2016 | |||||||||||||||||||||
Student Loan and Guaranty 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 and guaranty 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 | ||||||||||||||
Other income | — | — | — | 4,265 | 10,886 | — | 15,150 | ||||||||||||||
Gain on sale of loans and debt repurchases, net | — | — | — | 2,160 | — | — | 2,160 | ||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | 42,546 | (284 | ) | — | 42,262 | |||||||||||||
Derivative settlements, net | — | — | — | (6,028 | ) | (233 | ) | — | (6,261 | ) | |||||||||||
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 | ||||||||||||||
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 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 |
Three months ended September 30, 2015 (a) | ||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Asset Generation and Management | Corporate and Other Activities | Eliminations | Total | |||||||||||||
Total interest income | $ | 14 | — | 188,197 | 1,385 | (439 | ) | 189,157 | ||||||||||
Interest expense | — | — | 76,040 | 1,563 | (439 | ) | 77,164 | |||||||||||
Net interest income | 14 | — | 112,157 | (178 | ) | — | 111,993 | |||||||||||
Less provision for loan losses | — | — | 3,000 | — | — | 3,000 | ||||||||||||
Net interest income (loss) after provision for loan losses | 14 | — | 109,157 | (178 | ) | — | 108,993 | |||||||||||
Other income: | ||||||||||||||||||
Loan and guaranty servicing revenue | 61,900 | — | — | — | (380 | ) | 61,520 | |||||||||||
Intersegment servicing revenue | 12,027 | — | — | — | (12,027 | ) | — | |||||||||||
Tuition payment processing, school information, and campus commerce revenue | — | 30,439 | — | — | — | 30,439 | ||||||||||||
Enrollment services revenue | — | — | — | 13,741 | — | 13,741 | ||||||||||||
Other income | — | — | 3,312 | 8,970 | — | 12,282 | ||||||||||||
Gain (loss) on sale of loans and debt repurchases, net | — | — | 608 | (11 | ) | — | 597 | |||||||||||
Derivative market value and foreign currency adjustments, net | — | — | (24,357 | ) | (423 | ) | — | (24,780 | ) | |||||||||
Derivative settlements, net | — | — | (5,623 | ) | (255 | ) | — | (5,878 | ) | |||||||||
Total other income | 73,927 | 30,439 | (26,060 | ) | 22,022 | (12,407 | ) | 87,921 | ||||||||||
Operating expenses: | . | |||||||||||||||||
Salaries and benefits | 34,525 | 13,983 | 558 | 14,149 | — | 63,215 | ||||||||||||
Depreciation and amortization | 484 | 2,202 | — | 4,291 | — | 6,977 | ||||||||||||
Loan servicing fees | — | — | 7,793 | — | — | 7,793 | ||||||||||||
Cost to provide enrollment services | — | — | — | 11,349 | — | 11,349 | ||||||||||||
Other expenses | 14,602 | 3,579 | 1,421 | 12,002 | — | 31,604 | ||||||||||||
Intersegment expenses, net | 7,513 | 2,246 | 12,544 | (9,895 | ) | (12,407 | ) | — | ||||||||||
Total operating expenses | 57,124 | 22,010 | 22,316 | 31,896 | (12,407 | ) | 120,938 | |||||||||||
Income (loss) before income taxes | 16,817 | 8,429 | 60,781 | (10,052 | ) | — | 75,976 | |||||||||||
Income tax (expense) benefit | (6,390 | ) | (3,204 | ) | (23,096 | ) | 5,691 | — | (26,999 | ) | ||||||||
Net income (loss) | 10,427 | 5,225 | 37,685 | (4,361 | ) | — | 48,977 | |||||||||||
Net income attributable to noncontrolling interests | (5 | ) | — | — | 27 | — | 22 | |||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 10,432 | 5,225 | 37,685 | (4,388 | ) | — | 48,955 |
(a) | Does not include the Communications segment, which was initiated as a result of the acquisition of Allo on December 31, 2015. |
Nine months ended September 30, 2016 | |||||||||||||||||||||
Student Loan and Guaranty 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 and guaranty 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 on sale of loans and debt repurchases, net | — | — | — | 2,260 | — | — | 2,260 | ||||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | — | (8,763 | ) | (6,336 | ) | — | (15,099 | ) | |||||||||||
Derivative settlements, net | — | — | — | (17,596 | ) | (696 | ) | — | (18,292 | ) | |||||||||||
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 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 |
Nine months ended September 30, 2015 (a) | ||||||||||||||||||
Student Loan and Guaranty Servicing | Tuition Payment Processing and Campus Commerce | Asset Generation and Management | Corporate and Other Activities | Eliminations | Total | |||||||||||||
Total interest income | $ | 34 | 3 | 536,899 | 5,352 | (1,260 | ) | 541,028 | ||||||||||
Interest expense | — | — | 218,021 | 4,583 | (1,260 | ) | 221,344 | |||||||||||
Net interest income | 34 | 3 | 318,878 | 769 | — | 319,684 | ||||||||||||
Less provision for loan losses | — | — | 7,150 | — | — | 7,150 | ||||||||||||
Net interest income after provision for loan losses | 34 | 3 | 311,728 | 769 | — | 312,534 | ||||||||||||
Other income: | ||||||||||||||||||
Loan and guaranty servicing revenue | 183,544 | — | — | — | (380 | ) | 183,164 | |||||||||||
Intersegment servicing revenue | 37,121 | — | — | — | (37,121 | ) | — | |||||||||||
Tuition payment processing, school information, and campus commerce revenue | — | 92,805 | — | — | — | 92,805 | ||||||||||||
Enrollment services revenue | — | — | — | 39,794 | — | 39,794 | ||||||||||||
Other income | — | — | 11,838 | 23,837 | — | 35,675 | ||||||||||||
Gain on sale of loans and debt repurchases, net | — | — | 2,000 | 2,987 | — | 4,987 | ||||||||||||
Derivative market value and foreign currency adjustments, net | — | — | (11,363 | ) | 664 | — | (10,699 | ) | ||||||||||
Derivative settlements, net | — | — | (15,775 | ) | (760 | ) | — | (16,535 | ) | |||||||||
Total other income | 220,665 | 92,805 | (13,300 | ) | 66,522 | (37,501 | ) | 329,191 | ||||||||||
Operating expenses: | ||||||||||||||||||
Salaries and benefits | 99,813 | 40,887 | 1,623 | 40,729 | — | 183,052 | ||||||||||||
Depreciation and amortization | 1,457 | 6,592 | — | 11,091 | — | 19,140 | ||||||||||||
Loan servicing fees | — | — | 22,829 | — | — | 22,829 | ||||||||||||
Cost to provide enrollment services | — | — | — | 32,543 | — | 32,543 | ||||||||||||
Other expenses | 44,578 | 11,493 | 3,828 | 34,531 | — | 94,430 | ||||||||||||
Intersegment expenses, net | 22,200 | 6,444 | 37,913 | (29,056 | ) | (37,501 | ) | — | ||||||||||
Total operating expenses | 168,048 | 65,416 | 66,193 | 89,838 | (37,501 | ) | 351,994 | |||||||||||
Income (loss) before income taxes | 52,651 | 27,392 | 232,235 | (22,547 | ) | — | 289,731 | |||||||||||
Income tax (expense) benefit | (20,007 | ) | (10,410 | ) | (88,248 | ) | 13,680 | — | (104,985 | ) | ||||||||
Net income (loss) | 32,644 | 16,982 | 143,987 | (8,867 | ) | — | 184,746 | |||||||||||
Net income attributable to noncontrolling interests | (5 | ) | — | — | 122 | — | 117 | |||||||||||
Net income (loss) attributable to Nelnet, Inc. | $ | 32,649 | 16,982 | 143,987 | (8,989 | ) | — | 184,629 |
(a) | Does not include the Communications segment, which was initiated as a result of the acquisition of Allo on December 31, 2015. |
|
As of September 30, 2016 | As of December 31, 2015 | |||||||||||||||||
Level 1 | Level 2 | Total | Level 1 | Level 2 | Total | |||||||||||||
Assets: | ||||||||||||||||||
Investments (available-for-sale and trading): | ||||||||||||||||||
Student loan asset-backed securities | $ | — | 109,783 | 109,783 | — | 147,925 | 147,925 | |||||||||||
Equity securities | 2,719 | — | 2,719 | 7,337 | — | 7,337 | ||||||||||||
Debt securities | 122 | — | 122 | 130 | — | 130 | ||||||||||||
Total investments (available-for-sale and trading) | 2,841 | 109,783 | 112,624 | 7,467 | 147,925 | 155,392 | ||||||||||||
Fair value of derivative instruments | — | 14,476 | 14,476 | — | 28,690 | 28,690 | ||||||||||||
Total assets | $ | 2,841 | 124,259 | 127,100 | 7,467 | 176,615 | 184,082 | |||||||||||
Liabilities: | ||||||||||||||||||
Fair value of derivative instruments | $ | — | 65,053 | 65,053 | — | 74,881 | 74,881 | |||||||||||
Total liabilities | $ | — | 65,053 | 65,053 | — | 74,881 | 74,881 |
Cash and cash equivalents | $ | 334 | ||
Restricted cash and investments | 850 | |||
Accounts receivable | 1,935 | |||
Property and equipment | 32,479 | |||
Other assets | 371 | |||
Intangible assets | 11,410 | |||
Excess cost over fair value of net assets acquired (goodwill) | 21,112 | |||
Other liabilities | (4,587 | ) | ||
Bonds and notes payable | (13,904 | ) | ||
Net assets acquired | 50,000 | |||
Minority interest | (3,750 | ) | ||
Total consideration paid by the Company | $ | 46,250 |
As of September 30, 2016 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 26,145,847 | 25,615,434 | — | — | 26,145,847 | |||||||||
Cash and cash equivalents | 67,154 | 67,154 | 67,154 | — | — | ||||||||||
Investments (available-for-sale and trading) | 112,624 | 112,624 | 2,841 | 109,783 | — | ||||||||||
Notes receivable | 17,031 | 17,031 | — | 17,031 | — | ||||||||||
Restricted cash | 866,582 | 866,582 | 866,582 | — | — | ||||||||||
Restricted cash – due to customers | 91,505 | 91,505 | 91,505 | — | — | ||||||||||
Restricted investments | 6,292 | 6,292 | 6,292 | — | — | ||||||||||
Accrued interest receivable | 381,804 | 381,804 | — | 381,804 | — | ||||||||||
Derivative instruments | 14,476 | 14,476 | — | 14,476 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 24,750,721 | 25,320,878 | — | 24,750,721 | — | ||||||||||
Accrued interest payable | 42,840 | 42,840 | — | 42,840 | — | ||||||||||
Due to customers | 91,505 | 91,505 | 91,505 | — | — | ||||||||||
Derivative instruments | 65,053 | 65,053 | — | 65,053 | — |
As of December 31, 2015 | |||||||||||||||
Fair value | Carrying value | Level 1 | Level 2 | Level 3 | |||||||||||
Financial assets: | |||||||||||||||
Student loans receivable | $ | 28,611,350 | 28,324,552 | — | — | 28,611,350 | |||||||||
Cash and cash equivalents | 63,529 | 63,529 | 63,529 | — | — | ||||||||||
Investments (available-for-sale and trading) | 155,392 | 155,392 | 7,467 | 147,925 | — | ||||||||||
Notes receivable | 18,067 | 18,473 | — | 18,067 | — | ||||||||||
Restricted cash | 823,450 | 823,450 | 823,450 | — | — | ||||||||||
Restricted cash – due to customers | 144,771 | 144,771 | 144,771 | — | — | ||||||||||
Restricted investments | 9,174 | 9,174 | 9,174 | — | — | ||||||||||
Accrued interest receivable | 383,825 | 383,825 | — | 383,825 | — | ||||||||||
Derivative instruments | 28,690 | 28,690 | — | 28,690 | — | ||||||||||
Financial liabilities: | |||||||||||||||
Bonds and notes payable | 27,150,775 | 28,105,921 | — | 27,150,775 | — | ||||||||||
Accrued interest payable | 31,507 | 31,507 | — | 31,507 | — | ||||||||||
Due to customers | 144,771 | 144,771 | 144,771 | — | — | ||||||||||
Derivative instruments | 74,881 | 74,881 | — | 74,881 | — |
|
|
|||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|