NELNET INC, 10-Q filed on 5/5/2016
Quarterly Report
Document and Entity Information Document (USD $)
3 Months Ended
Mar. 31, 2016
Jun. 30, 2015
Apr. 30, 2016
Common Class A [Member]
Apr. 30, 2016
Common Class B [Member]
Document Information [Line Items]
 
 
 
 
Entity Registrant Name
NELNET INC 
 
 
 
Document Type
10-Q 
 
 
 
Current Fiscal Year End Date
--12-31 
 
 
 
Entity Common Stock, Shares Outstanding
 
 
31,004,045 
11,476,932 
Entity Public Float
 
$ 1,092,135,927 
 
 
Amendment Flag
false 
 
 
 
Entity Central Index Key
0001258602 
 
 
 
Entity Current Reporting Status
Yes 
 
 
 
Entity Voluntary Filers
No 
 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
 
Document Period End Date
Mar. 31, 2016 
 
 
 
Document Fiscal Year Focus
2016 
 
 
 
Document Fiscal Period Focus
Q1 
 
 
 
Consolidated Balance Sheets (unaudited) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Assets:
 
 
Student loans receivable (net of allowance for loan losses)
$ 27,519,052 
$ 28,324,552 
Cash and cash equivalents:
 
 
Cash and cash equivalents - not held at a related party
7,519 
11,379 
Cash and cash equivalents - held at a related party
43,515 
52,150 
Total cash and cash equivalents
51,034 
63,529 
Investments and notes receivable
273,451 
303,681 
Restricted cash and investments
924,925 
832,624 
Restricted cash - due to customers
85,805 
144,771 
Accrued interest receivable
384,277 
383,825 
Accounts receivable (net of allowance for doubtful accounts)
45,465 
51,345 
Goodwill
147,312 
146,000 
Intangible assets, net
48,827 
51,062 
Property and equipment, net
88,708 
80,482 
Other assets
11,470 
8,583 
Fair value of derivative instruments
9,021 
28,690 
Total assets
29,589,347 
30,419,144 
Liabilities:
 
 
Bonds and notes payable
27,349,891 
28,105,921 
Accrued interest payable
38,950 
31,507 
Other liabilities
165,367 
169,906 
Due to customers
85,805 
144,771 
Fair value of derivative instruments
62,408 
74,881 
Total liabilities
27,702,421 
28,526,986 
Nelnet, Inc. shareholders' equity:
 
 
Preferred stock
Additional paid-in capital
2,913 
Retained earnings
1,873,500 
1,881,708 
Accumulated other comprehensive earnings
1,416 
2,284 
Total Nelnet, Inc. shareholders' equity
1,878,254 
1,884,432 
Noncontrolling interest
8,672 
7,726 
Total equity
1,886,926 
1,892,158 
Total liabilities and equity
29,589,347 
30,419,144 
Common Class A [Member]
 
 
Nelnet, Inc. shareholders' equity:
 
 
Common stock
310 
325 
Total equity
310 
325 
Common Class B [Member]
 
 
Nelnet, Inc. shareholders' equity:
 
 
Common stock
115 
115 
Total equity
115 
115 
Variable Interest Entity, Primary Beneficiary [Member]
 
 
Assets:
 
 
Student loans receivable (net of allowance for loan losses)
27,684,335 
28,499,180 
Cash and cash equivalents:
 
 
Restricted cash and investments
867,707 
814,294 
Other assets
384,095 
384,230 
Liabilities:
 
 
Bonds and notes payable
27,642,500 
28,405,133 
Other liabilities
392,927 
353,607 
Fair value of derivative instruments
32,142 
64,080 
Equity:
 
 
Net assets of consolidated variable interest entities
$ 868,568 
$ 874,884 
Consolidated Balance Sheets (unaudited) (Parentheticals) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Allowance for loan losses
$ 50,084 
$ 50,498 
Allowance for doubtful accounts
$ 1,584 
$ 2,003 
Preferred stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Preferred stock, authorized shares
50,000,000 
50,000,000 
Preferred stock, issued shares
Preferred stock, outstanding shares
Common Class A [Member]
 
 
Par Value (in dollars per share)
$ 0.01 
$ 0.01 
Shares Authorized
600,000,000 
600,000,000 
Shares Issued
31,008,226 
32,476,528 
Shares Outstanding
31,008,226 
32,476,528 
Common Class B [Member]
 
 
Par Value (in dollars per share)
$ 0.01 
$ 0.01 
Shares Authorized
60,000,000 
60,000,000 
Shares Issued
11,476,932 
11,476,932 
Shares Outstanding
11,476,932 
11,476,932 
Consolidated Statements of Income (unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Interest income:
 
 
Loan interest
$ 189,988 
$ 171,944 
Investment interest
2,029 
2,205 
Total interest income
192,017 
174,149 1
Interest expense:
 
 
Interest on bonds and notes payable
90,408 
71,554 1
Net interest income
101,609 
102,595 1
Less provision for loan losses
2,500 
2,000 1
Net interest income after provision for loan losses
99,109 
100,595 1
Other income:
 
 
Loan and guaranty servicing revenue
52,330 
57,811 1
Tuition payment processing, school information, and campus commerce revenue
38,657 
34,680 1
Communications revenue
4,346 
Enrollment services revenue
4,326 
13,373 1
Other income
13,796 
11,408 1
Gain on sale of loans and debt repurchases
101 
2,875 1
Derivative market value and foreign currency adjustments and derivative settlements, net
(28,691)
(3,078)
Total other income
84,865 
117,069 1
Operating expenses:
 
 
Salaries and benefits
63,242 
61,050 1
Depreciation and amortization
7,640 
5,662 1
Loan servicing fees
6,928 
7,616 1
Cost to provide communications services
1,703 
Cost to provide enrollment services
3,623 
10,799 
Other expenses
28,376 
30,101 1
Total operating expenses
111,512 
115,228 1
Income before income taxes
72,462 
102,436 
Income tax expense
(24,433)
(37,630)1
Net income
48,029 
64,806 1
Net income attributable to noncontrolling interests
68 
41 1
Net income attributable to Nelnet, Inc.
$ 47,961 
$ 64,765 1
Earnings per common share:
 
 
Net income attributable to Nelnet, Inc. shareholders - basic and diluted
$ 1.11 
$ 1.40 
Weighted average common shares outstanding - basic and diluted
43,088,092 
46,290,590 
Consolidated Statements of Comprehensive Income (unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Net income
$ 48,029 
$ 64,806 1
Available-for-sale securities:
 
 
Unrealized holding losses arising during period, net
(1,510)
(213)
Reclassification adjustment for losses (gains) recognized in net income, net
132 
(205)
Income tax effect
510 
155 
Total other comprehensive loss
(868)
(263)
Comprehensive income
47,161 
64,543 
Comprehensive income attributable to noncontrolling interests
68 
41 
Comprehensive income attributable to Nelnet, Inc.
$ 47,093 
$ 64,502 
Consolidated Statements of Shareholders' Equity (unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Preferred Stock [Member]
Common Class A [Member]
Common Class B [Member]
Additional paid-in capital [Member]
Retained earnings [Member]
Accumulated other comprehensive earnings [Member]
Noncontrolling interest [Member]
Balance at Dec. 31, 2014
$ 1,725,678 
$ 0 
$ 348 
$ 115 
$ 17,290 
$ 1,702,560 
$ 5,135 
$ 230 
Balance (in Shares) at Dec. 31, 2014
 
34,756,384 
11,486,932 
 
 
 
 
Net income (loss) attributable to Nelnet, Inc.1
64,765 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Net income
64,806 1
 
 
 
 
64,765 
 
41 
Other comprehensive loss
(263)
 
 
 
 
 
(263)
 
Cash dividend on Class A and Class B common stock
(4,614)
 
 
 
 
(4,614)
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
132,479 
 
 
 
 
Issuance of common stock, net of forfeitures
2,468 
 
2,467 
 
 
 
Compensation expense for stock based awards
1,357 
 
 
 
1,357 
 
 
 
Repurchase of common stock (in Shares)
 
 
(175,798)
 
 
 
 
Repurchase of common stock
(7,939)
 
(2)
(7,937)
 
 
 
Balance at Mar. 31, 2015
1,781,493 
347 
115 
13,177 
1,762,711 
4,872 
271 
Balance (in Shares) at Mar. 31, 2015
 
34,713,065 
11,486,932 
 
 
 
 
Balance at Dec. 31, 2015
1,892,158 
325 
115 
1,881,708 
2,284 
7,726 
Balance (in Shares) at Dec. 31, 2015
 
32,476,528 
11,476,932 
 
 
 
 
Net income (loss) attributable to Nelnet, Inc.
47,961 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interest
975 
 
 
 
 
 
 
975 
Net income
48,029 
 
 
 
 
47,961 
 
68 
Other comprehensive loss
(868)
 
 
 
 
 
(868)
 
Distribution to noncontrolling interests
(97)
 
 
 
 
 
 
(97)
Cash dividend on Class A and Class B common stock
(5,093)
 
 
 
 
(5,093)
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
130,797 
 
 
 
 
Issuance of common stock, net of forfeitures
2,708 
 
2,707 
 
 
 
Compensation expense for stock based awards
1,183 
 
 
 
1,183 
 
 
 
Repurchase of common stock (in Shares)
 
 
(1,599,099)
 
 
 
 
Repurchase of common stock
(52,069)
 
(16)
(977)
(51,076)
 
 
Balance at Mar. 31, 2016
$ 1,886,926 
$ 0 
$ 310 
$ 115 
$ 2,913 
$ 1,873,500 
$ 1,416 
$ 8,672 
Balance (in Shares) at Mar. 31, 2016
 
31,008,226 
11,476,932 
 
 
 
 
Consolidated Statements of Shareholders' Equity (unaudited) (Parentheticals)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Common Class A [Member]
 
 
Dividends paid per common share
$ 0.12 
$ 0.10 
Common Class B [Member]
 
 
Dividends paid per common share
$ 0.12 
$ 0.10 
Consolidated Statements of Cash Flows (unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Net income attributable to Nelnet, Inc.
$ 47,961 
$ 64,765 1
Net income attributable to noncontrolling interests
68 
41 1
Net income
48,029 
64,806 1
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisitions:
 
 
Depreciation and amortization, including debt discounts and student loan premiums and deferred origination costs
31,078 
30,225 
Student loan discount accretion
(10,917)
(10,746)
Provision for loan losses
2,500 
2,000 1
Derivative market value adjustment
3,674 
46,072 
Foreign currency transaction adjustment
18,480 
(48,209)
Proceeds from termination of derivative instruments
3,522 
34,447 
Gain on sale of loans
(351)
Gain from debt repurchases
(101)
(2,524)
Loss (gain) from sales of available-for-sale securities, net
132 
(205)
(Payments for) proceeds from (purchases) sales of trading securities, net
(3,436)
1,304 
Deferred income tax (benefit) expense
(4,260)
224 
Other
3,212 
3,115 
Increase in accrued interest receivable
(452)
(3,784)
Decrease (increase) in accounts receivable
5,961 
(5,416)
(Increase) decrease in other assets
(2,922)
605 
Increase in accrued interest payable
7,443 
1,371 
Increase in other liabilities
2,551 
16,414 
Net cash provided by operating activities
104,494 
129,348 
Cash flows from investing activities, net of acquisitions:
 
 
Purchases of student loans
(108,543)
(844,120)
Net proceeds from student loan repayments, claims, capitalized interest, participations, and other
870,898 
940,907 
Proceeds from sale of student loans
44,738 
3,996 
Purchases of available-for-sale securities
(14,595)
(512)
Proceeds from sales of available-for-sale securities
44,675 
1,317 
Purchases of investments and issuance of notes receivable
(3,021)
(49,953)
Proceeds from investments and notes receivable
3,087 
4,709 
Purchases of property and equipment, net
(15,258)
(8,372)
Increase in restricted cash and investments, net
(92,301)
(16,147)
Net cash provided by investing activities
729,680 
31,825 
Cash flows from financing activities:
 
 
Payments on bonds and notes payable
(858,147)
(1,459,807)
Proceeds from issuance of bonds and notes payable
67,698 
1,285,760 
Payments of debt issuance costs
(164)
(5,256)
Dividends paid
(5,093)
(4,614)
Repurchases of common stock
(52,069)
(7,939)
Proceeds from issuance of common stock
228 
248 
Issuance of noncontrolling interests
975 
Distribution to noncontrolling interests
(97)
Net cash used in financing activities
(846,669)
(191,608)
Net decrease in cash and cash equivalents
(12,495)
(30,435)
Cash and cash equivalents, beginning of period
63,529 
130,481 
Cash and cash equivalents, end of period
51,034 
100,046 
Cash disbursements made for:
 
 
Interest
66,091 
53,235 
Income taxes paid, net of refunds
$ 1,323 
$ 45 
Basis of Financial Reporting
Basis of Financial Reporting
Basis of Financial Reporting

The accompanying unaudited consolidated financial statements of Nelnet, Inc. and subsidiaries (the “Company”) as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2015 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three months ended March 31, 2016 are not necessarily indicative of the results for the year ending December 31, 2016. The unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the "2015 Annual Report").

Reclassifications

Certain amounts previously reported within the Company's consolidated balance sheet and statements of income have been reclassified to conform to the current period presentation. These reclassifications are summarized below.

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.

Student Loans Receivable and Allowance for Loan Losses
Financing Receivables [Text Block]
Student Loans Receivable and Allowance for Loan Losses

Student loans receivable consisted of the following:
 
As of
 
As of
 
March 31, 2016
 
December 31, 2015
Federally insured loans:
 
 
 
Stafford and other
$
5,934,834

 
6,202,064

Consolidation
21,514,363

 
22,086,043

Total
27,449,197

 
28,288,107

Private education loans
294,621

 
267,642

 
27,743,818

 
28,555,749

Loan discount, net of unamortized loan premiums and deferred origination costs (a)
(174,682
)
 
(180,699
)
Allowance for loan losses – federally insured loans
(34,441
)
 
(35,490
)
Allowance for loan losses – private education loans
(15,643
)
 
(15,008
)
 
$
27,519,052

 
28,324,552



(a)
As of March 31, 2016 and December 31, 2015, "loan discount, net of unamortized loan premiums and deferred origination costs" included $29.7 million and $33.0 million, respectively, of non-accretable discount associated with purchased loans of $10.5 billion and $10.8 billion, respectively.

Private Education Loans

In February 2015, the Company entered into an agreement with CommonBond, Inc. ("CommonBond"), a student lending company that provides private education loans to graduate students, under which the Company committed to purchase private education loans for a period of 18 months, with the total purchase obligation limited to $200.0 million. As of March 31, 2016, the Company had purchased $189.9 million in private education loans from CommonBond pursuant to this agreement.

Activity in the Allowance for Loan Losses

The provision for loan losses represents the periodic expense of maintaining an allowance sufficient to absorb losses, net of recoveries, inherent in the portfolio of student loans. Activity in the allowance for loan losses is shown below.
 
Three months ended March 31,
 
2016
 
2015
Balance at beginning of period
$
50,498

 
48,900

Provision for loan losses:
 
 
 
Federally insured loans
2,000

 
2,000

Private education loans
500

 

Total provision for loan losses
2,500

 
2,000

Charge-offs:
 

 
 

Federally insured loans
(3,049
)
 
(3,149
)
Private education loans
(401
)
 
(676
)
Total charge-offs
(3,450
)
 
(3,825
)
Recoveries - private education loans
276

 
254

Purchase (sale) of federally insured and private education loans, net
160

 
(230
)
Transfer from repurchase obligation related to private education loans repurchased, net
100

 
4,062

Balance at end of period
$
50,084

 
51,161

 
 
 
 
Allocation of the allowance for loan losses:
 
 
 

Federally insured loans
$
34,441

 
38,021

Private education loans
15,643

 
13,140

Total allowance for loan losses
$
50,084

 
51,161


Student Loan Status and Delinquencies

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

 
As of March 31, 2016
 
As of December 31, 2015
 
As of March 31, 2015
Federally insured loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
2,198,559

 
 
 
$
2,292,941

 
 
 
$
2,781,537

 
 
Loans in forbearance
2,736,472

 
 
 
2,979,357

 
 
 
3,244,255

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
19,375,813

 
86.0
%
 
19,447,541

 
84.4
%
 
18,672,471

 
85.0
%
Loans delinquent 31-60 days
866,207

 
3.8

 
1,028,396

 
4.5

 
911,653

 
4.2

Loans delinquent 61-90 days
538,284

 
2.4

 
566,953

 
2.5

 
571,759

 
2.6

Loans delinquent 91-120 days
329,425

 
1.5

 
415,747

 
1.8

 
346,857

 
1.6

Loans delinquent 121-270 days
1,008,157

 
4.5

 
1,166,940

 
5.1

 
1,030,645

 
4.7

Loans delinquent 271 days or greater
396,280

 
1.8

 
390,232

 
1.7

 
416,398

 
1.9

Total loans in repayment
22,514,166

 
100.0
%
 
23,015,809

 
100.0
%
 
21,949,783

 
100.0
%
Total federally insured loans
$
27,449,197

 
 

 
$
28,288,107

 
 

 
$
27,975,575

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private education loans:
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
55,668

 
 
 
$
30,795

 
 
 
$
5,006

 
 
Loans in forbearance
722

 
 
 
350

 
 
 
20

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
231,556

 
97.2
%
 
228,464

 
96.7
%
 
118,278

 
93.5
%
Loans delinquent 31-60 days
968

 
0.4

 
1,771

 
0.7

 
1,200

 
0.9

Loans delinquent 61-90 days
1,144

 
0.5

 
1,283

 
0.5

 
1,753

 
1.4

Loans delinquent 91 days or greater
4,563

 
1.9

 
4,979

 
2.1

 
5,256

 
4.2

Total loans in repayment
238,231

 
100.0
%
 
236,497

 
100.0
%
 
126,487

 
100.0
%
Total private education loans
$
294,621

 
 

 
$
267,642

 
 

 
$
131,513

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

The following tables summarize the Company’s outstanding debt obligations by type of instrument:
 
As of March 31, 2016
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
24,335,564

 
0.00% - 6.90%
 
8/26/19 - 8/26/52
Bonds and notes based on auction
1,159,415

 
0.99% - 2.18%
 
3/22/32 - 11/26/46
Total variable-rate bonds and notes
25,494,979

 
 
 
 
FFELP warehouse facilities
1,889,589

 
0.44% - 0.77%
 
4/29/18 - 12/14/18
Private education loan warehouse facility
206,153

 
0.78%
 
12/26/16
Unsecured line of credit
90,000

 
1.94%
 
10/30/20
Unsecured debt - Junior Subordinated Hybrid Securities
57,184

 
4.01%
 
9/15/61
Other borrowings
93,355

 
1.94% - 3.38%
 
10/31/16 - 12/15/45
 
27,831,260

 
 
 
 
Discount on bonds and notes payable and debt issuance costs, net
(481,369
)
 
 
 
 
Total
$
27,349,891

 
 
 
 
 
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

 
 
 
 


FFELP Warehouse Facilities

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

As of March 31, 2016, the Company had three FFELP warehouse facilities as summarized below.
 
 
NHELP-III (a)
 
NFSLW-I (b)
 
NHELP-II
 
Total
Maximum financing amount
 
$
750,000

 
875,000

 
500,000

 
2,125,000

Amount outstanding
 
739,074

 
728,453

 
422,062

 
1,889,589

Amount available
 
$
10,926

 
146,547

 
77,938

 
235,411

Expiration of liquidity provisions
 
April 29, 2016

 
July 8, 2016

 
December 16, 2016

 
 
Final maturity date
 
April 29, 2018

 
July 9, 2018

 
December 14, 2018

 
 
Maximum advance rates
 
92.2 - 95.0%

 
92.0 - 98.0%

 
85.0 - 95.0%

 
 
Minimum advance rates
 
92.2 - 95.0%

 
84.0 - 90.0%

 
85.0 - 95.0%

 
 
Advanced as equity support
 
$
46,139

 
34,324

 
37,592

 
118,055



(a)
On April 29, 2016, the Company entered into an amended and restated agreement for this warehouse facility which changed the expiration date for the liquidity provisions to April 28, 2017, and changed the final maturity date to April 26, 2019.

(b)
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.

Private Education Loan Warehouse Facility

On June 26, 2015, the Company entered into a $275.0 million private education loan warehouse facility. As of March 31, 2016, there was $206.2 million outstanding on the facility and $68.8 million was available for future use. The facility has a static advance rate that requires initial equity for loan funding, but does not require increased equity based on market movements. The maximum advance rate on the entire facility is 88 percent and minimum advance rates, depending on loan characteristics and program type, ranged from 64 percent to 99 percent. As of March 31, 2016, $28.4 million was advanced on the facility as equity support. The facility is supported by liquidity provisions, which had an original expiration date of June 24, 2016.
On April 1, 2016, the Company amended the agreement for this facility to change the expiration date for the liquidity provisions to October 28, 2016, and to change the final maturity date to April 28, 2017. In addition, the minimum advance rates, depending on loan characteristics and program type, were changed to a range from 61.75 percent to 95.00 percent, and the maximum advance rate on the entire facility remained at 88 percent. In the event the Company is unable to renew the liquidity provisions by the amended expiration date of October 28, 2016, the facility would become a term facility at a stepped-up cost, with no additional student loans being eligible for financing, and the Company would be required to refinance the existing loans in the facility by the facility's amended final maturity date of April 28, 2017.
Unsecured Line of Credit

The Company has a $350.0 million unsecured line of credit that has a maturity date of October 30, 2020.  As of March 31, 2016, the unsecured line of credit had an outstanding balance of $90.0 million and $260.0 million was available for future use.
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments

The Company uses derivative financial instruments primarily to manage interest rate risk and foreign currency exchange risk. Derivative instruments used as part of the Company's risk management strategy are further described in note 5 of the notes to consolidated financial statements included in the 2015 Annual Report. A tabular presentation of such derivatives outstanding as of March 31, 2016 and December 31, 2015 is presented below.
Basis Swaps

The following table summarizes the Company’s basis swaps outstanding as of March 31, 2016 and December 31, 2015 in which the Company receives three-month LIBOR set discretely in advance and pays one-month LIBOR plus or minus a spread as defined in the agreements (the "1:3 Basis Swaps").
 
 
 
 
As of March 31,
 
As of December 31,
 
 
 
2016
 
2015
Maturity
 
Notional amount
 
Notional amount
2016
 
 
$
4,000,000

 
$
7,500,000

The weighted average rate paid by the Company on the 1:3 Basis Swaps as of March 31, 2016 and December 31, 2015 was one-month LIBOR plus 9.8 basis points and 10.0 basis points, respectively.
Interest Rate Swaps – Floor Income Hedges

The following table summarizes the outstanding derivative instruments used by the Company to economically hedge loans earning fixed rate floor income.
 
 
As of March 31, 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
%
 
$
1,000,000

 
0.76
%
2017
 
1,000,000

 
0.97

 
2,100,000

 
0.84

2018
 
1,600,000

 
1.08

 
1,600,000

 
1.08

2019
 
2,250,000

 
0.99

 
500,000

 
1.12

2020
 
500,000

 
1.02

 

 

2025
 
100,000

 
2.32

 
100,000

 
2.32

 
 
$
6,450,000

 
0.99
%
 
$
5,300,000

 
0.95
%

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

On August 20, 2014, the Company paid $9.1 million for an interest rate swap option to economically hedge loans earning fixed rate floor income. The interest rate swap option gives the Company the right, but not the obligation, to enter into a $250 million notional interest rate swap in which the Company would pay a fixed amount of 3.30% and receive discrete one-month LIBOR. If the interest rate swap option is exercised, the swap would become effective in 2019 and mature in 2024.

Interest Rate Swaps – Unsecured Debt Hedges

The Company had the following derivatives outstanding as of March 31, 2016 and December 31, 2015 that are used to effectively convert the variable interest rate on a portion of the Junior Subordinated Hybrid Securities to a fixed rate of 7.66%.
 
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
2036
 
$
25,000

 
4.28
%
(a)
For all interest rate derivatives, the Company receives discrete three-month LIBOR.

Interest Rate Caps

In June 2015, in conjunction with the entry into the $275.0 million private education loan warehouse facility, the Company paid $2.9 million for two interest rate cap contracts with a total notional amount of $275.0 million. The first interest rate cap has a notional amount of $125.0 million and a one-month LIBOR strike rate of 2.50%, and the second interest rate cap has a notional amount of $150.0 million and a one-month LIBOR strike rate of 4.99%. In the event that the one-month LIBOR rate rises above the applicable strike rate, the Company would receive monthly payments related to the spread difference. Both interest rate cap contracts have a maturity date of July 15, 2020.
Foreign Currency Exchange Risk

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

The Company entered into a cross-currency interest rate swap in connection with the issuance of the Euro Notes. Under the terms of the cross-currency interest rate swap, the Company receives from the counterparty a spread to the EURIBOR index based on a notional amount of €352.7 million and pays a spread to the LIBOR index based on a notional amount of $450.0 million. In addition, under the terms of this agreement, all principal payments on the Euro Notes will effectively be paid at the exchange rate in effect between the U.S. dollar and Euro as of the issuance of the notes.

The following table shows the income statement impact as a result of the re-measurement of the Euro Notes and the change in the fair value of the related derivative instrument.
 
Three months ended March 31,
 
2016
 
2015
Re-measurement of Euro Notes
$
(18,480
)
 
48,209

Change in fair value of cross-currency interest rate swap
32,701

 
(49,805
)
Total impact to consolidated statements of income - income (expense) (a)
$
14,221

 
(1,596
)
(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.
Management has structured the cross-currency interest rate swap to economically hedge the Euro Notes to effectively convert the Euro Notes to U.S. dollars and pay a spread on these notes based on the LIBOR index. However, the cross-currency interest rate swap does not qualify for hedge accounting. The re-measurement of the Euro-denominated bonds generally correlates with the change in the fair value of the corresponding cross-currency interest rate swap. However, the Company will experience unrealized gains and losses between these financial instruments due to the principal and accrued interest on the Euro Notes being re-measured to U.S. dollars at each reporting date based on the foreign currency exchange rate on that date, while the cross-currency interest rate swap is measured at fair value at each reporting date with the change in fair value recognized in the current period earnings.
Consolidated Financial Statement Impact Related to Derivatives

The following table summarizes the fair value of the Company’s derivatives as reflected in the consolidated balance sheets:
 
Fair value of asset derivatives
 
Fair value of liability derivatives
 
As of
 
As of
 
As of
 
As of
 
March 31,
2016
 
December 31,
2015
 
March 31,
2016
 
December 31,
2015
1:3 basis swaps
$
1,082

 
724

 

 
410

Interest rate swaps - floor income hedges
3,195

 
21,408

 
18,683

 
1,175

Interest rate swap option - floor income hedge
1,842

 
3,257

 

 

Interest rate swaps - hybrid debt hedges

 

 
10,195

 
7,646

Interest rate caps
808

 
1,570

 

 

Cross-currency interest rate swap



 
32,950

 
65,650

Other
2,094

 
1,731

 
580

 

Total
$
9,021

 
28,690

 
62,408

 
74,881



During the three months ended March 31, 2016, the Company terminated a total notional amount of $3.1 billion of fixed rate floor income hedges for gross proceeds of $3.0 million, and a total notional amount of $300.0 million of other basis swaps for gross proceeds of $0.5 million. During the three months ended March 31, 2015, the Company terminated a total notional amount of $2.7 billion of 1:3 Basis Swaps for gross proceeds of $34.4 million.

Offsetting of Derivative Assets/Liabilities

The Company records derivative instruments in the consolidated balance sheets on a gross basis as either an asset or liability measured at its fair value. Certain of the Company's derivative instruments are subject to right of offset provisions with counterparties. The following tables include the gross amounts related to the Company's derivative portfolio recognized in the consolidated balance sheets, reconciled to the net amount when excluding derivatives subject to enforceable master netting arrangements and cash collateral received/pledged:

 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative assets
 
Gross amounts of recognized assets presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral pledged
 
Net asset (liability)
Balance as of
March 31, 2016
 
$
9,021

 
(8,213
)
 

 
808

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
 
Net asset (liability)
Balance as of
March 31, 2016
 
$
(62,408
)
 
8,213

 
53,739

 
(456
)
Balance as of
December 31, 2015
 
(74,881
)
 
851

 
13,168

 
(60,862
)


The following table summarizes the effect of derivative instruments in the consolidated statements of income.
 
Three months ended March 31,
 
2016
 
2015
Settlements:
 

 
 

1:3 basis swaps
$
(329
)
 
266

Interest rate swaps - floor income hedges
(5,243
)
 
(5,015
)
Interest rate swaps - hybrid debt hedges
(232
)
 
(252
)
Cross-currency interest rate swap
(733
)
 
(214
)
Total settlements - expense
(6,537
)
 
(5,215
)
Change in fair value:
 

 
 

1:3 basis swaps
768

 
10,969

Interest rate swaps - floor income hedges
(32,709
)
 
(4,872
)
Interest rate swap option - floor income hedge
(1,415
)
 
(912
)
Interest rate swaps - hybrid debt hedges
(2,549
)
 
(1,452
)
Interest rate caps
(763
)
 

Cross-currency interest rate swap
32,701

 
(49,805
)
Other
293

 

Total change in fair value - expense
(3,674
)
 
(46,072
)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - (expense) income
(18,480
)
 
48,209

Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense)
$
(28,691
)
 
(3,078
)
Investments and Notes Receivable
Investments
Investments and Notes Receivable

A summary of the Company's investments and notes receivable follows:
 
As of March 31, 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)
$
109,813

 
2,326

 
(1,715
)
 
110,424

 
139,970

 
3,402

 
(1,362
)
 
142,010

Equity securities
792

 
1,736

 
(99
)
 
2,429

 
846

 
1,686

 
(100
)
 
2,432

Total available-for-sale investments
$
110,605

 
4,062

 
(1,814
)
 
112,853

 
140,816

 
5,088

 
(1,462
)
 
144,442

Trading investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed securities
 
 
 
 
 
 
5,946

 
 
 
 
 
 
 
6,045

Equity securities
 
 
 
 
 
 
8,439

 
 
 
 
 
 
 
4,905

Total trading investments
 
 
 
 
 
 
14,385

 
 
 
 
 
 
 
10,950

Total available-for-sale and trading investments
 
 
 
 
 
 
127,238

 
 
 
 
 
 
 
155,392

Other Investments and Notes Receivable (not measured at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
Venture capital and funds
 
 
 
 
 
 
64,857

 
 
 
 
 
 
 
63,323

Real estate
 
 
 
 
 
 
48,386

 
 
 
 
 
 
 
50,463

Notes receivable
 
 
 
 
 
 
18,279

 
 
 
 
 
 
 
18,473

Tax liens and affordable housing
 
 
 
 
 
 
14,691

 
 
 
 
 
 
 
16,030

Total investments and notes receivable
 
 
 
 
 
 
$
273,451

 
 
 
 
 
 
 
303,681


    
(a)
As of March 31, 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 March 31, 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.
Business Combinations Business Combinations (Notes)
Business Combination Disclosure [Text Block]
Business Combination

Allo Communications LLC ("Allo")

On December 31, 2015, the Company purchased 92.5 percent of the ownership interests of Allo for total cash consideration of $46.25 million.  On January 1, 2016, the Company sold a 1.0 percent ownership interest in Allo to a non-related third-party for $0.5 million. The remaining 7.5 percent of the ownership interests of Allo is owned by members of Allo management, who have the opportunity to earn an additional 11.5 percent (up to 19 percent) of the total ownership interests based on the financial performance of Allo.  The additional ownership interest that Allo management has the opportunity to earn are based on their continued employment with Allo. Accordingly, the value associated with the ownership interests issued to these employees of $1.0 million will be recognized by Allo as compensation expense over the performance period.

Allo provides pure fiber optic service to homes and businesses for internet, television, and telephone services.  The acquisition of Allo provides additional diversification of the Company's revenues and cash flows outside of education.  In addition, the acquisition leverages the Company's existing infrastructure, customer service capabilities and call centers, and financial strength and liquidity for continued growth. 

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The fair values of the assets and liabilities related to Allo are subject to refinement as the Company completes its analysis relative to the fair values at the date of acquisition. During the first quarter of 2016, the Company recognized certain adjustments to the provisional amounts recorded at December 31, 2015 that were needed to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The net impact of these adjustments was an increase to goodwill, and the adjustments had no impact on the operating results during the quarter.
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



The $11.4 million of acquired intangible assets on the date of acquisition had a weighted-average useful life of approximately 12 years. The intangible assets that made up this amount included customer relationships of $6.3 million (10-year useful life) and a trade name of $5.1 million (15-year useful life).

The $21.1 million of goodwill was assigned to the Communications operating segment and is expected to be deductible for tax purposes. The amount allocated to goodwill was primarily attributable to future customers to be generated through the continued expansion of Allo's services in rural markets.

The proforma impacts of the acquisition on the Company's historical results prior to the acquisition were not material.

Allo recognizes revenue when (i) persuasive evidence of an arrangement exists between Allo and the customer, (ii) delivery of the product to the customer has occurred or service has been provided to the customer, (iii) the price to the customer is fixed or determinable, and (iv) collectability of the sales price is reasonably assured. Revenues based on a flat fee, derived principally from local telephone, dedicated network access, data communications, Internet access service, and residential/business broadband service are billed in advance and recognized in subsequent periods when the services are provided. Revenues for usage-based services, such as access charges billed to other telephone carriers for originating and terminating long-distance calls on Allo's network, are billed in arrears. Allo recognizes revenue from these services in the period the services are rendered rather than billed. Earned but unbilled usage-based services are recorded in accounts receivable.
Intangible Assets Intangible Assets
Intangible Assets Disclosure [Text Block]
Intangible Assets and Goodwill

Intangible assets consist of the following:
 
Weighted average remaining useful life as of March 31, 2016 (months)
 
As of
March 31,
2016
 
As of December 31, 2015
 
 
 
Amortizable intangible assets:
 
 
 
Customer relationships (net of accumulated amortization of $4,914 and $4,028, respectively)
195
 
$
26,870

 
27,576

Computer software (net of accumulated amortization of $5,568 and $4,397, respectively)
32
 
10,431

 
11,601

Trade names (net of accumulated amortization of $1,010 and $795, respectively)
198
 
10,562

 
10,687

Content (net of accumulated amortization of $1,125 and $900, respectively)
9
 
675

 
900

Covenants not to compete (net of accumulated amortization of $65 and $56, respectively)
98
 
289

 
298

Total - amortizable intangible assets
158
 
$
48,827

 
51,062



The Company recorded amortization expense on its intangible assets of $2.5 million and $2.4 million during the three months ended March 31, 2016 and 2015, respectively. The Company will continue to amortize intangible assets over their remaining useful lives. As of March 31, 2016, the Company estimates it will record amortization expense as follows:

2016 (April 1 - December 31)
$
7,515

2017
7,033

2018
6,558

2019
3,911

2020
3,589

2021 and thereafter
20,221

 
$
48,827



The change in the carrying amount of goodwill by reportable operating segment was as follows:
 
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 March 31, 2016
$
8,596

 
67,168

 
21,112

 
41,883

 
8,553

 
147,312

Property Plant and Equipment Property Plant and Equipment (Notes)
Property, Plant and Equipment Disclosure [Text Block]
Property and Equipment

Property and equipment consisted of the following:
 
Useful life
 
As of March 31, 2016
 
As of December 31, 2015
Non-communications:
 
 
 
 
 
Computer equipment and software
1-5 years
 
$
92,035

 
89,093

Office furniture and equipment
3-7 years
 
12,415

 
12,638

Building and building improvements
5-39 years
 
12,239

 
12,239

Transportation equipment
4-10 years
 
3,868

 
3,868

Leasehold improvements
5-20 years
 
3,332

 
3,545

Land
 
700

 
700

Construction in progress
 
9,877

 
1,210

 
 
 
134,466

 
123,293

Accumulated depreciation - non-communications
 
 
80,335

 
77,188

Non-communications, net property and equipment
 
 
54,131

 
46,105

 
 
 
 
 
 
Communications:
 
 
 
 
 
Network plant and fiber
5-15 years
 
24,868

 
25,669

Customer located property
5-10 years
 
3,776

 
6,912

Central office
5-15 years
 
3,207

 
909

Other
1-20 years
 
1,754

 
887

Construction in progress
 
1,752

 

 
 
 
35,357

 
34,377

Accumulated depreciation - communications
 
 
780

 

Communications, net property and equipment
 
 
34,577

 
34,377

Total property and equipment, net
 
 
$
88,708

 
80,482



Depreciation expense for the three months ended March 31, 2016 and 2015 related to property and equipment was $5.1 million and $3.3 million, respectively.
Earnings per Common Share
Earnings Per Common Share
Earnings per Common Share

Presented below is a summary of the components used to calculate basic and diluted earnings per share. The Company applies the two-class method in computing both basic and diluted earnings per share, which requires the calculation of separate earnings per share amounts for common stock and unvested share based awards. Unvested share-based awards that contain nonforfeitable rights to dividends are considered securities which participate in undistributed earnings with common stock.
 
Three months ended March 31,
 
2016
 
2015
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
47,452

 
509

 
47,961

 
64,078

 
687

 
64,765

 
 
 
 
 


 
 
 
 
 
 
Denominator:


 


 


 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
42,630,806

 
457,286

 
43,088,092

 
45,799,873

 
490,717

 
46,290,590

Earnings per share - basic and diluted
$
1.11

 
1.11

 
1.11

 
1.40

 
1.40

 
1.40



Unvested restricted stock awards are the Company's only potential common shares and, accordingly, there were no awards that were antidilutive and not included in average shares outstanding for the diluted earnings per share calculation.
Segment Reporting
Segment Reporting
Segment Reporting

See note 14 of the notes to consolidated financial statements included in the 2015 Annual Report for a description of the Company's operating segments. The following tables include the results of each of the Company's operating segments reconciled to the consolidated financial statements.

Prior to January 1, 2016, the Company allocated certain corporate overhead expenses that are incurred within the Corporate and Other Activities segment to the other operating segments. These expenses included certain corporate activities related to executive management, internal audit, enterprise risk management, and other costs incurred by the Company due to corporate-wide initiatives. Effective January 1, 2016, internal reporting to executive management (the "chief operating decision maker") changed to eliminate the allocation of these expenses to the other segments. Management believes the change in its allocation methodology results in a better reflection of the operating results of each of the reportable segments as if they each operated as a standalone business entity, which also reflects how management evaluates the performance of the segments. Prior period segment operating results have been restated to conform to the current period presentation.
 
Three months ended March 31, 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
$
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 and guaranty 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 on sale of loans and debt repurchases

 

 

 
101

 

 

 
101

Derivative market value and foreign currency adjustments, net

 

 

 
(19,897
)
 
(2,256
)
 

 
(22,154
)
Derivative settlements, net

 

 

 
(6,304
)
 
(232
)
 

 
(6,537
)
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 communication 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