NELNET INC, 10-Q filed on 8/7/2017
Quarterly Report
Document and Entity Information Document (USD $)
6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jul. 31, 2017
Common Class A [Member]
Jul. 31, 2017
Common Class B [Member]
Document Information [Line Items]
 
 
 
 
Entity Registrant Name
NELNET INC 
 
 
 
Document Type
10-Q 
 
 
 
Current Fiscal Year End Date
--12-31 
 
 
 
Entity Common Stock, Shares Outstanding
 
 
30,062,906 
11,476,932 
Entity Public Float
 
$ 781,008,370 
 
 
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
Jun. 30, 2017 
 
 
 
Document Fiscal Year Focus
2017 
 
 
 
Document Fiscal Period Focus
Q2 
 
 
 
Consolidated Balance Sheets (unaudited) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Assets:
 
 
Student loans receivable (net of allowance for loan losses)
$ 23,202,294 
$ 24,903,724 
Cash and cash equivalents:
 
 
Cash and cash equivalents - not held at a related party
8,538 
7,841 
Cash and cash equivalents - held at a related party
60,701 
61,813 
Total cash and cash equivalents
69,239 
69,654 
Investments And Other Receivables
290,304 
254,144 
Restricted cash
780,141 
980,961 
Restricted cash - due to customers
136,900 
119,702 
Accrued interest receivable
395,734 
391,264 
Accounts receivable (net of allowance for doubtful accounts)
60,246 
43,972 
Goodwill
147,312 
147,312 
Intangible assets, net
43,077 
47,813 
Property and equipment, net
181,098 
123,786 
Other assets
15,123 
10,245 
Fair value of derivative instruments
1,619 
87,531 
Total assets
25,323,087 
27,180,108 
Liabilities:
 
 
Bonds and notes payable
22,790,780 
24,668,490 
Accrued interest payable
47,064 
45,677 
Other liabilities
171,528 
197,488 
Due to customers
136,900 
119,702 
Fair value of derivative instruments
46,406 
77,826 
Total liabilities
23,192,678 
25,109,183 
Nelnet, Inc. shareholders' equity:
 
 
Preferred stock
Additional paid-in capital
366 
420 
Retained earnings
2,110,158 
2,056,084 
Accumulated other comprehensive earnings
4,251 
4,730 
Total Nelnet, Inc. shareholders' equity
2,115,194 
2,061,655 
Noncontrolling interests
15,215 
9,270 
Total equity
2,130,409 
2,070,925 
Total liabilities and equity
25,323,087 
27,180,108 
Common Class A [Member]
 
 
Nelnet, Inc. shareholders' equity:
 
 
Common stock
304 
306 
Total equity
304 
306 
Common Class B [Member]
 
 
Nelnet, Inc. shareholders' equity:
 
 
Common stock
115 
115 
Total equity
115 
115 
Supplemental information - assets and liabilities of concolidated education lending variable interest entities: [Member]
 
 
Assets:
 
 
Student loans receivable (net of allowance for loan losses)
23,382,949 
25,090,530 
Cash and cash equivalents:
 
 
Restricted cash
740,544 
970,306 
Other assets
395,900 
390,504 
Liabilities:
 
 
Bonds and notes payable
23,179,144 
25,105,704 
Other liabilities
284,408 
290,996 
Fair value of derivative instruments
39,031 
66,453 
Equity:
 
 
Net assets of consolidated education lending variable interest entities
$ 1,016,810 
$ 988,187 
Consolidated Balance Sheets (unaudited) (Parentheticals) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Allowance for loan losses
$ 49,708 
$ 51,842 
Allowance for doubtful accounts
$ 1,704 
$ 1,549 
Preferred stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Preferred stock, authorized shares (in shares)
50,000,000 
50,000,000 
Preferred stock, issued shares (in shares)
Preferred stock, outstanding shares (in shares)
Common Class A [Member]
 
 
Par Value (in dollars per share)
$ 0.01 
$ 0.01 
Shares Authorized (in shares)
600,000,000 
600,000,000 
Shares Issued (in shares)
30,373,691 
30,628,112 
Shares Outstanding (in shares)
30,373,691 
30,628,112 
Common Class B [Member]
 
 
Par Value (in dollars per share)
$ 0.01 
$ 0.01 
Shares Authorized (in shares)
60,000,000 
60,000,000 
Shares Issued (in shares)
11,476,932 
11,476,932 
Shares Outstanding (in shares)
11,476,932 
11,476,932 
Consolidated Statements of Income (unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Interest income:
 
 
 
 
Loan interest
$ 189,488 
$ 184,067 
$ 370,695 
$ 374,055 
Investment interest
3,589 
2,185 
6,206 
4,214 
Total interest income
193,077 
186,252 
376,901 
378,269 
Interest expense:
 
 
 
 
Interest on bonds and notes payable
113,236 
94,052 
220,135 
184,460 
Net interest income
79,841 
92,200 
156,766 
193,809 
Less provision for loan losses
2,000 
2,000 
3,000 
4,500 
Net interest income after provision for loan losses
77,841 
90,200 
153,766 
189,309 
Other income:
 
 
 
 
Loan systems and servicing revenue
56,899 
54,402 
111,128 
106,732 
Tuition payment processing, school information, and campus commerce revenue
34,224 
30,483 
77,844 
69,140 
Communications revenue
5,719 
4,478 
10,826 
8,824 
Enrollment services revenue
4,326 
Other income
12,485 
9,765 
25,118 
23,559 
Gain from debt repurchases
442 
5,421 
101 
Derivative market value and foreign currency transaction adjustments and derivative settlements, net
(27,910)
(40,702)
(32,741)
(69,392)
Total other income
81,859 
58,426 
197,596 
143,290 
Operating expenses:
 
 
 
 
Salaries and benefits
74,628 
60,923 
146,491 
124,165 
Depreciation and amortization
9,038 
8,183 
17,636 
15,823 
Loan servicing fees
5,620 
7,216 
11,645 
14,144 
Cost to provide communications services
2,203 
1,681 
4,157 
3,384 
Cost to provide enrollment services
3,623 
Other expenses
27,528 
29,409 
54,075 
57,783 
Total operating expenses
119,017 
107,412 
234,004 
218,922 
Income before income taxes
40,683 
41,214 
117,358 
113,677 
Income tax expense
16,032 
15,036 
44,787 
39,469 
Net income
24,651 
26,178 
72,571 
74,208 
Net loss (income) attributable to noncontrolling interests
4,086 
(28)
6,192 
(97)
Net income attributable to Nelnet, Inc.
$ 28,737 
$ 26,150 
$ 78,763 
$ 74,111 
Earnings per common share:
 
 
 
 
Net income attributable to Nelnet, Inc. shareholders - basic and diluted
$ 0.68 
$ 0.61 
$ 1.86 
$ 1.73 
Weighted average common shares outstanding - basic and diluted (in shares)
42,326,540 
42,635,700 
42,309,295 
42,861,896 
Consolidated Statements of Comprehensive Income (unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 24,651 
$ 26,178 
$ 72,571 
$ 74,208 
Available-for-sale securities:
 
 
 
 
Unrealized holding losses arising during period, net of gains
(1,281)
(6,138)
(22)
(7,648)
Reclassification adjustment for (gains) losses recognized in net income, net
(409)
277 
(740)
409 
Income tax effect
626 
2,168 
283 
2,678 
Total other comprehensive income (loss)
(1,064)
(3,693)
(479)
(4,561)
Comprehensive income
23,587 
22,485 
72,092 
69,647 
Comprehensive loss (income) attributable to noncontrolling interests
4,086 
(28)
6,192 
(97)
Comprehensive income attributable to Nelnet, Inc.
$ 27,673 
$ 22,457 
$ 78,284 
$ 69,550 
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 interests [Member]
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 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interests
338 
 
 
 
 
 
 
338 
Net income
26,178 
 
 
 
 
26,150 
 
 
Net (loss) income attributable to noncontrolling interests
(28)
 
 
 
 
 
 
28 
Other comprehensive (loss) income
(3,693)
 
 
 
 
 
(3,693)
 
Distribution to noncontrolling interests
(122)
 
 
 
 
 
 
(122)
Cash dividend on Class A and Class B common stock
(5,099)
 
 
 
 
(5,099)
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
27,946 
 
 
 
 
Issuance of common stock, net of forfeitures
954 
 
954 
 
 
 
Compensation expense for stock based awards
1,133 
 
 
 
1,133 
 
 
 
Repurchase of common stock (in Shares)
 
 
(11,942)
 
 
 
 
Repurchase of common stock
(399)
 
(399)
 
 
Balance at Jun. 30, 2016
1,906,216 
310 
115 
4,601 
1,894,551 
(2,277)
8,916 
Balance (in Shares) at Jun. 30, 2016
 
31,024,230 
11,476,932 
 
 
 
 
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 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interests
1,312 
 
 
 
 
 
 
1,312 
Net income
74,208 
 
 
 
 
74,111 
 
 
Net (loss) income attributable to noncontrolling interests
(97)
 
 
 
 
 
 
97 
Other comprehensive (loss) income
(4,561)
 
 
 
 
 
(4,561)
 
Distribution to noncontrolling interests
(219)
 
 
 
 
 
 
(219)
Cash dividend on Class A and Class B common stock
(10,192)
 
 
 
 
(10,192)
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
158,743 
 
 
 
 
Issuance of common stock, net of forfeitures
3,662 
 
3,661 
 
 
 
Compensation expense for stock based awards
2,316 
 
 
 
2,316 
 
 
 
Repurchase of common stock (in Shares)
 
 
(1,611,041)
 
 
 
 
Repurchase of common stock
(52,468)
 
(16)
(1,376)
(51,076)
 
 
Balance at Jun. 30, 2016
1,906,216 
310 
115 
4,601 
1,894,551 
(2,277)
8,916 
Balance (in Shares) at Jun. 30, 2016
 
31,024,230 
11,476,932 
 
 
 
 
Balance at Dec. 31, 2016
2,070,925 
306 
115 
420 
2,056,084 
4,730 
9,270 
Balance (in Shares) at Dec. 31, 2016
 
30,628,112 
11,476,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interests
12,652 
 
 
 
 
 
 
12,652 
Net income
72,571 
 
 
 
 
78,763 
 
 
Net (loss) income attributable to noncontrolling interests
6,192 
 
 
 
 
 
 
(6,192)
Other comprehensive (loss) income
(479)
 
 
 
 
 
(479)
 
Distribution to noncontrolling interests
(515)
 
 
 
 
 
 
(515)
Cash dividend on Class A and Class B common stock
(11,803)
 
 
 
 
(11,803)
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
161,356 
 
 
 
 
Issuance of common stock, net of forfeitures
3,083 
 
3,081 
 
 
 
Compensation expense for stock based awards
2,170 
 
 
 
2,170 
 
 
 
Repurchase of common stock (in Shares)
 
 
(415,777)
 
 
 
 
Repurchase of common stock
(18,195)
 
(4)
(5,305)
(12,886)
 
 
Balance at Jun. 30, 2017
2,130,409 
304 
115 
366 
2,110,158 
4,251 
15,215 
Balance (in Shares) at Jun. 30, 2017
 
30,373,691 
11,476,932 
 
 
 
 
Balance at Mar. 31, 2017
2,127,667 
307 
115 
2,236 
2,100,214 
5,315 
19,480 
Balance (in Shares) at Mar. 31, 2017
 
30,740,185 
11,476,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interests
26 
 
 
 
 
 
 
26 
Net income
24,651 
 
 
 
 
28,737 
 
 
Net (loss) income attributable to noncontrolling interests
4,086 
 
 
 
 
 
 
(4,086)
Other comprehensive (loss) income
(1,064)
 
 
 
 
 
(1,064)
 
Distribution to noncontrolling interests
(205)
 
 
 
 
 
 
(205)
Cash dividend on Class A and Class B common stock
(5,907)
 
 
 
 
(5,907)
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
17,567 
 
 
 
 
Issuance of common stock, net of forfeitures
992 
 
992 
 
 
 
Compensation expense for stock based awards
1,075 
 
 
 
1,075 
 
 
 
Repurchase of common stock (in Shares)
 
 
(384,061)
 
 
 
 
Repurchase of common stock
(16,826)
 
(3)
(3,937)
(12,886)
 
 
Balance at Jun. 30, 2017
$ 2,130,409 
$ 0 
$ 304 
$ 115 
$ 366 
$ 2,110,158 
$ 4,251 
$ 15,215 
Balance (in Shares) at Jun. 30, 2017
 
30,373,691 
11,476,932 
 
 
 
 
Consolidated Statements of Shareholders' Equity (unaudited) (Parentheticals)
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Common Class A [Member]
 
 
 
 
Dividends paid per common share (in dollars per share)
$ 0.14 
$ 0.12 
$ 0.28 
$ 0.24 
Common Class B [Member]
 
 
 
 
Dividends paid per common share (in dollars per share)
$ 0.14 
$ 0.12 
$ 0.28 
$ 0.24 
Consolidated Statements of Cash Flows (unaudited) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Statement of Cash Flows [Abstract]
 
 
Net income attributable to Nelnet, Inc.
$ 78,763 
$ 74,111 
Net (loss) income attributable to noncontrolling interests
6,192 
(97)
Net income
72,571 
74,208 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization, including debt discounts and student loan premiums and deferred origination costs
66,805 
62,298 
Student loan discount accretion
(22,934)
(21,524)
Provision for loan losses
3,000 
4,500 
Derivative market value adjustment
(951)
48,649 
Unrealized foreign currency transaction adjustment
31,951 
8,712 
Proceeds from termination of derivative instruments
3,013 
3,523 
Payments to enter into derivative instruments
929 
Proceeds from clearinghouse to settle variation margin, net
25,927 
Gain from debt repurchases
(5,421)
(101)
(Gain) loss from sales of available-for-sale securities, net
(740)
409 
Proceeds (purchases) related to trading securities, net
23 
(235)
Deferred income tax benefit
(15,249)
(20,260)
Non-cash compensation expense
2,260 
2,388 
Other
2,209 
3,681 
(Increase) decrease in accrued interest receivable
(4,470)
3,685 
(Increase) decrease in accounts receivable
(16,274)
9,462 
Increase in other assets
(2,155)
(2,579)
Increase in accrued interest payable
1,387 
8,419 
Decrease in other liabilities
(7,891)
(10,006)
Net cash provided by operating activities
132,132 
175,229 
Cash flows from investing activities:
 
 
Purchases of student loans
(100,843)
(183,375)
Net proceeds from student loan repayments, claims, capitalized interest, and other
1,807,765 
1,927,319 
Proceeds from sale of student loans
44,738 
Purchases of available-for-sale securities
(77,118)
(51,735)
Proceeds from sales of available-for-sale securities
66,492 
58,232 
Purchases of investments and loans receivable and issuance of notes receivable
(33,131)
(10,222)
Proceeds From Investments And Other Receivables
5,551 
5,360 
Purchases of property and equipment
(70,814)
(29,577)
Decrease (increase) in restricted cash, net
226,409 
(131,325)
Net cash provided by investing activities
1,824,311 
1,629,415 
Cash flows from financing activities:
 
 
Payments on bonds and notes payable
(2,549,189)
(1,972,880)
Proceeds from issuance of bonds and notes payable
612,279 
226,194 
Payments of debt issuance costs
(2,256)
(1,084)
Dividends paid
(11,803)
(10,192)
Repurchases of common stock
(18,195)
(52,468)
Proceeds from issuance of common stock
221 
417 
Issuance of noncontrolling interests
12,600 
1,312 
Distribution to noncontrolling interests
(515)
(219)
Net cash used in financing activities
(1,956,858)
(1,808,920)
Net decrease in cash and cash equivalents
(415)
(4,276)
Cash and cash equivalents, beginning of period
69,654 
63,529 
Cash and cash equivalents, end of period
69,239 
59,253 
Cash disbursements made for:
 
 
Interest
183,821 
142,446 
Income taxes, net of refunds
$ 46,193 
$ 55,988 
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 June 30, 2017 and for the three and six months ended June 30, 2017 and 2016 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2016 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results for the year ending December 31, 2017. The unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (the "2016 Annual Report").

Consolidation

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

Variable Interest Entities
The following entities are VIEs of which the Company has determined that it is the primary beneficiary. The primary beneficiary is the entity which has both: (1) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance, and (2) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.
The Company's education lending subsidiaries are engaged in the securitization of education finance assets. These education lending subsidiaries hold beneficial interests in eligible loans, subject to creditors with specific interests. The liabilities of the Company's education lending subsidiaries are not the direct obligations of Nelnet, Inc. or any of its other subsidiaries. Each education lending subsidiary is structured to be bankruptcy remote, meaning that it should not be consolidated in the event of bankruptcy of the parent company or any other subsidiary. The Company is generally the administrator and master servicer of the securitized assets held in its education lending subsidiaries and owns the residual interest of the securitization trusts. As a result, for accounting purposes, the transfers of student loans to the securitization trusts do not qualify as sales. Accordingly, all the financial activities and related assets and liabilities, including debt, of the securitizations are reflected in the Company's consolidated financial statements and are summarized as supplemental information on the balance sheet.
The Company owns 91.5 percent of the economic rights of Allo Communications LLC and has a disproportional 80 percent of the voting rights related to all operating decisions for Allo's business. Allo management, as current minority members, has the opportunity to earn an additional 11.5 percent of the total ownership interests based on the financial performance of Allo. In addition to the Company’s equity investment, Nelnet, Inc. (the parent) issued a $200.0 million line of credit to Allo on December 30, 2015. The line of credit had $114.0 million outstanding as of June 30, 2017. Nelnet, Inc.’s maximum exposure to loss as a result of its involvement with Allo is equal to its equity investment and the balance of the line of credit. The amounts owed by Allo to Nelnet, Inc., including the interest costs incurred by Allo and interest earnings recognized by Nelnet, Inc., are not reflected in the Company’s consolidated balance sheet as they were eliminated in consolidation. All of Allo’s financial activities and related assets and liabilities, excluding the line of credit, are reflected in the Company’s consolidated financial statements. See note 10, "Segment Reporting," for disclosure of Allo's total assets and results of operations (included in the "Communications" operating segment), note 7, "Goodwill," for disclosure of Allo's goodwill, and note 8, “Property and Equipment,” for disclosure of Allo’s fixed assets. Allo's goodwill and property and equipment comprise the majority of its assets. The assets recognized as a result of consolidating Allo are the property of Allo and are not available for any other purpose, other than to Nelnet, Inc. as a secured lender under Allo's line of credit.
Noncontrolling Interest

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

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

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

Student loans receivable consisted of the following:
 
As of
 
As of
 
June 30, 2017
 
December 31, 2016
Federally insured loans:
 
 
 
Stafford and other
$
4,704,409

 
5,186,047

Consolidation
18,442,998

 
19,643,937

Total
23,147,407

 
24,829,984

Private education loans
242,893

 
273,659

 
23,390,300

 
25,103,643

Loan discount, net of unamortized loan premiums and deferred origination costs
(123,326
)
 
(129,507
)
Non-accretable discount (a)
(14,972
)
 
(18,570
)
Allowance for loan losses – federally insured loans
(35,862
)
 
(37,268
)
Allowance for loan losses – private education loans
(13,846
)
 
(14,574
)
 
$
23,202,294

 
24,903,724



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

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

Activity in the Allowance for Loan Losses

The provision for loan losses represents the periodic expense of maintaining an allowance sufficient to absorb losses, net of recoveries, inherent in the portfolio of student loans. Activity in the allowance for loan losses is shown below.
 
Three months ended June 30,
 
Six months ended June 30,
 
2017
 
2016
 
2017
 
2016
Balance at beginning of period
$
50,526

 
50,084

 
51,842

 
50,498

Provision for loan losses:
 
 
 
 
 
 
 
Federally insured loans
2,000

 
2,000

 
4,000

 
4,000

Private education loans

 

 
(1,000
)
 
500

Total provision for loan losses
2,000

 
2,000

 
3,000

 
4,500

Charge-offs:
 

 
 

 
 
 
 
Federally insured loans
(2,825
)
 
(3,217
)
 
(5,406
)
 
(6,266
)
Private education loans
(288
)
 
(514
)
 
(370
)
 
(915
)
Total charge-offs
(3,113
)
 
(3,731
)
 
(5,776
)
 
(7,181
)
Recoveries - private education loans
245

 
250

 
442

 
526

Purchase of private education loans

 
100

 

 
260

Transfer from repurchase obligation related to private education loans repurchased
50

 
50

 
200

 
150

Balance at end of period
$
49,708

 
48,753

 
49,708

 
$
48,753

 
 
 
 
 
 
 
 
Allocation of the allowance for loan losses:
 
 
 

 
 
 
 
Federally insured loans
$
35,862

 
33,224

 
35,862

 
33,224

Private education loans
13,846

 
15,529

 
13,846

 
15,529

Total allowance for loan losses
$
49,708

 
48,753

 
49,708

 
48,753





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 June 30, 2017
 
As of December 31, 2016
 
As of June 30, 2016
Federally insured loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
1,454,802

 
 
 
$
1,606,468

 
 
 
$
1,936,064

 
 
Loans in forbearance
2,065,167

 
 
 
2,295,367

 
 
 
2,672,241

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
17,106,921

 
87.2
%
 
18,125,768

 
86.6
%
 
18,957,457

 
86.7
%
Loans delinquent 31-60 days
743,738

 
3.8

 
818,976

 
3.9

 
828,885

 
3.8

Loans delinquent 61-90 days
479,552

 
2.4

 
487,647

 
2.3

 
482,379

 
2.2

Loans delinquent 91-120 days
267,139

 
1.4

 
335,291

 
1.6

 
320,213

 
1.5

Loans delinquent 121-270 days
772,875

 
3.9

 
854,432

 
4.1

 
918,788

 
4.2

Loans delinquent 271 days or greater
257,213

 
1.3

 
306,035

 
1.5

 
350,363

 
1.6

Total loans in repayment
19,627,438

 
100.0
%
 
20,928,149

 
100.0
%
 
21,858,085

 
100.0
%
Total federally insured loans
$
23,147,407

 
 

 
$
24,829,984

 
 

 
$
26,466,390

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private education loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
32,016

 
 
 
$
35,146

 
 
 
$
54,597

 
 
Loans in forbearance
1,814

 
 
 
3,448

 
 
 
1,610

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
202,155

 
96.7
%
 
228,612

 
97.2
%
 
225,585

 
97.2
%
Loans delinquent 31-60 days
2,066

 
1.0

 
1,677

 
0.7

 
1,361

 
0.6

Loans delinquent 61-90 days
1,323

 
0.6

 
1,110

 
0.5

 
929

 
0.4

Loans delinquent 91 days or greater
3,519

 
1.7

 
3,666

 
1.6

 
4,088

 
1.8

Total loans in repayment
209,063

 
100.0
%
 
235,065

 
100.0
%
 
231,963

 
100.0
%
Total private education loans
$
242,893

 
 

 
$
273,659

 
 

 
$
288,170

 
 
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 June 30, 2017
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
21,063,700

 
0.22% - 6.90%
 
8/25/21 - 9/25/65
Bonds and notes based on auction
796,140

 
1.82% - 2.36%
 
3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes
21,859,840

 
 
 
 
FFELP warehouse facilities
1,058,413

 
1.08% - 1.29%
 
9/7/18 - 4/27/20
Variable-rate bonds and notes issued in private education loan asset-backed securitization
93,727

 
2.97%
 
12/26/40
Fixed-rate bonds and notes issued in private education loan asset-backed securitization
98,076

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

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

 
4.67%
 
9/15/61
Other borrowings
60,169

 
1.96% - 3.38%
 
7/17/17 - 12/15/45
 
23,190,751

 
 
 
 
Discount on bonds and notes payable and debt issuance costs
(399,971
)
 
 
 
 
Total
$
22,790,780

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

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

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

 
 
 
 
FFELP warehouse facilities
1,677,443

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

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

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

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

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

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

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

 
 
 
 



Asset-Backed Securitizations

On May 24, 2017, the Company completed an asset-backed securitization totaling $535.0 million (par value). The interest rate and final maturity of these notes are 1-month LIBOR plus 0.78 percent and June 25, 2065, respectively.

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 June 30, 2017, the Company had three FFELP warehouse facilities as summarized below.
 
 
NFSLW-I (a)
 
NHELP-II
 
NHELP-III (b)
 
Total
Maximum financing amount
 
$
700,000

 
500,000

 
200,000

 
1,400,000

Amount outstanding
 
511,846

 
357,461

 
189,106

 
1,058,413

Amount available
 
$
188,154

 
142,539

 
10,894

 
341,587

Expiration of liquidity provisions
 
July 10, 2018

 
December 15, 2017

 
April 27, 2018

 
 
Final maturity date
 
September 7, 2018

 
December 13, 2019

 
April 27, 2020

 
 
Maximum advance rates
 
92.0 - 98.0%

 
85.0 - 95.0%

 
92.2 - 95.0%

 
 
Minimum advance rates
 
84.0 - 90.0%

 
85.0 - 95.0%

 
92.2 - 95.0%

 
 
Advanced as equity support
 
$
13,260

 
26,440

 
5,668

 
45,368



(a)
On May 25, 2017, the Company decreased the maximum financing amount for this warehouse facility from $875.0 million to $700.0 million.

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

Unsecured Line of Credit

The Company has a $350.0 million unsecured line of credit that has a maturity date of December 12, 2021.  As of June 30, 2017, no amounts were outstanding on the line of credit and $350.0 million was available for future use.

Repurchase Agreement

Included in "other borrowings" as of June 30, 2017 is $41.8 million that is subject to a repurchase agreement. Proceeds from this agreement are collateralized by FFELP asset-backed security investments.

Debt Repurchases

During the three months ended March 31, 2017, the Company initiated a cash tender offer to purchase any and all of its outstanding Hybrid Securities, including a related consent solicitation to effect certain amendments to the indenture governing the notes to eliminate a provision requiring a minimum principal amount of the notes to remain outstanding after a partial redemption. The aggregate principal amount of notes tendered to the Company was $29.7 million. The Company paid $25.3 million to redeem these notes and recognized a gain of $4.4 million. In addition, the amendments described above were made to the indenture. After the completion of this tender offer, the Company has $20.5 million of Hybrid Securities that remain outstanding. In addition, during the three and six months ended June 30, 2017, the Company recognized gains of $0.4 million and $1.0 million, respectively, on the repurchase of its own FFELP asset-backed securities.
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments

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

Basis Swaps

The following table summarizes the Company’s basis swaps outstanding 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 June 30,
 
As of December 31,
 
 
2017
 
2016
Maturity
 
Notional amount
 
Notional amount
2018
 
$
4,000,000

 
$

2019
 
2,000,000

 

2024
 
250,000

 

2026
 
1,150,000

 
1,150,000

2027
 
375,000

 

2028
 
325,000

 
325,000

2029
 
100,000

 

2031
 
300,000

 
300,000

 
 
$
8,500,000

 
$
1,775,000

The weighted average rate paid by the Company on the 1:3 Basis Swaps as of June 30, 2017 and December 31, 2016 was one-month LIBOR plus 13.9 basis points and 10.1 basis points, respectively.
Interest Rate Swaps – Floor Income Hedges

The following table summarizes the outstanding derivative instruments used by the Company to economically hedge loans earning fixed rate floor income.
 
 
As of June 30, 2017
 
As of December 31, 2016
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
 
 
 
2017
 
$
250,000

 
1.04
%
 
$
750,000

 
0.99
%
2018
 
1,350,000

 
1.07

 
1,350,000

 
1.07

2019
 
3,250,000

 
0.97

 
3,250,000

 
0.97

2020
 
1,500,000

 
1.01

 
1,500,000

 
1.01

2025
 
100,000

 
2.32

 
100,000

 
2.32

 
 
$
6,450,000

 
1.02
%
 
$
6,950,000

 
1.02
%

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

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

Interest Rate Caps

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

Interest Rate Swaps – Unsecured Debt Hedges

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

 
4.28
%

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

Foreign Currency Exchange Risk

In 2006, the Company issued €352.7 million of student loan asset-backed Euro Notes (the "Euro Notes") with an interest rate based on a spread to the EURIBOR index. As a result of the Euro Notes, the Company 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. Changes in the principal and accrued interest amounts as a result of foreign currency exchange rate fluctuations are included in the Company’s consolidated statements of income.

The Company entered into a cross-currency interest rate swap in connection with the issuance of the Euro Notes. Under the terms of the cross-currency interest rate swap, the Company 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 unrealized income statement impact as a result of the re-measurement of the Euro Notes and the change in the fair value of the related derivative instrument.
 
Three months ended June 30,
 
Six months ended June 30,
 
2017
 
2016
 
2017
 
2016
Re-measurement of Euro Notes
$
(27,261
)
 
9,768

 
(31,951
)
 
(8,712
)
Change in fair value of cross-currency interest rate swap
27,639

 
(12,008
)
 
28,574

 
20,693

Total impact to consolidated statements of income - income (expense) (a)
$
378

 
(2,240
)
 
(3,377
)
 
11,981

(a)
The financial statement impact of the above items is included in "Derivative market value and foreign currency transaction adjustments and derivative settlements, net" in the Company's consolidated statements of income.
Management 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

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

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

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

Balance Sheet

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

 

 

 
2,624

Interest rate swaps - floor income hedges
20

 
81,159

 

 
256

Interest rate swap option - floor income hedge
1,265

 
2,977

 

 

Interest rate caps
334

 
1,152

 

 

Interest rate swaps - hybrid debt hedges

 

 
7,375

 
7,341

Cross-currency interest rate swap



 
39,031

 
67,605

Other

 
2,243

 

 

Total
$
1,619

 
87,531

 
46,406

 
77,826



During the three months ended June 30, 2017, the Company received proceeds of $2.1 million from the termination of derivatives that were included in "other" in the preceding table.

Offsetting of Derivative Assets/Liabilities

The following tables include the gross amounts related to the Company's derivative portfolio recognized in the consolidated balance sheets, reconciled to the net amount when excluding derivatives subject to enforceable master netting arrangements and cash collateral received/pledged.
 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative assets
 
Gross amounts of recognized assets presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral pledged
 
Net asset (liability)
Balance as of
June 30, 2017
 
$
1,619

 

 

 
1,619

Balance as of
December 31, 2016
 
87,531

 
(2,880
)
 
475

 
85,126


 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative liabilities
 
Gross amounts of recognized liabilities presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral (received) pledged, net (a)
 
Net asset (liability)
Balance as of
June 30, 2017
 
$
(46,406
)
 

 
(13,252
)
 
(59,658
)
Balance as of
December 31, 2016
 
(77,826
)
 
2,880

 
7,292

 
(67,654
)


(a) As of June 30, 2017, the Company had received $21.4 million of collateral from the counterparty on the Company's cross-currency interest rate swap.

Income Statement Impact

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

 
 

 
 
 
 
1:3 basis swaps
$
(362
)
 
743

 
336

 
414

Interest rate swaps - floor income hedges
2,114

 
(4,841
)
 
1,994

 
(10,084
)
Interest rate swaps - hybrid debt hedges
(198
)
 
(231
)
 
(402
)
 
(463
)
Cross-currency interest rate swap
(1,917
)
 
(1,166
)
 
(3,669
)
 
(1,898
)
Total settlements - (expense) income
(363
)
 
(5,495
)
 
(1,741
)
 
(12,031
)
Change in fair value:
 

 
 

 
 
 
 
1:3 basis swaps
(8,841
)
 
(586
)
 
(11,416
)
 
183

Interest rate swaps - floor income hedges
(17,810
)
 
(27,276
)
 
(13,485
)
 
(59,985
)
Interest rate swap option - floor income hedge
(828
)
 
(856
)
 
(1,712
)
 
(2,272
)
Interest rate caps
(311
)
 
(453
)
 
(833
)
 
(1,215
)
Interest rate swaps - hybrid debt hedges
(453
)
 
(1,464
)
 
(34
)
 
(4,014
)
Cross-currency interest rate swap
27,639

 
(12,008
)
 
28,574

 
20,693

Other
318

 
(2,332
)
 
(143
)
 
(2,039
)
Total change in fair value - (expense) income
(286
)
 
(44,975
)
 
951

 
(48,649
)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - (expense) income
(27,261
)
 
9,768

 
(31,951
)
 
(8,712
)
Derivative market value and foreign currency transaction adjustments and derivative settlements, net - (expense) income
$
(27,910
)
 
(40,702
)
 
(32,741
)
 
(69,392
)
Investments and Notes Receivable
Investments
Investments and Other Receivables

A summary of the Company's investments and other receivables follows:
 
As of June 30, 2017
 
As of December 31, 2016
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses (a)
 
Fair value
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
 
 
 
 
 
 
 
 
Investments (at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities (b)
$
109,624

 
5,436

 
(678
)
 
114,382

 
98,260

 
6,280

 
(641
)
 
103,899

Equity securities
804

 
2,050

 
(62
)
 
2,792

 
720

 
1,930

 
(61
)
 
2,589

Total available-for-sale investments
$
110,428

 
7,486

 
(740
)
 
117,174

 
98,980

 
8,210

 
(702
)
 
106,488

Trading investments - equity securities
 
 
 
 
 
 

 
 
 
 
 
 
 
105

Total available-for-sale and trading investments
 
 
 
 
 
 
117,174

 
 
 
 
 
 
 
106,593

Other Investments and Other Receivables (not measured at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
Venture capital and funds
 
 
 
 
 
 
74,413

 
 
 
 
 
 
 
69,789

Real estate
 
 
 
 
 
 
46,862

 
 
 
 
 
 
 
48,379

Notes and loans receivable
 
 
 
 
 
 
41,065

 
 
 
 
 
 
 
17,031

Tax liens and affordable housing
 
 
 
 
 
 
10,790

 
 
 
 
 
 
 
12,352

Total investments and other receivables
 
 
 
 
 
 
$
290,304

 
 
 
 
 
 
 
254,144


    
(a)
As of June 30, 2017, the aggregate fair value of available-for-sale investments with unrealized losses was $30.4 million, of which $11.0 million had been in a continuous unrealized loss position for greater than 12 months. Because the Company currently has the intent and ability to retain these investments for an anticipated recovery in fair value, as of June 30, 2017, the Company considered the decline in market value of its available-for-sale investments to be temporary in nature and did not consider any of its investments other-than-temporarily impaired.

(b)
As of June 30, 2017, the stated maturities of substantially all of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years.
Intangible Assets Intangible Assets
Intangible Assets Disclosure [Text Block]
Intangible Assets

Intangible assets consist of the following:
 
 
Weighted average remaining useful life as of June 30, 2017 (months)
 
As of June 30, 2017
 
As of December 31, 2016
 
 
Amortizable intangible assets:
 
 
 
 
Customer relationships (net of accumulated amortization of $10,676 and $8,548, respectively)
164
 
$
26,208

 
28,335

 
Trade names (net of accumulated amortization of $2,075 and $1,653, respectively)
183
 
9,497

 
9,919

 
Computer software (net of accumulated amortization of $7,844 and $5,675, respectively)
20
 
7,127

 
9,296

 
Covenants not to compete (net of accumulated amortization of $109 and $91, respectively)
83
 
245

 
263

 
Total - amortizable intangible assets
144
 
$
43,077

 
47,813



The Company recorded amortization expense on its intangible assets of $2.4 million and $2.7 million during the three months ended June 30, 2017 and 2016, respectively, and $4.7 million and $5.2 million during the six months ended June 30, 2017 and 2016, respectively. The Company will continue to amortize intangible assets over their remaining useful lives. As of June 30, 2017, the Company estimates it will record amortization expense as follows:

2017 (July 1 - December 31)
$
4,650

2018
8,605

2019
5,147

2020
4,231

2021
3,480

2022 and thereafter
16,964

 
$
43,077

Goodwill Goodwill (Notes)
Goodwill Disclosure [Text Block]
Goodwill

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

 
67,168

 
21,112

 
41,883

 
8,553

 
147,312

Property 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:
 
 
 
As of June 30, 2017
 
As of December 31, 2016
 
Useful life
 
 
Non-communications:
 
 
 
 
 
Computer equipment and software
1-5 years
 
$
104,946

 
97,317

Office furniture and equipment
3-7 years
 
12,514

 
12,344

Building and building improvements
5-39 years
 
13,383

 
13,363

Transportation equipment
4-10 years
 
3,813

 
3,809

Leasehold improvements
5-20 years
 
3,627

 
3,579

Land
 
1,682

 
1,682

Construction in progress
 
29,491

 
16,346

 
 
 
169,456

 
148,440

Accumulated depreciation - non-communications
 
 
99,718

 
91,285

Non-communications, net property and equipment
 
 
69,738

 
57,155

 
 
 
 
 
 
Communications:
 
 
 
 
 
Network plant and fiber
5-15 years
 
64,337

 
40,844

Central office
5-15 years
 
8,115

 
6,448

Customer located property
5-10 years
 
8,811

 
5,138

Transportation equipment
4-10 years
 
4,620

 
2,966

Computer equipment and software
1-5 years
 
3,048

 
2,026

Other
1-39 years
 
1,581

 
1,268

Land
 
70

 
70

Construction in progress
 
29,726

 
12,537

 
 
 
120,308

 
71,297

Accumulated depreciation - communications
 
 
8,948

 
4,666

Communications, net property and equipment
 
 
111,360

 
66,631

Total property and equipment, net
 
 
$
181,098

 
123,786



The Company recorded depreciation expense on its property and equipment of $6.7 million and $5.4 million during the three months ended June 30, 2017 and 2016, respectively, and $12.9 million and $10.6 million during the six months ended June 30, 2017 and 2016, respectively.
Earnings per Common Share
Earnings Per Common Share
Earnings per Common Share

Presented below is a summary of the components used to calculate basic and diluted earnings per share. The Company applies the two-class method in computing both basic and diluted earnings per share, which requires the calculation of separate earnings per share amounts for common stock and unvested share-based awards. Unvested share-based awards that contain nonforfeitable rights to dividends are considered securities which participate in undistributed earnings with common stock.
 
Three months ended June 30,
 
2017
 
2016
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
28,457

 
280

 
28,737

 
25,879

 
271

 
26,150

 
 
 
 
 


 
 
 
 
 
 
Denominator:


 


 


 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
41,913,990

 
412,550

 
42,326,540

 
42,193,769

 
441,931

 
42,635,700

Earnings per share - basic and diluted
$
0.68

 
0.68

 
0.68

 
0.61

 
0.61

 
0.61



 
Six months ended June 30,
 
2017
 
2016
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
77,969

 
794

 
78,763

 
73,334

 
777

 
74,111

 
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
41,882,702

 
426,593

 
42,309,295

 
42,412,287

 
449,609

 
42,861,896

Earnings per share - basic and diluted
$
1.86

 
1.86

 
1.86

 
1.73

 
1.73

 
1.73

Segment Reporting
Segment Reporting

See note 14 of the notes to consolidated financial statements included in the 2016 Annual Report for a description of the Company's operating segments. The following tables include the results of each of the Company's operating segments reconciled to the consolidated financial statements.
 
Three months ended June 30, 2017
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
120

 
3

 
1

 
191,367

 
3,362

 
(1,776
)
 
193,077

Interest expense

 

 
1,104

 
113,073

 
835

 
(1,776
)
 
113,236

Net interest income
120

 
3

 
(1,103
)
 
78,294

 
2,527

 

 
79,841

Less provision for loan losses

 

 

 
2,000

 

 

 
2,000

Net interest income (loss) after provision for loan losses
120


3

 
(1,103
)
 
76,294

 
2,527

 

 
77,841

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
56,899

 

 

 

 

 

 
56,899

Intersegment servicing revenue
9,952

 

 

 

 

 
(9,952
)
 

Tuition payment processing, school information, and campus commerce revenue

 
34,224

 

 

 

 

 
34,224

Communications revenue

 

 
5,719

 

 

 

 
5,719

Other income

 

 

 
3,057

 
9,429

 

 
12,485

Gain from debt repurchases

 

 

 
442

 

 

 
442

Derivative settlements, net

 

 

 
(165
)
 
(198
)
 

 
(363
)
Derivative market value and foreign currency transaction adjustments, net

 

 

 
(27,412
)
 
(135
)
 

 
(27,547
)
Total other income
66,851

 
34,224

 
5,719

 
(24,078
)
 
9,096

 
(9,952
)
 
81,859

Operating expenses:
 

 
 

 
 
 
 
 
 

 
 
 
 

Salaries and benefits
40,506

 
16,901

 
3,411

 
363

 
13,447

 

 
74,628

Depreciation and amortization
546

 
2,346

 
2,600

 

 
3,547

 

 
9,038

Loan servicing fees

 

 

 
5,620

 

 

 
5,620

Cost to provide communications services

 

 
2,203

 

 

 

 
2,203

Other expenses
8,879

 
4,853

 
1,772

 
1,827

 
10,195

 

 
27,528

Intersegment expenses, net
8,324

 
2,136

 
496

 
10,043

 
(11,046
)
 
(9,952
)
 

Total operating expenses
58,255

 
26,236

 
10,482

 
17,853

 
16,143

 
(9,952
)
 
119,017

Income (loss) before income taxes
8,716

 
7,991

 
(5,866
)
 
34,363

 
(4,520
)
 

 
40,683

Income tax (expense) benefit
(4,918
)
 
(3,037
)
 
2,229

 
(13,057
)
 
2,751

 

 
(16,032
)
Net income (loss)
3,798

 
4,954

 
(3,637
)
 
21,306

 
(1,769
)
 

 
24,651

  Net loss (income) attributable to noncontrolling interests
4,226

 

 

 

 
(141
)
 

 
4,086

Net income (loss) attributable to Nelnet, Inc.
$
8,024

 
4,954

 
(3,637
)
 
21,306

 
(1,910
)
 

 
28,737

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of June 30, 2017
$
99,841

 
230,145

 
150,809

 
24,433,881

 
684,840

 
(276,429
)
 
25,323,087

 
Three months ended June 30, 2016
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other
Activities
 
Eliminations
 
Total
Total interest income
$
22

 
3

 

 
184,966

 
2,064

 
(802
)
 
186,252

Interest expense

 

 
205

 
92,769

 
1,881

 
(802
)
 
94,052

Net interest income
22

 
3

 
(205
)
 
92,197

 
183

 

 
92,200

Less provision for loan losses

 

 

 
2,000

 

 

 
2,000

Net interest income (loss) after provision for loan losses
22

 
3

 
(205
)
 
90,197

 
183

 

 
90,200

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
54,402

 

 

 

 

 

 
54,402

Intersegment servicing revenue
11,408

 

 

 

 

 
(11,408
)
 

Tuition payment processing, school information, and campus commerce revenue

 
30,483

 

 

 

 

 
30,483

Communications revenue

 

 
4,478

 

 

 

 
4,478

Enrollment services revenue

 

 

 

 

 

 

Other income

 

 

 
3,834

 
5,931

 

 
9,765

Gain from debt repurchases

 

 

 

 

 

 

Derivative settlements, net

 

 

 
(5,264
)
 
(231
)
 

 
(5,495
)
Derivative market value and foreign currency transaction adjustments, net

 

 

 
(31,411
)
 
(3,797
)
 

 
(35,207
)
Total other income
65,810

 
30,483

 
4,478

 
(32,841
)
 
1,903

 
(11,408
)
 
58,426

Operating expenses:
 

 
 

 
 
 
 

 
 

 
.

 
 

Salaries and benefits
31,380

 
15,444

 
1,377

 
499

 
12,222

 

 
60,923

Depreciation and amortization
445

 
2,511

 
1,378

 

 
3,848

 

 
8,183

Loan servicing fees

 

 

 
7,216

 

 

 
7,216

Cost to provide communications services

 

 
1,681

 

 

 

 
1,681

Cost to provide enrollment services

 

 

 

 

 

 

Other expenses
11,380

 
4,815

 
813

 
1,481

 
10,920

 

 
29,409

Intersegment expenses, net
6,102

 
1,562

 
187

 
11,539

 
(7,981
)
 
(11,408
)
 

Total operating expenses
49,307

 
24,332

 
5,436

 
20,735

 
19,009

 
(11,408
)
 
107,412

Income (loss) before income taxes
16,525

 
6,154

 
(1,163
)
 
36,621

 
(16,923
)
 

 
41,214

Income tax (expense) benefit
(6,280
)
 
(2,338
)
 
442

 
(13,916
)
 
7,057

 

 
(15,036
)
Net income (loss)
10,245

 
3,816

 
(721
)
 
22,705

 
(9,866
)
 

 
26,178

  Net loss (income) attributable to noncontrolling interests

 

 

 

 
(28
)
 

 
(28
)
Net income (loss) attributable to Nelnet, Inc.
$
10,245

 
3,816

 
(721
)
 
22,705

 
(9,894
)
 

 
26,150

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of June 30, 2016
$
71,403

 
230,308

 
78,578

 
27,856,952

 
730,122

 
(251,565
)
 
28,715,798




 
Six months ended June 30, 2017
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
214

 
5

 
1

 
373,692

 
6,123

 
(3,135
)
 
376,901

Interest expense

 

 
1,816

 
219,824

 
1,630

 
(3,135
)
 
220,135

Net interest income
214

 
5

 
(1,815
)
 
153,868

 
4,493

 

 
156,766

Less provision for loan losses

 

 

 
3,000

 

 

 
3,000

Net interest income (loss) after provision for loan losses
214


5

 
(1,815
)
 
150,868

 
4,493

 

 
153,766

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
111,128

 

 

 

 

 

 
111,128

Intersegment servicing revenue
20,275

 

 

 

 

 
(20,275
)
 

Tuition payment processing, school information, and campus commerce revenue

 
77,844

 

 

 

 

 
77,844

Communications revenue

 

 
10,826

 

 

 

 
10,826

Other income

 

 

 
6,399

 
18,719

 

 
25,118

Gain from debt repurchases

 

 

 
981

 
4,440

 

 
5,421

Derivative settlements, net

 

 

 
(1,339
)
 
(402
)
 

 
(1,741
)
Derivative market value and foreign currency transaction adjustments, net

 

 

 
(30,823
)
 
(177
)
 

 
(31,000
)
Total other income
131,403

 
77,844

 
10,826

 
(24,782
)
 
22,580

 
(20,275
)
 
197,596

Operating expenses:
 

 
 

 
 
 
 
 
 

 
 
 
 

Salaries and benefits
78,497

 
33,553

 
6,390

 
763

 
27,287

 

 
146,491

Depreciation and amortization
1,095

 
4,737

 
4,735

 

 
7,069

 

 
17,636

Loan servicing fees

 

 

 
11,645

 

 

 
11,645

Cost to provide communications services

 

 
4,157

 

 

 

 
4,157

Other expenses
18,015

 
9,847

 
3,144

 
2,819

 
20,249

 

 
54,075

Intersegment expenses, net
15,722

 
4,210

 
1,002

 
20,455

 
(21,114
)
 
(20,275
)
 

Total operating expenses
113,329

 
52,347

 
19,428

 
35,682

 
33,491

 
(20,275
)
 
234,004

Income (loss) before income taxes
18,288

 
25,502

 
(10,417
)
 
90,404

 
(6,418
)
 

 
117,358

Income tax (expense) benefit
(9,473
)
 
(9,690
)
 
3,959

 
(34,354
)
 
4,772

 

 
(44,787
)
Net income (loss)
8,815

 
15,812

 
(6,458
)
 
56,050

 
(1,646
)
 

 
72,571

  Net loss (income) attributable to noncontrolling interests
6,641

 

 

 

 
(450
)
 

 
6,192

Net income (loss) attributable to Nelnet, Inc.
$
15,456

 
15,812

 
(6,458
)
 
56,050

 
(2,096
)
 

 
78,763

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of June 30, 2017
$
99,841

 
230,145

 
150,809

 
24,433,881

 
684,840

 
(276,429
)
 
25,323,087



 
Six months ended June 30, 2016
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
43

 
5

 

 
375,689

 
4,157

 
(1,625
)
 
378,269

Interest expense

 

 
352

 
182,647

 
3,087

 
(1,625
)
 
184,460

Net interest income
43

 
5

 
(352
)
 
193,042

 
1,070

 

 
193,809

Less provision for loan losses

 

 

 
4,500

 

 

 
4,500

Net interest income (loss) after provision for loan losses
43


5

 
(352
)
 
188,542

 
1,070

 

 
189,309

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
106,732

 

 

 

 

 

 
106,732

Intersegment servicing revenue
23,415

 

 

 

 

 
(23,415
)
 

Tuition payment processing, school information, and campus commerce revenue

 
69,140

 

 

 

 

 
69,140

Communications revenue

 

 
8,824

 

 

 

 
8,824

Enrollment services revenue

 

 

 

 
4,326

 

 
4,326

Other income

 

 

 
8,097

 
15,462

 

 
23,559

Gain from debt repurchases

 

 

 
101

 

 

 
101

Derivative settlements, net

 

 

 
(11,568
)
 
(463
)
 

 
(12,031
)
Derivative market value and foreign currency transaction adjustments, net

 

 

 
(51,308
)
 
(6,053
)
 

 
(57,361
)
Total other income
130,147

 
69,140

 
8,824

 
(54,678
)
 
13,272

 
(23,415
)
 
143,290

Operating expenses:
 

 
 

 
 
 
 
 
 

 
 
 
 

Salaries and benefits
64,346

 
29,880

 
2,467

 
1,018

 
26,454

 

 
124,165

Depreciation and amortization
883

 
4,782

 
2,507

 

 
7,650

 

 
15,823

Loan servicing fees

 

 

 
14,144

 

 

 
14,144

Cost to provide communications services

 

 
3,384

 

 

 

 
3,384

Cost to provide enrollment services

 

 

 

 
3,623

 

 
3,623

Other expenses
22,850

 
8,973

 
1,566

 
2,997

 
21,397

 

 
57,783

Intersegment expenses, net
12,343

 
3,074

 
331

 
23,646

 
(15,978
)
 
(23,415
)
 

Total operating expenses
100,422

 
46,709

 
10,255

 
41,805

 
43,146

 
(23,415
)
 
218,922

Income (loss) before income taxes
29,768

 
22,436

 
(1,783
)
 
92,059

 
(28,804
)
 

 
113,677

Income tax (expense) benefit
(11,312
)
 
(8,526
)
 
678

 
(34,983
)
 
14,674

 

 
(39,469
)
Net income (loss)
18,456

 
13,910

 
(1,105
)
 
57,076

 
(14,130
)
 

 
74,208

  Net loss (income) attributable to noncontrolling interests

 

 

 

 
(97
)
 

 
(97
)
Net income (loss) attributable to Nelnet, Inc.
$
18,456

 
13,910

 
(1,105
)
 
57,076

 
(14,227
)
 

 
74,111

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of June 30, 2016
$
71,403

 
230,308

 
78,578

 
27,856,952

 
730,122

 
(251,565
)
 
28,715,798

Major Customer
Concentration Risk Disclosure [Text Block]
Major Customer
The Company earns loan servicing revenue from a servicing contract with the U.S. Department of Education (the "Department") that currently is set to expire on June 16, 2019. Revenue earned by the Company's Loan Systems and Servicing operating segment related to this contract was $39.8 million and $37.1 million for the three months ended June 30, 2017 and 2016, respectively, and $78.8 million and $72.3 million for the six months ended June 30, 2017 and 2016, respectively. In April 2016, the Department's Office of Federal Student Aid ("FSA") released information regarding a new contract procurement process for the Department to acquire a single servicing platform with multiple customer service providers to manage all student loans owned by the Department.  The contract solicitation process was divided into two phases.

On May 6, 2016, Nelnet Servicing, a subsidiary of the Company, and Great Lakes submitted a joint response to Phase I as part of a newly created joint venture to respond to the contract solicitation process and to provide services under the new contract in the event that the Department selects it to be awarded with the contract. The joint venture operates as a new legal entity called GreatNet. Nelnet Servicing and Great Lakes each own 50 percent of the ownership interests of GreatNet. In addition to Nelnet Servicing, Great Lakes is currently one of four private sector companies (referred to as Title IV Additional Servicers, or "TIVAS") that has a student loan servicing contract with the Department to provide servicing for loans owned by the Department.

On June 30, 2016, the Department announced which entities were selected to respond to Phase II of the procurement selection process. GreatNet was one of three entities selected. Navient Corporation and FedLoan Servicing (Pennsylvania Higher Education Assistance Agency ("PHEAA")), the other two TIVAS, were also selected to respond to Phase II. On January 6, 2017, GreatNet submitted its Phase II response to the Department. On April 11, 2017, the Department announced it was withdrawing certain policy memos to FSA from the prior administration regarding factors to be considered in the procurement process. On May 19, 2017, the Department announced it had amended the contract procurement process to provide that the single servicing platform to be acquired by the Department will be utilized by a single customer service provider to be selected by the Department to manage all student loans owned by the Department.  This amendment required another response by the Phase II participants, and on July 7, 2017, GreatNet submitted its response to the Department.

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

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


 
 
 
 
 
 
Student loan and other asset-backed securities
$

 
114,267

 
114,267

 

 
103,780

 
103,780

Equity securities
2,793

 

 
2,793

 
2,694

 

 
2,694

Debt securities
114

 

 
114

 
119

 

 
119

Total investments (available-for-sale and trading)
2,907

 
114,267

 
117,174

 
2,813

 
103,780

 
106,593

Derivative instruments

 
1,619

 
1,619

 

 
87,531

 
87,531

Total assets
$
2,907

 
115,886

 
118,793

 
2,813

 
191,311

 
194,124

Liabilities:
 

 
 

 
 

 
 
 
 
 
 
Derivative instruments
$

 
46,406

 
46,406

 

 
77,826

 
77,826

Total liabilities
$

 
46,406

 
46,406

 

 
77,826

 
77,826



The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:
 
As of June 30, 2017
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
24,278,179

 
23,202,294

 

 

 
24,278,179

Cash and cash equivalents
69,239

 
69,239

 
69,239

 

 

Investments (available-for-sale)
117,174

 
117,174

 
2,907

 
114,267

 

Notes receivable
16,563

 
16,563

 

 
16,563

 

Loans receivable
25,502

 
24,502

 

 

 
25,502

Restricted cash
780,141

 
780,141

 
780,141

 

 

Restricted cash – due to customers
136,900

 
136,900

 
136,900

 

 

Accrued interest receivable
395,734

 
395,734

 

 
395,734

 

Derivative instruments
1,619

 
1,619

 

 
1,619

 

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
22,744,128

 
22,790,780

 

 
22,744,128

 

Accrued interest payable
47,064

 
47,064

 

 
47,064

 

Due to customers
136,900

 
136,900

 
136,900

 

 

Derivative instruments
46,406

 
46,406

 

 
46,406

 

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

 
24,903,724

 

 

 
25,653,581

Cash and cash equivalents
69,654

 
69,654

 
69,654

 

 

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

 
106,593

 
2,813

 
103,780

 

Notes receivable
17,031

 
17,031

 

 
17,031

 

Restricted cash
980,961

 
980,961

 
980,961

 

 

Restricted cash – due to customers
119,702

 
119,702

 
119,702

 

 

Accrued interest receivable
391,264

 
391,264

 

 
391,264

 

Derivative instruments
87,531

 
87,531

 

 
87,531

 

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
24,220,996

 
24,668,490

 

 
24,220,996

 

Accrued interest payable
45,677

 
45,677

 

 
45,677

 

Due to customers
119,702

 
119,702

 
119,702

 

 

Derivative instruments
77,826

 
77,826

 

 
77,826

 


 
The methodologies for estimating the fair value of financial assets and liabilities are described in note 20 of the notes to consolidated financial statements included in the 2016 Annual Report.
Basis of Financial Reporting Significant Accounting Policies (Policies)
Basis of Financial Reporting

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

Consolidation

The consolidated financial statements include the accounts of Nelnet, Inc. and its consolidated subsidiaries. In addition, the accounts of all variable interest entities (“VIEs”) of which the Company has determined that it is the primary beneficiary are included in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in consolidation.
Variable Interest Entities
The following entities are VIEs of which the Company has determined that it is the primary beneficiary. The primary beneficiary is the entity which has both: (1) the power to direct the activities of the VIE that most significantly impact the VIE's economic performance, and (2) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE.
The Company's education lending subsidiaries are engaged in the securitization of education finance assets. These education lending subsidiaries hold beneficial interests in eligible loans, subject to creditors with specific interests. The liabilities of the Company's education lending subsidiaries are not the direct obligations of Nelnet, Inc. or any of its other subsidiaries. Each education lending subsidiary is structured to be bankruptcy remote, meaning that it should not be consolidated in the event of bankruptcy of the parent company or any other subsidiary. The Company is generally the administrator and master servicer of the securitized assets held in its education lending subsidiaries and owns the residual interest of the securitization trusts. As a result, for accounting purposes, the transfers of student loans to the securitization trusts do not qualify as sales. Accordingly, all the financial activities and related assets and liabilities, including debt, of the securitizations are reflected in the Company's consolidated financial statements and are summarized as supplemental information on the balance sheet.
The Company owns 91.5 percent of the economic rights of Allo Communications LLC and has a disproportional 80 percent of the voting rights related to all operating decisions for Allo's business. Allo management, as current minority members, has the opportunity to earn an additional 11.5 percent of the total ownership interests based on the financial performance of Allo. In addition to the Company’s equity investment, Nelnet, Inc. (the parent) issued a $200.0 million line of credit to Allo on December 30, 2015. The line of credit had $114.0 million outstanding as of June 30, 2017. Nelnet, Inc.’s maximum exposure to loss as a result of its involvement with Allo is equal to its equity investment and the balance of the line of credit. The amounts owed by Allo to Nelnet, Inc., including the interest costs incurred by Allo and interest earnings recognized by Nelnet, Inc., are not reflected in the Company’s consolidated balance sheet as they were eliminated in consolidation. All of Allo’s financial activities and related assets and liabilities, excluding the line of credit, are reflected in the Company’s consolidated financial statements. See note 10, "Segment Reporting," for disclosure of Allo's total assets and results of operations (included in the "Communications" operating segment), note 7, "Goodwill," for disclosure of Allo's goodwill, and note 8, “Property and Equipment,” for disclosure of Allo’s fixed assets. Allo's goodwill and property and equipment comprise the majority of its assets. The assets recognized as a result of consolidating Allo are the property of Allo and are not available for any other purpose, other than to Nelnet, Inc. as a secured lender under Allo's line of credit.
Noncontrolling Interest

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

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

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

Student Loans Receivable and Allowance for Loan Losses Constant Prepayment Rate Policy (Policies)
Student Loan Interest Income
The Company recognizes student loan interest income as earned, net of amortization of loan premiums and deferred origination costs and the accretion of loan discounts. Loan interest income is recognized based upon the expected yield of the loan after giving effect to interest rate reductions resulting from borrower utilization of incentives such as timely payments ("borrower benefits") and other yield adjustments. Loan premiums or discounts, deferred origination costs, and borrower benefits are amortized/accreted over the estimated life of the loans, which includes an estimate of forecasted payments in excess of contractually required payments. The Company periodically evaluates the assumptions used to estimate the life of the loans and prepayment rates. In instances where there are changes to the assumptions, amortization/accretion is adjusted on a cumulative basis to reflect the change since the acquisition of the loan.
  
In the third quarter of 2016, the Company revised its policy to correct for an error in its method of applying the interest method used to amortize premiums and deferred origination costs and accrete discounts on its student loan portfolio. Previously, the Company amortized premiums and deferred origination costs and accreted discounts by including in its prepayment assumption forecasted payments in excess of contractually required payments as well as forecasted defaults. The Company has determined that only payments in excess of contractually required payments (excluding forecasted defaults) should be included in the prepayment assumption. Under the Company's revised policy, as of September 30, 2016, the constant prepayment rate used by the Company to amortize/accrete student loan premiums/discounts was decreased. The constant prepayment rates under the Company's revised policy are 5 percent for Stafford loans and 3 percent for Consolidation loans. The constant prepayment rates under the Company's prior policy in effect before this correction were 6 percent and 4 percent, respectively.
Student Loans Receivable and Allowance for Loan Losses (Tables)
Student loans receivable consisted of the following:
 
As of
 
As of
 
June 30, 2017
 
December 31, 2016
Federally insured loans:
 
 
 
Stafford and other
$
4,704,409

 
5,186,047

Consolidation
18,442,998

 
19,643,937

Total
23,147,407

 
24,829,984

Private education loans
242,893

 
273,659

 
23,390,300

 
25,103,643

Loan discount, net of unamortized loan premiums and deferred origination costs
(123,326
)
 
(129,507
)
Non-accretable discount (a)
(14,972
)
 
(18,570
)
Allowance for loan losses – federally insured loans
(35,862
)
 
(37,268
)
Allowance for loan losses – private education loans
(13,846
)
 
(14,574
)
 
$
23,202,294

 
24,903,724



(a)
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 June 30,
 
Six months ended June 30,
 
2017
 
2016
 
2017
 
2016
Balance at beginning of period
$
50,526

 
50,084

 
51,842

 
50,498

Provision for loan losses:
 
 
 
 
 
 
 
Federally insured loans
2,000

 
2,000

 
4,000

 
4,000

Private education loans

 

 
(1,000
)
 
500

Total provision for loan losses
2,000

 
2,000

 
3,000

 
4,500

Charge-offs:
 

 
 

 
 
 
 
Federally insured loans
(2,825
)
 
(3,217
)
 
(5,406
)
 
(6,266
)
Private education loans
(288
)
 
(514
)
 
(370
)
 
(915
)
Total charge-offs
(3,113
)
 
(3,731
)
 
(5,776
)
 
(7,181
)
Recoveries - private education loans
245

 
250

 
442

 
526

Purchase of private education loans

 
100

 

 
260

Transfer from repurchase obligation related to private education loans repurchased
50

 
50

 
200

 
150

Balance at end of period
$
49,708

 
48,753

 
49,708

 
$
48,753

 
 
 
 
 
 
 
 
Allocation of the allowance for loan losses:
 
 
 

 
 
 
 
Federally insured loans
$
35,862

 
33,224

 
35,862

 
33,224

Private education loans
13,846

 
15,529

 
13,846

 
15,529

Total allowance for loan losses
$
49,708

 
48,753

 
49,708

 
48,753





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 June 30, 2017
 
As of December 31, 2016
 
As of June 30, 2016
Federally insured loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
1,454,802

 
 
 
$
1,606,468

 
 
 
$
1,936,064

 
 
Loans in forbearance
2,065,167

 
 
 
2,295,367

 
 
 
2,672,241

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
17,106,921

 
87.2
%
 
18,125,768

 
86.6
%
 
18,957,457

 
86.7
%
Loans delinquent 31-60 days
743,738

 
3.8

 
818,976

 
3.9

 
828,885

 
3.8

Loans delinquent 61-90 days
479,552

 
2.4

 
487,647

 
2.3

 
482,379

 
2.2

Loans delinquent 91-120 days
267,139

 
1.4

 
335,291

 
1.6

 
320,213

 
1.5

Loans delinquent 121-270 days
772,875

 
3.9

 
854,432

 
4.1

 
918,788

 
4.2

Loans delinquent 271 days or greater
257,213

 
1.3

 
306,035

 
1.5

 
350,363

 
1.6

Total loans in repayment
19,627,438

 
100.0
%
 
20,928,149

 
100.0
%
 
21,858,085

 
100.0
%
Total federally insured loans
$
23,147,407

 
 

 
$
24,829,984

 
 

 
$
26,466,390

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private education loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
32,016

 
 
 
$
35,146

 
 
 
$
54,597

 
 
Loans in forbearance
1,814

 
 
 
3,448

 
 
 
1,610

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
202,155

 
96.7
%
 
228,612

 
97.2
%
 
225,585

 
97.2
%
Loans delinquent 31-60 days
2,066

 
1.0

 
1,677

 
0.7

 
1,361

 
0.6

Loans delinquent 61-90 days
1,323

 
0.6

 
1,110

 
0.5

 
929

 
0.4

Loans delinquent 91 days or greater
3,519

 
1.7

 
3,666

 
1.6

 
4,088

 
1.8

Total loans in repayment
209,063

 
100.0
%
 
235,065

 
100.0
%
 
231,963

 
100.0
%
Total private education loans
$
242,893

 
 

 
$
273,659

 
 

 
$
288,170

 
 
Bonds and Notes payable (Tables)
The following tables summarize the Company’s outstanding debt obligations by type of instrument:
 
As of June 30, 2017
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in FFELP loan asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
21,063,700

 
0.22% - 6.90%
 
8/25/21 - 9/25/65
Bonds and notes based on auction
796,140

 
1.82% - 2.36%
 
3/22/32 - 11/26/46
Total FFELP variable-rate bonds and notes
21,859,840

 
 
 
 
FFELP warehouse facilities
1,058,413

 
1.08% - 1.29%
 
9/7/18 - 4/27/20
Variable-rate bonds and notes issued in private education loan asset-backed securitization
93,727

 
2.97%
 
12/26/40
Fixed-rate bonds and notes issued in private education loan asset-backed securitization
98,076

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

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

 
4.67%
 
9/15/61
Other borrowings
60,169

 
1.96% - 3.38%
 
7/17/17 - 12/15/45
 
23,190,751

 
 
 
 
Discount on bonds and notes payable and debt issuance costs
(399,971
)
 
 
 
 
Total
$
22,790,780

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

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

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

 
 
 
 
FFELP warehouse facilities
1,677,443

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

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

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

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

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

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

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

 
 
 
 
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 June 30, 2017, the Company had three FFELP warehouse facilities as summarized below.
 
 
NFSLW-I (a)
 
NHELP-II
 
NHELP-III (b)
 
Total
Maximum financing amount
 
$
700,000

 
500,000

 
200,000

 
1,400,000

Amount outstanding
 
511,846

 
357,461

 
189,106

 
1,058,413

Amount available
 
$
188,154

 
142,539

 
10,894

 
341,587

Expiration of liquidity provisions
 
July 10, 2018

 
December 15, 2017

 
April 27, 2018

 
 
Final maturity date
 
September 7, 2018

 
December 13, 2019

 
April 27, 2020

 
 
Maximum advance rates
 
92.0 - 98.0%

 
85.0 - 95.0%

 
92.2 - 95.0%

 
 
Minimum advance rates
 
84.0 - 90.0%

 
85.0 - 95.0%

 
92.2 - 95.0%

 
 
Advanced as equity support
 
$
13,260

 
26,440

 
5,668

 
45,368



(a)
On May 25, 2017, the Company decreased the maximum financing amount for this warehouse facility from $875.0 million to $700.0 million.

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

Derivative Financial Instruments (Tables)
Basis Swaps

The following table summarizes the Company’s basis swaps outstanding 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 June 30,
 
As of December 31,
 
 
2017
 
2016
Maturity
 
Notional amount
 
Notional amount
2018
 
$
4,000,000

 
$

2019
 
2,000,000

 

2024
 
250,000

 

2026
 
1,150,000

 
1,150,000

2027
 
375,000

 

2028
 
325,000

 
325,000

2029
 
100,000

 

2031
 
300,000

 
300,000

 
 
$
8,500,000

 
$
1,775,000

The weighted average rate paid by the Company on the 1:3 Basis Swaps as of June 30, 2017 and December 31, 2016 was one-month LIBOR plus 13.9 basis points and 10.1 basis points, respectively.
Interest Rate Swaps – Floor Income Hedges

The following table summarizes the outstanding derivative instruments used by the Company to economically hedge loans earning fixed rate floor income.
 
 
As of June 30, 2017
 
As of December 31, 2016
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
 
 
 
2017
 
$
250,000

 
1.04
%
 
$
750,000

 
0.99
%
2018
 
1,350,000

 
1.07

 
1,350,000

 
1.07

2019
 
3,250,000

 
0.97

 
3,250,000

 
0.97

2020
 
1,500,000

 
1.01

 
1,500,000

 
1.01

2025
 
100,000

 
2.32

 
100,000

 
2.32

 
 
$
6,450,000

 
1.02
%
 
$
6,950,000

 
1.02
%

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

 
4.28
%
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. Changes in the principal and accrued interest amounts as a result of foreign currency exchange rate fluctuations are included in the Company’s consolidated statements of income.

The Company entered into a cross-currency interest rate swap in connection with the issuance of the Euro Notes. Under the terms of the cross-currency interest rate swap, the Company 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 unrealized income statement impact as a result of the re-measurement of the Euro Notes and the change in the fair value of the related derivative instrument.
 
Three months ended June 30,
 
Six months ended June 30,
 
2017
 
2016
 
2017
 
2016
Re-measurement of Euro Notes
$
(27,261
)
 
9,768

 
(31,951
)
 
(8,712
)
Change in fair value of cross-currency interest rate swap
27,639

 
(12,008
)
 
28,574

 
20,693

Total impact to consolidated statements of income - income (expense) (a)
$
378

 
(2,240
)
 
(3,377
)
 
11,981

(a)
The financial statement impact of the above items is included in "Derivative market value and foreign currency transaction adjustments and derivative settlements, net" in the Company's consolidated statements of income.
Management 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

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

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

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

Balance Sheet

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

 

 

 
2,624

Interest rate swaps - floor income hedges
20

 
81,159

 

 
256

Interest rate swap option - floor income hedge
1,265

 
2,977

 

 

Interest rate caps
334

 
1,152

 

 

Interest rate swaps - hybrid debt hedges

 

 
7,375

 
7,341

Cross-currency interest rate swap



 
39,031

 
67,605

Other

 
2,243

 

 

Total
$
1,619

 
87,531

 
46,406

 
77,826



During the three months ended June 30, 2017, the Company received proceeds of $2.1 million from the termination of derivatives that were included in "other" in the preceding table.

Offsetting of Derivative Assets/Liabilities

The following tables include the gross amounts related to the Company's derivative portfolio recognized in the consolidated balance sheets, reconciled to the net amount when excluding derivatives subject to enforceable master netting arrangements and cash collateral received/pledged.
 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative assets
 
Gross amounts of recognized assets presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral pledged
 
Net asset (liability)
Balance as of
June 30, 2017
 
$
1,619

 

 

 
1,619

Balance as of
December 31, 2016
 
87,531

 
(2,880
)
 
475

 
85,126


 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative liabilities
 
Gross amounts of recognized liabilities presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral (received) pledged, net (a)
 
Net asset (liability)
Balance as of
June 30, 2017
 
$
(46,406
)
 

 
(13,252
)
 
(59,658
)
Balance as of
December 31, 2016
 
(77,826
)
 
2,880

 
7,292

 
(67,654
)

Income Statement Impact

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

 
 

 
 
 
 
1:3 basis swaps
$
(362
)
 
743

 
336

 
414

Interest rate swaps - floor income hedges
2,114

 
(4,841
)
 
1,994

 
(10,084
)
Interest rate swaps - hybrid debt hedges
(198
)
 
(231
)
 
(402
)
 
(463
)
Cross-currency interest rate swap
(1,917
)
 
(1,166
)
 
(3,669
)
 
(1,898
)
Total settlements - (expense) income
(363
)
 
(5,495
)
 
(1,741
)
 
(12,031
)
Change in fair value:
 

 
 

 
 
 
 
1:3 basis swaps
(8,841
)
 
(586
)
 
(11,416
)
 
183

Interest rate swaps - floor income hedges
(17,810
)
 
(27,276
)
 
(13,485
)
 
(59,985
)
Interest rate swap option - floor income hedge
(828
)
 
(856
)
 
(1,712
)
 
(2,272
)
Interest rate caps
(311
)
 
(453
)
 
(833
)
 
(1,215
)
Interest rate swaps - hybrid debt hedges
(453
)
 
(1,464
)
 
(34
)
 
(4,014
)
Cross-currency interest rate swap
27,639

 
(12,008
)
 
28,574

 
20,693

Other
318

 
(2,332
)
 
(143
)
 
(2,039
)
Total change in fair value - (expense) income
(286
)
 
(44,975
)
 
951

 
(48,649
)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - (expense) income
(27,261
)
 
9,768

 
(31,951
)
 
(8,712
)
Derivative market value and foreign currency transaction adjustments and derivative settlements, net - (expense) income
$
(27,910
)
 
(40,702
)
 
(32,741
)
 
(69,392
)
Investments and Notes Receivable (Tables)
Summary Investment Holdings
A summary of the Company's investments and other receivables follows:
 
As of June 30, 2017
 
As of December 31, 2016
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses (a)
 
Fair value
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
 
 
 
 
 
 
 
 
Investments (at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities (b)
$
109,624

 
5,436

 
(678
)
 
114,382

 
98,260

 
6,280

 
(641
)
 
103,899

Equity securities
804

 
2,050

 
(62
)
 
2,792

 
720

 
1,930

 
(61
)
 
2,589

Total available-for-sale investments
$
110,428

 
7,486

 
(740
)
 
117,174

 
98,980

 
8,210

 
(702
)
 
106,488

Trading investments - equity securities
 
 
 
 
 
 

 
 
 
 
 
 
 
105

Total available-for-sale and trading investments
 
 
 
 
 
 
117,174

 
 
 
 
 
 
 
106,593

Other Investments and Other Receivables (not measured at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
Venture capital and funds
 
 
 
 
 
 
74,413

 
 
 
 
 
 
 
69,789

Real estate
 
 
 
 
 
 
46,862

 
 
 
 
 
 
 
48,379

Notes and loans receivable
 
 
 
 
 
 
41,065

 
 
 
 
 
 
 
17,031

Tax liens and affordable housing
 
 
 
 
 
 
10,790

 
 
 
 
 
 
 
12,352

Total investments and other receivables
 
 
 
 
 
 
$
290,304

 
 
 
 
 
 
 
254,144


    
(a)
As of June 30, 2017, the aggregate fair value of available-for-sale investments with unrealized losses was $30.4 million, of which $11.0 million had been in a continuous unrealized loss position for greater than 12 months. Because the Company currently has the intent and ability to retain these investments for an anticipated recovery in fair value, as of June 30, 2017, the Company considered the decline in market value of its available-for-sale investments to be temporary in nature and did not consider any of its investments other-than-temporarily impaired.

(b)
As of June 30, 2017, the stated maturities of substantially all of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years.

Intangible Assets Intangible Assets (Tables)
Intangible assets consist of the following:
 
 
Weighted average remaining useful life as of June 30, 2017 (months)
 
As of June 30, 2017
 
As of December 31, 2016
 
 
Amortizable intangible assets:
 
 
 
 
Customer relationships (net of accumulated amortization of $10,676 and $8,548, respectively)
164
 
$
26,208

 
28,335

 
Trade names (net of accumulated amortization of $2,075 and $1,653, respectively)
183
 
9,497

 
9,919

 
Computer software (net of accumulated amortization of $7,844 and $5,675, respectively)
20
 
7,127

 
9,296

 
Covenants not to compete (net of accumulated amortization of $109 and $91, respectively)
83
 
245

 
263

 
Total - amortizable intangible assets
144
 
$
43,077

 
47,813

The Company recorded amortization expense on its intangible assets of $2.4 million and $2.7 million during the three months ended June 30, 2017 and 2016, respectively, and $4.7 million and $5.2 million during the six months ended June 30, 2017 and 2016, respectively. The Company will continue to amortize intangible assets over their remaining useful lives. As of June 30, 2017, the Company estimates it will record amortization expense as follows:

2017 (July 1 - December 31)
$
4,650

2018
8,605

2019
5,147

2020
4,231

2021
3,480

2022 and thereafter
16,964

 
$
43,077

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

 
67,168

 
21,112

 
41,883

 
8,553

 
147,312

Property Plant and Equipment Property Plant and Equipment (Tables)
Property, Plant and Equipment [Table Text Block]
Property and equipment consisted of the following:
 
 
 
As of June 30, 2017
 
As of December 31, 2016
 
Useful life
 
 
Non-communications:
 
 
 
 
 
Computer equipment and software
1-5 years
 
$
104,946

 
97,317

Office furniture and equipment
3-7 years
 
12,514

 
12,344

Building and building improvements
5-39 years
 
13,383

 
13,363

Transportation equipment
4-10 years
 
3,813

 
3,809

Leasehold improvements
5-20 years
 
3,627

 
3,579

Land
 
1,682

 
1,682

Construction in progress
 
29,491

 
16,346

 
 
 
169,456

 
148,440

Accumulated depreciation - non-communications
 
 
99,718

 
91,285

Non-communications, net property and equipment
 
 
69,738

 
57,155

 
 
 
 
 
 
Communications:
 
 
 
 
 
Network plant and fiber
5-15 years
 
64,337

 
40,844

Central office
5-15 years
 
8,115

 
6,448

Customer located property
5-10 years
 
8,811

 
5,138

Transportation equipment
4-10 years
 
4,620

 
2,966

Computer equipment and software
1-5 years
 
3,048

 
2,026

Other
1-39 years
 
1,581

 
1,268

Land
 
70

 
70

Construction in progress
 
29,726

 
12,537

 
 
 
120,308

 
71,297

Accumulated depreciation - communications
 
 
8,948

 
4,666

Communications, net property and equipment
 
 
111,360

 
66,631

Total property and equipment, net
 
 
$
181,098

 
123,786

Earnings per Common Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted
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 June 30,
 
2017
 
2016
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
 
Common shareholders
 
Unvested restricted stock shareholders
 
Total
Numerator:
 
 
 
 
 
 
 
 
 
 
 
Net income attributable to Nelnet, Inc.
$
28,457

 
280

 
28,737

 
25,879

 
271

 
26,150

 
 
 
 
 


 
 
 
 
 
 
Denominator:


 


 


 
 
 
 
 
 
Weighted-average common shares outstanding - basic and diluted
41,913,990

 
412,550

 
42,326,540

 
42,193,769

 
441,931

 
42,635,700

Earnings per share - basic and diluted
$
0.68

 
0.68

 
0.68

 
0.61

 
0.61

 
0.61

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

See note 14 of the notes to consolidated financial statements included in the 2016 Annual Report for a description of the Company's operating segments. The following tables include the results of each of the Company's operating segments reconciled to the consolidated financial statements.
 
Three months ended June 30, 2017
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
120

 
3

 
1

 
191,367

 
3,362

 
(1,776
)
 
193,077

Interest expense

 

 
1,104

 
113,073

 
835

 
(1,776
)
 
113,236

Net interest income
120

 
3

 
(1,103
)
 
78,294

 
2,527

 

 
79,841

Less provision for loan losses

 

 

 
2,000

 

 

 
2,000

Net interest income (loss) after provision for loan losses
120


3

 
(1,103
)
 
76,294

 
2,527

 

 
77,841

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
56,899

 

 

 

 

 

 
56,899

Intersegment servicing revenue
9,952

 

 

 

 

 
(9,952
)
 

Tuition payment processing, school information, and campus commerce revenue

 
34,224

 

 

 

 

 
34,224

Communications revenue

 

 
5,719

 

 

 

 
5,719

Other income

 

 

 
3,057

 
9,429

 

 
12,485

Gain from debt repurchases

 

 

 
442

 

 

 
442

Derivative settlements, net

 

 

 
(165
)
 
(198
)
 

 
(363
)
Derivative market value and foreign currency transaction adjustments, net

 

 

 
(27,412
)
 
(135
)
 

 
(27,547
)
Total other income
66,851

 
34,224

 
5,719

 
(24,078
)
 
9,096

 
(9,952
)
 
81,859

Operating expenses:
 

 
 

 
 
 
 
 
 

 
 
 
 

Salaries and benefits
40,506

 
16,901

 
3,411

 
363

 
13,447

 

 
74,628

Depreciation and amortization
546

 
2,346

 
2,600

 

 
3,547

 

 
9,038

Loan servicing fees

 

 

 
5,620

 

 

 
5,620

Cost to provide communications services

 

 
2,203

 

 

 

 
2,203

Other expenses
8,879

 
4,853

 
1,772

 
1,827

 
10,195

 

 
27,528

Intersegment expenses, net
8,324

 
2,136

 
496

 
10,043

 
(11,046
)
 
(9,952
)
 

Total operating expenses
58,255

 
26,236

 
10,482

 
17,853

 
16,143

 
(9,952
)
 
119,017

Income (loss) before income taxes
8,716

 
7,991

 
(5,866
)
 
34,363

 
(4,520
)
 

 
40,683

Income tax (expense) benefit
(4,918
)
 
(3,037
)
 
2,229

 
(13,057
)
 
2,751

 

 
(16,032
)
Net income (loss)
3,798

 
4,954

 
(3,637
)
 
21,306

 
(1,769
)
 

 
24,651

  Net loss (income) attributable to noncontrolling interests
4,226

 

 

 

 
(141
)
 

 
4,086

Net income (loss) attributable to Nelnet, Inc.
$
8,024

 
4,954

 
(3,637
)
 
21,306

 
(1,910
)
 

 
28,737

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of June 30, 2017
$
99,841

 
230,145

 
150,809

 
24,433,881

 
684,840

 
(276,429
)
 
25,323,087

 
Three months ended June 30, 2016
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other
Activities
 
Eliminations
 
Total
Total interest income
$
22

 
3

 

 
184,966

 
2,064

 
(802
)
 
186,252

Interest expense

 

 
205

 
92,769

 
1,881

 
(802
)
 
94,052

Net interest income
22

 
3

 
(205
)
 
92,197

 
183

 

 
92,200

Less provision for loan losses

 

 

 
2,000

 

 

 
2,000

Net interest income (loss) after provision for loan losses
22

 
3

 
(205
)
 
90,197

 
183

 

 
90,200

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
54,402

 

 

 

 

 

 
54,402

Intersegment servicing revenue
11,408

 

 

 

 

 
(11,408
)
 

Tuition payment processing, school information, and campus commerce revenue

 
30,483

 

 

 

 

 
30,483

Communications revenue

 

 
4,478

 

 

 

 
4,478

Enrollment services revenue

 

 

 

 

 

 

Other income

 

 

 
3,834

 
5,931

 

 
9,765

Gain from debt repurchases

 

 

 

 

 

 

Derivative settlements, net

 

 

 
(5,264
)
 
(231
)
 

 
(5,495
)
Derivative market value and foreign currency transaction adjustments, net

 

 

 
(31,411
)
 
(3,797
)
 

 
(35,207
)
Total other income
65,810

 
30,483

 
4,478

 
(32,841
)
 
1,903

 
(11,408
)
 
58,426

Operating expenses:
 

 
 

 
 
 
 

 
 

 
.

 
 

Salaries and benefits
31,380

 
15,444

 
1,377

 
499

 
12,222

 

 
60,923

Depreciation and amortization
445

 
2,511

 
1,378

 

 
3,848

 

 
8,183

Loan servicing fees

 

 

 
7,216

 

 

 
7,216

Cost to provide communications services

 

 
1,681

 

 

 

 
1,681

Cost to provide enrollment services

 

 

 

 

 

 

Other expenses
11,380

 
4,815

 
813

 
1,481

 
10,920

 

 
29,409

Intersegment expenses, net
6,102

 
1,562

 
187

 
11,539

 
(7,981
)
 
(11,408
)
 

Total operating expenses
49,307

 
24,332

 
5,436

 
20,735

 
19,009

 
(11,408
)
 
107,412

Income (loss) before income taxes
16,525

 
6,154

 
(1,163
)
 
36,621

 
(16,923
)
 

 
41,214

Income tax (expense) benefit
(6,280
)
 
(2,338
)
 
442

 
(13,916
)
 
7,057

 

 
(15,036
)
Net income (loss)
10,245

 
3,816

 
(721
)
 
22,705

 
(9,866
)
 

 
26,178

  Net loss (income) attributable to noncontrolling interests

 

 

 

 
(28
)
 

 
(28
)
Net income (loss) attributable to Nelnet, Inc.
$
10,245

 
3,816

 
(721
)
 
22,705

 
(9,894
)
 

 
26,150

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of June 30, 2016
$
71,403

 
230,308

 
78,578

 
27,856,952

 
730,122

 
(251,565
)
 
28,715,798




 
Six months ended June 30, 2017
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
214

 
5

 
1

 
373,692

 
6,123

 
(3,135
)
 
376,901

Interest expense

 

 
1,816

 
219,824

 
1,630

 
(3,135
)
 
220,135

Net interest income
214

 
5

 
(1,815
)
 
153,868

 
4,493

 

 
156,766

Less provision for loan losses

 

 

 
3,000

 

 

 
3,000

Net interest income (loss) after provision for loan losses
214


5

 
(1,815
)
 
150,868

 
4,493

 

 
153,766

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
111,128

 

 

 

 

 

 
111,128

Intersegment servicing revenue
20,275

 

 

 

 

 
(20,275
)
 

Tuition payment processing, school information, and campus commerce revenue

 
77,844

 

 

 

 

 
77,844

Communications revenue

 

 
10,826

 

 

 

 
10,826

Other income

 

 

 
6,399

 
18,719

 

 
25,118

Gain from debt repurchases

 

 

 
981

 
4,440

 

 
5,421

Derivative settlements, net

 

 

 
(1,339
)
 
(402
)
 

 
(1,741
)
Derivative market value and foreign currency transaction adjustments, net

 

 

 
(30,823
)
 
(177
)
 

 
(31,000
)
Total other income
131,403

 
77,844

 
10,826

 
(24,782
)
 
22,580

 
(20,275
)
 
197,596

Operating expenses:
 

 
 

 
 
 
 
 
 

 
 
 
 

Salaries and benefits
78,497

 
33,553

 
6,390

 
763

 
27,287

 

 
146,491

Depreciation and amortization
1,095

 
4,737

 
4,735

 

 
7,069

 

 
17,636

Loan servicing fees

 

 

 
11,645

 

 

 
11,645

Cost to provide communications services

 

 
4,157

 

 

 

 
4,157

Other expenses
18,015

 
9,847

 
3,144

 
2,819

 
20,249

 

 
54,075

Intersegment expenses, net
15,722

 
4,210

 
1,002

 
20,455

 
(21,114
)
 
(20,275
)
 

Total operating expenses
113,329

 
52,347

 
19,428

 
35,682

 
33,491

 
(20,275
)
 
234,004

Income (loss) before income taxes
18,288

 
25,502

 
(10,417
)
 
90,404

 
(6,418
)
 

 
117,358

Income tax (expense) benefit
(9,473
)
 
(9,690
)
 
3,959

 
(34,354
)
 
4,772

 

 
(44,787
)
Net income (loss)
8,815

 
15,812

 
(6,458
)
 
56,050

 
(1,646
)
 

 
72,571

  Net loss (income) attributable to noncontrolling interests
6,641

 

 

 

 
(450
)
 

 
6,192

Net income (loss) attributable to Nelnet, Inc.
$
15,456

 
15,812

 
(6,458
)
 
56,050

 
(2,096
)
 

 
78,763

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of June 30, 2017
$
99,841

 
230,145

 
150,809

 
24,433,881

 
684,840

 
(276,429
)
 
25,323,087



 
Six months ended June 30, 2016
 
Loan Systems and Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset
Generation and
Management
 
Corporate and Other Activities
 
Eliminations
 
Total
Total interest income
$
43

 
5

 

 
375,689

 
4,157

 
(1,625
)
 
378,269

Interest expense

 

 
352

 
182,647

 
3,087

 
(1,625
)
 
184,460

Net interest income
43

 
5

 
(352
)
 
193,042

 
1,070

 

 
193,809

Less provision for loan losses

 

 

 
4,500

 

 

 
4,500

Net interest income (loss) after provision for loan losses
43


5

 
(352
)
 
188,542

 
1,070

 

 
189,309

Other income:
 

 
 

 
 
 
 

 
 

 
 

 
 

Loan systems and servicing revenue
106,732

 

 

 

 

 

 
106,732

Intersegment servicing revenue
23,415

 

 

 

 

 
(23,415
)
 

Tuition payment processing, school information, and campus commerce revenue

 
69,140

 

 

 

 

 
69,140

Communications revenue

 

 
8,824

 

 

 

 
8,824

Enrollment services revenue

 

 

 

 
4,326

 

 
4,326

Other income

 

 

 
8,097

 
15,462

 

 
23,559

Gain from debt repurchases

 

 

 
101

 

 

 
101

Derivative settlements, net

 

 

 
(11,568
)
 
(463
)
 

 
(12,031
)
Derivative market value and foreign currency transaction adjustments, net

 

 

 
(51,308
)
 
(6,053
)
 

 
(57,361
)
Total other income
130,147

 
69,140

 
8,824

 
(54,678
)
 
13,272

 
(23,415
)
 
143,290

Operating expenses:
 

 
 

 
 
 
 
 
 

 
 
 
 

Salaries and benefits
64,346

 
29,880

 
2,467

 
1,018

 
26,454

 

 
124,165

Depreciation and amortization
883

 
4,782

 
2,507

 

 
7,650

 

 
15,823

Loan servicing fees

 

 

 
14,144

 

 

 
14,144

Cost to provide communications services

 

 
3,384

 

 

 

 
3,384

Cost to provide enrollment services

 

 

 

 
3,623

 

 
3,623

Other expenses
22,850

 
8,973

 
1,566

 
2,997

 
21,397

 

 
57,783

Intersegment expenses, net
12,343

 
3,074

 
331

 
23,646

 
(15,978
)
 
(23,415
)
 

Total operating expenses
100,422

 
46,709

 
10,255

 
41,805

 
43,146

 
(23,415
)
 
218,922

Income (loss) before income taxes
29,768

 
22,436

 
(1,783
)
 
92,059

 
(28,804
)
 

 
113,677

Income tax (expense) benefit
(11,312
)
 
(8,526
)
 
678

 
(34,983
)
 
14,674

 

 
(39,469
)
Net income (loss)
18,456

 
13,910

 
(1,105
)
 
57,076

 
(14,130
)
 

 
74,208

  Net loss (income) attributable to noncontrolling interests

 

 

 

 
(97
)
 

 
(97
)
Net income (loss) attributable to Nelnet, Inc.
$
18,456

 
13,910

 
(1,105
)
 
57,076

 
(14,227
)
 

 
74,111

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets as of June 30, 2016
$
71,403

 
230,308

 
78,578

 
27,856,952

 
730,122

 
(251,565
)
 
28,715,798

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


 
 
 
 
 
 
Student loan and other asset-backed securities
$

 
114,267

 
114,267

 

 
103,780

 
103,780

Equity securities
2,793

 

 
2,793

 
2,694

 

 
2,694

Debt securities
114

 

 
114

 
119

 

 
119

Total investments (available-for-sale and trading)
2,907

 
114,267

 
117,174

 
2,813

 
103,780

 
106,593

Derivative instruments

 
1,619

 
1,619

 

 
87,531

 
87,531

Total assets
$
2,907

 
115,886

 
118,793

 
2,813

 
191,311

 
194,124

Liabilities:
 

 
 

 
 

 
 
 
 
 
 
Derivative instruments
$

 
46,406

 
46,406

 

 
77,826

 
77,826

Total liabilities
$

 
46,406

 
46,406

 

 
77,826

 
77,826



The following table summarizes the fair values of all of the Company’s financial instruments on the consolidated balance sheets:
 
As of June 30, 2017
 
Fair value
 
Carrying value
 
Level 1
 
Level 2
 
Level 3
Financial assets:
 
 
 
 
 
 
 
 
 
Student loans receivable
$
24,278,179

 
23,202,294

 

 

 
24,278,179

Cash and cash equivalents
69,239

 
69,239

 
69,239

 

 

Investments (available-for-sale)
117,174

 
117,174

 
2,907

 
114,267

 

Notes receivable
16,563

 
16,563

 

 
16,563

 

Loans receivable
25,502

 
24,502

 

 

 
25,502

Restricted cash
780,141

 
780,141

 
780,141

 

 

Restricted cash – due to customers
136,900

 
136,900

 
136,900

 

 

Accrued interest receivable
395,734

 
395,734

 

 
395,734

 

Derivative instruments
1,619

 
1,619

 

 
1,619

 

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
22,744,128

 
22,790,780

 

 
22,744,128

 

Accrued interest payable
47,064

 
47,064

 

 
47,064

 

Due to customers
136,900

 
136,900

 
136,900

 

 

Derivative instruments
46,406

 
46,406

 

 
46,406

 

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

 
24,903,724

 

 

 
25,653,581

Cash and cash equivalents
69,654

 
69,654

 
69,654

 

 

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

 
106,593

 
2,813

 
103,780

 

Notes receivable
17,031

 
17,031

 

 
17,031

 

Restricted cash
980,961

 
980,961

 
980,961

 

 

Restricted cash – due to customers
119,702

 
119,702

 
119,702

 

 

Accrued interest receivable
391,264

 
391,264

 

 
391,264

 

Derivative instruments
87,531

 
87,531

 

 
87,531

 

Financial liabilities:
 

 
 

 
 
 
 
 
 
Bonds and notes payable
24,220,996

 
24,668,490

 

 
24,220,996

 

Accrued interest payable
45,677

 
45,677

 

 
45,677

 

Due to customers
119,702

 
119,702

 
119,702

 

 

Derivative instruments
77,826

 
77,826

 

 
77,826

 

Basis of Financial Reporting Noncontrolling Interest (Details) (USD $)
6 Months Ended 3 Months Ended
Jun. 30, 2017
Allo Communications [Member]
Mar. 31, 2017
GreatNet, LLC [Member]
Jun. 30, 2017
GreatNet, LLC [Member]
Jun. 30, 2017
Line of Credit [Member]
Allo Communications [Member]
Dec. 30, 2015
Line of Credit [Member]
Allo Communications [Member]
Noncontrolling Interest [Line Items]
 
 
 
 
 
Percent ownership in VIE
91.50% 
 
 
 
 
Percent of operating decision voting power
80.00% 
 
 
 
 
Potential additional percent earned by VIE management
11.50% 
 
 
 
 
Line of credit issued to VIE
 
 
 
 
$ 200,000,000.0 
VIE line of credit amount outstanding
 
 
 
114,000,000 
 
Noncontrolling Interest, Ownership Percentage by Parent
 
 
50.00% 
 
 
Contribution to non-controlling interest
 
$ 12,600,000 
 
 
 
Student Loans Receivable (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Mar. 31, 2017
Dec. 31, 2016
Jun. 30, 2016
Mar. 31, 2016
Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Allowance for loan losses
$ (49,708)
$ (50,526)
$ (51,842)
$ (48,753)
$ (50,084)
$ (50,498)
Student loans receivable
23,202,294 
 
24,903,724 
 
 
 
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Allowance for loan losses
(35,862)
 
 
(33,224)
 
 
Private education loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Allowance for loan losses
(13,846)
 
 
(15,529)
 
 
held for investment [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
23,390,300 
 
25,103,643 
 
 
 
Loan discount, net of unamortized loan premiums and deferred origination costs
(123,326)
 
(129,507)
 
 
 
Student loans receivable
23,202,294 
 
24,903,724 
 
 
 
held for investment [Member] |
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
23,147,407 
 
24,829,984 
 
 
 
Allowance for loan losses
(35,862)
 
(37,268)
 
 
 
held for investment [Member] |
Private education loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
242,893 
 
273,659 
 
 
 
Allowance for loan losses
(13,846)
 
(14,574)
 
 
 
held for investment [Member] |
Stafford and Other [Member] |
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
4,704,409 
 
5,186,047 
 
 
 
held for investment [Member] |
Consolidation Loans [Member] |
Federally insured loans [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Student loans receivable, gross
18,442,998 
 
19,643,937 
 
 
 
Non-accretable discount [Member] |
held for investment [Member]
 
 
 
 
 
 
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
 
Loan discount, net of unamortized loan premiums and deferred origination costs
$ (14,972)
 
$ (18,570)
 
 
 
Student Loans Receivable and Allowance for Loan Losses - Narrative (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Stafford Loan [Member]
Sep. 29, 2016
Stafford Loan [Member]
Jun. 30, 2017
Consolidation Loan [Member]
Sep. 29, 2016
Consolidation Loan [Member]
Sep. 30, 2016
Restatement Adjustment [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
 
 
Constant prepayment rate
5.00% 
6.00% 
3.00% 
4.00% 
 
Loan discount, net of unamortized loan premiums and deferred origination costs
 
 
 
 
$ 8,200 
Student Loans Receivable and Allowance for Loan Losses Allowance for Loan Losses (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
Allowance for loan losses - balance
$ 50,526 
$ 50,084 
$ 51,842 
$ 50,498 
Provision for loan losses
2,000 
2,000 
3,000 
4,500 
Charge-offs
(3,113)
(3,731)
(5,776)
(7,181)
Purchase of private education loans
100 
260 
Allowance for loan losses - balance
49,708 
48,753 
49,708 
48,753 
Federally insured loans [Member]
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
Provision for loan losses
2,000 
2,000 
4,000 
4,000 
Charge-offs
(2,825)
(3,217)
(5,406)
(6,266)
Allowance for loan losses - balance
35,862 
33,224 
35,862 
33,224 
Private education loans [Member]
 
 
 
 
Financing Receivable, Allowance for Credit Losses [Roll Forward]
 
 
 
 
Provision for loan losses
(1,000)
500 
Charge-offs
(288)
(514)
(370)
(915)
Recoveries - private education loans
245 
250 
442 
526 
Transfer from repurchase obligation related to private education loans repurchased
50 
50 
200 
150 
Allowance for loan losses - balance
$ 13,846 
$ 15,529 
$ 13,846 
$ 15,529 
Student Loans Receivable and Allowance for Loan Losses Student Loan Status and Delinquency (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Federally insured loans [Member]
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
Loans in-school/grace/deferment
$ 1,454,802 
$ 1,936,064 
$ 1,606,468 
Loans in forbearance
2,065,167 
2,672,241 
2,295,367 
Student loans receivable, gross
23,147,407 
26,466,390 
24,829,984 
Loans in repayment status:
 
 
 
Loans current
17,106,921 
18,957,457 
18,125,768 
Loans current, percentage
87.20% 
86.70% 
86.60% 
Total loans in repayment
19,627,438 
21,858,085 
20,928,149 
Total loans in repayment, percentage
100.00% 
100.00% 
100.00% 
Private education loans [Member]
 
 
 
Financing Receivable, Recorded Investment [Line Items]
 
 
 
Loans in-school/grace/deferment
32,016 
54,597 
35,146 
Loans in forbearance
1,814 
1,610 
3,448 
Student loans receivable, gross
242,893 
288,170 
273,659 
Loans in repayment status:
 
 
 
Loans current
202,155 
225,585 
228,612 
Loans current, percentage
96.70% 
97.20% 
97.20% 
Total loans in repayment
209,063 
231,963 
235,065 
Total loans in repayment, percentage
100.00% 
100.00% 
100.00% 
Financing Receivables, 31 to 60 Days Past Due [Member] [Member] |
Federally insured loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Financing Receivable, Recorded Investment, Past Due
743,738 
828,885 
818,976 
Financing Receivable, Percent Past Due
3.80% 
3.80% 
3.90% 
Financing Receivables, 31 to 60 Days Past Due [Member] [Member] |
Private education loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Financing Receivable, Recorded Investment, Past Due
2,066 
1,361 
1,677 
Financing Receivable, Percent Past Due
1.00% 
0.60% 
0.70% 
Financing Receivables, 61 to 90 Days Past Due [Member] |
Federally insured loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Financing Receivable, Recorded Investment, Past Due
479,552 
482,379 
487,647 
Financing Receivable, Percent Past Due
2.40% 
2.20% 
2.30% 
Financing Receivables, 61 to 90 Days Past Due [Member] |
Private education loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Financing Receivable, Recorded Investment, Past Due
1,323 
929 
1,110 
Financing Receivable, Percent Past Due
0.60% 
0.40% 
0.50% 
Financing receivables, 91-120 days past due [Member] |
Federally insured loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Financing Receivable, Recorded Investment, Past Due
267,139 
320,213 
335,291 
Financing Receivable, Percent Past Due
1.40% 
1.50% 
1.60% 
Financing receivables, 121-270 days past due [Member] |
Federally insured loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Financing Receivable, Recorded Investment, Past Due
772,875 
918,788 
854,432 
Financing Receivable, Percent Past Due
3.90% 
4.20% 
4.10% 
Financing receivables, 271 days or greater past due [Member] |
Federally insured loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Financing Receivable, Recorded Investment, Past Due
257,213 
350,363 
306,035 
Financing Receivable, Percent Past Due
1.30% 
1.60% 
1.50% 
Financing Receivables, Equal to Greater than 91 Days Past Due [Member] |
Private education loans [Member]
 
 
 
Loans in repayment status:
 
 
 
Financing Receivable, Recorded Investment, Past Due
$ 3,519 
$ 4,088 
$ 3,666 
Financing Receivable, Percent Past Due
1.70% 
1.80% 
1.60% 
Outstanding Debt Obligations (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 30, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Bonds and notes payable
$ 22,790,780 
$ 24,668,490 
Discount on bonds and notes payable and debt issuance costs
(399,971)
(431,930)
Variable-rate bonds and notes [Member] |
Private education [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
 
112,582 
Warehouse facilities [Member] |
FFELP Warehouse Total [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
1,058,413 
1,677,443 
Warehouse facilities [Member] |
FFELP Warehouse Total [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
1.08% 
0.63% 
Debt Instrument, Maturity Date
Sep. 07, 2018 
Sep. 07, 2018 
Warehouse facilities [Member] |
FFELP Warehouse Total [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
1.29% 
1.09% 
Debt Instrument, Maturity Date
Apr. 27, 2020 
Dec. 13, 2019 
Line of Credit [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
Line of Credit [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
0.00% 
0.00% 
Debt Instrument, Maturity Date
Dec. 21, 2021 
Dec. 12, 2021 
Line of Credit [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
0.00% 
0.00% 
Debt Instrument, Maturity Date
Dec. 12, 2021 
Dec. 12, 2021 
Junior Subordinated Debt [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
20,500 
50,184 
Junior Subordinated Debt [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
4.671% 
4.373% 
Debt Instrument, Maturity Date
Sep. 15, 2061 
Sep. 15, 2061 
Junior Subordinated Debt [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
4.671% 
4.373% 
Debt Instrument, Maturity Date
Sep. 15, 2061 
Sep. 15, 2061 
Other borrowings [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
60,200 
18,355 
Other borrowings [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
3.38% 
3.38% 
Debt Instrument, Maturity Date
Jul. 28, 2017 
Mar. 31, 2023 
Other borrowings [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
3.38% 
3.38% 
Debt Instrument, Maturity Date
Dec. 15, 2045 
Dec. 15, 2045 
Bonds and notes payable, gross [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
23,190,751 
25,100,420 
Federally insured [Member] |
Variable-rate bonds and notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
21,859,840 
23,128,478 
Federally insured [Member] |
Bonds and notes based on indices [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
21,063,700 
22,130,063 
Federally insured [Member] |
Bonds and notes based on indices [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
0.22% 
0.24% 
Debt Instrument, Maturity Date
Aug. 25, 2021 
Jun. 25, 2021 
Federally insured [Member] |
Bonds and notes based on indices [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
6.90% 
6.90% 
Debt Instrument, Maturity Date
Sep. 25, 2065 
Sep. 25, 2065 
Federally insured [Member] |
Bonds and notes based on auction or remarketing [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
796,140 
998,415 
Federally insured [Member] |
Bonds and notes based on auction or remarketing [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
1.82% 
1.61% 
Debt Instrument, Maturity Date
Mar. 22, 2032 
Mar. 22, 2032 
Federally insured [Member] |
Bonds and notes based on auction or remarketing [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
2.36% 
2.28% 
Debt Instrument, Maturity Date
Nov. 26, 2046 
Nov. 26, 2046 
Private education [Member] |
Variable-rate bonds and notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
93,727 
 
Private education [Member] |
Variable-rate bonds and notes [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
2.97% 
2.60% 
Debt Instrument, Maturity Date
Dec. 26, 2040 
Dec. 26, 2040 
Private education [Member] |
Variable-rate bonds and notes [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
2.97% 
2.60% 
Debt Instrument, Maturity Date
Dec. 26, 2040 
Dec. 26, 2040 
Private education [Member] |
fixed rate bonds and notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Bonds and notes payable
$ 98,076 
$ 113,378 
Private education [Member] |
fixed rate bonds and notes [Member] |
Minimum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
3.60% 
3.60% 
Debt Instrument, Maturity Date
Dec. 26, 2040 
Dec. 26, 2040 
Private education [Member] |
fixed rate bonds and notes [Member] |
Maximum [Member]
 
 
Debt Instrument [Line Items]
 
 
Debt Instrument, Interest Rate, Stated Percentage
5.35% 
5.35% 
Debt Instrument, Maturity Date
Dec. 28, 2043 
Dec. 28, 2043 
Bonds and Notes Payable Outstanding Lines of Credit (Details) (USD $)
3 Months Ended 6 Months Ended 6 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended 0 Months Ended
Mar. 31, 2017
Unsecured Line of Credit [Member]
Jun. 30, 2017
Unsecured Line of Credit [Member]
Jun. 30, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
Jun. 30, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
Jun. 2, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
May 25, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
May 5, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
Apr. 3, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
Apr. 2, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
Jun. 30, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NFSLW-I Warehouse [Member]
May 24, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NFSLW-I Warehouse [Member]
Jun. 30, 2017
FFELP Warehouse Total [Member]
Warehouse facilities [Member]
NHELP-II Warehouse [Member]
Jun. 30, 2017
FFELP Warehouse Total [Member]
Minimum [Member]
Warehouse facilities [Member]
Dec. 31, 2016
FFELP Warehouse Total [Member]
Minimum [Member]
Warehouse facilities [Member]
Jun. 30, 2017
FFELP Warehouse Total [Member]
Minimum [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
Jun. 30, 2017
FFELP Warehouse Total [Member]
Minimum [Member]
Warehouse facilities [Member]
NFSLW-I Warehouse [Member]
Jun. 30, 2017
FFELP Warehouse Total [Member]
Minimum [Member]
Warehouse facilities [Member]
NHELP-II Warehouse [Member]
Jun. 30, 2017
FFELP Warehouse Total [Member]
Maximum [Member]
Warehouse facilities [Member]
Dec. 31, 2016
FFELP Warehouse Total [Member]
Maximum [Member]
Warehouse facilities [Member]
Jun. 30, 2017
FFELP Warehouse Total [Member]
Maximum [Member]
Warehouse facilities [Member]
NHELP-III Warehouse [Member]
Jun. 30, 2017
FFELP Warehouse Total [Member]
Maximum [Member]
Warehouse facilities [Member]
NFSLW-I Warehouse [Member]
Jun. 30, 2017
FFELP Warehouse Total [Member]
Maximum [Member]
Warehouse facilities [Member]
NHELP-II Warehouse [Member]
May 24, 2017
Secured Debt
Asset Backed Securitization [Member]
May 24, 2017
Secured Debt
London Interbank Offered Rate (LIBOR)
Asset Backed Securitization [Member]
Line of Credit Facility [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset backed securitization
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 535,000,000 
 
Variable interest rate on asset backed security
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.78% 
Maximum financing amount
 
350,000,000 
1,400,000,000 
200,000,000.0 1
 
 
 
600,000,000.0 1
750,000,000.0 1
700,000,000 
875,000,000.0 
500,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
Amount outstanding
 
 
1,058,413,000 
189,106,000 1
 
 
 
 
 
511,846,000 
 
357,461,000 
 
 
 
 
 
 
 
 
 
 
 
 
Amount available
 
350,000,000 
341,587,000 
10,894,000 1
 
 
 
 
 
188,154,000 
 
142,539,000 
 
 
 
 
 
 
 
 
 
 
 
 
Expiration of liquidity provisions
 
 
 
Apr. 27, 2018 1
 
 
 
 
 
Jul. 10, 2018 
 
Dec. 15, 2017 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Maturity Date
Dec. 12, 2021 
 
 
Apr. 27, 2020 1
 
 
 
 
 
Sep. 07, 2018 
 
Dec. 13, 2019 
Sep. 07, 2018 
Sep. 07, 2018 
 
 
 
Apr. 27, 2020 
Dec. 13, 2019 
 
 
 
 
 
Minimum advance rates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
92.15% 1
84.00% 
85.00% 
 
 
95.00% 1
90.00% 
95.00% 
 
 
Maximum advance rates
 
 
 
 
 
 
 
 
 
 
 
 
 
 
92.15% 1
92.00% 
85.00% 
 
 
95.00% 1
98.00% 
95.00% 
 
 
Advanced as equity support
 
 
45,368,000 
5,668,000 1
 
 
 
 
 
13,260,000 
 
26,440,000 
 
 
 
 
 
 
 
 
 
 
 
 
Decrease to maximum borrowing capacity
 
 
 
 
$ 100,000,000.0 
$ 100,000,000.0 1
$ 200,000,000.0 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bonds and Notes Payable Gain on debt repurchases (Details) (USD $)
6 Months Ended 3 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Mar. 31, 2017
Junior Subordinated Debt [Member]
Jun. 30, 2017
Junior Subordinated Debt [Member]
Dec. 31, 2016
Junior Subordinated Debt [Member]
Jun. 30, 2017
Asset-backed Securities [Member]
Jun. 30, 2017
Asset-backed Securities [Member]
Extinguishment of Debt [Line Items]
 
 
 
 
 
 
 
 
Debt included in other borrowings subject to repurchase agreement
$ 41,800,000 
 
 
 
 
 
 
 
Extinguishment of Debt, Amount
 
 
 
29,700,000 
 
 
 
 
Debt Instrument, Repurchase price
 
 
 
25,300,000 
 
 
 
 
Gain (Loss) on Repurchase of Debt Instrument
5,421,000 
101,000 
 
4,400,000 
 
 
400,000 
1,000,000 
Debt outstanding after extinguishment
$ 22,790,780,000 
 
$ 24,668,490,000 
 
$ 20,500,000 
$ 50,184,000 
 
 
Derivative Financial Instruments Outstanding (Details) (USD $)
6 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended 1 Months Ended 3 Months Ended 0 Months Ended 6 Months Ended 12 Months Ended 6 Months Ended 12 Months Ended 1 Months Ended 6 Months Ended 3 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Mar. 31, 2017
1:3 basis swaps [Member]
Jun. 30, 2017
1:3 basis swaps [Member]
Dec. 31, 2016
1:3 basis swaps [Member]
Jun. 30, 2017
Interest Rate Swap [Member]
Interest rate swaps - floor income hedges [Member]
Dec. 31, 2016
Interest Rate Swap [Member]
Interest rate swaps - floor income hedges [Member]
Jun. 30, 2017
Interest Rate Swap [Member]
Interest rate swaps - floor income hedges [Member]
Maturity 2017 [Member]
Dec. 31, 2016
Interest Rate Swap [Member]
Interest rate swaps - floor income hedges [Member]
Maturity 2017 [Member]
Jun. 30, 2017
Interest Rate Swap [Member]
Interest rate swaps - floor income hedges [Member]
Maturity 2018 [Member]
Dec. 31, 2016
Interest Rate Swap [Member]
Interest rate swaps - floor income hedges [Member]
Maturity 2018 [Member]
Jun. 30, 2017
Interest Rate Swap [Member]
Interest rate swaps - floor income hedges [Member]
Maturity 2019 [Member]
Dec. 31, 2016
Interest Rate Swap [Member]
Interest rate swaps - floor income hedges [Member]
Maturity 2019 [Member]
Jun. 30, 2017
Interest Rate Swap [Member]
Interest rate swaps - floor income hedges [Member]
Maturity 2020 [Member]
Dec. 31, 2016
Interest Rate Swap [Member]
Interest rate swaps - floor income hedges [Member]
Maturity 2020 [Member]
Jun. 30, 2017
Interest Rate Swap [Member]
Interest rate swaps - floor income hedges [Member]
Maturity 2025 [Member]
Dec. 31, 2016
Interest Rate Swap [Member]
Interest rate swaps - floor income hedges [Member]
Maturity 2025 [Member]
Jun. 30, 2015
Interest Rate Cap [Member]
Mar. 31, 2017
Interest Rate Cap [Member]
Aug. 20, 2014
Swaption [Member]
Jun. 30, 2017
Swaption [Member]
Dec. 31, 2016
Swaption [Member]
Jun. 30, 2017
Junior Subordinated Debt [Member]
Dec. 31, 2016
Junior Subordinated Debt [Member]
Jun. 30, 2017
Junior Subordinated Debt [Member]
Interest Rate Swap [Member]
unsecured debt hedges [Member]
Maturity 2036 [Member]
Dec. 31, 2016
Junior Subordinated Debt [Member]
Interest Rate Swap [Member]
unsecured debt hedges [Member]
Maturity 2036 [Member]
Jun. 30, 2015
Private Loan Warehouse Total [Member]
Interest Rate Cap [Member]
Jun. 30, 2015
2015 Interest Rate Cap 1 [Member]
Interest Rate Cap [Member]
Jun. 30, 2015
2015 Interest Rate Cap 2 [Member]
Interest Rate Cap [Member]
Mar. 31, 2017
2017 Interest Rate Cap [Member]
Interest Rate Cap [Member]
Jun. 30, 2017
Maturity 2018
1:3 basis swaps [Member]
Jun. 30, 2017
Maturity 2019
1:3 basis swaps [Member]
Jun. 30, 2017
Maturity 2024
1:3 basis swaps [Member]
Jun. 30, 2017
Maturity 2026
1:3 basis swaps [Member]
Dec. 31, 2016
Maturity 2026
1:3 basis swaps [Member]
Jun. 30, 2017
Maturity 2027
1:3 basis swaps [Member]
Jun. 30, 2017
Maturity 2028
1:3 basis swaps [Member]
Dec. 31, 2016
Maturity 2028
1:3 basis swaps [Member]
Jun. 30, 2017
Maturity 2029
1:3 basis swaps [Member]
Jun. 30, 2017
Maturity 2031
1:3 basis swaps [Member]
Dec. 31, 2016
Maturity 2031
1:3 basis swaps [Member]
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments to enter into derivative instruments
$ 929,000 
$ 0 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,900,000 
 
$ 9,100,000 
 
 
 
 
 
 
 
 
 
$ 929,000 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Type of Interest Rate Paid on Swap
 
 
 
one-month LIBOR 
one-month LIBOR 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Basis Spread on Variable Rate
 
 
 
 
0.139% 
0.101% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average basis spread on variable rate paid on swap
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.375% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Notional Amount
 
 
 
 
8,500,000,000 
1,775,000,000 
6,450,000,000 
6,950,000,000 
250,000,000 
750,000,000 
1,350,000,000 
1,350,000,000 
3,250,000,000 
3,250,000,000 
1,500,000,000 
1,500,000,000 
100,000,000 
100,000,000 
275,000,000 
 
 
250,000,000 
 
 
 
25,000,000 
25,000,000 
 
125,000,000 
150,000,000 
 
4,000,000,000 
2,000,000,000 
250,000,000 
1,150,000,000 
1,150,000,000 
375,000,000 
325,000,000 
325,000,000 
100,000,000 
300,000,000 
300,000,000 
Derivative, Average Fixed Interest Rate
 
 
 
 
 
 
1.02% 1
1.02% 1
1.04% 1
0.99% 1
1.07% 1
1.07% 1
0.97% 1
0.97% 1
1.01% 1
1.01% 1
2.32% 1
2.32% 1
 
 
 
 
 
 
 
4.28% 
4.28% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bonds and notes payable
22,790,780,000 
 
24,668,490,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
20,500,000 
50,184,000 
20,500,000 
50,200,000 
275,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Type of Interest Rate Received on Swap
 
 
 
 
3-month LIBOR 
3-month LIBOR 
3-month LIBOR 
3-month LIBOR 
 
 
 
 
 
 
 
 
 
 
 
 
 
1-month LIBOR 
1-month LIBOR 
 
 
3-month LIBOR 
3-month LIBOR 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Swaption Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.30% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed interest rate on derivatives and debt, net
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7.66% 
7.66% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Description of Terms
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
one-month LIBOR 
one-month LIBOR 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative, Cap Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.50% 
4.99% 
 
 
 
 
 
 
 
 
 
 
 
 
Unsecured Debt Scheduled Interest Rate Change Date
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep. 29, 2036 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument, Description of Variable Rate Basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
three-month LIBOR 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds (payments) to terminate and or amend derivative instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 913,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments Cross-currency Interest Rate Swaps (Details)
In Thousands, unless otherwise specified
6 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2017
USD ($)
Jun. 30, 2016
USD ($)
Dec. 31, 2016
USD ($)
Jun. 30, 2017
Currency Swap [Member]
USD ($)
Jun. 30, 2016
Currency Swap [Member]
USD ($)
Jun. 30, 2017
Currency Swap [Member]
USD ($)
Jun. 30, 2016
Currency Swap [Member]
USD ($)
Jun. 30, 2017
Currency Swap [Member]
EUR (€)
Dec. 31, 2006
Currency Swap [Member]
EUR (€)
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
 
 
 
 
 
Bonds and notes payable
$ 22,790,780 
 
$ 24,668,490 
 
 
 
 
 
€ 352,700 
Derivative, Notional Amount
 
 
 
450,000 
 
450,000 
 
352,700 
 
Re-measurement of Euro Notes
 
 
 
(27,261)
9,768 
(31,951)
(8,712)
 
 
Change in fair value of cross currency interest rate swaps
951 
(48,649)
 
27,639 
(12,008)
28,574 
20,693 
 
 
Total impact to statements of income - income (expense)
 
 
 
$ 378 1
$ (2,240)1
$ (3,377)1
$ 11,981 1
 
 
Derivative Financial Instruments Fair Value of Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended 3 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Jun. 30, 2017
Derivative Financial Instruments, Assets [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Jun. 30, 2017
Derivative Financial Instruments, Assets [Member]
1:3 basis swaps [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
1:3 basis swaps [Member]
Jun. 30, 2017
Derivative Financial Instruments, Assets [Member]
Interest rate swaps - floor income hedges [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Interest rate swaps - floor income hedges [Member]
Jun. 30, 2017
Derivative Financial Instruments, Assets [Member]
Swaption [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Swaption [Member]
Jun. 30, 2017
Derivative Financial Instruments, Assets [Member]
Interest rate swaps - hybrid debt hedges [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Interest rate swaps - hybrid debt hedges [Member]
Jun. 30, 2017
Derivative Financial Instruments, Assets [Member]
Interest Rate Cap [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Interest Rate Cap [Member]
Jun. 30, 2017
Derivative Financial Instruments, Assets [Member]
Cross-currency interest rate swap [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Cross-currency interest rate swap [Member]
Jun. 30, 2017
Derivative Financial Instruments, Assets [Member]
Other Contract [Member]
Dec. 31, 2016
Derivative Financial Instruments, Assets [Member]
Other Contract [Member]
Jun. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Jun. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
1:3 basis swaps [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
1:3 basis swaps [Member]
Jun. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Interest rate swaps - floor income hedges [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Interest rate swaps - floor income hedges [Member]
Jun. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Swaption [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Swaption [Member]
Jun. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Interest rate swaps - hybrid debt hedges [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Interest rate swaps - hybrid debt hedges [Member]
Jun. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Interest Rate Cap [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Interest Rate Cap [Member]
Jun. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Cross-currency interest rate swap [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Cross-currency interest rate swap [Member]
Jun. 30, 2017
Derivative Financial Instruments, Liabilities [Member]
Other Contract [Member]
Dec. 31, 2016
Derivative Financial Instruments, Liabilities [Member]
Other Contract [Member]
Derivatives, Fair Value [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Instruments not Designated as Hedging instruments, Asset, at Fair Value
$ 1,619 
 
$ 87,531 
$ 1,619 
$ 87,531 
$ 0 
$ 0 
$ 20 
$ 81,159 
$ 1,265 
$ 2,977 
$ 0 
$ 0 
$ 334 
$ 1,152 
$ 0 
$ 0 
$ 0 
$ 2,243 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Instruments Not Designated as Hedging Instruments, Liability, at Fair Value
46,406 
 
77,826 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
46,406 
77,826 
2,624 
256 
7,375 
7,341 
39,031 
67,605 
Proceeds from Derivative Instrument, Investing Activities
$ (3,013)
$ (3,523)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 2,100 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments Gross/Net (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Derivatives, Fair Value [Line Items]
 
 
Derivative Assets Not Designated As Hedging Instruments, Net
$ 1,619 
$ 85,126 
Fair value of derivative instruments, asset, net
(59,658)
67,654 
Derivative Financial Instruments, Assets [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative Asset, Fair Value, Gross Asset Including Not Subject to Master Netting Arrangement
1,619 
87,531 
Derivative Asset, Fair Value, Gross Liability and Obligation to Return Cash, Offset
(2,880)
Derivative, Collateral, Obligation to Return Cash
 
Derivative, Collateral, Right to Reclaim Cash
 
475 
Cross Currency Interest Rate Swap
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative, Collateral, Obligation to Return Cash
21,400 
 
Derivative Financial Instruments, Liabilities [Member]
 
 
Derivatives, Fair Value [Line Items]
 
 
Derivative, Collateral, Obligation to Return Cash
(13,252)
 
Derivative, Collateral, Right to Reclaim Cash
 
7,292 
Derivative Liability, Fair Value, Gross Liability Including Not Subject to Master Netting Arrangement
(46,406)
(77,826)
Derivative Liability, Fair Value, Gross Asset and Right to Reclaim Cash, Offset
$ 0 
$ 2,880 
Derivative Financial Instruments Income Statement Effect of Derivative Instruments (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
$ (363)
$ (5,495)
$ (1,741)
$ (12,031)
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(363)
(5,495)
(1,741)
(12,031)
Change in fair value
(286)
(44,975)
951 
(48,649)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense)
(27,261)
9,768 
(31,951)
(8,712)
Derivative market value and foreign currency adjustments and derivative settlements - income (expense)
(27,910)
(40,702)
(32,741)
(69,392)
1:3 basis swaps [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(362)
743 
336 
414 
Change in fair value
(8,841)
(586)
(11,416)
183 
Interest rate swaps - floor income hedges [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
2,114 
(4,841)
1,994 
(10,084)
Change in fair value
(17,810)
(27,276)
(13,485)
(59,985)
Interest rate swap option - floor income hedges [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Change in fair value
(828)
(856)
(1,712)
(2,272)
Interest rate swaps - hybrid debt hedges [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(198)
(231)
(402)
(463)
Change in fair value
(453)
(1,464)
(34)
(4,014)
Interest Rate Cap [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Change in fair value
(311)
(453)
(833)
(1,215)
Cross-currency interest rate swap [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Derivative settlements, net
(1,917)
(1,166)
(3,669)
(1,898)
Change in fair value
27,639 
(12,008)
28,574 
20,693 
Other Contract [Member] |
Other Income [Member]
 
 
 
 
Derivative Instruments, Gain (Loss) [Line Items]
 
 
 
 
Change in fair value
$ 318 
$ (2,332)
$ (143)
$ (2,039)
Investments and Notes Receivable Summary (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Investment Holdings [Line Items]
 
 
Investments And Other Receivables
$ 290,304 
$ 254,144 
Investments [Member]
 
 
Investment Holdings [Line Items]
 
 
Investments, Fair Value Disclosure
117,174 
106,593 
Investments [Member] |
Available-for-sale investments [Member]
 
 
Investment Holdings [Line Items]
 
 
Amortized cost
110,428 
98,980 
Gross Unrealized Gain
7,486 
8,210 
Gross Unrealized Loss
(740)1
(702)
Investments, Fair Value Disclosure
117,174 
106,488 
Investments [Member] |
Available-for-sale investments [Member] |
aggregate fair value of available-for-sale investments with unrealized losses [Member]
 
 
Investment Holdings [Line Items]
 
 
Investments, Fair Value Disclosure
30,400 
 
Investments [Member] |
Available-for-sale investments [Member] |
aggregate fair value of available-for-sale investments with unrealized losses in a continuous unrealized loss position for greater than 12 months [Member]
 
 
Investment Holdings [Line Items]
 
 
Investments, Fair Value Disclosure
11,000 
 
Investments [Member] |
Available-for-sale investments [Member] |
Student Loan Asset-Backed and Other Debt Securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Amortized cost
109,624 2
98,260 2
Gross Unrealized Gain
5,436 2
6,280 2
Gross Unrealized Loss
(678)1 2
(641)2
Investments, Fair Value Disclosure
114,382 2
103,899 2
Investments [Member] |
Available-for-sale investments [Member] |
Equity securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Amortized cost
804 
720 
Gross Unrealized Gain
2,050 
1,930 
Gross Unrealized Loss
(62)1
(61)
Investments, Fair Value Disclosure
2,792 
2,589 
Investments [Member] |
Trading investments [Member] |
Equity securities [Member]
 
 
Investment Holdings [Line Items]
 
 
Investments, Fair Value Disclosure
105 
Other Investments and Notes Receivable (not measured at fair value) [Member] |
Venture Capital and Funds [Member]
 
 
Investment Holdings [Line Items]
 
 
Other Investments
74,413 
69,789 
Other Investments and Notes Receivable (not measured at fair value) [Member] |
Real Estate Investment [Member]
 
 
Investment Holdings [Line Items]
 
 
Other Investments
46,862 
48,379 
Other Investments and Notes Receivable (not measured at fair value) [Member] |
Notes Receivable [Member]
 
 
Investment Holdings [Line Items]
 
 
Other Investments
41,065 
17,031 
Other Investments and Notes Receivable (not measured at fair value) [Member] |
Tax liens and affordable housing investments [Member]
 
 
Investment Holdings [Line Items]
 
 
Other Investments
$ 10,790 
$ 12,352 
Intangible Assets Intangible Assets (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Amortization of Intangible Assets
$ 2,400,000 
$ 2,700,000 
$ 4,700,000 
$ 5,200,000 
 
Weighted average remaining useful life (months)
 
 
144 months 
 
 
Finite-Lived Intangible Assets, Net
43,077,000 
 
43,077,000 
 
47,813,000 
Customer Relationships [Member]
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Finite-Lived Intangible Assets, Accumulated Amortization
10,676,000 
 
10,676,000 
 
8,548,000 
Weighted average remaining useful life (months)
 
 
164 months 
 
 
Finite-Lived Intangible Assets, Net
26,208,000 
 
26,208,000 
 
28,335,000 
Trade Names [Member]
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Finite-Lived Intangible Assets, Accumulated Amortization
2,075,000 
 
2,075,000 
 
1,653,000 
Weighted average remaining useful life (months)
 
 
183 months 
 
 
Finite-Lived Intangible Assets, Net
9,497,000 
 
9,497,000 
 
9,919,000 
Computer Software, Intangible Asset [Member]
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Finite-Lived Intangible Assets, Accumulated Amortization
7,844,000 
 
7,844,000 
 
5,675,000 
Weighted average remaining useful life (months)
 
 
20 months 
 
 
Finite-Lived Intangible Assets, Net
7,127,000 
 
7,127,000 
 
9,296,000 
Covenants not to compete [Member]
 
 
 
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
 
 
 
Finite-Lived Intangible Assets, Accumulated Amortization
109,000 
 
109,000 
 
91,000 
Weighted average remaining useful life (months)
 
 
83 months 
 
 
Finite-Lived Intangible Assets, Net
$ 245,000 
 
$ 245,000 
 
$ 263,000 
Intangible Assets Amortization Expense (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
 
 
 
 
 
Amortization of Intangible Assets
$ 2,400,000 
$ 2,700,000 
$ 4,700,000 
$ 5,200,000 
 
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year
4,650,000 
 
4,650,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, Year Two
8,605,000 
 
8,605,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, Year Three
5,147,000 
 
5,147,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, Year Four
4,231,000 
 
4,231,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, Year Five
3,480,000 
 
3,480,000 
 
 
Finite-Lived Intangible Assets, Amortization Expense, after Year Five
16,964,000 
 
16,964,000 
 
 
Finite-Lived Intangible Assets, Net
$ 43,077,000 
 
$ 43,077,000 
 
$ 47,813,000 
Goodwill Goodwill (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Goodwill [Line Items]
 
 
Goodwill
$ 147,312 
$ 147,312 
Loan Systems and Servicing [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
8,596 
8,596 
Tuition Payment Processing and Campus Commerce [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
67,168 
67,168 
Communications [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
21,112 
21,112 
Asset Generation and Management [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
41,883 
41,883 
Corporate and Other Activities [Member]
 
 
Goodwill [Line Items]
 
 
Goodwill
$ 8,553 
$ 8,553 
Property Plant and Equipment Property Plant and Equipment (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Depreciation
$ 6,700,000 
$ 5,400,000 
$ 12,900,000 
$ 10,600,000 
 
Property and equipment, net
181,098,000 
 
181,098,000 
 
123,786,000 
non-communications [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
169,456,000 
 
169,456,000 
 
148,440,000 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
99,718,000 
 
99,718,000 
 
91,285,000 
Property and equipment, net
69,738,000 
 
69,738,000 
 
57,155,000 
non-communications [Member] |
Computer Equipment and Software [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
104,946,000 
 
104,946,000 
 
97,317,000 
non-communications [Member] |
Computer Equipment and Software [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
1 year 
 
 
non-communications [Member] |
Computer Equipment and Software [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
5 years 
 
 
non-communications [Member] |
Furniture and Fixtures [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
12,514,000 
 
12,514,000 
 
12,344,000 
non-communications [Member] |
Furniture and Fixtures [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
3 years 
 
 
non-communications [Member] |
Furniture and Fixtures [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
7 years 
 
 
non-communications [Member] |
Building [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
13,383,000 
 
13,383,000 
 
13,363,000 
non-communications [Member] |
Building [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
5 years 
 
 
non-communications [Member] |
Building [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
39 years 
 
 
non-communications [Member] |
Transportation Equipment [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
3,813,000 
 
3,813,000 
 
3,809,000 
non-communications [Member] |
Transportation Equipment [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
4 years 
 
 
non-communications [Member] |
Transportation Equipment [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
10 years 
 
 
non-communications [Member] |
Leasehold Improvements [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
3,627,000 
 
3,627,000 
 
3,579,000 
non-communications [Member] |
Leasehold Improvements [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
5 years 
 
 
non-communications [Member] |
Leasehold Improvements [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
20 years 
 
 
non-communications [Member] |
Land [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
1,682,000 
 
1,682,000 
 
1,682,000 
non-communications [Member] |
Construction in Progress [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
29,491,000 
 
29,491,000 
 
16,346,000 
Communications [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
120,308,000 
 
120,308,000 
 
71,297,000 
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment
8,948,000 
 
8,948,000 
 
4,666,000 
Property and equipment, net
111,360,000 
 
111,360,000 
 
66,631,000 
Communications [Member] |
Computer Equipment and Software [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
3,048,000 
 
3,048,000 
 
2,026,000 
Communications [Member] |
Computer Equipment and Software [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
1 year 
 
 
Communications [Member] |
Computer Equipment and Software [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
5 years 
 
 
Communications [Member] |
Transportation Equipment [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
4,620,000 
 
4,620,000 
 
2,966,000 
Communications [Member] |
Transportation Equipment [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
4 years 
 
 
Communications [Member] |
Transportation Equipment [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
10 years 
 
 
Communications [Member] |
Land [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
70,000 
 
70,000 
 
70,000 
Communications [Member] |
Construction in Progress [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
29,726,000 
 
29,726,000 
 
12,537,000 
Communications [Member] |
network plant and fiber [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
64,337,000 
 
64,337,000 
 
40,844,000 
Communications [Member] |
network plant and fiber [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
5 years 
 
 
Communications [Member] |
network plant and fiber [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
15 years 
 
 
Communications [Member] |
central office [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
8,115,000 
 
8,115,000 
 
6,448,000 
Communications [Member] |
central office [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
5 years 
 
 
Communications [Member] |
central office [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
15 years 
 
 
Communications [Member] |
Customer located property [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
8,811,000 
 
8,811,000 
 
5,138,000 
Communications [Member] |
Customer located property [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
5 years 
 
 
Communications [Member] |
Customer located property [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
10 years 
 
 
Communications [Member] |
Other Capitalized Property Plant and Equipment [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Gross
$ 1,581,000 
 
$ 1,581,000 
 
$ 1,268,000 
Communications [Member] |
Other Capitalized Property Plant and Equipment [Member] |
Minimum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
1 year 
 
 
Communications [Member] |
Other Capitalized Property Plant and Equipment [Member] |
Maximum [Member]
 
 
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
 
 
Property, Plant and Equipment, Useful Life
 
 
39 years 
 
 
Earnings per Common Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
Net income attributable to Nelnet, Inc.
$ 28,737 
$ 26,150 
$ 78,763 
$ 74,111 
Weighted average common shares outstanding - basic and diluted (in shares)
42,326,540 
42,635,700 
42,309,295 
42,861,896 
Earnings per share - basic and diluted
$ 0.68 
$ 0.61 
$ 1.86 
$ 1.73 
Common shareholders [Member]
 
 
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Net income attributable to Nelnet, Inc.
28,457 
25,879 
77,969 
73,334 
Weighted average common shares outstanding - basic and diluted (in shares)
41,913,990 
42,193,769 
41,882,702 
42,412,287 
Earnings per share - basic and diluted
$ 0.68 
$ 0.61 
$ 1.86 
$ 1.73 
Unvested restricted stock shareholders [Member]
 
 
 
 
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items]
 
 
 
 
Net income attributable to Nelnet, Inc.
$ 280 
$ 271 
$ 794 
$ 777 
Weighted average common shares outstanding - basic and diluted (in shares)
412,550 
441,931 
426,593 
449,609 
Earnings per share - basic and diluted
$ 0.68 
$ 0.61 
$ 1.86 
$ 1.73 
Segment Reporting (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Dec. 31, 2016
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
$ 193,077 
$ 186,252 
$ 376,901 
$ 378,269 
 
Interest expense
113,236 
94,052 
220,135 
184,460 
 
Net interest income
79,841 
92,200 
156,766 
193,809 
 
Less provision for loan losses
(2,000)
(2,000)
(3,000)
(4,500)
 
Net interest income (loss) after provision for loan losses
77,841 
90,200 
153,766 
189,309 
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
56,899 
54,402 
111,128 
106,732 
 
Intersegment servicing revenue
 
Tuition payment processing, school information, and campus commerce revenue
34,224 
30,483 
77,844 
69,140 
 
Communications revenue
5,719 
4,478 
10,826 
8,824 
 
Enrollment services revenue
4,326 
 
Gain from debt repurchases
442 
5,421 
101 
 
Derivative settlements, net
(363)
(5,495)
(1,741)
(12,031)
 
Derivative market value and foreign currency transaction adjustments, net
(27,547)
(35,207)
(31,000)
(57,361)
 
Other income
12,485 
9,765 
25,118 
23,559 
 
Total other income
81,859 
58,426 
197,596 
143,290 
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
74,628 
60,923 
146,491 
124,165 
 
Depreciation and amortization
9,038 
8,183 
17,636 
15,823 
 
Loan servicing fees
5,620 
7,216 
11,645 
14,144 
 
Cost to provide communications services
2,203 
1,681 
4,157 
3,384 
 
Cost to provide enrollment services
 
 
3,623 
 
Other expenses
27,528 
29,409 
54,075 
57,783 
 
Intersegment expenses, net
 
Total operating expenses
119,017 
107,412 
234,004 
218,922 
 
Income (loss) before income taxes
40,683 
41,214 
117,358 
113,677 
 
Income tax (expense) benefit
(16,032)
(15,036)
(44,787)
(39,469)
 
Net income (loss)
24,651 
26,178 
72,571 
74,208 
 
Net Income (Loss) Attributable to noncontrolling interests
4,086 
(28)
6,192 
(97)
 
Net income (loss) attributable to Nelnet, Inc.
28,737 
26,150 
78,763 
74,111 
 
Total assets
25,323,087 
28,715,798 
25,323,087 
28,715,798 
27,180,108 
Loan Systems and Servicing [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
120 
22 
214 
43 
 
Interest expense
 
Net interest income
120 
22 
214 
43 
 
Less provision for loan losses
 
Net interest income (loss) after provision for loan losses
120 
22 
214 
43 
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
56,899 
54,402 
111,128 
106,732 
 
Intersegment servicing revenue
9,952 
11,408 
20,275 
23,415 
 
Tuition payment processing, school information, and campus commerce revenue
 
Communications revenue
 
Enrollment services revenue
 
 
 
Gain from debt repurchases
 
Derivative settlements, net
 
Derivative market value and foreign currency transaction adjustments, net
 
Other income
 
Total other income
66,851 
65,810 
131,403 
130,147 
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
40,506 
31,380 
78,497 
64,346 
 
Depreciation and amortization
546 
445 
1,095 
883 
 
Loan servicing fees
 
Cost to provide communications services
 
Cost to provide enrollment services
 
 
 
Other expenses
8,879 
11,380 
18,015 
22,850 
 
Intersegment expenses, net
8,324 
6,102 
15,722 
12,343 
 
Total operating expenses
58,255 
49,307 
113,329 
100,422 
 
Income (loss) before income taxes
8,716 
16,525 
18,288 
29,768 
 
Income tax (expense) benefit
(4,918)
(6,280)
(9,473)
(11,312)
 
Net income (loss)
3,798 
10,245 
8,815 
18,456 
 
Net Income (Loss) Attributable to noncontrolling interests
4,226 
6,641 
 
Net income (loss) attributable to Nelnet, Inc.
8,024 
10,245 
15,456 
18,456 
 
Total assets
99,841 
71,403 
99,841 
71,403 
 
Tuition Payment Processing and Campus Commerce [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
 
Interest expense
 
Net interest income
 
Less provision for loan losses
 
Net interest income (loss) after provision for loan losses
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
 
Intersegment servicing revenue
 
Tuition payment processing, school information, and campus commerce revenue
34,224 
30,483 
77,844 
69,140 
 
Communications revenue
 
Enrollment services revenue
 
 
 
Gain from debt repurchases
 
Derivative settlements, net
 
Derivative market value and foreign currency transaction adjustments, net
 
Other income
 
Total other income
34,224 
30,483 
77,844 
69,140 
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
16,901 
15,444 
33,553 
29,880 
 
Depreciation and amortization
2,346 
2,511 
4,737 
4,782 
 
Loan servicing fees
 
Cost to provide communications services
 
Cost to provide enrollment services
 
 
 
Other expenses
4,853 
4,815 
9,847 
8,973 
 
Intersegment expenses, net
2,136 
1,562 
4,210 
3,074 
 
Total operating expenses
26,236 
24,332 
52,347 
46,709 
 
Income (loss) before income taxes
7,991 
6,154 
25,502 
22,436 
 
Income tax (expense) benefit
(3,037)
(2,338)
(9,690)
(8,526)
 
Net income (loss)
4,954 
3,816 
15,812 
13,910 
 
Net Income (Loss) Attributable to noncontrolling interests
 
Net income (loss) attributable to Nelnet, Inc.
4,954 
3,816 
15,812 
13,910 
 
Total assets
230,145 
230,308 
230,145 
230,308 
 
Communications [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
 
Interest expense
1,104 
205 
1,816 
352 
 
Net interest income
(1,103)
(205)
(1,815)
(352)
 
Less provision for loan losses
 
Net interest income (loss) after provision for loan losses
(1,103)
(205)
(1,815)
(352)
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
 
Intersegment servicing revenue
 
Tuition payment processing, school information, and campus commerce revenue
 
Communications revenue
5,719 
4,478 
10,826 
8,824 
 
Enrollment services revenue
 
 
 
Gain from debt repurchases
 
Derivative settlements, net
 
Derivative market value and foreign currency transaction adjustments, net
 
Other income
 
Total other income
5,719 
4,478 
10,826 
8,824 
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
3,411 
1,377 
6,390 
2,467 
 
Depreciation and amortization
2,600 
1,378 
4,735 
2,507 
 
Loan servicing fees
 
Cost to provide communications services
2,203 
1,681 
4,157 
3,384 
 
Cost to provide enrollment services
 
 
 
Other expenses
1,772 
813 
3,144 
1,566 
 
Intersegment expenses, net
496 
187 
1,002 
331 
 
Total operating expenses
10,482 
5,436 
19,428 
10,255 
 
Income (loss) before income taxes
(5,866)
(1,163)
(10,417)
(1,783)
 
Income tax (expense) benefit
2,229 
442 
3,959 
678 
 
Net income (loss)
(3,637)
(721)
(6,458)
(1,105)
 
Net Income (Loss) Attributable to noncontrolling interests
 
Net income (loss) attributable to Nelnet, Inc.
(3,637)
(721)
(6,458)
(1,105)
 
Total assets
150,809 
78,578 
150,809 
78,578 
 
Asset Generation and Management [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
191,367 
184,966 
373,692 
375,689 
 
Interest expense
113,073 
92,769 
219,824 
182,647 
 
Net interest income
78,294 
92,197 
153,868 
193,042 
 
Less provision for loan losses
(2,000)
(2,000)
(3,000)
(4,500)
 
Net interest income (loss) after provision for loan losses
76,294 
90,197 
150,868 
188,542 
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
 
Intersegment servicing revenue
 
Tuition payment processing, school information, and campus commerce revenue
 
Communications revenue
 
Enrollment services revenue
 
 
 
Gain from debt repurchases
442 
981 
101 
 
Derivative settlements, net
(165)
(5,264)
(1,339)
(11,568)
 
Derivative market value and foreign currency transaction adjustments, net
(27,412)
(31,411)
(30,823)
(51,308)
 
Other income
3,057 
3,834 
6,399 
8,097 
 
Total other income
(24,078)
(32,841)
(24,782)
(54,678)
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
363 
499 
763 
1,018 
 
Depreciation and amortization
 
Loan servicing fees
5,620 
7,216 
11,645 
14,144 
 
Cost to provide communications services
 
Cost to provide enrollment services
 
 
 
Other expenses
1,827 
1,481 
2,819 
2,997 
 
Intersegment expenses, net
10,043 
11,539 
20,455 
23,646 
 
Total operating expenses
17,853 
20,735 
35,682 
41,805 
 
Income (loss) before income taxes
34,363 
36,621 
90,404 
92,059 
 
Income tax (expense) benefit
(13,057)
(13,916)
(34,354)
(34,983)
 
Net income (loss)
21,306 
22,705 
56,050 
57,076 
 
Net Income (Loss) Attributable to noncontrolling interests
 
Net income (loss) attributable to Nelnet, Inc.
21,306 
22,705 
56,050 
57,076 
 
Total assets
24,433,881 
27,856,952 
24,433,881 
27,856,952 
 
Corporate and Other Activities [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
3,362 
2,064 
6,123 
4,157 
 
Interest expense
835 
1,881 
1,630 
3,087 
 
Net interest income
2,527 
183 
4,493 
1,070 
 
Less provision for loan losses
 
Net interest income (loss) after provision for loan losses
2,527 
183 
4,493 
1,070 
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
 
Intersegment servicing revenue
 
Tuition payment processing, school information, and campus commerce revenue
 
Communications revenue
 
Enrollment services revenue
 
 
4,326 
 
Gain from debt repurchases
4,440 
 
Derivative settlements, net
(198)
(231)
(402)
(463)
 
Derivative market value and foreign currency transaction adjustments, net
(135)
(3,797)
(177)
(6,053)
 
Other income
9,429 
5,931 
18,719 
15,462 
 
Total other income
9,096 
1,903 
22,580 
13,272 
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
13,447 
12,222 
27,287 
26,454 
 
Depreciation and amortization
3,547 
3,848 
7,069 
7,650 
 
Loan servicing fees
 
Cost to provide communications services
 
Cost to provide enrollment services
 
 
3,623 
 
Other expenses
10,195 
10,920 
20,249 
21,397 
 
Intersegment expenses, net
(11,046)
(7,981)
(21,114)
(15,978)
 
Total operating expenses
16,143 
19,009 
33,491 
43,146 
 
Income (loss) before income taxes
(4,520)
(16,923)
(6,418)
(28,804)
 
Income tax (expense) benefit
2,751 
7,057 
4,772 
14,674 
 
Net income (loss)
(1,769)
(9,866)
(1,646)
(14,130)
 
Net Income (Loss) Attributable to noncontrolling interests
(141)
(28)
(450)
(97)
 
Net income (loss) attributable to Nelnet, Inc.
(1,910)
(9,894)
(2,096)
(14,227)
 
Total assets
684,840 
730,122 
684,840 
730,122 
 
Intersegment Eliminations [Member]
 
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
 
Total interest income
(1,776)
(802)
(3,135)
(1,625)
 
Interest expense
(1,776)
(802)
(3,135)
(1,625)
 
Net interest income
 
Less provision for loan losses
 
Net interest income (loss) after provision for loan losses
 
Other income:
 
 
 
 
 
Loan systems and servicing revenue
 
Intersegment servicing revenue
(9,952)
(11,408)
(20,275)
(23,415)
 
Tuition payment processing, school information, and campus commerce revenue
 
Communications revenue
 
Enrollment services revenue
 
 
 
Gain from debt repurchases
 
Derivative settlements, net
 
Derivative market value and foreign currency transaction adjustments, net
 
Other income
 
Total other income
(9,952)
(11,408)
(20,275)
(23,415)
 
Operating expenses:
 
 
 
 
 
Salaries and benefits
 
Depreciation and amortization
 
Loan servicing fees
 
Cost to provide communications services
 
Cost to provide enrollment services
 
 
 
Other expenses
 
Intersegment expenses, net
(9,952)
(11,408)
(20,275)
(23,415)
 
Total operating expenses
(9,952)
(11,408)
(20,275)
(23,415)
 
Income (loss) before income taxes
 
Income tax (expense) benefit
 
Net income (loss)
 
Net Income (Loss) Attributable to noncontrolling interests
 
Net income (loss) attributable to Nelnet, Inc.
 
Total assets
$ (276,429)
$ (251,565)
$ (276,429)
$ (251,565)
 
Major Customer (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2016
Jun. 30, 2017
Jun. 30, 2016
Concentration Risk [Line Items]
 
 
 
 
Concentration Risk, Customer
Department of Education 
Department of Education 
Department of Education 
Department of Education 
Concentration Risk Dollar Value [Member]
 
 
 
 
Concentration Risk [Line Items]
 
 
 
 
Loan systems and servicing revenue
$ 39.8 
$ 37.1 
$ 78.8 
$ 72.3 
GreatNet [Member]
 
 
 
 
Concentration Risk [Line Items]
 
 
 
 
Noncontrolling Interest, Ownership Percentage by Parent
50.00% 
 
50.00% 
 
Related Parties (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Jun. 30, 2017
Union Bank and Trust Company
Consumer Loan
Jul. 7, 2017
Subsequent Event [Member]
Agile Sports Technologies, Inc.
Preferred Stock Investment In Hudl
Related Party Transaction [Line Items]
 
 
Loans purchased from related party
$ 4.9 
 
Additional investment in Hudl
 
$ 10.4 
Assets and Liabilities that are Measured at Fair Value (Details) (Fair Value, Measurements, Recurring [Member], USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
$ 117,174 
$ 106,593 
Fair value of derivative instruments
1,619 
87,531 
Total assets
118,793 
194,124 
Liabilities, Fair Value Disclosure [Abstract]
 
 
Fair value of derivative instruments
46,406 
77,826 
Total liabilities
46,406 
77,826 
Student loan asset-backed securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
114,267 
103,780 
Equity securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
2,793 
2,694 
Debt securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
114 
119 
Level 1 [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
2,907 
2,813 
Fair value of derivative instruments
Total assets
2,907 
2,813 
Liabilities, Fair Value Disclosure [Abstract]
 
 
Fair value of derivative instruments
Total liabilities
Level 1 [Member] |
Student loan asset-backed securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
Level 1 [Member] |
Equity securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
2,793 
2,694 
Level 1 [Member] |
Debt securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
114 
119 
Level 2 [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
114,267 
103,780 
Fair value of derivative instruments
1,619 
87,531 
Total assets
115,886 
191,311 
Liabilities, Fair Value Disclosure [Abstract]
 
 
Fair value of derivative instruments
46,406 
77,826 
Total liabilities
46,406 
77,826 
Level 2 [Member] |
Student loan asset-backed securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
114,267 
103,780 
Level 2 [Member] |
Equity securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
Level 2 [Member] |
Debt securities [Member]
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
Investments, Fair Value Disclosure
$ 0 
$ 0 
Fair Value of Financial Instruments (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2017
Dec. 31, 2016
Jun. 30, 2016
Dec. 31, 2015
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
Student loans receivable
$ 23,202,294 
$ 24,903,724 
 
 
Cash and cash equivalents
69,239 
69,654 
59,253 
63,529 
Restricted cash
780,141 
980,961 
 
 
Restricted cash - due to customers
136,900 
119,702 
 
 
Accrued interest receivable
395,734 
391,264 
 
 
Derivative instruments
1,619 
87,531 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
Bonds and notes payable
22,790,780 
24,668,490 
 
 
Accrued interest payable
47,064 
45,677 
 
 
Due to customers
136,900 
119,702 
 
 
Fair value of derivative instruments
46,406 
77,826 
 
 
Fair value [Member]
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
Student loans receivable
24,278,179 
25,653,581 
 
 
Cash and cash equivalents
69,239 
69,654 
 
 
Investments (available-for-sale and trading)
117,174 
106,593 
 
 
Notes Receivable
16,563 
17,031 
 
 
Loans receivable
25,502 
 
 
 
Restricted cash
 
980,961 
 
 
Restricted cash - due to customers
136,900 
119,702 
 
 
Accrued interest receivable
395,734 
391,264 
 
 
Derivative instruments
1,619 
87,531 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
Bonds and notes payable
22,744,128 
24,220,996 
 
 
Accrued interest payable
47,064 
45,677 
 
 
Due to customers
136,900 
119,702 
 
 
Fair value of derivative instruments
46,406 
77,826 
 
 
Fair value [Member] |
Level 1 [Member]
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
Student loans receivable
 
 
Cash and cash equivalents
69,239 
69,654 
 
 
Investments (available-for-sale and trading)
2,907 
2,813 
 
 
Notes Receivable
 
 
Loans receivable
 
 
 
Restricted cash
780,141 
980,961 
 
 
Restricted cash - due to customers
136,900 
119,702 
 
 
Accrued interest receivable
 
 
Derivative instruments
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
Bonds and notes payable
 
 
Accrued interest payable
 
 
Due to customers
136,900 
119,702 
 
 
Fair value of derivative instruments
 
 
Fair value [Member] |
Level 2 [Member]
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
Student loans receivable
 
 
Cash and cash equivalents
 
 
Investments (available-for-sale and trading)
114,267 
103,780 
 
 
Notes Receivable
16,563 
17,031 
 
 
Loans receivable
 
 
 
Restricted cash
 
 
Restricted cash - due to customers
 
 
Accrued interest receivable
395,734 
391,264 
 
 
Derivative instruments
1,619 
87,531 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
Bonds and notes payable
22,744,128 
24,220,996 
 
 
Accrued interest payable
47,064 
45,677 
 
 
Due to customers
 
 
Fair value of derivative instruments
46,406 
77,826 
 
 
Fair value [Member] |
Level 3 [Member]
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
Student loans receivable
24,278,179 
25,653,581 
 
 
Cash and cash equivalents
 
 
Investments (available-for-sale and trading)
 
 
Notes Receivable
 
 
Loans receivable
25,502 
 
 
 
Restricted cash
 
 
Restricted cash - due to customers
 
 
Accrued interest receivable
 
 
Derivative instruments
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
Bonds and notes payable
 
 
Accrued interest payable
 
 
Due to customers
 
 
Fair value of derivative instruments
 
 
Carrying value [Member]
 
 
 
 
Assets, Fair Value Disclosure [Abstract]
 
 
 
 
Student loans receivable
23,202,294 
24,903,724 
 
 
Cash and cash equivalents
69,239 
69,654 
 
 
Investments (available-for-sale and trading)
117,174 
106,593 
 
 
Notes Receivable
16,563 
17,031 
 
 
Loans receivable
24,502 
 
 
 
Restricted cash
780,141 
980,961 
 
 
Restricted cash - due to customers
136,900 
119,702 
 
 
Accrued interest receivable
395,734 
391,264 
 
 
Derivative instruments
1,619 
87,531 
 
 
Liabilities, Fair Value Disclosure [Abstract]
 
 
 
 
Bonds and notes payable
22,790,780 
24,668,490 
 
 
Accrued interest payable
47,064 
45,677 
 
 
Due to customers
136,900 
119,702 
 
 
Fair value of derivative instruments
$ 46,406 
$ 77,826