NELNET INC, 10-Q filed on 8/4/2016
Quarterly Report
Document and Entity Information Document (USD $)
6 Months Ended
Jun. 30, 2016
Jul. 31, 2016
Common Class A [Member]
Jul. 31, 2016
Common Class B [Member]
Document Information [Line Items]
 
 
 
Entity Registrant Name
NELNET INC 
 
 
Document Type
10-Q 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Common Stock, Shares Outstanding
 
31,021,028 
11,476,932 
Entity Public Float
$ 1,092,135,927 
 
 
Amendment Flag
false 
 
 
Entity Central Index Key
0001258602 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Document Period End Date
Jun. 30, 2016 
 
 
Document Fiscal Year Focus
2016 
 
 
Document Fiscal Period Focus
Q2 
 
 
Consolidated Balance Sheets (unaudited) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Assets:
 
 
Student loans receivable (net of allowance for loan losses)
$ 26,539,604 
$ 28,324,552 
Cash and cash equivalents:
 
 
Cash and cash equivalents - not held at a related party
9,225 
11,379 
Cash and cash equivalents - held at a related party
50,028 
52,150 
Total cash and cash equivalents
59,253 
63,529 
Investments and notes receivable
285,996 
303,681 
Restricted cash and investments
964,799 
832,624 
Restricted cash - due to customers
132,018 
144,771 
Accrued interest receivable
380,140 
383,825 
Accounts receivable (net of allowance for doubtful accounts)
41,964 
51,345 
Goodwill
147,312 
146,000 
Intangible assets, net
54,141 
51,062 
Property and equipment, net
96,079 
80,482 
Other assets
11,084 
8,583 
Fair value of derivative instruments
3,408 
28,690 
Total assets
28,715,798 
30,419,144 
Liabilities:
 
 
Bonds and notes payable
26,399,686 
28,105,921 
Accrued interest payable
39,926 
31,507 
Other liabilities
136,181 
169,906 
Due to customers
132,018 
144,771 
Fair value of derivative instruments
101,771 
74,881 
Total liabilities
26,809,582 
28,526,986 
Nelnet, Inc. shareholders' equity:
 
 
Preferred stock
Additional paid-in capital
4,601 
Retained earnings
1,894,551 
1,881,708 
Accumulated other comprehensive (loss) earnings
(2,277)
2,284 
Total Nelnet, Inc. shareholders' equity
1,897,300 
1,884,432 
Noncontrolling interest
8,916 
7,726 
Total equity
1,906,216 
1,892,158 
Total liabilities and equity
28,715,798 
30,419,144 
Common Class A [Member]
 
 
Nelnet, Inc. shareholders' equity:
 
 
Common stock
310 
325 
Total equity
310 
325 
Common Class B [Member]
 
 
Nelnet, Inc. shareholders' equity:
 
 
Common stock
115 
115 
Total equity
115 
115 
Variable Interest Entity, Primary Beneficiary [Member]
 
 
Assets:
 
 
Student loans receivable (net of allowance for loan losses)
26,735,698 
28,499,180 
Cash and cash equivalents:
 
 
Restricted cash and investments
851,389 
814,294 
Other assets
380,230 
384,230 
Liabilities:
 
 
Bonds and notes payable
26,660,478 
28,405,133 
Other liabilities
405,832 
353,607 
Fair value of derivative instruments
44,602 
64,080 
Equity:
 
 
Net assets of consolidated variable interest entities
$ 856,405 
$ 874,884 
Consolidated Balance Sheets (unaudited) (Parentheticals) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2016
Dec. 31, 2015
Allowance for loan losses
$ 48,753 
$ 50,498 
Allowance for doubtful accounts
$ 1,498 
$ 2,003 
Preferred stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Preferred stock, authorized shares
50,000,000 
50,000,000 
Preferred stock, issued shares
Preferred stock, outstanding shares
Common Class A [Member]
 
 
Par Value (in dollars per share)
$ 0.01 
$ 0.01 
Shares Authorized
600,000,000 
600,000,000 
Shares Issued
31,024,230 
32,476,528 
Shares Outstanding
31,024,230 
32,476,528 
Common Class B [Member]
 
 
Par Value (in dollars per share)
$ 0.01 
$ 0.01 
Shares Authorized
60,000,000 
60,000,000 
Shares Issued
11,476,932 
11,476,932 
Shares Outstanding
11,476,932 
11,476,932 
Consolidated Statements of Income (unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Interest income:
 
 
 
 
Loan interest
$ 184,067 
$ 175,835 
$ 374,055 
$ 347,779 
Investment interest
2,185 
1,887 
4,214 
4,092 
Total interest income
186,252 
177,722 1
378,269 
351,871 1
Interest expense:
 
 
 
 
Interest on bonds and notes payable
94,052 
72,626 1
184,460 
144,180 1
Net interest income
92,200 
105,096 1
193,809 
207,691 1
Less provision for loan losses
2,000 
2,150 1
4,500 
4,150 1
Net interest income after provision for loan losses
90,200 
102,946 1
189,309 
203,541 1
Other income:
 
 
 
 
Loan and guaranty servicing revenue
54,402 
63,833 1
106,732 
121,644 1
Tuition payment processing, school information, and campus commerce revenue
30,483 
27,686 1
69,140 
62,366 1
Communications revenue
4,478 
8,824 
Enrollment services revenue
12,680 1
4,326 
26,053 1
Other income
9,765 
11,985 1
23,559 
23,393 1
Gain on sale of loans and debt repurchases
1,515 1
101 
4,390 1
Derivative market value and foreign currency adjustments and derivative settlements, net
(40,702)
6,502 
(69,392)
3,424 
Total other income
58,426 
124,201 1
143,290 
241,270 1
Operating expenses:
 
 
 
 
Salaries and benefits
60,923 
58,787 1
124,165 
119,837 1
Depreciation and amortization
8,183 
6,501 1
15,823 
12,163 1
Loan servicing fees
7,216 
7,420 1
14,144 
15,036 1
Cost to provide communications services
1,681 
3,384 
Cost to provide enrollment services
10,395 
3,623 
21,194 
Other expenses
29,409 
32,725 1
57,783 
62,826 1
Total operating expenses
107,412 
115,828 1
218,922 
231,056 1
Income before income taxes
41,214 
111,319 
113,677 
213,755 
Income tax expense
(15,036)
(40,356)1
(39,469)
(77,986)1
Net income
26,178 
70,963 1
74,208 
135,769 1
Net income attributable to noncontrolling interests
28 
54 1
97 
95 1
Net income attributable to Nelnet, Inc.
$ 26,150 
$ 70,909 1
$ 74,111 
$ 135,674 1
Earnings per common share:
 
 
 
 
Net income attributable to Nelnet, Inc. shareholders - basic and diluted
$ 0.61 
$ 1.54 
$ 1.73 
$ 2.94 
Weighted average common shares outstanding - basic and diluted
42,635,700 
45,946,415 
42,861,896 
46,127,207 
Consolidated Statements of Comprehensive Income (unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Net income
$ 26,178 
$ 70,963 1
$ 74,208 
$ 135,769 1
Available-for-sale securities:
 
 
 
 
Unrealized holding losses arising during period, net
(6,138)
(436)
(7,648)
(649)
Reclassification adjustment for losses (gains) recognized in net income, net
277 
(2,093)
409 
(2,297)
Income tax effect
2,168 
940 
2,678 
1,094 
Total other comprehensive loss
(3,693)
(1,589)
(4,561)
(1,852)
Comprehensive income
22,485 
69,374 
69,647 
133,917 
Comprehensive income attributable to noncontrolling interests
28 
54 
97 
95 
Comprehensive income attributable to Nelnet, Inc.
$ 22,457 
$ 69,320 
$ 69,550 
$ 133,822 
Consolidated Statements of Shareholders' Equity (unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Preferred Stock [Member]
Common Class A [Member]
Common Class B [Member]
Additional paid-in capital [Member]
Retained earnings [Member]
Accumulated other comprehensive earnings [Member]
Noncontrolling interest [Member]
Balance at Mar. 31, 2015
$ 1,781,493 
$ 0 
$ 347 
$ 115 
$ 13,177 
$ 1,762,711 
$ 4,872 
$ 271 
Balance (in Shares) at Mar. 31, 2015
 
34,713,065 
11,486,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interest
19 
 
 
 
 
 
 
19 
Net income
70,963 1
 
 
 
 
70,909 
 
54 
Other comprehensive loss
(1,589)
 
 
 
 
 
(1,589)
 
Distribution to noncontrolling interests
(44)
 
 
 
 
 
 
(44)
Cash dividend on Class A and Class B common stock
(4,559)
 
 
 
 
(4,559)
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
9,616 
 
 
 
 
Issuance of common stock, net of forfeitures
945 
 
945 
 
 
 
Compensation expense for stock based awards
1,353 
 
 
 
1,353 
 
 
 
Repurchase of common stock (in Shares)
 
 
(998,210)
 
 
 
 
Repurchase of common stock
(43,089)
 
(10)
(15,475)
(27,604)
 
 
Balance at Jun. 30, 2015
1,805,492 
337 
115 
1,801,457 
3,283 
300 
Balance (in Shares) at Jun. 30, 2015
 
33,724,471 
11,486,932 
 
 
 
 
Balance at Dec. 31, 2014
1,725,678 
348 
115 
17,290 
1,702,560 
5,135 
230 
Balance (in Shares) at Dec. 31, 2014
 
34,756,384 
11,486,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interest
19 
 
 
 
 
 
 
19 
Net income
135,769 1
 
 
 
 
135,674 
 
95 
Other comprehensive loss
(1,852)
 
 
 
 
 
(1,852)
 
Distribution to noncontrolling interests
(44)
 
 
 
 
 
 
(44)
Cash dividend on Class A and Class B common stock
(9,173)
 
 
 
 
(9,173)
 
 
Issuance of common stock, net of forfeitures (in Shares)
 
 
142,095 
 
 
 
 
Issuance of common stock, net of forfeitures
3,412 
 
3,411 
 
 
 
Compensation expense for stock based awards
2,711 
 
 
 
2,711 
 
 
 
Repurchase of common stock (in Shares)
 
 
(1,174,008)
 
 
 
 
Repurchase of common stock
(51,028)
 
(12)
(23,412)
(27,604)
 
 
Balance at Jun. 30, 2015
1,805,492 
337 
115 
1,801,457 
3,283 
300 
Balance (in Shares) at Jun. 30, 2015
 
33,724,471 
11,486,932 
 
 
 
 
Balance at Dec. 31, 2015
1,892,158 
325 
115 
1,881,708 
2,284 
7,726 
Balance (in Shares) at Dec. 31, 2015
 
32,476,528 
11,476,932 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
Issuance of noncontrolling interest
1,312 
 
 
 
 
 
 
1,312 
Net income
74,208 
 
 
 
 
74,111 
 
97 
Other comprehensive loss
(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 Mar. 31, 2016
1,886,926 
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 interest
338 
 
 
 
 
 
 
338 
Net income
26,178 
 
 
 
 
26,150 
 
28 
Other comprehensive loss
(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 
$ 0 
$ 310 
$ 115 
$ 4,601 
$ 1,894,551 
$ (2,277)
$ 8,916 
Balance (in Shares) at Jun. 30, 2016
 
31,024,230 
11,476,932 
 
 
 
 
Consolidated Statements of Shareholders' Equity (unaudited) (Parentheticals)
3 Months Ended 6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Jun. 30, 2016
Jun. 30, 2015
Common Class A [Member]
 
 
 
 
Dividends paid per common share
$ 0.12 
$ 0.10 
$ 0.24 
$ 0.20 
Common Class B [Member]
 
 
 
 
Dividends paid per common share
$ 0.12 
$ 0.10 
$ 0.24 
$ 0.20 
Consolidated Statements of Cash Flows (unaudited) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2016
Jun. 30, 2015
Net income attributable to Nelnet, Inc.
$ 74,111 
$ 135,674 1
Net income attributable to noncontrolling interests
97 
95 1
Net income
74,208 
135,769 1
Adjustments to reconcile net income to net cash provided by operating activities, net of acquisitions:
 
 
Depreciation and amortization, including debt discounts and student loan premiums and deferred origination costs
62,298 
60,191 
Student loan discount accretion
(21,524)
(21,506)
Provision for loan losses
4,500 
4,150 1
Derivative market value adjustment
48,649 
19,457 
Foreign currency transaction adjustment
8,712 
(33,538)
Proceeds from termination of derivative instruments
3,523 
51,947 
Increase (Decrease) in Financial Instruments Used in Operating Activities
585 
Gain on sale of loans
(351)
Gain from debt repurchases
(101)
(4,039)
Loss (gain) from sales of available-for-sale securities, net
409 
(2,297)
(Payments for) proceeds from (purchases) sales of trading securities, net
(235)
(11,697)
Deferred income tax (benefit) expense
(20,260)
3,119 
Other
6,069 
6,376 
Decrease (increase) in accrued interest receivable
3,685 
(743)
Decrease (increase) in accounts receivable
9,462 
(10,341)
(Increase) decrease in other assets
(2,579)
(1,967)
Increase in accrued interest payable
8,419 
2,566 
Decrease in other liabilities
(10,006)
(4,526)
Net cash provided by operating activities
175,229 
191,985 
Cash flows from investing activities, net of acquisitions:
 
 
Purchases of student loans and student loan residual interests
(183,375)
(1,637,650)
Net proceeds from student loan repayments, claims, capitalized interest, participations, and other
1,927,319 
1,953,437 
Proceeds from sale of student loans
44,738 
3,996 
Purchases of available-for-sale securities
(51,735)
(5,550)
Proceeds from sales of available-for-sale securities
58,232 
47,951 
Purchases of investments and issuance of notes receivable
(10,222)
(53,770)
Proceeds from investments and notes receivable
5,360 
8,824 
Purchases of property and equipment, net
(29,577)
(9,519)
(Increase) decrease in restricted cash and investments, net
(131,325)
16,532 
Net cash provided by investing activities
1,629,415 
324,251 
Cash flows from financing activities:
 
 
Payments on bonds and notes payable
(1,972,880)
(2,629,565)
Proceeds from issuance of bonds and notes payable
226,194 
2,233,630 
Payments of debt issuance costs
(1,084)
(8,707)
Dividends paid
(10,192)
(9,173)
Repurchases of common stock
(52,468)
(51,028)
Proceeds from issuance of common stock
417 
431 
Issuance of noncontrolling interests
1,312 
19 
Distribution to noncontrolling interests
(219)
(44)
Net cash used in financing activities
(1,808,920)
(464,437)
Net (decrease) increase in cash and cash equivalents
(4,276)
51,799 
Cash and cash equivalents, beginning of period
63,529 
130,481 
Cash and cash equivalents, end of period
59,253 
182,280 
Cash disbursements made for:
 
 
Interest
142,446 
108,436 
Income taxes paid, net of refunds
55,988 
67,211 
Noncash activity:
 
 
Noncash or Part Noncash Acquisition, Value of Assets Acquired
517,845 
Noncash or Part Noncash Acquisition, Other Liabilities Assumed
$ 0 
$ 451,845 
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, 2016 and for the three and six months ended June 30, 2016 and 2015 have been prepared on the same basis as the audited consolidated financial statements for the year ended December 31, 2015 and, in the opinion of the Company’s management, the unaudited consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of results of operations for the interim periods presented. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Operating results for the three and six months ended June 30, 2016 are not necessarily indicative of the results for the year ending December 31, 2016. The unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the "2015 Annual Report").

Reclassifications

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

In April 2015, the Financial Accounting Standards Board ("FASB") issued accounting guidance regarding the presentation of debt issuance costs. The new guidance requires that entities present debt issuance costs related to a debt liability as a direct deduction from that liability on the balance sheet. This guidance became effective for the Company beginning January 1, 2016. As a result of this standard, the Company reclassified its debt issuance costs, which were previously included in "other assets" on the consolidated balance sheet, to "bonds and notes payable."

On February 1, 2016, the Company sold 100 percent of the membership interests in Sparkroom LLC, which includes the majority of the Company's inquiry management products and services within Nelnet Enrollment Solutions. The Company retained the digital marketing and content solution products and services under the brand name Peterson's within the Nelnet Enrollment Solutions business, which include test preparation study guides, school directories and databases, career exploration guides, on-line courses, scholarship search and selection data, career planning information and guides, and on-line information about colleges and universities. The Company reclassified the revenue and cost of goods sold attributable to the Peterson's products and services from "enrollment services revenue" and "cost to provide enrollment services" to "other income" and "other expenses," respectively, on the consolidated statements of income. After this reclassification, "enrollment services revenue" and "cost to provide enrollment services" include the operating results of the products and services sold as part of the Sparkroom disposition for all periods presented. These reclassifications had no effect on consolidated net income.

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

Student loans receivable consisted of the following:
 
As of
 
As of
 
June 30, 2016
 
December 31, 2015
Federally insured loans:
 
 
 
Stafford and other
$
5,629,034

 
6,202,064

Consolidation
20,837,356

 
22,086,043

Total
26,466,390

 
28,288,107

Private education loans
288,170

 
267,642

 
26,754,560

 
28,555,749

Loan discount, net of unamortized loan premiums and deferred origination costs (a)
(166,203
)
 
(180,699
)
Allowance for loan losses – federally insured loans
(33,224
)
 
(35,490
)
Allowance for loan losses – private education loans
(15,529
)
 
(15,008
)
 
$
26,539,604

 
28,324,552



(a)
As of June 30, 2016 and December 31, 2015, "loan discount, net of unamortized loan premiums and deferred origination costs" included $26.2 million and $33.0 million, respectively, of non-accretable discount associated with purchased loans of $10.1 billion and $10.8 billion, respectively.

Private Education Loans

In February 2015, the Company entered into an agreement with CommonBond, Inc. ("CommonBond"), a student lending company that provides private education loans to graduate students, under which the Company committed to purchase private education loans for a period of 18 months, with the maximum purchase obligation limited to $200.0 million. As of June 30, 2016, the Company had purchased $190.1 million in private education loans from CommonBond and has satisfied its commitment under this agreement.

Activity in the Allowance for Loan Losses

The provision for loan losses represents the periodic expense of maintaining an allowance sufficient to absorb losses, net of recoveries, inherent in the portfolio of student loans. Activity in the allowance for loan losses is shown below.
 
Three months ended June 30,
 
Six months ended June 30,
 
2016
 
2015
 
2016
 
2015
Balance at beginning of period
$
50,084

 
51,161

 
50,498

 
48,900

Provision for loan losses:
 
 
 
 
 

 
 

Federally insured loans
2,000

 
2,000

 
4,000

 
4,000

Private education loans

 
150

 
500

 
150

Total provision for loan losses
2,000

 
2,150

 
4,500

 
4,150

Charge-offs:
 

 
 

 
 

 
 

Federally insured loans
(3,217
)
 
(3,259
)
 
(6,266
)
 
(6,408
)
Private education loans
(514
)
 
(446
)
 
(915
)
 
(1,122
)
Total charge-offs
(3,731
)
 
(3,705
)
 
(7,181
)
 
(7,530
)
Recoveries - private education loans
250

 
238

 
526

 
492

Purchase (sale) of federally insured and private education loans, net
100

 

 
260

 
(230
)
Transfer from repurchase obligation related to private education loans repurchased, net
50

 
180

 
150

 
4,242

Balance at end of period
$
48,753

 
50,024

 
48,753

 
50,024

 
 
 
 
 
 
 
 
Allocation of the allowance for loan losses:
 
 
 

 
 

 
 

Federally insured loans
$
33,224

 
36,762

 
33,224

 
36,762

Private education loans
15,529

 
13,262

 
15,529

 
13,262

Total allowance for loan losses
$
48,753

 
50,024

 
48,753

 
50,024


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, 2016
 
As of December 31, 2015
 
As of June 30, 2015
Federally insured loans:
 
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
1,936,064

 
 
 
$
2,292,941

 
 
 
$
2,634,088

 
 
Loans in forbearance
2,672,241

 
 
 
2,979,357

 
 
 
3,118,774

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
18,957,457

 
86.7
%
 
19,447,541

 
84.4
%
 
19,055,994

 
85.2
%
Loans delinquent 31-60 days
828,885

 
3.8

 
1,028,396

 
4.5

 
950,055

 
4.2

Loans delinquent 61-90 days
482,379

 
2.2

 
566,953

 
2.5

 
612,657

 
2.7

Loans delinquent 91-120 days
320,213

 
1.5

 
415,747

 
1.8

 
355,636

 
1.6

Loans delinquent 121-270 days
918,788

 
4.2

 
1,166,940

 
5.1

 
1,051,843

 
4.7

Loans delinquent 271 days or greater
350,363

 
1.6

 
390,232

 
1.7

 
359,601

 
1.6

Total loans in repayment
21,858,085

 
100.0
%
 
23,015,809

 
100.0
%
 
22,385,786

 
100.0
%
Total federally insured loans
$
26,466,390

 
 

 
$
28,288,107

 
 

 
$
28,138,648

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Private education loans:
 
 
 
 
 
 
 
 
 
 
Loans in-school/grace/deferment
$
54,597

 
 
 
$
30,795

 
 
 
$
5,268

 
 
Loans in forbearance
1,610

 
 
 
350

 
 
 
142

 
 
Loans in repayment status:
 
 
 
 
 
 
 
 
 
 
 
Loans current
225,585

 
97.2
%
 
228,464

 
96.7
%
 
161,355

 
95.0
%
Loans delinquent 31-60 days
1,361

 
0.6

 
1,771

 
0.7

 
1,407

 
0.8

Loans delinquent 61-90 days
929

 
0.4

 
1,283

 
0.5

 
1,647

 
1.0

Loans delinquent 91 days or greater
4,088

 
1.8

 
4,979

 
2.1

 
5,383

 
3.2

Total loans in repayment
231,963

 
100.0
%
 
236,497

 
100.0
%
 
169,792

 
100.0
%
Total private education loans
$
288,170

 
 

 
$
267,642

 
 

 
$
175,202

 
 
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, 2016
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
23,418,478

 
0.30% - 6.90%
 
8/26/19 - 8/26/52
Bonds and notes based on auction
1,158,415

 
1.26% - 2.21%
 
3/22/32 - 11/26/46
Total variable-rate bonds and notes
24,576,893

 
 
 
 
FFELP warehouse facilities
1,811,708

 
0.46% - 0.80%
 
7/9/18 - 4/26/19
Private education loan warehouse facility
221,114

 
0.81%
 
4/28/17
Unsecured line of credit
105,000

 
1.94% - 1.95%
 
10/30/20
Unsecured debt - Junior Subordinated Hybrid Securities
57,184

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

 
1.97% - 3.38%
 
10/31/16 - 12/15/45
 
26,865,254

 
 
 
 
Discount on bonds and notes payable and debt issuance costs, net
(465,568
)
 
 
 
 
Total
$
26,399,686

 
 
 
 
 
As of December 31, 2015
 
Carrying
amount
 
Interest rate
range
 
Final maturity
Variable-rate bonds and notes issued in asset-backed securitizations:
 
 
 
 
 
Bonds and notes based on indices
$
25,155,336

 
0.05% - 6.90%
 
8/26/19 - 8/26/52
Bonds and notes based on auction
1,160,365

 
0.88% - 2.17%
 
3/22/32 - 11/26/46
Total variable-rate bonds and notes
26,315,701

 
 
 
 
FFELP warehouse facilities
1,855,907

 
0.27% - 0.56%
 
4/29/18 - 12/14/18
Private education loan warehouse facility
181,184

 
0.57%
 
12/26/16
Unsecured line of credit
100,000

 
1.79% - 1.92%
 
10/30/20
Unsecured debt - Junior Subordinated Hybrid Securities
57,184

 
3.99%
 
9/15/61
Other borrowings
93,355

 
1.93% - 3.38%
 
10/31/16 - 12/15/45
 
28,603,331

 
 
 
 
Discount on bonds and notes payable and debt issuance costs, net
(497,410
)
 
 
 
 
Total
$
28,105,921

 
 
 
 


FFELP Warehouse Facilities

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

As of June 30, 2016, the Company had three FFELP warehouse facilities as summarized below.
 
 
NFSLW-I (a)
 
NHELP-II
 
NHELP-III
 
 
Total
Maximum financing amount
 
$
875,000

 
500,000

 
750,000

 
 
2,125,000

Amount outstanding
 
844,087

 
455,049

 
512,572

 
 
1,811,708

Amount available
 
$
30,913

 
44,951

 
237,428

 
 
313,292

Expiration of liquidity provisions
 
July 8, 2016

 
December 16, 2016

 
April 28, 2017

 
 
 
Final maturity date
 
July 9, 2018

 
December 14, 2018

 
April 26, 2019

 
 
 
Maximum advance rates
 
92.0 - 98.0%

 
85.0 - 95.0%

 
92.2 - 95.0%

 
 
 
Minimum advance rates
 
84.0 - 90.0%

 
85.0 - 95.0%

 
92.2 - 95.0%

 
 
 
Advanced as equity support
 
$
36,663

 
38,051

 
30,694

 
 
105,408



(a)
On July 10, 2015, the Company amended the agreement for this warehouse facility to temporarily increase the maximum financing amount to $875.0 million. The maximum financing amount was scheduled to decrease by $125.0 million on March 31, 2016. On January 26, 2016, the Company amended the agreement for this warehouse facility to extend the scheduled decrease of the maximum financing amount by $125.0 million to July 8, 2016. On July 7, 2016, the Company amended the agreement for this warehouse facility to permanently set the maximum financing amount at $875.0 million, and changed the expiration of liquidity provisions to July 10, 2018 and the final maturity date to September 7, 2018.

Private Education Loan Warehouse Facility

On June 26, 2015, the Company entered into a $275.0 million private education loan warehouse facility. As of June 30, 2016, there was $221.1 million outstanding on the facility and $53.9 million was available for future use. The facility has a static advance rate that requires initial equity for loan funding, but does not require increased equity based on market movements. The maximum advance rate on the entire facility is 88 percent and minimum advance rates, depending on loan characteristics and program type, ranged from 64 percent to 99 percent. As of June 30, 2016, $32.0 million was advanced on the facility as equity support. The facility is supported by liquidity provisions, which had an original expiration date of June 24, 2016.
On April 1, 2016, the Company amended the agreement for this facility to change the expiration date for the liquidity provisions to October 28, 2016, and to change the final maturity date to April 28, 2017. In addition, the minimum advance rates, depending on loan characteristics and program type, were changed to a range from 61.75 percent to 95.00 percent, and the maximum advance rate on the entire facility remained at 88 percent. In the event the Company is unable to renew the liquidity provisions by the amended expiration date of October 28, 2016, the facility would become a term facility at a stepped-up cost, with no additional student loans being eligible for financing, and the Company would be required to refinance the existing loans in the facility by the facility's amended final maturity date of April 28, 2017.
Unsecured Line of Credit

The Company has a $350.0 million unsecured line of credit that has a maturity date of October 30, 2020.  As of June 30, 2016, the unsecured line of credit had an outstanding balance of $105.0 million and $245.0 million was available for future use.
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments

The Company uses derivative financial instruments primarily to manage interest rate risk and foreign currency exchange risk. Derivative instruments used as part of the Company's risk management strategy are further described in note 5 of the notes to consolidated financial statements included in the 2015 Annual Report. A tabular presentation of such derivatives outstanding as of June 30, 2016 and December 31, 2015 is presented below.

Basis Swaps

The following table summarizes the Company’s basis swaps outstanding as of June 30, 2016 and December 31, 2015 in which the Company receives three-month LIBOR set discretely in advance and pays one-month LIBOR plus or minus a spread as defined in the agreements (the "1:3 Basis Swaps").
 
 
 
As of June 30,
 
As of December 31,
 
 
2016
 
2015
Maturity
 
Notional amount
 
Notional amount
2016
 
$
2,000,000

 
$
7,500,000

2028
 
125,000

 

The weighted average rate paid by the Company on the 1:3 Basis Swaps as of June 30, 2016 and December 31, 2015 was one-month LIBOR plus 9.3 basis points and 10.0 basis points, respectively.
Interest Rate Swaps – Floor Income Hedges

The following table summarizes the outstanding derivative instruments used by the Company to economically hedge loans earning fixed rate floor income.
 
 
As of June 30, 2016
 
As of December 31, 2015
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
 
 
 
 
2016
 
$
750,000

 
0.72
%
 
$
1,000,000

 
0.76
%
2017
 
1,000,000

 
0.97

 
2,100,000

 
0.84

2018
 
1,600,000

 
1.08

 
1,600,000

 
1.08

2019
 
3,250,000

 
0.97

 
500,000

 
1.12

2020
 
1,500,000

 
1.01

 

 

2025
 
100,000

 
2.32

 
100,000

 
2.32

2026
 
50,000

 
1.52

 

 

 
 
$
8,250,000

 
0.99
%
 
$
5,300,000

 
0.95
%

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

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

Interest Rate Swaps – Unsecured Debt Hedges

The Company had the following derivatives outstanding as of June 30, 2016 and December 31, 2015 that are used to effectively convert the variable interest rate on a portion of the Junior Subordinated Hybrid Securities to a fixed rate of 7.66%.

 
Maturity
 
Notional amount
 
Weighted average fixed rate paid by the Company (a)
2036
 
$
25,000

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

Interest Rate Caps

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

Foreign Currency Exchange Risk

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

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

The following table shows the income statement impact as a result of the re-measurement of the Euro Notes and the change in the fair value of the related derivative instrument.
 
Three months ended June 30,
 
Six months ended June 30,
 
2016
 
2015
 
2016
 
2015
Re-measurement of Euro Notes
$
9,768

 
(14,671
)
 
(8,712
)
 
33,538

Change in fair value of cross-currency interest rate swap
(12,008
)
 
13,933

 
20,693

 
(35,873
)
Total impact to consolidated statements of income - income (expense) (a)
$
(2,240
)
 
(738
)
 
11,981

 
(2,335
)
(a)
The financial statement impact of the above items is included in "Derivative market value and foreign currency adjustments and derivative settlements, net" in the Company's consolidated statements of income.
Management has structured the cross-currency interest rate swap to economically hedge the Euro Notes to effectively convert the Euro Notes to U.S. dollars and pay a spread on these notes based on the LIBOR index. However, the cross-currency interest rate swap does not qualify for hedge accounting. The re-measurement of the Euro-denominated bonds generally correlates with the change in the fair value of the corresponding cross-currency interest rate swap. However, the Company will experience unrealized gains and losses between these financial instruments due to the principal and accrued interest on the Euro Notes being re-measured to U.S. dollars at each reporting date based on the foreign currency exchange rate on that date, while the cross-currency interest rate swap is measured at fair value at each reporting date with the change in fair value recognized in the current period earnings.
Consolidated Financial Statement Impact Related to Derivatives

The following table summarizes the fair value of the Company’s derivatives as reflected in the consolidated balance sheets:
 
Fair value of asset derivatives
 
Fair value of liability derivatives
 
As of
 
As of
 
As of
 
As of
 
June 30,
2016
 
December 31,
2015
 
June 30,
2016
 
December 31,
2015
1:3 basis swaps
$
623

 
724

 
127

 
410

Interest rate swaps - floor income hedges
27

 
21,408

 
42,791

 
1,175

Interest rate swap option - floor income hedge
986

 
3,257

 

 

Interest rate swaps - hybrid debt hedges

 

 
11,660

 
7,646

Interest rate caps
355

 
1,570

 

 

Cross-currency interest rate swap



 
44,957

 
65,650

Other
1,417

 
1,731

 
2,236

 

Total
$
3,408

 
28,690

 
101,771

 
74,881



During the six months ended June 30, 2016, the Company terminated a total notional amount of $3.1 billion of fixed rate floor income hedges for gross proceeds of $3.0 million, and a total notional amount of $300.0 million of other basis swaps for gross proceeds of $0.5 million. During the six months ended June 30, 2015, the Company terminated a total notional amount of $5.5 billion of 1:3 Basis Swaps for gross proceeds of $51.9 million.

Offsetting of Derivative Assets/Liabilities

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

 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative assets
 
Gross amounts of recognized assets presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral pledged
 
Net asset (liability)
Balance as of
June 30, 2016
 
$
3,408

 
(3,053
)
 

 
355

Balance as of
December 31, 2015
 
28,690

 
(851
)
 
1,632

 
29,471


 
 
 
 
Gross amounts not offset in the consolidated balance sheets
 
 
Derivative liabilities
 
Gross amounts of recognized liabilities presented in the consolidated balance sheets
 
Derivatives subject to enforceable master netting arrangement
 
Cash collateral pledged/received, net
 
Net asset (liability)
Balance as of
June 30, 2016
 
$
(101,771
)
 
3,053

 
90,170

 
(8,548
)
Balance as of
December 31, 2015
 
(74,881
)
 
851

 
13,168

 
(60,862
)


The following table summarizes the effect of derivative instruments in the consolidated statements of income.
 
Three months ended June 30,
 
Six months ended June 30,
 
2016
 
2015
 
2016
 
2015
Settlements:
 

 
 

 
 

 
 

1:3 basis swaps
$
743

 
123

 
414

 
389

Interest rate swaps - floor income hedges
(4,841
)
 
(5,019
)
 
(10,084
)
 
(10,034
)
Interest rate swaps - hybrid debt hedges
(231
)
 
(253
)
 
(463
)
 
(505
)
Cross-currency interest rate swap
(1,166
)
 
(293
)
 
(1,898
)
 
(507
)
Total settlements - expense
(5,495
)
 
(5,442
)
 
(12,031
)
 
(10,657
)
Change in fair value:
 

 
 

 
 

 
 

1:3 basis swaps
(586
)
 
1,428

 
183

 
12,398

Interest rate swaps - floor income hedges
(27,276
)
 
7,534

 
(59,985
)
 
2,662

Interest rate swap option - floor income hedge
(856
)
 
1,381

 
(2,272
)
 
470

Interest rate swaps - hybrid debt hedges
(1,464
)
 
2,540

 
(4,014
)
 
1,087

Interest rate caps
(453
)
 
(201
)
 
(1,215
)
 
(201
)
Cross-currency interest rate swap
(12,008
)
 
13,933

 
20,693

 
(35,873
)
Other
(2,332
)
 

 
(2,039
)
 

Total change in fair value - (expense) income
(44,975
)
 
26,615

 
(48,649
)
 
(19,457
)
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense)
9,768

 
(14,671
)
 
(8,712
)
 
33,538

Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense)
$
(40,702
)
 
6,502

 
(69,392
)
 
3,424

Investments and Notes Receivable
Investments
Investments and Notes Receivable

A summary of the Company's investments and notes receivable follows:
 
As of June 30, 2016
 
As of December 31, 2015
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses (a)
 
Fair value
 
Amortized cost
 
Gross unrealized gains
 
Gross unrealized losses
 
Fair value
 
 
 
 
 
 
 
 
Investments (at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed and other debt securities (b)
$
133,190

 
1,091

 
(6,432
)
 
127,849

 
139,970

 
3,402

 
(1,362
)
 
142,010

Equity securities
720

 
1,797

 
(69
)
 
2,448

 
846

 
1,686

 
(100
)
 
2,432

Total available-for-sale investments
$
133,910

 
2,888

 
(6,501
)
 
130,297

 
140,816

 
5,088

 
(1,462
)
 
144,442

Trading investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Student loan asset-backed securities
 
 
 
 
 
 
5,867

 
 
 
 
 
 
 
6,045

Equity securities
 
 
 
 
 
 
5,318

 
 
 
 
 
 
 
4,905

Total trading investments
 
 
 
 
 
 
11,185

 
 
 
 
 
 
 
10,950

Total available-for-sale and trading investments
 
 
 
 
 
 
141,482

 
 
 
 
 
 
 
155,392

Other Investments and Notes Receivable (not measured at fair value):
 
 
 
 
 
 
 
 
 
 
 
 
Venture capital and funds
 
 
 
 
 
 
65,778

 
 
 
 
 
 
 
63,323

Real estate
 
 
 
 
 
 
48,586

 
 
 
 
 
 
 
50,463

Notes receivable
 
 
 
 
 
 
17,206

 
 
 
 
 
 
 
18,473

Tax liens and affordable housing
 
 
 
 
 
 
12,944

 
 
 
 
 
 
 
16,030

Total investments and notes receivable
 
 
 
 
 
 
$
285,996

 
 
 
 
 
 
 
303,681


    
(a)
As of June 30, 2016, the Company considered the decline in market value of its available-for-sale investments to be temporary in nature and did not consider any of its investments other-than-temporarily impaired.

(b)
As of June 30, 2016, the stated maturities of the majority of the Company's student loan asset-backed and other debt securities classified as available-for-sale were greater than 10 years.
Business Combinations Business Combinations (Notes)
Business Combination Disclosure [Text Block]
Business Combination

Allo Communications LLC ("Allo")

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

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

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The fair values of the assets and liabilities related to Allo are subject to refinement as the Company completes its analysis relative to the fair values at the date of acquisition. During the first six months of 2016, the Company recognized certain adjustments to the provisional amounts recorded at December 31, 2015 that were needed to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The net impact of these adjustments was an increase to goodwill, and the adjustments had no impact on operating results.
Cash and cash equivalents
 
$
334

Restricted cash and investments
 
850

Accounts receivable
 
1,935

Property and equipment
 
32,479

Other assets
 
371

Intangible assets
 
11,410

Excess cost over fair value of net assets acquired (goodwill)
 
21,112

Other liabilities
 
(4,587
)
Bonds and notes payable
 
(13,904
)
Net assets acquired
 
50,000

Minority interest
 
(3,750
)
Total consideration paid by the Company
 
$
46,250



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

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

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

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

Intangible assets consist of the following:
 
Weighted average remaining useful life as of June 30, 2016 (months)
 
As of
June 30,
2016
 
As of December 31, 2015
 
 
 
Amortizable intangible assets:
 
 
 
Customer relationships (net of accumulated amortization of $5,949 and $4,028, respectively)
171
 
$
30,935

 
27,576

Computer software (net of accumulated amortization of $6,820 and $4,397, respectively)
31
 
12,128

 
11,601

Trade names (net of accumulated amortization of $1,224 and $795, respectively)
195
 
10,348

 
10,687

Content (net of accumulated amortization of $1,350 and $900, respectively)
6
 
450

 
900

Covenants not to compete (net of accumulated amortization of $74 and $56, respectively)
95
 
280

 
298

Total - amortizable intangible assets
143
 
$
54,141

 
51,062



The Company recorded amortization expense on its intangible assets of $2.7 million and $2.4 million during the three months ended June 30, 2016 and 2015, respectively, and $5.2 million and $4.8 million during the six months ended June 30, 2016 and 2015, respectively. The Company will continue to amortize intangible assets over their remaining useful lives. As of June 30, 2016, the Company estimates it will record amortization expense as follows:

2016 (July 1 - December 31)
$
6,328

2017
9,386

2018
8,605

2019
5,147

2020
4,231

2021 and thereafter
20,444

 
$
54,141



The change in the carrying amount of goodwill by reportable operating segment was as follows:
 
Student Loan and Guaranty Servicing
 
Tuition Payment Processing and Campus Commerce
 
Communications
 
Asset Generation and Management
 
Corporate and Other Activities
 
Total
Balance as of December 31, 2015
$
8,596

 
67,168

 
19,800

 
41,883

 
8,553

 
146,000

Allo purchase price adjustment

 

 
1,312

 

 

 
1,312

Balance as of March 31, 2016
8,596

 
67,168

 
21,112

 
41,883

 
8,553

 
147,312

Allo purchase price adjustment

 

 

 

 

 

Balance as of June 30, 2016
$
8,596


67,168


21,112


41,883


8,553


147,312

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

Property and equipment consisted of the following:
 
 
 
As of
 
As of
 
Useful life
 
June 30, 2016
 
December 31, 2015
Non-communications:
 
 
 
 
 
Computer equipment and software
1-5 years
 
$
95,113

 
89,093

Office furniture and equipment
3-7 years
 
12,576

 
12,638

Building and building improvements
5-39 years
 
12,244

 
12,239

Transportation equipment
4-10 years
 
3,868

 
3,868

Leasehold improvements
5-20 years
 
3,342

 
3,545

Land
 
827

 
700

Construction in progress
 
9,986

 
1,210

 
 
 
137,956

 
123,293

Accumulated depreciation - non-communications
 
 
84,583

 
77,188

Non-communications, net property and equipment
 
 
53,373

 
46,105