(Mark One)
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2015
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or
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
to
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NEBRASKA
(State or other jurisdiction of incorporation or organization)
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84-0748903
(I.R.S. Employer Identification No.)
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121 SOUTH 13TH STREET, SUITE 100
LINCOLN, NEBRASKA
(Address of principal executive offices)
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68508
(Zip Code)
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•
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student loan portfolio risks such as interest rate basis and repricing risk resulting from the fact that the interest rate characteristics of the student loan assets do not match the interest rate characteristics of the funding for those assets, the risk of loss of floor income on certain student loans originated under the Federal Family Education Loan Program (the "FFEL Program" or "FFELP"), risks related to the use of derivatives to manage exposure to interest rate fluctuations, uncertainties regarding the expected benefits from recently purchased securitized and unsecuritized FFELP student loans and initiatives to purchase additional FFELP and private education loans, and risks from changes in levels of student loan prepayment or default rates;
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•
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financing and liquidity risks, including risks of changes in the general interest rate environment and in the securitization and other financing markets for student loans, which may increase the costs or limit the availability of financings necessary to purchase, refinance, or continue to hold student loans;
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•
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risks from changes in the educational credit and services markets resulting from changes in applicable laws, regulations, and government programs and budgets, such as the expected decline over time in FFELP loan interest income and fee-based revenues due to the discontinuation of new FFELP loan originations in 2010 and potential government initiatives or legislative proposals to consolidate existing FFELP loans to the Federal Direct Loan Program or otherwise allow FFELP loans to be refinanced with Federal Direct Loan Program loans, risks related to reduced government payments to guaranty agencies to rehabilitate defaulted FFELP loans and services in support of those activities, including potential adverse effects on the Company's guaranty servicing contracts, risks related to adverse changes in the Company's future volumes allocated under the Company's loan servicing contract with the U.S. Department of Education (the "Department"), which accounted for approximately 15 percent of the Company's revenue in 2015, and risks related to the Company's ability to comply with agreements with third-party customers for the servicing of FFELP, Federal Direct Loan Program, and private education loans;
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•
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risks related to a breach of or failure in the Company's operational or information systems or infrastructure, or those of third-party vendors;
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•
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uncertainties inherent in forecasting future cash flows from student loan assets and related asset-backed securitizations;
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•
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the uncertain nature of the expected benefits from the acquisition of Allo Communications LLC and the ability to integrate its telecommunications operations and successfully expand its fiber network in existing service areas and additional communities;
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•
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risks and uncertainties related to initiatives to pursue additional strategic investments and acquisitions, including investments and acquisitions that are intended to diversify the Company both within and outside of its historical core education-related businesses; and
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•
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risks and uncertainties associated with litigation matters and with maintaining compliance with the extensive regulatory requirements applicable to the Company's businesses, and uncertainties inherent in the estimates and assumptions about future events that management is required to make in the preparation of the Company's consolidated financial statements.
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•
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Referred to as Nelnet Diversified Solutions (“NDS”)
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•
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Focuses on student loan servicing, student loan servicing-related technology solutions, and outsourcing services for lenders, guaranty agencies, and other entities
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•
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Includes the brands Nelnet Loan Servicing, Firstmark Services, Nelnet Guarantor Solutions, 5280 Solutions, CampusGuard, Proxi, and U-Fi
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•
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Commonly known as Nelnet Business Solutions (“NBS”)
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•
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Focuses on tuition payment plans, financial needs assessment services, online payment and refund processing, and school information system software
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•
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Includes the brands FACTS Management and RenWeb
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•
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Includes the acquisition and management of the Company's student loan assets
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•
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Includes the operations of Allo
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•
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Focuses on providing pure fiber optic service directly to homes and businesses for internet, television, and telephone services
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•
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Servicing federally-owned student loans for the Department
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•
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Servicing FFELP loans
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•
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Marketing, originating, and servicing private education loans
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•
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Servicing and outsourcing services for FFELP guaranty agencies, including FFELP guaranty collection services
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•
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Providing student loan servicing software and other information technology products and services
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•
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Providing outsourced services including call center, processing, and marketing services
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•
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Two metrics measure the satisfaction among separate customer groups, including borrowers (35 percent) and Federal Student Aid personnel who work with the servicers (5 percent).
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•
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Three metrics measure the success of keeping borrowers in an on-time repayment status and helping borrowers avoid default as reflected by the percentage of borrowers in current repayment status (30 percent), percentage of borrowers more than 90 days but less than 271 days delinquent (15 percent), and percentage of borrowers over 270 days and less than 361 days delinquent (15 percent).
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•
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Three metrics measured the satisfaction among separate borrower groups, including borrowers (20 percent), financial aid personnel at postsecondary schools participating in federal student loan programs (20 percent), and Federal Student Aid and other federal agency personnel or contractors who worked with the servicers (20 percent).
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•
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Two performance metrics measured the success of default prevention efforts as reflected by the percentage of borrowers (20 percent) and percentage of dollars (20 percent) in each servicer's portfolio that went into default.
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Contract Year
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|||||||||||||
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1
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2
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3
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4
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5
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6
(a)
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6
(b)
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Defaulted borrower #
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4
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4
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1
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1
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2
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Borrower survey
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2
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2
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Defaulted borrower $
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4
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4
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1
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1
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2
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FSA survey
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2
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2
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Borrower survey
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4
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4
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3
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2
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2
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Current repay %
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4
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4
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School survey
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2
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2
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2
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3
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2
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91-270 Repay %
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4
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4
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FSA survey
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3
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3
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3
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3
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4
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271-360 Repay %
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4
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4
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Overall ranking
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4
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4
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1
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1
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2
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4
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4
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Allocation
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16%
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16%
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30%
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30%
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26%
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14%
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13%
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Allocation period
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August 15, 2010 - August 14, 2011
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August 15, 2011 - August 14, 2012
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August 15, 2012 - August 14, 2013
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August 15, 2013 - August 14, 2014
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August 15, 2014 - February 28, 2015
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March 1, 2015 - August 31, 2015
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September 1, 2015 - February 29, 2016
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(a)
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Ranking based on the average of the September and December 2014 quarter end results.
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(b)
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Ranking based on the average of the March and June 2015 quarter end results.
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•
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Administration of the Total and Permanent Disability (TPD) Discharge program
. The Company processes applications for the TPD Discharge program and is responsible for discharge, monitoring, and servicing of TPD loans. Individuals who are totally and permanently disabled may qualify for a discharge of their federal student loans, and the Company processes applications under the program and receives a fee from the Department on a per application basis, as well as a monthly servicing fee during the monitoring period. The Company is the exclusive provider of this service to the Department.
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•
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Origination of consolidation loans.
Beginning in 2014, the Department implemented a new process to outsource the origination of consolidation loans whereby each of the four TIVAS receives Federal Direct Loan consolidation origination volume based on borrower choice. The Department pays the Company a fee for each completed consolidation loan application it processes. The Company services the consolidation volume it originates.
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2015
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2014
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2013
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(Dollars in thousands)
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Residential revenue
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$
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8,665
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6,155
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3,988
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Business revenue
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6,940
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6,163
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5,541
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Total revenue
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$
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15,605
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12,318
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9,529
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EBITDA (a)
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$
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4,274
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3,000
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1,715
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Capital expenditures
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6,678
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4,522
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6,775
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Revenue contribution:
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Internet
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36.1
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%
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33.3
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%
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31.8
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%
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Telephone
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29.9
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34.9
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42.1
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Television
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32.6
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29.4
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24.7
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Other
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1.4
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2.4
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1.4
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100
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%
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100
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%
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100
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%
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Residential customer information:
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Households served
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7,600
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5,794
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3,905
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Households passed (b)
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21,274
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16,433
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16,054
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Total households in current markets
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28,874
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19,592
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19,592
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Total households in markets announced (c)
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137,500
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23,389
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19,592
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(a)
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Earnings before interest, taxes, depreciation, and amortization ("EBITDA") is a non-GAAP performance measure that is frequently used in capital-intensive industries such as telecommunications. Allo's management has historically used EBITDA to compare Allo's performance to that of its competitors and to eliminate certain non-cash and non-operating items in order to consistently measure performance from period to period. EBITDA excludes interest expense and income taxes because these items are associated with a company's particular capitalization and tax structures. EBITDA also excludes depreciation and amortization expense because these non-cash expenses primarily reflect the impact of historical capital investments, as opposed to the cash impacts of capital expenditures made in recent periods, which may be evaluated through cash flow measures. There are limitations to using EBITDA as a performance measure, including the difficulty associated with comparing companies that use similar performance measures whose calculations may differ from Allo's calculations. In addition, EBITDA should not be considered a substitute for other measures of financial performance reported in accordance with GAAP.
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(b)
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Represents the estimated number of single residence homes, apartments, and condominiums that Allo already serves and those in which Allo has the capacity to connect to its network distribution system without further material extensions to the transmission lines, but have not been connected.
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(c)
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In November 2015, Allo announced plans to expand its network to make services available to substantially all commercial and residential premises in Lincoln, Nebraska, and currently plans to expand to additional communities in Nebraska and surrounding states over the next several years.
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•
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Promoting the advantages of an all-fiber network connected directly to homes and businesses that delivers synchronous internet speeds of one gigabit per second (about 100 times faster than standard broadband connections with copper or coaxial cable)
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•
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Building complete fiber communities by passing all homes and businesses within their network
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•
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Organizing sales and marketing activities around consumer, enterprise, and carrier customers
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•
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Positioning Allo as a single point of contact for customers’ communications needs
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•
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Providing customers with a broad array of internet, broadband, television, and telephone services and bundling these services whenever possible
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•
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Providing excellent customer service, including 24/7/365 centralized customer support to coordinate installation of new services, repair, and maintenance functions
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•
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Developing and delivering new services to meet evolving customer needs and market demands
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•
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Utilizing proven modern technology to deliver services
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•
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The Higher Education Act, which establishes financial responsibility and administrative capability that govern all third-party servicers of insured student loans
|
•
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The Telephone Consumer Protection Act (“TCPA”), which governs communication methods that may be used to contact customers
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•
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The Truth-In-Lending Act and Regulation Z, which governs disclosures of credit terms to consumer borrowers
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•
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The Fair Credit Reporting Act and Regulation V, which governs the use and provision of information to consumer reporting agencies
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•
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The Equal Credit Opportunity Act and Regulation B, which prohibits discrimination on the basis of race, creed, or other prohibited factors in extending credit
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•
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The Servicemembers Civil Relief Act (“SCRA”), which applies to all debts incurred prior to commencement of active military service and limits the amount of interest, including certain fees or charges that are related to the obligation or liability
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•
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The Electronic Funds Transfer Act (“EFTA”) and Regulation E, which protects individual consumers engaged in electronic fund transfers (“EFTs”)
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•
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The Gramm-Leach-Bliley Act (“GLBA”) and Regulation P, which governs a financial institution’s treatment of nonpublic personal information about consumers and requires that an institution, under certain circumstances, notify consumers about its privacy policies and practices
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•
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Laws prohibiting unfair, deceptive, or abusive acts or practices
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•
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Various laws, regulations, and standards that govern government contractors
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Location
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Primary function or segment
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Approximate square feet
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Lease expiration date
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Lincoln, NE
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Corporate Headquarters, Student Loan and Guaranty Servicing, Tuition Payment Processing and Campus Commerce
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187,000
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(a)
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—
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Highlands Ranch, CO
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Student Loan and Guaranty Servicing
|
|
67,000
|
|
|
|
March 2017
|
|
|
|
|
|
|
|
|
|
Lincoln, NE
|
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Student Loan and Guaranty Servicing, Asset Generation and Management
|
|
51,000
|
|
|
|
November 2023 and March 2024
|
|
|
|
|
|
|
|
|
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Aurora, CO
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Student Loan and Guaranty Servicing
|
|
43,000
|
|
|
|
September 2019
|
|
|
|
|
|
|
|
|
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Omaha, NE
|
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Student Loan and Guaranty Servicing, Tuition Payment Processing and Campus Commerce
|
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42,000
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(b)
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December 2020 and December 2025
|
|
|
|
|
|
|
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Lincoln, NE
|
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Student Loan and Guaranty Servicing, Asset Generation and Management, Tuition Payment Processing and Campus Commerce
|
|
22,000
|
|
|
|
August 2016, December 2016, and October 2017
|
|
|
|
|
|
|
|
|
|
Burleson, TX
|
|
Tuition Payment Processing and Campus Commerce
|
|
17,000
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|
|
|
October 2021
|
|
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Imperial, NE
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Telecommunications
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6,000
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|
|
|
—
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(a)
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Excludes a total of approximately 27,000 square feet of owned office space that the Company leases to third parties.
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(b)
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Per the terms of the lease agreements, total square footage increased to approximately 57,000 square feet on January 1, 2016.
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2015
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|
2014
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1st Quarter
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2nd Quarter
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3rd Quarter
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4th Quarter
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1st Quarter
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2nd Quarter
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3rd Quarter
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4th Quarter
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High
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$
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48.80
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|
$
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48.69
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|
|
$
|
44.92
|
|
|
$
|
36.97
|
|
|
$
|
44.30
|
|
|
$
|
44.20
|
|
|
$
|
45.91
|
|
|
$
|
48.52
|
|
Low
|
43.00
|
|
|
40.81
|
|
|
34.26
|
|
|
30.55
|
|
|
34.86
|
|
|
38.42
|
|
|
40.16
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|
|
42.42
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|
|
2015
|
|
2014
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Record date
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2/27/15
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|
|
6/1/15
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|
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9/1/15
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|
|
12/1/15
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|
|
2/28/14
|
|
|
5/30/14
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|
|
9/1/14
|
|
|
12/1/14
|
|
||||||||
Payment date
|
3/13/15
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|
|
6/15/15
|
|
|
9/15/15
|
|
|
12/15/15
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|
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3/14/14
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|
6/13/14
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9/15/14
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12/15/14
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|
||||||||
Dividend amount per share
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$
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0.10
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|
|
$
|
0.10
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|
|
$
|
0.10
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|
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$
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0.12
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|
|
$
|
0.10
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|
|
$
|
0.10
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|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
Company/Index
|
12/31/2010
|
|
|
12/31/2011
|
|
|
12/31/2012
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|
|
12/31/2013
|
|
|
12/31/2014
|
|
|
12/31/2015
|
|
||||||
Nelnet, Inc.
|
$
|
100.00
|
|
|
$
|
105.14
|
|
|
$
|
135.16
|
|
|
$
|
193.20
|
|
|
$
|
214.46
|
|
|
$
|
157.09
|
|
S&P 500
|
100.00
|
|
|
102.11
|
|
|
118.45
|
|
|
156.82
|
|
|
178.29
|
|
|
180.75
|
|
||||||
S&P Financials
|
100.00
|
|
|
82.94
|
|
|
106.84
|
|
|
144.90
|
|
|
166.93
|
|
|
164.39
|
|
Period
|
|
Total number of shares purchased (a)
|
|
Average price paid per share
|
|
Total number of shares purchased as part of publicly announced plans or programs (b)
|
|
Maximum number of shares that may yet be purchased under the plans or programs (b)
|
|||||
October 1 - October 31, 2015
|
|
685
|
|
|
$
|
34.80
|
|
|
—
|
|
|
4,150,186
|
|
November 1 - November 30, 2015
|
|
134,596
|
|
|
31.42
|
|
|
134,287
|
|
|
4,015,899
|
|
|
December 1 - December 31, 2015
|
|
783,286
|
|
|
32.36
|
|
|
781,252
|
|
|
3,234,647
|
|
|
Total
|
|
918,567
|
|
|
$
|
32.14
|
|
|
915,539
|
|
|
|
|
(a)
|
The total number of shares includes: (i) shares repurchased pursuant to the stock repurchase program discussed in footnote (b) below; and (ii) shares owned and tendered by employees to satisfy tax withholding obligations upon the vesting of restricted shares. Shares of Class A common stock tendered by employees to satisfy tax withholding obligations included
|
(b)
|
On May 7, 2015, the Company announced that its Board of Directors had authorized a stock repurchase program to repurchase up to a total of five million shares of the Company's Class A common stock during the three-year period ending May 24, 2018.
|
|
Year ended December 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||
|
(Dollars in thousands, except share data)
|
||||||||||||||
Operating Data:
|
|
|
|
|
|
|
|
|
|
||||||
Net interest income
|
$
|
431,899
|
|
|
436,563
|
|
|
413,875
|
|
|
345,287
|
|
|
364,565
|
|
Loan and guaranty servicing revenue
|
239,858
|
|
|
240,414
|
|
|
243,428
|
|
|
209,748
|
|
|
175,657
|
|
|
Tuition payment processing, school information, and campus commerce revenue
|
120,365
|
|
|
98,156
|
|
|
80,682
|
|
|
74,410
|
|
|
67,797
|
|
|
Enrollment services revenue
|
70,705
|
|
|
82,883
|
|
|
98,078
|
|
|
117,925
|
|
|
130,470
|
|
|
Other income, net
|
27,630
|
|
|
54,002
|
|
|
46,298
|
|
|
39,476
|
|
|
29,513
|
|
|
Gain on sale of loans and debt repurchases, net
|
5,153
|
|
|
3,651
|
|
|
11,699
|
|
|
4,139
|
|
|
8,340
|
|
|
Net income attributable to Nelnet, Inc.
|
267,979
|
|
|
307,610
|
|
|
302,672
|
|
|
177,997
|
|
|
204,335
|
|
|
Earnings per common share attributable to Nelnet, Inc. shareholders - basic and diluted:
|
5.89
|
|
|
6.62
|
|
|
6.50
|
|
|
3.76
|
|
|
4.24
|
|
|
Dividends per common share
|
0.42
|
|
|
0.40
|
|
|
0.40
|
|
|
1.40
|
|
|
0.37
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||
Fixed rate floor income, net of derivative settlements
|
$
|
184,746
|
|
|
179,870
|
|
|
148,431
|
|
|
145,345
|
|
|
144,454
|
|
Core student loan spread
|
1.43
|
%
|
|
1.48
|
%
|
|
1.54
|
%
|
|
1.44
|
%
|
|
1.52
|
%
|
|
Acquisition of student loans (par value)
|
$
|
4,036,333
|
|
|
6,099,249
|
|
|
4,058,997
|
|
|
3,885,138
|
|
|
2,841,334
|
|
Student loans serviced (at end of period)
|
176,436,497
|
|
|
161,642,254
|
|
|
138,208,897
|
|
|
97,492,053
|
|
|
76,119,717
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
As of December 31,
|
||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||
Balance Sheet Data:
|
(Dollars in thousands, except share data)
|
||||||||||||||
Cash and cash equivalents
|
$
|
63,529
|
|
|
130,481
|
|
|
63,267
|
|
|
66,031
|
|
|
42,570
|
|
Student loans receivable, net
|
28,324,552
|
|
|
28,005,195
|
|
|
25,907,589
|
|
|
24,830,621
|
|
|
24,297,876
|
|
|
Goodwill and intangible assets, net
|
197,062
|
|
|
168,782
|
|
|
123,250
|
|
|
126,511
|
|
|
145,492
|
|
|
Total assets
|
30,485,905
|
|
|
30,098,143
|
|
|
27,770,849
|
|
|
26,607,895
|
|
|
25,852,217
|
|
|
Bonds and notes payable
|
28,172,682
|
|
|
28,027,350
|
|
|
25,955,289
|
|
|
25,098,835
|
|
|
24,434,540
|
|
|
Nelnet, Inc. shareholders' equity
|
1,884,432
|
|
|
1,725,448
|
|
|
1,443,662
|
|
|
1,165,208
|
|
|
1,066,205
|
|
|
Tangible Nelnet, Inc. shareholders' equity (a)
|
1,687,370
|
|
|
1,556,666
|
|
|
1,320,412
|
|
|
1,038,697
|
|
|
920,713
|
|
|
Book value per common share
|
42.87
|
|
|
37.31
|
|
|
31.13
|
|
|
25.00
|
|
|
22.62
|
|
|
Tangible book value per common share (a)
|
38.39
|
|
|
33.66
|
|
|
28.47
|
|
|
22.28
|
|
|
19.53
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Ratios:
|
|
|
|
|
|
|
|
|
|
||||||
Shareholders' equity to total assets
|
6.18
|
%
|
|
5.73
|
%
|
|
5.20
|
%
|
|
4.38
|
%
|
|
4.12
|
%
|
(a)
|
Tangible Nelnet, Inc. shareholders' equity, a non-GAAP measure, equals "Nelnet, Inc. shareholders' equity" less "goodwill" and "intangible assets, net." Management believes tangible equity and tangible book value per common share are useful measures of evaluating the strength of the Company's capital position. These measures may be calculated differently by other companies.
|
|
Year ended December 31,
|
||||||||
|
2015
|
|
2014
|
|
2013
|
||||
GAAP net income attributable to Nelnet, Inc.
|
$
|
267,979
|
|
|
307,610
|
|
|
302,672
|
|
Derivative market value and foreign currency adjustments, net of tax
|
(17,764
|
)
|
|
(23,376
|
)
|
|
(30,128
|
)
|
|
Net income, excluding derivative market value and foreign currency adjustments (a)
|
$
|
250,215
|
|
|
284,234
|
|
|
272,544
|
|
|
|
|
|
|
|
||||
Earnings per share:
|
|
|
|
|
|
||||
GAAP net income attributable to Nelnet, Inc.
|
$
|
5.89
|
|
|
6.62
|
|
|
6.50
|
|
Derivative market value and foreign currency adjustments, net of tax
|
(0.39
|
)
|
|
(0.50
|
)
|
|
(0.65
|
)
|
|
Net income, excluding derivative market value and foreign currency adjustments (a)
|
$
|
5.50
|
|
|
6.12
|
|
|
5.85
|
|
(a)
|
The Company provides non-GAAP information that reflects specific items management believes to be important in the evaluation of its financial position and performance. "Derivative market value and foreign currency adjustments" include (i) the unrealized gains and losses that are caused by changes in fair values of derivatives which do not qualify for "hedge treatment" under GAAP; and (ii) the foreign currency transaction gains or losses caused by the re-measurement of the Company's Euro-denominated bonds to U.S. dollars. The Company believes these point-in-time estimates of asset and liability values related to these financial instruments that are subject to interest and currency rate fluctuations affect the period-to-period comparability of the results of operations. Accordingly, the Company provides operating results excluding these items for comparability purposes.
|
•
|
Student Loan and Guaranty Servicing ("LGS") - referred to as Nelnet Diversified Solutions ("NDS")
|
•
|
Tuition Payment Processing and Campus Commerce ("TPP&CC") - referred to as Nelnet Business Solutions ("NBS")
|
(a)
|
Revenue includes intersegment revenue earned by LGS as a result of servicing loans for AGM.
|
(b)
|
Total revenue includes "net interest income after provision for loan losses" and "total other income" from the Company's segment statements of income, excluding the impact from changes in fair values of derivatives and foreign currency transaction adjustments. Net income excludes changes in fair values of derivatives and foreign currency transaction adjustments, net of tax. For additional information regarding these non-GAAP measures, see "Asset Generation and Management Operating Segment - Results of Operations - Summary and Comparison of Operating Results" below.
|
(c)
|
Computed as income before income taxes divided by total revenue.
|
•
|
As of December 31, 2015, the Company was servicing $176.4 billion in FFELP, private, and government owned student loans, as compared with $161.6 billion and $138.2 billion of loans as of December 31, 2014 and 2013, respectively. The year over year increase was due to an increase in government servicing volume.
|
•
|
Revenue decreased in 2015 compared to 2014 due to federal budget provisions that became effective July 1, 2014 that have reduced payments by the Department to guaranty agencies for assisting student loan borrowers with the rehabilitation of defaulted loans under FFELP, and as a result, rehabilitation revenue has been negatively affected. This decrease in revenue was partially offset by increases in revenue from the Department servicing contract and private loan servicing revenue. Revenue decreased in 2014 compared to 2013 due to decreases in rehabilitation collection revenue, traditional FFELP and guaranty servicing revenue, and software services revenue, which were partially offset by growth in servicing volume under the Company's contract with the Department.
|
•
|
A significant amount of the Company's guaranty servicing revenue came from a single guaranty servicing client. The contract with this client expired on October 31, 2015. FFELP guaranty servicing and FFELP guaranty collection revenue recognized by the Company from this client for the years ended December 31, 2015, 2014, and 2013 was $37.3 million, $48.5 million, and $64.3 million, respectively.
|
•
|
Before tax operating margin was 14.8%, 21.2%, and 26.7% for the years ended
December 31, 2015
, 2014, and 2013, respectively. The year over year decrease is a result of the implementation of federal budget reductions for guaranty agencies' revenue. In addition, as the volume of loans serviced under the Department servicing contract continues to grow and loans serviced under the legacy commercial programs continue to run off, the Company expects operating margins to tighten accordingly. The Company also anticipates that margins will tighten as a result of the loss of the FFELP guaranty servicing and FFELP guaranty collection clients as discussed above
|
•
|
Revenue increased in 2015 and 2014, compared to
2014
and 2013, respectively, due to increases in the number of managed tuition payment plans, campus commerce customer transaction volume, and new school customers. In addition, the Company purchased RenWeb on June 3, 2014, which increased revenue in 2014 and 2015.
|
•
|
Before tax operating margin excluding amortization of intangibles was 28.3%, 27.6%, and 30.7% for 2015, 2014, and 2013, respectively. The decrease in margin in 2014 compared to 2013 was primarily due to a change in the mix of products and services provided as a result of integration efforts with the acquisition of RenWeb referred to above.
|
•
|
The Company acquired $4.0 billion of FFELP and private education student loans during
2015
, compared to $6.1 billion in
2014
and $4.1 billion in 2013. The average loan portfolio balance for 2015,
2014
, and
2013
was $28.6 billion, $28.0 billion, and $25.0 billion, respectively.
|
•
|
Core student loan spread decreased to 1.43% for 2015, compared to 1.48% for 2014. This decrease was a result of earning a lower yield on the student loans included in securitizations of which residual interests have recently been acquired, relative to the yield earned on the rest of the student loan portfolio
.
|
•
|
Due to historically low interest rates, the Company continues to earn significant fixed rate floor income. During 2015, 2014, and
2013
, the Company earned
$184.7 million
,
$179.9 million
, and
$148.4 million
, respectively, of fixed rate floor income (net of
$23.0 million
,
$24.4 million
, and
$31.0 million
of derivative settlements, respectively, used to hedge such loans).
|
•
|
Whitetail Rock Capital Management, LLC, the Company's SEC-registered investment advisory subsidiary, recognized investment advisory revenue of
$4.3 million
, $17.7 million, and $17.4 million for 2015, 2014, and
2013
, respectively. These amounts include performance fees earned from the sale of managed securities or managed securities being called prior to the full contractual maturity. Due to improvements in the capital markets, the opportunities to earn performance fees on the sale of student loan asset-backed securities were more limited in 2015 as compared to previous years.
|
•
|
As of
December 31, 2015
, the Company had cash and cash equivalents of
$63.5 million
. In addition, the Company had a portfolio of available-for-sale and trading investments, consisting primarily of student loan asset-backed securities, with a fair value of $155.4 million as of
December 31, 2015
.
|
•
|
For the year ended
December 31, 2015
, the Company generated
$391.4 million
in net cash provided by operating activities, including
$65.5 million
from the termination of certain derivative financial instruments.
|
•
|
Forecasted undiscounted future cash flows from the Company's FFELP student loan portfolio financed in asset-backed securitization transactions are estimated to be approximately
$2.31 billion
as of
December 31, 2015
.
|
•
|
As of December 31, 2015
, $100.0 million was outstanding on the Company's unsecured line of credit and
$250.0 million
was available for future use. The unsecured line of credit has a maturity date of October 30, 2020.
|
•
|
During 2015, the Company repurchased a total of
2,449,159
shares of Class A common stock for
$96.2 million
(
$39.27
per share).
|
•
|
During 2015, the Company paid cash dividends of $19.0 million ($0.42 per share).
|
•
|
The Company intends to use its liquidity position to capitalize on market opportunities, including FFELP and private education loan acquisitions; strategic acquisitions and investments; expansion of Allo's telecommunications network; and capital management initiatives, including stock repurchases, debt repurchases, and dividend distributions. Dependent upon the timing and size of the opportunities, the Company's cash and investment balances may increase from their current levels.
|
•
|
During the period from January 1, 2016 through February 25, 2016, the Company repurchased a total of 1,430,720 shares of Class A common stock for $45.9 million ($32.06 per share).
|
•
|
During the period from January 1, 2016 through February 25, 2016, the Company entered into $4.25 billion notional amount of interest rate swaps to hedge student loans earning fixed rate floor income. As of February 25, 2016, the Company had a total of $9.55 billion notional amount of interest rate swaps hedging student loans earning fixed rate floor income in which the Company is paying an average fixed rate of 0.90 percent. These derivatives have various maturity dates ranging from 2016 through 2025.
|
|
Year ended December 31,
|
|
|
||||||||
|
2015
|
|
2014
|
|
2013
|
|
Additional information
|
||||
Variable student loan interest margin, net of settlements on derivatives
|
$
|
222,479
|
|
|
234,814
|
|
|
235,480
|
|
|
Represents the yield the Company receives on its student loan portfolio less the cost of funding these loans. Variable student loan spread is also impacted by the amortization/accretion of loan premiums and discounts, the 1.05% per year consolidation loan rebate fee paid to the Department, and yield adjustments from borrower benefit programs. See AGM operating segment - results of operations.
|
Fixed rate floor income, net of settlements on derivatives
|
184,746
|
|
|
179,870
|
|
|
148,431
|
|
|
The Company has a portfolio of student loans that are earning interest at a fixed borrower rate which exceeds the statutorily defined variable lender rates, generating fixed rate floor income. See Item 7A, "Quantitative and Qualitative Disclosures About Market Risk - Interest Rate Risk" for additional information.
|
|
Investment interest
|
7,851
|
|
|
6,793
|
|
|
6,668
|
|
|
|
|
Non-portfolio related derivative settlements
|
(1,014
|
)
|
|
(1,026
|
)
|
|
(1,671
|
)
|
|
|
|
Corporate debt interest expense
|
(6,413
|
)
|
|
(5,731
|
)
|
|
(4,669
|
)
|
|
Includes interest expense on the Junior Subordinated Hybrid Securities and unsecured and secured lines of credit.
|
|
Net interest income (net of settlements on derivatives)
|
$
|
407,649
|
|
|
414,720
|
|
|
384,239
|
|
|
|
|
Inquiry management (marketing) (a)
|
|
Inquiry management (software)
|
|
Inquiry generation (b)
|
|
Digital marketing
|
|
Content solutions
|
|
Total
|
|||||||
|
Year ended December 31, 2015
|
|||||||||||||||||
Enrollment services revenue
|
$
|
47,277
|
|
|
3,796
|
|
|
—
|
|
|
4,734
|
|
|
14,898
|
|
|
70,705
|
|
Cost to provide enrollment services
|
41,733
|
|
|
—
|
|
|
—
|
|
|
429
|
|
|
3,373
|
|
|
45,535
|
|
|
Gross profit
|
$
|
5,544
|
|
|
3,796
|
|
|
—
|
|
|
4,305
|
|
|
11,525
|
|
|
25,170
|
|
Gross profit %
|
11.7%
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Year ended December 31, 2014
|
|||||||||||||||||
Enrollment services revenue
|
$
|
51,998
|
|
|
3,640
|
|
|
7,311
|
|
|
4,488
|
|
|
15,446
|
|
|
82,883
|
|
Cost to provide enrollment services
|
45,892
|
|
|
—
|
|
|
4,093
|
|
|
379
|
|
|
2,943
|
|
|
53,307
|
|
|
Gross profit
|
$
|
6,106
|
|
|
3,640
|
|
|
3,218
|
|
|
4,109
|
|
|
12,503
|
|
|
29,576
|
|
Gross profit %
|
11.7%
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Year ended December 31, 2013
|
|||||||||||||||||
Enrollment services revenue
|
$
|
59,852
|
|
|
3,985
|
|
|
14,285
|
|
|
4,399
|
|
|
15,557
|
|
|
98,078
|
|
Cost to provide enrollment services
|
52,919
|
|
|
—
|
|
|
9,108
|
|
|
318
|
|
|
2,616
|
|
|
64,961
|
|
|
Gross profit
|
$
|
6,933
|
|
|
3,985
|
|
|
5,177
|
|
|
4,081
|
|
|
12,941
|
|
|
33,117
|
|
Gross profit %
|
11.6%
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Inquiry management (marketing) revenue decreased
$4.7 million
(
9.1%
) and
$7.9 million
(
13.1%
) in 2015 and 2014, respectively, compared to 2014 and 2013, respectively, as a result of a decrease in spending on marketing efforts by school clients and a 2015 school closing of a significant client.
|
(b)
|
Effective August 29, 2014 the Company stopped providing inquiry generation services.
|
|
Year ended December 31,
|
||||||||
|
2015
|
|
2014
|
|
2013
|
||||
Borrower late fee income
|
$
|
14,693
|
|
|
14,760
|
|
|
12,686
|
|
Investment advisory fees (a)
|
4,302
|
|
|
17,653
|
|
|
17,422
|
|
|
Realized and unrealized gains/(losses) on investments classified as available-for-sale and trading, net
|
143
|
|
|
7,289
|
|
|
6,164
|
|
|
Remeasurement of business acquisition contingent consideration
|
(925
|
)
|
|
1,268
|
|
|
—
|
|
|
Reduction of repurchase obligation (b)
|
—
|
|
|
4,235
|
|
|
—
|
|
|
Other
|
9,417
|
|
|
8,797
|
|
|
10,026
|
|
|
Other income, net
|
$
|
27,630
|
|
|
54,002
|
|
|
46,298
|
|
(a)
|
The Company provides investment advisory services under various arrangements and earns annual fees of 25 basis points on the outstanding balance of investments and up to 50 percent of the gains from the sale of securities for which it provides advisory services. Due to improvements in the capital markets, the opportunities to earn performance fees on the sale of student loan asset-backed securities were more limited in 2015 as compared to previous years. As of December 31, 2015, the outstanding balance of investments subject to these arrangements was $863.6 million.
|
(b)
|
During 2014, the Company recognized income related to the modification of certain servicing agreements in which the Company's loan repurchase obligation was reduced.
|
Company owned
|
|
$22,650
|
|
$21,237
|
|
$21,397
|
|
$21,192
|
|
$21,110
|
|
$20,511
|
|
$19,742
|
|
$19,369
|
|
$18,934
|
|
$18,593
|
|
$18,886
|
|||||||||||
% of total
|
|
29.8%
|
|
21.8%
|
|
15.5%
|
|
14.3%
|
|
14.1%
|
|
12.9%
|
|
12.2%
|
|
11.5%
|
|
11.1%
|
|
10.6%
|
|
10.7%
|
|||||||||||
Number of servicing borrowers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Government servicing
|
|
3,036,534
|
|
|
3,892,929
|
|
|
5,305,498
|
|
|
5,438,933
|
|
|
5,465,395
|
|
|
5,824,743
|
|
|
5,915,449
|
|
|
5,882,446
|
|
|
5,817,078
|
|
|
5,886,266
|
|
|
5,842,163
|
|
FFELP servicing
|
|
1,799,484
|
|
|
1,626,146
|
|
|
1,462,122
|
|
|
1,426,435
|
|
|
1,390,541
|
|
|
1,404,619
|
|
|
1,397,295
|
|
|
1,358,551
|
|
|
1,353,785
|
|
|
1,339,307
|
|
|
1,335,538
|
|
Private servicing
|
|
164,554
|
|
|
173,948
|
|
|
195,580
|
|
|
191,606
|
|
|
186,863
|
|
|
200,095
|
|
|
202,529
|
|
|
205,926
|
|
|
209,854
|
|
|
230,403
|
|
|
245,737
|
|
Total:
|
|
5,000,572
|
|
|
5,693,023
|
|
|
6,963,200
|
|
|
7,056,974
|
|
|
7,042,799
|
|
|
7,429,457
|
|
|
7,515,273
|
|
|
7,446,923
|
|
|
7,380,717
|
|
|
7,455,976
|
|
|
7,423,438
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Number of remote hosted borrowers
|
|
9,566,296
|
|
|
6,912,204
|
|
|
1,915,203
|
|
|
1,796,287
|
|
|
1,735,594
|
|
|
1,677,547
|
|
|
1,611,654
|
|
|
1,592,813
|
|
|
1,559,573
|
|
|
1,710,577
|
|
|
1,755,341
|
|
|
Year ended December 31,
|
|
|
||||||||
|
2015
|
|
2014
|
|
2013
|
|
Additional information
|
||||
Net interest income
|
$
|
49
|
|
|
30
|
|
|
40
|
|
|
|
Loan and guaranty servicing revenue
|
239,858
|
|
|
240,414
|
|
|
243,428
|
|
|
See table below for additional analysis.
|
|
Intersegment servicing revenue
|
50,354
|
|
|
55,139
|
|
|
56,744
|
|
|
Represents revenue earned by the LGS operating segment as a result of servicing loans for the AGM operating segment. Year over year decrease was due to portfolio run-off.
|
|
Total other income
|
290,212
|
|
|
295,553
|
|
|
300,172
|
|
|
|
|
Salaries and benefits
|
134,634
|
|
|
125,844
|
|
|
106,825
|
|
|
Increase due to additional personnel to support the increase in volume under the government servicing contract, the increase in volume of loans entering repayment status, and the increase in private loan servicing volume.
|
|
Depreciation and amortization
|
1,931
|
|
|
1,734
|
|
|
3,924
|
|
|
|
|
Other expenses
|
57,799
|
|
|
59,521
|
|
|
67,494
|
|
|
Collection costs associated with FFELP guaranty collection revenue were $19.2 million, $24.3 million, and $32.0 million in 2015, 2014, and 2013, respectively. Excluding collection costs, other expenses were $38.6 million, $35.2 million, and $35.5 million in 2015, 2014, and 2013, respectively.
|
|
Intersegment expenses, net
|
43,034
|
|
|
36,646
|
|
|
35,743
|
|
|
Intersegment expenses represent costs for certain corporate activities that are allocated to each operating segment based on estimated use of such activities and services.
|
|
Total operating expenses
|
237,398
|
|
|
223,745
|
|
|
213,986
|
|
|
|
|
Income before income taxes and corporate overhead allocation
|
52,863
|
|
|
71,838
|
|
|
86,226
|
|
|
|
|
Corporate overhead allocation
|
(9,628
|
)
|
|
(9,029
|
)
|
|
(6,150
|
)
|
|
|
|
Income before income taxes
|
43,235
|
|
|
62,809
|
|
|
80,076
|
|
|
|
|
Income tax expense
|
(16,430
|
)
|
|
(23,867
|
)
|
|
(30,430
|
)
|
|
|
|
Net income
|
26,805
|
|
|
38,942
|
|
|
49,646
|
|
|
|
|
Net loss attributable to noncontrolling interest
|
20
|
|
|
—
|
|
|
—
|
|
|
|
|
Net income attributable to Nelnet, Inc.
|
$
|
26,825
|
|
|
38,942
|
|
|
49,646
|
|
|
|
Before tax operating margin
|
14.8
|
%
|
|
21.2
|
%
|
|
26.7
|
%
|
|
This segment experienced year over year decreases in operating margin as a result of the implementation of previously announced federal budget reductions for guaranty agencies' revenue. In addition, as the volume of loans serviced under the Department servicing contract continues to grow and loans serviced under the legacy commercial programs continue to run off, the Company expects operating margins to tighten accordingly. The Company also anticipates that margins will decrease as a result of the loss of the FFELP guaranty servicing and FFELP guaranty collection clients as discussed below.
|
|
Year ended December 31,
|
|
|
||||||||
|
2015
|
|
2014
|
|
2013
|
|
Additional information
|
||||
Government servicing
|
$
|
133,189
|
|
|
124,378
|
|
|
97,351
|
|
|
Increase due to an increase in the number of borrowers serviced under the government servicing contract.
|
FFELP servicing
|
14,248
|
|
|
13,334
|
|
|
20,420
|
|
|
Increase in 2015 compared to 2014 due to an increase in third-party servicing volume as a result of conversions to the Company's servicing platform during 2015. Over time, FFELP servicing revenue will decrease as third-party customers' FFELP portfolios run off.
|
|
Private servicing
|
12,040
|
|
|
10,497
|
|
|
9,485
|
|
|
Increase due to an increase in private loan servicing volume.
|
|
FFELP guaranty servicing
|
9,318
|
|
|
11,284
|
|
|
12,251
|
|
|
Decrease will continue as FFELP portfolios run off and guaranty volume decreases. See additional information regarding guaranty servicing and guaranty collection revenue in the paragraphs following this table.
|
|
FFELP guaranty collection
|
47,597
|
|
|
55,369
|
|
|
73,628
|
|
|
The Company earns revenue from rehabilitating defaulted FFELP loans on behalf of guaranty agencies. Over time, this FFELP-related revenue source will decrease as FFELP portfolios continue to run off. Also, recent federal budget provisions that became effective July 1, 2014 have reduced payments by the Department to guaranty agencies for assisting student loan borrowers with the rehabilitation of defaulted loans under FFELP. Rehabilitation collection revenue was $34.3 million, $41.6 million, and $54.2 million in 2015, 2014, and 2013, respectively. This revenue was negatively impacted in 2015 and 2014 as a result of these federal budget provisions. The Company anticipates this revenue will continue to be negatively impacted as a result of these federal budget provisions. See additional information regarding guaranty servicing and guaranty collection revenue in the paragraphs following this table.
|
|
Software services
|
19,492
|
|
|
22,349
|
|
|
28,609
|
|
|
The majority of software services revenue relates to providing hosted student loan servicing. In October 2011, the Company began providing hosted student loan servicing to a significant customer. The contract with this customer expired in December 2013. Revenue earned from this customer in 2013 was $6.2 million. Decrease in 2015 compared to 2014 is due to a decrease in the average number of remote hosted borrowers.
|
|
Other
|
3,974
|
|
|
3,203
|
|
|
1,684
|
|
|
Increase due to additional contact center outsourcing activities.
|
|
Loan and guaranty servicing revenue
|
$
|
239,858
|
|
|
240,414
|
|
|
243,428
|
|
|
|
|
Year ended December 31,
|
|
|
||||||||
|
2015
|
|
2014
|
|
2013
|
|
Additional information
|
||||
Net interest income
|
$
|
3
|
|
|
6
|
|
|
—
|
|
|
|
Tuition payment processing, school information, and campus commerce revenue
|
120,365
|
|
|
98,156
|
|
|
80,682
|
|
|
In addition to the acquisition of RenWeb referred to above, the remaining increase was due to an increase in the number of managed tuition payment plans, campus commerce customer transaction volume, and new school customers.
|
|
Other income (expense)
|
(925
|
)
|
|
1,268
|
|
|
—
|
|
|
Amount represents the remeasurement of contingent consideration to fair value related to the acquisition of RenWeb.
|
|
Total other income
|
119,440
|
|
|
99,424
|
|
|
80,682
|
|
|
|
|
Salaries and benefits
|
55,523
|
|
|
48,453
|
|
|
37,575
|
|
|
In addition to the acquisition of RenWeb referred to above, the remaining increase was due to additional personnel to support the increase in payment plans and continued system maintenance and enhancements.
|
|
Depreciation and amortization
|
8,992
|
|
|
8,169
|
|
|
4,518
|
|
|
Amortization of intangible assets for 2015, 2014, and 2013 was $8.9 million, $6.5 million, and $3.3 million, respectively. As a result of the acquisition of RenWeb, the Company recorded $37.2 million of intangible assets that increased amortization expense in 2015 and 2014.
|
|
Other expenses
|
15,161
|
|
|
13,006
|
|
|
9,147
|
|
|
In addition to the acquisition of RenWeb referred to above, the remaining increase was due to additional personnel to support the increase in payment plans and continued system maintenance and enhancements.
|
|
Intersegment expenses, net
|
11,056
|
|
|
5,864
|
|
|
5,989
|
|
|
Intersegment expenses represent costs for certain corporate activities that are allocated to each operating segment based on estimated use of such activities and services.
|
|
Total operating expenses
|
90,732
|
|
|
75,492
|
|
|
57,229
|
|
|
|
|
Income before income taxes and corporate overhead allocation
|
28,711
|
|
|
23,938
|
|
|
23,453
|
|
|
|
|
Corporate overhead allocation
|
(3,852
|
)
|
|
(3,010
|
)
|
|
(1,957
|
)
|
|
|
|
Income before income taxes
|
24,859
|
|
|
20,928
|
|
|
21,496
|
|
|
|
|
Income tax expense
|
(9,446
|
)
|
|
(7,952
|
)
|
|
(8,168
|
)
|
|
|
|
Net income
|
$
|
15,413
|
|
|
12,976
|
|
|
13,328
|
|
|
|
Before tax operating margin
|
20.8
|
%
|
|
21.0
|
%
|
|
26.6
|
%
|
|
Excluding the amortization of intangibles, before tax operating margin was 28.3%, 27.6%, and 30.7%, for 2015, 2014, and 2013, respectively. The decrease in margin in 2014 compared to 2013 was primarily due to a change in the mix of products and services provided as a result of integration efforts with the acquisition of RenWeb referred to above.
|
|
Year ended December 31,
|
||||||||
|
2015
|
|
2014
|
|
2013
|
||||
Beginning balance
|
$
|
28,223,908
|
|
|
26,121,306
|
|
|
24,995,880
|
|
Loan acquisitions
|
4,036,333
|
|
|
6,099,249
|
|
|
4,058,997
|
|
|
Repayments, claims, capitalized interest, and other
|
(2,466,378
|
)
|
|
(2,745,341
|
)
|
|
(2,375,806
|
)
|
|
Consolidation loans lost to external parties
|
(1,234,118
|
)
|
|
(990,960
|
)
|
|
(514,108
|
)
|
|
Loans sold
|
(3,996
|
)
|
|
(260,346
|
)
|
|
(43,657
|
)
|
|
Ending balance
|
$
|
28,555,749
|
|
|
28,223,908
|
|
|
26,121,306
|
|
|
Year ended December 31,
|
||||||||
|
2015
|
|
2014
|
|
2013
|
||||
Variable student loan yield, gross
|
2.59
|
%
|
|
2.55
|
%
|
|
2.58
|
%
|
|
Consolidation rebate fees
|
(0.83
|
)
|
|
(0.82
|
)
|
|
(0.77
|
)
|
|
Discount accretion, net of premium and deferred origination costs amortization
|
0.05
|
|
|
0.05
|
|
|
0.03
|
|
|
Variable student loan yield, net
|
1.81
|
|
|
1.78
|
|
|
1.84
|
|
|
Student loan cost of funds - interest expense
|
(1.02
|
)
|
|
(0.95
|
)
|
|
(0.91
|
)
|
|
Student loan cost of funds - derivative settlements
|
—
|
|
|
0.01
|
|
|
0.01
|
|
|
Variable student loan spread
|
0.79
|
|
|
0.84
|
|
|
0.94
|
|
|
Fixed rate floor income, net of settlements on derivatives
|
0.64
|
|
|
0.64
|
|
|
0.60
|
|
|
Core student loan spread
|
1.43
|
%
|
|
1.48
|
%
|
|
1.54
|
%
|
|
|
|
|
|
|
|
||||
Average balance of student loans
|
$
|
28,647,108
|
|
|
28,036,577
|
|
|
24,960,521
|
|
Average balance of debt outstanding
|
28,687,086
|
|
|
28,116,989
|
|
|
24,954,546
|
|
(a)
|
The interest earned on a large portion of the Company's FFELP student loan assets is indexed to the one-month LIBOR rate. The Company funds the majority of its assets with three-month LIBOR indexed floating rate securities. The relationship between the indices in which the Company earns interest on its loans and funds such loans has a significant impact on student loan spread. This table (the right axis) shows the difference between the Company's liability base rate and the one-month LIBOR rate by quarter.
|
|
Year ended December 31,
|
||||||||
|
2015
|
|
2014
|
|
2013
|
||||
Fixed rate floor income, gross
|
$
|
207,787
|
|
|
204,250
|
|
|
179,453
|
|
Derivative settlements (a)
|
(23,041
|
)
|
|
(24,380
|
)
|
|
(31,022
|
)
|
|
Fixed rate floor income, net
|
$
|
184,746
|
|
|
179,870
|
|
|
148,431
|
|
Fixed rate floor income contribution to spread, net
|
0.64
|
%
|
|
0.64
|
%
|
|
0.60
|
%
|
(a)
|
Includes settlement payments on derivatives used to hedge student loans earning fixed rate floor income.
|
|
Year ended December 31,
|
|
|
||||||||
|
2015
|
|
2014
|
|
2013
|
|
Additional Information
|
||||
Variable interest income, net of settlements on derivatives
|
$
|
740,778
|
|
|
718,274
|
|
|
645,739
|
|
|
Increase due to an increase in the average student loan portfolio in 2015 and 2014; gross yield earned on student loans increased in 2015 compared to 2014 and decreased in 2014 compared to 2013.
|
Consolidation rebate fees
|
(237,233
|
)
|
|
(230,956
|
)
|
|
(192,061
|
)
|
|
Increase due to an increase in the average consolidation loan balance.
|
|
Discount accretion, net of premium and deferred origination costs amortization
|
14,731
|
|
|
15,002
|
|
|
8,067
|
|
|
Increase in 2015 and 2014 as compared to 2013 due to the Company's purchases of loans at a net discount over the last several years.
|
|
Interest on bonds and notes payable
|
(295,797
|
)
|
|
(267,506
|
)
|
|
(226,265
|
)
|
|
Increase due to an increase in average debt outstanding and an increase in cost of funds.
|
|
Variable student loan interest margin, net of settlements on derivatives
|
222,479
|
|
|
234,814
|
|
|
235,480
|
|
|
|
|
Fixed rate floor income, net of settlements on derivatives
|
184,746
|
|
|
179,870
|
|
|
148,431
|
|
|
The high levels of fixed rate floor income earned were due to historically low interest rates. Fixed rate floor income has increased year over year due to recent purchases of loans earning fixed rate floor income and a decrease in settlements related to derivative instruments used to hedge student loans earning fixed rate floor income.
|
|
Investment interest
|
1,939
|
|
|
374
|
|
|
461
|
|
|
|
|
Intercompany interest
|
(1,828
|
)
|
|
(2,236
|
)
|
|
(3,267
|
)
|
|
|
|
Provision for loan losses - federally insured loans
|
(8,000
|
)
|
|
(11,000
|
)
|
|
(20,000
|
)
|
|
|
|
(Provision) recovery of loan losses - private education loans
|
(2,150
|
)
|
|
1,500
|
|
|
1,500
|
|
|
|
|
Net interest income after provision for loan losses (net of settlements on derivatives)
|
$
|
397,186
|
|
|
403,322
|
|
|
362,605
|
|
|
|
|
As of December 31, 2015
|
||||
|
Carrying
amount
|
|
Final maturity
|
||
Bonds and notes issued in asset-backed securitizations
|
$
|
26,315,701
|
|
|
8/26/19 - 8/26/52
|
FFELP warehouse facilities
|
1,855,907
|
|
|
4/29/18 - 12/14/18
|
|
Private education loan warehouse facility
|
181,184
|
|
|
12/26/16
|
|
Other borrowings
|
75,000
|
|
|
10/31/16
|
|
|
$
|
28,427,792
|
|
|
|
|
Total shares repurchased
|
|
Purchase price (in thousands)
|
|
Average price of shares repurchased (per share)
|
|||||
|
|
|
||||||||
Year ended December 31, 2015
|
2,449,159
|
|
|
$
|
96,169
|
|
|
$
|
39.27
|
|
Year ended December 31, 2014
|
381,689
|
|
|
15,713
|
|
|
41.17
|
|
||
Year ended December 31, 2013
|
393,259
|
|
|
13,136
|
|
|
33.40
|
|
|
As of December 31, 2015
|
||||||||||||||
|
Total
|
|
Less than 1 year
|
|
1 to 3 years
|
|
3 to 5 years
|
|
More than 5 years
|
||||||
Bonds and notes payable (a)
|
$
|
28,603,331
|
|
|
256,184
|
|
|
1,855,907
|
|
|
368,403
|
|
|
26,122,837
|
|
Operating lease obligations
|
22,300
|
|
|
5,258
|
|
|
7,597
|
|
|
4,438
|
|
|
5,007
|
|
|
Capital lease obligations
|
1,020
|
|
|
588
|
|
|
425
|
|
|
7
|
|
|
—
|
|
|
Total
|
$
|
28,626,651
|
|
|
262,030
|
|
|
1,863,929
|
|
|
372,848
|
|
|
26,127,844
|
|
(a)
|
Amounts exclude interest as substantially all bonds and notes payable carry variable rates of interest.
|
|
As of December 31, 2015
|
|
As of December 31, 2014
|
||||||||||
|
Dollars
|
|
Percent
|
|
Dollars
|
|
Percent
|
||||||
Fixed-rate loan assets
|
$
|
11,229,584
|
|
|
39.3
|
%
|
|
$
|
12,700,494
|
|
|
45.0
|
%
|
Variable-rate loan assets
|
17,326,165
|
|
|
60.7
|
|
|
15,523,414
|
|
|
55.0
|
|
||
Total
|
$
|
28,555,749
|
|
|
100.0
|
%
|
|
$
|
28,223,908
|
|
|
100.0
|
%
|
|
|||||||||||||
Fixed-rate debt instruments
|
$
|
—
|
|
|
—
|
%
|
|
$
|
—
|
|
|
—
|
%
|
Variable-rate debt instruments
|
28,603,331
|
|
|
100.0
|
|
|
28,420,422
|
|
|
100.0
|
|
||
Total
|
$
|
28,603,331
|
|
|
100.0
|
%
|
|
$
|
28,420,422
|
|
|
100.0
|
%
|
|
Year ended December 31,
|
||||||||
|
2015
|
|
2014
|
|
2013
|
||||
Fixed rate floor income, gross
|
$
|
207,787
|
|
|
204,250
|
|
|
179,453
|
|
Derivative settlements (a)
|
(23,041
|
)
|
|
(24,380
|
)
|
|
(31,022
|
)
|
|
Fixed rate floor income, net
|
$
|
184,746
|
|
|
179,870
|
|
|
148,431
|
|
(a)
|
Includes settlement payments on derivatives used to hedge student loans earning fixed rate floor income.
|
Fixed interest rate range
|
|
Borrower/lender weighted average yield
|
|
Estimated variable conversion rate (a)
|
|
Loan balance
|
||
|
|
|
||||||
3.0 - 3.49%
|
|
3.20%
|
|
0.56%
|
|
$
|
2,268,676
|
|
3.5 - 3.99%
|
|
3.65%
|
|
1.01%
|
|
2,344,201
|
|
|
4.0 - 4.49%
|
|
4.20%
|
|
1.56%
|
|
1,747,359
|
|
|
4.5 - 4.99%
|
|
4.72%
|
|
2.08%
|
|
1,062,731
|
|
|
5.0 - 5.49%
|
|
5.22%
|
|
2.58%
|
|
668,247
|
|
|
5.5 - 5.99%
|
|
5.67%
|
|
3.03%
|
|
464,698
|
|
|
6.0 - 6.49%
|
|
6.19%
|
|
3.55%
|
|
540,592
|
|
|
6.5 - 6.99%
|
|
6.70%
|
|
4.06%
|
|
531,121
|
|
|
7.0 - 7.49%
|
|
7.17%
|
|
4.53%
|
|
185,523
|
|
|
7.5 - 7.99%
|
|
7.71%
|
|
5.07%
|
|
312,178
|
|
|
8.0 - 8.99%
|
|
8.18%
|
|
5.54%
|
|
728,994
|
|
|
> 9.0%
|
|
9.05%
|
|
6.41%
|
|
252,948
|
|
|
|
|
|
|
|
|
$
|
11,107,268
|
|
(a)
|
The estimated variable conversion rate is the estimated short-term interest rate at which loans would convert to a variable rate. As of
December 31, 2015
, the weighted average estimated variable conversion rate was
2.15%
and the short-term interest rate was
26
basis points.
|
(a)
|
For all interest rate derivatives, the Company receives discrete three-month LIBOR.
|
Index
|
|
Frequency of variable resets
|
|
Assets
|
|
Funding of student loan assets
|
|||
1 month LIBOR (a)
|
|
Daily
|
|
$
|
26,033,048
|
|
|
—
|
|
3 month H15 financial commercial paper
|
|
Daily
|
|
1,420,512
|
|
|
—
|
|
|
3 month Treasury bill
|
|
Daily
|
|
834,547
|
|
|
—
|
|
|
3 month LIBOR (a) (b)
|
|
Quarterly
|
|
—
|
|
|
15,763,391
|
|
|
1 month LIBOR
|
|
Monthly
|
|
—
|
|
|
10,129,979
|
|
|
Auction-rate (c)
|
|
Varies
|
|
—
|
|
|
1,160,365
|
|
|
Asset-backed commercial paper (d)
|
|
Varies
|
|
—
|
|
|
1,117,873
|
|
|
Other (e)
|
|
|
|
1,190,697
|
|
|
1,307,196
|
|
|
|
|
|
|
$
|
29,478,804
|
|
|
29,478,804
|
|
(a)
|
The Company has certain basis swaps outstanding in which the Company receives three-month LIBOR and pays one-month LIBOR plus or minus a spread as defined in the agreements (the "1:3 Basis Swaps"). The Company entered into these derivative instruments to better match the interest rate characteristics on its student loan assets and the debt funding such assets. As of December 31, 2015, the Company had $7.5 billion notional amount of 1:3 Basis Swaps outstanding that mature during 2016. The weighted average rate paid by the Company on the 1:3 Basis Swaps as of December 31, 2015 was one-month LIBOR plus 10.0 basis points.
|
(b)
|
The Company has Euro-denominated notes that reprice on the EURIBOR index. The Company has entered into a cross-currency interest rate swap that converts the EURIBOR index to three-month LIBOR. As a result, these notes are reflected in the three-month LIBOR category in the above table. See “Foreign Currency Exchange Risk” below.
|
(c)
|
The interest rates on certain of the Company's asset-backed securities are set and periodically reset via a "dutch auction" (“Auction Rate Securities”). As of
December 31, 2015
, the Company was sponsor for
$1.2 billion
of Auction Rate Securities. Since February 2008, problems in the auction rate securities market as a whole have led to failures of the auctions pursuant to which the Company's Auction Rate Securities' interest rates are set. As a result, the Auction Rate Securities generally pay interest to the holder at a maximum rate as defined by the indenture. While these rates will vary, they will generally be based on a spread to LIBOR or Treasury Securities, or the Net Loan Rate as defined in the financing documents.
|
(d)
|
The interest rates on certain of the Company's warehouse facilities are indexed to asset-backed commercial paper rates.
|
(e)
|
Assets include accrued interest receivable and restricted cash and investments. Funding represents overcollateralization (equity) included in FFELP asset-backed securitizations and warehouse facilities and other liabilities funding student loans and related assets.
|
|
Interest rates
|
|
Asset and funding index mismatches
|
||||||||||||||||||||||||
|
Change from increase of 100 basis points
|
|
Change from increase of 300 basis points
|
|
Increase of 10 basis points
|
|
Increase of 30 basis points
|
||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||
|
Dollars
|
|
Percent
|
|
Dollars
|
|
Percent
|
|
Dollars
|
|
Percent
|
|
Dollars
|
|
Percent
|
||||||||||||
|
Year ended December 31, 2015
|
||||||||||||||||||||||||||
Effect on earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Decrease in pre-tax net income before impact of derivative settlements
|
$
|
(83,412
|
)
|
|
(19.8
|
)%
|
|
$
|
(151,492
|
)
|
|
(36.0
|
)%
|
|
$
|
(17,079
|
)
|
|
(4.1
|
)%
|
|
$
|
(51,238
|
)
|
|
(12.2
|
)%
|
Impact of derivative settlements
|
38,439
|
|
|
9.1
|
|
|
115,315
|
|
|
27.4
|
|
|
6,161
|
|
|
1.5
|
|
|
18,484
|
|
|
4.4
|
|
||||
Increase (decrease) in net income before taxes
|
$
|
(44,973
|
)
|
|
(10.7
|
)%
|
|
$
|
(36,177
|
)
|
|
(8.6
|
)%
|
|
$
|
(10,918
|
)
|
|
(2.6
|
)%
|
|
$
|
(32,754
|
)
|
|
(7.8
|
)%
|
Increase (decrease) in basic and diluted earnings per share
|
$
|
(0.61
|
)
|
|
|
|
$
|
(0.49
|
)
|
|
|
|
$
|
(0.16
|
)
|
|
|
|
$
|
(0.46
|
)
|
|
|
||||
|
Year ended December 31, 2014
|
||||||||||||||||||||||||||
Effect on earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Decrease in pre-tax net income before impact of derivative settlements
|
$
|
(81,669
|
)
|
|
(17.4
|
)%
|
|
$
|
(144,648
|
)
|
|
(30.8
|
)%
|
|
$
|
(17,231
|
)
|
|
(3.6
|
)%
|
|
$
|
(51,697
|
)
|
|
(11.0
|
)%
|
Impact of derivative settlements
|
40,267
|
|
|
8.6
|
|
|
120,801
|
|
|
25.7
|
|
|
7,649
|
|
|
1.6
|
|
|
22,951
|
|
|
4.9
|
|
||||
Increase (decrease) in net income before taxes
|
$
|
(41,402
|
)
|
|
(8.8
|
)%
|
|
$
|
(23,847
|
)
|
|
(5.1
|
)%
|
|
$
|
(9,582
|
)
|
|
(2.0
|
)%
|
|
$
|
(28,746
|
)
|
|
(6.1
|
)%
|
Increase (decrease) in basic and diluted earnings per share
|
$
|
(0.55
|
)
|
|
|
|
$
|
(0.32
|
)
|
|
|
|
$
|
(0.12
|
)
|
|
|
|
$
|
(0.38
|
)
|
|
|
||||
|
Year ended December 31, 2013
|
||||||||||||||||||||||||||
Effect on earnings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Decrease in pre-tax net income before impact of derivative settlements
|
$
|
(70,599
|
)
|
|
(15.1
|
)%
|
|
$
|
(124,864
|
)
|
|
(26.8
|
)%
|
|
$
|
(16,831
|
)
|
|
(3.6
|
)%
|
|
$
|
(50,493
|
)
|
|
(10.8
|
)%
|
Impact of derivative settlements
|
60,123
|
|
|
12.9
|
|
|
180,370
|
|
|
38.7
|
|
|
6,855
|
|
|
1.5
|
|
|
20,565
|
|
|
4.4
|
|
||||
Increase (decrease) in net income before taxes
|
$
|
(10,476
|
)
|
|
(2.2
|
)%
|
|
$
|
55,506
|
|
|
11.9
|
%
|
|
$
|
(9,976
|
)
|
|
(2.1
|
)%
|
|
$
|
(29,928
|
)
|
|
(6.4
|
)%
|
Increase (decrease) in basic and diluted earnings per share
|
$
|
(0.14
|
)
|
|
|
|
$
|
0.74
|
|
|
|
|
$
|
(0.13
|
)
|
|
|
|
$
|
(0.40
|
)
|
|
|
|
|
As of December 31, 2015
|
||||||||
Plan category
|
|
Number of shares to be issued upon exercise of outstanding options, warrants, and rights (a)
|
|
Weighted-average exercise price of outstanding options, warrants, and rights (b)
|
|
Number of shares remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
|
||||
Equity compensation plans approved by shareholders
|
|
—
|
|
|
—
|
|
|
2,638,296
|
|
(1)
|
Equity compensation plans not approved by shareholders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
—
|
|
|
—
|
|
|
2,638,296
|
|
|
(1)
|
Includes
2,024,655
,
79,479
, and
534,162
shares of Class A Common Stock remaining available for future issuance under the Nelnet, Inc. Restricted Stock Plan, Nelnet, Inc. Directors Stock Compensation Plan, and Nelnet, Inc. Employee Share Purchase Plan, respectively.
|
(a)
|
1. Consolidated Financial Statements
|
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
|
F-2
|
Consolidated Balance Sheets as of December 31, 2015 and 2014
|
|
F-3
|
Consolidated Statements of Income for the years ended December 31, 2015, 2014, and 2013
|
|
F-4
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2015, 2014, and 2013
|
|
F-5
|
Consolidated Statements of Shareholders' Equity for the years ended December 31, 2015, 2014, and 2013
|
|
F-6
|
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014, and 2013
|
|
F-7
|
Notes to Consolidated Financial Statements
|
|
F-8
|
(b)
|
Exhibits
|
Exhibit Index
|
|
Exhibit No.
|
Description
|
2.1++
|
Stock Purchase Agreement dated as of April 10, 2014 among Nelnet Finance Corp., Nelnet, Inc., Student Loan Xpress, Inc., and CIT Group Inc., filed as Exhibit 2.1 to the registrant's Current Report on Form 8-K filed on April 16, 2014 and incorporated by reference herein.
|
|
|
2.2++
|
Loan Sale Agreement dated as of April 10, 2014 among National Education Loan Network, Inc., Student Loan Xpress, Inc., Fifth Third Bank, Union Bank and Trust Company, and CIT Group Inc., filed as Exhibit 2.2 to the registrant's Current Report on Form 8-K filed on April 16, 2014 and incorporated by reference herein.
|
|
|
2.3++
|
Loan Sale Agreement dated as of April 10, 2014 among National Education Loan Network, Inc., CIT Education Loan Trust 2012-1, Manufacturers and Traders Trust Company, Union Bank and Trust Company, and CIT Group Inc., filed as Exhibit 2.3 to the registrant's Current Report on Form 8-K filed on April 16, 2014 and incorporated by reference herein.
|
|
|
2.4++
|
Loan Sale Agreement dated as of April 10, 2014 among National Education Loan Network, Inc., CIT Education Loan Trust 2011-1, Manufacturers and Traders Trust Company, Union Bank and Trust Company, and CIT Group Inc., filed as Exhibit 2.4 to the registrant's Current Report on Form 8-K filed on April 16, 2014 and incorporated by reference herein.
|
|
|
3.1
|
Second Amended and Restated Articles of Incorporation of Nelnet, Inc., and Articles of Amendment thereto, filed as Exhibit 3.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2006 and incorporated by reference herein.
|
|
|
Exhibit Index
|
|
3.2
|
Articles of Amendment to Second Amended and Restated Articles of Incorporation of Nelnet, Inc., filed as Exhibit 3.1 to the registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007 and incorporated by reference herein.
|
|
|
3.3
|
Seventh Amended and Restated Bylaws of Nelnet, Inc., as amended as of February 6, 2014, filed as Exhibit 3.1 to the registrant's Current Report on Form 8-K filed on February 11, 2014 and incorporated by reference herein.
|
|
|
4.1
|
Form of Class A Common Stock Certificate of Nelnet, Inc., filed on November 24, 2003 as Exhibit 4.1 to the registrant’s Registration Statement on Form S-1 (Registration No. 333-108070) and incorporated by reference herein.
|
|
|
4.2
|
Certain instruments, including indentures of trust, defining the rights of holders of long-term debt of the registrant and its consolidated subsidiaries, none of which instruments authorizes a total amount of indebtedness thereunder in excess of 10 percent of the total assets of the registrant and its subsidiaries on a consolidated basis, are omitted from this Exhibit Index pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K. Many of such instruments have been previously filed with the Securities and Exchange Commission, and the registrant hereby agrees to furnish a copy of any such instrument to the Commission upon request.
|
|
|
4.3
|
Registration Rights Agreement, dated as of December 16, 2003, by and among Nelnet, Inc. and the shareholders of Nelnet, Inc. signatory thereto, filed on November 24, 2003 as Exhibit 4.11 to the registrant’s Registration Statement on Form S-1 (Registration No. 333-108070) and incorporated by reference herein.
|
|
|
10.1
|
Composite Form of Amended and Restated Participation Agreement, dated as of June 1, 2001, between NELnet, Inc. (subsequently renamed National Education Loan Network, Inc.) and Union Bank and Trust Company, as amended by the First Amendment thereto dated as of December 19, 2001 through the Cancellation of the Fifteenth Amendment thereto dated as of March 16, 2011 (such Participation Agreement and each amendment through the Cancellation of the Fifteenth Amendment thereto have been previously filed as set forth in the Exhibit Index for the registrant’s Annual Report on Form 10-K for the year ended December 31, 2012, and are incorporated by reference herein), filed as Exhibit 10.1 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2013 and incorporated by reference herein.
|
|
|
10.2
|
Sixteenth Amendment of Amended and Restated Participation Agreement, dated as of March 23, 2012, by and between Union Bank and Trust Company and National Education Loan Network, Inc., filed as Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 and incorporated by reference herein.
|
|
|
10.3
|
Guaranteed Purchase Agreement, dated as of March 19, 2001, by and between NELnet, Inc. (subsequently renamed National Education Loan Network, Inc.) and Union Bank and Trust Company, filed on September 25, 2003 as Exhibit 10.36 to the registrant’s Registration Statement on Form S-1 (Registration No. 333-108070) and incorporated by reference herein.
|
|
|
10.4
|
First Amendment of Guaranteed Purchase Agreement, dated as of February 1, 2002, by and between NELnet, Inc. (subsequently renamed National Education Loan Network, Inc.) and Union Bank and Trust Company, filed on September 25, 2003 as Exhibit 10.37 to the registrant’s Registration Statement on Form S-1 (Registration No. 333-108070) and incorporated by reference herein.
|
|
|
10.5
|
Second Amendment of Guaranteed Purchase Agreement, dated as of December 1, 2002, by and between Nelnet, Inc. (f/k/a/ NELnet, Inc.) (subsequently renamed National Education Loan Network, Inc.) and Union Bank and Trust Company, filed on September 25, 2003 as Exhibit 10.38 to the registrant’s Registration Statement on Form S-1 (Registration No. 333-108070) and incorporated by reference herein.
|
|
|
10.6
|
Guaranteed Purchase Agreement, dated as of September 1, 2010, by and between Nelnet, Inc. and Union Bank and Trust Company, filed as Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 and incorporated by reference herein.
|
|
|
10.7
|
First Amendment of Guaranteed Purchase Agreement, dated as of March 22, 2011, by and between Nelnet, Inc. and Union Bank and Trust Company, filed as Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 and incorporated by reference herein.
|
|
|
10.8
|
Amendment of Agreements dated as of February 4, 2005, by and between National Education Loan Network, Inc. and Union Bank and Trust Company, filed as Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on February 10, 2005 and incorporated by reference herein.
|
|
|
10.9+
|
Nelnet, Inc. Employee Share Purchase Plan, as amended through March 17, 2011, filed as Exhibit 10.4 to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 and incorporated by reference herein.
|
|
|
Exhibit Index
|
|
10.10
|
Office Building Lease dated June 21, 1996 between Miller & Paine and Union Bank and Trust Company, filed as Exhibit 10.3 to the registrant's Current Report on Form 8-K filed on October 16, 2006 and incorporated by reference herein.
|
|
|
10.11
|
Amendment to Office Building Lease dated June 11, 1997 between Miller & Paine and Union Bank and Trust Company, filed as Exhibit 10.4 to the registrant's Current Report on Form 8-K filed on October 16, 2006 and incorporated by reference herein.
|
|
|
10.12
|
Lease Amendment Number Two dated February 8, 2001 between Miller & Paine and Union Bank and Trust Company, filed as Exhibit 10.5 to the registrant's Current Report on Form 8-K filed on October 16, 2006 and incorporated by reference herein.
|
|
|
10.13
|
Lease Amendment Number Three dated May 23, 2005 between Miller & Paine, LLC and Union Bank and Trust Company, filed as Exhibit 10.6 to the registrant's Current Report on Form 8-K filed on October 16, 2006 and incorporated by reference herein.
|
|
|
10.14
|
Lease Agreement dated May 20, 2005 between Miller & Paine, LLC and Union Bank and Trust Company, filed as Exhibit 10.7 to the registrant's Current Report on Form 8-K filed on October 16, 2006 and incorporated by reference herein.
|
|
|
10.15
|
Office Sublease dated April 30, 2001 between Union Bank and Trust Company and Nelnet, Inc., filed as Exhibit 10.8 to the registrant's Current Report on Form 8-K filed on October 16, 2006 and incorporated by reference herein.
|
|
|
10.16+
|
Nelnet, Inc. Restricted Stock Plan, as amended through May 22, 2014, filed as Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on May 28, 2014 and incorporated by reference herein.
|
|
|
10.17+
|
Nelnet, Inc. Directors Stock Compensation Plan, as amended through April 18, 2008, filed on June 27, 2008 as Exhibit 99.1 to the registrant’s Registration Statement on Form S-8 (Registration No. 333-151911) and incorporated herein by reference.
|
|
|
10.18+
|
Nelnet, Inc. Executive Officers Incentive Compensation Plan, filed as Exhibit 10.2 to the registrant's Current Report on Form 8-K filed on May 28, 2014 and incorporated by reference herein.
|
|
|
10.19
|
Loan Purchase Agreement, dated as of November 25, 2008, by and between Nelnet Education Loan Funding, Inc., f/k/a NEBHELP, INC., acting, where applicable, by and through Wells Fargo Bank, National Association, not individually but as Eligible Lender Trustee for the Seller under the Warehouse Agreement or Eligible Lender Trust Agreement, and Union Bank and Trust Company, acting in its individual capacity and as trustee, filed as Exhibit 10.71 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference.
|
|
|
10.20
|
Student Loan Servicing Contract between the United States Department of Education and Nelnet Servicing, LLC, filed as Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 and incorporated herein by reference.
|
|
|
10.21
|
Modification of Contract dated effective as of June 17, 2014 for Student Loan Servicing Contract between the United States Department of Education and Nelnet Servicing, LLC, filed as Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on June 18, 2014 and incorporated by reference herein.
|
|
|
10.22
|
Modification of Contract dated effective as of September 1, 2014 for Student Loan Servicing Contract between the United States Department of Education and Nelnet Servicing, LLC, filed as Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on September 2, 2014 and incorporated herein by reference.
|
|
|
10.23
|
Management Agreement, dated effective as of May 1, 2011, by Whitetail Rock Capital Management, LLC and Union Bank and Trust Company, filed as Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 and incorporated herein by reference.
|
|
|
10.24
|
Management Agreement, dated effective as of January 20, 2012, by and between Union Bank and Trust Company and Whitetail Rock Capital Management, LLC, filed as Exhibit 10.58 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2011 and incorporated herein by reference.
|
|
|
10.25*
|
Management Agreement, dated effective as of October 27, 2015, by and between Union Bank and Trust Company and Whitetail Rock Capital Management, LLC.
|
|
|
10.26
|
Investment Management Agreement, dated effective as of February 10, 2012, by and among Whitetail Rock SLAB Fund I, LLC, Whitetail Rock Fund Management, LLC, and Whitetail Rock Capital Management, LLC, filed as Exhibit 10.4 to the registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 and incorporated herein by reference.
|
|
|
Exhibit Index
|
|
10.27
|
Investment Management Agreement, dated effective as of February 14, 2013, by and among Whitetail Rock SLAB Fund III, LLC, Whitetail Rock Fund Management, LLC, and Whitetail Rock Capital Management, LLC, filed as Exhibit 10.31 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2013 and incorporated herein by reference.
|
|
|
10.28
|
Form of Custodian Agreement for Whitetail Rock SLAB Funds by and among the Fund, Whitetail Rock Fund Management, LLC, and Union Bank and Trust Company, filed as Exhibit 10.27 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2014 and incorporated herein by reference.
|
|
|
10.29
|
Form of Administrative Services Agreement for Whitetail Rock SLAB Funds by and among the Fund, Whitetail Rock Fund Management, LLC, Adminisystems, Inc., and Union Bank and Trust Company, filed as Exhibit 10.28 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2014 and incorporated herein by reference.
|
|
|
10.30
|
Credit Agreement, dated as of February 17, 2012, among Nelnet, Inc., U.S. Bank National Association, as Administrative Agent, Lead Arranger and Book Runner, Wells Fargo Bank, National Association, as Syndication Agent, and Citibank, N.A. and Royal Bank of Canada, as Co-Documentation Agents, and various lender parties thereto, filed as Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on February 24, 2012 and incorporated herein by reference.
|
|
|
10.31
|
Amendment No. 1 dated as of March 16, 2012 to Credit Agreement dated as of February 17, 2012, by and among Nelnet, Inc., U.S. Bank National Association, as Agent for the Lenders, and various lender parties thereto, filed as Exhibit 10.2 to the registrant's Current Report on Form 8-K filed on April 2, 2013 and incorporated by reference herein.
|
|
|
10.32
|
Amendment No. 2 dated as of March 28, 2013 to Credit Agreement dated as of February 17, 2012, by and among Nelnet, Inc., U.S. Bank National Association, as Agent for the Lenders, and various lender parties thereto, filed as Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on April 2, 2013 and incorporated by reference herein.
|
|
|
10.33
|
Amendment No. 3 dated as of June 30, 2014 to Credit Agreement dated as of February 17, 2012, by and among Nelnet, Inc., U.S. Bank National Association, as Agent for the Lenders, and various lender parties thereto, filed as Exhibit 10.1 to the registrant's Current Report on Form 8-K filed on July 7, 2014 and incorporated by reference herein.
|
|
|
10.34
|
Amendment No. 4 dated as of February 13, 2015 to Credit Agreement dated as of February 17, 2012, by and among Nelnet, Inc., U.S. Bank National Association, as Agent for the Lenders, and various lender parties thereto, filed as Exhibit 10.34 to the registrant's Annual Report on Form 10-K for the year ended December 31, 2014 and incorporated herein by reference.
|
|
|
10.35
|
Amended and Restated Credit Agreement dated as of October 30, 2015, among Nelnet, Inc., U.S. Bank National Association, as Administrative Agent, Lead Arranger and Book Runner, Wells Fargo Bank, National Association, as Syndication Agent, and Citibank, N.A. and Royal Bank of Canada, as Co-Documentation Agents, and various lender parties thereto, filed as Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 and incorporated herein by reference.
|
|
|
10.36
|
Amended and Restated Guaranty dated as of October 30, 2015, by each of the subsidiaries of Nelnet, Inc. signatories thereto, in favor of U.S. Bank National Association, as Administrative Agent, filed as Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 and incorporated herein by reference.
|
|
|
10.37
|
Aircraft Purchase Agreement dated as of May 20, 2013, by and between Galena Air Services Company and National Education Loan Network, Inc., filed as Exhibit 10.1 to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 and incorporated by reference herein.
|
|
|
10.38
|
First Amendment of Aircraft Purchase Agreement dated as of June 11, 2013, by and between Galena Air Services Company and National Education Loan Network, Inc., filed as Exhibit 10.2 to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 and incorporated by reference herein.
|
|
|
10.39
|
Agreement for Purchase and Sale of Interest in Aircraft dated as of June 25, 2013, by and between National Education Loan Network, Inc. and Union Financial Services, Inc., filed as Exhibit 10.3 to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 and incorporated by reference herein.
|
|
|
10.40
|
Aircraft Joint Ownership Agreement dated as of June 25, 2013, by and between National Education Loan Network, Inc. and Union Financial Services, Inc., filed as Exhibit 10.4 to the registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 and incorporated by reference herein.
|
|
|
Exhibit Index
|
|
** Furnished herewith
|
|
+ Indicates a management contract or compensatory plan or arrangement contemplated by Item 15(a)(3) on Form 10-K.
|
|
++ Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules and similar attachments to the exhibit have been omitted. The registrant hereby agrees to furnish supplementally a copy of any omitted schedule or attachment to the U.S. Securities and Exchange Commission upon request. The exhibit is not intended to be, and should not be relied upon as, including disclosures regarding any facts and circumstances relating to the registrant or any of its subsidiaries or affiliates. The exhibit contains representations and warranties by the registrant and the other parties that were made only for purposes of the agreement set forth in the exhibit and as of specified dates. The representations, warranties, and covenants in the agreement were made solely for the benefit of the parties to the agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the agreement instead of establishing these matters as facts), and may apply contractual standards of materiality or material adverse effect that generally differ from those applicable to investors. In addition, information concerning the subject matter of the representations, warranties, and covenants may change after the date of the agreement, which subsequent information may or may not be fully reflected in the registrant's public disclosures.
|
|
± Certain portions of this exhibit have been redacted and are subject to a confidential treatment order granted by the U.S. Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934.
|
|
|
|
|
Dated:
|
February 25, 2016
|
|
|
|
|
NELNET, INC
|
|
|
|
|
|
|
|
By:
|
/s/ JEFFREY R. NOORDHOEK
|
|
|
Name: Jeffrey R. Noordhoek
|
|
|
|
Title: Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ JEFFREY R. NOORDHOEK
|
|
Chief Executive Officer (Principal Executive Officer)
|
|
February 25, 2016
|
Jeffrey R. Noordhoek
|
|
|
|
|
|
|
|
|
|
/s/ JAMES D. KRUGER
|
|
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
|
|
February 25, 2016
|
James D. Kruger
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL S. DUNLAP
|
|
Executive Chairman
|
|
February 25, 2016
|
Michael S. Dunlap
|
|
|
|
|
|
|
|
|
|
/s/ STEPHEN F. BUTTERFIELD
|
|
Vice Chairman
|
|
February 25, 2016
|
Stephen F. Butterfield
|
|
|
|
|
|
|
|
|
|
/s/ JAMES P. ABEL
|
|
Director
|
|
February 25, 2016
|
James P. Abel
|
|
|
|
|
|
|
|
|
|
/s/ WILLIAM R. CINTANI
|
|
Director
|
|
February 25, 2016
|
William R. Cintani
|
|
|
|
|
|
|
|
|
|
/s/ KATHLEEN A. FARRELL
|
|
Director
|
|
February 25, 2016
|
Kathleen A. Farrell
|
|
|
|
|
|
|
|
|
|
/s/ DAVID S. GRAFF
|
|
Director
|
|
February 25, 2016
|
David S. Graff
|
|
|
|
|
|
|
|
|
|
/s/ THOMAS E. HENNING
|
|
Director
|
|
February 25, 2016
|
Thomas E. Henning
|
|
|
|
|
|
|
|
|
|
/s/ KIMBERLY K. RATH
|
|
Director
|
|
February 25, 2016
|
Kimberly K. Rath
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL D. REARDON
|
|
Director
|
|
February 25, 2016
|
Michael D. Reardon
|
|
|
|
|
Page
|
F-2
|
|
F-3
|
|
F-4
|
|
F-5
|
|
F-6
|
|
F-7
|
|
F-8
|
NELNET, INC. AND SUBSIDIARIES
|
||||||
Consolidated Balance Sheets
|
||||||
December 31, 2015 and 2014
|
||||||
|
2015
|
|
2014
|
|||
|
(Dollars in thousands, except share data)
|
|||||
Assets:
|
|
|
|
|||
Student loans receivable (net of allowance for loan losses of $50,498 and $48,900, respectively)
|
$
|
28,324,552
|
|
|
28,005,195
|
|
Cash and cash equivalents:
|
|
|
|
|
|
|
Cash and cash equivalents - not held at a related party
|
11,379
|
|
|
37,781
|
|
|
Cash and cash equivalents - held at a related party
|
52,150
|
|
|
92,700
|
|
|
Total cash and cash equivalents
|
63,529
|
|
|
130,481
|
|
|
Investments and notes receivable
|
303,681
|
|
|
235,709
|
|
|
Restricted cash and investments
|
832,624
|
|
|
850,440
|
|
|
Restricted cash - due to customers
|
144,771
|
|
|
118,488
|
|
|
Accrued interest receivable
|
383,825
|
|
|
351,588
|
|
|
Accounts receivable (net of allowance for doubtful accounts of $2,003 and $1,656, respectively)
|
51,345
|
|
|
50,552
|
|
|
Goodwill
|
146,000
|
|
|
126,200
|
|
|
Intangible assets, net
|
51,062
|
|
|
42,582
|
|
|
Property and equipment, net
|
80,482
|
|
|
45,894
|
|
|
Other assets
|
75,344
|
|
|
76,622
|
|
|
Fair value of derivative instruments
|
28,690
|
|
|
64,392
|
|
|
Total assets
|
$
|
30,485,905
|
|
|
30,098,143
|
|
Liabilities:
|
|
|
|
|
|
|
Bonds and notes payable
|
$
|
28,172,682
|
|
|
28,027,350
|
|
Accrued interest payable
|
31,507
|
|
|
25,904
|
|
|
Other liabilities
|
169,906
|
|
|
167,881
|
|
|
Due to customers
|
144,771
|
|
|
118,488
|
|
|
Fair value of derivative instruments
|
74,881
|
|
|
32,842
|
|
|
Total liabilities
|
28,593,747
|
|
|
28,372,465
|
|
|
Commitments and contingencies
|
|
|
|
|||
Equity:
|
|
|
|
|||
Nelnet, Inc. shareholders' equity:
|
|
|
|
|
|
|
Preferred stock, $0.01 par value. Authorized 50,000,000 shares; no shares issued or outstanding
|
—
|
|
|
—
|
|
|
Common stock:
|
|
|
|
|||
Class A, $0.01 par value. Authorized 600,000,000 shares; issued and outstanding 32,476,528 shares and 34,756,384 shares, respectively
|
325
|
|
|
348
|
|
|
Class B, convertible, $0.01 par value. Authorized 60,000,000 shares; issued and outstanding 11,476,932 shares and 11,486,932 shares, respectively
|
115
|
|
|
115
|
|
|
Additional paid-in capital
|
—
|
|
|
17,290
|
|
|
Retained earnings
|
1,881,708
|
|
|
1,702,560
|
|
|
Accumulated other comprehensive earnings
|
2,284
|
|
|
5,135
|
|
|
Total Nelnet, Inc. shareholders' equity
|
1,884,432
|
|
|
1,725,448
|
|
|
Noncontrolling interests
|
7,726
|
|
|
230
|
|
|
Total equity
|
1,892,158
|
|
|
1,725,678
|
|
|
|
|
|
|
|||
Total liabilities and equity
|
$
|
30,485,905
|
|
|
30,098,143
|
|
|
|
|
|
|||
Supplemental information - assets and liabilities of consolidated variable interest entities:
|
|
|
|
|||
Student loans receivable
|
$
|
28,499,180
|
|
|
28,181,244
|
|
Restricted cash and investments
|
814,294
|
|
|
846,199
|
|
|
Other assets
|
384,230
|
|
|
351,934
|
|
|
Bonds and notes payable
|
(28,405,133
|
)
|
|
(28,391,530
|
)
|
|
Other liabilities
|
(353,607
|
)
|
|
(280,233
|
)
|
|
Fair value of derivative instruments, net
|
(64,080
|
)
|
|
(20,455
|
)
|
|
Net assets of consolidated variable interest entities
|
$
|
874,884
|
|
|
687,159
|
|
|
|
|
|
NELNET, INC. AND SUBSIDIARIES
|
|||||||||
Consolidated Statements of Income
|
|||||||||
Years ended December 31, 2015, 2014, and 2013
|
|||||||||
|
|
|
|
|
|
||||
|
2015
|
|
2014
|
|
2013
|
||||
|
(Dollars in thousands, except share data)
|
||||||||
Interest income:
|
|
|
|
|
|
||||
Loan interest
|
$
|
726,258
|
|
|
703,007
|
|
|
638,142
|
|
Investment interest
|
7,851
|
|
|
6,793
|
|
|
6,668
|
|
|
Total interest income
|
734,109
|
|
|
709,800
|
|
|
644,810
|
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
Interest on bonds and notes payable
|
302,210
|
|
|
273,237
|
|
|
230,935
|
|
|
Net interest income
|
431,899
|
|
|
436,563
|
|
|
413,875
|
|
|
Less provision for loan losses
|
10,150
|
|
|
9,500
|
|
|
18,500
|
|
|
Net interest income after provision for loan losses
|
421,749
|
|
|
427,063
|
|
|
395,375
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Loan and guaranty servicing revenue
|
239,858
|
|
|
240,414
|
|
|
243,428
|
|
|
Tuition payment processing, school information, and campus commerce revenue
|
120,365
|
|
|
98,156
|
|
|
80,682
|
|
|
Enrollment services revenue
|
70,705
|
|
|
82,883
|
|
|
98,078
|
|
|
Other income, net
|
27,630
|
|
|
54,002
|
|
|
46,298
|
|
|
Gain on sale of loans and debt repurchases, net
|
5,153
|
|
|
3,651
|
|
|
11,699
|
|
|
Derivative market value and foreign currency adjustments and derivative settlements, net
|
4,401
|
|
|
15,860
|
|
|
18,957
|
|
|
Total other income
|
468,112
|
|
|
494,966
|
|
|
499,142
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
|
247,914
|
|
|
228,079
|
|
|
196,169
|
|
|
Cost to provide enrollment services
|
45,535
|
|
|
53,307
|
|
|
64,961
|
|
|
Loan servicing fees
|
30,213
|
|
|
27,009
|
|
|
23,881
|
|
|
Depreciation and amortization
|
26,343
|
|
|
21,134
|
|
|
18,311
|
|
|
Other
|
119,212
|
|
|
122,981
|
|
|
125,661
|
|
|
Total operating expenses
|
469,217
|
|
|
452,510
|
|
|
428,983
|
|
|
Income before income taxes
|
420,644
|
|
|
469,519
|
|
|
465,534
|
|
|
Income tax expense
|
152,380
|
|
|
160,238
|
|
|
161,193
|
|
|
Net income
|
268,264
|
|
|
309,281
|
|
|
304,341
|
|
|
Net income attributable to noncontrolling interests
|
285
|
|
|
1,671
|
|
|
1,669
|
|
|
Net income attributable to Nelnet, Inc.
|
$
|
267,979
|
|
|
307,610
|
|
|
302,672
|
|
Earnings per common share:
|
|
|
|
|
|
||||
Net income attributable to Nelnet, Inc. shareholders - basic and diluted
|
$
|
5.89
|
|
|
6.62
|
|
|
6.50
|
|
Weighted average common shares outstanding - basic and diluted
|
45,529,340
|
|
|
46,469,615
|
|
|
46,570,314
|
|
NELNET, INC. AND SUBSIDIARIES
|
|||||||||
Consolidated Statements of Comprehensive Income
|
|||||||||
Years ended December 31, 2015, 2014, and 2013
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
||||
|
(Dollars in thousands)
|
||||||||
Net income
|
$
|
268,264
|
|
|
309,281
|
|
|
304,341
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
||||
Unrealized holding (losses) gains arising during period, net
|
(1,570
|
)
|
|
9,006
|
|
|
9,134
|
|
|
Less reclassification adjustment for gains recognized in net income, net of losses
|
(2,955
|
)
|
|
(8,506
|
)
|
|
(5,938
|
)
|
|
Income tax effect
|
1,674
|
|
|
(184
|
)
|
|
(1,190
|
)
|
|
Total other comprehensive (loss) income
|
(2,851
|
)
|
|
316
|
|
|
2,006
|
|
|
Comprehensive income
|
265,413
|
|
|
309,597
|
|
|
306,347
|
|
|
Comprehensive income attributable to noncontrolling interest
|
285
|
|
|
1,671
|
|
|
1,669
|
|
|
Comprehensive income attributable to Nelnet, Inc.
|
$
|
265,128
|
|
|
307,926
|
|
|
304,678
|
|
NELNET, INC. AND SUBSIDIARIES
|
|||||||||||||||||||||||||||||||||
Consolidated Statements of Shareholders' Equity
|
|||||||||||||||||||||||||||||||||
Years ended December 31, 2015, 2014, and 2013
|
|||||||||||||||||||||||||||||||||
|
Nelnet, Inc. Shareholders
|
|
|
|
|||||||||||||||||||||||||||||
|
Preferred stock shares
|
|
Common stock shares
|
|
Preferred stock
|
|
Class A common stock
|
|
Class B common stock
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive earnings
|
|
Noncontrolling interests
|
|
Total equity
|
||||||||||||||
|
|
Class A
|
|
Class B
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
(Dollars in thousands, except share data)
|
||||||||||||||||||||||||||||||||
Balance as of December 31, 2012
|
—
|
|
|
35,116,913
|
|
|
11,495,377
|
|
|
$
|
—
|
|
|
351
|
|
|
115
|
|
|
32,540
|
|
|
1,129,389
|
|
|
2,813
|
|
|
5
|
|
|
1,165,213
|
|
Issuance of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
302,672
|
|
|
—
|
|
|
1,669
|
|
|
304,341
|
|
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,006
|
|
|
—
|
|
|
2,006
|
|
|
Distribution to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,351
|
)
|
|
(1,351
|
)
|
|
Cash dividends on Class A and Class B common stock - $0.40 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,569
|
)
|
|
—
|
|
|
—
|
|
|
(18,569
|
)
|
|
Issuance of common stock, net of forfeitures
|
—
|
|
|
157,684
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2,377
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,379
|
|
|
Compensation expense for stock based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,102
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,102
|
|
|
Repurchase of common stock
|
—
|
|
|
(393,259
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(13,132
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,136
|
)
|
|
Balance as of December 31, 2013
|
—
|
|
|
34,881,338
|
|
|
11,495,377
|
|
|
—
|
|
|
349
|
|
|
115
|
|
|
24,887
|
|
|
1,413,492
|
|
|
4,819
|
|
|
328
|
|
|
1,443,990
|
|
|
Issuance of noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
201
|
|
|
201
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
307,610
|
|
|
—
|
|
|
1,671
|
|
|
309,281
|
|
|
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
316
|
|
|
—
|
|
|
316
|
|
|
Distribution to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,970
|
)
|
|
(1,970
|
)
|
|
Cash dividends on Class A and Class B common stock - $0.40 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18,542
|
)
|
|
—
|
|
|
—
|
|
|
(18,542
|
)
|
|
Issuance of common stock, net of forfeitures
|
—
|
|
|
248,290
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3,551
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,554
|
|
|
Compensation expense for stock based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,561
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,561
|
|
|
Repurchase of common stock
|
—
|
|
|
(381,689
|
)
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(15,709
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,713
|
)
|
|
Conversion of common stock
|
—
|
|
|
8,445
|
|
|
(8,445
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance as of December 31, 2014
|
—
|
|
|
34,756,384
|
|
|
11,486,932
|
|
|
—
|
|
|
348
|
|
|
115
|
|
|
17,290
|
|
|
1,702,560
|
|
|
5,135
|
|
|
230
|
|
|
1,725,678
|
|
|
Issuance of noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,443
|
|
|
7,443
|
|
|
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
267,979
|
|
|
—
|
|
|
285
|
|
|
268,264
|
|
|
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,851
|
)
|
|
—
|
|
|
(2,851
|
)
|
|
Distribution to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(232
|
)
|
|
(232
|
)
|
|
Cash dividends on Class A and Class B common stock - $0.42 per share
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19,025
|
)
|
|
—
|
|
|
—
|
|
|
(19,025
|
)
|
|
Issuance of common stock, net of forfeitures
|
—
|
|
|
159,303
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
3,860
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,862
|
|
|
Compensation expense for stock based awards
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,188
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,188
|
|
|
Repurchase of common stock
|
—
|
|
|
(2,449,159
|
)
|
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
—
|
|
|
(26,338
|
)
|
|
(69,806
|
)
|
|
—
|
|
|
—
|
|
|
(96,169
|
)
|
|
Conversion of common stock
|
—
|
|
|
10,000
|
|
|
(10,000
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Balance as of December 31, 2015
|
—
|
|
|
32,476,528
|
|
|
11,476,932
|
|
|
$
|
—
|
|
|
325
|
|
|
115
|
|
|
—
|
|
|
1,881,708
|
|
|
2,284
|
|
|
7,726
|
|
|
1,892,158
|
|
NELNET, INC. AND SUBSIDIARIES
|
||||||||||
Consolidated Statements of Cash Flows
|
||||||||||
Years ended December 31, 2015, 2014, and 2013
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||
|
|
(Dollars in thousands)
|
||||||||
Net income attributable to Nelnet, Inc.
|
|
$
|
267,979
|
|
|
307,610
|
|
|
302,672
|
|
Net income attributable to noncontrolling interest
|
|
285
|
|
|
1,671
|
|
|
1,669
|
|
|
Net income
|
|
268,264
|
|
|
309,281
|
|
|
304,341
|
|
|
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
|
|
123,736
|
|
|
107,969
|
|
|
79,484
|
|
|
Student loan discount accretion
|
|
(43,766
|
)
|
|
(43,479
|
)
|
|
(36,258
|
)
|
|
Provision for loan losses
|
|
10,150
|
|
|
9,500
|
|
|
18,500
|
|
|
Derivative market value adjustment
|
|
15,150
|
|
|
20,310
|
|
|
(83,878
|
)
|
|
Foreign currency transaction adjustment
|
|
(43,801
|
)
|
|
(58,013
|
)
|
|
35,285
|
|
|
Payments to enter into derivative instruments
|
|
(2,936
|
)
|
|
(9,087
|
)
|
|
—
|
|
|
Proceeds to terminate/amend derivative instruments, net of payments
|
|
65,527
|
|
|
1,765
|
|
|
65,890
|
|
|
(Gain) loss on sale of loans, net
|
|
(351
|
)
|
|
2,964
|
|
|
(33
|
)
|
|
Gain from debt repurchases
|
|
(4,802
|
)
|
|
(6,615
|
)
|
|
(11,666
|
)
|
|
Gain from sales of available-for-sale securities, net
|
|
(2,955
|
)
|
|
(8,506
|
)
|
|
(5,938
|
)
|
|
(Purchases) proceeds related to trading securities, net
|
|
(3,120
|
)
|
|
3,128
|
|
|
—
|
|
|
Deferred income tax expense
|
|
7,049
|
|
|
19,659
|
|
|
2,539
|
|
|
Non-cash compensation expense
|
|
5,347
|
|
|
4,699
|
|
|
3,329
|
|
|
Other
|
|
3,875
|
|
|
7,127
|
|
|
112
|
|
|
(Increase) decrease in accrued interest receivable
|
|
(3,819
|
)
|
|
5,205
|
|
|
8,341
|
|
|
Decrease in accounts receivable
|
|
1,061
|
|
|
6,690
|
|
|
7,566
|
|
|
Decrease (increase) in other assets
|
|
375
|
|
|
2,372
|
|
|
(4,783
|
)
|
|
Increase (decrease) in accrued interest payable
|
|
5,117
|
|
|
3,009
|
|
|
(433
|
)
|
|
(Decrease) increase in other liabilities
|
|
(8,736
|
)
|
|
(20,529
|
)
|
|
4,782
|
|
|
Net cash provided by operating activities
|
|
391,365
|
|
|
357,449
|
|
|
387,180
|
|
|
Cash flows from investing activities, net of acquisitions:
|
|
|
|
|
|
|
|
|
||
Purchases of student loans and student loan residual interests
|
|
(2,189,450
|
)
|
|
(3,753,936
|
)
|
|
(2,392,676
|
)
|
|
Net proceeds from student loan repayments, claims, capitalized interest, and other
|
|
3,668,302
|
|
|
3,700,005
|
|
|
2,852,177
|
|
|
Proceeds from sale of student loans
|
|
3,996
|
|
|
50,190
|
|
|
43,292
|
|
|
Purchases of available-for-sale securities
|
|
(100,476
|
)
|
|
(192,998
|
)
|
|
(219,894
|
)
|
|
Proceeds from sales of available-for-sale securities
|
|
95,758
|
|
|
241,793
|
|
|
103,250
|
|
|
Purchases of investments and issuance of notes receivable
|
|
(93,948
|
)
|
|
(45,925
|
)
|
|
(20,302
|
)
|
|
Proceeds from investments and notes receivable
|
|
29,799
|
|
|
15,819
|
|
|
—
|
|
|
Purchases of property and equipment, net
|
|
(16,761
|
)
|
|
(26,488
|
)
|
|
(17,010
|
)
|
|
Decrease (increase) in restricted cash and investments, net
|
|
67,108
|
|
|
(51,135
|
)
|
|
147,743
|
|
|
Business and asset acquisitions, net of cash acquired
|
|
(46,966
|
)
|
|
(46,833
|
)
|
|
—
|
|
|
Net cash provided by (used in) investing activities
|
|
1,417,362
|
|
|
(109,508
|
)
|
|
496,580
|
|
|
Cash flows from financing activities, net of borrowings assumed:
|
|
|
|
|
|
|
|
|
||
Payments on bonds and notes payable
|
|
(4,368,180
|
)
|
|
(3,632,741
|
)
|
|
(5,153,057
|
)
|
|
Proceeds from issuance of bonds and notes payable
|
|
2,614,595
|
|
|
3,502,316
|
|
|
4,312,720
|
|
|
Payments of debt issuance costs
|
|
(11,162
|
)
|
|
(14,934
|
)
|
|
(13,697
|
)
|
|
Dividends paid
|
|
(19,025
|
)
|
|
(18,542
|
)
|
|
(18,569
|
)
|
|
Repurchases of common stock
|
|
(96,169
|
)
|
|
(15,713
|
)
|
|
(13,136
|
)
|
|
Proceeds from issuance of common stock
|
|
801
|
|
|
656
|
|
|
561
|
|
|
Issuance of noncontrolling interest
|
|
3,693
|
|
|
201
|
|
|
5
|
|
|
Distribution to noncontrolling interest
|
|
(232
|
)
|
|
(1,970
|
)
|
|
(1,351
|
)
|
|
Net cash used in financing activities
|
|
(1,875,679
|
)
|
|
(180,727
|
)
|
|
(886,524
|
)
|
|
Net (decrease) increase in cash and cash equivalents
|
|
(66,952
|
)
|
|
67,214
|
|
|
(2,764
|
)
|
|
Cash and cash equivalents, beginning of year
|
|
130,481
|
|
|
63,267
|
|
|
66,031
|
|
|
Cash and cash equivalents, end of year
|
|
$
|
63,529
|
|
|
130,481
|
|
|
63,267
|
|
|
|
|
|
|
|
|
||||
Cash disbursements made for:
|
|
|
|
|
|
|
|
|
||
Interest
|
|
$
|
228,248
|
|
|
210,700
|
|
|
190,998
|
|
Income taxes, net of refunds
|
|
$
|
147,235
|
|
|
155,828
|
|
|
154,840
|
|
Noncash investing and financing activities:
|
|
|
|
|
|
|
||||
Student loans and other assets acquired
|
|
$
|
2,025,453
|
|
|
2,571,997
|
|
|
1,715,260
|
|
Sale of education lending subsidiary, including student loans and other assets
|
|
$
|
—
|
|
|
246,376
|
|
|
—
|
|
Note receivable obtained in connection with sale of education lending subsidiary
|
|
$
|
—
|
|
|
20,737
|
|
|
—
|
|
Borrowings and other liabilities transferred in sale of education lending subsidiary
|
|
$
|
—
|
|
|
225,139
|
|
|
—
|
|
Borrowings and other liabilities assumed in acquisition of student loans
|
|
$
|
1,885,453
|
|
|
2,444,874
|
|
|
1,676,761
|
|
Issuance of minority interest
|
|
$
|
3,750
|
|
|
—
|
|
|
—
|
|
1.
|
Description of Business
|
•
|
Servicing federally-owned student loans for the Department
|
•
|
Servicing FFELP loans
|
•
|
Marketing, originating, and servicing private education loans
|
•
|
Servicing and outsourcing services for FFELP guaranty agencies, including FFELP guaranty collection services
|
•
|
Providing student loan servicing software and other information technology products and services
|
•
|
Providing outsourced services including call center, processing, and marketing services
|
•
|
The operating results of Whitetail Rock Capital Management, LLC ("WRCM"), the Company's SEC-registered investment advisory subsidiary
|
•
|
The operating results of the Enrollment Services business
|
•
|
Income earned on certain investment activities
|
•
|
Interest expense incurred on unsecured debt transactions
|
•
|
Other product and service offerings that are not considered reportable operating segments
|
2.
|
Summary of Significant Accounting Policies and Practices
|
•
|
Reclassifying certain investments and notes receivable, which were previously included in "other assets" to "investments and notes receivable."
|
•
|
Reclassifying third-party loan servicing fees, which were previously included in "other" operating expenses to "loan servicing fees."
|
•
|
Whitetail Rock Capital Management, LLC (“WRCM”) - WRCM is the Company’s SEC-registered investment advisory subsidiary. WRCM issued
10 percent
minority membership interests on January 1, 2012.
|
•
|
Allo Communications LLC - On December 31, 2015, the Company purchased
92.5 percent
of the ownership interests of Allo. The remaining
7.5 percent
of the ownership interests of Allo is owned by Allo management, who has 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.
|
•
|
401 Building, LLC (“401 Building”) - 401 Building is an entity established on October 19, 2015 for the sole purpose of acquiring, developing, and operating a commercial building. The Company owns
50 percent
of 401 Building.
|
•
|
TDP Phase Three, LLC (“TDP”) - TDP is an entity established on October 20, 2015 for the sole purpose of developing and operating a commercial building. The Company owns
25 percent
of TDP.
|
•
|
Level 1: Quoted prices for
identical
instruments in active markets. The types of financial instruments included in Level 1 are highly liquid instruments with quoted prices.
|
•
|
Level 2: Quoted prices for
similar
instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose primary value drivers are observable.
|
•
|
Level 3: Instruments whose primary value drivers are
unobservable
. Inputs are developed based on the best information available; however, significant judgment is required by management in developing the inputs.
|
•
|
Loan and guaranty servicing fees
– Loan servicing fees are determined according to individual agreements with customers and are calculated based on the dollar value of loans, number of loans, or number of borrowers serviced for each customer. Guaranty servicing fees are generally calculated based on the number of loans serviced, volume of loans serviced, or
|
•
|
Guaranty collections revenue
– Guaranty collections revenue is earned when collected. Collection costs paid to third parties associated with this revenue is expensed upon successful collection.
|
•
|
Software services revenue
– Software services revenue is determined from individual agreements with customers and includes license and maintenance fees associated with student loan software products. Computer and software consulting and remote hosting revenues are recognized over the period in which services are provided to customers.
|
•
|
Inquiry Generation and Management
- This revenue is derived primarily from fees which are earned through the delivery of qualified inquiries or clicks. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is reasonably assured. Delivery is deemed to have occurred at the time a qualified inquiry or click is delivered to the customer, provided that no significant obligations remain. From time to time, the Company may agree to credit certain inquiries or clicks if they fail to meet the contractual or other guidelines of a particular client. The Company has established a sales reserve based on historical experience. To date, such credits have been immaterial and within management’s expectations.
|
•
|
Content Solutions
- Several content solutions services, including services to connect students to colleges and universities, are sold based on subscriptions. Revenue from sales of subscription services is recognized ratably over the term of the contract as earned. Subscription revenue received or receivable in advance of the delivery of services is included in deferred revenue. Revenue from the sale of print products is generally earned and recognized, net of estimated returns, upon shipment or delivery. All other revenue is recognized over the period in which services are provided to customers.
|
|
As of December 31,
|
|||||
|
2015
|
|
2014
|
|||
Federally insured loans
|
|
|
|
|||
Stafford and other
|
$
|
6,202,064
|
|
|
6,030,825
|
|
Consolidation
|
22,086,043
|
|
|
22,165,605
|
|
|
Total
|
28,288,107
|
|
|
28,196,430
|
|
|
Private education loans
|
267,642
|
|
|
27,478
|
|
|
|
28,555,749
|
|
|
28,223,908
|
|
|
Loan discount, net of unamortized loan premiums and deferred origination costs (a)
|
(180,699
|
)
|
|
(169,813
|
)
|
|
Allowance for loan losses – federally insured loans
|
(35,490
|
)
|
|
(39,170
|
)
|
|
Allowance for loan losses – private education loans
|
(15,008
|
)
|
|
(9,730
|
)
|
|
|
$
|
28,324,552
|
|
|
28,005,195
|
|
|
Year ended December 31,
|
||||||||
|
2015
|
|
2014
|
|
2013
|
||||
Balance at beginning of period
|
$
|
48,900
|
|
|
55,122
|
|
|
51,902
|
|
Provision for loan losses:
|
|
|
|
|
|
||||
Federally insured loans
|
8,000
|
|
|
11,000
|
|
|
20,000
|
|
|
Private education loans
|
2,150
|
|
|
(1,500
|
)
|
|
(1,500
|
)
|
|
Total provision for loan losses
|
10,150
|
|
|
9,500
|
|
|
18,500
|
|
|
Charge-offs:
|
|
|
|
|
|
|
|
||
Federally insured loans
|
(11,730
|
)
|
|
(15,260
|
)
|
|
(15,588
|
)
|
|
Private education loans
|
(2,414
|
)
|
|
(2,332
|
)
|
|
(3,683
|
)
|
|
Total charge-offs
|
(14,144
|
)
|
|
(17,592
|
)
|
|
(19,271
|
)
|
|
Recoveries - private education loans
|
1,050
|
|
|
1,315
|
|
|
1,577
|
|
|
Purchase (sale) of federally insured loans, net
|
50
|
|
|
(10
|
)
|
|
(1,093
|
)
|
|
Sale of private education loans, net
|
(140
|
)
|
|
(1,620
|
)
|
|
—
|
|
|
Transfer from repurchase obligation related to private education loans repurchased, net
|
4,632
|
|
|
2,185
|
|
|
3,507
|
|
|
Balance at end of period
|
$
|
50,498
|
|
|
48,900
|
|
|
55,122
|
|
|
|
|
|
|
|
||||
Allocation of the allowance for loan losses:
|
|
|
|
|
|
|
|
||
Federally insured loans
|
$
|
35,490
|
|
|
39,170
|
|
|
43,440
|
|
Private education loans
|
15,008
|
|
|
9,730
|
|
|
11,682
|
|
|
Total allowance for loan losses
|
$
|
50,498
|
|
|
48,900
|
|
|
55,122
|
|
|
As of December 31,
|
|||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|||||||||||||||
Federally insured loans:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loans in-school/grace/deferment (a)
|
$
|
2,292,941
|
|
|
|
|
$
|
2,805,228
|
|
|
|
|
$
|
2,872,505
|
|
|
|
|||
Loans in forbearance (b)
|
2,979,357
|
|
|
|
|
3,288,412
|
|
|
|
|
3,370,025
|
|
|
|
||||||
Loans in repayment status:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loans current
|
19,447,541
|
|
|
84.4
|
%
|
|
18,460,279
|
|
|
83.5
|
%
|
|
16,337,922
|
|
|
82.4
|
%
|
|||
Loans delinquent 31-60 days (c)
|
1,028,396
|
|
|
4.5
|
|
|
1,043,119
|
|
|
4.8
|
|
|
967,318
|
|
|
4.9
|
|
|||
Loans delinquent 61-90 days (c)
|
566,953
|
|
|
2.5
|
|
|
588,777
|
|
|
2.7
|
|
|
550,333
|
|
|
2.9
|
|
|||
Loans delinquent 91-120 days (c)
|
415,747
|
|
|
1.8
|
|
|
404,905
|
|
|
1.8
|
|
|
390,791
|
|
|
2.0
|
|
|||
Loans delinquent 121-270 days (c)
|
1,166,940
|
|
|
5.1
|
|
|
1,204,405
|
|
|
5.4
|
|
|
1,117,936
|
|
|
5.6
|
|
|||
Loans delinquent 271 days or greater (c)(d)
|
390,232
|
|
|
1.7
|
|
|
401,305
|
|
|
1.8
|
|
|
443,373
|
|
|
2.2
|
|
|||
Total loans in repayment
|
23,015,809
|
|
|
100.0
|
%
|
|
22,102,790
|
|
|
100.0
|
%
|
|
19,807,673
|
|
|
100.0
|
%
|
|||
Total federally insured loans
|
$
|
28,288,107
|
|
|
|
|
|
$
|
28,196,430
|
|
|
|
|
|
$
|
26,050,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Private education loans:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loans in-school/grace/deferment (a)
|
$
|
30,795
|
|
|
|
|
$
|
905
|
|
|
|
|
$
|
2,700
|
|
|
|
|||
Loans in forbearance (b)
|
350
|
|
|
|
|
—
|
|
|
|
|
366
|
|
|
|
||||||
Loans in repayment status:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loans current
|
228,464
|
|
|
96.7
|
%
|
|
18,390
|
|
|
69.2
|
%
|
|
59,001
|
|
|
86.7
|
%
|
|||
Loans delinquent 31-60 days (c)
|
1,771
|
|
|
0.7
|
|
|
1,078
|
|
|
4.1
|
|
|
1,672
|
|
|
2.5
|
|
|||
Loans delinquent 61-90 days (c)
|
1,283
|
|
|
0.5
|
|
|
1,035
|
|
|
3.9
|
|
|
1,718
|
|
|
2.5
|
|
|||
Loans delinquent 91 days or greater (c)
|
4,979
|
|
|
2.1
|
|
|
6,070
|
|
|
22.8
|
|
|
5,646
|
|
|
8.3
|
|
|||
Total loans in repayment
|
236,497
|
|
|
100.0
|
%
|
|
26,573
|
|
|
100.0
|
%
|
|
68,037
|
|
|
100.0
|
%
|
|||
Total private education loans
|
$
|
267,642
|
|
|
|
|
|
$
|
27,478
|
|
|
|
|
|
$
|
71,103
|
|
|
|
(a)
|
Loans for borrowers who still may be attending school or engaging in other permitted educational activities and are not yet required to make payments on the loans,
e.g.
, residency periods for medical students or a grace period for bar exam preparation for law students.
|
(b)
|
Loans for borrowers who have temporarily ceased making full payments due to hardship or other factors, according to a schedule approved by the servicer consistent with the established loan program servicing procedures and policies.
|
(c)
|
The period of delinquency is based on the number of days scheduled payments are contractually past due and relate to repayment loans, that is, receivables not charged off, and not in school, grace, deferment, or forbearance.
|
(d)
|
A portion of loans included in loans delinquent 271 days or greater includes loans in claim status, which are loans that have gone into default and have been submitted to the guaranty agency.
|
|
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
|
(430,649
|
)
|
|
|
|
|
|
Total
|
$
|
28,172,682
|
|
|
|
|
|
|
As of December 31, 2014
|
||||||
|
Carrying
amount
|
|
Interest rate
range
|
|
Final maturity
|
||
Variable-rate bonds and notes issued in asset-backed securitizations:
|
|
|
|
|
|
||
Bonds and notes based on indices
|
$
|
25,713,431
|
|
|
0.19% - 6.90%
|
|
5/25/18 - 8/26/52
|
Bonds and notes based on auction
|
1,311,669
|
|
|
0.47% - 2.17%
|
|
3/22/32 - 11/26/46
|
|
Total variable-rate bonds and notes
|
27,025,100
|
|
|
|
|
|
|
FFELP warehouse facilities
|
1,241,665
|
|
|
0.16% - 0.26%
|
|
1/17/16 - 6/11/17
|
|
Unsecured line of credit
|
—
|
|
|
—
|
|
6/30/19
|
|
Unsecured debt - Junior Subordinated Hybrid Securities
|
71,688
|
|
|
3.63%
|
|
9/15/61
|
|
Other borrowings
|
81,969
|
|
|
1.67% - 5.10%
|
|
11/11/15 - 12/31/18
|
|
|
28,420,422
|
|
|
|
|
|
|
Discount on bonds and notes payable
|
(393,072
|
)
|
|
|
|
|
|
Total
|
$
|
28,027,350
|
|
|
|
|
|
|
NHELP-III
|
|
NFSLW-I
|
|
NHELP-II
|
|
Total
|
|||||
Maximum financing amount
|
$
|
750,000
|
|
|
875,000
|
|
|
500,000
|
|
|
2,125,000
|
|
Amount outstanding
|
738,034
|
|
|
686,764
|
|
|
431,109
|
|
|
1,855,907
|
|
|
Amount available
|
$
|
11,966
|
|
|
188,236
|
|
|
68,891
|
|
|
269,093
|
|
Expiration of liquidity provisions
|
April 29, 2016
|
|
|
July 8, 2016
|
|
|
December 16, 2016
|
|
|
|
||
Final maturity date
|
April 29, 2018
|
|
|
July 9, 2018
|
|
|
December 14, 2018
|
|
|
|
||
Maximum advance rates
|
92.2 - 95.0%
|
|
|
92.0 - 98.0%
|
|
|
85.0 - 95.0%
|
|
|
|
||
Minimum advance rates
|
92.2 - 95.0%
|
|
|
84.0 - 90.0%
|
|
|
85.0 - 95.0%
|
|
|
|
||
Advanced as equity support
|
$
|
45,301
|
|
|
32,757
|
|
|
36,089
|
|
|
114,147
|
|
|
|
Securitizations completed during the year ended December 31, 2015
|
|||||||||||||||||||||||||||
|
|
2015-1
|
|
2015-2
|
|
2015-3
|
|
Total
|
|||||||||||||||||||||
|
|
|
|
Class A-1 notes
|
|
Class A-2 notes
|
|
2015-2 total
|
|
Class A-1 notes
|
|
Class A-2 notes
|
|
Class A-3 notes
|
|
2015-3 total
|
|
|
|||||||||||
Date securities issued
|
|
2/27/15
|
|
3/26/15
|
|
3/26/15
|
|
3/26/15
|
|
5/21/15
|
|
5/21/15
|
|
5/21/15
|
|
5/21/15
|
|
|
|||||||||||
Total original principal amount
|
|
$
|
566,346
|
|
|
122,500
|
|
|
584,500
|
|
|
722,000
|
|
|
82,500
|
|
|
270,000
|
|
|
41,400
|
|
|
401,400
|
|
|
$
|
1,689,746
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Class A senior notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total original principal amount
|
|
$
|
553,232
|
|
|
122,500
|
|
|
584,500
|
|
|
707,000
|
|
|
82,500
|
|
|
270,000
|
|
|
41,400
|
|
|
393,900
|
|
|
1,654,132
|
|
|
Bond discount
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(380
|
)
|
|
(1,095
|
)
|
|
(1,475
|
)
|
|
(1,475
|
)
|
||
Issue price
|
|
$
|
553,232
|
|
|
122,500
|
|
|
584,500
|
|
|
707,000
|
|
|
82,500
|
|
|
269,620
|
|
|
40,305
|
|
|
392,425
|
|
|
1,652,657
|
|
|
Cost of funds (1-month LIBOR plus:)
|
|
0.59
|
%
|
|
0.27
|
%
|
|
0.60
|
%
|
|
|
|
0.30
|
%
|
|
0.60
|
%
|
|
0.90
|
%
|
|
|
|
|
|||||
Final maturity date
|
|
4/25/41
|
|
|
3/25/20
|
|
|
9/25/42
|
|
|
|
|
1/27/25
|
|
|
2/26/46
|
|
|
6/25/49
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Class B subordinated notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total original principal amount
|
|
$
|
13,114
|
|
|
|
|
|
|
15,000
|
|
|
|
|
|
|
|
|
7,500
|
|
|
35,614
|
|
||||||
Bond discount
|
|
(1,157
|
)
|
|
|
|
|
|
(1,793
|
)
|
|
|
|
|
|
|
|
(968
|
)
|
|
(3,918
|
)
|
|||||||
Issue price
|
|
$
|
11,957
|
|
|
|
|
|
|
13,207
|
|
|
|
|
|
|
|
|
6,532
|
|
|
31,696
|
|
||||||
Cost of funds (1-month LIBOR plus:)
|
|
1.50
|
%
|
|
|
|
|
|
1.50
|
%
|
|
|
|
|
|
|
|
1.50
|
%
|
|
|
||||||||
Final maturity date
|
|
6/25/46
|
|
|
|
|
|
|
5/25/49
|
|
|
|
|
|
|
|
|
6/27/50
|
|
|
|
|
|
Securitizations completed during the year ended December 31, 2014
|
||||||||||||||||||||||||||||||||||||
|
|
2014-1
|
|
2014-2
|
|
2014-3
|
|
2014-4
|
|
2014-5
|
|
2014-6
|
|
Total
|
||||||||||||||||||||||||
|
|
|
|
Class A-1 notes
|
|
Class A-2 notes
|
|
Class A-3 notes
|
|
2014-2 total
|
|
|
|
Class A-1 notes
|
|
Class A-2 notes
|
|
2014-4 total
|
|
|
|
|
|
|
||||||||||||||
Date securities issued
|
|
2/6/14
|
|
3/12/14
|
|
3/12/14
|
|
3/12/14
|
|
3/12/14
|
|
4/30/14
|
|
5/23/14
|
|
5/23/14
|
|
5/23/14
|
|
6/18/14
|
|
7/31/14
|
|
|
||||||||||||||
Total original principal amount
|
|
$
|
458,500
|
|
|
191,000
|
|
|
222,000
|
|
|
84,000
|
|
|
509,000
|
|
|
719,800
|
|
|
267,500
|
|
|
107,500
|
|
|
384,500
|
|
|
603,000
|
|
|
565,000
|
|
|
$
|
3,239,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Class A senior notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total original principal amount
|
|
$
|
445,000
|
|
|
191,000
|
|
|
222,000
|
|
|
84,000
|
|
|
497,000
|
|
|
700,700
|
|
|
267,500
|
|
|
107,500
|
|
|
375,000
|
|
|
587,000
|
|
|
565,000
|
|
|
3,169,700
|
|
|
Bond discount
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(535
|
)
|
|
(535
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,124
|
)
|
|
(3,659
|
)
|
||
Issue price
|
|
$
|
445,000
|
|
|
191,000
|
|
|
222,000
|
|
|
83,465
|
|
|
496,465
|
|
|
700,700
|
|
|
267,500
|
|
|
107,500
|
|
|
375,000
|
|
|
587,000
|
|
|
561,876
|
|
|
3,166,041
|
|
|
Cost of funds (1-month LIBOR plus:)
|
|
0.57
|
%
|
|
0.28
|
%
|
|
0.60
|
%
|
|
0.85
|
%
|
|
|
|
0.58
|
%
|
|
0.54
|
%
|
|
0.95
|
%
|
|
|
|
0.55
|
%
|
|
0.65
|
%
|
|
|
|||||
Final maturity date
|
|
9/25/41
|
|
|
6/25/21
|
|
|
3/25/30
|
|
|
7/27/37
|
|
|
|
|
6/25/41
|
|
|
11/27/34
|
|
|
11/25/43
|
|
|
|
|
7/25/41
|
|
|
11/25/47
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Class B subordinated notes:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total original principal amount
|
|
$
|
13,500
|
|
|
|
|
|
|
|
|
12,000
|
|
|
19,100
|
|
|
|
|
|
|
9,500
|
|
|
16,000
|
|
|
|
|
70,100
|
|
|||||||
Bond discount
|
|
(1,132
|
)
|
|
|
|
|
|
|
|
(1,046
|
)
|
|
(1,467
|
)
|
|
|
|
|
|
(1,138
|
)
|
|
(1,232
|
)
|
|
|
|
(6,015
|
)
|
||||||||
Issue price
|
|
$
|
12,368
|
|
|
|
|
|
|
|
|
10,954
|
|
|
17,633
|
|
|
|
|
|
|
8,362
|
|
|
14,768
|
|
|
|
|
64,085
|
|
|||||||
Cost of funds (1-month LIBOR plus:)
|
|
1.50
|
%
|
|
|
|
|
|
|
|
1.50
|
%
|
|
1.50
|
%
|
|
|
|
|
|
1.50
|
%
|
|
1.50
|
%
|
|
|
|
|
|||||||||
Final maturity date
|
|
10/25/47
|
|
|
|
|
|
|
|
|
6/25/41
|
|
|
10/25/50
|
|
|
|
|
|
|
9/25/51
|
|
|
5/25/49
|
|
|
|
|
|
•
|
A minimum consolidated net worth
|
•
|
A minimum adjusted EBITDA to corporate debt interest (over the last four rolling quarters)
|
•
|
A limitation on recourse indebtedness
|
•
|
A limitation on the amount of unsecuritized private education loans in the Company’s portfolio
|
•
|
A limitation on permitted investments, including business acquisitions that are not in one of the Company's existing lines of business
|
2016
|
|
$
|
256,184
|
|
2017
|
|
—
|
|
|
2018
|
|
1,855,907
|
|
|
2019
|
|
173,755
|
|
|
2020
|
|
194,648
|
|
|
2021 and thereafter
|
|
26,122,837
|
|
|
|
|
$
|
28,603,331
|
|
|
Par value
|
|
Purchase price
|
|
Gain
|
|
Par value
|
|
Purchase price
|
|
Gain
|
|
Par value
|
|
Purchase price
|
|
Gain
|
||||||||||
|
Year ended December 31,
|
||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||
Unsecured debt - Hybrid Securities
|
$
|
14,504
|
|
|
11,374
|
|
|
3,130
|
|
|
24,769
|
|
|
19,761
|
|
|
5,008
|
|
|
2,775
|
|
|
2,080
|
|
|
695
|
|
Asset-backed securities
|
32,026
|
|
|
30,354
|
|
|
1,672
|
|
|
29,243
|
|
|
27,636
|
|
|
1,607
|
|
|
87,696
|
|
|
76,725
|
|
|
10,971
|
|
|
|
$
|
46,530
|
|
|
41,728
|
|
|
4,802
|
|
|
54,012
|
|
|
47,397
|
|
|
6,615
|
|
|
90,471
|
|
|
78,805
|
|
|
11,666
|
|
|
|
|
|
As of December 31,
|
|||||
|
|
|
2015
|
|
2014
|
||||
|
Maturity
|
|
Notional amount
|
|
Notional amount
|
||||
|
2016
|
|
|
$
|
7,500,000
|
|
|
—
|
|
|
2021
|
|
|
—
|
|
|
250,000
|
|
|
|
2022
|
|
|
—
|
|
|
1,900,000
|
|
|
|
2023
|
|
|
—
|
|
|
3,650,000
|
|
|
|
2024
|
|
|
—
|
|
|
250,000
|
|
|
|
2026
|
|
|
—
|
|
|
800,000
|
|
|
|
2028
|
|
|
—
|
|
|
100,000
|
|
|
|
2036
|
|
|
—
|
|
|
700,000
|
|
|
|
2039
|
|
|
—
|
|
|
150,000
|
|
|
|
|
|
|
$
|
7,500,000
|
|
|
7,800,000
|
|
|
|
|
As of December 31, 2015
|
|
As of December 31, 2014
|
||||||||||
|
Maturity
|
|
Notional amount
|
|
Weighted average fixed rate paid by the Company (a)
|
|
Notional amount
|
|
Weighted average fixed rate paid by the Company (a)
|
||||||
|
|
|
|
|
|||||||||||
|
2015
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
1,100,000
|
|
|
0.89
|
%
|
|
2016
|
|
1,000,000
|
|
|
0.76
|
|
|
750,000
|
|
|
0.85
|
|
||
|
2017
|
|
2,100,000
|
|
|
0.84
|
|
|
1,250,000
|
|
|
0.86
|
|
||
|
2018
|
|
1,600,000
|
|
|
1.08
|
|
|
—
|
|
|
—
|
|
||
|
2019
|
|
500,000
|
|
|
1.12
|
|
|
—
|
|
|
—
|
|
||
|
2025
|
|
100,000
|
|
|
2.32
|
|
|
—
|
|
|
—
|
|
||
|
|
|
$
|
5,300,000
|
|
|
0.95
|
%
|
|
$
|
3,100,000
|
|
|
0.87
|
%
|
(a)
|
For all interest rate derivatives, the Company receives discrete three-month LIBOR.
|
Maturity
|
|
Notional amount
|
|
Weighted average fixed rate paid by the Company (a)
|
||
2036
|
|
$
|
25,000
|
|
|
4.28%
|
(a)
|
For all interest rate derivatives, the Company receives discrete three-month LIBOR.
|
|
Year ended December 31,
|
||||||||
|
2015
|
|
2014
|
|
2013 (b)
|
||||
Re-measurement of Euro Notes
|
$
|
43,801
|
|
|
58,013
|
|
|
(35,285
|
)
|
Change in fair value of cross currency interest rate swaps
|
(45,195
|
)
|
|
(57,289
|
)
|
|
26,354
|
|
|
Total impact to consolidated statements of income - (expense) income (a)
|
$
|
(1,394
|
)
|
|
724
|
|
|
(8,931
|
)
|
(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.
|
(b)
|
The 2013 operating results include the re-measurement of an additional
€420.5 million
of student loan asset-backed Euro notes and the change in fair value of a related cross-currency interest rate swap entered into in connection with the issuance of such notes. In November 2013, the principal amount outstanding on the notes was changed to U.S. dollars and the cross-currency interest swap was terminated.
|
|
Fair value of asset derivatives
|
|
Fair value of liability derivatives
|
|||||||||
|
As of
|
|
As of
|
|
As of
|
|
As of
|
|||||
|
December 31, 2015
|
|
December 31, 2014
|
|
December 31, 2015
|
|
December 31, 2014
|
|||||
1:3 basis swaps
|
$
|
724
|
|
|
53,549
|
|
|
410
|
|
|
—
|
|
Interest rate swaps - floor income hedges
|
21,408
|
|
|
5,165
|
|
|
1,175
|
|
|
5,034
|
|
|
Interest rate swap option - floor income hedge
|
3,257
|
|
|
5,678
|
|
|
—
|
|
|
—
|
|
|
Interest rate swaps - hybrid debt hedges
|
—
|
|
|
—
|
|
|
7,646
|
|
|
7,353
|
|
|
Interest rate caps
|
1,570
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Cross-currency interest rate swap
|
—
|
|
|
—
|
|
|
65,650
|
|
|
20,455
|
|
|
Other
|
1,731
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
$
|
28,690
|
|
|
64,392
|
|
|
74,881
|
|
|
32,842
|
|
|
|
|
|
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 (received)
|
|
Net asset (liability)
|
|||||
Balance as of December 31, 2015
|
|
$
|
28,690
|
|
|
(851
|
)
|
|
1,632
|
|
|
29,471
|
|
Balance as of December 31, 2014
|
|
64,392
|
|
|
(12,387
|
)
|
|
—
|
|
|
52,005
|
|
|
|
|
|
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 asset (liability)
|
|||||
Balance as of December 31, 2015
|
|
$
|
(74,881
|
)
|
|
851
|
|
|
13,168
|
|
|
(60,862
|
)
|
Balance as of December 31, 2014
|
|
(32,842
|
)
|
|
12,387
|
|
|
(1,454
|
)
|
|
(21,909
|
)
|
|
|
Year ended December 31,
|
||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||
Settlements:
|
|
|
|
|
|
|
|
|
||
1:3 basis swaps
|
|
$
|
1,058
|
|
|
3,389
|
|
|
3,301
|
|
Interest rate swaps - floor income hedges
|
|
(23,041
|
)
|
|
(24,380
|
)
|
|
(31,022
|
)
|
|
Interest rate swaps - hybrid debt hedges
|
|
(1,012
|
)
|
|
(1,025
|
)
|
|
(1,670
|
)
|
|
Cross-currency interest rate swaps
|
|
(1,255
|
)
|
|
173
|
|
|
(245
|
)
|
|
Total settlements - (expense) income
|
|
(24,250
|
)
|
|
(21,843
|
)
|
|
(29,636
|
)
|
|
Change in fair value:
|
|
|
|
|
|
|
|
|
|
|
1:3 basis swaps
|
|
12,292
|
|
|
36,824
|
|
|
7,467
|
|
|
Interest rate swaps - floor income hedges
|
|
20,103
|
|
|
8,797
|
|
|
36,719
|
|
|
Interest rate swap option - floor income hedge
|
|
(2,420
|
)
|
|
(3,409
|
)
|
|
—
|
|
|
Interest rate swaps - hybrid debt hedges
|
|
(295
|
)
|
|
(5,233
|
)
|
|
12,997
|
|
|
Interest rate caps
|
|
(1,365
|
)
|
|
—
|
|
|
—
|
|
|
Cross-currency interest rate swaps
|
|
(45,195
|
)
|
|
(57,289
|
)
|
|
26,354
|
|
|
Other
|
|
1,730
|
|
|
—
|
|
|
341
|
|
|
Total change in fair value - (expense) income
|
|
(15,150
|
)
|
|
(20,310
|
)
|
|
83,878
|
|
|
Re-measurement of Euro Notes (foreign currency transaction adjustment) - income (expense)
|
|
43,801
|
|
|
58,013
|
|
|
(35,285
|
)
|
|
Derivative market value and foreign currency adjustments and derivative settlements, net - income (expense)
|
|
$
|
4,401
|
|
|
15,860
|
|
|
18,957
|
|
|
As of December 31, 2015
|
|
As of December 31, 2014
|
||||||||||||||||||||||
|
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)
|
$
|
139,970
|
|
|
3,402
|
|
|
(1,362
|
)
|
|
142,010
|
|
|
131,589
|
|
|
6,204
|
|
|
(236
|
)
|
|
137,557
|
|
|
Equity securities
|
846
|
|
|
1,686
|
|
|
(100
|
)
|
|
2,432
|
|
|
1,553
|
|
|
2,216
|
|
|
(33
|
)
|
|
3,736
|
|
||
Total available-for-sale investments
|
$
|
140,816
|
|
|
5,088
|
|
|
(1,462
|
)
|
|
144,442
|
|
|
133,142
|
|
|
8,420
|
|
|
(269
|
)
|
|
141,293
|
|
|
Trading investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Student loan asset-backed securities
|
|
|
|
|
|
|
6,045
|
|
|
|
|
|
|
|
|
7,830
|
|
||||||||
Equity securities
|
|
|
|
|
|
|
4,905
|
|
|
|
|
|
|
|
|
—
|
|
||||||||
Total trading investments
|
|
|
|
|
|
|
10,950
|
|
|
|
|
|
|
|
|
7,830
|
|
||||||||
Total available-for-sale and trading investments
|
|
|
|
|
|
|
155,392
|
|
|
|
|
|
|
|
|
149,123
|
|
||||||||
Other Investments and Notes Receivable (not measured at fair value):
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Venture capital and funds (c)
|
|
|
|
|
|
|
63,323
|
|
|
|
|
|
|
|
|
19,987
|
|
||||||||
Real estate (d)
|
|
|
|
|
|
|
50,463
|
|
|
|
|
|
|
|
|
18,661
|
|
||||||||
Notes receivable (e)
|
|
|
|
|
|
|
18,473
|
|
|
|
|
|
|
|
|
22,255
|
|
||||||||
Tax liens and affordable housing
|
|
|
|
|
|
|
16,030
|
|
|
|
|
|
|
|
|
25,683
|
|
||||||||
Total investments and notes receivable
|
|
|
|
|
|
|
$
|
303,681
|
|
|
|
|
|
|
|
|
235,709
|
|
(a)
|
As of
December 31, 2015
, 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
December 31, 2015
, the stated maturities of the Company's student loan asset-backed securities and other debt securities classified as available-for-sale are shown in the following table:
|
Year of Maturity:
|
Amortized cost
|
|
Fair value
|
|||
Within 1 year
|
$
|
6,323
|
|
|
6,283
|
|
1-5 years
|
125
|
|
|
125
|
|
|
6-10 years
|
279
|
|
|
279
|
|
|
After 10 years
|
133,243
|
|
|
135,323
|
|
|
Total
|
$
|
139,970
|
|
|
142,010
|
|
(c)
|
As of December 31, 2015 and 2014, "Venture capital and funds" included
$41.4 million
and
$0.8 million
, respectively, of the Company's equity investment in Hudl. See note 19 for further information.
|
(d)
|
As of December 31, 2015, "Real estate" included
$25.0 million
of the Company's investment in TDP. This investment includes
$3.5 million
of land, construction in progress, and related assets and
$21.5 million
of restricted cash to be used for real estate development. TDP has notes payable of
$18.4 million
outstanding as of December 31, 2015.
|
(e)
|
As of December 31, 2015 and 2014, "Notes receivable" included
$17.3 million
and
$20.7 million
, respectively, of a note receivable obtained in connection with the sale of an education lending subsidiary.
|
|
|
Year ended December 31,
|
||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||
Available-for-sale securities:
|
|
|
|
|
|
|
||||
Gross realized gains
|
|
$
|
3,402
|
|
|
8,581
|
|
|
6,270
|
|
Gross realized losses
|
|
(447
|
)
|
|
(75
|
)
|
|
(332
|
)
|
|
Trading securities:
|
|
|
|
|
|
|
||||
Unrealized (losses) gains, net
|
|
(715
|
)
|
|
(135
|
)
|
|
221
|
|
|
Realized (losses) gains, net
|
|
(2,097
|
)
|
|
(1,082
|
)
|
|
5
|
|
|
|
|
$
|
143
|
|
|
7,289
|
|
|
6,164
|
|
Cash and cash equivalents
|
|
$
|
326
|
|
Accounts receivable
|
|
961
|
|
|
Property and equipment
|
|
105
|
|
|
Other assets
|
|
22
|
|
|
Intangible assets
|
|
37,188
|
|
|
Excess cost over fair value of net assets acquired (goodwill)
|
|
9,082
|
|
|
Other liabilities
|
|
(1,341
|
)
|
|
Net assets acquired
|
|
$
|
46,343
|
|
Cash and cash equivalents
|
|
$
|
334
|
|
Restricted cash and investments
|
|
850
|
|
|
Accounts receivable
|
|
1,854
|
|
|
Property and equipment
|
|
34,377
|
|
|
Other assets
|
|
405
|
|
|
Intangible assets
|
|
11,140
|
|
|
Excess cost over fair value of net assets acquired (goodwill)
|
|
19,800
|
|
|
Other liabilities
|
|
(4,856
|
)
|
|
Bonds and notes payable
|
|
(13,904
|
)
|
|
Net assets acquired
|
|
50,000
|
|
|
Minority interest
|
|
(3,750
|
)
|
|
Total consideration paid by the Company
|
|
$
|
46,250
|
|
|
Weighted average remaining useful life as of December 31, 2015 (months)
|
|
As of December 31, 2015
|
|
As of December 31, 2014
|
|||
|
|
|
||||||
Amortizable intangible assets:
|
|
|
|
|||||
Customer relationships (net of accumulated amortization of $23,195 and $17,361, respectively)
|
199
|
|
$
|
27,576
|
|
|
27,330
|
|
Computer software (net of accumulated amortization of $4,397 and $1,896, respectively)
|
34
|
|
11,601
|
|
|
6,969
|
|
|
Trade names (net of accumulated amortization of $795 and $272, respectively)
|
202
|
|
10,687
|
|
|
6,150
|
|
|
Content (net of accumulated amortization of $900 and $0, respectively)
|
12
|
|
900
|
|
|
1,800
|
|
|
Covenants not to compete (net of accumulated amortization of $56 and $21, respectively)
|
101
|
|
298
|
|
|
333
|
|
|
Total - amortizable intangible assets
|
158
|
|
$
|
51,062
|
|
|
42,582
|
|
2016
|
$
|
9,990
|
|
2017
|
7,002
|
|
|
2018
|
6,533
|
|
|
2019
|
3,886
|
|
|
2020
|
3,564
|
|
|
2021 and thereafter
|
20,087
|
|
|
|
$
|
51,062
|
|
|
Student Loan and Guaranty Servicing
|
|
Tuition Payment Processing and Campus Commerce
|
|
Asset Generation and Management (a)
|
|
Tele- communications
|
|
Corporate and Other Activities
|
|
Total
|
|||||||
Balance as of December 31, 2013
|
$
|
8,596
|
|
|
58,086
|
|
|
41,883
|
|
|
—
|
|
|
8,553
|
|
|
117,118
|
|
Goodwill acquired during the period
|
—
|
|
|
9,082
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,082
|
|
|
Balance as of December 31, 2014
|
8,596
|
|
|
67,168
|
|
|
41,883
|
|
|
—
|
|
|
8,553
|
|
|
126,200
|
|
|
Goodwill acquired during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
19,800
|
|
|
—
|
|
|
19,800
|
|
|
Balance as of December 31, 2015
|
$
|
8,596
|
|
|
67,168
|
|
|
41,883
|
|
|
19,800
|
|
|
8,553
|
|
|
146,000
|
|
(a)
|
As a result of the Reconciliation Act of 2010, the Company no longer originates new FFELP loans, and net interest income from the Company's existing FFELP loan portfolio will decline over time as the Company's portfolio pays down. As a result, as this revenue stream winds down, goodwill impairment will be triggered for the Asset Generation and Management reporting unit due to the passage of time and depletion of projected cash flows stemming from its FFELP student loan portfolio. Management believes the elimination of new FFELP loan originations will not have an adverse impact on the fair value of the Company's other reporting units.
|
|
|
|
As of December 31,
|
|||||
|
Useful life
|
|
2015
|
|
2014
|
|||
Non-telecommunications:
|
|
|
|
|
|
|||
Computer equipment and software
|
1-5 years
|
|
$
|
89,093
|
|
|
85,294
|
|
Office furniture and equipment
|
3-7 years
|
|
12,638
|
|
|
12,265
|
|
|
Building and building improvements
|
5-39 years
|
|
12,239
|
|
|
11,336
|
|
|
Transportation equipment
|
4-10 years
|
|
3,868
|
|
|
3,877
|
|
|
Leasehold improvements
|
5-20 years
|
|
3,545
|
|
|
3,645
|
|
|
Land
|
—
|
|
700
|
|
|
700
|
|
|
Construction in progress
|
—
|
|
1,210
|
|
|
13,168
|
|
|
|
|
|
123,293
|
|
|
130,285
|
|
|
Accumulated depreciation - non-telecommunications
|
|
|
77,188
|
|
|
84,391
|
|
|
Non-telecommunications, net property and equipment
|
|
|
46,105
|
|
|
45,894
|
|
|
|
|
|
|
|
|
|||
Telecommunications:
|
|
|
|
|
|
|||
Network plant and fiber
|
5-15 years
|
|
25,669
|
|
|
—
|
|
|
Customer located property
|
5-10 years
|
|
6,912
|
|
|
—
|
|
|
Central office
|
5-15 years
|
|
909
|
|
|
—
|
|
|
Other
|
1-20 years
|
|
887
|
|
|
—
|
|
|
|
|
|
34,377
|
|
|
—
|
|
|
Accumulated depreciation - telecommunications
|
|
|
—
|
|
|
—
|
|
|
Telecommunications, net property and equipment
|
|
|
34,377
|
|
|
—
|
|
|
Total property and equipment, net
|
|
|
$
|
80,482
|
|
|
45,894
|
|
|
|
Total shares repurchased
|
|
Purchase price (in thousands)
|
|
Average price of shares repurchased (per share)
|
|||||
Year ended December 31, 2015
|
|
2,449,159
|
|
|
$
|
96,169
|
|
|
$
|
39.27
|
|
Year ended December 31, 2014
|
|
381,689
|
|
|
15,713
|
|
|
41.17
|
|
||
Year ended December 31, 2013
|
|
393,259
|
|
|
13,136
|
|
|
33.40
|
|
|
Year ended December 31,
|
||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||||||
|
Common shareholders
|
|
Unvested restricted stock shareholders
|
|
Total
|
|
Common shareholders
|
|
Unvested restricted stock shareholders
|
|
Total
|
|
Common shareholders
|
|
Unvested restricted stock shareholders
|
|
Total
|
||||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income attributable to Nelnet, Inc.
|
$
|
265,129
|
|
|
2,850
|
|
|
267,979
|
|
|
304,540
|
|
|
3,070
|
|
|
307,610
|
|
|
300,043
|
|
|
2,629
|
|
|
302,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average common shares outstanding - basic and diluted
|
45,045,199
|
|
|
484,141
|
|
|
45,529,340
|
|
|
46,005,915
|
|
|
463,700
|
|
|
46,469,615
|
|
|
46,165,785
|
|
|
404,529
|
|
|
46,570,314
|
|
|
Earnings per share - basic and diluted
|
$
|
5.89
|
|
|
5.89
|
|
|
5.89
|
|
|
6.62
|
|
|
6.62
|
|
|
6.62
|
|
|
6.50
|
|
|
6.50
|
|
|
6.50
|
|
|
Year ended December 31,
|
|||||
|
2015
|
|
2014
|
|||
Gross balance - beginning of year
|
$
|
21,336
|
|
|
19,141
|
|
Additions based on tax positions of prior years
|
4,749
|
|
|
1,421
|
|
|
Additions based on tax positions related to the current year
|
5,096
|
|
|
4,393
|
|
|
Settlements with taxing authorities
|
—
|
|
|
(833
|
)
|
|
Reductions for tax positions of prior years
|
(1,327
|
)
|
|
(641
|
)
|
|
Reductions based on tax positions related to the current year
|
—
|
|
|
—
|
|
|
Reductions due to lapse of applicable statutes of limitations
|
(2,166
|
)
|
|
(2,145
|
)
|
|
Gross balance - end of year
|
$
|
27,688
|
|
|
21,336
|
|
|
Year ended December 31,
|
||||||||
|
2015
|
|
2014
|
|
2013
|
||||
Current:
|
|
|
|
|
|
||||
Federal
|
$
|
140,778
|
|
|
138,269
|
|
|
153,756
|
|
State
|
4,530
|
|
|
2,545
|
|
|
4,776
|
|
|
Foreign
|
23
|
|
|
(235
|
)
|
|
122
|
|
|
Total current provision
|
145,331
|
|
|
140,579
|
|
|
158,654
|
|
|
|
|
|
|
|
|
||||
Deferred:
|
|
|
|
|
|
||||
Federal
|
3,572
|
|
|
16,598
|
|
|
1,676
|
|
|
State
|
3,875
|
|
|
3,464
|
|
|
868
|
|
|
Foreign
|
(398
|
)
|
|
(403
|
)
|
|
(5
|
)
|
|
Total deferred provision
|
7,049
|
|
|
19,659
|
|
|
2,539
|
|
|
Provision for income tax expense
|
$
|
152,380
|
|
|
160,238
|
|
|
161,193
|
|
|
Year ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Tax expense at federal rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Increase (decrease) resulting from:
|
|
|
|
|
|
|||
State tax, net of federal income tax benefit
|
1.0
|
|
|
0.7
|
|
|
0.8
|
|
Provision for uncertain federal and state tax matters
|
0.9
|
|
|
0.4
|
|
|
(0.6)
|
|
Tax credits
|
(0.5)
|
|
|
(0.4)
|
|
|
(0.4)
|
|
Other
|
(0.1)
|
|
|
(1.4)
|
|
|
—
|
|
Effective tax rate
|
36.3
|
%
|
|
34.3
|
%
|
|
34.8
|
%
|
|
As of December 31,
|
|||||
|
2015
|
|
2014
|
|||
Deferred tax assets:
|
|
|
|
|||
Student loans
|
$
|
20,711
|
|
|
21,139
|
|
Intangible assets
|
10,482
|
|
|
12,682
|
|
|
Securitizations
|
6,684
|
|
|
7,626
|
|
|
Capital loss carry-back
|
4,169
|
|
|
3,974
|
|
|
Accrued expenses
|
3,034
|
|
|
2,872
|
|
|
Stock compensation
|
2,882
|
|
|
2,490
|
|
|
Deferred revenue
|
2,220
|
|
|
1,548
|
|
|
Other
|
—
|
|
|
109
|
|
|
Total gross deferred tax assets
|
50,182
|
|
|
52,440
|
|
|
Less valuation allowance
|
(222
|
)
|
|
(304
|
)
|
|
Net deferred tax assets
|
49,960
|
|
|
52,136
|
|
|
Deferred tax liabilities:
|
|
|
|
|||
Basis in certain derivative contracts
|
24,101
|
|
|
15,692
|
|
|
Debt repurchases
|
18,759
|
|
|
24,918
|
|
|
Loan origination services
|
15,695
|
|
|
19,258
|
|
|
Depreciation
|
5,514
|
|
|
4,122
|
|
|
Partnership basis
|
1,748
|
|
|
1,143
|
|
|
Unrealized gain on debt and equity securities
|
1,400
|
|
|
3,016
|
|
|
Other
|
47
|
|
|
—
|
|
|
Total gross deferred tax liabilities
|
67,264
|
|
|
68,149
|
|
|
Net deferred tax (liability) asset
|
$
|
(17,304
|
)
|
|
(16,013
|
)
|
•
|
Income earned on certain investment activities
|
•
|
Interest expense incurred on unsecured debt transactions
|
•
|
Other product and service offerings that are not considered reportable operating segments including, but not limited to, WRCM, the SEC-registered investment advisory subsidiary, and the Enrollment Services business
|
|
Year ended December 31, 2015
|
||||||||||||||||||||
|
Student Loan and Guaranty Servicing
|
|
Tuition Payment Processing and Campus Commerce
|
|
Asset
Generation and Management |
|
Telecommunications
|
|
Corporate and Other Activities
|
|
Eliminations
|
|
Total
|
||||||||
Total interest income
|
$
|
49
|
|
|
3
|
|
|
728,199
|
|
|
—
|
|
|
7,686
|
|
|
(1,828
|
)
|
|
734,109
|
|
Interest expense
|
—
|
|
|
—
|
|
|
297,625
|
|
|
—
|
|
|
6,413
|
|
|
(1,828
|
)
|
|
302,210
|
|
|
Net interest income
|
49
|
|
|
3
|
|
|
430,574
|
|
|
—
|
|
|
1,273
|
|
|
—
|
|
|
431,899
|
|
|
Less provision for loan losses
|
—
|
|
|
—
|
|
|
10,150
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,150
|
|
|
Net interest income after provision for loan losses
|
49
|
|
|
3
|
|
|
420,424
|
|
|
—
|
|
|
1,273
|
|
|
—
|
|
|
421,749
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Loan and guaranty servicing revenue
|
239,858
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
239,858
|
|
|
Intersegment servicing revenue
|
50,354
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,354
|
)
|
|
—
|
|
|
Tuition payment processing, school information, and campus commerce revenue
|
—
|
|
|
120,365
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120,365
|
|
|
Enrollment services revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
70,705
|
|
|
—
|
|
|
70,705
|
|
|
Other income, net
|
—
|
|
|
(925
|
)
|
|
15,939
|
|
|
—
|
|
|
12,616
|
|
|
—
|
|
|
27,630
|
|
|
Gain on sale of loans and debt repurchases, net
|
—
|
|
|
—
|
|
|
2,034
|
|
|
—
|
|
|
3,119
|
|
|
—
|
|
|
5,153
|
|
|
Derivative market value and foreign currency adjustments, net
|
—
|
|
|
—
|
|
|
27,216
|
|
|
—
|
|
|
1,435
|
|
|
—
|
|
|
28,651
|
|
|
Derivative settlements, net
|
—
|
|
|
—
|
|
|
(23,238
|
)
|
|
—
|
|
|
(1,012
|
)
|
|
—
|
|
|
(24,250
|
)
|
|
Total other income (expense)
|
290,212
|
|
|
119,440
|
|
|
21,951
|
|
|
—
|
|
|
86,863
|
|
|
(50,354
|
)
|
|
468,112
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Salaries and benefits
|
134,634
|
|
|
55,523
|
|
|
2,172
|
|
|
—
|
|
|
55,585
|
|
|
—
|
|
|
247,914
|
|
|
Cost to provide enrollment services
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,535
|
|
|
—
|
|
|
45,535
|
|
|
Loan servicing fees
|
—
|
|
|
—
|
|
|
30,213
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,213
|
|
|
Depreciation and amortization
|
1,931
|
|
|
8,992
|
|
|
—
|
|
|
—
|
|
|
15,420
|
|
|
—
|
|
|
26,343
|
|
|
Other
|
57,799
|
|
|
15,161
|
|
|
5,083
|
|
|
—
|
|
|
41,169
|
|
|
—
|
|
|
119,212
|
|
|
Intersegment expenses, net
|
43,034
|
|
|
11,056
|
|
|
51,036
|
|
|
—
|
|
|
(54,772
|
)
|
|
(50,354
|
)
|
|
—
|
|
|
Total operating expenses
|
237,398
|
|
|
90,732
|
|
|
88,504
|
|
|
—
|
|
|
102,937
|
|
|
(50,354
|
)
|
|
469,217
|
|
|
Income (loss) before income taxes and corporate overhead allocation
|
52,863
|
|
|
28,711
|
|
|
353,871
|
|
|
—
|
|
|
(14,801
|
)
|
|
—
|
|
|
420,644
|
|
|
Corporate overhead allocation
|
(9,628
|
)
|
|
(3,852
|
)
|
|
(4,816
|
)
|
|
—
|
|
|
18,296
|
|
|
—
|
|
|
—
|
|
|
Income before income taxes
|
43,235
|
|
|
24,859
|
|
|
349,055
|
|
|
—
|
|
|
3,495
|
|
|
—
|
|
|
420,644
|
|
|
Income tax (expense) benefit
|
(16,430
|
)
|
|
(9,446
|
)
|
|
(132,641
|
)
|
|
—
|
|
|
6,137
|
|
|
—
|
|
|
(152,380
|
)
|
|
Net income
|
26,805
|
|
|
15,413
|
|
|
216,414
|
|
|
—
|
|
|
9,632
|
|
|
—
|
|
|
268,264
|
|
|
Net income attributable to noncontrolling interest
|
(20
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
305
|
|
|
—
|
|
|
285
|
|
|
Net income attributable to Nelnet, Inc.
|
$
|
26,825
|
|
|
15,413
|
|
|
216,414
|
|
|
—
|
|
|
9,327
|
|
|
—
|
|
|
267,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total assets
|
$
|
80,459
|
|
|
229,615
|
|
|
29,699,164
|
|
|
68,760
|
|
|
626,830
|
|
|
(218,923
|
)
|
|
30,485,905
|
|
|
Year ended December 31, 2014
|
|||||||||||||||||
|
Student Loan and Guaranty Servicing
|
|
Tuition Payment Processing and Campus Commerce
|
|
Asset
Generation and Management |
|
Corporate and Other Activities
|
|
Eliminations
|
|
Total
|
|||||||
Total interest income
|
$
|
30
|
|
|
6
|
|
|
703,382
|
|
|
8,618
|
|
|
(2,236
|
)
|
|
709,800
|
|
Interest expense
|
—
|
|
|
—
|
|
|
269,742
|
|
|
5,731
|
|
|
(2,236
|
)
|
|
273,237
|
|
|
Net interest income
|
30
|
|
|
6
|
|
|
433,640
|
|
|
2,887
|
|
|
—
|
|
|
436,563
|
|
|
Less provision for loan losses
|
—
|
|
|
—
|
|
|
9,500
|
|
|
—
|
|
|
—
|
|
|
9,500
|
|
|
Net interest income after provision for loan losses
|
30
|
|
|
6
|
|
|
424,140
|
|
|
2,887
|
|
|
—
|
|
|
427,063
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan and guaranty servicing revenue
|
240,414
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
240,414
|
|
|
Intersegment servicing revenue
|
55,139
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(55,139
|
)
|
|
—
|
|
|
Tuition payment processing, school information, and campus commerce revenue
|
—
|
|
|
98,156
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
98,156
|
|
|
Enrollment services revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
82,883
|
|
|
—
|
|
|
82,883
|
|
|
Other income, net
|
—
|
|
|
1,268
|
|
|
21,532
|
|
|
31,202
|
|
|
—
|
|
|
54,002
|
|
|
Gain on sale of loans and debt repurchases, net
|
—
|
|
|
—
|
|
|
(1,357
|
)
|
|
5,008
|
|
|
—
|
|
|
3,651
|
|
|
Derivative market value and foreign currency adjustments, net
|
—
|
|
|
—
|
|
|
42,935
|
|
|
(5,232
|
)
|
|
—
|
|
|
37,703
|
|
|
Derivative settlements, net
|
—
|
|
|
—
|
|
|
(20,818
|
)
|
|
(1,025
|
)
|
|
—
|
|
|
(21,843
|
)
|
|
Total other income (expense)
|
295,553
|
|
|
99,424
|
|
|
42,292
|
|
|
112,836
|
|
|
(55,139
|
)
|
|
494,966
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
|
125,844
|
|
|
48,453
|
|
|
2,316
|
|
|
51,466
|
|
|
—
|
|
|
228,079
|
|
|
Cost to provide enrollment services
|
—
|
|
|
—
|
|
|
—
|
|
|
53,307
|
|
|
—
|
|
|
53,307
|
|
|
Loan servicing fees
|
—
|
|
|
—
|
|
|
27,009
|
|
|
—
|
|
|
—
|
|
|
27,009
|
|
|
Depreciation and amortization
|
1,734
|
|
|
8,169
|
|
|
—
|
|
|
11,231
|
|
|
—
|
|
|
21,134
|
|
|
Other
|
59,521
|
|
|
13,006
|
|
|
6,602
|
|
|
43,852
|
|
|
—
|
|
|
122,981
|
|
|
Intersegment expenses, net
|
36,646
|
|
|
5,864
|
|
|
55,808
|
|
|
(43,179
|
)
|
|
(55,139
|
)
|
|
—
|
|
|
Total operating expenses
|
223,745
|
|
|
75,492
|
|
|
91,735
|
|
|
116,677
|
|
|
(55,139
|
)
|
|
452,510
|
|
|
Income (loss) before income taxes and corporate overhead allocation
|
71,838
|
|
|
23,938
|
|
|
374,697
|
|
|
(954
|
)
|
|
—
|
|
|
469,519
|
|
|
Corporate overhead allocation
|
(9,029
|
)
|
|
(3,010
|
)
|
|
(5,017
|
)
|
|
17,056
|
|
|
—
|
|
|
—
|
|
|
Income before income taxes
|
62,809
|
|
|
20,928
|
|
|
369,680
|
|
|
16,102
|
|
|
—
|
|
|
469,519
|
|
|
Income tax (expense) benefit
|
(23,867
|
)
|
|
(7,952
|
)
|
|
(140,477
|
)
|
|
12,058
|
|
|
—
|
|
|
(160,238
|
)
|
|
Net income
|
38,942
|
|
|
12,976
|
|
|
229,203
|
|
|
28,160
|
|
|
—
|
|
|
309,281
|
|
|
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
1,671
|
|
|
—
|
|
|
1,671
|
|
|
Net income attributable to Nelnet, Inc.
|
$
|
38,942
|
|
|
12,976
|
|
|
229,203
|
|
|
26,489
|
|
|
—
|
|
|
307,610
|
|
Total assets
|
$
|
84,495
|
|
|
231,991
|
|
|
29,505,439
|
|
|
497,147
|
|
|
(220,929
|
)
|
|
30,098,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2013
|
|||||||||||||||||
|
Student Loan and Guaranty Servicing
|
|
Tuition Payment Processing and Campus Commerce
|
|
Asset
Generation and Management |
|
Corporate and Other Activities
|
|
Eliminations
|
|
Total
|
|||||||
Total interest income
|
$
|
40
|
|
|
—
|
|
|
638,604
|
|
|
9,433
|
|
|
(3,267
|
)
|
|
644,810
|
|
Interest expense
|
—
|
|
|
—
|
|
|
229,533
|
|
|
4,669
|
|
|
(3,267
|
)
|
|
230,935
|
|
|
Net interest income
|
40
|
|
|
—
|
|
|
409,071
|
|
|
4,764
|
|
|
—
|
|
|
413,875
|
|
|
Less provision for loan losses
|
—
|
|
|
—
|
|
|
18,500
|
|
|
—
|
|
|
—
|
|
|
18,500
|
|
|
Net interest income after provision for loan losses
|
40
|
|
|
—
|
|
|
390,571
|
|
|
4,764
|
|
|
—
|
|
|
395,375
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loan and guaranty servicing revenue
|
243,428
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
243,428
|
|
|
Intersegment servicing revenue
|
56,744
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(56,744
|
)
|
|
—
|
|
|
Tuition payment processing, school information, and campus commerce revenue
|
—
|
|
|
80,682
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80,682
|
|
|
Enrollment services revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
98,078
|
|
|
—
|
|
|
98,078
|
|
|
Other income, net
|
—
|
|
|
—
|
|
|
15,223
|
|
|
32,218
|
|
|
(1,143
|
)
|
|
46,298
|
|
|
Gain on sale of loans and debt repurchases
|
—
|
|
|
—
|
|
|
11,004
|
|
|
695
|
|
|
—
|
|
|
11,699
|
|
|
Derivative market value and foreign currency adjustments, net
|
—
|
|
|
—
|
|
|
35,256
|
|
|
13,337
|
|
|
—
|
|
|
48,593
|
|
|
Derivative settlements, net
|
—
|
|
|
—
|
|
|
(27,966
|
)
|
|
(1,670
|
)
|
|
—
|
|
|
(29,636
|
)
|
|
Total other income (expense)
|
300,172
|
|
|
80,682
|
|
|
33,517
|
|
|
142,658
|
|
|
(57,887
|
)
|
|
499,142
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and benefits
|
106,825
|
|
|
37,575
|
|
|
2,292
|
|
|
49,477
|
|
|
—
|
|
|
196,169
|
|
|
Cost to provide enrollment services
|
—
|
|
|
—
|
|
|
—
|
|
|
64,961
|
|
|
—
|
|
|
64,961
|
|
|
Loan servicing fees
|
—
|
|
|
—
|
|
|
23,881
|
|
|
—
|
|
|
—
|
|
|
23,881
|
|
|
Depreciation and amortization
|
3,924
|
|
|
4,518
|
|
|
—
|
|
|
9,869
|
|
|
—
|
|
|
18,311
|
|
|
Other
|
67,494
|
|
|
9,147
|
|
|
7,064
|
|
|
43,099
|
|
|
(1,143
|
)
|
|
125,661
|
|
|
Intersegment expenses, net
|
35,743
|
|
|
5,989
|
|
|
57,572
|
|
|
(42,560
|
)
|
|
(56,744
|
)
|
|
—
|
|
|
Total operating expenses
|
213,986
|
|
|
57,229
|
|
|
90,809
|
|
|
124,846
|
|
|
(57,887
|
)
|
|
428,983
|
|
|
Income before income taxes and corporate overhead allocation
|
86,226
|
|
|
23,453
|
|
|
333,279
|
|
|
22,576
|
|
|
—
|
|
|
465,534
|
|
|
Corporate overhead allocation
|
(6,150
|
)
|
|
(1,957
|
)
|
|
(3,896
|
)
|
|
12,003
|
|
|
—
|
|
|
—
|
|
|
Income before income taxes
|
80,076
|
|
|
21,496
|
|
|
329,383
|
|
|
34,579
|
|
|
—
|
|
|
465,534
|
|
|
Income tax (expense) benefit
|
(30,430
|
)
|
|
(8,168
|
)
|
|
(125,165
|
)
|
|
2,570
|
|
|
—
|
|
|
(161,193
|
)
|
|
Net income
|
49,646
|
|
|
13,328
|
|
|
204,218
|
|
|
37,149
|
|
|
—
|
|
|
304,341
|
|
|
Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
1,669
|
|
|
—
|
|
|
1,669
|
|
|
Net income attributable to Nelnet, Inc.
|
$
|
49,646
|
|
|
13,328
|
|
|
204,218
|
|
|
35,480
|
|
|
—
|
|
|
302,672
|
|
Total assets
|
$
|
84,986
|
|
|
219,064
|
|
|
27,387,461
|
|
|
425,959
|
|
|
(346,621
|
)
|
|
27,770,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital leases
|
|
Operating leases
|
||||
2016
|
$
|
588
|
|
|
5,258
|
|
|
2017
|
333
|
|
|
4,192
|
|
||
2018
|
92
|
|
|
3,405
|
|
||
2019
|
7
|
|
|
2,512
|
|
||
2020
|
—
|
|
|
1,926
|
|
||
2021 and thereafter
|
—
|
|
|
5,007
|
|
||
Total minimum lease payments
|
1,020
|
|
|
$
|
22,300
|
|
|
Less amounts representing interest
|
(67
|
)
|
|
|
|||
Capital lease obligation (a)
|
$
|
953
|
|
|
|
(a)
|
Capital leases are included in "other liabilities" on the Company's consolidated balance sheet.
|
|
Year ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Non-vested shares at beginning of year
|
499,463
|
|
|
407,051
|
|
|
378,671
|
|
Granted
|
126,946
|
|
|
189,716
|
|
|
131,933
|
|
Vested
|
(108,424
|
)
|
|
(77,219
|
)
|
|
(62,491
|
)
|
Canceled
|
(46,388
|
)
|
|
(20,085
|
)
|
|
(41,062
|
)
|
Non-vested shares at end of year
|
471,597
|
|
|
499,463
|
|
|
407,051
|
|
2016
|
$
|
3,477
|
|
2017
|
2,076
|
|
|
2018
|
1,256
|
|
|
2019
|
751
|
|
|
2020
|
440
|
|
|
2021 and thereafter
|
658
|
|
|
|
$
|
8,658
|
|
|
Shares issued - not deferred
|
|
Shares- deferred
|
|
Total
|
|||
Year ended December 31, 2015
|
8,164
|
|
|
10,406
|
|
|
18,570
|
|
Year ended December 31, 2014
|
8,067
|
|
|
10,175
|
|
|
18,242
|
|
Year ended December 31, 2013
|
10,156
|
|
|
5,279
|
|
|
15,435
|
|
19.
|
Related Parties
|
|
As of December 31, 2015
|
|
As of December 31, 2014
|
|||||||||||||||
|
Level 1
|
|
Level 2
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Total
|
|||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Investments: (a)
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Student loan asset-backed securities
|
$
|
—
|
|
|
147,925
|
|
|
147,925
|
|
|
—
|
|
|
145,000
|
|
|
145,000
|
|
Equity securities
|
7,337
|
|
|
—
|
|
|
7,337
|
|
|
3,736
|
|
|
—
|
|
|
3,736
|
|
|
Debt securities
|
130
|
|
|
—
|
|
|
130
|
|
|
387
|
|
|
—
|
|
|
387
|
|
|
Total investments
|
7,467
|
|
|
147,925
|
|
|
155,392
|
|
|
4,123
|
|
|
145,000
|
|
|
149,123
|
|
|
Fair value of derivative instruments (b)
|
—
|
|
|
28,690
|
|
|
28,690
|
|
|
—
|
|
|
64,392
|
|
|
64,392
|
|
|
Total assets
|
$
|
7,467
|
|
|
176,615
|
|
|
184,082
|
|
|
4,123
|
|
|
209,392
|
|
|
213,515
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Fair value of derivative instruments (b):
|
$
|
—
|
|
|
74,881
|
|
|
74,881
|
|
|
—
|
|
|
32,842
|
|
|
32,842
|
|
Total liabilities
|
$
|
—
|
|
|
74,881
|
|
|
74,881
|
|
|
—
|
|
|
32,842
|
|
|
32,842
|
|
(a)
|
Investments represent investments recorded at fair value on a recurring basis. Level 1 investments are measured based upon quoted prices and include investments traded on an active exchange, such as the New York Stock Exchange, and corporate bonds, mortgage-backed securities, U.S. government bonds, and U.S. Treasury securities that trade in active markets. Level 2 investments include student loan asset-backed securities. The fair value for the student loan asset-backed securities is determined using indicative quotes from broker-dealers or an income approach valuation technique (present value using the discount rate adjustment technique) that considers, among other things, rates currently observed in publicly traded debt markets for debt of similar terms issued by companies with comparable credit risk.
|
(b)
|
All derivatives are accounted for at fair value on a recurring basis. The fair value of derivative financial instruments is determined using a market approach in which derivative pricing models use the stated terms of the contracts and observable yield curves, forward foreign currency exchange rates, and volatilities from active markets.
|
|
As of December 31, 2015
|
||||||||||||||
|
Fair value
|
|
Carrying value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||
Student loans receivable
|
$
|
28,611,350
|
|
|
28,324,552
|
|
|
—
|
|
|
—
|
|
|
28,611,350
|
|
Cash and cash equivalents
|
63,529
|
|
|
63,529
|
|
|
63,529
|
|
|
—
|
|
|
—
|
|
|
Investments (available-for-sale and trading)
|
155,392
|
|
|
155,392
|
|
|
7,467
|
|
|
147,925
|
|
|
—
|
|
|
Notes receivable
|
18,067
|
|
|
18,473
|
|
|
—
|
|
|
18,067
|
|
|
—
|
|
|
Restricted cash
|
823,450
|
|
|
823,450
|
|
|
823,450
|
|
|
—
|
|
|
—
|
|
|
Restricted cash – due to customers
|
144,771
|
|
|
144,771
|
|
|
144,771
|
|
|
—
|
|
|
—
|
|
|
Restricted investments
|
9,174
|
|
|
9,174
|
|
|
9,174
|
|
|
—
|
|
|
—
|
|
|
Accrued interest receivable
|
383,825
|
|
|
383,825
|
|
|
—
|
|
|
383,825
|
|
|
—
|
|
|
Derivative instruments
|
28,690
|
|
|
28,690
|
|
|
—
|
|
|
28,690
|
|
|
—
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds and notes payable
|
27,217,536
|
|
|
28,172,682
|
|
|
—
|
|
|
27,217,536
|
|
|
—
|
|
|
Accrued interest payable
|
31,507
|
|
|
31,507
|
|
|
—
|
|
|
31,507
|
|
|
—
|
|
|
Due to customers
|
144,771
|
|
|
144,771
|
|
|
144,771
|
|
|
—
|
|
|
—
|
|
|
Derivative instruments
|
74,881
|
|
|
74,881
|
|
|
—
|
|
|
74,881
|
|
|
—
|
|
|
As of December 31, 2014
|
||||||||||||||
|
Fair value
|
|
Carrying value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Financial assets:
|
|
|
|
|
|
|
|
|
|
||||||
Student loans receivable
|
$
|
28,954,266
|
|
|
28,005,195
|
|
|
—
|
|
|
—
|
|
|
28,954,266
|
|
Cash and cash equivalents
|
130,481
|
|
|
130,481
|
|
|
130,481
|
|
|
—
|
|
|
—
|
|
|
Investments (available-for-sale and trading)
|
149,123
|
|
|
149,123
|
|
|
4,123
|
|
|
145,000
|
|
|
—
|
|
|
Notes receivable
|
22,255
|
|
|
22,255
|
|
|
—
|
|
|
22,255
|
|
|
—
|
|
|
Restricted cash
|
800,164
|
|
|
800,164
|
|
|
800,164
|
|
|
—
|
|
|
—
|
|
|
Restricted cash – due to customers
|
118,488
|
|
|
118,488
|
|
|
118,488
|
|
|
—
|
|
|
—
|
|
|
Restricted investments
|
50,276
|
|
|
50,276
|
|
|
50,276
|
|
|
—
|
|
|
—
|
|
|
Accrued interest receivable
|
351,588
|
|
|
351,588
|
|
|
—
|
|
|
351,588
|
|
|
—
|
|
|
Derivative instruments
|
64,392
|
|
|
64,392
|
|
|
—
|
|
|
64,392
|
|
|
—
|
|
|
Financial liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Bonds and notes payable
|
27,809,997
|
|
|
28,027,350
|
|
|
—
|
|
|
27,809,997
|
|
|
—
|
|
|
Accrued interest payable
|
25,904
|
|
|
25,904
|
|
|
—
|
|
|
25,904
|
|
|
—
|
|
|
Due to customers
|
118,488
|
|
|
118,488
|
|
|
118,488
|
|
|
—
|
|
|
—
|
|
|
Derivative instruments
|
32,842
|
|
|
32,842
|
|
|
—
|
|
|
32,842
|
|
|
—
|
|
|
2015
|
|||||||||||
|
First quarter
|
|
Second quarter
|
|
Third quarter
|
|
Fourth quarter
|
|||||
Net interest income
|
$
|
102,595
|
|
|
105,096
|
|
|
111,993
|
|
|
112,215
|
|
Less provision for loan losses
|
2,000
|
|
|
2,150
|
|
|
3,000
|
|
|
3,000
|
|
|
Net interest income after provision for loan losses
|
100,595
|
|
|
102,946
|
|
|
108,993
|
|
|
109,215
|
|
|
Loan and guaranty servicing revenue
|
57,811
|
|
|
63,833
|
|
|
61,520
|
|
|
56,694
|
|
|
Tuition payment processing, school information, and campus commerce revenue
|
34,680
|
|
|
27,686
|
|
|
30,439
|
|
|
27,561
|
|
|
Enrollment services revenue
|
17,863
|
|
|
17,161
|
|
|
19,500
|
|
|
16,181
|
|
|
Other income, net
|
6,918
|
|
|
7,504
|
|
|
6,523
|
|
|
6,684
|
|
|
Gain on sale of loans and debt repurchases, net
|
2,875
|
|
|
1,515
|
|
|
597
|
|
|
166
|
|
|
Derivative market value and foreign currency adjustments and derivative settlements, net
|
(3,078
|
)
|
|
6,502
|
|
|
(30,658
|
)
|
|
31,635
|
|
|
Salaries and benefits
|
(61,050
|
)
|
|
(58,787
|
)
|
|
(63,215
|
)
|
|
(64,862
|
)
|
|
Cost to provide enrollment services
|
(11,702
|
)
|
|
(11,162
|
)
|
|
(12,534
|
)
|
|
(10,137
|
)
|
|
Loan servicing fees
|
(7,616
|
)
|
|
(7,420
|
)
|
|
(7,793
|
)
|
|
(7,384
|
)
|
|
Depreciation and amortization
|
(5,662
|
)
|
|
(6,501
|
)
|
|
(6,977
|
)
|
|
(7,203
|
)
|
|
Operating expenses - other
|
(29,198
|
)
|
|
(31,958
|
)
|
|
(30,419
|
)
|
|
(27,637
|
)
|
|
Income tax expense
|
(37,630
|
)
|
|
(40,356
|
)
|
|
(26,999
|
)
|
|
(47,395
|
)
|
|
Net income
|
64,806
|
|
|
70,963
|
|
|
48,977
|
|
|
83,518
|
|
|
Net income attributable to noncontrolling interest
|
41
|
|
|
54
|
|
|
22
|
|
|
168
|
|
|
Net income attributable to Nelnet, Inc.
|
$
|
64,765
|
|
|
70,909
|
|
|
48,955
|
|
|
83,350
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|||||
Net income attributable to Nelnet, Inc. shareholders - basic and diluted
|
$
|
1.40
|
|
|
1.54
|
|
|
1.09
|
|
|
1.86
|
|
|
2014
|
|||||||||||
|
First quarter
|
|
Second quarter
|
|
Third quarter
|
|
Fourth quarter
|
|||||
Net interest income
|
$
|
98,871
|
|
|
107,713
|
|
|
117,487
|
|
|
112,492
|
|
Less provision for loan losses
|
2,500
|
|
|
1,500
|
|
|
2,000
|
|
|
3,500
|
|
|
Net interest income after provision for loan losses
|
96,371
|
|
|
106,213
|
|
|
115,487
|
|
|
108,992
|
|
|
Loan and guaranty servicing revenue
|
64,757
|
|
|
66,460
|
|
|
52,659
|
|
|
56,538
|
|
|
Tuition payment processing, school information, and campus commerce revenue
|
25,235
|
|
|
21,834
|
|
|
26,399
|
|
|
24,688
|
|
|
Enrollment services revenue
|
22,011
|
|
|
20,145
|
|
|
22,936
|
|
|
17,791
|
|
|
Other income, net
|
18,131
|
|
|
15,315
|
|
|
7,650
|
|
|
12,906
|
|
|
Gain on sale of loans and debt repurchases, net
|
39
|
|
|
18
|
|
|
—
|
|
|
3,594
|
|
|
Derivative market value and foreign currency adjustments and derivative settlements, net
|
(4,265
|
)
|
|
1,570
|
|
|
24,203
|
|
|
(5,648
|
)
|
|
Salaries and benefits
|
(52,484
|
)
|
|
(53,888
|
)
|
|
(61,098
|
)
|
|
(60,609
|
)
|
|
Cost to provide enrollment services
|
(14,475
|
)
|
|
(13,311
|
)
|
|
(14,178
|
)
|
|
(11,343
|
)
|
|
Loan servicing fees
|
(5,403
|
)
|
|
(7,317
|
)
|
|
(7,077
|
)
|
|
(7,212
|
)
|
|
Depreciation and amortization
|
(4,783
|
)
|
|
(5,214
|
)
|
|
(5,493
|
)
|
|
(5,644
|
)
|
|
Operating expenses - other
|
(30,224
|
)
|
|
(33,060
|
)
|
|
(29,599
|
)
|
|
(30,098
|
)
|
|
Income tax expense
|
(40,611
|
)
|
|
(43,078
|
)
|
|
(46,513
|
)
|
|
(30,036
|
)
|
|
Net income
|
74,299
|
|
|
75,687
|
|
|
85,376
|
|
|
73,919
|
|
|
Net income attributable to noncontrolling interest
|
513
|
|
|
693
|
|
|
157
|
|
|
308
|
|
|
Net income attributable to Nelnet, Inc.
|
$
|
73,786
|
|
|
74,994
|
|
|
85,219
|
|
|
73,611
|
|
Earnings per common share:
|
|
|
|
|
|
|
|
|||||
Net income attributable to Nelnet, Inc. shareholders - basic and diluted
|
$
|
1.59
|
|
|
1.61
|
|
|
1.84
|
|
|
1.59
|
|
Statements of Income
|
|||||||||
(Parent Company Only)
|
|||||||||
Years ended December 31, 2015, 2014, and 2013
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
||||
Investment interest
|
$
|
5,776
|
|
|
6,863
|
|
|
7,911
|
|
Interest on bonds and notes payable
|
6,242
|
|
|
5,492
|
|
|
4,433
|
|
|
Net interest (expense) income
|
(466
|
)
|
|
1,371
|
|
|
3,478
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Other income, net
|
4,012
|
|
|
8,943
|
|
|
7,112
|
|
|
Gain from debt repurchases
|
4,904
|
|
|
6,685
|
|
|
11,905
|
|
|
Equity in subsidiaries income
|
276,825
|
|
|
316,934
|
|
|
275,989
|
|
|
Derivative market value adjustments and derivative settlements, net
|
8,416
|
|
|
14,963
|
|
|
28,134
|
|
|
Total other income
|
294,157
|
|
|
347,525
|
|
|
323,140
|
|
|
Operating expenses
|
5,057
|
|
|
5,598
|
|
|
5,626
|
|
|
Income before income taxes
|
288,634
|
|
|
343,298
|
|
|
320,992
|
|
|
Income tax expense
|
(20,655
|
)
|
|
(34,017
|
)
|
|
(16,651
|
)
|
|
Net income
|
267,979
|
|
|
309,281
|
|
|
304,341
|
|
|
Net income attributable to noncontrolling interest
|
—
|
|
|
1,671
|
|
|
1,669
|
|
|
Net income attributable to Nelnet, Inc.
|
$
|
267,979
|
|
|
307,610
|
|
|
302,672
|
|
Statements of Comprehensive Income
|
|||||||||
(Parent Company Only)
|
|||||||||
Years ended December 31, 2015, 2014, and 2013
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
||||
Net income
|
$
|
267,979
|
|
|
309,281
|
|
|
304,341
|
|
Other comprehensive income:
|
|
|
|
|
|
||||
Available-for-sale securities:
|
|
|
|
|
|
||||
Unrealized holding (losses) gains arising during period, net
|
(1,570
|
)
|
|
9,006
|
|
|
9,134
|
|
|
Less reclassification adjustment for gains recognized in net income, net of losses
|
(2,955
|
)
|
|
(8,506
|
)
|
|
(5,938
|
)
|
|
Income tax effect
|
1,674
|
|
|
(184
|
)
|
|
(1,190
|
)
|
|
Total other comprehensive (loss) income
|
(2,851
|
)
|
|
316
|
|
|
2,006
|
|
|
Comprehensive income
|
265,128
|
|
|
309,597
|
|
|
306,347
|
|
|
Comprehensive income attributable to noncontrolling interest
|
—
|
|
|
1,671
|
|
|
1,669
|
|
|
Comprehensive income attributable to Nelnet, Inc.
|
$
|
265,128
|
|
|
307,926
|
|
|
304,678
|
|
Statements of Cash Flows
|
|||||||||
(Parent Company Only)
|
|||||||||
Years ended December 31, 2015, 2014, and 2013
|
|||||||||
|
2015
|
|
2014
|
|
2013
|
||||
Net income attributable to Nelnet, Inc.
|
$
|
267,979
|
|
|
307,610
|
|
|
302,672
|
|
Net income attributable to noncontrolling interest
|
—
|
|
|
1,671
|
|
|
1,669
|
|
|
Net income
|
267,979
|
|
|
309,281
|
|
|
304,341
|
|
|
Adjustments to reconcile net income to net cash (used by) provided by operating activities:
|
|
|
|
|
|
||||
Depreciation and amortization
|
327
|
|
|
303
|
|
|
284
|
|
|
Derivative market value adjustment
|
(31,411
|
)
|
|
(36,979
|
)
|
|
(57,525
|
)
|
|
Proceeds (payments) to terminate and/or amend derivative instruments, net
|
65,527
|
|
|
1,765
|
|
|
(6,469
|
)
|
|
Payment to enter into derivative instruments
|
—
|
|
|
(9,087
|
)
|
|
—
|
|
|
Equity in earnings of subsidiaries
|
(276,825
|
)
|
|
(316,934
|
)
|
|
(275,989
|
)
|
|
Gain from sale of available-for-sale securities, net
|
(2,955
|
)
|
|
(8,506
|
)
|
|
(5,938
|
)
|
|
Gain from debt repurchases
|
(4,904
|
)
|
|
(6,685
|
)
|
|
(11,905
|
)
|
|
Other
|
7,460
|
|
|
5,396
|
|
|
3,835
|
|
|
(Increase) decrease in other assets
|
(78,698
|
)
|
|
4,057
|
|
|
209,896
|
|
|
Increase in other liabilities
|
9,825
|
|
|
12,512
|
|
|
16,205
|
|
|
Net cash (used by) provided by operating activities
|
(43,675
|
)
|
|
(44,877
|
)
|
|
176,735
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
||||
(Increase) decrease in restricted cash
|
(13,825
|
)
|
|
3,636
|
|
|
59,495
|
|
|
Purchases of available-for-sale securities
|
(98,332
|
)
|
|
(192,315
|
)
|
|
(217,415
|
)
|
|
Proceeds from sales of available-for-sale securities
|
94,722
|
|
|
240,371
|
|
|
116,337
|
|
|
Capital contributions to/from subsidiaries, net
|
120,291
|
|
|
(25,017
|
)
|
|
—
|
|
|
Sales (purchases) of subsidiary debt, net
|
72,125
|
|
|
111,038
|
|
|
(66,272
|
)
|
|
Purchases of investments and issuances of notes receivable
|
(55,206
|
)
|
|
(14,769
|
)
|
|
(11,758
|
)
|
|
Business acquisitions, net of cash acquired
|
(45,916
|
)
|
|
—
|
|
|
—
|
|
|
Net cash provided by (used in) investing activities
|
73,859
|
|
|
122,944
|
|
|
(119,613
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
||||
Payments on notes payable
|
(42,541
|
)
|
|
(63,084
|
)
|
|
(147,080
|
)
|
|
Proceeds from issuance of notes payable
|
116,460
|
|
|
27,577
|
|
|
135,000
|
|
|
Payments of debt issuance costs
|
(773
|
)
|
|
(512
|
)
|
|
(644
|
)
|
|
Dividends paid
|
(19,025
|
)
|
|
(18,542
|
)
|
|
(18,569
|
)
|
|
Repurchases of common stock
|
(96,169
|
)
|
|
(15,713
|
)
|
|
(13,136
|
)
|
|
Proceeds from issuance of common stock
|
801
|
|
|
656
|
|
|
561
|
|
|
Issuance of noncontrolling interest
|
—
|
|
|
201
|
|
|
5
|
|
|
Distribution to noncontrolling interest
|
(230
|
)
|
|
(1,970
|
)
|
|
(1,351
|
)
|
|
Net cash used in financing activities
|
(41,477
|
)
|
|
(71,387
|
)
|
|
(45,214
|
)
|
|
Net (decrease) increase in cash and cash equivalents
|
(11,293
|
)
|
|
6,680
|
|
|
11,908
|
|
|
Cash and cash equivalents, beginning of period
|
30,712
|
|
|
24,032
|
|
|
12,124
|
|
|
Cash and cash equivalents, end of period
|
$
|
19,419
|
|
|
30,712
|
|
|
24,032
|
|
|
|
|
|
|
|
||||
Cash disbursements made for:
|
|
|
|
|
|
||||
Interest
|
$
|
5,914
|
|
|
5,189
|
|
|
4,150
|
|
Income taxes, net of refunds
|
$
|
147,130
|
|
|
155,715
|
|
|
59,565
|
|
|
|
|
|
|
|
||||
Noncash investing and financing activities:
|
|
|
|
|
|
||||
Issuance of minority interest
|
$
|
3,750
|
|
|
—
|
|
|
—
|
|
•
|
had been accepted for enrollment or was enrolled in good standing at an eligible institution of higher education;
|
•
|
was carrying or planning to carry at least one-half the normal full-time workload, as determined by the institution, for the course of study the student was pursuing;
|
•
|
was not in default on any federal education loans;
|
•
|
had not committed a crime involving fraud in obtaining funds under the Higher Education Act which funds had not been fully repaid; and
|
•
|
met other applicable eligibility requirements.
|
•
|
Subsidized Stafford Loans
|
•
|
Unsubsidized Stafford Loans
|
•
|
PLUS Loans
|
•
|
Consolidation Loans
|
•
|
Original fixed interest rate of 8% for the first 48 months of repayment. Beginning on the first day of the 49
th
month of repayment, the interest rate increased to a fixed rate of 10% thereafter. Loans in this category were subject to excess interest rebates and have been converted to a variable interest rate based on the bond equivalent rate of the 91-day Treasury bill auctioned at the final auction before the preceding June 1, plus 3.25%. The variable interest rate is adjusted annually on July 1. The maximum interest rate for loans in this category is 10%.
|
•
|
When the borrower is in school, in grace, or in an authorized period of deferment, the applicable interest rate is variable and is based on the bond equivalent rate of the 91-day Treasury bill auctioned at the final auction before the preceding June 1, plus 2.5%. The variable interest rate is adjusted annually on July 1. The maximum interest rate is 8.25%.
|
•
|
When the borrower is in repayment or in a period of forbearance, the applicable interest rate is variable and is based on the bond equivalent rate of the 91-day Treasury bill auctioned at the final auction before the preceding June 1, plus 3.1%. The variable interest rate is adjusted annually on July 1. The maximum interest rate is 8.25%.
|
•
|
When the borrower is in school, in grace, or in an authorized period of deferment, the applicable interest rate is variable and is based on the bond equivalent rate of the 91-day Treasury bill auctioned at the final auction before the preceding June 1, plus 1.7%. The variable interest rate is adjusted annually on July 1. The maximum interest rate is 8.25%.
|
•
|
When the borrower is in repayment or in a period of forbearance, the applicable interest rate is variable and is based on the bond equivalent rate of the 91-day Treasury bill auctioned at the final auction before the preceding June 1, plus 2.3%. The variable interest rate is adjusted annually on July 1. The maximum interest rate is 8.25%.
|
•
|
July 1, 2008 and before July 1, 2009, the applicable interest rate is fixed at 6.00%,
|
•
|
July 1, 2009 and before July 1, 2010, the applicable interest rate is fixed at 5.60%.
|
•
|
Beginning July 1, 2001, the applicable interest rate is variable and is based on the weekly average one-year constant maturity Treasury yield for the last calendar week ending on or before June 26 preceding July 1 of each year, plus 3.1%. The variable interest rate is adjusted annually on July 1. The maximum interest rate is 11%. Prior to July 1, 2001, SLS Loans in this category had interest rates which were based on the 52-week Treasury bill auctioned at the final auction held prior to the preceding June 1, plus 3.1%. The annual (July 1) variable interest rate adjustment was applicable prior to July 1, 2001, as was the maximum interest rate of 11%.
|
•
|
have outstanding indebtedness on student loans made under the Federal Family Education Loan Program and/or certain other federal student loan programs; and
|
•
|
be in repayment status or in a grace period on loans to be consolidated.
|
•
|
9%, or
|
•
|
The weighted average of the interest rates on the loans consolidated, rounded to the nearest whole percent.
|
•
|
For the portion of the Consolidation Loan which is comprised of FFELP, Direct, FISL, Perkins, HPSL, or NSL loans, the variable interest rate is based on the bond equivalent rate of the 91-day Treasury bills auctioned at the final auction before the preceding June 1, plus 3.1%. The variable interest rate for this portion of the Consolidation Loan is adjusted annually on July 1. The maximum interest rate for this portion of the Consolidation Loan is 8.25%.
|
•
|
For the portion of the Consolidation Loan which is attributable to HEAL Loans (if applicable), the variable interest rate is based on the average of the bond equivalent rates of the 91-day Treasury bills auctioned for the quarter ending
|
•
|
For the portion of the Consolidation Loan which is comprised of FFELP, Direct, FISL, Perkins, HPSL, or NSL loans, the applicable interest rate is fixed and is based on the weighted average of the interest rates on the non-HEAL loans being consolidated, rounded up to the nearest one-eighth of one percent. The maximum interest rate for this portion of the Consolidation Loan is 8.25%.
|
•
|
For the portion of the Consolidation Loan which is attributable to HEAL Loans (if applicable), the applicable interest rate is variable and is based on the average of the bond equivalent rates of the 91-day Treasury bills auctioned for the quarter ending June 30, plus 3.0%. The variable interest rate for this portion of the Consolidation Loan is adjusted annually on July 1. There is no maximum interest rate for the portion of the Consolidation Loan that is represented by HEAL Loans.
|
•
|
during a period not exceeding three years while the borrower is a member of the Armed Forces, an officer in the Commissioned Corps of the Public Health Service or, with respect to a borrower who first obtained a student loan disbursed on or after July 1, 1987, or a student loan for a period of enrollment beginning on or after July 1, 1987, an active duty member of the National Oceanic and Atmospheric Administration Corps;
|
•
|
during a period not exceeding three years while the borrower is a volunteer under the Peace Corps Act;
|
•
|
during a period not exceeding three years while the borrower is a full-time paid volunteer under the Domestic Volunteer Act of 1973;
|
•
|
during a period not exceeding three years while the borrower is a full-time volunteer in service which the Secretary of Education has determined is comparable to service in the Peace Corp or under the Domestic Volunteer Act of 1970 with an organization which is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code;
|
•
|
during a period not exceeding two years while the borrower is serving an internship necessary to receive professional recognition required to begin professional practice or service, or a qualified internship or residency program;
|
•
|
during a period not exceeding three years while the borrower is temporarily totally disabled, as established by sworn affidavit of a qualified physician, or while the borrower is unable to secure employment because of caring for a dependent who is so disabled;
|
•
|
during a period not exceeding two years while the borrower is seeking and unable to find full-time employment;
|
•
|
during any period that the borrower is pursuing a full-time course of study at an eligible institution (or, with respect to a borrower who first obtained a student loan disbursed on or after July 1, 1987, or a student loan for a period of enrollment beginning on or after July 1, 1987, is pursuing at least a half-time course of study);
|
•
|
during any period that the borrower is pursuing a course of study in a graduate fellowship program;
|
•
|
during any period the borrower is receiving rehabilitation training services for qualified individuals, as defined by the Secretary of Education;
|
•
|
during a period not exceeding six months per request while the borrower is on parental leave; and
|
•
|
only with respect to a borrower who first obtained a student loan disbursed on or after July 1, 1987, or a student loan for a period of enrollment beginning on or after July 1, 1987, during a period not exceeding three years while the borrower is a full-time teacher in a public or nonprofit private elementary or secondary school in a “teacher shortage area” (as prescribed by the Secretary of Education), and during a period not exceeding one year for mothers, with preschool age children, who are entering or re-entering the work force and who are paid at a rate of no more than $1 per hour more than the federal minimum wage.
|
•
|
during any period that the borrower is pursuing at least a half-time course of study at an eligible institution;
|
•
|
during any period that the borrower is pursuing a course of study in a graduate fellowship program;
|
•
|
during any period the borrower is receiving rehabilitation training services for qualified individuals, as defined by the Secretary of Education;
|
•
|
during a period not exceeding three years while the borrower is seeking and unable to find full-time employment; and
|
•
|
during a period not exceeding three years for any reason which has caused or will cause the borrower economic hardship. Economic hardship includes working full time and earning an amount that does not exceed the greater of the federal minimum wage or 150% of the poverty line applicable to a borrower's family size and state of residence. Additional categories of economic hardship are based on the receipt of payments from a state or federal public assistance program, service in the Peace Corps, or until July 1, 2009, the relationship between a borrower's educational debt burden and his or her income.
|
•
|
is a National Guard member, Armed Forces reserves member, or retired member of the Armed Forces;
|
•
|
is called or ordered to active duty; and
|
•
|
is enrolled at the time of, or was enrolled within six months prior to, the activation in a program at an eligible institution.
|
•
|
A parent PLUS borrower, upon request, may defer the repayment of the loan during any period during which the student for whom the loan was borrowed is enrolled at least half time. Also upon request, the borrower can defer the loan for the six-month period immediately following the date on which the student for whom the loan was borrowed ceases to be enrolled at least half time, or if the parent borrower is also a student, the date after he or she ceases to be enrolled at least half time.
|
•
|
A graduate or professional student PLUS borrower may defer the loan for the six-month period immediately following the date on which he or she ceases to be enrolled at least half time. This option does not require a request and may be granted each time the borrower ceases to be enrolled at least half time.
|
•
|
1.5% with respect to loans for which the first disbursement was made on or after July 1, 2007, and before July 1, 2008;
|
•
|
1.0% with respect to loans for which the first disbursement was made on or after July 1, 2008, and before July 1, 2009; and
|
•
|
0.5% with respect to loans for which the first disbursement was made on or after July 1, 2009, and before July 1, 2010.
|
Date of Loans
|
Annualized SAP Rate
|
On or after October 1, 1981
|
T-Bill Rate less Applicable Interest Rate + 3.5%
|
On or after November 16, 1986
|
T-Bill Rate less Applicable Interest Rate + 3.25%
|
On or after October 1, 1992
|
T-Bill Rate less Applicable Interest Rate + 3.1%
|
On or after July 1, 1995
|
T-Bill Rate less Applicable Interest Rate + 3.1%
(1)
|
On or after July 1, 1998
|
T-Bill Rate less Applicable Interest Rate + 2.8%
(2)
|
On or after January 1, 2000
|
3 Month Commercial Paper Rate less Applicable Interest Rate + 2.34%
(3)(6)
|
On or after October 1, 2007 and held by a Department of Education certified not-for-profit holder or Eligible Lender Trustee holding on behalf of a Department of Education certified not-for-profit entity
|
3 Month Commercial Paper Rate less Applicable Interest Rate + 1.94%
(4)(6)
|
All other loans on or after October 1, 2007
|
3 Month Commercial Paper Rate less Applicable Interest Rate + 1.79%
(5)(6)
|
•
|
the applicable interest rate minus the special allowance support level for the loan, multiplied by
|
•
|
the average daily principal balance of the loan during the quarter, divided by
|
•
|
four.
|
•
|
originated or acquired with funds obtained from the refunding of tax-exempt obligations issued prior to October 1, 1993, or
|
•
|
originated or acquired with funds obtained from collections on other loans made or purchased with funds obtained from tax-exempt obligations initially issued prior to October 1, 1993.
|
|
Name
|
Organized in
|
Relationship to Nelnet Inc.
|
Percentage Ownership
|
1
|
National Education Loan Network, Inc.
|
Nevada
|
Direct Subsidiary
|
100%
|
2
|
Nelnet Capital LLC
|
Nebraska
|
Direct Subsidiary
|
100%
|
3
|
Nelnet Guarantor Solutions, LLC (formerly Nelnet Guarantee Services LLC; formerly GuaranTec LLP)
|
Florida
|
Indirect Subsidiary
|
100%
|
4
|
5280 Solutions LLC (f/k/a Nelnet Technology Services LLC) (d/b/a Idaho Financial Associates, Charter Account Systems and 5280 Solutions)
|
Colorado
|
Indirect Subsidiary
|
100%
|
5
|
Nelnet Real Estate Ventures, Inc. (f/k/a Health Education Solutions, Inc. and ClassCredit, Inc.)
|
Florida
|
Indirect Subsidiary
|
100%
|
6
|
EFS Finance Co., LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
7
|
Nelnet Management Corporation-1 (formerly Nelnet Student Loan Warehouse Corporation – 1)
|
Nevada
|
Indirect Subsidiary
|
100%
|
8
|
Nelnet Student Loan Funding Management Corporation
|
Nevada
|
Indirect Subsidiary
|
100%
|
9
|
Nelnet Student Loan Funding, LLC
|
Delaware
|
Indirect Subsidiary
|
100%
|
10
|
Nelnet Education Loan Funding, Inc. (f/k/a NEBHELP, INC.)
|
Nebraska
|
Indirect Subsidiary
|
100%
|
11
|
Nelnet Canada, Inc.
|
Canada
|
Indirect Subsidiary
|
100%
|
12
|
Nelnet Business Solutions, Inc. (f/k/a FACTS Management Co.) (dba FACTS Management and infiNET Integrated Solutions)
|
Nebraska
|
Indirect Subsidiary
|
100%
|
13
|
Nelnet Academic Services, LLC (f/k/a Nelnet Mentor, LLC)
|
Nebraska
|
Direct Subsidiary
|
100%
|
14
|
CUnet, LLC
|
Delaware
|
Indirect Subsidiary
|
100%
|
15
|
Peterson’s Nelnet, LLC (formerly NELN Acquisition, LLC)
|
Nebraska
|
Indirect Subsidiary
|
100%
|
16
|
M & P Building, LLC
|
Nebraska
|
Direct/Indirect
|
100%
|
17
|
First National Life Insurance Company of the USA
|
Nebraska
|
Indirect Subsidiary
|
100%
|
18
|
Unilink Data Systems Pty Ltd
|
Australia
|
Indirect Subsidiary
|
100%
|
19
|
Nelnet Servicing, LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
20
|
Nelnet Diversified Solutions, LLC (formerly NLS Holding Company, LLC)
|
Nebraska
|
Direct Subsidiary
|
100%
|
21
|
Nelnet Enrollment Solutions, LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
22
|
Nelnet FFELP Student Loan Warehouse-I, LLC
|
Delaware
|
Indirect Subsidiary
|
100%
|
23
|
Merchant Preservation Services, LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
24
|
Next Gen Web Solutions, LLC
|
Nebraska
|
Indirect Subsidiary
|
50%
|
25
|
Whitetail Rock Capital Management, LLC
|
Nebraska
|
Indirect Subsidiary
|
90%
|
26
|
Municipal Tax Investment, LLC
|
Nebraska
|
Direct Subsidiary
|
100%
|
27
|
Globalnet, LLC
|
Nebraska
|
Direct Subsidiary
|
50%
|
28
|
Nelnet B2B Services, LLC
|
Nebraska
|
Direct/Indirect
|
100%
|
29
|
NHELP-III, LLC
|
Delaware
|
Indirect Subsidiary
|
100%
|
30
|
GCO SLIMS Trust-I
|
Delaware
|
Indirect Subsidiary
|
100%
|
31
|
GCO Education Loan Funding Trust-I
|
Delaware
|
Indirect Subsidiary
|
100%
|
32
|
NHELP-II, LLC
|
Delaware
|
Indirect Subsidiary
|
100%
|
33
|
Whitetail Rock Fund Management, LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
34
|
Nelnet Student Loan Funding II, LLC
|
Delaware
|
Indirect Subsidiary
|
100%
|
35
|
Nelnet Student Loan Funding II, Management Corporation
|
Nebraska
|
Indirect Subsidiary
|
100%
|
36
|
Municipal Tax Property, LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
37
|
Nelnet UNL Alliance, LLC
|
Nebraska
|
Direct Subsidiary
|
100%
|
38
|
Nelnet Captive Insurance Company, Inc.
|
Delaware
|
Direct Subsidiary
|
100%
|
39
|
GCO Education Loan Funding Master Trust - II
|
Delaware
|
Indirect Subsidiary
|
100%
|
40
|
Nelnet Finance Corp.
|
Nebraska
|
Indirect Subsidiary
|
100%
|
41
|
Whitetail Rock Quantitative Strategies I, LP
|
Delaware
|
Indirect Subsidiary
|
97.944%
|
42
|
Nelnet Fund Strategies, LLC
|
Delaware
|
Indirect Subsidiary
|
90%
|
43
|
Nelnet Consumer Finance, Inc.
|
Nebraska
|
Indirect Subsidiary
|
100%
|
44
|
Class Bundl, LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
45
|
Total Well Being, LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
46
|
NBS Sales Co., LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
47
|
Education Lending Services, Inc.
|
Delaware
|
Indirect Subsidiary
|
100%
|
48
|
Education Funding Capital I, LLC
|
Delaware
|
Indirect Subsidiary
|
100%
|
49
|
Wilcomp Software, LLC
|
Texas
|
Indirect Subsidiary
|
100%
|
50
|
Nelnet Transaction Services, LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
51
|
NTS - Renweb
|
Jamaica
|
Indirect Subsidiary
|
100%
|
52
|
Sparkroom, LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
53
|
NES Smart, LLC
|
Nebraska
|
Indirect Subsidiary
|
50%
|
54
|
IniPHI, LLC
|
Nebraska
|
Indirect Subsidiary
|
95%
|
55
|
Nelnet Loan Acquisition Corporation
|
Nebraska
|
Indirect Subsidiary
|
100%
|
56
|
Wachovia Education Loan Funding, LLC
|
Delaware
|
Indirect Subsidiary
|
100%
|
57
|
Nelnet Private Student Loan Financing Corporation
|
Nebraska
|
Indirect Subsidiary
|
100%
|
58
|
Nelnet Private Student Loan Warehouse-I, LLC
|
Delaware
|
Indirect Subsidiary
|
100%
|
59
|
Nelnet Fund Management LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
60
|
Harvest 960, LP
|
Pennsylvania
|
Indirect Subsidiary
|
56.55%
|
61
|
Timberline Suntree Associates, LLC
|
Kansas
|
Indirect Subsidiary
|
56.67%
|
62
|
Invite Education, LLC
|
Delaware
|
Indirect Subsidiary
|
50%
|
63
|
Gigabit, LLC
|
Nebraska
|
Indirect Subsidiary
|
100%
|
64
|
StudioCode, LLC
|
Nebraska
|
Indirect Subsidiary
|
50%
|
65
|
151 Building, LLC
|
Nebraska
|
Indirect Subsidiary
|
50%
|
66
|
Lincoln Workspace, LLC
|
Nebraska
|
Indirect Subsidiary
|
50%
|
67
|
401 Building, LLC
|
Nebraska
|
Indirect Subsidiary
|
50%
|
68
|
EADO, LLC
|
Nebraska
|
Indirect Subsidiary
|
50%
|
69
|
406 National, LLC
|
Nebraska
|
Indirect Subsidiary
|
50%
|
70
|
Allo Communications, LLC
|
Nebraska
|
Indirect Subsidiary
|
92.5%
|
71
|
Allo Alliance, LLC
|
Nebraska
|
Indirect Subsidiary
|
92.5%
|
72
|
Allo North Platte, LLC
|
Nebraska
|
Indirect Subsidiary
|
92.5%
|
73
|
Allo Holdings, LLC
|
Nebraska
|
Indirect Subsidiary
|
92.5%
|
74
|
Allo Ogallala, LLC
|
Nebraska
|
Indirect Subsidiary
|
92.5%
|
75
|
Allo Twin Cities, LLC
|
Nebraska
|
Indirect Subsidiary
|
92.5%
|
1.
|
I have reviewed this
annual
report on Form
10-K
of Nelnet, Inc. (the “Company”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 25, 2016
|
/s/ JEFFREY R. NOORDHOEK
|
|
|
Jeffrey R. Noordhoek Chief Executive Officer
Principal Executive Officer |
1.
|
I have reviewed this
annual
report on Form
10-K
of Nelnet, Inc. (the “Company”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
February 25, 2016
|
/s/ JAMES D. KRUGER
|
|
|
James D. Kruger
Chief Financial Officer
Principal Financial Officer and Principal Accounting Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date:
|
February 25, 2016
|
By:
/s/ JEFFREY R. NOORDHOEK
|
|
|
Name: Jeffrey R. Noordhoek
Title: Chief Executive Officer
Principal Executive Officer
|
|
|
|
|
|
By:
/s/ JAMES D. KRUGER
|
|
|
Name: James D. Kruger
Title: Chief Financial Officer
Principal Financial Officer and Principal Accounting Officer
|