EX-99.2 3 ex-992.txt ADDITIONAL INFORMATION FOR RELEASE: 4/27/07 MEDIA CONTACT: Ben Kiser, 402.458.3024 INVESTOR CONTACT: Cheryl Watson, 317.469.2064 NELNET, INC. SUPPLEMENTAL FINANCIAL INFORMATION FOR THE FIRST QUARTER 2007 The following supplemental information should be read in connection with the first-quarter 2007 earnings press release of Nelnet, Inc. (the "Company"), dated April 27, 2007. Information contained in this earnings supplement, other than historical information, may be considered forward-looking in nature and is subject to various risks, uncertainties, and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated, or expected. Among the key factors that may have a direct bearing on the Company's operating results, performance, or financial condition expressed or implied by the forward-looking statements are changes in terms of student loans and the educational credit marketplace, changes in the demand for educational financing or in financing preferences of educational institutions, students and their families, or changes in the general interest rate environment and in the securitization markets for education loans. Certain prior year amounts have been reclassified to conform to the current period presentation. For more information see our filings with the Securities and Exchange Commission.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED ------------------------------------------ MARCH 31, DECEMBER 31, MARCH 31, 2007 2006 2006 ------------ ------------ ------------ (UNAUDITED) (UNAUDITED) (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) Interest income: Loan interest $ 418,113 $ 410,015 $ 347,522 Amortization of loan premiums and deferred origination costs (21,059) (22,838) (21,862) Investment interest 21,496 24,310 19,541 ------------ ------------ ------------ Total interest income 418,550 411,487 345,201 Interest expense: Interest on bonds and notes payable 350,226 347,615 258,949 ------------ ------------ ------------ Net interest income 68,324 63,872 86,252 Less provision for loan losses 2,753 1,800 9,618 ------------ ------------ ------------ Net interest income after provision for loan losses 65,571 62,072 76,634 ------------ ------------ ------------ Other income (expense): Loan and guarantee servicing income 49,445 50,985 47,074 Other fee-based income 40,029 36,868 18,155 Software services income 5,748 4,064 3,409 Other income 6,931 4,850 1,987 Derivative market value, foreign currency, and put option adjustments (12,130) (19,510) 39,263 Derivative settlements, net 4,240 7,013 4,744 ------------ ------------ ------------ Total other income (expense) 94,263 84,270 114,632 ------------ ------------ ------------ Operating expenses: Salaries and benefits 70,009 60,842 57,684 Other expenses 59,259 60,916 44,930 Amortization of intangible assets 6,918 6,794 5,633 Impairment expense - 31,090 - ------------ ------------ ------------ Total operating expenses 136,186 159,642 108,247 ------------ ------------ ------------ Income (loss) before income taxes 23,648 (13,300) 83,019 Income tax expense (benefit) 8,868 (5,990) 30,711 ------------ ------------ ------------ Net income (loss) before minority interest 14,780 (7,310) 52,308 Minority interest in net earnings of subsidiaries - - (242) ------------ ------------ ------------ Net income (loss) $ 14,780 $ (7,310) $ 52,066 ============ ============ ============ Earnings (loss) per share, basic and diluted $ 0.29 $ (0.14) $ 0.96 ============ ============ ============ Weighted average shares outstanding 50,982,187 52,506,936 54,241,341
CONDENSED CONSOLIDATED BALANCE SHEETS AND FINANCIAL DATA AS OF AS OF AS OF MARCH 31, DECEMBER 31, MARCH 31, 2007 2006 2006 ----------- ------------- ----------- (UNAUDITED) (UNAUDITED) (DOLLARS IN THOUSANDS) Assets: Student loans receivable, net $ 25,013,045 $ 23,789,552 $ 21,320,374 Cash, cash equivalents, and investments 1,417,304 1,777,494 1,456,181 Goodwill 191,214 191,420 132,389 Intangible assets, net 154,176 162,994 162,396 Other assets 906,264 875,413 732,811 ------------ ------------ ------------ Total assets $ 27,682,003 $ 26,796,873 $ 23,804,151 ============ ============ ============ Liabilities: Bonds and notes payable $ 26,537,482 $ 25,562,119 $ 22,670,772 Other liabilities 533,403 562,904 416,173 ------------ ------------ ------------ Total liabilities 27,070,885 26,125,023 23,086,945 ------------ ------------ ------------ Shareholders' equity 611,118 671,850 717,206 ------------ ------------ ------------ Total liabilities and shareholders' equity $ 27,682,003 $ 26,796,873 $ 23,804,151 ============ ============ ============ Return on average total assets 0.22% 0.27% 0.90% Return on average equity 9.4% 9.6% 30.4% Shareholders' equity to total assets 2.21% 2.51% 3.01%
NON-GAAP PERFORMANCE MEASURES In accordance with the Rules and Regulations of the Securities and Exchange Commission ("SEC"), the Company prepares financial statements in accordance with generally accepted accounting principles ("GAAP"). In addition to evaluating the Company's GAAP-based financial information, management also evaluates the Company on a non-GAAP performance measure referred to as base net income. While base net income is not a substitute for reported results under GAAP, the Company provides base net income as additional information regarding its financial results. Base net income is the primary financial performance measure used by management to develop financial plans, allocate resources, track results, evaluate performance, establish corporate performance targets, and determine incentive compensation. The Company's board of directors utilizes base net income to set performance targets and evaluate management's performance. The Company also believes analysts, rating agencies, and creditors use base net income in their evaluation of the Company's results of operations. While base net income is not a substitute for reported results under GAAP, the Company utilizes base net income in operating its business because base net income permits management to make meaningful period-to-period comparisons by eliminating the temporary volatility in the Company's performance that arises from certain items that are primarily affected by factors beyond the control of management. Management believes base net income provides additional insight into the financial performance of the core business activities of the Company's operations. The following table provides a reconciliation of GAAP net income (loss) to base and adjusted base net income.
THREE MONTHS ENDED ----------------------------------------- MARCH 31, DECEMBER 31, MARCH 31, 2007 2006 2006 ------------- ------------ ------------ (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA) GAAP net income (loss) $ 14,780 $ (7,310) $ 52,066 Base adjustments: Derivative market value, foreign currency, and put option adjustments 12,130 19,510 (39,263) Amortization of intangible assets 6,918 6,794 5,633 Non-cash stock based compensation related to business combinations 477 476 318 Variable-rate floor income - - - ------------- ------------ ------------ Total base adjustments before income taxes 19,525 26,780 (33,312) Net tax effect (b) (6,638) (9,865) 12,861 ------------- ------------ ------------ Total base adjustments 12,887 16,915 (20,451) ------------- ------------ ------------ Base net income 27,667 9,605 31,615 Adjustments to base net income: Special allowance yield adjustment (a) - - (13,910) Derivative settlements, net - - (4,164) ------------- ------------ ------------ Total adjustments to base net income before income taxes - - (18,074) Net tax effect (b) - - 6,868 ------------- ------------ ------------ Total adjustments to base net income - - (11,206) ------------- ------------ ------------ Adjusted base net income $ 27,667 $ 9,605 $ 20,409 ============= ============ ============ Earnings (loss) per share, basic and diluted: GAAP net income (loss) $ 0.29 $ (0.14) $ 0.96 Total base adjustments 0.25 0.32 (0.37) ------------- ------------ ------------ Base net income 0.54 0.18 0.59 Total adjustments to base net income - - (0.21) ------------- ------------ ------------ Adjusted base net income $ 0.54 $ 0.18 $ 0.38 ============= ============ ============
---------------------------- (a) As previously disclosed, on January 19, 2007, the Company entered into a Settlement Agreement (the "Agreement") with the Department of Education (the "Department") to resolve the audit by the Department's Office of Inspector General (the "OIG") of the Company's portfolio of student loans receiving 9.5% special allowance payments. Under the terms of the Agreement, all 9.5% special allowance payments were eliminated for periods on and after July 1, 2006. The Company had been deferring recognition of 9.5% special allowance payments related to those loans subject to the OIG audit effective July 1, 2006 pending satisfactory resolution of this issue. (b) Tax effect computed at 38%. The change in the value of the put option is not tax effected as this is not deductible for income tax purposes. LIMITATIONS OF BASE NET INCOME While GAAP provides a uniform, comprehensive basis of accounting, for the reasons discussed above, management believes that base net income is an important additional tool for providing a more complete understanding of the Company's results of operations. Nevertheless, base net income is subject to certain general and specific limitations that investors should carefully consider. For example, unlike financial statements prepared in accordance with GAAP, the Company's base net income presentation does not represent a comprehensive basis of accounting. In addition, the Company's base net income is not a defined term within GAAP and may not be comparable to similarly titled measures reported by other companies. Investors, therefore, may not be able to compare our Company's performance with that of other companies based upon base net income. Base net income results are only meant to supplement GAAP results by providing additional information regarding the operational and performance indicators that are most closely monitored and used by the Company's management and board of directors to assess performance and information which the Company believes is important to analysts, rating agencies, and creditors. Other limitations of base net income arise from the specific adjustments that management makes to GAAP results to derive base net income results. These differences are described below. DIFFERENCES BETWEEN GAAP AND BASE NET INCOME Management's financial planning and evaluation of operating results does not take into account the following items because their volatility and/or inherent uncertainty affect the period-to-period comparability of the Company's results of operations. A more detailed discussion of the differences between GAAP and base net income follows. DERIVATIVE MARKET VALUE, FOREIGN CURRENCY, AND PUT OPTION ADJUSTMENTS: Base net income excludes the periodic unrealized gains and losses that are caused by the change in fair value on derivatives in which the Company does not qualify for "hedge treatment" under GAAP. Statement of Financial Accounting Standards No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES ("SFAS No. 133"), requires that changes in fair value of derivative instruments be recognized currently in earnings unless specific hedge accounting criteria, as specified by SFAS No. 133, are met. The Company maintains an overall interest rate risk management strategy that incorporates the use of derivative instruments to reduce the economic effect of interest rate volatility. Derivative instruments primarily used by the Company include interest rate swaps, basis swaps, interest rate floor contracts, and cross-currency interest rate swaps. Management has structured all of the Company's derivative transactions with the intent that each is economically effective. However, the Company does not qualify its derivatives for "hedge treatment" as defined by SFAS No. 133, and the stand-alone derivative must be marked-to-market in the income statement with no consideration for the corresponding change in fair value of the hedged item. Since the Company plans to hold all derivative instruments until their maturity, the Company believes these point-in-time estimates of asset and liability values that are subject to interest rate fluctuations make it difficult to evaluate the ongoing results of operations against its business plan and affect the period-to-period comparability of the results of operations. Included in base net income are the economic effects of the Company's derivative instruments, which includes any cash paid or received being recognized as an expense or revenue upon actual derivative settlements. These settlements are included in "Derivative settlements, net" on the Company's consolidated statements of operations. Base net income excludes the foreign currency transaction gains or losses caused by the re-measurement of the Company's Euro-denominated bonds to U.S. dollars. In connection with the issuance of the Euro-denominated bonds, the Company has entered into cross-currency interest rate swaps. Under the terms of these agreements, the principal payments on the Euro-denominated notes will effectively be paid at the exchange rate in effect at the issuance date of the bonds. The cross-currency interest rate swaps also convert the floating rate paid on the Euro-denominated bonds' (EURIBOR index) to an index based on LIBOR. Included in base net income are the economic effects of any cash paid or received being recognized as an expense or revenue upon actual settlements of the cross-currency interest rate swaps. These settlements are included in "Derivative settlements, net" on the Company's consolidated statements of operations. However, the gains or losses caused by the re-measurement of the Euro-denominated bonds to U.S. dollars and the change in market value of the cross-currency interest rate swaps are excluded from base net income as the Company believes the point-in-time estimates of value that are subject to currency rate fluctuations related to these financial instruments make it difficult to evaluate the ongoing results of operations against the Company's business plan and affect the period-to-period comparability of the results of operations. The re-measurement of the Euro-denominated bonds correlates with the change in fair value of the cross-currency interest rate swaps. However, the Company will experience unrealized gains or losses related to the cross-currency interest rate swaps if the two underlying indices (and related forward curve) do not move in parallel. Base net income also excludes the change in fair value of put options issued by the Company for certain business acquisitions. The put options are valued by the Company each reporting period using a Black-Scholes pricing model. Therefore, the fair value of these options is primarily affected by the strike price and term of the underlying option, the Company's current stock price, and the dividend yield and volatility of the Company's stock. The Company believes these point-in-time estimates of value that are subject to fluctuations make it difficult to evaluate the ongoing results of operations against the Company's business plans and affects the period-to-period comparability of the results of operations. The gains and/or losses included in "Derivative market value, foreign currency, and put option adjustments" on the Company's consolidated statements of operations are primarily caused by interest rate and currency volatility, changes in the value of put options based on the inputs used in the Black-Scholes pricing model, as well as the volume and terms of put options and of derivatives not receiving hedge treatment. Base net income excludes these unrealized gains and losses and isolates the effect of interest rate, currency, and put option volatility on the fair value of such instruments during the period. Under GAAP, the effects of these factors on the fair value of the put options and the derivative instruments (but not the underlying hedged item) tend to show more volatility in the short term. AMORTIZATION OF INTANGIBLE ASSETS: Base net income excludes the amortization of acquired intangibles, which arises primarily from the acquisition of definite life intangible assets in connection with the Company's acquisitions, since the Company feels that such charges do not drive the Company's operating performance on a long-term basis and can affect the period-to-period comparability of the results of operations. NON-CASH STOCK BASED COMPENSATION RELATED TO BUSINESS COMBINATIONS: The Company has structured certain business combinations in which the stock consideration paid has been dependent on the sellers' continued employment with the Company. As such, the value of the consideration paid is recognized as compensation expense by the Company over the term of the applicable employment agreement. Base net income excludes this expense because the Company believes such charges do not drive its operating performance on a long-term basis and can affect the period-to-period comparability of the results of operations. If the Company did not enter into the employment agreements in connection with the acquisition, the amount paid to these former shareholders of the acquired entity would have been recorded by the Company as additional consideration of the acquired entity, thus, not having an effect on the Company's results of operations. VARIABLE-RATE FLOOR INCOME: Loans that reset annually on July 1 can generate excess spread income compared with the rate based on the special allowance payment formula in declining interest rate environments. The Company refers to this additional income as variable-rate floor income. The Company excludes variable rate floor income from its base net income since its timing and amount (if any) is uncertain, it has been eliminated by legislation for all loans originated on and after April 1, 2006, and it is in excess of expected spreads. In addition, because variable rate floor income is subject to the underlying rate for the subject loans being reset annually on July 1, it is a factor beyond the Company's control which can affect the period-to-period comparability of results of operations. There was no variable-rate floor income in the periods presented. SPECIAL ALLOWANCE YIELD ADJUSTMENT AND RELATED HEDGING ACTIVITY: The Company excludes the special allowance yield adjustments and the net settlements received or paid on those derivative instruments used to hedge the student loans that were earning 9.5% special allowance payments. Pursuant to the settlement agreement entered into with the Department, effective July 1, 2006, the Company no longer receives 9.5% special allowance payments. Prior to this agreement, the Company excluded the special allowance yield adjustments from base net income because the Company expected 9.5% special allowance payments to decline over time due to the fact that in April 2004 it ceased adding loans receiving 9.5% special allowance payments to its portfolio. STUDENT LOANS RECEIVABLE Student loans receivable includes all student loans owned by or on behalf of the Company and includes the unamortized cost of acquisition or origination less an allowance for loan losses. The following table describes the components of the Company's loan portfolio:
AS OF AS OF AS OF MARCH 31, DECEMBER 31, MARCH 31, 2007 2006 2006 ---------------------- ---------------------- ---------------------- PERCENT PERCENT PERCENT DOLLARS OF TOTAL DOLLARS OF TOTAL DOLLARS OF TOTAL ------------ --------- ------------ -------- ------------ -------- (DOLLARS IN THOUSANDS) Federally insured: Stafford $ 6,096,393 24.4 % $ 5,724,586 24.1 % $ 6,541,680 30.7 % PLUS/SLS 460,575 1.8 365,112 1.5 431,268 2.0 Consolidation 17,835,192 71.3 17,127,623 72.0 13,826,647 64.8 Non-federally insured 224,870 0.9 197,147 0.8 163,624 0.8 ------------ --------- ------------ --------- ------------ --------- Total 24,617,030 98.4 23,414,468 98.4 20,963,219 98.3 Unamortized premiums and deferred origination costs 422,239 1.7 401,087 1.7 379,380 1.8 Allowance for loan losses: Allowance - federally insured (7,859) (0.0) (7,601) (0.0) (7,075) (0.0) Allowance - non-federally insured (18,365) (0.1) (18,402) (0.1) (15,150) (0.1) ------------ --------- ------------ --------- ------------ --------- Net $25,013,045 100.0 % $23,789,552 100.0 % $21,320,374 100.0 % ============ ========= ============ ========= ============ =========
The following table sets forth the loans originated or acquired through each of the Company's channels:
THREE MONTHS ENDED -------------------------------------------- MARCH 31, DECEMBER 31, MARCH 31, 2007 2006 2006 ------------ ------------ ------------ (DOLLARS IN THOUSANDS) Beginning balance $23,414,468 $22,534,661 $19,912,955 Direct channel: Consolidation loan originations 1,064,238 1,762,371 1,024,835 Less consolidation of existing portfolio (473,795) (843,749) (433,900) ------------ ------------ ------------ Net consolidation loan originations 590,443 918,622 590,935 Stafford/PLUS loan originations 354,827 192,533 306,148 Branding partner channel (a) (b) 202,290 69,498 230,150 Forward flow channel 375,941 332,702 351,812 Other channels (b) 205,918 12,209 243,953 ------------ ------------ ------------ Total channel acquisitions 1,729,419 1,525,564 1,722,998 Repayments, claims, capitalized interest, and other (235,807) (125,756) (365,158) Consolidation loans lost to external parties (239,404) (307,649) (270,400) Loans sold (51,646) (212,352) (37,176) ------------ ------------ ------------ Ending balance $24,617,030 $23,414,468 $20,963,219 ============ ============ ============
(a) Included in the branding partner channel are private loan originations of $44.3 million, $19.7 million, and $10.5 million for the three months ended March 31, 2007, December 31, 2006, and March 31, 2006, respectively. (b) Included in other channels for the three months ended March 31, 2006 is $190.1 million of acquisitions that were previously presented as branding partner channel acquisitions. This reclassification was made for comparative purposes due to the nature of the transactions. STUDENT LOAN SPREAD The following table analyzes the student loan spread on the Company's portfolio of student loans. This table represents the spread on assets earned in conjunction with the liabilities used to fund the assets, including the effects of net derivative settlements.
THREE MONTHS ENDED ------------------------------------------- MARCH 31, DECEMBER 31, MARCH 31, 2007 2006 2006 ------------- ------------- ------------- Student loan yield (a) 7.90 % 7.88 % 7.68 % Consolidation rebate fees (0.79) (0.76) (0.71) Premium and deferred origination costs amortization (b) (0.36) (0.33) (0.44) ------------- ------------- ------------- Student loan net yield 6.75 6.79 6.53 Student loan cost of funds (c) (5.46) (5.48) (4.63) ------------- ------------- ------------- Student loan spread 1.29 1.31 1.90 Special allowance yield adjustments, net of settlements on derivatives (d) - - (0.36) ------------- ------------- ------------- Core student loan spread 1.29 % 1.31 % 1.54 % ============= ============= ============= Average balance of student loans (in thousands) $23,844,815 $22,978,951 $ 20,237,068 Average balance of debt outstanding (in thousands) 25,378,267 24,552,113 21,796,549
------------------------------------------- (a) The student loan yield for the three months ended December 31, 2006 does not include the $2.8 million charge to write off accounts receivable from the Department related to third quarter 2006 9.5% special allowance payments that were not received under the Company's previously disclosed Settlement Agreement with the Department. The $2.8 million relates to loans earning 9.5% special allowance payments that were not subject to the OIG audit. (b) Premium and deferred origination costs amortization for the three months ended December 31, 2006 excludes premium amortization related to the Company's portfolio of 9.5% loans purchased in October 2005 as part of a business combination. (c) The student loan cost of funds includes the effects of net settlement costs on the Company's derivative instruments used to hedge the Company's student loan portfolio. (d) The special allowance yield adjustments represent the impact on net spread had loans earned at statutorily defined rates under a taxable financing. The special allowance yield adjustments include net settlements on derivative instruments that were used to hedge this loan portfolio earning the excess yield. As previously disclosed, on January 19, 2007, the Company entered into a Settlement Agreement with the Department to resolve the audit by the OIG of the Company's portfolio of student loans receiving 9.5% special allowance payments. Under the terms of the Agreement, all 9.5% special allowance payments were eliminated for periods on and after July 1, 2006. The Company had been deferring recognition of 9.5% special allowance payments related to those loans subject to the OIG audit effective July 1, 2006 pending satisfactory resolution of this issue. INTEREST RATE SENSITIVITY A portion of the Company's student loan assets earn a fixed rate. As a result, management uses fixed-rate debt and interest rate swaps to reduce the economic effect of interest rate volatility. The following table shows the Company's student loan assets currently earning at a fixed rate as of March 31, 2007: BORROWER/ FIXED LENDER ESTIMATED INTEREST WEIGHTED VARIABLE BALANCE RATE AVERAGE CONVERSION OF FIXED RANGE YIELD RATE (A) RATE ASSETS --------- ------------- ------------ ------------- (DOLLARS IN THOUSANDS) 8.0-9.0 % 8.23 % 5.59 % $ 362,919 >9.0 9.05 6.41 402,077 ------------- $ 764,996 ============= ------------------ (a) The estimated variable conversion rate is the estimated short-term interest rate at which loans would convert to variable rate. The following table summarizes the outstanding derivative instruments as of March 31, 2007 used by the Company to hedge the fixed-rate loan portfolio. WEIGHTED AVERAGE NOTIONAL FIXED RATE PAID BY MATURITY VALUES THE COMPANY ---------------- -------------- ----------------- (DOLLARS IN THOUSANDS) 2008 $ 462,500 3.76% 2009 312,500 4.01% ------------ --------------- Total $ 775,000 3.86% ============ =============== In addition to the interest rate swaps with notional values of $0.8 billion summarized above, as of March 31, 2007, the Company had $376.4 million of fixed-rate debt (excluding the Company's fixed-rate unsecured debt of $475.0 million) that was used by the Company to hedge fixed-rate student loan assets. DERIVATIVE SETTLEMENTS The following table summarizes the components of derivative settlements.
THREE MONTHS ENDED ---------------------------------- MARCH 31, DECEMBER 31, MARCH 31, 2007 2006 2006 ---------- ------------ ---------- (DOLLARS IN THOUSANDS) Interest rate and basis swap derivatives- loan portfolio $ 2,895 $ 4,291 $ 1,732 Interest rate swap derivatives- other (a) 4,664 7,044 - Special allowance yield adjustment derivatives (a) - - 4,164 Cross currency interest rate swaps (3,319) (4,322) (1,152) ---------- ------------ ---------- Derivative settlements, net $ 4,240 $ 7,013 $ 4,744 ========== ============ ==========
(a) Derivative settlements for interest rate swaps "other" include settlements on the portfolio of derivatives that the Company had used to hedge 9.5% special allowance payments and the portfolio of off-setting interest rate swaps the Company entered into during the fourth quarter 2006. The new derivatives mirror the 9.5% special allowance payment derivatives. Settlements on the 9.5% special allowance derivatives were classified in the special allowance yield adjustment derivatives line item through September 30, 2006. STUDENT LOAN SERVICING The Company performs servicing activities for its own portfolio and third parties. The following table summarizes the Company's loan servicing volumes:
AS OF MARCH 31, AS OF DECEMBER 31, AS OF MARCH 31, 2007 2006 2006 -------------------------------- --------------------------------- ------------------------------- COMPANY THIRD PARTY TOTAL COMPANY THIRD PARTY TOTAL COMPANY THIRD PARTY TOTAL ---------- ----------- --------- ---------- ------------ --------- --------- ----------- --------- (DOLLARS IN MILLIONS) FFELP and private loans $ 23,274 $ 8,935 $ 32,209 $ 21,869 $ 8,725 $ 30,594 $ 18,017 $ 10,626 $ 28,643 Canadian loans (in U.S. $) (a) - 9,266 9,266 - 9,043 9,043 - 8,388 8,388 ---------- ----------- --------- ---------- ------------ --------- --------- ----------- --------- Total $ 23,274 $ 18,201 $ 41,475 $ 21,869 $ 17,768 $ 39,637 $ 18,017 $ 19,014 $ 37,031 ========== =========== ========= ========== ============ ========= ========= =========== =========
(a) As previously disclosed, EDULINX Canada Corporation, a subsidiary of Nelnet, TED] announced that the Government of Canada decided to award a competitive contract to provide services in support of the Canada and Integrated Student Loan Programs (CSLP) upon the expiration of the current EDULINX contract for such services to another service provider. The Government of Canada is EDULINX's largest customer. This contract is scheduled to expire on March 31, 2008. As a result of this decision, EDULINX will be required to transition the existing CSLP portfolio it services to the selected service provider. As of March 31, 2007, the Company serviced $8.0 billion of CSLP loans.