LINCOLN, Neb., Aug. 11 /PRNewswire-FirstCall/ -- Nelnet, Inc. (NYSE: NNI)
today reported GAAP net income for the second quarter of 2008 of
$43.7 million, or $0.89 per share, compared with $14.8 million, or $0.30 per
share, for the second quarter of 2007. Base net income excluding discontinued
operations and restructuring related charges for the second quarter of 2008
was $26.5 million, or $0.54 per share, compared with $21.7 million, or
$0.44 per share, for the same period a year ago.
'We are very pleased with our results for the second quarter in what
continues to be a challenging capital markets environment,' said Mike Dunlap,
Nelnet Chairman and Chief Executive Officer. 'We continue to be proactive
with our decisions to create operating efficiencies and remain competitive for
the long term with our student loan business. More importantly, our
diversification strategy has reduced our reliance on net interest income and
has provided us many more opportunities to be successful in the execution of
our business plan.'
'While the capital markets remain severely disrupted, the Department of
Education's funding facilities will provide an important source of liquidity,
allowing us to make loans to all eligible students for the 2008-2009 academic
year,' added Jeff Noordhoek, Nelnet President.
GAAP net loss for the first six months of 2008 was $26.1 million, or
$0.53 per share, compared with GAAP net income of $29.5 million, or $0.59 per
share, for the first six months of 2007. Base net income excluding
discontinued operations, restructuring related charges, and the loss on the
sale of loans for the first six months of 2008 was $41.8 million, or $0.85 per
share, compared with $46.4 million, or $0.92 per share, for the first six
months of 2007.
Fee-based Revenue
In the second quarter of 2008, other fee-based income increased to
$40.8 million, up from $38.3 million in the same period a year ago. Other
fee-based income increased to $86.7 million for the first six months of 2008
compared with $78.3 million for the first six months of 2007. Other fee-based
income includes Nelnet's list management, direct marketing, tuition payment
plan, and enrollment services businesses.
In the second quarter of 2008, loan and guaranty servicing income was
$24.9 million compared with $31.6 million in the second quarter of 2007.
Income from loan and guaranty servicing was $51.0 million for the first six
months of 2008 compared with $62.1 million in the first six months of 2007.
Operating Expenses
Operating expenses were $97.9 million in the second quarter of 2008
compared with $120.6 million for the same period a year ago. For the first
six months of 2008, the company reported operating expenses of $226.8 million
compared with $241.9 million for the first six months of 2007. Excluding
restructuring and impairment charges, operating expenses decreased by
$22.4 million and $41.1 million for the three and six months ended June 30,
2008 compared with the same periods in 2007, respectively.
Net Interest Margin
For the second quarter of 2008, Nelnet reported net interest income of
$73.3 million compared with $68.0 million for the second quarter of 2007. Net
interest income for the first six months of 2008 was $89.9 million compared
with $136.0 million for the first six months of 2007. Net interest income
includes variable-rate floor income and excludes settlements on the company's
derivative portfolio. In addition, net interest income in the second quarter
of 2008 includes $4.6 million from a change in estimate on certain liabilities
related to a prior business acquisition.
For the second quarter of 2008, Nelnet reported core student loan spread
of 1.07 percent compared with 1.28 percent in the same period of 2007 and
0.73 percent for the first quarter of 2008.
