Nelnet, Inc. · NYSE:NNI
Nelnet — Shareholder Meeting (May 2008)
17 slides from Nelnet's shareholder meeting presentation, May 29, 2008
Slide 1: Annual Meeting of Shareholders May 22, 2008
Annual Meeting of Shareholders May 22, 2008
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This report contains forward-looking statements and information based on management's current expectations as of the date of this document. When used in this document, the words "anticipate," "believe," "estimate," "intend," and "expect" and similar expressions are intende
Slide 3: Overview
1. Who we are 2. Who we serve - Our customer base 3. What we do - Our products and services 4. How we do it - Our lines of business 5. Challenges and responses 6. Why Nelnet? - Our value creation Diversification strategy Differentiation from competition Strong industry and company value prospects OV
Slide 4: Who We Are
WHO WE ARE While much has changed, many things remain the same. Vision Making educational dreams come true. Mission Nelnet, a diversified educational services company, will consistently deliver premier solutions and quality services. Core values Customers Associates Communication Diversification
Slide 5: Who We Serve - Our Customer Base
WHO WE SERVE - OUR CUSTOMER BASE 2000 2001 2002 2003 2004 2005 2006 2007 2008 Public 4-Yr 8.08 8.439 9.032 9.672 10.53 11.376 12.115 12.837 13.589 Private 4-Yr 21.475 22.24 23.856 24.867 26.057 27.465 28.743 30.497 32.307 Annual Cost of Higher Education (thousands) (3) (1) Source: Digest of Educatio
Slide 6: What We Do - Our Products and Services
WHAT WE DO - OUR PRODUCTS AND SERVICES Our products and services span the entire education life cycle. Student loans are only one (and shrinking) component of our total product set. Grant and aid assessment Actively managed payment plans 529 plans Practice tests Coaching Counseling List generation C
Slide 7: How We Do It - Our Lines of Business
HOW WE DO IT - OUR LINES OF BUSINESS Software / Technology Services Enrollment Services / List Management Tuition Payment / Campus Commerce Student Loan / Guaranty Servicing Asset Generation/ Management Portfolio Management Asset Generation FFELP Private Guaranty K-12 College Planning Lead Generatio
Slide 8: Opportunities in the Student Loan Industry
OPPORTUNITIES IN THE STUDENT LOAN INDUSTRY 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 39.8 45.3 52.2 59.3 64.3 68.3 75 82.2 86.6 91.4 96.5 102 107.9 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 16.61171 16.900479 17.272043 17.487481 17.67183 17.958
Slide 9: Challenges in the Student Loan Industry
4/1/2002 7/1/2002 10/1/2002 12/1/2002 3/1/2003 7/1/2003 10/1/2003 12/1/2003 3/1/2004 7/1/2004 10/1/2004 12/1/2004 3/1/2005 7/1/2005 10/1/2005 12/1/2005 3/1/2006 7/1/2006 10/1/2006 12/1/2006 3/1/2007 7/1/2007 Multi-Year Average 8 9 9 11 11 12 12 11 7 10 8 6 5 5 5 6 4 3 3 3 4 7 127 The historical stud
Slide 10: Our Proactive Response to the Challenges
4/1/2002 7/1/2002 10/1/2002 12/1/2002 3/1/2003 7/1/2003 10/1/2003 12/1/2003 3/1/2004 7/1/2004 10/1/2004 12/1/2004 3/1/2005 7/1/2005 10/1/2005 12/1/2005 3/1/2006 7/1/2006 10/1/2006 12/1/2006 3/1/2007 7/1/2007 9/1/2007 Multi-Year Average 8 9 9 11 11 12 12 11 7 10 8 6 5 5 5 6 4 3 3 3 4 7 36 127 Externa
Slide 11: Our Proactive Response to the Challenges
4/1/2002 7/1/2002 10/1/2002 12/1/2002 3/1/2003 7/1/2003 10/1/2003 12/1/2003 3/1/2004 7/1/2004 10/1/2004 12/1/2004 3/1/2005 7/1/2005 10/1/2005 12/1/2005 3/1/2006 7/1/2006 10/1/2006 12/1/2006 3/1/2007 7/1/2007 9/1/2007 12/1/2007 1/1/2008 Multi-Year Average 8 9 9 11 11 12 12 11 7 10 8 6 5 5 5 6 4 3 3 3
Slide 12: Our Proactive Response to the Challenges
4/1/2002 7/1/2002 10/1/2002 12/1/2002 3/1/2003 7/1/2003 10/1/2003 12/1/2003 3/1/2004 7/1/2004 10/1/2004 12/1/2004 3/1/2005 7/1/2005 10/1/2005 12/1/2005 3/1/2006 7/1/2006 10/1/2006 12/1/2006 3/1/2007 7/1/2007 9/1/2007 12/1/2007 1/1/2008 3/1/2008 4/8/2008 5/8/2008 Multi-Year Average 8 9 9 11 11 12 12
Slide 13: How Our Strategy to Diversify Is Working
Nelnet Technology Solutions 6% Column 1 Column 3 Column 4 Column 5 Column 6 Column 7 Column 8 Column 9 Column 10 Column 11 Column 12 Column 13 Column 14 Column 15 Column 16 Asset management 0.4 Loan & guarantee servicing 0.31 Nelnet Business Solutions 0.07 Nelnet Enrollment Solutions 0.16 Nelnet Tec
Slide 14: How Our Strategy to Diversify Is Working: Revenue Diversification
2004 YTD Revenues 2008 YTD Revenues Fee-based revenues have grown from 22% to 83% of revenues. Net interest income 78% Fee-based revenues 22% Fee-based revenues 83% Net interest income 17% Revenue Diversification HOW OUR STRATEGY TO DIVERSIFY IS WORKING
Slide 15: How Our Strategy to Diversify Is Working: Earnings per Share
In 2007, Nelnet earned more exclusively from its fee-based businesses than it did from the entire company (including student loans) in 2004 Earnings per share HOW OUR STRATEGY TO DIVERSIFY IS WORKING
Slide 16: Why Nelnet? Differentiation from Competition
WHY NELNET? DIFFERENTIATION FROM COMPETITION Balance sheet strength $27 billion portfolio, 99% government guaranteed Strong capital base - $538 million in equity Value captured - $22 billion in loans generating > $1.4 billion in future cash flow Improved liquidity position - $1.9 billion in loans re
Slide 17: What Excites Us About Nelnet's Future?
WHAT EXCITES US ABOUT NELNET'S FUTURE? Industry dynamics = Opportunity Increasing customer base - Largest in U.S. history Increasing cost of education - Demand for products/services Increasing complexity - Demand for products/services Increasing change/disruption in loan industry - Opportunity Posit