Note 2 - Segment Reporting (Notes)

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Reporting

Our mortgage insurance and financial guaranty segments are strategic business units that are managed separately on an operating basis. We allocate corporate income and expenses to our mortgage insurance and financial guaranty segments based on either an allocated percentage of time spent or internally allocated capital. We allocate corporate cash and investments to our segments based on internally allocated capital, which is based on relative GAAP equity. The results for each segment for each reporting period can cause significant volatility in internally allocated capital based on GAAP equity.

Summarized financial information concerning our operating segments, as of and for the periods indicated, are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2012			2011			2012			2011
Mortgage Insurance
Net premiums written—insurance	$	209,890		$	178,215		$	589,261		$	523,255
Net premiums earned—insurance	$	178,685		$	163,436		$	522,899		$	513,895
Net investment income	14,758			21,642			50,377			73,328
Net gains on investments	43,379			53,263			102,219			98,450
Net impairment losses recognized in earnings	—			(20		)	—			(31		)
Change in fair value of derivative instruments	(1		)	200			(32		)	64
Net (losses) gains on other financial instruments	(1,960		)	2,486			(2,627		)	4,321
Gain on sale of affiliate	—			—			—			—
Other income	1,280			1,357			3,928			3,881
Total revenues	236,141			242,364			676,764			693,908
Provision for losses	171,805			276,599			614,612			960,564
Change in reserve for premium deficiency	966			(1,942		)	1,505			(6,427		)
Policy acquisition costs	10,126			7,834			26,662			26,651
Other operating expenses	40,250			36,082			107,787			104,132
Interest expense	1,910			2,015			5,355			11,950
Total expenses	225,057			320,588			755,921			1,096,870
Equity in net (loss) income of affiliates	—			—			—			—
Pretax (loss) income	11,084			(78,224		)	(79,157		)	(402,962		)
Income tax (benefit) provision	(20,316		)	(36,033		)	(42,324		)	(27,158		)
Net (loss) income	$	31,400		$	(42,191	)	$	(36,833	)	$	(375,804	)
Cash and investments	$	3,192,341		$	3,176,860
Deferred policy acquisition costs	39,148			47,863
Total assets	3,651,849			3,731,978
Unearned premiums	333,144			206,477
Reserve for losses and LAE	3,046,706			3,214,854
VIE debt	9,448			31,164
Derivative liabilities	—			—
New Insurance Written (in millions)	$	10,598		$	4,107		$	25,398		$	8,973

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2012			2011			2012			2011
Financial Guaranty
Net premiums written—insurance	$	(613	)	$	72		$	(120,374	)	$	(9,441	)
Net premiums earned—insurance	$	12,278		$	16,219		$	22,208		$	57,717
Net investment income	10,877			17,121			40,848			51,498
Net gains on investments	41,280			28,377			76,318			64,861
Net impairment losses recognized in earnings	—			—			—			—
Change in fair value of derivative instruments	(41,055		)	125,808			(146,905		)	558,562
Net (losses) gains on other financial instruments	1,220			78,116			(77,827		)	156,579
Gain on sale of affiliate	—			—			7,708			—
Other income	48			47			235			167
Total revenues	24,648			265,688			(77,415		)	889,384
Provision for losses	4,547			(27,001		)	38,762			(20,027		)
Change in reserve for premium deficiency	—			—			—			—
Policy acquisition costs	2,801			3,615			25,116			13,316
Other operating expenses	10,179			9,158			32,989			33,281
Interest expense	10,610			12,079			33,894			35,247
Total expenses	28,137			(2,149		)	130,761			61,817
Equity in net (loss) income of affiliates	—			—			(13		)	65
Pretax (loss) income	(3,489		)	267,837			(208,189		)	827,632
Income tax provision	13,586			42,078			29,144			28,139
Net (loss) income	$	(17,075	)	$	225,759		$	(237,333	)	$	799,493
Cash and investments	$	2,099,454		$	2,759,726
Deferred policy acquisition costs	52,123			91,099
Total assets	2,389,508			3,514,307
Unearned premiums	281,311			421,923
Reserve for losses and LAE	72,891			45,702
VIE debt	100,203			242,215
Derivative liabilities	267,323			188,921

A reconciliation of segment net (loss) income to consolidated net (loss) income is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2012			2011			2012			2011
Consolidated
Net (loss) income:
Mortgage Insurance	$	31,400		$	(42,191	)	$	(36,833	)	$	(375,804	)
Financial Guaranty	(17,075		)	225,759			(237,333		)	799,493
Total	$	14,325		$	183,568		$	(274,166	)	$	423,689