Note 2 - Segment Reporting (Notes)

3 Months Ended

Mar. 31, 2013

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. We allocate corporate income and expenses to our mortgage insurance and financial guaranty segments based on either an allocated percentage of time spent on each segment or internally allocated capital, which is based on the relative GAAP equity of each segment. We allocate corporate cash and investments to our segments based on internally allocated capital, which also 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 relative GAAP equity, which can impact the allocations of income and expenses to our segments.

Management has determined that the allocation of our consolidated provision for taxes to the segments is no longer material to the evaluation of our business results. Therefore, beginning with the first quarter of 2013, financial information for our business segments will be disclosed on a pretax basis as pretax results are used by senior management in the allocation of resources and in assessing the performance of the segments.

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

	Three Months Ended March 31,
(In thousands)	2013			2012
Mortgage Insurance
Net premiums written—insurance	$	217,286		$	196,853
Net premiums earned—insurance	$	182,992		$	173,451
Net investment income	15,102			18,011
Net (losses) gains on investments	(3,237		)	32,178
Change in fair value of derivative instruments	—			21
Net losses on other financial instruments	(1,877		)	(709		)
Other income	1,712			1,344
Total revenues	194,692			224,296
Provision for losses	131,956			234,729
Change in PDR	(629		)	(20		)
Policy acquisition costs	11,732			8,646
Other operating expenses	65,780			36,265
Interest expense	2,669			1,722
Total expenses	211,508			281,342
Equity in net income (loss) of affiliates	—			—
Pretax loss	$	(16,816	)	$	(57,046	)
Cash and investments	$	3,186,871		$	3,259,204
Deferred policy acquisition costs	29,920			49,786
Total assets	3,663,552			3,476,732
Unearned premiums	428,574			256,809
Reserve for losses and LAE	2,894,500			3,230,938
VIE debt	11,062			8,625
Derivative liabilities	—			—
New Insurance Written (“NIW”) (in millions)	$	10,906		$	6,465

	Three Months Ended March 31,
(In thousands)	2013			2012
Financial Guaranty
Net premiums written—insurance	$	(10,101	)	$	(119,175	)
Net premiums earned—insurance	$	9,596		$	(6,086	)
Net investment income	11,771			16,702
Net (losses) gains on investments	(2,268		)	35,281
Change in fair value of derivative instruments	(167,670		)	(72,778		)
Net losses on other financial instruments	(3,798		)	(17,143		)
Other income	59			96
Total revenues	(152,310		)	(43,928		)
Provision for losses	103			31,425
Change in PDR	—			—
Policy acquisition costs	5,463			19,400
Other operating expenses	14,320			13,889
Interest expense	13,212			12,426
Total expenses	33,098			77,140
Equity in net income (loss) of affiliates	1			(11		)
Pretax loss	$	(185,407	)	$	(121,079	)
Cash and investments	$	2,486,017		$	2,392,620
Deferred policy acquisition costs	44,681			58,155
Total assets	2,707,397			2,971,789
Unearned premiums	245,275			315,756
Reserve for losses and LAE	24,573			85,426
VIE debt	96,339			246,609
Derivative liabilities	430,898			202,100

A reconciliation of segment pretax loss to consolidated net loss is as follows:

	Three Months Ended March 31,
(In thousands)	2013			2012
Mortgage Insurance pretax loss	$	(16,816	)	$	(57,046	)
Financial Guaranty pretax loss	(185,407		)	(121,079		)
Income tax benefit	(14,723		)	(8,893		)
Consolidated net loss	$	(187,500	)	$	(169,232	)