Note 3 - Segment Reporting (Tables)

9 Months Ended

Sep. 30, 2017

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Summarized operating results for our segments as of and for the periods indicated, are as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2017			2016 (1)			2017			2016 (1)
Mortgage Insurance
Net premiums written—insurance (2)	$	247,810		$	240,999		$	713,782		$	499,662
(Increase) decrease in unearned premiums	(11,108		)	(2,850		)	(26,184		)	188,522
Net premiums earned—insurance	236,702			238,149			687,598			688,184
Net investment income	32,540			28,430			93,643			84,470
Other income	760			716			2,118			2,836
Total (3)	270,002			267,295			783,359			775,490

Provision for losses	35,980			56,151			100,926			149,500
Policy acquisition costs	5,554			6,119			18,406			17,901
Other operating expenses before corporate allocations	36,941			35,940			114,169			102,851
Total (4)	78,475			98,210			233,501			270,252
Adjusted pretax operating income before corporate allocations	191,527			169,085			549,858			505,238
Allocation of corporate operating expenses	11,737			11,911			41,817			35,526
Allocation of interest expense	11,282			15,360			34,539			50,596
Adjusted pretax operating income	$	168,508		$	141,814		$	473,502		$	419,116

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(1)

Reflects changes made during the fourth quarter of 2016 to align our segment reporting structure concurrent with changes in personnel reporting lines and management oversight related to contract underwriting performed on behalf of third parties. Revenue and expenses for this business are now reflected in the Services segment. As a result, Services revenue, cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses.


(2)	Net of ceded premiums written under the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information.


(3)	Excludes net gains on investments and other financial instruments of $2.5 million and $5.0 million, respectively, for the three and nine months ended September 30, 2017, and net gains on investments and other financial instruments of $7.7 million and $69.5 million, respectively, for the three and nine months ended September 30, 2016, not included in adjusted pretax operating income.

(4)Includes inter-segment expenses as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2017		2016		2017		2016
Inter-segment expenses	$	1,491	$	2,156	$	5,726	$	5,702



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2017			2016 (1)			2017			2016 (1)
Services
Services revenue (2)	$	41,062		$	48,033		$	121,126		$	124,691

Cost of services	27,544			29,655			82,196			81,239
Other operating expenses before corporate allocations	12,781			13,575			38,188			40,973
Restructuring and other exit costs (3)	5,463			—			5,463			—
Total	45,788			43,230			125,847			122,212
Adjusted pretax operating income (loss) before corporate allocations	(4,726		)	4,803			(4,721		)	2,479
Allocation of corporate operating expenses	3,730			2,265			10,852			6,795
Allocation of interest expense	4,433			4,423			13,293			13,267
Adjusted pretax operating income (loss)	$	(12,889	)	$	(1,885	)	$	(28,866	)	$	(17,583	)

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(1)


(2)	Includes inter-segment revenues as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2017		2016		2017		2016
Inter-segment revenues	$	1,491	$	2,156	$	5,726	$	5,702


(3)	Primarily includes employee severance and related benefit costs. Does not include impairment of long-lived assets, which is not considered a component of adjusted pretax operating income.

Selected balance sheet information for our segments, as of the periods indicated, is as follows:



	At September 30, 2017
(In thousands)	Mortgage Insurance		Services (1)		Total
Total assets	$	5,630,687	$	213,586	$	5,844,273

	At December 31, 2016
(In thousands)	Mortgage Insurance		Services		Total
Total assets	$	5,506,338	$	356,836	$	5,863,174

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(1)	The decrease in total assets for the Services segment at September 30, 2017, as compared to December 31, 2016, is primarily due to the impairment of goodwill and other intangible assets. See Note 6 for further details.

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

The reconciliation of adjusted pretax operating income to consolidated pretax income (loss) is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2017			2016			2017			2016
Adjusted pretax operating income (loss):
Mortgage Insurance (1)	$	168,508		$	141,814		$	473,502		$	419,116
Services (1)	(12,889		)	(1,885		)	(28,866		)	(17,583		)
Total adjusted pretax operating income	155,619			139,929			444,636			401,533

Net gains (losses) on investments and other financial instruments	2,480			7,711			4,960			69,524
Loss on induced conversion and debt extinguishment	(45,766		)	(17,397		)	(51,469		)	(75,075		)
Acquisition-related expenses (2)	(54		)	(10		)	(126		)	(161		)
Impairment of goodwill	—			—			(184,374		)	—
Amortization and impairment of other intangible assets	(2,890		)	(3,292		)	(25,042		)	(9,931		)
Impairment of other long-lived assets (3)	(6,575		)	—			(6,575		)	—
Consolidated pretax income	$	102,814		$	126,941		$	182,010		$	385,890

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(1)	Includes inter-segment expenses and revenues as listed in the notes to the preceding tables.


(2)	Acquisition-related expenses represent expenses incurred to effect the acquisition of a business, net of adjustments to accruals previously recorded for acquisition expenses.


(3)	Included within restructuring and other exit costs. See Note 1.