Note 3 - Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2018

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



	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2018			2017			2018		2017
Mortgage Insurance
Net premiums written—insurance (1)	$	251,958		$	241,307		$	489,938	$	465,972
(Increase) decrease in unearned premiums	(2,990		)	(12,211		)	1,580		(15,076		)
Net premiums earned—insurance	248,968			229,096			491,518		450,896
Net investment income	37,447			30,071			71,403		61,103
Other income	621			612			1,428		1,358
Total (2)	287,036			259,779			564,349		513,357

Provision for losses	19,362			17,714			56,753		64,946
Policy acquisition costs	5,996			6,123			13,113		12,852
Other operating expenses before corporate allocations	33,262			37,939			65,150		77,228
Total (3)	58,620			61,776			135,016		155,026
Adjusted pretax operating income before corporate allocations	228,416			198,003			429,333		358,331
Allocation of corporate operating expenses	20,136			15,894			38,713		30,080
Allocation of interest expense	10,840			11,748			21,469		23,257
Adjusted pretax operating income	$	197,440		$	170,361		$	369,151	$	304,994

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


(2)	Excludes net losses on investments and other financial instruments of $7.4 million and $26.3 million for the three and six months ended June 30, 2018, and net gains on investments and other financial instruments of $5.3 million and $2.5 million for the three and six months ended June 30, 2017, not included in adjusted pretax operating income.

(3)Includes inter-segment expenses as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2018			2017			2018			2017
Services
Net premiums earned—insurance (1)	$	2,376		$	—		$	2,376		$	—
Services revenue (2)	37,713			39,975			71,879			80,064
Net investment income (1)	26			—			26			—
Other income (1)	395			—			395			—
Total (2)	40,510			39,975			74,676			80,064

Provision for losses (1)	53			—			53			—
Cost of services	24,357			25,962			47,627			54,652
Other operating expenses before corporate allocations	14,015			12,803			24,759			25,407
Restructuring and other exit costs (3)	1,055			—			1,580			—
Total	39,480			38,765			74,019			80,059
Adjusted pretax operating income (loss) before corporate allocations	1,030			1,210			657			5
Allocation of corporate operating expenses	3,010			3,404			5,794			7,122
Allocation of interest expense	4,451			4,431			8,902			8,860
Adjusted pretax operating income (loss)	$	(6,431	)	$	(6,625	)	$	(14,039	)	$	(15,977	)

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(1)	Results from inclusion of the operations of EnTitle Direct, a national title insurance and settlement services company, acquired in March 2018.

(2)Includes inter-segment revenues as follows:


(3)	Does not include impairment of long-lived assets and loss from the sale of a business line, which is not a component of adjusted pretax operating income.

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

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



	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2018			2017			2018			2017
Adjusted pretax operating income (loss):
Mortgage Insurance (1)	$	197,440		$	170,361		$	369,151		$	304,994
Services (1)	(6,431		)	(6,625		)	(14,039		)	(15,977		)
Total adjusted pretax operating income	191,009			163,736			355,112			289,017

Net gains (losses) on investments and other financial instruments	(7,404		)	5,331			(26,291		)	2,480
Loss on induced conversion and debt extinguishment	—			(1,247		)	—			(5,703		)
Acquisition-related expenses (2)	(416		)	(64		)	(416		)	(72		)
Impairment of goodwill	—			(184,374		)	—			(184,374		)
Amortization and impairment of other intangible assets	(2,748		)	(18,856		)	(5,496		)	(22,152		)
Impairment of other long-lived assets and loss from the sale of a business line (3)	130			—			104			—
Consolidated pretax income (loss)	$	180,571		$	(35,474	)	$	323,013		$	79,196

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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.