Note 4 - Segment Reporting Level 3 (Tables)

12 Months Ended

Dec. 31, 2018

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

Summarized operating results for our segments as of and for the years ended, as applicable, were as follows:



	December 31, 2018
(In thousands)	Mortgage Insurance		Services				Total
Net premiums written—insurance (1)	$	991,021	$	7,286		(2)	$	998,307
(Increase) decrease in unearned premiums	15,700		—			(2)	15,700
Net premiums earned—insurance	1,006,721		7,286			(2)	1,014,007
Services revenue	—		148,217				148,217
Net investment income	152,102		373			(2)	152,475
Other income	2,794		1,234			(2)	4,028
Total (3) (4)	1,161,617		157,110				1,318,727

Provision for losses	104,547		408			(2)	104,955
Policy acquisition costs	25,265		—				25,265
Cost of services	—		98,692				98,692
Other operating expenses before corporate allocations	135,372		53,250				188,622
Restructuring and other exit costs (5)	—		2,100				2,100
Total (4)	265,184		154,450				419,634
Adjusted pretax operating income (loss) before corporate allocations	896,433		2,660				899,093
Allocation of corporate operating expenses	80,134		11,974				92,108
Allocation of interest expense	43,685		17,805				61,490
Adjusted pretax operating income (loss)	$	772,614	$	(27,119	)		$	745,495

Total assets	$	6,138,679	$	175,973			$	6,314,652

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(1)	Net of ceded premiums written under the QSR Program, the Single Premium QSR Program and the Excess-of-Loss Program. See Note 8 for additional information.


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


(3)	Excludes net losses on investments and other financial instruments of $42.5 million, not included in adjusted pretax operating income.


(4)	Includes inter-segment revenues and expenses as follows:



	December 31, 2018
(In thousands)	Mortgage Insurance		Services
Inter-segment revenues included in Services segment	$	—	$	3,245
Inter-segment expenses included in Mortgage Insurance segment	3,245		—


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



	December 31, 2017
(In thousands)	Mortgage Insurance		Services				Total
Net premiums written—insurance (1) (2)	$	818,417	$	—			$	818,417
(Increase) decrease in unearned premiums (2)	114,356		—				114,356
Net premiums earned—insurance	932,773		—				932,773
Services revenue	—		161,833				161,833
Net investment income	127,248		—				127,248
Other income	2,886		—				2,886
Total (3) (4)	1,062,907		161,833				1,224,740

Provision for losses	136,183		—				136,183
Policy acquisition costs	24,277		—				24,277
Cost of services	—		105,812				105,812
Other operating expenses before corporate allocations	150,975		50,969				201,944
Restructuring and other exit costs (5)	—		6,828				6,828
Total (4)	311,435		163,609				475,044
Adjusted pretax operating income (loss) before corporate allocations	751,472		(1,776		)		749,696
Allocation of corporate operating expenses	55,441		14,319				69,760
Allocation of interest expense	45,016		17,745				62,761
Adjusted pretax operating income (loss)	$	651,015	$	(33,840	)		$	617,175

Total assets	$	5,733,918	$	166,963		(6)	$	5,900,881

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(1)	Net of ceded premiums written under the QSR Program and the Single Premium QSR Program. See Note 8 for additional information.


(2)	Effective December 31, 2017, we amended the 2016 Single Premium QSR Agreement to increase the amount of ceded risk for performing loans under the agreement from 35% to 65% for the 2015 through 2017 vintages, resulting in a reduction of $145.7 million in net premiums written.


(3)	Excludes net gains on investments and other financial instruments of $3.6 million, not included in adjusted pretax operating income.


(4)	Includes inter-segment revenues and expenses as follows:



	December 31, 2017
(In thousands)	Mortgage Insurance		Services
Inter-segment revenues included in Services segment	$	—	$	6,730
Inter-segment expenses included in Mortgage Insurance segment	6,730		—


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


(6)	The decrease in total assets for the Services segment at December 31, 2017, as compared to December 31, 2016, is primarily due to the impairment of goodwill and other acquired intangible assets. See Note 7 for further details.



	December 31, 2016
	Mortgage Insurance		Services			Total
(In thousands)
Net premiums written—insurance (1)	$	733,834	$	—		$	733,834
(Increase) decrease in unearned premiums	187,935		—			187,935
Net premiums earned—insurance	921,769		—			921,769
Services revenue	—		177,249			177,249
Net investment income	113,466		—			113,466
Other income	3,572		—			3,572
Total (2) (3)	1,038,807		177,249			1,216,056

Provision for losses	204,175		—			204,175
Policy acquisition costs	23,480		—			23,480
Cost of services	—		115,369			115,369
Other operating expenses before corporate allocations	140,624		55,815			196,439
Total (3)	368,279		171,184			539,463
Adjusted pretax operating income (loss) before corporate allocations	670,528		6,065			676,593
Allocation of corporate operating expenses	45,178		8,533			53,711
Allocation of interest expense	63,439		17,693			81,132
Adjusted pretax operating income (loss)	$	561,911	$	(20,161	)	$	541,750

Total assets	5,506,338		356,836			5,863,174

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(1)	Net of ceded premiums written under the QSR Program and the Single Premium QSR Program. See Note 8 for additional information.


(2)	Excludes net gains on investments and other financial instruments of $30.8 million, not included in adjusted pretax operating income.


(3)	Includes inter-segment revenues and expenses as follows:



	December 31, 2016
(In thousands)	Mortgage Insurance		Services
Inter-segment revenues included in Services segment	$	—	$	8,355
Inter-segment expenses included in Mortgage Insurance segment	8,355		—

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

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



	December 31,
(In thousands)	2018			2017			2016
Adjusted pretax operating income (loss):
Mortgage insurance (1)	$	772,614		$	651,015		$	561,911
Services (1)	(27,119		)	(33,840		)	(20,161		)
Total adjusted pretax operating income	$	745,495		$	617,175		$	541,750

Net gains (losses) on investments and other financial instruments	(42,476		)	3,621			30,751
Loss on induced conversion and debt extinguishment	—			(51,469		)	(75,075		)
Acquisition-related expenses (2)	(881		)	(105		)	(519		)
Impairment of goodwill	—			(184,374		)	—
Amortization and impairment of other acquired intangible assets	(12,429		)	(27,671		)	(13,221		)
Impairment of other long-lived assets (3)	(5,523		)	(10,440		)	—
Consolidated pretax income	$	684,186		$	346,737		$	483,686

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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)

For the year ended December 31, 2018, this item comprises other operating expenses of $1.5 million and restructuring and other exit costs of $4.0 million, each as included in the consolidated statement of operations. For the year ended December 31, 2017, the full amount is included in restructuring and other exit costs in the consolidated statement of operations. See Note 1.