We have two strategic business units that we manage separately—Mortgage and Real Estate. Our Mortgage segment derives its revenue from mortgage insurance and other mortgage and risk services, including contract underwriting services provided to lenders. Our Real Estate segment offers a broad array of title, valuation, asset management and other real estate services to market participants across the real estate value chain. In addition, we report as All Other activities that include income (losses) from assets held by our holding company, related general corporate operating expenses not attributable or allocated to our reportable segments and, for all periods through the first quarter of 2020, income and expenses related to Clayton prior to its sale in January 2020.

Subsequent to the sale of Clayton, our Chief Executive Officer (Radian’s chief operating decision maker) implemented certain organizational changes that caused the composition of our reportable segments to change. As revised, the Company’s Mortgage and Real Estate segments are managed by our President of Mortgage and Co-Heads of Real Estate, respectively, who are responsible for the overall profitability of their respective segments and who are directly accountable to our chief operating decision maker.


Business Activity	Current Segmentation	Prior Segmentation
Mortgage insurance and risk services	Mortgage	Mortgage Insurance
Contract underwriting services	Mortgage	Services
Title and real estate services (1)	Real Estate	Services
Clayton	All Other	Services
Income (loss) from holding company assets (and related corporate expenses)	All Other	Mortgage Insurance

These segment reporting changes align with the changes in personnel reporting lines, management oversight and branding following the sale of Clayton, and are consistent with the way our chief operating decision maker began assessing the performance of our reportable segments and other business activities effective in the first quarter of 2020. These changes to our reportable segments have been reflected in our segment operating results for all periods presented. See Note 1 for additional details about our Mortgage and Real Estate businesses.

We allocate corporate operating expenses to both reportable segments based on each segment’s forecasted annual percentage of total revenue, which approximates the estimated percentage of management time spent on each segment. In addition, we allocate all corporate interest expense to our Mortgage segment, due to the capital-intensive nature of our mortgage insurance business.

With the exception of goodwill and other acquired intangible assets that relate to our Real Estate segment, which are reviewed as part of our annual goodwill impairment assessment, we do not manage assets by segment.

Our senior management, including our chief operating decision maker, uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of each of Radian’s business segments and to allocate resources to the segments. Adjusted pretax operating income (loss) is defined as pretax income (loss) excluding the effects of: (i) net gains (losses) on investments and other financial instruments; (ii) loss on extinguishment of debt; (iii) amortization and impairment of goodwill and other acquired intangible assets; and (iv) impairment of other long-lived assets and other non-operating items, such as gains (losses) from the sale of lines of business and acquisition-related income and expenses. See Note 4 of Notes to Consolidated Financial Statements in our 2019 Form 10-K for detailed information regarding items excluded from adjusted pretax operating income (loss), including the reasons for their treatment.

Although adjusted pretax operating income (loss) excludes certain items that have occurred in the past and are expected to occur in the future, the excluded items represent those that are: (i) not viewed as part of the operating performance of our primary activities or (ii) not expected to result in an economic impact equal to the amount reflected in pretax income (loss).

Adjusted pretax operating income (loss) for each segment represents segment results on a standalone basis; therefore, inter-segment eliminations and reclassifications required for consolidated GAAP presentation have not been reflected. Inter-segment activities are recorded at market rates for segment reporting and eliminated in consolidation.


	Three Months Ended June 30,							Six Months Ended June 30,
(In thousands)	2020		2019			2020		2019
Adjusted pretax operating income (loss):
Mortgage (1)	$	(88,321)	$	214,710	(2)	$	117,346	$	418,341	(2)
Real Estate (3)	(4,817)		(3,772)			(9,684)		(7,697)
Total adjusted pretax operating income (loss) for reportable segments	(93,138)		210,938			107,662		410,644
All Other adjusted pretax operating income (loss)	4,639		4,901			8,438		7,265
Net gains (losses) on investments and other financial instruments	47,276		12,540			25,249		34,453
Loss on extinguishment of debt	—		(16,798)			—		(16,798)
Amortization and impairment of other acquired intangible assets	(979)		(2,139)			(1,958)		(4,326)
Impairment of other long-lived assets and other non-operating items	(22)		103			(322)		(5,557)
Consolidated pretax income (loss)	$	(42,224)	$	209,545		$	139,069	$	425,681


	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Allocated corporate operating expenses	$	25,191	$	24,388	$	54,265	$	50,013
Depreciation expense	3,112		3,849		6,824		7,711


	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Allocated corporate operating expenses	$	3,339	$	2,659	$	7,175	$	5,454
Depreciation expense	776		615		1,442		1,208

Our results for the second quarter of 2019 include a $32.9 million increase in net premiums earned and a $0.12 increase in net income per share due to a reduction in our unearned premiums, resulting from a cumulative adjustment related to an update to the amortization rates used to recognize revenue for Single Premium Policies. See Note 2 of Notes to Consolidated Financial Statements in our 2019 Form 10-K for additional information regarding this adjustment and our accounting policies for insurance premiums revenue recognition.


	Three Months Ended June 30,							Six Months Ended June 30,
(In thousands)	2020		2019			2020		2019
Revenues:
Mortgage (1)	$	286,943	$	336,644	(2)	$	602,027	$	639,014	(2)
Real Estate (1)	26,092		27,627			54,675		50,650
Total revenues for reportable segments	313,035		364,271			656,702		689,664
All Other revenues	6,493		18,519			14,126		35,358
Net gains (losses) on investments and other financial instruments	47,276		12,540			25,249		34,453
Other non-operating revenue	247		—			247		—
Elimination of inter-segment revenues	(2,610)		(366)			(2,802)		(882)
Total revenues	$	364,441	$	394,964		$	693,522	$	758,593

The accounting standard on revenue from contracts with customers is primarily applicable to our services revenue and is not applicable to our investments and insurance products, which represent the majority of our revenue. See Note 2 of Notes to Consolidated Financial Statements in our 2019 Form 10-K for additional information regarding our accounting policies and the services we offer.

The table below, which represents total services revenue on our condensed consolidated statements of operations for the periods indicated, represents the disaggregation of services revenues from external customers, by type:


	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Services revenue
Real Estate services:
Valuation services	$	7,794	$	13,358	$	19,638	$	26,064
Title services	9,059		4,999		16,364		6,599
Asset management services	6,964		6,461		13,338		12,733
Other real estate services	340		72		750		72
Mortgage services	3,918		1,872		7,051		2,516
All Other services	—		12,541		2,861		24,072
Total services revenue	$	28,075	$	39,303	$	60,002	$	72,056

Our services revenues are recognized over time and measured each period based on the progress to date as services are performed and made available to customers. Our contracts with customers, including payment terms, are generally short-term in nature; therefore, any impact related to timing is immaterial. Revenue expected to be recognized in any future period related to remaining performance obligations, such as contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, is not material.

Revenue recognized related to services made available to customers and billed is reflected in accounts and notes receivable. Accounts and notes receivable included $17.9 million and $10.8 million as of June 30, 2020 and December 31, 2019, respectively, related to services revenue contracts. Revenue recognized related to services performed and not yet billed is recorded in unbilled receivables and reflected in other assets. See Note 8 for additional information. Deferred revenue, which