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Segment Reporting
 3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
Segment Reporting Segment Reporting
We have two strategic business units that we manage separately—Mortgage and homegenius. Our Mortgage segment derives its revenue from mortgage insurance and other mortgage and risk services, including contract underwriting and fulfillment solutions provided to mortgage lending institutions and mortgage credit investors. Our homegenius segment offers an array of title, real estate and technology products and services to consumers, mortgage lenders, mortgage and real estate investors, GSEs, real estate brokers and agents.
In addition, we report as All Other activities that include: (i) income (losses) from assets held by Radian Group, our holding company; (ii) related general corporate operating expenses not attributable or allocated to our reportable segments; (iii) the income and expenses related to our traditional appraisal services, which we wound down beginning in the fourth quarter of 2020; and (iv) certain other immaterial activities, including investments in new business opportunities.
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 primary exception of goodwill and other acquired intangible assets, which all relate to our homegenius segment, and are reviewed as part of our annual goodwill impairment assessment, we do not manage assets by segment.
See Note 1 for additional details about our Mortgage and homegenius businesses.
Adjusted Pretax Operating Income (Loss)
Our senior management, including our Chief Executive Officer (Radian’s 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, except for certain investments attributable to our reportable segments; (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 impairment of internal-use software, 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 2021 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).
The reconciliation of adjusted pretax operating income (loss) for our reportable segments to consolidated pretax income (loss) is as follows.
Reconciliation of adjusted pretax operating income (loss) by segment
Three Months Ended
March 31,
(In thousands)20222021
Adjusted pretax operating income (loss)
Mortgage$277,841 $175,709 
homegenius(13,506)(10,453)
Total adjusted pretax operating income for reportable segments (1)
264,335 165,256 
All Other adjusted pretax operating income613 2,060 
Net gains (losses) on investments and other financial instruments(29,457)(5,181)
Amortization of other acquired intangible assets(849)(862)
Impairment of other long-lived assets and other non-operating items (502)(84)
Consolidated pretax income$234,140 $161,189 
(1)Includes allocated corporate operating expenses and depreciation expense as follows.
Three Months Ended
March 31,
(In thousands)20222021
Mortgage
Allocated corporate operating expenses (a)
$36,209 $27,576 
Direct depreciation expense2,328 2,642 
homegenius
Allocated corporate operating expenses (b)
$5,280 $3,996 
Direct depreciation expense644 578 
(a)Includes allocated depreciation expense of $0.8 million for both the three months ended March 31, 2022 and 2021.
(b)Includes allocated depreciation expense of $0.1 million for both the three months ended March 31, 2022 and 2021.
Revenues
The reconciliation of revenues for our reportable segments to consolidated revenues is as follows.
Reconciliation of revenues by segment
Three Months Ended
March 31,
(In thousands)20222021
Revenues
Mortgage$284,446 $303,797 
homegenius (1)
33,912 25,795 
Total revenues for reportable segments318,358 329,592 
All Other revenues4,161 4,461 
Net gains (losses) on investments and other financial instruments(29,457)(5,181)
Elimination of inter-segment revenues(82)(59)
Total revenues$292,980 $328,813 
(1)Includes immaterial inter-segment revenues for the three months ended March 31, 2022 and 2021.
The table below, which represents total services revenue on our condensed consolidated statements of operations for the periods indicated, represents the disaggregation of services revenue by revenue type.
Services revenue
Three Months Ended
March 31,
(In thousands)20222021
homegenius
Title$6,403 $8,057 
Real estate
Valuation7,969 3,922 
Single family rental7,230 3,449 
REO asset management813 580 
Other real estate services1 13 
Technology
Asset management technology platform1,332 1,506 
Other technology services1,048 964 
Mortgage4,552 4,351 
All Other (1)
— 53 
Total services revenue $29,348 $22,895 
(1)Includes amounts related to our traditional appraisal business, which we wound down beginning in the fourth quarter of 2020.
Revenue recognized related to services made available to customers and billed is reflected in accounts and notes receivable. Accounts and notes receivable include $15.6 million and $20.0 million as of March 31, 2022 and December 31, 2021, 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. Deferred revenue, which represents advance payments received from customers in advance of revenue recognition, is immaterial for all periods presented. We have no material bad-debt expense. See Note 2 of Notes to Consolidated Financial Statements in our 2021 Form 10-K for information regarding our accounting policies and the services we offer.