XML 21 R12.htm IDEA: XBRL DOCUMENT v3.23.3
Segment Reporting
 9 Months Ended
Sep. 30, 2023
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 solutions provided to mortgage lending institutions and mortgage credit investors. Our homegenius segment offers an array of title, real estate and real estate 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; and (iii) certain investments in new business opportunities, including activities and investments associated with Radian Mortgage Capital, and other immaterial activities.
We allocate corporate operating expenses to both reportable segments based primarily 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. 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 and other financial instruments attributable to our reportable segments and All Other activities; (ii) amortization and impairment of goodwill and other acquired intangible assets; and (iii) impairment of other long-lived assets and other non-operating items, if any, such as gains (losses) from the sale of lines of business, acquisition-related income and expenses and gains (losses) on extinguishment of debt. See Note 4 of Notes to Consolidated Financial Statements in our 2022 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 is as follows.
Reconciliation of adjusted pretax operating income (loss) by segment
Three Months Ended
September 30,		Nine Months Ended
September 30,
(In thousands)2023202220232022
Adjusted pretax operating income (loss)
Mortgage$218,601 $295,675 $630,786 $890,036 
homegenius(20,932)(25,536)(68,394)(56,732)
Total adjusted pretax operating income for reportable segments (1)
197,669 270,139 562,392 833,304 
All Other adjusted pretax operating income12,786 2,581 32,301 6,397 
Net gains (losses) on investments and other financial instruments (2)
(8,838)(16,252)(3,664)(87,578)
Amortization of other acquired intangible assets(1,371)(1,023)(4,112)(2,721)
Impairment of other long-lived assets and other non-operating items 737 16 753 79 
Consolidated pretax income$200,983 $255,461 $587,670 $749,481 
(1)Includes allocated corporate operating expenses and depreciation expense as follows.
Three Months Ended
September 30,		Nine Months Ended
September 30,
(In thousands)2023202220232022
Mortgage
Allocated corporate operating expenses (a)
$31,744 $32,457 $103,654 $101,903 
Direct depreciation expense1,995 2,234 6,164 6,803 
homegenius
Allocated corporate operating expenses (a)
$4,241 $5,555 $13,853 $16,554 
Direct depreciation expense704 646 1,912 1,932 
(a)Includes immaterial allocated depreciation expense for the three and nine months ended September 30, 2023 and 2022.
(2)Excludes certain net gains (losses), if any, on investments and other financial instruments that are attributable to specific operating segments and therefore included in adjusted pretax operating income (loss).
Revenues
The reconciliation of revenues for our reportable segments to consolidated revenues is as follows.
Reconciliation of revenues by segment
Three Months Ended
September 30,		Nine Months Ended
September 30,
(In thousands)2023202220232022
Revenues
Mortgage$288,649 $281,033 $829,336 $855,262 
homegenius (1)
14,707 25,083 42,474 91,338 
Total revenues for reportable segments303,356 306,116 871,810 946,600 
All Other revenues18,249 6,396 45,857 17,218 
Net gains (losses) on investments and other financial instruments(8,838)(16,252)(3,664)(87,578)
Other non-operating revenue868 — 868 — 
Elimination of inter-segment revenues(102)(71)(305)(238)
Total revenues$313,533 $296,189 $914,566 $876,002 
(1)Includes immaterial inter-segment revenues for the three and nine months ended September 30, 2023 and 2022.
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
September 30,		Nine Months Ended
September 30,
(In thousands)2023202220232022
homegenius
Real estate
Valuation$4,024 $7,634 $12,141 $26,687 
Single family rental1,529 5,430 5,583 20,887 
Asset management technology platform1,199 1,134 3,574 3,740 
Real estate owned asset management887 750 2,687 2,302 
Other real estate services26 78 27 83 
Title2,964 4,714 8,751 16,012 
Real estate technology
Real estate technology services(3)2 24 2 
Mortgage266 404 886 7,062 
Total services revenue $10,892 $20,146 $33,673 $76,775 
Revenue recognized related to services made available to customers and billed is reflected in accounts and notes receivable. Accounts and notes receivable include $8 million and $12 million as of September 30, 2023, and December 31, 2022, respectively, related to services revenue contracts. See Note 2 of Notes to Consolidated Financial Statements in our 2022 Form 10-K for information regarding our accounting policies and the services we offer.