Note 2 - Segment Reporting Level 1 (Notes)

6 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Segment Reporting

Our mortgage insurance and financial guaranty segments are strategic business units that are managed separately on an operating basis. We allocate corporate income and expenses to our mortgage insurance and financial guaranty segments based on either an allocated percentage of time spent or internally allocated capital. We allocate corporate cash and investments to our segments based on internally allocated capital. The results for each segment for each reporting period can cause significant volatility in allocated capital.

Summarized financial information concerning our operating segments, as of and for the periods indicated, are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2012			2011			2012			2011
Mortgage Insurance
Net premiums written—insurance	$	182,518		$	164,194		$	379,371		$	345,040
Net premiums earned—insurance	$	170,763		$	164,325		$	344,214		$	350,459
Net investment income	17,608			24,853			35,619			51,686
Net gains on investments	26,662			27,425			58,840			45,187
Net impairment losses recognized in earnings	—			(11		)	—			(11		)
Change in fair value of derivative instruments	(52		)	258			(31		)	(136		)
Net gains (losses) on other financial instruments	42			(631		)	(667		)	1,835
Gain on sale of affiliate	—			—			—			—
Other income	1,304			1,124			2,648			2,524
Total revenues	216,327			217,343			440,623			451,544
Provision for losses	208,078			269,992			442,807			683,965
Change in reserve for premium deficiency	559			(3,102		)	539			(4,485		)
Policy acquisition costs	7,890			8,601			16,536			18,817
Other operating expenses	31,272			33,913			67,537			68,050
Interest expense	1,723			146			3,445			9,935
Total expenses	249,522			309,550			530,864			776,282
Equity in net (loss) income of affiliates	—			—			—			—
Pretax loss	(33,195		)	(92,207		)	(90,241		)	(324,738		)
Income tax (benefit) provision	(10,209		)	5,374			(22,008		)	8,875
Net loss	$	(22,986	)	$	(97,581	)	$	(68,233	)	$	(333,613	)
Cash and investments	$	3,176,027		$	3,334,789
Deferred policy acquisition costs	44,240			44,509
Total assets	3,388,524			3,688,720
Unearned premiums	290,880			191,737
Reserve for losses and LAE	3,155,343			3,268,582
VIE debt	7,500			56,239
Derivative liabilities	—			—
NIW (in millions)	$	8,335		$	2,280		$	14,800		$	4,866

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2012			2011			2012			2011
Financial Guaranty
Net premiums written—insurance	$	(586	)	$	(11,416	)	$	(119,761	)	$	(9,513	)
Net premiums earned—insurance	$	16,016		$	24,609		$	9,930		$	41,498
Net investment income	13,269			18,970			29,971			34,377
Net (losses) gains on investments	(243		)	16,811			35,038			36,484
Net impairment losses recognized in earnings	—			—			—			—
Change in fair value of derivative instruments	(33,072		)	188,468			(105,850		)	432,754
Net (losses) gains on other financial instruments	(61,904		)	5,678			(79,047		)	78,463
Gain on sale of affiliate	7,708			—			7,708			—
Other income	91			72			187			120
Total revenues	(58,135		)	254,608			(102,063		)	623,696
Provision for losses	2,790			(6,426		)	34,215			6,974
Change in reserve for premium deficiency	—			—			—			—
Policy acquisition costs	2,915			5,786			22,315			9,701
Other operating expenses	8,921			12,041			22,810			24,123
Interest expense	10,858			15,933			23,284			23,168
Total expenses	25,484			27,334			102,624			63,966
Equity in net (loss) income of affiliates	(2		)	—			(13		)	65
Pretax (loss) income	(83,621		)	227,274			(204,700		)	559,795
Income tax provision (benefit)	12,652			(7,422		)	15,558			(13,939		)
Net (loss) income	$	(96,273	)	$	234,696		$	(220,258	)	$	573,734
Cash and investments	$	2,137,956		$	2,703,740
Deferred policy acquisition costs	55,146			94,417
Total assets	2,643,006			3,240,076
Unearned premiums	297,551			438,076
Reserve for losses and LAE	94,937			75,042
VIE debt	100,333			337,501
Derivative liabilities	219,960			313,708

A reconciliation of segment net (loss) income to consolidated net (loss) income is as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2012			2011			2012			2011
Consolidated
Net (loss) income:
Mortgage Insurance	$	(22,986	)	$	(97,581	)	$	(68,233	)	$	(333,613	)
Financial Guaranty	(96,273		)	234,696			(220,258		)	573,734
Total	$	(119,259	)	$	137,115		$	(288,491	)	$	240,121