Note 4 - Segment Reporting Level 3 (Tables)

12 Months Ended

Dec. 31, 2014

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

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



	December 31, 2014
(In thousands)	Mortgage Insurance			MRES (1)		Total
Net premiums written—insurance	$	925,181		$	—	$	925,181
Increase in unearned premiums	(80,653		)	—		(80,653		)
Net premiums earned—insurance	844,528			—		844,528
Services revenue (2)	—			76,709		76,709
Net investment income (3)	65,655			—		65,655
Other income (3)	5,321			1,265		6,586
Total	915,504			77,974		993,478			(4)

Provision for losses (5)	246,865			—		246,865
Estimated present value of net credit recoveries incurred	113			—		113
Policy acquisition costs	24,446			—		24,446
Direct cost of services	—			43,605		43,605
Other operating expenses (3) (6)	225,544			20,059		245,603
Interest expense (3)	81,600			8,864		90,464
Total	578,568			72,528		651,096

Adjusted pretax operating income	$	336,936		$	5,446	$	342,382

Cash and investments	$	3,649,582		$	10,182	$	3,659,764
Restricted cash	11,508			2,523		14,031
Deferred policy acquisition costs	12,003			—		12,003
Goodwill	—			191,932		191,932
Other intangible assets, net	137			96,171		96,308
Assets held for sale (7)	—			—		1,736,444
Total assets	4,786,641			336,878		6,859,963
Unearned premiums	644,504			—		644,504
Reserve for losses and LAE	1,560,032			—		1,560,032

NIW (in millions)	$	37,349

________________


(1)	Includes the acquisition of Clayton, effective June 30, 2014.


(2)	Includes a de minimis amount of inter-segment revenues in the MRES segment.

(3)

Includes corporate income and expenses that have been reallocated to the mortgage insurance segment that were previously allocated to the financial guaranty segment, but were not reclassified to discontinued operations. These items include net investment income of $4.8 million, other income of $0.3 million, interest expense of $53.3 million and corporate overhead expenses of $13.5 million for the year ended December 31, 2014.


(4)	Excludes the following revenue items not included in adjusted pretax operating income: (a) net gains on investments of $83.9 million; and (b) net losses on other financial instruments of $3.9 million. Includes inter-segment revenues of $0.8 million in the MRES segment.


(5)	Includes inter-segment expenses of $0.8 million in the mortgage insurance segment.


(6)	Excludes $6.7 million of acquisition-related expenses not included in segment other operating expenses.


(7)	Assets held for sale are not part of the mortgage insurance or MRES segments.



	Mortgage Insurance
	December 31,
(In thousands)	2013			2012
Net premiums written—insurance	$	950,998		$	806,305
Increase in unearned premiums	(169,578		)	(103,920		)
Net premiums earned—insurance	781,420			702,385
Net investment income (1)	68,121			72,679
Other income (2) (3)	6,255			5,787
Total (4)	855,796			780,851

Provision for losses	562,747			921,548
Estimated present value of net credit (recoveries) losses incurred	(21		)	933
Policy acquisition costs	28,485			34,131
Other operating expenses (5)	257,402			167,660
Interest expense (6)	74,618			51,832
Total	923,231			1,176,104

Adjusted pretax operating loss	$	(67,435	)	$	(395,253	)

Cash and investments	$	3,384,558		$	3,447,201
Restricted cash	22,527			24,225
Deferred policy acquisition costs	29,741			38,478
Total assets (7)	3,853,630			3,937,588
Unearned premiums	567,072			382,413
Reserve for losses and LAE	2,164,353			3,083,608

NIW (in millions)	$	47,255		$	37,061

________________


(1)	Net investment income of $6.5 million and $9.5 million has been reallocated to the mortgage insurance segment for the years ended December 31, 2013 and 2012, respectively.


(2)	Other income of $0.2 million has been reallocated to the mortgage insurance segment for each of the years ended December 31, 2013 and 2012.


(3)	Does not include change in fair value of derivative instruments of $0.6 million and ($0.2) million for the years ended December 31, 2013 and 2012, respectively.

(4)

For the year ended December 31, 2013, excludes the following revenue items not included in adjusted pretax operating loss: (a) net losses on investments of $98.9 million; (b) net losses on other financial instruments of $7.6 million; and (c) change in fair value of derivative instruments of $0.6 million. For the year ended December 31, 2012, excludes the following revenue items not included in adjusted pretax operating loss: (a) net gains on investments of $114.3 million;(b) net losses on other financial instruments of $7.8 million; and (c) change in fair value of derivative instruments of ($0.2) million.


(5)	Corporate overhead expenses of $20.5 million and $15.2 million have been reallocated to the mortgage insurance segment for the years ended December 31, 2013 and 2012, respectively.


(6)	Interest expense of $56.6 million and $44.4 million has been reallocated to the mortgage insurance segment for the years ended December 31, 2013 and 2012, respectively.


(7)	Does not include assets held for sale of $1.8 billion and $2.0 billion for the years ended December 31, 2013 and 2012, respectively, which are not a part of the mortgage insurance segment.

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

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



	December 31,
(In thousands)	2014				2013			2012
Adjusted pretax operating income (loss):
Mortgage insurance (2)	$	336,936		(1)	$	(67,435	)	$	(395,253	)
MRES	5,446			(3)	—			—
Total adjusted pretax operating income (loss)	$	342,382			$	(67,435	)	$	(395,253	)

Change in fair value of derivative instruments	—				635			(192		)
Less: Estimated present value of net credit (losses) recoveries incurred	(113		)		21			(933		)
Change in fair value of derivative instruments expected to reverse over time	113				614			741

Net gains (losses) on investments	83,869				(98,945		)	114,282
Net (losses) gains on other financial instruments	(3,880		)		(7,580		)	7,802
Acquisition-related expenses	(6,680		)		—			—
Amortization and impairment of intangible assets	(8,648		)		—			—
Consolidated pretax income (loss) from continuing operations	$	407,156			$	(173,346	)	$	(272,428	)

________________


(1)	Includes inter-segment expenses of $0.8 million for the year ended December 31, 2014.


(2)	Includes certain corporate income and expenses that have been reallocated to the mortgage insurance segment for all periods presented, as listed in the preceding detailed tables. These amounts represent items that were previously allocated to the financial guaranty segment but were not reclassified to discontinued operations.


(3)	Includes inter-segment revenues of $0.8 million for the year ended December 31, 2014.

- Definition

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

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