Note 18 - Discontinued Operations (Notes)

12 Months Ended

Dec. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Discontinued Operations

On April 1, 2015, Radian Guaranty completed the sale of 100% of the issued and outstanding shares of Radian Asset Assurance for a purchase price of approximately $810 million, pursuant to the Radian Asset Assurance Stock Purchase Agreement.

Radian Asset Assurance provided direct insurance and reinsurance on credit-based risks. The assets and liabilities associated with the discontinued operations had historically been a source of significant volatility to Radian’s results of operations, due to various factors including fluctuations in fair value and credit risk. The divestiture was intended to better position Radian Guaranty to comply with the PMIERs (which are discussed in Note 1) and to support Radian’s strategic focus on the mortgage and real estate industries. After closing costs and other adjustments, Radian Guaranty received net proceeds of $789 million.

Based upon the applicable terms of the Radian Asset Assurance Stock Purchase Agreement, we determined that Radian Asset Assurance met the criteria for held for sale and discontinued operations accounting at December 31, 2014. As a result, we recognized a pre-tax impairment charge of $467.5 million for the year ended December 31, 2014 and an additional pre-tax impairment charge of $14.3 million through April 1, 2015, when the sale was completed. We recorded total net income from discontinued operations of $5.4 million related to this sale in 2015, consisting primarily of the recognition of investment gains previously deferred and recorded in AOCI and recognized as a result of the completion of the sale of Radian Asset Assurance to Assured on April 1, 2015, as well as adjustments to estimated transaction costs and taxes. The operating results of Radian Asset Assurance are classified as discontinued operations for all periods presented in our consolidated statements of operations. No general corporate overhead or interest expense was allocated to discontinued operations.

The table below summarizes the components of income (loss) from discontinued operations, net of tax, for the periods indicated. There was no activity for discontinued operations in the year ended December 31, 2016.

	Year Ended December 31,
(In thousands)	2015			2014
Net premiums earned—insurance	$	1,007		$	37,194
Net investment income	9,153			35,633
Net gains (losses) on investments and other financial instruments	21,486			55,312
Change in fair value of derivative instruments	2,625			130,617
Other income	—			88
Total revenues	34,271			258,844
Provision for losses	502			2,853
Policy acquisition costs	(191		)	6,340
Other operating expense	4,107			23,726
Total expenses	4,418			32,919
Equity in net income (loss) of affiliates	(13		)	(13		)
Income (loss) from operations of businesses held for sale	29,840			225,912
Income (loss) on sale	(14,280		)	(467,527		)
Income tax provision (benefit)	10,175			58,442
Income (loss) from discontinued operations, net of tax	$	5,385		$	(300,057	)