Radian (RDN) 8-K Financial statements and exhibits

EXHIBIT 99

Quarterly

Operating Supplement

Fourth Quarter 2003

Quarterly Operating Supplement

Table of Contents

	Page
Company Profile	2
Company Information	2
Key Financial Highlights	3
Statutory Income Statements	4
Statutory Balance Sheets	5
Gross Premiums Written by Product	6
Total Claims-Paying Resources and Leverage Ratios	6
Investment Portfolio Highlights	7
Insured Portfolio Highlights	8
Management Team	12

1 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Table of Contents

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Quarterly Operating Supplement

December 31, 2003

Company Profile

Radian Asset Assurance Inc., founded in 1985 and rated AA by Standard & Poor’s and Fitch, provides credit enhancement to the holders of debt obligations and asset-backed securities. As a direct writer of financial guaranty insurance for municipal bonds, asset-backed securities and structured transactions, the Company plays an important role in extending the benefits of insurance to a broad range of institutions and securities issuers.

Radian Asset Assurance Inc. is a subsidiary of Radian Group Inc. (NYSE: RDN), a global credit enhancement provider headquartered in Philadelphia, with significant operations in New York City and London.

Company Information
Radian Asset Assurance Inc.	Contact:
335 Madison Avenue	John C. DeLuca
New York, New York 10017	Senior Vice President, Market Development
1 877 337.4925 (within the U.S.)	1 212 984.9222
1 212 983.3100	john.deluca@radian.biz

2 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Company Profile / Company Information

Quarterly Operating Supplement

Radian Group Inc. and Subsidiaries

Key Financial Highlights* ($ Thousands)

	Twelve months ended December 31, 2003
	Mortgage Insurance		Financial Services			Financial Guaranty		Total
Net premiums written	$	741,840	$	—		$	368,637	$	1,110,477
Net premiums earned	$	759,620	$	—		$	248,563	$	1,008,183
Net investment income		107,690		36			78,437		186,163
Equity in net income of affiliates		—		95,507			9,969		105,476
Other income		32,003		27,680			3,639		63,322
Total revenues		899,313		123,223			340,608		1,363,144
Provision for losses(1)		309,272		—			166,782		476,054
Policy acquisition costs		70,195		—			58,323		128,518
Other operating expenses		125,951		47,058			38,068		211,077
Interest expense		21,467		3,162			12,913		37,542
Total expenses		526,885		50,220			276,086		853,191
Gain/(loss) on disposition of investments		8,123		(2,284	)		11,548		17,387
Change in fair value of derivative instruments		3,275		90			774		4,139
Net gains/(losses)		11,398		(2,194	)		12,322		21,526
Pretax income		383,826		70,809			76,844		531,479
Income tax provision		104,013		28,313			13,252		145,578
Net income	$	279,813	$	42,496		$	63,592	$	385,901
Total assets	$	3,849,210	$	314,628		$	2,281,929	$	6,445,767
Deferred policy acquisition costs		79,542		—			139,237		218,779
Reserve for losses		513,473		—			276,907		790,380
Unearned premiums		93,415		—			625,234		718,649
Equity	$	1,850,796	$	260,918		$	1,114,130	$	3,225,844

* Reported on a GAAP basis.

(1) On January 14, 2004, Radian Asset Assurance Inc. (the “Company”), which is included in the Financial Guaranty business segment of the Company’s ultimate parent, Radian Group Inc. (“Radian Group”), announced it would have claims from a single manufactured housing transaction that the Company reinsured from Radian Insurance Inc., an affiliate of the Company. The Company received its first default notice related to this transaction on January 27, 2004. The Company established $111.25 million in loss reserves for this transaction in 2003 for GAAP purposes. These reserves were established on a Statutory basis in 2004. The Company expects losses to be paid out over the next several years. The Company also announced that it would immediately receive $65.0 million in capital from Radian Group to offset (on an after-tax basis) the effect of this loss on the Company.

3 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Key Financial Highlights

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Statutory Income Statements ($ Thousands)

	Quarter ended						Twelve months ended
	December 31 2003			December 31 2002			December 31 2003			December 31 2002
Revenues
Gross premiums written	$	79,684		$	50,048		$	194,870		$	195,530
Reinsurance premiums ceded		(5,575	)		(2,311	)		(25,697	)		(24,617	)
Net premiums written		74,109			47,737			169,173			170,913
Increase in unearned premiums		(46,014	)		(19,465	)		(64,477	)		(76,765	)
Premiums earned		28,095			28,272			104,696			94,148
Net investment income		7,387			6,203			29,542			24,990
Net realized gain on sale of investments		1,669			1,511			4,318			2,205
Net investment gains		9,056			7,714			33,860			27,195
Other (expense) income		(1,100	)		120			(923	)		594
Total revenues		36,051			36,106			137,633			121,937
Expenses
Losses and loss adjustment expenses incurred		13,060			7,192			25,730			32,151
Commissions incurred		(550	)		3,959			(6,964	)		12,386
Other underwriting expenses		14,433			5,990			49,176			31,805
Total expenses		26,943			17,141			67,942			76,342
Income before income taxes		9,108			18,965			69,691			45,595
Federal and foreign income taxes		3,801			6,622			9,335			13,371
Net income	$	5,307		$	12,343		$	60,356		$	32,224
Financial Ratios
Loss and LAE Ratio		46.5	%		25.4	%		24.6	%		34.1	%
Underwriting Expense Ratio		18.7	%		20.8	%		25.0	%		25.9	%
Combined Ratio		65.2	%		46.2	%		49.6	%		60.0	%

Effective April 30, 2003, Radian Asset Assurance Inc. (the “Company”) entered into an assumptive reinsurance agreement, in regard to its Trade Credit product, with an affiliated company (Radian Reinsurance Inc.) whereby the Company reversed assumed unearned premiums of $21.5 million and loss and loss adjustment reserves of $38.2 million. This transaction had no impact on premiums earned or losses and loss adjustment expenses incurred.

4 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Statutory Income Statements

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Statutory Balance Sheets ($ Thousands)

	December 31 2003		December 31 2002
Assets
Long-term bonds	$	670,790	$	550,512
Preferred stock		32,252		24,585
Common stock		74,204		1,156
Cash and short-term investments		67,333		46,100
Receivable for securities		515		149
Total Investments		845,094		622,502
Investment income due and accrued		9,722		6,919
Premiums receivable		12,805		22,449
Funds held by reinsured companies		73		1,863
Current federal income tax recoverable		609		—
Net deferred tax asset		1,130		1,531
Other assets		—		2,118
Total Assets	$	869,433	$	657,382
Liabilities
Contingency reserve	$	59,462	$	39,272
Losses and loss adjustment expenses		19,847		50,453
Reinsurance payable on paid losses and loss adjustment expenses		2,434		4,843
Unearned premiums		298,178		233,701
Provision for reinsurance		284		284
Payable to affiliates		18,076		2,200
Payable for securities		2,962		6,660
Ceded reinsurance premiums payable		1,395		2,670
Federal and foreign income taxes payable		3,642		5,360
Funds held under reinsurance treaties		6,696		—
Accrued expenses and other liabilities		3,463		2,480
Total Liabilities		416,439		347,923
Policyholders’ Surplus
Common stock		15,000		15,000
Additional paid-in capital		326,714		229,077
Unassigned funds		111,280		65,382
Total Policyholders’ Surplus		452,994		309,459
Total Liabilities and Policyholders’ Surplus	$	869,433	$	657,382
Qualified Statutory Capital	$	512,456	$	348,731

Effective April 30, 2003, Radian Asset Assurance Inc. (the “Company”) entered into an assumptive reinsurance agreement, in regard to its Trade Credit product, with an affiliated company (Radian Reinsurance Inc.) whereby the Company reversed assumed unearned premiums of $21.5 million and loss and loss adjustment reserves of $38.2 million. This transaction had no impact on premiums earned or losses and loss adjustment expenses incurred.

5 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Statutory Balance Sheets

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Gross Premiums Written by Product ($ Thousands)

	4th Qtr 2003		4th Qtr 2002		% Change		YTD 2003			YTD 2002		% Change
Public Finance Direct	$	42,036	$	19,575	114.7	%	$	85,316		$	63,431	34.5	%
Structured Finance Direct		34,276		14,771	132.0	%		102,800			72,788	41.2	%
Public Finance Reinsurance		860		—	—			5,610			2,468	127.3	%
Structured Finance Reinsurance		2,512		5,162	–51.3	%		10,837			18,878	–42.6	%
Trade Credit Reinsurance		—		10,540	–100.0	%		(9,693	)		37,965	–125.5	%
	$	79,684	$	50,048	59.2	%	$	194,870		$	195,530	–0.3	%

Effective April 30, 2003, Radian Asset Assurance Inc. (the “Company”) entered into an assumptive reinsurance agreement, in regard to its Trade Credit product, with an affiliated company (Radian Reinsurance Inc.) whereby the Company reversed assumed unearned premiums of $21.5 million and loss and loss adjustment reserves of $38.2 million. This transaction had no impact on premiums earned or losses and loss adjustment expenses incurred.

Total Claims-Paying Resources and Leverage Ratios

($ Thousands except ratios)

	December 31 2003		December 31 2002		% Change
Capital and Surplus	$	452,994	$	309,459	46	%
Contingency Reserve		59,462		39,272	51	%
Qualified Statutory Capital		512,456		348,731	47	%
Unearned Premium Reserve		298,178		233,701	28	%
Loss and Loss Expense Reserves		19,847		50,453	–61	%
Total Policyholders’ Reserves		830,481		632,885	31	%
Present Value of Future Installment Premiums		190,266		151,032	26	%
Reinsurance and Soft Capital Facilities		200,000		15,000	1,233	%
Total Claims-Paying Resources	$	1,220,747	$	798,917	53	%
Total Debt Service (Principal and Interest) Outstanding	$	28,961,961	$	22,081,339	31	%
Capital Leverage Ratio1		57:1		63:1
Claims-Paying Ratio2		24:1		28:1

1 Capital Leverage Ratio: Total debt service/Qualified statutory capital.

2 Claims-Paying Ratio: Total debt service/Total claims-paying resources.

6 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Gross Premiums / Total Claims-Paying Resources

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Investment Portfolio Highlights

Asset Quality

As of December 31, 2003, the book value of our investment portfolio was $823.5 million, with an average duration of 4.6 years.

Asset Class

Our conservative portfolio is invested primarily in fixed-income securities. Our primary objective is to achieve total return, with a secondary objective of maximizing after-tax income.

7 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Investment Portfolio Highlights

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Insured Portfolio Highlights ($ Thousands)

Geographic Diversification

State	Net Par (12/31/2003)		Percent of total		Net Par (12/31/2002)		Percent of total
New York	$	1,279,650	6.1	%	$	1,019,026	6.7	%
Pennsylvania		1,218,444	5.9	%		993,019	6.5	%
Texas		1,081,670	5.2	%		1,133,571	7.4	%
Florida		708,912	3.4	%		649,067	4.3	%
California		695,664	3.4	%		494,536	3.2	%
Colorado		511,114	2.5	%		371,126	2.4	%
Connecticut		447,951	2.2	%		463,912	3.0	%
Illinois		395,050	1.9	%		362,451	2.4	%
Ohio		357,977	1.7	%		215,141	1.4	%
Massachusetts		352,506	1.7	%		266,640	1.8	%
Total of top ten states		7,048,938	34.0	%		5,968,489	39.1	%
Total of other states		4,343,800	21.0	%		3,406,208	22.3	%
Domestic structured finance		8,918,367	43.0	%		5,282,486	34.6	%
International		406,482	2.0	%		608,706	4.0	%
Total	$	20,717,587	100.0	%	$	15,265,889	100.0	%

8 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Insured Portfolio Highlights

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Insured Portfolio Highlights ($ Thousands)

Sector Breakout

Public Finance	Net Par (12/31/2003)		Percent of total		Net Par (12/31/2002)		Percent of total
Healthcare	$	2,603,369	12.5	%	$	1,997,820	13.1	%
General Obligations		2,460,205	11.9	%		2,105,718	13.7	%
Education		1,939,787	9.4	%		1,549,056	10.1	%
Long-Term Care		1,054,633	5.1	%		840,073	5.5	%
Utilities		890,419	4.3	%		827,500	5.4	%
Tax-Backed		757,979	3.7	%		497,104	3.3	%
Other Public Finance		680,833	3.3	%		468,386	3.1	%
Transportation		405,082	1.9	%		408,275	2.7	%
Second-To-Pay Muni Wrap		387,730	1.8	%		442,891	2.9	%
Housing		183,462	0.9	%		208,523	1.4	%
Investor-Owned Utilities		57,308	0.3	%		59,856	0.4	%
Subtotal Public Finance	$	11,420,807	55.1	%	$	9,405,202	61.6	%
Structured Finance	Net Par (12/31/2003)		Percent of total		Net Par (12/31/2002)		Percent of total
Collateralized Debt Obligations	$	6,720,501	32.5	%	$	4,227,312	27.6	%
Asset-Backed – Consumer		981,871	4.7	%		649,398	4.3	%
Asset-Backed – Mortgage and MBS		975,114	4.7	%		192,886	1.3	%
Asset-Backed – Commercial and Other		397,647	1.9	%		490,718	3.2	%
Other Structured Finance		221,647	1.1	%		300,373	2.0	%
Subtotal Structured Finance	$	9,296,780	44.9	%	$	5,860,687	38.4	%
Total	$	20,717,587	100.0	%	$	15,265,889	100.0	%

9 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Insured Portfolio Highlights

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Insured Portfolio Highlights ($ Thousands)

Rating Distribution

Rating*	Net Par (12/31/2003)		Percent of total		Net Par (12/31/2002)		Percent of total
AAA	$	4,998,370	24.1	%	$	2,434,386	16.0	%
AA		3,072,299	14.8	%		2,903,551	19.0	%
A		3,652,262	17.6	%		2,638,433	17.3	%
BBB		7,625,867	36.8	%		5,682,251	37.2	%
Investment Grade		406,110	2.0	%		198,467	1.3	%
Below Investment Grade		634,814	3.1	%		719,055	4.7	%
Not Rated		327,865	1.6	%		689,746	4.5	%
Total	$	20,717,587	100.0	%	$	15,265,889	100.0	%

* Indicated category reflects highest rating of the three rating agencies.

10 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Insured Portfolio Highlights

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Insured Portfolio Highlights ($ Thousands)

10 Largest Public Finance Exposures

	Net Par (12/31/2003)		Percent of total Net Par		Rating*
New York, New York GO	$	184,223	0.89	%	A
Muni Leveraged Lease		145,377	0.70	%	A
Virgin Islands Pub Fin Auth		124,255	0.60	%	BBB
Jefferson Cnty Ala Sewer		106,168	0.51	%	A
Second-To-Pay Muni Wrap		90,000	0.43	%	AAA
Second-To-Pay Muni Wrap		90,000	0.43	%	AAA
Second-To-Pay Muni Wrap		88,000	0.42	%	AAA
Interlocken Consolidated Metropolitan District		83,640	0.40	%	BBB–
Long Island Univ – New York St Dorm Auth		81,393	0.39	%	BBB–
Orlando Regional Health Systems Florida		78,558	0.38	%	A–
Total top ten	$	1,071,614	5.15	%
10 Largest Structured Finance Exposures
	Net Par (12/31/2003)		Percent of total Net Par		Rating*
European Static Synthetic CDO	$	270,900	1.31	%	AAA
U.S. Static Synthetic CDO		270,000	1.30	%	AAA
U.S. Static Synthetic CDO		270,000	1.30	%	AA
European Static Synthetic CDO		264,590	1.28	%	AAA
CDO of ABS		257,529	1.24	%	AA
U.S. Static Synthetic CDO		252,051	1.22	%	AA
U.S. Static Synthetic CDO		250,000	1.21	%	AAA
U.S. Static Synthetic CDO		250,000	1.21	%	AA+
U.S. Static Synthetic CDO		250,000	1.21	%	AAA
European RMBS		226,438	1.09	%	AAA
Total top ten	$	2,561,508	12.37	%

* Indicated category reflects highest rating of the three rating agencies.

11 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Insured Portfolio Highlights

Quarterly Operating Supplement

Radian Asset Assurance Inc.

Management Team

Martin A. Kamarck

President

David J. Beidler

Senior Vice President, Senior Counsel

Edward McC. Bowers

Senior Vice President, Global Structured Products

Sally B. Campbell

Senior Vice President, Public Finance

John C. DeLuca

Senior Vice President, Market Development

Bonita Z. Dorland

Senior Vice President, Chief Risk Officer

Andrew C.J. Poole

Managing Director, Radian Representatives Ltd.

Jack Praschnik

Senior Vice President, Global Strategies

Patrick Rossi

Senior Vice President, Controller

Jeffrey C. Salton

Senior Vice President, Operations and Analysis

12 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Radian Asset Assurance Inc. Management Team

Quarterly

Operating Supplement

Fourth Quarter 2003

Quarterly Operating Supplement

Table of Contents

	Page
Company Profile	2
Company Information	2
Key Financial Highlights	3
Statutory Income Statements	4
Statutory Balance Sheets	5
Gross Premiums Written by Product	6
Total Claims-Paying Resources and Leverage Ratios	6
Investment Portfolio Highlights	7
Insured Portfolio Highlights	8
Management Team	12

1 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Table of Contents

Quarterly Operating Supplement

Radian Reinsurance Inc.

Quarterly Operating Supplement

December 31, 2003

Company Profile

Radian Reinsurance Inc., founded in 1986 and rated AA by Fitch Ratings and Standard & Poor’s and Aa2 by Moody’s, was the first company dedicated exclusively to the reinsurance of investment-grade securities. The Company is a leading provider of treaty and facultative reinsurance for primary insurers of municipal bonds, asset-backed obligations and structured finance obligations, helping insurers manage portfolio risk exposure, increase insurance capacity, and meet regulatory and rating-agency capital requirements.

Radian Reinsurance Inc. is a subsidiary of Radian Group Inc. (NYSE: RDN), a global credit enhancement provider headquartered in Philadelphia, with significant operations in New York City and London.

Company Information
Radian Reinsurance Inc.	Contact:
335 Madison Avenue	John C. DeLuca
New York, New York 10017	Senior Vice President, Market Development
1 877 337.4925 (within the U.S.)	1 212 984.9222
1 212 983.3100	john.deluca@radian.biz

2 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Company Profile / Company Information

Quarterly Operating Supplement

Radian Group Inc. and Subsidiaries

Key Financial Highlights* ($ Thousands)

	Twelve months ended December 31, 2003
	Mortgage Insurance		Financial Services			Financial Guaranty		Total
Net premiums written	$	741,840	$	—		$	368,637	$	1,110,477
Net premiums earned	$	759,620	$	—		$	248,563	$	1,008,183
Net investment income		107,690		36			78,437		186,163
Equity in net income of affiliates		—		95,507			9,969		105,476
Other income		32,003		27,680			3,639		63,322
Total revenues		899,313		123,223			340,608		1,363,144
Provision for losses(1)		309,272		—			166,782		476,054
Policy acquisition costs		70,195		—			58,323		128,518
Other operating expenses		125,951		47,058			38,068		211,077
Interest expense		21,467		3,162			12,913		37,542
Total expenses		526,885		50,220			276,086		853,191
Gain/(loss) on disposition of investments		8,123		(2,284	)		11,548		17,387
Change in fair value of derivative instruments		3,275		90			774		4,139
Net gains/(losses)		11,398		(2,194	)		12,322		21,526
Pretax income		383,826		70,809			76,844		531,479
Income tax provision		104,013		28,313			13,252		145,578
Net income	$	279,813	$	42,496		$	63,592	$	385,901
Total assets	$	3,849,210	$	314,628		$	2,281,929	$	6,445,767
Deferred policy acquisition costs		79,542		—			139,237		218,779
Reserve for losses		513,473		—			276,907		790,380
Unearned premiums		93,415		—			625,234		718,649
Equity	$	1,850,796	$	260,918		$	1,114,130	$	3,225,844

* Reported on a GAAP basis.

(1) On January 14, 2004, Radian Asset Assurance Inc. (“Radian Asset Assurance”), an affiliate of Radian Reinsurance Inc. (the “Company”), which is included in the Financial Guaranty business segment of the Company’s ultimate parent, Radian Group Inc. (“Radian Group”), announced it would have claims from a single manufactured housing transaction that Radian Asset Assurance reinsured from Radian Insurance Inc., another affiliate of the Company and Radian Asset Assurance. Radian Asset Assurance received its first default notice related to this transaction on January 27, 2004. Radian Asset Assurance established $111.25 million in loss reserves for this transaction in 2003 for GAAP purposes. These reserves were established on a Statutory basis in 2004. Radian Asset Assurance expects losses to be paid out over the next several years. Radian Asset Assurance also announced that it would immediately receive $65.0 million in capital from Radian Group to offset (on an after-tax basis) the effect of this loss.

3 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Key Financial Highlights

Quarterly Operating Supplement

Radian Reinsurance Inc.

Statutory Income Statements ($ Thousands)

	Quarter ended						Twelve months ended
	December 31 2003			December 31 2002			December 31 2003			December 31 2002
Revenues
Gross premiums written	$	20,678		$	28,775		$	187,501		$	111,713
Reinsurance premiums ceded		(1,076	)		(8	)		(3,247	)		(1,576	)
Net premiums written		19,602			28,767			184,254			110,137
Decrease (increase) in unearned premiums		21,531			(5,205	)		(42,998	)		(29,385	)
Premiums earned		41,133			23,562			141,256			80,752
Net investment income		12,312			11,698			48,505			47,864
Net realized gain (loss) on sale of investments		760			(181	)		6,823			6,139
Net investment gains		13,072			11,517			55,328			54,003
Other (expense) income		(1,546	)		47			(4,438	)		106
Total revenues		52,659			35,126			192,146			134,861
Expenses
Losses and loss adjustment expenses incurred		16,371			7,427			36,523			14,304
Commissions incurred		2,719			9,228			57,128			34,182
Other underwriting expenses		5,412			2,321			16,999			9,230
Total expenses		24,502			18,976			110,650			57,716
Income before income taxes		28,157			16,150			81,496			77,145
Federal and foreign income tax (benefit) expense		(6,827	)		2,937			2,473			4,580
Net income	$	34,984		$	13,213		$	79,023		$	72,565
Financial Ratios
Loss and LAE Ratio		39.8	%		31.5	%		25.9	%		17.7	%
Underwriting Expense Ratio		41.5	%		40.1	%		40.2	%		39.4	%
Combined Ratio		81.3	%		71.6	%		66.1	%		57.1	%

Effective April 30, 2003, Radian Reinsurance Inc. (the “Company”) entered into an assumptive reinsurance agreement, in regard to its Trade Credit product, with an affiliated company (Radian Asset Assurance Inc.) whereby the Company assumed unearned premiums of $21.5 million and loss and loss adjustment reserves of $38.2 million. This transaction had no impact on premiums earned or losses and loss adjustment expenses incurred.

Effective December 31, 2003, the Company entered into a novation agreement, in regard to its Trade Credit product, with an affiliated company (Radian Asset Assurance Limited) whereby the Company novated unearned premiums of $20.0 million and loss and loss adjustment reserves of $26.7 million. This transaction had no impact on premiums earned or losses and loss adjustment expenses incurred.

4 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Statutory Income Statements

Quarterly Operating Supplement

Radian Reinsurance Inc.

Statutory Balance Sheets ($ Thousands)

	December 31 2003		December 31 2002
Assets
Long-term bonds	$	991,764	$	905,719
Cash and short-term investments		76,397		21,971
Receivable for securities		—		654
Total Investments		1,068,161		928,344
Investment income due and accrued		13,930		12,817
Premiums receivable		9,746		5,100
Funds held by reinsured companies		7,575		524
Current federal income tax recoverable		7,957		3,174
Net deferred tax asset		1,889		1,991
Receivable from affiliates		—		790
Other assets		2,316		1,360
Total Assets	$	1,111,574	$	954,100
Liabilities
Contingency reserve	$	261,850	$	280,376
Losses and loss adjustment expenses		43,002		16,114
Reinsurance payable on paid losses and loss adjustment expenses		3,625		1,262
Unearned premiums		412,308		369,310
Payable for securities		—		3,840
Commissions and contingent profit commissions		742		735
Ceded reinsurance premiums payable		1,245		7
Payable to affiliates		7,274		—
Accrued expenses and other liabilities		11,448		10,320
Total Liabilities		741,494		681,964
Policyholders’ Surplus
Common stock		15,000		15,000
Additional paid-in capital		186,500		186,500
Unassigned funds		168,580		70,636
Total Policyholders’ Surplus		370,080		272,136
Total Liabilities and Policyholders’ Surplus	$	1,111,574	$	954,100
Qualified Statutory Capital	$	631,930	$	552,512

Effective April 30, 2003, Radian Reinsurance Inc. (the “Company”) entered into an assumptive reinsurance agreement, in regard to its Trade Credit product, with an affiliated company (Radian Asset Assurance Inc.) whereby the Company assumed unearned premiums of $21.5 million and loss and loss adjustment reserves of $38.2 million. This transaction had no impact on premiums earned or losses and loss adjustment expenses incurred.

Effective December 31, 2003, the Company entered into a novation agreement, in regard to its Trade Credit product, with an affiliated company (Radian Asset Assurance Limited) whereby the Company novated unearned premiums of $20.0 million and loss and loss adjustment reserves of $26.7 million. This transaction had no impact on premiums earned or losses and loss adjustment expenses incurred.

5 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Statutory Balance Sheets

Quarterly Operating Supplement

Radian Reinsurance Inc.

Gross Premiums Written by Product ($ Thousands)

	4th Qtr 2003			4th Qtr 2002		% Change		YTD 2003		YTD 2002		% Change
Public Finance	$	14,952		$	13,910	7	%	$	86,982	$	58,172	50	%
Structured Finance		12,619			11,281	12	%		51,183		41,647	23	%
Trade Credit Reinsurance		(6,893	)		3,584	–292	%		49,336		11,894	315	%
	$	20,678		$	28,775	–28	%	$	187,501	$	111,713	68	%

Effective April 30, 2003, Radian Reinsurance Inc. (the “Company”) entered into an assumptive reinsurance agreement, in regard to its Trade Credit product, with an affiliated company (Radian Asset Assurance Inc.) whereby the Company assumed unearned premiums of $21.5 million and loss and loss adjustment reserves of $38.2 million. This transaction had no impact on premiums earned or losses and loss adjustment expenses incurred.

Effective December 31, 2003, the Company entered into a novation agreement, in regard to its Trade Credit product, with an affiliated company (Radian Asset Assurance Limited) whereby the Company novated unearned premiums of $20.0 million and loss and loss adjustment reserves of $26.7 million. This transaction had no impact on premiums earned or losses and loss adjustment expenses incurred.

Total Claims-Paying Resources and Leverage Ratios

($ Thousands except ratios)

	December 31 2003		December 31 2002		% Change
Capital and Surplus	$	370,080	$	272,136	36	%
Contingency Reserve		261,850		280,376	–7	%
Qualified Statutory Capital		631,930		552,512	14	%
Unearned Premium Reserve		412,308		369,310	12	%
Loss and Loss Expense Reserves		43,002		16,114	167	%
Total Policyholders’ Reserves		1,087,240		937,936	16	%
Present Value of Future Installment Premiums		254,102		249,108	2	%
Reinsurance and Soft-Capital Facilities		125,000		150,000	–17	%
Total Claims-Paying Resources	$	1,466,342	$	1,337,044	10	%
Total Debt Service
(Principal and Interest) Outstanding	$	90,231,840	$	82,674,463	9	%
Capital Leverage Ratio1		143:1		150:1
Claims-Paying Ratio2		62:1		62:1

1 Capital Leverage Ratio. Total debt service/Qualified statutory capital.

2 Claims-Paying Ratio. Total debt service/Total claims-paying resources.

6 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Gross Premiums / Total Claims-Paying Resources

Quarterly Operating Supplement

Radian Reinsurance Inc.

Investment Portfolio Highlights

Asset Quality

As of December 31, 2003, the book value of our investment portfolio was $1.1 billion, with an average duration of 5.5 years.

Asset Class

Our conservative portfolio is invested primarily in fixed-income securities. Our primary objective is to achieve total return, with a secondary objective of maximizing after-tax income.

7 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Investment Portfolio Highlights

Quarterly Operating Supplement

Radian Reinsurance Inc.

Insured Portfolio Highlights ($ Thousands)

Geographic Diversification

State	Net Par (12/31/2003)		Percent of total		Net Par (12/31/2002)		Percent of total
California	$	5,559,232	9.7	%	$	5,054,594	9.8	%
New York		3,650,233	6.3	%		3,361,363	6.6	%
Texas		2,645,631	4.6	%		2,221,825	4.4	%
Florida		2,422,728	4.2	%		2,376,386	4.7	%
Illinois		2,307,437	4.0	%		2,298,487	4.5	%
New Jersey		1,933,361	3.4	%		1,935,968	3.8	%
Massachusetts		1,882,621	3.3	%		1,791,923	3.5	%
Pennsylvania		1,731,354	3.0	%		1,791,052	3.5	%
Puerto Rico		1,096,917	1.9	%		1,092,288	2.1	%
Washington		1,033,840	1.8	%		928,917	1.8	%
Total of top ten states		24,263,354	42.2	%		22,852,803	44.7	%
Total of other states		14,945,109	26.0	%		14,208,643	27.8	%
Domestic structured finance		11,927,230	20.7	%		9,885,628	19.4	%
International		6,384,637	11.1	%		4,124,347	8.1	%
Total	$	57,520,330	100.0	%	$	51,071,421	100.0	%

8 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Insured Portfolio Highlights

Quarterly Operating Supplement

Radian Reinsurance Inc.

Insured Portfolio Highlights ($ Thousands)

Sector Breakout

Public Finance	Net Par (12/31/2003)		Percent of total		Net Par (12/31/2002)		Percent of total
General Obligations	$	11,926,347	20.6	%	$	10,560,096	20.7	%
Utilities		7,034,723	12.2	%		6,802,514	13.3	%
Transportation		6,808,469	11.8	%		5,952,153	11.7	%
Healthcare		6,270,554	10.9	%		6,204,510	12.1	%
Tax-Backed		3,615,302	6.3	%		3,377,458	6.6	%
Investor-Owned Utilities		2,176,923	3.8	%		1,904,838	3.7	%
Education		1,878,134	3.3	%		1,575,248	3.1	%
Housing		1,192,983	2.1	%		1,184,544	2.3	%
Other Public Finance		594,681	1.0	%		672,199	1.3	%
Second-To-Pay Muni Wrap		405,073	0.7	%		405,496	0.8	%
Long-Term Care		93,903	0.2	%		94,790	0.2	%
Subtotal Public Finance	$	41,997,092	72.9	%	$	38,733,846	75.8	%
Structured Finance	Net Par (12/31/2003)		Percent of total		Net Par (12/31/2002)		Percent of total
Asset-Backed – Consumer	$	6,247,278	10.9	%	$	5,514,421	10.8	%
Collateralized Debt Obligations		4,078,503	7.1	%		2,552,035	5.0	%
Asset-Backed – Commercial and Other		2,848,456	5.0	%		2,489,820	4.9	%
Asset-Backed – Mortgage and MBS		1,590,747	2.8	%		992,167	1.9	%
Other Structured Finance		758,254	1.3	%		789,132	1.6	%
Subtotal Structured Finance	$	15,523,238	27.1	%	$	12,337,575	24.2	%
Total	$	57,520,330	100.0	%	$	51,071,421	100.0	%

9 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Insured Portfolio Highlights

Quarterly Operating Supplement

Radian Reinsurance Inc.

Insured Portfolio Highlights ($ Thousands)

Rating Distribution

Rating*	Net Par (12/31/2003)		Percent of total		Net Par (12/31/2002)		Percent of total
AAA	$	7,134,726	12.4	%	$	4,107,705	8.0	%
AA		14,384,011	25.0	%		12,018,943	23.5	%
A		23,100,368	40.2	%		21,409,661	41.9	%
BBB		10,405,340	18.1	%		9,616,900	18.8	%
Investment Grade		193,402	0.3	%		445,010	0.9	%
Below Investment Grade		638,460	1.1	%		512,053	1.0	%
Not Rated		1,664,023	2.9	%		2,961,149	5.9	%
Total	$	57,520,330	100.0	%	$	51,071,421	100.0	%

* Indicated category reflects highest rating of the three rating agencies.

10 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Insured Portfolio Highlights

Quarterly Operating Supplement

Radian Reinsurance Inc.

Insured Portfolio Highlights ($ Thousands)

10 Largest Public Finance Exposures

	Net Par (12/31/2003)		Percent of total Net Par		Rating*
Long Island Power Authority NY	$	324,068	0.56	%	A–
Illinois State GO		296,619	0.52	%	AA
California State		284,974	0.50	%	A
California State Public Works Board – Lease		279,947	0.49	%	BBB+
San Francisco, California City & County Airports		278,958	0.48	%	A+
Denver, Colorado Airport Revenue		273,508	0.48	%	A
Chicago – O’Hare International Airport		265,080	0.46	%	A–
New York, NY		263,908	0.46	%	A
Houston, Texas – Water & Sewer		263,509	0.46	%	A
Puerto Rico Commonwealth Highway & Transit		238,643	0.41	%	A
Total top ten	$	2,769,214	4.82	%
10 Largest Structured Finance Exposures
	Net Par (12/31/2003)		Percent of total Net Par		Rating*
Pilgrim Principal Protection Fund	$	308,076	0.54	%	AAA
European Static Synthetic CDO		288,000	0.50	%	AAA
U.S. Static Synthetic CDO		285,000	0.50	%	AA
European RMBS		226,438	0.39	%	AAA
European RMBS		223,471	0.39	%	AAA
Providian Gateway Master Trust		216,878	0.38	%	BBB
U.S. Static Synthetic CDO		204,000	0.35	%	AAA
Mid-State Homes Trust IV		190,425	0.33	%	BBB
U.S. Static Synthetic CDO		180,000	0.31	%	AAA
ABCP		167,500	0.29	%	BBB
Total top ten	$	2,289,788	3.98	%

* Indicated category reflects highest rating of the three rating agencies.

11 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Insured Portfolio Highlights

Quarterly Operating Supplement

Radian Reinsurance Inc.

Management Team

Martin A. Kamarck

President

David J. Beidler

Senior Vice President, Senior Counsel

Edward McC. Bowers

Senior Vice President, Global Structured Products

Sally B. Campbell

Senior Vice President, Public Finance

John C. DeLuca

Senior Vice President, Market Development

Bonita Z. Dorland

Senior Vice President, Chief Risk Officer

Andrew C.J. Poole

Managing Director, Radian Representatives Ltd.

Jack Praschnik

Senior Vice President, Global Strategies

Patrick Rossi

Senior Vice President, Controller

Jeffrey C. Salton

Senior Vice President, Operations and Analysis

12 Quarterly Operating Supplement for the Period Ended December 31, 2003 /Radian Reinsurance Inc. Management Team