Exhibit 99.1
The PMI Group, Inc.
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 | | NEWS RELEASE |
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| | | Investor and media contacts: |
| | | Glen Corso / Matt Nichols |
| | | 925.658.6429 / 925.658.6618 |
FOR IMMEDIATE RELEASE:
THE PMI GROUP, INC. REPORTS SECOND QUARTER 2004
NET INCOME PER SHARE OF $0.99
Walnut Creek, CA, August 5, 2004, —The PMI Group, Inc. (NYSE: PMI) (the “Company”) today announced thatnet income per share totaled $0.99 for the quarter ended June 30, 2004 and $2.22 for the six months ended June 30, 2004, compared to $0.77 and $1.77 for the same periods a year ago.Net income for the quarter and year to date totaled $96.7 million and $216.1 million respectively compared to $69.5 million and $159.1 million for the same periods a year ago.
The diluted weighted average common shares outstanding for the quarter and year to date totaled 97.4 million and 97.2 million respectively, compared to 89.7 million and 89.8 for the same periods a year ago. The increase reflects the issuance of 5.75 million shares in November 2003.
Second Quarter 2004 Highlights
| | • | Combined1 insurance in force totaled $242.4 billion compared to $192.7 billion at June 30, 2003. |
| | • | Consolidated net premiums earned grew 11.6 percent to $187.7 million compared to $168.2 million for the second quarter 2003 |
| | • | The second full quarter of PMI’s investment in FGIC yielded equity in earnings of $16.3 million, (after tax) |
| | • | Net income from International Operations increased by $8.4 million to $25.0 million over the second quarter 2003 including $2.3 million attributable to changes in foreign currency exchange rates. |
Combined new insurance written for the quarter and year to date was $22.1 billion and $42.3 billion respectively, compared to $25.1 billion and $42.9 billion for the same periods a year ago.Combined insurance in force at June 30, 2004 was $242.4 billion, compared to $192.7 billion at
| 1 | “Combined” includes results from U.S. Mortgage Insurance Operations, CMG Mortgage Insurance Company (“CMG”), PMI Australia and PMI Europe. |
June 30, 2003. The increase in combined insurance in force was the result of the increase of insurance in force for PMI Australia and PMI Europe’s acquisition of the U.K. lenders’ mortgage insurance portfolio from Royal & Sun Alliance (R&SA).
Consolidated net premiums written for the quarter and year to date totaled $190.9 million and $384.3 million respectively, compared to $175.1 million and $349.8 million for the same periods a year ago. The change was primarily the result of an increase in net premiums written for International Operations. Consolidated premiums earned for the quarter and year to date totaled $187.7 million and $373.0 million respectively, compared to $168.2 million and $344.2 million for the same periods a year ago. The increase for the quarter was a result of increases in premiums earned for U.S. Mortgage Insurance Operations and International Operations. The year to date increase was due primarily to the increase in premiums earned for International Operations.
Net investment income for the quarter and year to date totaled $43.6 million and $83.7 million respectively, compared to $34.1 million and $67.2 million for the same periods a year ago. The increases were a result of higher net investment income for U.S. Mortgage Insurance Operations and International Operations due primarily to an increase in the investment portfolio for each segment and municipal bond refundings of $1.7 million for the quarter and $1.9 million year to date.
Consolidatedlosses and loss adjustment expenses for the quarter and year to date totaled $56.5 million and $116.4 million respectively, compared to $56.2 million and $103.0 million for the same periods a year ago. The year to date increase was due primarily to the higher loss expenses incurred by U.S. Mortgage Insurance Operations.
Consolidatedreserve for losses and loss adjustment expense totaled $357.0 million at June 30, 2004, compared to $346.9 million at December 31, 2003 and $340.1 million at June 30, 2003. The higher reserve totals were led by increases for U.S. Mortgage Insurance Operations and PMI Europe, with the latter due to the acquisition of the R&SA insurance portfolio.
Consolidatedother underwriting and operating expensesfor the quarter and year to date totaled $48.5 million and $97.3 million respectively, compared to $47.3 million and $83.6 million for the same periods a year ago. The increases for the quarter and year to date were due primarily to the higher expenses for U.S. Mortgage Insurance Operations and PMI Australia, partially offset by lower U.S. contract underwriting expenses.
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Standard & Poor’s (S&P) announced several ratings actions for the Company and its subsidiaries during the quarter. S&P designated PMI Mortgage Insurance Ltd (PMI Australia) and PMI Mortgage Insurance Company Limited (PMI Europe) to be core businesses of the Company and affirmed their ratings at AA (stable outlook from negative). Further, S&P changed the debt ratings for The PMI Group, Inc. to A (stable) from A+ (negative) and the insurer financial strength rating for PMI Mortgage Insurance Co. from AA+ (negative) to AA (stable).
Moody’s Investors Service designated PMI Australia as a core business of the Company during the quarter and upgraded the rating to Aa2 (stable) from Aa3 (positive).
SECOND QUARTER SEGMENT HIGHLIGHTS
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(Dollars in millions)
| | U.S. Mortgage
Insurance
Operations2
| | International
Operations3
| | Financial Guaranty4
| | Other5
| | | Total
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Net premiums written | | $ | 147.4 | | $ | 43.5 | | $ | — | | $ | 0.0 | | | $ | 190.9 |
Premiums earned | | | 154.4 | | | 33.3 | | | — | | | 0.0 | | | | 187.7 |
Equity in earnings | | | 3.7 | | | — | | | 19.7 | | | 0.2 | | | | 23.6 |
Total revenues | | | 185.8 | | | 46.7 | | | 19.7 | | | 12.5 | | | | 264.7 |
Losses, expenses and interest expense | | | 98.8 | | | 10.9 | | | — | | | 26.5 | | | | 136.2 |
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Net income | | $ | 63.3 | | $ | 25.0 | | $ | 17.5 | | $ | (9.0 | ) | | $ | 96.7 |
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U.S. Mortgage Insurance Operations
U.S. Mortgage Insurance Operations hadnet income for the quarter and year to date of $63.3 million and $116.9 million respectively, compared to $55.9 million and $127.8 million for the same periods a year ago. The increase for the quarter primarily was the result of increases in premiums earned and net investment income partially offset by an increase in other underwriting and operating expenses. The year-to-date decrease in net income was due primarily to the increases in other underwriting and operating expenses, including a field operations restructuring charge of $2.6 million, and losses and loss adjustment expenses.
| 2 | “U.S. Mortgage Insurance Operations” includes the results of PMI Mortgage Insurance Co. and affiliated U.S. reinsurance companies and equity in earnings from CMG. |
| 3 | “International Operations” includes the results of PMI Australia, PMI Europe and the results of operations in Hong Kong. |
| 4 | “Financial Guaranty” includes the equity in earnings from FGIC and RAM Re. |
| 5 | “Other” includes the results from the holding company, equity in earnings/losses from Select Portfolio Servicing, limited partnerships, PMI Mortgage Services Co., dormant insurance companies and the discontinued operations of APTIC. |
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U.S. Mortgage Insurance Operations reportednet premiums written for the quarter and year to date of $147.4 million and $300.5 million respectively, compared to $142.2 million and $293.9 million for the same periods a year ago.Premiums earned for the quarter and year to date totaled $154.4 million and $303.4 million respectively, compared to $145.0 million and $301.5 million for the same periods a year ago. The increases in net premiums written and premiums earned were due primarily to the increase in the average premium rate as a result of a higher percentage of policies with deeper coverage, a higher percentage of policies on adjustable rate mortgages and a higher proportion of mortgages with higher loan to value ratios, all compared to the same period a year ago.
Net investment income for the quarter and year to date totaled $27.9 million and $52.4 million respectively, compared to $22.3 million and $45.5 million for the same periods a year ago. The increase was due primarily to the increase in the investment portfolio and municipal bond refundings.
Theequity in earnings from CMG Mortgage Insurance Company for the quarter and year to date totaled $2.4 million (after tax) and $4.6 million (after tax) respectively, compared to $2.5 million (after tax) and $4.4 million (after tax) for the same periods a year ago.
Losses and loss adjustment expenses for the quarter and year to date totaled $55.8 million and $114.7 million respectively, compared to $55.7 million and $103.1 million for the same periods a year ago. The year to date increase was primarily the result of a $12.8 million increase in primary claims paid and a $3.9 million increase in additions to net loss reserves, partially offset by a decrease in real estate owned carrying costs and loss adjustment expense, with the latter caused by a reallocation to operating expenses of certain expenses previously classified as loss adjustment expenses commencing in the second quarter of 2003. The increase to the loss reserve balance at June 30, 2004 was due primarily to an expected higher proportion of delinquencies developing into claims.
Amortization of deferred policy acquisition costs for the quarter and year to date totaled $18.1 million and $37.5 million respectively, compared to $19.5 million and $39.0 million for the same periods a year ago. The deferred policy acquisition cost asset declined $9.8 million from December 31, 2003 as the amortization of deferred costs outpaced additions.
Other underwriting and operating expenses for the quarter and year to date totaled $23.8 million and $48.4 million respectively, compared to $18.9 million and $33.7 million for the same periods a year ago. The increase for the quarter was due primarily to the recognition of expenses previously deferred as acquisition costs and increased depreciation expense. The year to date increase was due primarily to: 2003 compensation and related expenses paid in the first quarter of 2004; the recognition of expenses previously deferred as acquisition costs; increases in depreciation, premium taxes, and insurance; and the reallocation of expenses previously recorded as loss adjustment expenses.
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Over the course of 2004, the Company has and will consolidate certain field underwriting and sales offices and reduce the number of field personnel. The impact from consolidation is presently expected to result in annual pre-tax savings of approximately $5 million to $6 million beginning in 2005. Charges for the present value of the remaining lease obligations and severance expense that will be incurred throughout 2004 are expected to total $3 million to $4 million pre-tax. PMI incurred expenses of $1.1 million pre-tax and $2.6 million pre-tax for the quarter and year to date respectively, as changes related to this consolidation and reduction.
NEW INSURANCE WRITTEN
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(Dollars in billions)
| | Q2 2004
| | YTD 2004
| | Q2 2003
| | YTD 2003
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Domestic6 new primary mortgage insurance written | | $ | 12.9 | | $ | 22.7 | | $ | 17.5 | | $ | 31.2 |
Excluding CMG | | | 11.4 | | | 20.2 | | | 15.7 | | | 27.9 |
Bulk transactions | | | 1.0 | | | 1.3 | | | 3.2 | | | 3.9 |
Domestic mortgage pool insurance written | | | 2.5 | | | 6.5 | | | 2.8 | | | 5.4 |
New insurance written for the quarter and year to date totaled $12.9 billion and $22.7 billion respectively, compared to $17.5 billion and $31.2 billion for the same periods a year ago. The decreases were due primarily to lower mortgage origination volume through June 30, 2004 and tighter spreads in the structured transactions market which drove lower bulk insurance writings.
PRIMARY MORTGAGE INSURANCE IN FORCE
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(Dollars in billions)
| | as of 6/30/04
| | | as of 12/31/03
| | | as of 6/30/03
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Domestic primary insurance in force | | $ | 117.6 | | | $ | 117.8 | | | $ | 115.2 | |
Excluding CMG | | | 104.2 | | | | 105.2 | | | | 103.5 | |
Domestic primary risk in force | | | 27.8 | | | | 27.4 | | | | 26.7 | |
Excluding CMG | | | 24.8 | | | | 24.7 | | | | 24.1 | |
Domestic annual primary persistency rate | | | 53.6 | % | | | 45.1 | % | | | 47.1 | % |
Excluding CMG | | | 52.8 | % | | | 44.6 | % | | | 46.3 | % |
Domestic primary insurance in force totaled $117.6 billion, compared to $115.2 billion a year ago. The increase from June 30, 2003 was a result of new insurance written outpacing the cancellations of insurance over the previous twelve months. The domestic annual persistency rate increased to 53.6 percent as of June 30, 2004 from 45.1 percent as of December 31, 2003 and 47.1 percent as of June 30, 2003.
| 6 | “Domestic” includes results from U.S. Mortgage Insurance Operations and CMG. |
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Pool risk in force as of June 30, 2004 was $2.5 billion, compared to $2.9 billion at December 31, 2003 and $2.8 billion at June 30, 2003.
DEFAULT RATE
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| | | as of 6/30/04
| | | as of 12/31/03
| | | as of 6/30/03
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Domestic primary mortgage insurance | | 3.94 | % | | 4.10 | % | | 3.75 | % |
Excluding CMG | | 4.36 | % | | 4.53 | % | | 4.12 | % |
Excluding CMG and bulk transactions | | 3.79 | % | | 3.89 | % | | 3.54 | % |
Bulk transactions only | | 9.01 | % | | 9.45 | % | | 8.77 | % |
Pool insurance | | 4.43 | % | | 4.36 | % | | 3.63 | % |
At June 30, 2004, PMI’s primary insurancedefault rate, excluding CMG, was 4.36 percent compared to 4.53 percent at December 31, 2003 and 4.12 percent at June 30, 2003. The year-over-year increase was due to the 871 increase in delinquent loan inventory and the 26,385 decrease in policies in force.
At June 30, 2004, thedefault rate of PMI’s pool insurance portfolio was 4.43 percent compared to 4.36 percent at December 31, 2003 and 3.63 percent at June 30, 2003. The year over year increase in the delinquency rate was due primarily to the 49,680 decrease in pool insurance policies in force.
CLAIMS PAID – EXCLUDING CMG
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(Dollars in millions)
| | Q2 2004
| | YTD 2004
| | | Q2 2003
| | YTD 2003
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Claims paid | | | | | | | | | | | | | |
Primary – traditional flow | | $ | 37.1 | | $ | 68.7 | | | $ | 27.6 | | $ | 53.4 |
Primary – bulk | | | 14.0 | | | 26.4 | | | | 17.8 | | | 28.9 |
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Total primary | | | 51.1 | | | 95.1 | | | | 45.4 | | | 82.3 |
Total pool | | | 3.9 | | | 8.2 | | | | 4.7 | | | 8.0 |
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Total claims paid | | $ | 55.0 | | $ | 103.2 | * | | $ | 50.1 | | $ | 90.3 |
| * | Total does not foot due to rounding |
Primary claims paid for the quarter and year to date totaled $51.1 million and $95.1 million respectively, compared to $45.4 million and $82.3 million for the same periods a year ago. We believe the level of claims activity over the past twelve months was influenced by the age of our insurance portfolio and general economic conditions.
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International Operations
International Operations reportednet income for the quarter and year to date of $25.0 million and $52.0 million respectively, compared to $16.6 million and $30.7 million for the same periods a year ago, driven by a 53 percent year to date increase in net income from PMI Australia. The results of our International Operations are subject to fluctuations in the monthly average foreign currency exchange rate of the U.S. dollar with the Australian dollar and the Euro. The change in the monthly average foreign exchange rates from the second quarter and first six months of 2003 to the corresponding periods in 2004 favorably impacted our International Operations’ net income by $2.3 million and $7.7 million, respectively, due primarily to the appreciation in the Australian dollar.
In the second quarter of 2004, the Company initiated a foreign currency put option program designed to mitigate negative effects to net income due to a potential strengthening of the U.S. dollar relative to the Australian dollar and the Euro during the remainder of 2004. In the second quarter, the Company recorded in other income a net gain of $0.9 million related to the foreign currency put option program.
Net investment income for the quarter and year to date totaled $10.6 million and $22.5 million respectively, compared to $7.3 million and $13.2 million for the same periods a year ago. The increase was due primarily to the increase in the investment portfolios of PMI Australia and PMI Europe and an increase in the yield on investments in the PMI Australia investment portfolio.
Net income from PMI Australia for the quarter and year to date totaled $19.2 million and $39.5 million respectively, compared to $13.7 million and $25.8 million for the same periods a year ago. The increases were due primarily to increases in premiums earned, increases in net investment income and the strengthening of the Australian dollar versus the U.S. dollar.
Credit trends have remained favorable for PMI Australia.Losses and loss adjustment expenses for PMI Australia for the quarter and year to date totaled $0.2 million and $0.4 million respectively, compared to ($0.5) million and ($1.4) million for the same periods a year ago. The level of losses and loss adjustment expenses is the result of a low level of claims paid and the continued low delinquent loan inventory. Claims paid totaled $0.1 million and $0.3 million for the quarter and year to date respectively, compared to $0.7 million and $1.6 million for the same periods a year ago.
Premiums earned for PMI Australia for the quarter and year to date increased to $26.7 million and $55.6 million respectively, compared to $19.8 million and $37.1 million for the same periods a year ago, as a result of an increase in insurance in force and the strengthening of the Australian dollar versus the U.S. dollar.
Primaryinsurance in force for PMI Australia was $91.5 billion at June 30, 2004, compared to $87.9 billion at December 31, 2003 and $69.0 billion at June 30, 2003. Primaryrisk in force was $82.8 billion at June 30, 2004, compared to $79.3 billion at December 31, 2003 and $62.9 billion at June 30, 2003.
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New insurance written for PMI Australia for the quarter and year to date totaled $8.7 billion and $16.9 billion respectively, compared to $5.1 billion and $9.2 billion for the same periods a year ago. PMI Australia’s primary new insurance written includes flow channel insurance and insurance on residential mortgage-backed securities, or RMBS. RMBS transactions include insurance on seasoned portfolios comprised of prime credit quality loans that have LTVs principally below 80 percent. RMBS new insurance written for the quarter and year to date totaled $3.7 billion and $6.6 billion respectively, compared to $1.6 billion and $2.8 billion for the same periods a year ago.
For PMI Europe, net incomefor the quarter and year to date totaled $4.3 million and $9.0 million respectively, compared to $1.5 million and $2.4 million for the same periods a year ago.Premiums earned for the quarter and year to date totaled $5.0 million and $10.4 million respectively, compared to $2.2 million and $3.0 million for the same periods a year ago.Insurance in forcewas $33.3 billion at June 30, 2004, compared to $31.6 billion at December 31, 2003 and $8.6 billion at June 30, 2003.Risk in force was $3.3 billion at June 30, 2004, compared to $3.1 billion at December 31, 2003 and $0.6 billion at June 30, 2003. The increases noted above were largely the result of the acquisition of the U.K. lenders’ mortgage insurance portfolio from R&SA.
Net premiums written for the quarter and year to date totaled $2.4 million and $5.2 million respectively, compared to $2.5 million and $3.3 million for the same periods a year ago. The increase in net premiums written was primarily a result of an increase in insurance in force.
PMI Europe has entered into four credit default swaps which are classified as derivative instruments.Other income totaled $1.3 million and $2.7 million for the quarter and year to date respectively and primarily relates to the change in the fair value of those instruments.
In the second quarter 2004, PMI Australia and PMI Europe were designated as core businesses of the Company by Standard & Poor’s. PMI Australia’s and PMI Europe’s ratings were affirmed at AA (stable) by Standard & Poor’s. Moody’s Investor Services also designated PMI Australia as a core business and upgraded PMI Australia’s rating to Aa2 (stable) from Aa3 (positive).
PMI’sHong Kong reinsurance premiums earned for the quarter and year to date totaled $1.5 million and $3.5 million respectively, compared to $1.3 million and $2.5 million for the same periods a year ago. The increases were due primarily to an increase in mortgage origination activity in Hong Kong. PMI’s Hong Kong branch reinsures mortgage risk primarily for the Hong Kong Mortgage Corporation.
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Financial Guaranty
Financial Guaranty, which includes the Company’s investments in FGIC and RAM Re, reportednet income for the quarter and year to date of $17.5 million and $31.0 million respectively, compared to $0.8 million and $0.9 million for the same periods a year ago. The increase was largely the result of our 42 percent investment in FGIC, which closed in December 2003. For the quarter and year to date, the Company’s share of equity in earnings fromFGIC totaled $16.3 million (after tax) and $29.0 million (after tax) respectively.
The Company’s equity in earnings fromRAM Re for the quarter and year to date were $1.2 million (after tax) and $2.0 million (after tax) respectively, compared to $0.8 million (after tax) and $0.9 million (after tax) for the same periods a year ago. The increase was due primarily to increases in premiums earned and net investment income. The year to date increase was primarily the result of a $1.9 million charge in the first quarter of 2003 for other-than-temporary impairment to its investment portfolio. PMI reports equity in earnings from RAM Re on a one-quarter lag.
Other
TheOther segment consists of revenues and expenses of the holding company, PMI Mortgage Services Co., equity earnings from Select Portfolio Servicing, Inc. (SPS), formerly Fairbanks Capital, certain limited partnerships, and for 2003 and the first quarter of 2004, the discontinued operations of APTIC. For the quarter the Other segment reported a net loss of $9.0 million compared to a net loss $3.7 million for the same period a year ago. Year to date, net income from the Other segment totaled $16.3 million compared to a net loss of $0.4 million for the same period a year ago. The decrease in net income for the second quarter of 2004 compared to the second quarter of 2003 was due primarily to the absence of net income from discontinued operations due to the sale of APTIC in the first quarter of 2004 and an increase in interest expense due to the November 2003 issuance of our hybrid income term securities to finance our FGIC investment. The year to date increase in net income from the Other segment was due to the gain on sale of APTIC in the first quarter of 2004 partially offset by the decrease in equity in earnings from SPS and the increase in interest expense previously referenced. On March 19, 2004, we completed the sale of APTIC, received $115.1 million in cash and recognized an after tax gain of $30.1 million. Post-closing adjustments on the sale have been finalized, with no adjustment to the recorded gain on the sale.
Equity in earnings of SPS for the quarter and year to date totaled $0.1 million (after tax) and $0.4 million (after tax) respectively, compared to a loss of $0.4 million (after tax) and earnings of $6.2 million (after tax) for the same periods a year ago. The year to date decline was largely the result of a decrease in servicing fee income and higher restructuring and legal expenses. As of June 30, 2004, the Company’s carrying value of its investment in SPS was $110.5 million compared to $110.7 million at March 31, 2004. The carrying value of SPS includes the Company’s share of net unrealized gains and
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losses in the SPS’s investment portfolio. The $0.2 million decline in the carrying value from March 31, 2004 is the result of the decline in the unrealized gains in SPS’s investment portfolio, partially offset by an increase in the undistributed earnings of SPS. In addition, the Company holds receivables of $45.7 million from SPS which is included in related party receivables.
Other income totaled $7.4 million and $14.6 million for the quarter and year to date, compared to $14.0 million and $24.6 million for the same periods a year ago. The decline was the result of a decline in contract underwriting volume.
Other underwriting and operating expenses for the quarter and year to date totaled $17.8 million and $35.1 million respectively, compared to $23.9 million and $41.3 million for the same periods a year ago. The level of expenses reflects lower contract underwriting expenses due to decreased volume partially offset by higher holding company expenses including compensation and interest expense. The higher interest expense is due to the issuance of our hybrid income term securities in November 2003 previously referenced.
ABOUT THE PMI GROUP, INC.
The PMI Group, Inc. (NYSE:PMI) headquartered in Walnut Creek, California is an international provider of credit enhancement products that promotes homeownership and facilitates mortgage transactions in the capital markets. Through its wholly owned subsidiaries and unconsolidated strategic investments, the Company offers residential mortgage insurance and credit enhancement products domestically and internationally as well as financial guaranty insurance and reinsurance.
The Company is an advocate of affordable housing and supports a number of organizations that foster greater access to affordable housing. The Company’s approach to affordable housing lending is to develop products and services that assist responsible borrowers who may not qualify for mortgage loans under traditional underwriting practices.
Cautionary Statement: Statements in this earnings press release that are not historical facts, and that relate to future plans, events or performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to the Company’s field underwriting office consolidation. Readers are cautioned that these forward-looking statements by their nature involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including, among others, refinements of our estimates of savings and charges as we implement the office consolidation, conditions affecting the Company’s mortgage insurance operations, the mortgage insurance industry, and general economic conditions. Risks and uncertainties that could affect the Company are discussed in our various Securities and Exchange Commission filings, including our Form 10-Q for the quarter ended March 31, 2004.
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THE PMI GROUP, INC. AND SUBSIDIARIES
FINANCIAL RESULTS AND STATISTICAL INFORMATION FOR THE PERIOD ENDING JUNE 30, 2004
Contents
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Consolidated Statements of Operations and Balance Sheets | | Page 2 |
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Business Segments Results of Operations - Three Months Ended June 30, 2004 and 2003 | | Page 3 |
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Business Segments Results of Operations - Six Months Ended June 30, 2004 and 2003 | | Page 4 |
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Business Segments Balance Sheets | | Page 5 |
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U.S. Mortgage Insurance Operations Analysis of Loss Reserves and Statistical Information | | Page 6 |
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U.S. Mortgage Insurance Operations and CMG Mortgage Insurance Company Statistical Information | | Page 7 |
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International Operations | | Page 8 |
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Appendix A - U.S. Mortgage Insurance Operations | | Page 9 |
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Appendix B - PMI International Supplemental Statistical Information | | Page 10 |
Please refer to the following when noted:
| (1) | The Company’s investments and equity earnings in unconsolidated subsidiaries include FGIC Corporation, SPS Holding Corp. (“SPS”) (formerly Fairbanks Capital Corp.), CMG, RAM Reinsurance, and other limited partnership interests. In December 2003, the Company completed its investment in FGIC, and the investment is accounted for under the equity method of accounting. |
| (2) | Company obligated mandatory redeemable preferred capital securities of the subsidiary trust holding solely junior subordinated deferrable interest debentures of the Company. Upon the adoption of Financial Interpretation Number (“FIN”) 46 in December 2003, the Company deconsolidated the trust subsidiary that issued the preferred securities. The underlying debentures issued by the holding company to the trust have been included in long term debt as of December 31, 2003. |
| (3) | The operating results of APTIC were reflected as discontinued operations in the fourth quarter of 2003 with prior period financial information reclassified accordingly. The Company completed its sale of APTIC in March 2004. Post-closing adjustments on the sale have been finalized and the Company does not anticipate adjusting its recorded gain on the sale. |
| (4) | U.S. Mortgage Insurance Operations include the operating results of PMI Mortgage Insurance Co. and affiliated U.S. mortgage insurance and reinsurance Companies. CMG and its affiliates are included under the equity method of accounting in equity earnings of unconsolidated subsidiaries. |
| (5) | International Operations include PMI Australia, PMI Europe and PMI’s Hong Kong reinsurance operations. |
| (6) | Financial Guaranty represents equity investments of FGIC and RAM Reinsurance. |
| (7) | The “Other” segment includes other income and related operating expenses of MSC; investment income, interest expense and corporate overhead of The PMI Group; the results of Commercial Loans Insurance Co. and WMAC Credit Insurance Corporation; equity in earnings from SPS; and the results from discontinued operations of APTIC. |
| (8) | The expense ratio is the ratio, expressed as a percentage, of the sum of amortization of policy acquisition costs and other underwriting expenses to net premiums written. |
| (9) | Pool insurance includes modified pool, GSE pool, old pool and all other pool insurance products for U.S. Mortgage Insurance Operations. |
| (10) | Statutory risk to capital ratio for PMI Mortgage Insurance Co. |
| (11) | The interim financial and statistical information contained in this material are unaudited. Certain prior year information has been reclassified to conform to the current quarters’ presentation. |
THE PMI GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
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| | | Three Months Ended June 30,
| | Six Months Ended June 30,
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| | | 2004
| | 2003
| | 2004
| | 2003
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| | | (Unaudited) | | (Unaudited) | | (Unaudited) | | (Unaudited) |
| | | (Dollars in thousands, except per share data) | | (Dollars in thousands, except per share data) |
Net premiums written | | $ | 190,876 | | $ | 175,133 | | $ | 384,280 | | $ | 349,810 |
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Revenues | | | | | | | | | | | | |
Premiums earned | | $ | 187,663 | | $ | 168,213 | | $ | 372,965 | | $ | 344,183 |
Net investment income | | | 43,622 | | | 34,126 | | | 83,663 | | | 67,180 |
Equity in earnings of unconsolidated subsidiaries(1) | | | 23,585 | | | 5,687 | | | 42,683 | | | 14,502 |
Net realized investment gains | | | 68 | | | 2,066 | | | 1,343 | | | 3,356 |
Other income | | | 9,798 | | | 14,351 | | | 18,649 | | | 25,070 |
| | |
|
| |
|
| |
|
| |
|
|
Total revenues | | | 264,736 | | | 224,443 | | | 519,303 | | | 454,291 |
| | |
|
| |
|
| |
|
| |
|
|
Losses and expenses | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 56,532 | | | 56,179 | | | 116,352 | | | 102,971 |
Amortization of policy acquisition costs | | | 21,244 | | | 22,043 | | | 44,339 | | | 43,888 |
Other underwriting and operating expenses | | | 48,529 | | | 47,325 | | | 97,339 | | | 83,597 |
Field operations restructuring charge | | | 1,089 | | | — | | | 2,599 | | | — |
Interest expense and distributions on mandatorily redeemable preferred securities(2) | | | 8,822 | | | 5,653 | | | 17,337 | | | 10,688 |
| | |
|
| |
|
| |
|
| |
|
|
Total losses and expenses | | | 136,216 | | | 131,200 | | | 277,966 | | | 241,144 |
| | |
|
| |
|
| |
|
| |
|
|
Income from continuing operations before income taxes | | | 128,520 | | | 93,243 | | | 241,337 | | | 213,147 |
Income taxes from continuing operations | | | 31,845 | | | 26,910 | | | 59,099 | | | 60,198 |
| | |
|
| |
|
| |
|
| |
|
|
Income from continuing operations after income taxes | | | 96,675 | | | 66,333 | | | 182,238 | | | 152,949 |
| | |
|
| |
|
| |
|
| |
|
|
Income from discontinued operations before income taxes(3) | | | — | | | 4,770 | | | 5,756 | | | 9,322 |
Income taxes from discontinued operations | | | — | | | 1,646 | | | 1,958 | | | 3,206 |
| | |
|
| |
|
| |
|
| |
|
|
Income from discontinued operations after income taxes | | | — | | | 3,124 | | | 3,798 | | | 6,116 |
| | |
|
| |
|
| |
|
| |
|
|
Gain on sale of discontinued operations, net of income taxes of $17,131(3) | | | — | | | — | | | 30,108 | | | — |
| | |
|
| |
|
| |
|
| |
|
|
Net income | | $ | 96,675 | | $ | 69,457 | | $ | 216,144 | | $ | 159,065 |
| | |
|
| |
|
| |
|
| |
|
|
Diluted weighted average common shares outstanding (shares in thousands) | | | 97,446 | | | 89,708 | | | 97,151 | | | 89,835 |
| | |
|
| |
|
| |
|
| |
|
|
Diluted net income per share | | $ | 0.99 | | $ | 0.77 | | $ | 2.22 | | $ | 1.77 |
| | |
|
| |
|
| |
|
| |
|
|
CONSOLIDATED BALANCE SHEETS
| | | | | | | | | |
| | | June 30, 2004
| | December 31, 2003
| | June 30, 2003
|
| | | |
| | | (Unaudited) | | | | (Unaudited) |
| | | (Dollars in thousands, except per share data) |
Assets | | | | | | | | | |
Cash and investments, at fair value | | $ | 3,365,964 | | $ | 3,202,881 | | $ | 2,864,729 |
Investments in unconsolidated subsidiaries(1) (12) | | | 955,577 | | | 937,846 | | | 331,695 |
Reinsurance recoverable and prepaid premiums | | | 45,743 | | | 56,799 | | | 51,309 |
Deferred policy acquisition costs | | | 91,816 | | | 102,074 | | | 91,573 |
Related party receivables | | | 47,831 | | | 27,840 | | | 27,162 |
Other assets | | | 347,647 | | | 348,987 | | | 358,207 |
Assets - discontinued operations(3) | | | — | | | 117,862 | | | 103,685 |
| | |
|
| |
|
| |
|
|
Total assets | | $ | 4,854,578 | | $ | 4,794,289 | | $ | 3,828,360 |
| | |
|
| |
|
| |
|
|
Liabilities | | | | | | | | | |
Reserve for losses and loss adjustment expenses | | $ | 357,028 | | $ | 346,939 | | $ | 340,125 |
Unearned premiums | | | 460,998 | | | 469,001 | | | 267,606 |
Long-term debt | | | 819,543 | | | 819,543 | | | 422,950 |
Other liabilities | | | 310,661 | | | 330,560 | | | 276,321 |
Liabilities - discontinued operations(3) | | | — | | | 44,217 | | | 43,181 |
| | |
|
| |
|
| |
|
|
Total liabilities | | | 1,948,230 | | | 2,010,260 | | | 1,350,183 |
Mandatorily redeemable preferred securities(2) | | | — | | | — | | | 48,500 |
| | | |
Shareholder’s equity | | | 2,906,348 | | | 2,784,029 | | | 2,429,677 |
| | |
|
| |
|
| |
|
|
Total liabilities, mandatorily redeemable preferred securities and shareholders’ equity | | $ | 4,854,578 | | $ | 4,794,289 | | $ | 3,828,360 |
| | |
|
| |
|
| |
|
|
Book value per share | | $ | 30.28 | | $ | 29.26 | | $ | 27.35 |
| | |
|
| |
|
| |
|
|
2
THE PMI GROUP, INC. AND SUBSIDIARIES
BUSINESS SEGMENTS RESULTS OF OPERATIONS
| | | | | | | | | | | | | | | | | | |
| | | U.S. Mortgage
Operations(4)
| | | International
Operations (5)
| | | Financial
Guaranty (6)
| | Other(7)
| | | Consolidated
Total
|
| | | Three Months Ended June 30, 2004 (Unaudited)
|
| | | (Dollars in thousands) |
Net premiums written | | $ | 147,407 | | | $ | 43,460 | | | $ | — | | $ | 9 | | | $ | 190,876 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Revenues | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 154,392 | | | $ | 33,255 | | | $ | — | | $ | 16 | | | $ | 187,663 |
Net investment income | | | 27,944 | | | | 10,646 | | | | — | | | 5,032 | | | | 43,622 |
Equity in earnings of unconsolidated subsidiaries (1) | | | 3,676 | | | | — | | | | 19,699 | | | 210 | | | | 23,585 |
Net realized investment gains (losses) | | | (166 | ) | | | 377 | | | | — | | | (143 | ) | | | 68 |
Other income | | | (25 | ) | | | 2,399 | | | | — | | | 7,424 | | | | 9,798 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Total revenues | | | 185,821 | | | | 46,677 | | | | 19,699 | | | 12,539 | | | | 264,736 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Losses and expenses | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 55,755 | | | | 777 | | | | — | | | — | | | | 56,532 |
Amortization of policy acquisition costs | | | 18,109 | | | | 3,135 | | | | — | | | — | | | | 21,244 |
Other underwriting and operating expenses | | | 23,799 | | | | 6,940 | | | | — | | | 17,790 | | | | 48,529 |
Field operations restructuring charge | | | 1,089 | | | | — | | | | — | | | — | | | | 1,089 |
Interest expense | | | 17 | | | | 60 | | | | — | | | 8,745 | | | | 8,822 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Total losses and expenses | | | 98,769 | | | | 10,912 | | | | — | | | 26,535 | | | | 136,216 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income (loss) before income taxes | | | 87,052 | | | | 35,765 | | | | 19,699 | | | (13,996 | ) | | | 128,520 |
Income tax (benefit) | | | 23,790 | | | | 10,799 | | | | 2,220 | | | (4,964 | ) | | | 31,845 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Net income (loss) | | $ | 63,262 | | | $ | 24,966 | | | $ | 17,479 | | $ | (9,032 | ) | | $ | 96,675 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Expense ratio(8) | | | 28.4 | % | | | 23.2 | % | | | | | | | | | | |
Loss ratio | | | 36.1 | % | | | 2.3 | % | | | | | | | | | | |
Combined ratio | | | 64.5 | % | | | 25.5 | % | | | | | | | | | | |
| |
| | | Three Months Ended June 30, 2003 (Unaudited)
|
| | | (Dollars in thousands) |
Net premiums written | | $ | 142,238 | | | $ | 32,877 | | | $ | — | | $ | 18 | | | $ | 175,133 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Revenues | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 144,955 | | | $ | 23,237 | | | $ | — | | $ | 21 | | | $ | 168,213 |
Net investment income | | | 22,323 | | | | 7,316 | | | | — | | | 4,487 | | | | 34,126 |
Equity in earnings of unconsolidated subsidiaries(1) | | | 3,846 | | | | — | | | | 1,162 | | | 679 | | | | 5,687 |
Net realized investment gains (losses) | | | 2,016 | | | | (91 | ) | | | — | | | 141 | | | | 2,066 |
Other income | | | 5 | | | | 310 | | | | — | | | 14,036 | | | | 14,351 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Total revenues | | | 173,145 | | | | 30,772 | | | | 1,162 | | | 19,364 | | | | 224,443 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Losses and expenses | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 55,653 | | | | 526 | | | | — | | | — | | | | 56,179 |
Amortization of policy acquisition costs | | | 19,536 | | | | 2,507 | | | | — | | | — | | | | 22,043 |
Other underwriting and operating expenses | | | 18,931 | | | | 4,529 | | | | — | | | 23,865 | | | | 47,325 |
Interest expense and distributions on redeemable preferred securities(2) | | | 49 | | | | — | | | | — | | | 5,604 | | | | 5,653 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Total losses and expenses | | | 94,169 | | | | 7,562 | | | | — | | | 29,469 | | | | 131,200 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income (loss) from continuing operations before income taxes | | | 78,976 | | | | 23,210 | | | | 1,162 | | | (10,105 | ) | | | 93,243 |
Income tax (benefit) from continuing operations | | | 23,118 | | | | 6,648 | | | | 407 | | | (3,263 | ) | | | 26,910 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income (loss) from continuing operations after income taxes | | | 55,858 | | | | 16,562 | | | | 755 | | | (6,842 | ) | | | 66,333 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income from discontinued operations before taxes(3) | | | — | | | | — | | | | — | | | 4,770 | | | | 4,770 |
Income taxes from discontinued operations | | | — | | | | — | | | | — | | | 1,646 | | | | 1,646 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income from discontinued operations after income taxes | | | — | | | | — | | | | — | | | 3,124 | | | | 3,124 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Net income (loss) | | $ | 55,858 | | | $ | 16,562 | | | $ | 755 | | $ | (3,718 | ) | | $ | 69,457 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Expense ratio(8) | | | 27.0 | % | | | 21.4 | % | | | | | | | | | | |
Loss ratio | | | 38.4 | % | | | 2.3 | % | | | | | | | | | | |
Combined ratio | | | 65.4 | % | | | 23.7 | % | | | | | | | | | | |
3
THE PMI GROUP, INC. AND SUBSIDIARIES
BUSINESS SEGMENTS RESULTS OF OPERATIONS
| | | | | | | | | | | | | | | | | | |
| | | U.S. Mortgage
Operations(4)
| | | International
Operations (5)
| | | Financial
Guaranty (6)
| | Other(7)
| | | Consolidated
Total
|
| | | Six Months Ended June 30, 2004 (Unaudited)
|
| | | (Dollars in thousands) |
Net premiums written | | $ | 300,471 | | | $ | 83,783 | | | $ | — | | $ | 26 | | | $ | 384,280 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Revenues | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 303,415 | | | $ | 69,514 | | | $ | — | | $ | 36 | | | $ | 372,965 |
Net investment income | | | 52,402 | | | | 22,453 | | | | — | | | 8,808 | | | | 83,663 |
Equity in earnings of unconsolidated subsidiaries(1) | | | 7,004 | | | | — | | | | 34,627 | | | 1,052 | | | | 42,683 |
Net realized investment gains (losses) | | | 921 | | | | 602 | | | | — | | | (180 | ) | | | 1,343 |
Other income | | | 57 | | | | 4,001 | | | | — | | | 14,591 | | | | 18,649 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Total revenues | | | 363,799 | | | | 96,570 | | | | 34,627 | | | 24,307 | | | | 519,303 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Losses and expenses | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 114,710 | | | | 1,642 | | | | — | | | — | | | | 116,352 |
Amortization of policy acquisition costs | | | 37,542 | | | | 6,797 | | | | — | | | — | | | | 44,339 |
Other underwriting and operating expenses | | | 48,429 | | | | 13,807 | | | | — | | | 35,103 | | | | 97,339 |
Field operations restructuring charge | | | 2,599 | | | | — | | | | — | | | — | | | | 2,599 |
Interest expense | | | 37 | | | | 61 | | | | — | | | 17,239 | | | | 17,337 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Total losses and expenses | | | 203,317 | | | | 22,307 | | | | — | | | 52,342 | | | | 277,966 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income (loss) from continuing operations before income taxes | | | 160,482 | | | | 74,263 | | | | 34,627 | | | (28,035 | ) | | | 241,337 |
Income tax (benefit) from continuing operations | | | 43,612 | | | | 22,269 | | | | 3,633 | | | (10,415 | ) | | | 59,099 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income (loss) from continuing operations after income taxes | | | 116,870 | | | | 51,994 | | | | 30,994 | | | (17,620 | ) | | | 182,238 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income from discontinued operations before taxes(3) | | | — | | | | — | | | | — | | | 5,756 | | | | 5,756 |
Income taxes from discontinued operations | | | — | | | | — | | | | — | | | 1,958 | | | | 1,958 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income from discontinued operations after income taxes | | | — | | | | — | | | | — | | | 3,798 | | | | 3,798 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Gain on sale of discontinued operations, net of income taxes(3) | | | — | | | | — | | | | — | | | 30,108 | | | | 30,108 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Net income | | $ | 116,870 | | | $ | 51,994 | | | $ | 30,994 | | $ | 16,286 | | | $ | 216,144 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Expense ratio(8) | | | 28.6 | % | | | 24.6 | % | | | | | | | | | | |
Loss ratio | | | 37.8 | % | | | 2.4 | % | | | | | | | | | | |
Combined ratio | | | 66.4 | % | | | 27.0 | % | | | | | | | | | | |
| |
| | | Six Months Ended June 30, 2003 (Unaudited)
|
| | | (Dollars in thousands) |
Net premiums written | | $ | 293,926 | | | $ | 55,853 | | | $ | — | | $ | 31 | | | $ | 349,810 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Revenues | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 301,537 | | | $ | 42,603 | | | $ | — | | $ | 43 | | | $ | 344,183 |
Net investment income | | | 45,474 | | | | 13,179 | | | | — | | | 8,527 | | | | 67,180 |
Equity in earnings of unconsolidated subsidiaries(1) | | | 6,710 | | | | — | | | | 1,423 | | | 6,369 | | | | 14,502 |
Net realized investment gains (losses) | | | 1,537 | | | | 250 | | | | — | | | 1,569 | | | | 3,356 |
Other income | | | 174 | | | | 310 | | | | — | | | 24,586 | | | | 25,070 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Total revenues | | | 355,432 | | | | 56,342 | | | | 1,423 | | | 41,094 | | | | 454,291 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Losses and expenses | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 103,106 | | | | (135 | ) | | | — | | | — | | | | 102,971 |
Amortization of policy acquisition costs | | | 39,011 | | | | 4,877 | | | | — | | | — | | | | 43,888 |
Other underwriting and operating expenses | | | 33,716 | | | | 8,533 | | | | — | | | 41,348 | | | | 83,597 |
Interest expense and distributions on redeemable preferred securities(2) | | | 74 | | | | — | | | | — | | | 10,614 | | | | 10,688 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Total losses and expenses | | | 175,907 | | | | 13,275 | | | | — | | | 51,962 | | | | 241,144 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income (loss) from continuing operations before income taxes | | | 179,525 | | | | 43,067 | | | | 1,423 | | | (10,868 | ) | | | 213,147 |
Income tax (benefit) from continuing operations | | | 51,758 | | | | 12,320 | | | | 498 | | | (4,378 | ) | | | 60,198 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income (loss) from continuing operations after income taxes | | | 127,767 | | | | 30,747 | | | | 925 | | | (6,490 | ) | | | 152,949 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income from discontinued operations before taxes(3) | | | — | | | | — | | | | — | | | 9,322 | | | | 9,322 |
Income taxes from discontinued operations | | | — | | | | — | | | | — | | | 3,206 | | | | 3,206 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income from discontinued operations after income taxes | | | — | | | | — | | | | — | | | 6,116 | | | | 6,116 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Net income (loss) | | $ | 127,767 | | | $ | 30,747 | | | $ | 925 | | $ | (374 | ) | | $ | 159,065 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Expense ratio(8) | | | 24.7 | % | | | 24.0 | % | | | | | | | | | | |
Loss ratio | | | 34.2 | % | | | -0.3 | % | | | | | | | | | | |
Combined ratio | | | 58.9 | % | | | 23.7 | % | | | | | | | | | | |
4
THE PMI GROUP, INC. AND SUBSIDIARIES
BUSINESS SEGMENTS BALANCE SHEETS
| | | | | | | | | | | | | | | | |
| | | U.S. Mortgage
Insurance
Operations(4)
| | International
Operations (5)
| | Financial
Guaranty (6)
| | Other(7)
| | | Consolidated
Total
|
| | | June 30, 2004 (Unaudited)
|
| | | (Dollars in thousands) |
Assets | | | | | | | | | | | | | | | | |
Cash and investments, at fair value | | $ | 2,120,337 | | $ | 842,675 | | $ | — | | $ | 402,952 | | | $ | 3,365,964 |
Investments in unconsolidated subsidiaries(1) | | | 102,346 | | | — | | | 716,858 | | | 136,373 | | | | 955,577 |
Reinsurance recoverable and prepaid premiums | | | 30,007 | | | 15,736 | | | — | | | — | | | | 45,743 |
Deferred policy acquisition costs | | | 59,866 | | | 31,950 | | | — | | | — | | | | 91,816 |
Related party receivables | | | 2,011 | | | — | | | — | | | 45,820 | | | | 47,831 |
Other assets | | | 206,500 | | | 28,118 | | | — | | | 113,029 | | | | 347,647 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total assets | | $ | 2,521,067 | | $ | 918,479 | | $ | 716,858 | | $ | 698,174 | | | $ | 4,854,578 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Liabilities | | | | | | | | | | | | | | | | |
Reserve for losses and loss adjustment expenses | | $ | 334,744 | | $ | 22,281 | | $ | — | | $ | 3 | | | $ | 357,028 |
Unearned premiums | | | 179,851 | | | 281,109 | | | — | | | 38 | | | | 460,998 |
Long-term debt | | | — | | | — | | | — | | | 819,543 | | | | 819,543 |
Other liabilities | | | 123,526 | | | 57,034 | | | 9,301 | | | 120,800 | | | | 310,661 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities | | | 638,121 | | | 360,424 | | | 9,301 | | | 940,384 | | | | 1,948,230 |
| | | | | |
Shareholder’s equity | | | 1,882,946 | | | 558,055 | | | 707,557 | | | (242,210 | ) | | | 2,906,348 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities and shareholders’ equity | | $ | 2,521,067 | | $ | 918,479 | | $ | 716,858 | | $ | 698,174 | | | $ | 4,854,578 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
| |
| | | December 31, 2003
|
| | | (Dollars in thousands) |
Assets | | | | | | | | | | | | | | | | |
Cash and investments, at fair value | | $ | 2,042,152 | | $ | 836,570 | | $ | — | | $ | 324,159 | | | $ | 3,202,881 |
Investments in unconsolidated subsidiaries(1) | | | 97,389 | | | — | | | 700,828 | | | 139,629 | | | | 937,846 |
Reinsurance recoverable and prepaid premiums | | | 39,774 | | | 17,025 | | | — | | | — | | | | 56,799 |
Deferred policy acquisition costs | | | 69,656 | | | 32,418 | | | — | | | — | | | | 102,074 |
Related party receivables | | | 1,698 | | | — | | | — | | | 26,142 | | | | 27,840 |
Other assets | | | 217,063 | | | 19,792 | | | — | | | 112,132 | | | | 348,987 |
Assets - discontinued operations(3) | | | — | | | — | | | — | | | 117,862 | | | | 117,862 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total assets | | $ | 2,467,732 | | $ | 905,805 | | $ | 700,828 | | $ | 719,924 | | | $ | 4,794,289 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Liabilities | | | | | | | | | | | | | | | | |
Reserve for losses and loss adjustment expenses | | $ | 325,262 | | $ | 21,674 | | $ | — | | $ | 3 | | | $ | 346,939 |
Unearned premiums | | | 181,854 | | | 287,099 | | | — | | | 48 | | | | 469,001 |
Long-term debt | | | — | | | — | | | — | | | 819,543 | | | | 819,543 |
Other liabilities | | | 160,959 | | | 52,067 | | | 6,085 | | | 111,449 | | | | 330,560 |
Liabilities - discontinued operations(3) | | | — | | | — | | | — | | | 44,217 | | | | 44,217 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities | | | 668,075 | | | 360,840 | | | 6,085 | | | 975,260 | | | | 2,010,260 |
| | | | | |
Shareholders’ equity | | | 1,799,657 | | | 544,965 | | | 694,743 | | | (255,336 | ) | | | 2,784,029 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities and shareholders’ equity | | $ | 2,467,732 | | $ | 905,805 | | $ | 700,828 | | $ | 719,924 | | | $ | 4,794,289 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
| |
| | | June 30, 2003 (Unaudited)
|
| | | (Dollars in thousands) |
Assets | | | | | | | | | | | | | | | | |
Cash and investments, at fair value | | $ | 1,837,523 | | $ | 632,200 | | $ | — | | $ | 395,006 | | | $ | 2,864,729 |
Investments in unconsolidated subsidiaries(1) | | | 91,190 | | | — | | | 73,092 | | | 167,413 | | | | 331,695 |
Reinsurance recoverable and prepaid premiums | | | 39,042 | | | 12,267 | | | — | | | — | | | | 51,309 |
Deferred policy acquisition costs | | | 66,066 | | | 25,507 | | | — | | | — | | | | 91,573 |
Related party receivables | | | 2,802 | | | — | | | — | | | 24,360 | | | | 27,162 |
Other assets | | | 214,871 | | | 19,772 | | | — | | | 123,564 | | | | 358,207 |
Assets - discontinued operations(3) | | | — | | | — | | | — | | | 103,685 | | | | 103,685 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total assets | | $ | 2,251,494 | | $ | 689,746 | | $ | 73,092 | | $ | 814,028 | | | $ | 3,828,360 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Liabilities | | | | | | | | | | | | | | | | |
Reserve for losses and loss adjustment expenses | | $ | 321,137 | | $ | 18,985 | | $ | — | | $ | 3 | | | $ | 340,125 |
Unearned premiums | | | 79,709 | | | 187,854 | | | — | | | 43 | | | | 267,606 |
Long-term debt | | | — | | | — | | | — | | | 422,950 | | | | 422,950 |
Other liabilities | | | 152,153 | | | 26,107 | | | 4,530 | | | 93,531 | | | | 276,321 |
Liabilities - discontinued operations(3) | | | — | | | — | | | — | | | 43,181 | | | | 43,181 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities | | | 552,999 | | | 232,946 | | | 4,530 | | | 559,708 | | | | 1,350,183 |
| | | | | |
Mandatorily redeemable preferred securities (2) | | | — | | | — | | | — | | | 48,500 | | | | 48,500 |
Shareholders’ equity | | | 1,698,495 | | | 456,800 | | | 68,562 | | | 205,820 | | | | 2,429,677 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities, mandatorily redeemable securities and shareholders’ equity | | $ | 2,251,494 | | $ | 689,746 | | $ | 73,092 | | $ | 814,028 | | | $ | 3,828,360 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
5
THE PMI GROUP, INC. AND SUBSIDIARIES
U.S. MORTGAGE INSURANCE OPERATIONS ANALYSIS OF LOSS RESERVE(4)
| | | | | | | | | | | | | | | |
| | | June 30, 2004
| | March 31, 2004
| | June 30, 2003
|
| | | Loans in
Default
| | Reserve for
Losses
| | Loans in
Default
| | Reserve for
Losses
| | Loans in
Default
| | Reserve for
Losses
|
| | | (Dollars in thousands) |
Primary insurance | | 35,232 | | $ | 302,099 | | 34,762 | | $ | 301,615 | | 34,361 | | $ | 284,596 |
Pool insurance | | 16,804 | | | 32,645 | | 16,810 | | | 32,637 | | 15,559 | | | 36,541 |
| | |
| |
|
| |
| |
|
| |
| |
|
|
Total | | 52,036 | | $ | 334,744 | | 51,572 | | $ | 334,252 | | 49,920 | | $ | 321,137 |
| | |
| |
|
| |
| |
|
| |
| |
|
|
Reconciliation of Reserve for Losses
| | | | | | | | | | | | |
| | | June 30,
2004
| | | March 31,
2004
| | | Reserve
Change
| |
| | | (Dollars in thousands) | |
Gross reserves: | | | | | | | | | | | | |
Primary insurance | | $ | 302,099 | | | $ | 301,615 | | | $ | 484 | |
Pool insurance | | | 32,645 | | | | 32,637 | | | | 8 | |
| | |
|
|
| |
|
|
| |
|
|
|
U.S. Mortgage Insurance operations gross loss reserves | | | 334,744 | | | | 334,252 | | | | 492 | |
| | | |
Ceded Reserves: | | | | | | | | | | | | |
Primary insurance | | | (2,684 | ) | | | (2,769 | ) | | | 85 | |
Pool insurance | | | (117 | ) | | | (112 | ) | | | (5 | ) |
| | |
|
|
| |
|
|
| |
|
|
|
Total ceded loss reserves | | | (2,801 | ) | | | (2,881 | ) | | | 80 | |
| | |
|
|
| |
|
|
| |
|
|
|
U.S. Mortgage Insurance operations net loss reserves | | $ | 331,943 | | | $ | 331,371 | | | $ | 572 | |
| | |
|
|
| |
|
|
| |
|
|
|
U.S. MORTGAGE INSURANCE OPERATIONS STATISTICAL INFORMATION(4)
| | | | | | | | | | | | | | | | |
| | | Three Months Ended June 30,
| | | Six Months Ended June 30,
| |
| | | 2004
| | | 2003
| | | 2004
| | | 2003
| |
Primary new insurance written(in millions) | | $ | 11,407 | | | $ | 15,674 | | | $ | 20,205 | | | $ | 27,916 | |
| | | | |
Primary new risk written (in millions) | | $ | 2,950 | | | $ | 3,622 | | | $ | 5,157 | | | $ | 6,462 | |
| | | | |
Pool insurance written(in millions)(9) | | $ | 2,550 | | | $ | 1,998 | | | $ | 6,453 | | | $ | 4,174 | |
| | | | |
Pool risk written(in millions)(9) | | $ | 64 | | | $ | 78 | | | $ | 139 | | | $ | 156 | |
| | | | |
Product mix as a % of new insurance written: | | | | | | | | | | | | | | | | |
97% LTV’s and above | | | 9 | % | | | 11 | % | | | 10 | % | | | 9 | % |
95% LTV’s | | | 31 | % | | | 25 | % | | | 32 | % | | | 27 | % |
90% LTV’s | | | 40 | % | | | 37 | % | | | 40 | % | | | 39 | % |
95% LTV’s with >= 30% coverage | | | 26 | % | | | 19 | % | | | 26 | % | | | 20 | % |
90% LTV’s with >= 25% coverage | | | 33 | % | | | 28 | % | | | 33 | % | | | 30 | % |
ARMs | | | 21 | % | | | 12 | % | | | 19 | % | | | 10 | % |
Monthlies | | | 98 | % | | | 91 | % | | | 97 | % | | | 92 | % |
Refinances | | | 34 | % | | | 49 | % | | | 34 | % | | | 50 | % |
Bulk transactions | | | 9 | % | | | 20 | % | | | 7 | % | | | 14 | % |
| | | | |
Premiums Written(in thousands): | | | | | | | | | | | | | | | | |
Gross premiums written | | $ | 188,745 | | | $ | 178,897 | | | $ | 381,587 | | | $ | 366,035 | |
Ceded premiums, net of assumed premiums | | | (37,824 | ) | | | (30,878 | ) | | | (74,011 | ) | | | (61,705 | ) |
Refunded premiums | | | (3,514 | ) | | | (5,781 | ) | | | (7,105 | ) | | | (10,404 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net premiums written | | | 147,407 | | | | 142,238 | | | | 300,471 | | | | 293,926 | |
Change in unearned premiums | | | 6,985 | | | | 2,717 | | | | 2,944 | | | | 7,611 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net premiums earned | | $ | 154,392 | | | $ | 144,955 | | | $ | 303,415 | | | $ | 301,537 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
6
THE PMI GROUP, INC. AND SUBSIDIARIES
U.S. MORTGAGE INSURANCE OPERATIONS STATISTICAL INFORMATION(4)
| | | | | | | | | | | | |
| | | June 30,
2004
| | | March 31,
2004
| | | June 30,
2003
| |
Primary insurance in force (in millions) | | $ | 104,206 | | | $ | 104,304 | | | $ | 103,506 | |
Primary risk in force (in millions) | | $ | 24,802 | | | $ | 24,545 | | | $ | 24,089 | |
Pool risk in force(in millions) (9) | | $ | 2,535 | | | $ | 2,565 | | | $ | 2,830 | |
Risk-to-capital ratio (10) | | | 8.6 to 1 | | | | 8.8 to 1 | | | | 10.3 to 1 | |
Insured primary loans | | | 807,822 | | | | 816,624 | | | | 834,207 | |
Persistency | | | 52.8 | % | | | 47.8 | % | | | 46.3 | % |
Primary loans in default | | | 35,232 | | | | 34,762 | | | | 34,361 | |
Primary default rate | | | 4.36 | % | | | 4.26 | % | | | 4.12 | % |
Primary claims paid (year-to-date in thousands) | | $ | 95,066 | | | $ | 44,014 | | | $ | 82,328 | |
Number of primary claims paid(year-to-date) | | | 4,029 | | | | 1,840 | | | | 3,510 | |
Average primary claim size (year-to-date in thousands) | | $ | 23.6 | | | $ | 23.9 | | | $ | 23.5 | |
Percentage of NIW subject to captive reinsurance arrangements(year-to-date) | | | 56.0 | % | | | 55.0 | % | | | 54.1 | % |
Percentage of IIF subject to captive reinsurance arrangements(year-to-date) | | | 52.2 | % | | | 51.3 | % | | | 46.9 | % |
CMG MORTGAGE INSURANCE COMPANY STATISTICAL INFORMATION(4)
| | | | | | | | | | | | |
| | | June 30,
2004
| | | March 31,
2004
| | | June 30,
2003
| |
Primary new insurance written(year-to-date in millions) | | $ | 2,544 | | | $ | 1,021 | | | $ | 3,308 | |
Primary insurance in force(in millions) | | $ | 13,358 | | | $ | 12,735 | | | $ | 11,677 | |
Primary risk in force(in millions) | | $ | 2,991 | | | $ | 2,824 | | | $ | 2,591 | |
Insured primary loans | | | 102,044 | | | | 98,926 | | | | 93,792 | |
Persistency | | | 61.0 | % | | | 55.8 | % | | | 55.9 | % |
Primary loans in default | | | 587 | | | | 544 | | | | 481 | |
Primary default rate(year-to-date) | | | 0.58 | % | | | 0.55 | % | | | 0.51 | % |
Primary claims paid (year-to-date in thousands) | | $ | 2,665 | | | $ | 1,124 | | | $ | 1,172 | |
Number of primary claims paid(year-to-date) | | | 111 | | | | 44 | | | | 54 | |
Average primary claims size(year-to-date in thousands) | | $ | 24.0 | | | $ | 25.5 | | | $ | 21.7 | |
7
THE PMI GROUP, INC. AND SUBSIDIARIES
INTERNATIONAL OPERATIONS STATISTICAL INFORMATION(5)
| | | | | | | | | |
| | | June 30,
2004
| | March 31,
2004
| | June 30,
2003
|
PMI Australia | | | | | | | | | |
Net premium written(year-to-date in thousands) | | $ | 74,169 | | $ | 35,796 | | $ | 49,621 |
Premium earned(year-to-date in thousands) | | $ | 55,590 | | $ | 28,852 | | $ | 37,062 |
Flow insurance written(year-to-date in millions) | | $ | 10,268 | | $ | 5,276 | | $ | 6,386 |
RMBS insurance written(year-to-date in millions) | | | 6,648 | | | 2,987 | | | 2,845 |
| | |
|
| |
|
| |
|
|
Total new insurance written(year-to-date in millions) | | $ | 16,916 | | $ | 8,263 | | $ | 9,231 |
Insurance in force(in millions) | | $ | 91,467 | | $ | 93,232 | | $ | 68,954 |
Risk in force(in millions) | | $ | 82,764 | | $ | 84,458 | | $ | 62,913 |
Loans in default | | | 1,276 | | | 1,309 | | | 1,660 |
Claims paid(year-to-date in thousands) | | $ | 280 | | $ | 198 | | $ | 1,591 |
Number claims paid(year-to-date) | | | 26 | | | 14 | | | 136 |
| | | |
PMI Europe | | | | | | | | | |
Net premium written(year-to-date in thousands) | | $ | 5,167 | | $ | 2,725 | | $ | 3,341 |
Premium earned(year-to-date in thousands) | | $ | 10,399 | | $ | 5,369 | | $ | 3,007 |
New credit default swap written(year-to-date in millions) | | $ | 2,603 | | $ | 2,068 | | $ | 2,483 |
New reinsurance written(year-to-date in millions) | | $ | — | | $ | — | | $ | — |
Insurance in force(in millions) | | $ | 33,346 | | $ | 33,699 | | $ | 8,586 |
Risk in force(in millions) | | $ | 3,251 | | $ | 3,283 | | $ | 599 |
Claims paid(year-to-date in thousands) | | $ | 651 | | $ | 489 | | $ | — |
Number claims paid(year-to-date) | | | 51 | | | 31 | | | — |
8
THE PMI GROUP, INC. AND SUBSIDIARIES
APPENDIX A - U.S. MORTGAGE INSURANCE OPERATIONS STATISTICAL INFORMATION(4)
| | | | | | | | | | | | | | | | | | | | |
| | | 6/30/2004
| | | 3/31/2004
| | | 12/31/2003
| | | 9/30/2003
| | | 6/30/2003
| |
Primary insurance in force(in millions) | | | | | | | | | | | | | | | | | | | | |
Flow | | $ | 92,968 | | | $ | 93,161 | | | $ | 93,279 | | | $ | 92,650 | | | $ | 92,433 | |
Bulk | | $ | 11,238 | | | $ | 11,143 | | | $ | 11,962 | | | $ | 11,924 | | | $ | 11,073 | |
Total | | $ | 104,206 | | | $ | 104,304 | | | $ | 105,241 | | | $ | 104,574 | | | $ | 103,506 | |
| | | | | |
Primary policies in force | | | 807,822 | | | | 816,624 | | | | 827,225 | | | | 829,064 | | | | 834,207 | |
| | | | | |
Primary risk in force - credit score distribution | | | | | | | | | | | | | | | | | | | | |
Flow 619-575 | | | 6.6 | % | | | 6.8 | % | | | 7.1 | % | | | 7.3 | % | | | 7.6 | % |
574 or below | | | 2.0 | % | | | 2.1 | % | | | 2.2 | % | | | 2.3 | % | | | 2.4 | % |
| | | | | |
Bulk 619-575 | | | 21.0 | % | | | 21.3 | % | | | 21.6 | % | | | 22.2 | % | | | 22.0 | % |
574 or below | | | 12.2 | % | | | 12.7 | % | | | 12.8 | % | | | 12.8 | % | | | 12.5 | % |
| | | | | |
Total 619-575 | | | 8.0 | % | | | 8.3 | % | | | 8.6 | % | | | 8.9 | % | | | 9.0 | % |
574 or below | | | 3.0 | % | | | 3.1 | % | | | 3.3 | % | | | 3.4 | % | | | 3.4 | % |
| | | | | |
Primary average loan size(in thousands) | | | | | | | | | | | | | | | | | | | | |
Flow | | $ | 129.3 | | | $ | 128.1 | | | $ | 127.4 | | | $ | 126.2 | | | $ | 124.6 | |
Bulk | | $ | 126.9 | | | $ | 124.9 | | | $ | 126.1 | | | $ | 125.8 | | | $ | 120.2 | |
Total | | $ | 129.0 | | | $ | 127.7 | | | $ | 127.2 | | | $ | 126.1 | | | $ | 124.1 | |
| | | | | |
Loss severity - primary(quarterly) | | | | | | | | | | | | | | | | | | | | |
Flow | | | 83.0 | % | | | 82.1 | % | | | 81.6 | % | | | 78.4 | % | | | 80.8 | % |
Bulk | | | 83.5 | % | | | 82.1 | % | | | 83.4 | % | | | 83.0 | % | | | 84.5 | % |
Total | | | 83.1 | % | | | 82.1 | % | | | 82.2 | % | | | 80.0 | % | | | 82.2 | % |
| | | | | |
ALT-A primary insurance in force(in millions) | | | | | | | | | | | | | | | | | | | | |
| | | | | |
With FICO scores of 660 and above | | $ | 8,590 | | | $ | 7,623 | | | $ | 7,167 | | | $ | 6,570 | | | $ | 5,832 | |
With FICO scores below 660 | | | 1,648 | | | | 1,330 | | | | 1,233 | | | | 1,242 | | | | 1,121 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total ALT-A Primary Insurance In force | | $ | 10,238 | | | $ | 8,953 | | | $ | 8,400 | | | $ | 7,812 | | | $ | 6,953 | |
NEW INSURANCE WRITTEN AND INSURANCE IN FORCE ANALYSIS
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 6/30/2004
| | | 3/31/2004
| | | 12/31/2003
| | | 9/30/2003
| | | 6/30/2003
| | | 3/31/2003
| | | 12/31/2002
| | | 9/30/2002
| |
FICO > 700 and LTV > 80%(in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Primary new insurance written(year to date) | | $ | 8,633 | | | $ | 3,826 | | | $ | 26,172 | | | $ | 20,317 | | | $ | 12,280 | | | $ | 5,737 | | | $ | 21,246 | | | $ | 15,169 | |
Primary insurance in force | | $ | 43,640 | | | $ | 43,660 | | | $ | 43,800 | | | $ | 43,361 | | | $ | 43,354 | | | $ | 45,190 | | | $ | 46,470 | | | $ | 47,887 | |
| | | | | | | | |
Total portfolio(in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Primary new insurance written(year to date) | | $ | 20,205 | | | $ | 8,799 | | | $ | 57,301 | | | $ | 45,429 | | | $ | 27,916 | | | $ | 12,241 | | | $ | 47,803 | | | $ | 34,585 | |
Primary insurance in force | | $ | 104,206 | | | $ | 104,304 | | | $ | 105,241 | | | $ | 104,574 | | | $ | 103,506 | | | $ | 105,518 | | | $ | 107,579 | | | $ | 109,629 | |
| | | | | | | | |
FICO > 700 and LTV > 80% as a percentage of total portfolio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Primary new insurance written(year to date) | | | 42.7 | % | | | 43.5 | % | | | 45.7 | % | | | 44.7 | % | | | 44.0 | % | | | 46.9 | % | | | 44.4 | % | | | 43.9 | % |
Primary insurance in force | | | 41.9 | % | | | 41.9 | % | | | 41.6 | % | | | 41.5 | % | | | 41.9 | % | | | 42.8 | % | | | 43.2 | % | | | 43.7 | % |
9
THE PMI GROUP, INC. AND SUBSIDIARIES
APPENDIX B - INTERNATIONAL OPERATONS SUPPLEMENTAL STATISTICAL INFORMATION(5)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 6/30/04
| | | 3/31/04
| | | 12/31/03
| | | 9/30/03
| | | 6/30/03
| | | 3/31/03
| | | 12/31/02
| | | 9/30/02
| |
| | | | | | | | |
PMI Australia | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Loss ratio | | | 0.7 | % | | | 0.6 | % | | | 1.7 | % | | | -33.2 | % | | | -2.4 | % | | | -5.4 | % | | | 5.8 | % | | | 19.1 | % |
| | | | | | | | |
Expense ratio (8) | | | 23.2 | % | | | 25.1 | % | | | 18.9 | % | | | 20.5 | % | | | 22.7 | % | | | 27.2 | % | | | 39.2 | % | | | 27.0 | % |
| | | | | | | | |
Pre-tax net income(in thousands) | | $ | 27,723 | | | $ | 29,192 | | | $ | 24,757 | | | $ | 29,956 | | | $ | 20,239 | | | $ | 17,412 | | | $ | 15,741 | | | $ | 11,576 | |
| | | | | | | | |
PMI Europe | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Loss ratio | | | 11.7 | % | | | 12.9 | % | | | 7.7 | % | | | 39.6 | % | | | 46.4 | % | | | 32.4 | % | | | 32.5 | % | | | 27.2 | % |
| | | | | | | | |
Expense ratio (8) | | | 48.1 | % | | | 56.1 | % | | | 2.6 | % | | | 70.9 | % | | | 23.4 | % | | | 71.2 | % | | | 28.7 | % | | | 39.8 | % |
| | | | | | | | |
Pre-tax net income(in thousands) | | $ | 6,556 | | | $ | 7,268 | | | $ | 8,159 | | | $ | 1,862 | | | $ | 1,689 | | | $ | 1,194 | | | $ | 1,247 | | | $ | 1,330 | |
| | | | | | | | |
PMI Australia Claims Performance | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Loans in arrears | | | 1,276 | | | | 1,309 | | | | 1,207 | | | | 1,422 | | | | 1,660 | | | | 1,789 | | | | 2,173 | | | | 2,165 | |
Policies in force | | $ | 861,470 | | | $ | 822,467 | | | $ | 800,550 | | | $ | 778,415 | | | $ | 743,458 | | | $ | 735,200 | | | $ | 719,895 | | | $ | 713,786 | |
Arrears percentage | | | 0.15 | % | | | 0.16 | % | | | 0.15 | % | | | 0.18 | % | | | 0.22 | % | | | 0.24 | % | | | 0.30 | % | | | 0.30 | % |
| | | | | | | | |
Gross claims paid(in thousands) | | $ | 131 | | | $ | 258 | | | $ | 568 | | | $ | 975 | | | $ | 1,057 | | | $ | 1,500 | | | $ | 2,215 | | | $ | 2,945 | |
Claim severity | | | 13.9 | % | | | 17.5 | % | | | 17.4 | % | | | 23.3 | % | | | 20.1 | % | | | 24.9 | % | | | 23.3 | % | | | 24.8 | % |
PMI AUSTRALIA INSURANCE IN FORCE INFORMATION
| | | | | | |
| | | 6/30/04
| |
Insurance in force by LTV($ in millions) | | | | |
| | |
0 to 60% | | $ | 14,601 | | 16.0 | % |
60.01 to 70% | | | 9,072 | | 9.9 | % |
70.01 to 80% | | | 23,295 | | 25.5 | % |
80.01 to 85% | | | 7,431 | | 8.1 | % |
85.01 to 90% | | | 20,644 | | 22.6 | % |
90.01 to 95% | | | 15,855 | | 17.3 | % |
95.01% + | | | 569 | | 0.6 | % |
| | |
|
| |
|
|
Total | | $ | 91,467 | | 100.0 | % |
| | |
Insurance in force by geographic location($ in millions) | | | | | | |
| | |
New South Wales | | $ | 33,798 | | 37.0 | % |
Queensland | | | 16,068 | | 17.6 | % |
Victoria | | | 14,314 | | 15.6 | % |
Western Australia | | | 8,715 | | 9.5 | % |
South Australia | | | 5,011 | | 5.5 | % |
Australian Capital Territory | | | 1,599 | | 1.7 | % |
Tasmania | | | 732 | | 0.8 | % |
Northern Territory | | | 511 | | 0.6 | % |
New Zealand | | | 10,719 | | 11.7 | % |
| | |
|
| |
|
|
Total | | $ | 91,467 | | 100.0 | % |
| | |
Insurance in force by underwriting year($ in millions) | | | | | | |
| | |
Prior to 1998 | | $ | 11,982 | | 13.1 | % |
1998 | | | 4,116 | | 4.5 | % |
1999 | | | 4,939 | | 5.4 | % |
2000 | | | 7,043 | | 7.7 | % |
2001 | | | 11,982 | | 13.1 | % |
2002 | | | 13,354 | | 14.6 | % |
2003 | | | 22,135 | | 24.2 | % |
2004 | | | 15,915 | | 17.4 | % |
| | |
|
| |
|
|
Total | | $ | 91,467 | | 100.0 | % |
10
