Exhibit 99.1
NEWS RELEASE
Investors and Media Contacts:
Bill Horning / Beth Haiken
925.658.6193 / 925.658.6192
THE PMI GROUP, INC. REPORTS FOURTH QUARTER
2005 NET INCOME OF $107.7 MILLION, OR $1.11 PER DILUTED SHARE
Walnut Creek, CA, February 7, 2006 - The PMI Group, Inc. (NYSE: PMI) (the “Company”) today reported a 33.8% increase in net income of $107.7 million for the fourth quarter of 2005 compared to net income of $80.5 million for the fourth quarter of 2004. Earnings per diluted share were $1.11 for the fourth quarter of 2005 compared to $0.79 for the fourth quarter of 2004, representing a 40.5% increase.
For the full year, the Company reported record income from continuing operations after income taxes of $409.2 million in 2005 compared to $366.5 million in 2004, an increase of 11.7%. Diluted earnings per share from continuing operations after income taxes were $4.10 per share in 2005 compared to $3.55 per share in 2004, an increase of 15.5%.
Highlights for the fourth quarter of 2005 and the full year 2005 included strong growth in U.S. Mortgage Insurance Operations1 net premiums written and full year incurred losses at the low end of the Company’s guidance, growth in the International Operations2 net income driven by results from PMI Australia and positive results from the Financial Guaranty3 segment led by equity in earnings from FGIC.
The Company’s book value per share as of December 31, 2005 was $36.42 compared to $33.37 at December 31, 2004, representing an increase of 9.1%.
The PMI Group, Inc. Fourth Quarter Results by Segment
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| | | Fourth Quarter Total Revenues
| | | Fourth Quarter Net Income
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| (Dollars in millions, except per share data) | | 2005
| | 2004
| | | % Change
| | | 2005
| | | 2004
| | | % Change
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U.S. Mortgage Insurance Operations | | $ | 197.9 | | $ | 198.4 | | | (0.3 | %) | | $ | 69.9 | | | $ | 69.8 | | | 0.1 | % |
International Operations | | | 54.8 | | | 49.5 | | | 10.7 | % | | | 27.0 | | | | 24.2 | | | 11.6 | % |
Financial Guaranty | | | 21.5 | | | 16.2 | | | 32.7 | % | | | 19.2 | | | | 14.5 | | | 32.4 | % |
Other4 | | | 9.0 | | | (11.3 | ) | | n.m. | | | | (8.4 | ) | | | (28.0 | ) | | n.m. | |
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Total | | $ | 283.2 | | $ | 252.8 | | | 12.0 | % | | $ | 107.7 | | | $ | 80.5 | | | 33.8 | % |
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Diluted Net Income Per Share | | | | | | | | | | | | $ | 1.11 | | | $ | 0.79 | | | 40.5 | % |
Book Value Per Share | | | | | | | | | | | | $ | 36.42 | | | $ | 33.37 | | | 9.1 | % |
May not total due to rounding.
n.m. – Not meaningful
| 1 | “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 Mortgage Insurance Company (CMG). |
| 2 | “International Operations” includes the results of PMI Australia, PMI Europe and the results of operations from the Hong Kong branch operations. |
| 3 | “Financial Guaranty” includes the results of the Financial Guaranty Insurance Company, Inc. (FGIC) with which The PMI Group, Inc. has an equity ownership interest of 42.0% and results from the RAM Reinsurance Group of Companies (RAM Re), a financial guaranty reinsurer based in Bermuda. |
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The PMI Group, Inc. Full Year Results by Segment
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| | | Full Year Total Revenues
| | | Full Year Net Income
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| (Dollars in millions, except per share data) | | 2005
| | 2004
| | % Change
| | | 2005
| | | 2004
| | | % Change
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U.S. Mortgage Insurance Operations | | $ | 792.9 | | $ | 754.1 | | 5.1 | % | | $ | 275.4 | | | $ | 254.5 | | | 8.2 | % |
International Operations | | | 212.4 | | | 191.3 | | 11.0 | % | | | 105.5 | | | | 99.9 | | | 5.6 | % |
Financial Guaranty | | | 79.8 | | | 67.8 | | 17.7 | % | | | 72.2 | | | | 60.7 | | | 18.9 | % |
Other | | | 32.7 | | | 24.9 | | 31.3 | % | | | (43.9 | ) | | | (15.8 | ) | | n.m. | |
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Total | | $ | 1,117.8 | | $ | 1,038.2 | | 7.7 | % | | $ | 409.2 | | | $ | 399.3 | | | 2.5 | % |
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Diluted Net Income Per Share | | | | | | | | | | | $ | 4.10 | | | $ | 3.87 | | | 5.9 | % |
Diluted Net Income from Continuing Operations Per Share | | | | | | | | | | | $ | 4.10 | | | $ | 3.55 | | | 15.5 | % |
May not total due to rounding.
n.m. – Not meaningful
| 4 | The “Other” segment primarily consists of the holding company, contract underwriting operations and Select Portfolio Servicing, Inc. (SPS) prior to its disposition on October 4, 2005. In the fourth quarter of 2004 the Company incurred a $13.3 million (after tax) realized capital loss related to SPS. |
Consolidated Operating Results
Consolidated net premiums written for the fourth quarter and full year 2005 totaled $246.1 million and $845.7 million, respectively, compared to $200.1 million and $771.4 million for the same periods a year ago. The increases were due primarily to an increase in premiums written in U.S. Mortgage Insurance Operations.
Consolidated premiums earned for the fourth quarter and full year 2005 were $206.6 million and $817.6 million, respectively, compared to $202.3 million and $770.4 million for the same periods a year ago. The increases were due primarily to increases in premiums earned in the U.S. Mortgage Insurance Operations and International Operations.
Consolidated losses and loss adjustment expenses for the fourth quarter and full year 2005 totaled $64.8 million and $257.8 million, respectively, compared to $60.1 million and $237.3 million for the same periods a year ago. The increases were due primarily to higher paid claims in the fourth quarter and full year 2005 in the U.S. Mortgage Insurance Operations.
Consolidated other underwriting and operating expensesfor the fourth quarter and full year 2005 totaled $59.1 million and $213.6 million, respectively, compared to $57.8 million and $204.7 million for the same periods a year ago. The increases were due primarily from International Operations, principally from higher profit sharing commissions in PMI Europe related to the continued favorable credit performance of the Royal & Sun Alliance (R&SA) portfolio and an increase in expenses related to implementing new regulatory requirements in PMI Australia.
Consolidated reserve for losses and loss adjustment expenses totaled $368.8 million as of December 31, 2005 compared to $366.3 million as of September 30, 2005 and $364.8 million as of December 31, 2004. The increase for the fourth quarter of 2005
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was attributable to an increase in U.S. Mortgage Insurance Operations claim rates due to the portfolio composition and seasoning of the insurance portfolio and to loss reserve increases due to an increase in notices of defaults from the hurricane impacted areas.
Common shares repurchasedin the fourth quarter of 2005 totaled 1.1 million shares at a total cost of $44.5 million, completing the Company’s $150 million common share repurchase program authorized in July 2005. For the full year 2005, the Company invested $250 million to repurchase a total of 6.3 million common shares at an average cost of $39.74 per share. For the full year 2005, the Company repurchased approximately 7% of its common shares outstanding as of December 31, 2004.
Hurricane Related Items
| | • | | As of December 31, 2005, U.S. Mortgage Insurance Operations provided loss reserves of $2.5 million (pre-tax) for approximately 3,500 pending notices of default (NODs) from the hurricane impacted areas estimated to have a reduced likelihood of generating a claim. Loss reserves were established for all other NODs from the hurricane impacted areas in the normal course of operations. |
| | • | | For the full year 2005, the Company recorded a total of $9.4 million (after tax) in loss reserve increases in the U.S. Mortgage Insurance Operations, reduced equity earnings from Select Portfolio Servicing, Inc. and Financial Guaranty Insurance Company and expenses related to disaster relief donations. |
Segment Highlights
U.S. Mortgage Insurance Operations
| | • | | U.S. Mortgage Insurance Operations realized a 30.7% increase in net premiums written for the fourth quarter of 2005 to $201.2 million as compared to $153.9 million for the fourth quarter of 2004. The increase was primarily due to two large single premium structured transactions completed in the fourth quarter of 2005 and an increase in average overall premium rates. |
| | • | | U.S. Mortgage Insurance Operations total incurred losses for the fourth quarter 2005 were $63.2 million, bringing the full year 2005 total incurred losses to $253.4 million, which was at the low end of the Company’s range of guidance. |
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| | • | | Equity in earnings from CMG for the full year 2005 increased 22.9% to $18.8 million compared to $15.3 million for the full year 2004. |
International Operations
| | • | | PMI Australia reported net income of $23.7 million for the fourth quarter of 2005, an increase of 22.8% over net income for the fourth quarter 2004 of $19.3 million. For the full year 2005, PMI Australia reported net income of $88.5 million compared to $76.3 million for the full year 2004 representing an increase of 16.0% year-over-year. The increases were due primarily to increases in premiums earned, higher investment income and the appreciation of the Australian dollar relative to the U.S. dollar. |
| | • | | PMI Europe reported net income for the quarter and full year of 2005 of $1.6 million and $9.8 million, respectively, compared to $3.5 million and $17.3 million for the same periods a year ago. The decreases in the fourth quarter and full year 2005 were due principally from higher profit sharing commissions related to the continued favorable credit performance of the R&SA portfolio. |
| | • | | PMI’s Hong Kong gross reinsurance premiums written for the full year 2005 totaled $18.4 million compared to $12.8 million for the same period a year ago, an increase of 43.8%. The increase was due primarily to increased policy writings as a result of higher mortgage market volume and increased market penetration. |
Financial Guaranty
| | • | | Equity in earnings from FGIC grew for the fourth quarter and full year 2005 to $18.0 million (after-tax) and $69.1 million (after-tax), respectively, compared to $13.5 million (after-tax) and $56.6 million (after-tax) for the same periods a year ago. The increases were due to higher premiums earned and higher investment income partially offset by an increase in reserves related to Hurricane Katrina for the third quarter of 2005. |
| | • | | Equity in earnings from RAM Re for the fourth quarter and full year 2005 were $1.3 million (after-tax) and $3.1 million (after-tax), respectively, compared to $1.0 million (after-tax) and $4.1 million (after-tax) for the same periods a year ago. |
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Other
| | • | | As previously reported by the Company, on October 4, 2005 the Company completed the sale of all outstanding stock of SPS to Credit Suisse First Boston (USA). In the fourth quarter of 2004, the Company signed a letter of intent granting Credit Suisse First Boston (USA) an option to buy 100% of the outstanding stock of SPS from the Company. As a result of this agreement, the Company incurred a $13.3 million (after tax) realized capital loss on its investment in SPS for the fourth quarter of 2004. |
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 promote homeownership and facilitate 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 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. Readers are cautioned that 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. Risks and uncertainties that could affect the Company are discussed in our Form 10-K for the year ended December 31, 2004 and our Form 10-Q for the quarter ended September 30, 2005 and include changes in economic conditions such as interest rates, home values, employment rates and refinance activity. We undertake no obligation to update forward-looking statements.
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THE PMI GROUP, INC. AND SUBSIDIARIES (the “Company”)
FINANCIAL RESULTS AND STATISTICAL INFORMATION FOR THE PERIOD ENDED DECEMBER 31, 2005
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 December 31, 2005 and 2004 | | Page 3 |
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Business Segments Results of Operations - Year Ended December 31, 2005 and 2004 | | Page 4 |
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Business Segments Balance Sheets | | Page 5 |
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U.S. Mortgage Insurance Operations Analysis of Reserve for Losses and LAE and Financial and Statistical Information | | Page 6 |
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U.S. Mortgage Insurance Operations Financial and Statistical Information | | Page 7 |
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CMG Mortgage Insurance Company, PMI Australia and PMI Europe Financial and Statistical Information | | Page 8 |
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Appendix A - PMI Australia Quarterly Financial Information | | Page 9 |
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Appendix B - PMI Europe Quarterly Financial Information | | Page 10 |
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Appendix C - Business Segments Results of Operations by Quarter | | Page 11 |
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Appendix C - Business Segments Results of Operations by Quarter (Continued) | | Page 12 |
Please refer to the following when noted:
| (1) | For year ended December 31, 2005, the Company’s equity in earnings from unconsolidated subsidiaries include FGIC Corporation, CMG Mortgage Insurance Company (“CMG”), RAM Reinsurance Company, Ltd. (“RAM Re”), other limited partnership interests and the trust subsidiary that issued the Company’s preferred securities. As of December 31, 2004, the equity investment in SPS Holding Corp. (“SPS”) was reclassified from investments in unconsolidated subsidiaries to an equity investment held for sale. Effective January 1, 2005, SPS’s equity earnings are reported in other income. |
| (2) | In the fourth quarter of 2004, the Company recorded a write-down of its equity investment in SPS for $20.4 million (pre-tax). The write-down was recorded as a realized capital loss on its equity investment due to the Company’s decision to sell SPS. |
| (3) | The $2.6 million refund relates to the settlement in 2001 of theBaynham class action litigation. |
| (4) | The operating results, assets and liabilities of American Pioneer Title Insurance Company (“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 and recorded a gain on sale of discontinued operations of $30.1 million, net of $17.1 million of income tax expense. In December 2004, the Company reduced its gain on sale of APTIC by $1.1 million after tax related to the true-up of the Company’s pension liability due to settlement accounting triggered by the sale of APTIC. |
| (5) | U.S. Mortgage Insurance Operations include the operating results of PMI Mortgage Insurance Co. and affiliated U.S. mortgage insurance and reinsurance companies (“PMI”). CMG and its affiliates are included under the equity method of accounting in equity in earnings from unconsolidated subsidiaries. |
| (6) | International Operations include PMI Australia, PMI Europe and the Company’s Hong Kong branch’s results of operations. |
| (7) | Financial Guaranty represents our equity investments in FGIC Corporation and RAM Re. |
| (8) | The “Other” segment includes other income and related operating expenses of PMI Mortgage Services Co.; investment income, interest expense and corporate expenses of The PMI Group, Inc.; the results of Commercial Loans Insurance Co. and WMAC Credit Insurance Corporation; equity in earnings from SPS and certain limited partnerships; and the results from the discontinued operations of APTIC. |
| (9) | The expense ratio is the ratio, expressed as a percentage, of the sum of amortization of deferred policy acquisition costs and other underwriting and operating expenses to net premiums written. The loss ratio is the ratio, expressed as a percentage, of the sum of losses and loss adjustment expenses to premiums earned. |
| (10) | Pool insurance includes modified pool, GSE pool, old pool and all other pool insurance products for U.S. Mortgage Insurance Operations. |
| (11) | Statutory risk-to-capital ratio is for PMI Mortgage Insurance Co. only. |
| Note: | The interim financial and statistical information contained in this material is unaudited. Certain prior year information has been reclassified to conform to the current periods’ presentation. |
THE PMI GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
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| | | Three Months Ended December 31,
| | | Year Ended December 31,
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| | | 2005
| | 2004
| | | 2005
| | 2004
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| | | (Dollars and shares, except per share data, in thousands) | |
Net premiums written | | $ | 246,100 | | $ | 200,103 | | | $ | 845,689 | | $ | 771,362 | |
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Revenues | | | | | | | | | | | | | | |
Premiums earned | | $ | 206,577 | | $ | 202,312 | | | $ | 817,602 | | $ | 770,399 | |
Net investment income | | | 45,499 | | | 42,991 | | | | 179,463 | | | 168,609 | |
Equity in earnings from unconsolidated subsidiaries(1) | | | 25,871 | | | 19,750 | | | | 97,885 | | | 83,554 | |
Net realized investment gains (losses) | | | 153 | | | (275 | ) | | | 2,050 | | | 2,621 | |
Realized capital loss on equity investment held for sale(2) | | | — | | | (20,420 | ) | | | — | | | (20,420 | ) |
Other income | | | 5,058 | | | 8,404 | | | | 20,783 | | | 33,473 | |
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Total revenues | | | 283,158 | | | 252,762 | | | | 1,117,783 | | | 1,038,236 | |
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Losses and expenses | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 64,760 | | | 60,092 | | | | 257,779 | | | 237,282 | |
Amortization of deferred policy acquisition costs | | | 17,387 | | | 19,650 | | | | 74,387 | | | 85,216 | |
Other underwriting and operating expenses | | | 59,074 | | | 57,765 | | | | 213,649 | | | 204,695 | |
Legal settlement refund (3) | | | — | | | — | | | | — | | | (2,574 | ) |
Interest expense | | | 4,654 | | | 8,652 | | | | 31,137 | | | 34,626 | |
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Total losses and expenses | | | 145,875 | | | 146,159 | | | | 576,952 | | | 559,245 | |
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Income from continuing operations before income taxes | | | 137,283 | | | 106,603 | | | | 540,831 | | | 478,991 | |
Income taxes from continuing operations | | | 29,568 | | | 24,952 | | | | 131,662 | | | 112,459 | |
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Income from continuing operations after income taxes | | | 107,715 | | | 81,651 | | | | 409,169 | | | 366,532 | |
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Income from discontinued operations before income taxes(4) | | | — | | | — | | | | — | | | 5,756 | |
Income taxes from discontinued operations(4) | | | — | | | — | | | | — | | | 1,958 | |
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Income from discontinued operations after income taxes (4) | | | — | | | — | | | | — | | | 3,798 | |
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Gain on sale of discontinued operations, net of income taxes of $16,536 (4) | | | — | | | (1,105 | ) | | | — | | | 29,003 | |
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Net income | | $ | 107,715 | | $ | 80,546 | | | $ | 409,169 | | $ | 399,333 | |
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Reconciliation of earnings per share | | | | | | | | | | | | | | |
Net income | | $ | 107,715 | | $ | 80,546 | | | $ | 409,169 | | $ | 399,333 | |
Plus: Interest expense on contingently convertible debt, net of income taxes | | | 1,912 | | | 1,920 | | | | 7,648 | | | 7,685 | |
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Net income adjusted for diluted earnings per share calculation | | $ | 109,627 | | $ | 82,466 | | | $ | 416,817 | | $ | 407,018 | |
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Share data: | | | | | | | | | | | | | | |
Basic weighted average common shares outstanding | | | 89,247 | | | 94,837 | | | | 91,738 | | | 95,452 | |
Stock options and other dilutive components | | | 1,789 | | | 1,446 | | | | 1,729 | | | 1,626 | |
Common stock equivalent shares related to contingently convertible debt | | | 8,153 | | | 8,153 | | | | 8,153 | | | 8,153 | |
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Diluted weighted average common shares outstanding | | | 99,189 | | | 104,436 | | | | 101,620 | | | 105,231 | |
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Per share data: | | | | | | | | | | | | | | |
Diluted net income from continuing operations per share | | $ | 1.11 | | $ | 0.80 | | | $ | 4.10 | | $ | 3.55 | |
Income from discontinued operations after income taxes | | | — | | | — | | | | — | | | 0.04 | |
Gain on sale of discontinued operations, net of income taxes | | | — | | | (0.01 | ) | | | — | | | 0.28 | |
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Diluted net income per share | | $ | 1.11 | | $ | 0.79 | | | $ | 4.10 | | $ | 3.87 | |
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Common share repurchase data: | | | | | | | | | | | | | | |
Common shares repurchased | | | 1,100 | | | 1,484 | | | | 6,292 | | | 2,470 | |
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Average price paid per common share repurchased (including commissions) | | $ | 40.47 | | $ | 40.61 | | | $ | 39.74 | | $ | 40.63 | |
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CONSOLIDATED BALANCE SHEETS
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| | | December 31,
2005
| | December 31,
2004
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| | | (Dollars in thousands, except per share data) |
Assets | | | | | | |
Cash and investments, at fair value | | $ | 3,789,432 | | $ | 3,621,550 |
Investments in unconsolidated subsidiaries(1) | | | 984,925 | | | 911,604 |
Equity investment held for sale(2) | | | — | | | 109,519 |
Related party receivables | | | 2,864 | | | 18,439 |
Reinsurance receivables, reinsurance recoverables and prepaid premiums | | | 30,338 | | | 49,657 |
Deferred policy acquisition costs | | | 86,170 | | | 92,438 |
Other assets | | | 360,407 | | | 342,760 |
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Total assets | | $ | 5,254,136 | | $ | 5,145,967 |
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Liabilities | | | | | | |
Reserve for losses and loss adjustment expenses | | $ | 368,841 | | $ | 364,847 |
Unearned premiums | | | 490,899 | | | 484,815 |
Long-term debt | | | 819,529 | | | 819,529 |
Other liabilities | | | 344,077 | | | 339,021 |
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Total liabilities | | | 2,023,346 | | | 2,008,212 |
Shareholders’ equity | | | 3,230,790 | | | 3,137,755 |
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Total liabilities and shareholders’ equity | | $ | 5,254,136 | | $ | 5,145,967 |
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Basic shares issued and outstanding(shares in thousands) | | | 88,713 | | | 94,025 |
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Book value per share | | $ | 36.42 | | $ | 33.37 |
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2
THE PMI GROUP, INC. AND SUBSIDIARIES
BUSINESS SEGMENTS RESULTS OF OPERATIONS
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| | | U.S. Mortgage
Insurance
Operations(5)
| | | International
Operations (6)
| | | Financial
Guaranty (7)
| | Other(8)
| | | Consolidated
Total
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| | | Three Months Ended December 31, 2005
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| | | (Dollars in thousands) | |
Net premiums written | | $ | 201,160 | | | $ | 44,913 | | | $ | — | | $ | 27 | | | $ | 246,100 | |
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Revenues | | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 166,778 | | | $ | 39,781 | | | $ | — | | $ | 18 | | | $ | 206,577 | |
Net investment income | | | 26,168 | | | | 14,499 | | | | — | | | 4,832 | | | | 45,499 | |
Equity in earnings (losses) from unconsolidated subsidiaries(1) | | | 4,583 | | | | — | | | | 21,453 | | | (165 | ) | | | 25,871 | |
Net realized investment gains (losses) | | | 378 | | | | (221 | ) | | | — | | | (4 | ) | | | 153 | |
Other income (loss) | | | (3 | ) | | | 778 | | | | — | | | 4,283 | | | | 5,058 | |
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Total revenues | | | 197,904 | | | | 54,837 | | | | 21,453 | | | 8,964 | | | | 283,158 | |
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|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Losses and expenses | | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 63,159 | | | | 1,601 | | | | — | | | — | | | | 64,760 | |
Amortization of deferred policy acquisition costs | | | 14,113 | | | | 3,274 | | | | — | | | — | | | | 17,387 | |
Other underwriting and operating expenses | | | 29,057 | | | | 12,663 | | | | — | | | 17,354 | | | | 59,074 | |
Interest expense | | | 1 | | | | 9 | | | | — | | | 4,644 | | | | 4,654 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Total losses and expenses | | | 106,330 | | | | 17,547 | | | | — | | | 21,998 | | | | 145,875 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Income (loss) before income taxes | | | 91,574 | | | | 37,290 | | | | 21,453 | | | (13,034 | ) | | | 137,283 | |
Income taxes (benefits) | | | 21,696 | | | | 10,251 | | | | 2,208 | | | (4,587 | ) | | | 29,568 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Net income (loss) | | $ | 69,878 | | | $ | 27,039 | | | $ | 19,245 | | $ | (8,447 | ) | | $ | 107,715 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Expense ratio(9) | | | 21.5 | % | | | 35.5 | % | | | | | | | | | | | |
Loss ratio(9) | | | 37.9 | % | | | 4.0 | % | | | | | | | | | | | |
Combined ratio | | | 59.4 | % | | | 39.5 | % | | | | | | | | | | | |
| |
| | | Three Months Ended December 31, 2004
| |
| | | (Dollars in thousands) | |
Net premiums written | | $ | 153,916 | | | $ | 46,156 | | | $ | — | | $ | 31 | | | $ | 200,103 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Revenues | | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 168,313 | | | $ | 33,979 | | | $ | — | | $ | 20 | | | $ | 202,312 | |
Net investment income | | | 25,496 | | | | 12,789 | | | | — | | | 4,706 | | | | 42,991 | |
Equity in earnings from unconsolidated subsidiaries(1) | | | 4,569 | | | | — | | | | 16,156 | | | (975 | ) | | | 19,750 | |
Net realized investment losses | | | (12 | ) | | | (263 | ) | | | — | | | — | | | | (275 | ) |
Realized capital loss on equity investment held for sale(2) | | | — | | | | — | | | | — | | | (20,420 | ) | | | (20,420 | ) |
Other income | | | 15 | | | | 3,044 | | | | — | | | 5,345 | | | | 8,404 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Total revenues | | | 198,381 | | | | 49,549 | | | | 16,156 | | | (11,324 | ) | | | 252,762 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Losses and expenses | | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 58,355 | | | | 1,737 | | | | — | | | — | | | | 60,092 | |
Amortization of deferred policy acquisition costs | | | 16,585 | | | | 3,065 | | | | — | | | — | | | | 19,650 | |
Other underwriting and operating expenses | | | 27,258 | | | | 10,235 | | | | — | | | 20,272 | | | | 57,765 | |
Legal settlement refund(3) | | | — | | | | — | | | | — | | | — | | | | — | |
Interest expense | | | 12 | | | | — | | | | — | | | 8,640 | | | | 8,652 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Total losses and expenses | | | 102,210 | | | | 15,037 | | | | — | | | 28,912 | | | | 146,159 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Income (loss) from continuing operations before income taxes | | | 96,171 | | | | 34,512 | | | | 16,156 | | | (40,236 | ) | | | 106,603 | |
Income taxes (benefits) from continuing operations | | | 26,328 | | | | 10,274 | | | | 1,689 | | | (13,339 | ) | | | 24,952 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Income (loss) from continuing operations after income taxes | | | 69,843 | | | | 24,238 | | | | 14,467 | | | (26,897 | ) | | | 81,651 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Loss on sale of discontinued operations, net of tax benefit(4) | | | — | | | | — | | | | — | | | (1,105 | ) | | | (1,105 | ) |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Net income (loss) | | $ | 69,843 | | | $ | 24,238 | | | $ | 14,467 | | $ | (28,002 | ) | | $ | 80,546 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Expense ratio(9) | | | 28.5 | % | | | 28.8 | % | | | | | | | | | | | |
Loss ratio (9) | | | 34.7 | % | | | 5.1 | % | | | | | | | | | | | |
Combined ratio | | | 63.2 | % | | | 33.9 | % | | | | | | | | | | | |
3
THE PMI GROUP, INC. AND SUBSIDIARIES
BUSINESS SEGMENTS RESULTS OF OPERATIONS
| | | | | | | | | | | | | | | | | | | |
| | | U.S. Mortgage
Insurance
Operations(5)
| | | International
Operations (6)
| | | Financial
Guaranty (7)
| | Other(8)
| | | Consolidated
Total
| |
| | | Year Ended December 31, 2005
| |
| | | (Dollars in thousands) | |
Net premiums written | | $ | 667,128 | | | $ | 178,481 | | | $ | — | | $ | 80 | | | $ | 845,689 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Revenues | | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 665,190 | | | $ | 152,336 | | | $ | — | | $ | 76 | | | $ | 817,602 | |
Net investment income | | | 104,339 | | | | 57,155 | | | | — | | | 17,969 | | | | 179,463 | |
Equity in earnings (loss) from unconsolidated subsidiaries(1) | | | 18,811 | | | | — | | | | 79,752 | | | (678 | ) | | | 97,885 | |
Net realized investment gains (losses) | | | 4,563 | | | | 75 | | | | — | | | (2,588 | ) | | | 2,050 | |
Other income (loss) | | | (1 | ) | | | 2,825 | | | | — | | | 17,959 | | | | 20,783 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Total revenues | | | 792,902 | | | | 212,391 | | | | 79,752 | | | 32,738 | | | | 1,117,783 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Losses and expenses | | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 253,440 | | | | 4,339 | | | | — | | | — | | | | 257,779 | |
Amortization of deferred policy acquisition costs | | | 59,647 | | | | 14,740 | | | | — | | | — | | | | 74,387 | |
Other underwriting and operating expenses | | | 103,149 | | | | 41,855 | | | | — | | | 68,645 | | | | 213,649 | |
Interest expense | | | 6 | | | | 8 | | | | — | | | 31,123 | | | | 31,137 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Total losses and expenses | | | 416,242 | | | | 60,942 | | | | — | | | 99,768 | | | | 576,952 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Income (loss) before income taxes | | | 376,660 | | | | 151,449 | | | | 79,752 | | | (67,030 | ) | | | 540,831 | |
Income tax (benefit) | | | 101,221 | | | | 45,996 | | | | 7,553 | | | (23,108 | ) | | | 131,662 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Net income (loss) | | $ | 275,439 | | | $ | 105,453 | | | $ | 72,199 | | $ | (43,922 | ) | | $ | 409,169 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Expense ratio(9) | | | 24.4 | % | | | 31.7 | % | | | | | | | | | | | |
Loss ratio(9) | | | 38.1 | % | | | 2.8 | % | | | | | | | | | | | |
Combined ratio | | | 62.5 | % | | | 34.5 | % | | | | | | | | | | | |
| |
| | | Year Ended December 31, 2004
| |
| | | (Dollars in thousands) | |
Net premiums written | | $ | 598,119 | | | $ | 173,178 | | | $ | — | | $ | 65 | | | $ | 771,362 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Revenues | | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 634,004 | | | $ | 136,321 | | | $ | — | | $ | 74 | | | $ | 770,399 | |
Net investment income | | | 102,230 | | | | 47,091 | | | | — | | | 19,288 | | | | 168,609 | |
Equity in earnings from unconsolidated subsidiaries(1) | | | 15,280 | | | | — | | | | 67,844 | | | 430 | | | | 83,554 | |
Net realized investment gains (losses) | | | 2,582 | | | | 595 | | | | — | | | (556 | ) | | | 2,621 | |
Realized capital loss on equity investment held for sale(2) | | | — | | | | — | | | | — | | | (20,420 | ) | | | (20,420 | ) |
Other income | | | 47 | | | | 7,342 | | | | — | | | 26,084 | | | | 33,473 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Total revenues | | | 754,143 | | | | 191,349 | | | | 67,844 | | | 24,900 | | | | 1,038,236 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Losses and expenses | | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 233,157 | | | | 4,125 | | | | — | | | — | | | | 237,282 | |
Amortization of deferred policy acquisition costs | | | 72,129 | | | | 13,087 | | | | — | | | — | | | | 85,216 | |
Other underwriting and operating expenses | | | 101,387 | | | | 31,388 | | | | — | | | 71,920 | | | | 204,695 | |
Legal settlement refund(3) | | | (2,574 | ) | | | — | | | | — | | | — | | | | (2,574 | ) |
Interest expense | | | 62 | | | | 73 | | | | — | | | 34,491 | | | | 34,626 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Total losses and expenses | | | 404,161 | | | | 48,673 | | | | — | | | 106,411 | | | | 559,245 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Income (loss) from continuing operations before income taxes | | | 349,982 | | | | 142,676 | | | | 67,844 | | | (81,511 | ) | | | 478,991 | |
Income taxes (benefits) from continuing operations | | | 95,467 | | | | 42,761 | | | | 7,142 | | | (32,911 | ) | | | 112,459 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Income (loss) from continuing operations after income taxes | | | 254,515 | | | | 99,915 | | | | 60,702 | | | (48,600 | ) | | | 366,532 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Income from discontinued operations before taxes(4) | | | — | | | | — | | | | — | | | 5,756 | | | | 5,756 | |
Income taxes from discontinued operations(4) | | | — | | | | — | | | | — | | | 1,958 | | | | 1,958 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Income from discontinued operations after income taxes(4) | | | — | | | | — | | | | — | | | 3,798 | | | | 3,798 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Gain on sale of discontinued operations, net of income taxes (4) | | | — | | | | — | | | | — | | | 29,003 | | | | 29,003 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Net income (loss) | | $ | 254,515 | | | $ | 99,915 | | | $ | 60,702 | | $ | (15,799 | ) | | $ | 399,333 | |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
|
Expense ratio(9) | | | 28.5 | % | | | 25.7 | % | | | | | | | | | | | |
Loss ratio(9) | | | 36.8 | % | | | 3.0 | % | | | | | | | | | | | |
Combined ratio | | | 65.3 | % | | | 28.7 | % | | | | | | | | | | | |
4
THE PMI GROUP, INC. AND SUBSIDIARIES
BUSINESS SEGMENTS BALANCE SHEETS
| | | | | | | | | | | | | | | | |
| | | U.S. Mortgage
Insurance
Operations(5)
| | International
Operations (6)
| | Financial
Guaranty (7)
| | Other(8)
| | | Consolidated
Total
|
| | | December 31, 2005
|
| | | (Dollars in thousands) |
Assets | | | | | | | | | | | | | | | | |
Cash and investments, at fair value | | $ | 2,108,853 | | $ | 1,093,505 | | $ | — | | $ | 587,074 | | | $ | 3,789,432 |
Investments in unconsolidated subsidiaries(1) | | | 129,600 | | | — | | | 836,752 | | | 18,573 | | | | 984,925 |
Related party receivables | | | 2,700 | | | — | | | — | | | 164 | | | | 2,864 |
Reinsurance receivables, recoverables and prepaid premiums | | | 24,576 | | | 5,762 | | | — | | | — | | | | 30,338 |
Deferred policy acquisition costs | | | 48,310 | | | 37,860 | | | — | | | — | | | | 86,170 |
Other assets | | | 207,436 | | | 25,260 | | | — | | | 127,711 | | | | 360,407 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total assets | | $ | 2,521,475 | | $ | 1,162,387 | | $ | 836,752 | | $ | 733,522 | | | $ | 5,254,136 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Liabilities | | | | | | | | | | | | | | | | |
Reserve for losses and loss adjustment expenses | | $ | 345,536 | | $ | 23,302 | | $ | — | | $ | 3 | | | $ | 368,841 |
Unearned premiums | | | 162,368 | | | 328,489 | | | — | | | 42 | | | | 490,899 |
Long-term debt | | | — | | | — | | | — | | | 819,529 | | | | 819,529 |
Other liabilities | | | 248,343 | | | 79,610 | | | 19,204 | | | (3,080 | ) | | | 344,077 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities | | | 756,247 | | | 431,401 | | | 19,204 | | | 816,494 | | | | 2,023,346 |
Shareholders’ equity | | | 1,765,228 | | | 730,986 | | | 817,548 | | | (82,972 | ) | | | 3,230,790 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities and shareholders’ equity | | $ | 2,521,475 | | $ | 1,162,387 | | $ | 836,752 | | $ | 733,522 | | | $ | 5,254,136 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
| |
| | | December 31, 2004
|
| | | (Dollars in thousands) |
Assets | | | | | | | | | | | | | | | | |
Cash and investments, at fair value | | $ | 2,132,300 | | $ | 1,030,751 | | $ | — | | $ | 458,499 | | | $ | 3,621,550 |
Investments in unconsolidated subsidiaries(1) | | | 112,456 | | | — | | | 774,880 | | | 24,268 | | | | 911,604 |
Equity investment held for sale(2) | | | — | | | — | | | — | | | 109,519 | | | | 109,519 |
Related party receivables | | | 1,633 | | | — | | | — | | | 16,806 | | | | 18,439 |
Reinsurance receivables, recoverables and prepaid premiums | | | 31,110 | | | 18,547 | | | — | | | — | | | | 49,657 |
Deferred policy acquisition costs | | | 53,998 | | | 38,440 | | | — | | | — | | | | 92,438 |
Other assets | | | 208,806 | | | 26,460 | | | — | | | 107,494 | | | | 342,760 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total assets | | $ | 2,540,303 | | $ | 1,114,198 | | $ | 774,880 | | $ | 716,586 | | | $ | 5,145,967 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Liabilities | | | | | | | | | | | | | | | | |
Reserve for losses and loss adjustment expenses | | $ | 338,620 | | $ | 26,224 | | $ | — | | $ | 3 | | | $ | 364,847 |
Unearned premiums | | | 152,685 | | | 332,091 | | | — | | | 39 | | | | 484,815 |
Long-term debt | | | — | | | — | | | — | | | 819,529 | | | | 819,529 |
Other liabilities | | | 237,431 | | | 71,740 | | | 12,424 | | | 17,426 | | | | 339,021 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities | | | 728,736 | | | 430,055 | | | 12,424 | | | 836,997 | | | | 2,008,212 |
Shareholders’ equity | | | 1,811,567 | | | 684,143 | | | 762,456 | | | (120,411 | ) | | | 3,137,755 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities and shareholders’ equity | | $ | 2,540,303 | | $ | 1,114,198 | | $ | 774,880 | | $ | 716,586 | | | $ | 5,145,967 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
5
THE PMI GROUP, INC. AND SUBSIDIARIES
U.S. MORTGAGE INSURANCE OPERATIONS(5) ANALYSIS OF RESERVE FOR LOSSES AND LAE
| | | | | | | | | | | | | | | |
| | | December 31, 2005
| | September 30, 2005
| | December 31, 2004
|
| | | Loans in
Default
| | Reserve for
Losses and LAE
| | Loans in
Default
| | Reserve for
Losses and LAE
| | Loans in
Default
| | Reserve for
Losses and LAE
|
| | | | | | | (Dollars in thousands) | | | | |
Primary insurance | | 42,702 | | $ | 307,066 | | 38,146 | | $ | 302,925 | | 39,054 | | $ | 306,023 |
Pool insurance | | 20,379 | | | 38,470 | | 19,037 | | | 39,249 | | 17,186 | | | 32,597 |
| | |
| |
|
| |
| |
|
| |
| |
|
|
Total | | 63,081 | | $ | 345,536 | | 57,183 | | $ | 342,174 | | 56,240 | | $ | 338,620 |
| | |
| |
|
| |
| |
|
| |
| |
|
|
Reconciliation of Reserve for Losses and LAE
| | | | | | | | | | | | |
| | | December 31,
2005
| | | September 30,
2005
| | | Reserve
Change
| |
| | | (Dollars in thousands) | |
Gross reserve for losses and LAE: | | | | | | | | | | | | |
Primary insurance | | $ | 307,066 | | | $ | 302,925 | | | $ | 4,141 | |
Pool insurance | | | 38,470 | | | | 39,249 | | | | (779 | ) |
| | |
|
|
| |
|
|
| |
|
|
|
Total gross reserve for losses and LAE | | | 345,536 | | | | 342,174 | | | | 3,362 | |
Ceded reserve for losses: | | | | | | | | | | | | |
Primary insurance | | | (2,422 | ) | | | (2,595 | ) | | | 173 | |
Pool insurance | | | (55 | ) | | | (89 | ) | | | 34 | |
| | |
|
|
| |
|
|
| |
|
|
|
Total ceded reserve for losses | | | (2,477 | ) | | | (2,684 | ) | | | 207 | |
| | |
|
|
| |
|
|
| |
|
|
|
Net reserve for losses and LAE | | $ | 343,059 | | | $ | 339,490 | | | $ | 3,569 | |
| | |
|
|
| |
|
|
| |
|
|
|
U.S. MORTGAGE INSURANCE OPERATIONS(5) FINANCIAL AND STATISTICAL INFORMATION
| | | | | | | | | | | | | | | | |
| | | Three Months Ended December 31,
| | | Year Ended December 31,
| |
| | | 2005
| | | 2004
| | | 2005
| | | 2004
| |
Flow insurance written(in millions) | | $ | 6,625 | | | $ | 8,259 | | | $ | 28,194 | | | $ | 36,257 | |
Structured transactions insurance written(in millions) | | | 2,751 | | | | 2,260 | | | | 7,740 | | | | 4,956 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Primary new insurance written(in millions) | | $ | 9,376 | | | $ | 10,519 | | | $ | 35,934 | | | $ | 41,213 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Primary new risk written(in millions) | | $ | 2,392 | | | $ | 2,741 | | | $ | 9,237 | | | $ | 10,680 | |
Pool new insurance written(in millions)(10) | | $ | 4,369 | | | $ | 3,043 | | | $ | 14,062 | | | $ | 10,454 | |
Pool new risk written(in millions)(10) | | $ | 102 | | | $ | 84 | | | $ | 327 | | | $ | 251 | |
Product mix as a % of new insurance written: | | | | | | | | | | | | | | | | |
Above 97% LTV’s | | | 13 | % | | | 15 | % | | | 13 | % | | | 12 | % |
90.01% to 95% LTV’s | | | 21 | % | | | 26 | % | | | 24 | % | | | 30 | % |
85.01% to 90% LTV’s | | | 44 | % | | | 36 | % | | | 43 | % | | | 38 | % |
90.01% to 95% LTV’s with >= 30% coverage | | | 17 | % | | | 22 | % | | | 20 | % | | | 25 | % |
85.01% to 90% LTV’s with >= 25% coverage | | | 38 | % | | | 31 | % | | | 37 | % | | | 32 | % |
ARMs | | | 36 | % | | | 33 | % | | | 33 | % | | | 25 | % |
Monthlies | | | 85 | % | | | 98 | % | | | 94 | % | | | 98 | % |
Refinances | | | 37 | % | | | 33 | % | | | 36 | % | | | 32 | % |
Structured transactions | | | 29 | % | | | 21 | % | | | 22 | % | | | 12 | % |
Premiums written(in thousands): | | | | | | | | | | | | | | | | |
Gross premiums written | | $ | 246,432 | | | $ | 197,953 | | | $ | 849,209 | | | $ | 767,399 | |
Ceded premiums, net of assumed premiums | | | (41,450 | ) | | | (40,613 | ) | | | (167,778 | ) | | | (155,274 | ) |
Refunded premiums | | | (3,822 | ) | | | (3,424 | ) | | | (14,303 | ) | | | (14,006 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net premiums written | | | 201,160 | | | | 153,916 | | | | 667,128 | | | | 598,119 | |
Change in unearned premiums | | | (34,382 | ) | | | 14,397 | | | | (1,938 | ) | | | 35,885 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net premiums earned | | $ | 166,778 | | | $ | 168,313 | | | $ | 665,190 | | | $ | 634,004 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
6
THE PMI GROUP, INC. AND SUBSIDIARIES
U.S. MORTGAGE INSURANCE OPERATIONS(5) FINANCIAL AND STATISTICAL INFORMATION
| | | | | | | | | | | | | | | | | | | | | | |
| | | | | 12/31/2005
| | | 9/30/2005
| | | 6/30/2005
| | | 3/31/2005
| | | 12/31/2004
| |
Primary insurance in force(in millions) | | | | | | | | | | | | | | | | | | | | |
Flow | | $ | 86,991 | | | $ | 88,433 | | | $ | 89,965 | | | $ | 91,399 | | | $ | 93,263 | |
Structured transactions | | | 14,099 | | | | 12,788 | | | | 13,469 | | | | 12,598 | | | | 12,058 | |
| | | | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total | | $ | 101,090 | | | $ | 101,221 | | | $ | 103,434 | | | $ | 103,997 | | | $ | 105,321 | |
| | | | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | |
Primary risk in force(in millions) | | | | | | | | | | | | | | | | | | | | |
Flow | | $ | 21,644 | | | $ | 21,981 | | | $ | 22,296 | | | $ | 22,541 | | | $ | 22,885 | |
Structured transactions | | | 3,584 | | | | 3,167 | | | | 3,296 | | | | 2,966 | | | | 2,773 | |
| | | | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total | | $ | 25,228 | | | $ | 25,148 | | | $ | 25,592 | | | $ | 25,507 | | | $ | 25,658 | |
| | | | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | |
Pool risk in force (in millions)(10) | | $ | 2,589 | | | $ | 2,530 | | | $ | 2,445 | | | $ | 2,417 | | | $ | 2,408 | |
| | | | | |
Primary risk in force - credit score distribution | | | | | | | | | | | | | | | | | | | | |
Flow | | 620 or above | | | 93.0 | % | | | 92.7 | % | | | 92.4 | % | | | 92.2 | % | | | 92.0 | % |
| | | 619-575 | | | 5.5 | % | | | 5.7 | % | | | 5.9 | % | | | 6.1 | % | | | 6.2 | % |
| | | 574 or below | | | 1.5 | % | | | 1.6 | % | | | 1.7 | % | | | 1.7 | % | | | 1.8 | % |
| | | | | | |
Structured transactions | | 620 or above | | | 76.9 | % | | | 73.9 | % | | | 71.7 | % | | | 66.9 | % | | | 65.9 | % |
| | | 619-575 | | | 14.5 | % | | | 16.0 | % | | | 17.4 | % | | | 20.2 | % | | | 21.1 | % |
| | | 574 or below | | | 8.6 | % | | | 10.1 | % | | | 10.9 | % | | | 12.9 | % | | | 13.0 | % |
| | | | | | |
Total | | 620 or above | | | 90.7 | % | | | 90.3 | % | | | 89.7 | % | | | 89.3 | % | | | 89.2 | % |
| | | 619-575 | | | 6.8 | % | | | 7.0 | % | | | 7.4 | % | | | 7.7 | % | | | 7.8 | % |
| | | 574 or below | | | 2.5 | % | | | 2.7 | % | | | 2.9 | % | | | 3.0 | % | | | 3.0 | % |
| | | | | |
Primary average loan size(in thousands) | | | | | | | | | | | | | | | | | | | | |
Flow | | $ | 134.5 | | | $ | 133.3 | | | $ | 132.2 | | | $ | 131.5 | | | $ | 131.3 | |
Structured transactions | | $ | 145.4 | | | $ | 139.5 | | | $ | 139.8 | | | $ | 134.1 | | | $ | 129.8 | |
Total | | $ | 136.0 | | | $ | 134.1 | | | $ | 133.2 | | | $ | 131.8 | | | $ | 131.1 | |
| | | | | |
Loss severity - primary(quarterly) | | | | | | | | | | | | | | | | | | | | |
Flow | | | 95.6 | % | | | 84.0 | % | | | 83.8 | % | | | 85.6 | % | | | 84.9 | % |
Structured transactions | | | 93.1 | % | | | 89.6 | % | | | 87.7 | % | | | 90.9 | % | | | 84.6 | % |
Total | | | 95.0 | % | | | 85.2 | % | | | 84.6 | % | | | 86.8 | % | | | 84.8 | % |
| | | | | |
Persistency | | | 61.9 | % | | | 61.2 | % | | | 62.0 | % | | | 60.8 | % | | | 60.9 | % |
| | | | | |
Primary loans, defaults and default rates | | | | | | | | | | | | | | | | | | | | |
Primary policies in force | | | 743,533 | | | | 754,934 | | | | 776,721 | | | | 788,847 | | | | 803,236 | |
| | | | | |
Primary loans in default | | | 42,702 | | | | 38,146 | | | | 35,030 | | | | 35,716 | | | | 39,054 | |
| | | | | |
Primary default rate | | | 5.74 | % | | | 5.05 | % | | | 4.51 | % | | | 4.53 | % | | | 4.86 | % |
Structured transactions only default rate | | | 9.85 | % | | | 10.09 | % | | | 8.54 | % | | | 8.17 | % | | | 9.19 | % |
Pool default rate | | | 6.84 | % | | | 6.34 | % | | | 5.65 | % | | | 5.65 | % | | | 5.51 | % |
| | | | | |
Claims paid(year-to-date in thousands) | | | | | | | | | | | | | | | | | | | | |
Primary claims paid - flow | | $ | 165.8 | | | $ | 126.6 | | | $ | 87.8 | | | $ | 41.7 | | | $ | 141.3 | |
Primary claims paid - structured transactions | | | 49.1 | | | | 36.8 | | | | 25.4 | | | | 13.8 | | | | 51.9 | |
| | | | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total primary claims paid | | | 214.9 | | | | 163.4 | | | | 113.2 | | | | 55.5 | | | | 193.2 | |
Total pool and other | | | 20.1 | | | | 15.0 | | | | 9.6 | | | | 4.7 | | | | 17.7 | |
| | | | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total claims paid | | $ | 235.0 | | | $ | 178.4 | | | $ | 122.8 | | | $ | 60.2 | | | $ | 210.9 | |
| | | | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | | |
Number of primary claims paid(year-to-date) | | | 9,262 | | | | 7,124 | | | | 4,934 | | | | 2,413 | | | | 8,335 | |
| | | | | |
Average primary claim size(year-to-date in thousands) | | $ | 23.2 | | | $ | 22.9 | | | $ | 22.9 | | | $ | 23.0 | | | $ | 23.2 | |
| | | | | |
Captive reinsurance arrangements(year-to-date) | | | | | | | | | | | | | | | | | | | | |
Percentage of flow NIW subject to captive reinsurance arrangements | | | 69.0 | % | | | 68.0 | % | | | 65.0 | % | | | 60.4 | % | | | 62.8 | % |
Percentage of primary NIW subject to captive reinsurance arrangements | | | 54.7 | % | | | 55.7 | % | | | 50.7 | % | | | 47.1 | % | | | 55.7 | % |
Percentage of primary IIF subject to captive reinsurance arrangements | | | 53.4 | % | | | 53.2 | % | | | 52.1 | % | | | 52.4 | % | | | 52.0 | % |
Percentage of primary RIF subject to captive reinsurance arrangements | | | 53.8 | % | | | 53.9 | % | | | 52.9 | % | | | 53.5 | % | | | 53.2 | % |
| | | | | |
Risk-to-capital ratio(11) | | | 8.3 to 1 | | | | 8.1 to 1 | | | | 8.4 to 1 | | | | 8.1 to 1 | | | | 8.2 to 1 | |
7
THE PMI GROUP, INC. AND SUBSIDIARIES
CMG MORTGAGE INSURANCE COMPANY FINANCIAL AND STATISTICAL INFORMATION
| | | | | | | | | | | | |
| | | December 31,
2005
| | | September 30,
2005
| | | December 31,
2004
| |
Primary new insurance written(year-to-date in millions) | | $ | 5,388 | | | $ | 4,234 | | | $ | 5,355 | |
Primary insurance in force(in millions) | | $ | 15,495 | | | $ | 15,358 | | | $ | 14,037 | |
Primary risk in force(in millions) | | $ | 3,666 | | | $ | 3,607 | | | $ | 3,219 | |
Insured primary loans | | | 111,472 | | | | 111,217 | | | | 105,568 | |
Persistency | | | 72.0 | % | | | 70.2 | % | | | 69.1 | % |
Primary loans in default | | | 907 | | | | 632 | | | | 666 | |
Primary default rate | | | 0.81 | % | | | 0.57 | % | | | 0.63 | % |
Primary claims paid(year-to-date in thousands) | | $ | 4,827 | | | $ | 3,152 | | | $ | 5,111 | |
Number of primary claims paid(year-to-date) | | | 222 | | | | 149 | | | | 244 | |
Average primary claim size (year-to-date in thousands) | | $ | 21.7 | | | $ | 21.2 | | | $ | 20.9 | |
PMI AUSTRALIA FINANCIAL AND STATISTICAL INFORMATION
| | | | | | | | | | | | |
| | | December 31,
2005
| | | September 30,
2005
| | | December 31,
2004
| |
Net premiums written(year-to-date in thousands) | | $ | 151,882 | | | $ | 112,320 | | | $ | 151,164 | |
Premiums earned(year-to-date in thousands) | | $ | 123,781 | | | $ | 91,096 | | | $ | 109,071 | |
Flow insurance written(year-to-date in millions) | | $ | 18,321 | | | $ | 13,648 | | | $ | 19,540 | |
RMBS insurance written(year-to-date in millions) | | | 10,671 | | | | 9,484 | | | | 14,669 | |
| | |
|
|
| |
|
|
| |
|
|
|
New insurance written(year-to-date in millions) | | $ | 28,992 | | | $ | 23,132 | | | $ | 34,209 | |
| | |
|
|
| |
|
|
| |
|
|
|
Insurance in force(in millions) | | $ | 119,915 | | | $ | 124,014 | | | $ | 113,628 | |
Risk in force(in millions) | | $ | 108,751 | | | $ | 113,028 | | | $ | 103,135 | |
Policies in force | | | 981,732 | | | | 994,330 | | | | 926,073 | |
Loans in default | | | 1,264 | | | | 1,007 | | | | 751 | |
Default rate | | | 0.13 | % | | | 0.10 | % | | | 0.08 | % |
Claims paid(year-to-date in thousands) | | $ | 3,261 | | | $ | 1,807 | | | $ | 1,111 | |
Number of claims paid(year-to-date) | | | 93 | | | | 56 | | | | 65 | |
Average claim size(year-to-date in thousands) | | $ | 35.1 | | | $ | 32.3 | | | $ | 17.1 | |
PMI EUROPE FINANCIAL AND STATISTICAL INFORMATION
| | | | | | | | | |
| | | December 31,
2005
| | September 30,
2005
| | December 31,
2004
|
Net premiums written(year-to-date in thousands) | | $ | 8,921 | | $ | 5,444 | | $ | 9,568 |
Premiums earned(year-to-date in thousands) | | $ | 17,507 | | $ | 13,083 | | $ | 20,944 |
New insurance written (year-to-date in millions) | | $ | 33 | | $ | — | | $ | — |
New credit default swaps written (year-to-date in millions) | | $ | 514 | �� | $ | 514 | | $ | 2,603 |
New reinsurance written (year-to-date in millions) | | $ | 6,215 | | $ | 2,992 | | $ | — |
Insurance in force (in millions) | | $ | 38,443 | | $ | 34,501 | | $ | 34,332 |
Risk in force (in millions) | | $ | 2,776 | | $ | 2,894 | | $ | 2,747 |
Claims paid including credit default swaps(year-to-date in thousands) | | $ | 2,761 | | $ | 1,685 | | $ | 979 |
8
THE PMI GROUP, INC. AND SUBSIDIARIES
APPENDIX A - PMI AUSTRALIA QUARTERLY FINANCIAL INFORMATION
| | | | | | | | | | | | | | | | |
| | | 2005
| |
| | | 4th Quarter
| | | 3rd Quarter
| | | 2nd Quarter
| | | 1st Quarter
| |
| | | (Australian $ in thousands, unless otherwise noted) | |
Income Statement Components - Quarter Ended | | | | | | | | | | | | | | | | |
| | | | |
Premiums earned | | $ | 43,959 | | | $ | 41,815 | | | $ | 38,929 | | | $ | 37,840 | |
Net investment income | | $ | 16,257 | | | $ | 15,854 | | | $ | 14,966 | | | $ | 14,705 | |
Change in fair value of foreign currency put options | | $ | (24 | ) | | $ | (232 | ) | | $ | (422 | ) | | $ | (1,338 | ) |
Total expenses | | $ | 17,226 | | | $ | 13,632 | | | $ | 15,104 | | | $ | 13,788 | |
Net income | | $ | 31,906 | | | $ | 31,079 | | | $ | 26,725 | | | $ | 26,487 | |
| | | | |
Net income(U.S.$ in thousands) | | $ | 23,728 | | | $ | 23,623 | | | $ | 20,541 | | | $ | 20,584 | |
| | | | |
Balance Sheet Components | | | | | | | | | | | | | | | | |
| | | | |
Assets | | | | | | | | | | | | | | | | |
Cash and investments, at fair value | | $ | 1,197,016 | | | $ | 1,147,390 | | | $ | 1,090,399 | | | $ | 1,037,704 | |
Total assets | | $ | 1,275,573 | | | $ | 1,225,683 | | | $ | 1,188,574 | | | $ | 1,132,961 | |
| | | | |
Liabilities and Shareholder’s Equity | | | | | | | | | | | | | | | | |
Reserve for losses and LAE | | $ | 11,573 | | | $ | 11,156 | | | $ | 12,541 | | | $ | 12,549 | |
Unearned premiums | | $ | 415,885 | | | $ | 406,661 | | | $ | 395,113 | | | $ | 382,781 | |
Shareholder’s equity | | $ | 793,045 | | | $ | 757,372 | | | $ | 730,113 | | | $ | 689,927 | |
| |
| | | 2004
| |
| | | 4th Quarter
| | | 3rd Quarter
| | | 2nd Quarter
| | | 1st Quarter
| |
| | | (Australian $ in thousands, unless otherwise noted) | |
Income Statement Components - Quarter Ended | | | | | | | | | | | | | | | | |
| | | | |
Premiums earned | | $ | 35,819 | | | $ | 37,109 | | | $ | 37,308 | | | $ | 37,790 | |
Net investment income | | $ | 14,087 | | | $ | 13,098 | | | $ | 12,677 | | | $ | 12,139 | |
Change in fair value of foreign currency put options | | $ | (228 | ) | | $ | (1,890 | ) | | $ | 1,311 | | | $ | — | |
Total expenses | | $ | 13,624 | | | $ | 13,413 | | | $ | 12,799 | | | $ | 12,030 | |
Net income | | $ | 25,447 | | | $ | 24,725 | | | $ | 26,832 | | | $ | 26,518 | |
| | | | |
Net income(U.S.$ in thousands) | | $ | 19,272 | | | $ | 17,554 | | | $ | 19,219 | | | $ | 20,265 | |
| | | | |
Balance Sheet Components | | | | | | | | | | | | | | | | |
| | | | |
Assets | | | | | | | | | | | | | | | | |
Cash and investments, at fair value | | $ | 1,027,236 | | | $ | 973,479 | | | $ | 924,330 | | | $ | 892,864 | |
Total assets | | $ | 1,116,874 | | | $ | 1,068,080 | | | $ | 1,013,102 | | | $ | 976,723 | |
| | | | |
Liabilities and Shareholder’s Equity | | | | | | | | | | | | | | | | |
Reserve for losses and LAE | | $ | 12,547 | | | $ | 13,692 | | | $ | 13,556 | | | $ | 13,537 | |
Unearned premiums | | $ | 378,981 | | | $ | 364,120 | | | $ | 346,748 | | | $ | 330,477 | |
Shareholder’s equity | | $ | 673,124 | | | $ | 642,585 | | | $ | 607,781 | | | $ | 586,842 | |
9
THE PMI GROUP, INC. AND SUBSIDIARIES
APPENDIX B - PMI EUROPE QUARTERLY FINANCIAL INFORMATION
| | | | | | | | | | | | | | | | |
| | | 2005
| |
| | | 4th Quarter
| | | 3rd Quarter
| | | 2nd Quarter
| | | 1st Quarter
| |
| | | (Euro € in thousands, unless otherwise noted) | |
Income Statement Components - Quarter Ended | | | | | | | | | | | | | | | | |
| | | | |
Premiums earned | | € | 3,721 | | | € | 3,749 | | | € | 3,298 | | | € | 3,321 | |
Net investment income | | € | 1,730 | | | € | 2,188 | | | € | 1,951 | | | € | 2,002 | |
Change in fair value of foreign currency put options | | € | 55 | | | € | (3 | ) | | € | 342 | | | € | (33 | ) |
Total expenses | | € | 3,824 | | | € | 3,244 | | | € | 3,168 | | | € | 2,031 | |
Net income | | € | 1,362 | | | € | 2,276 | | | € | 1,828 | | | € | 2,326 | |
| | | | |
Net income(U.S.$ in thousands) | | $ | 1,615 | | | $ | 2,774 | | | $ | 2,330 | | | $ | 3,049 | |
| | | | |
Balance Sheet Components | | | | | | | | | | | | | | | | |
| | | | |
Assets | | | | | | | | | | | | | | | | |
Cash and investments, at fair value | | € | 182,559 | | | € | 182,682 | | | € | 179,698 | | | € | 172,707 | |
Total assets | | € | 192,107 | | | € | 192,431 | | | € | 188,840 | | | € | 182,857 | |
| | | | |
Liabilities and Shareholders Equity | | | | | | | | | | | | | | | | |
Reserve for losses and LAE | | € | 12,508 | | | € | 13,019 | | | € | 13,395 | | | € | 12,807 | |
Unearned premiums | | € | 20,020 | | | € | 20,808 | | | € | 22,589 | | | € | 24,719 | |
Shareholders equity | | € | 133,818 | | | € | 133,352 | | | € | 131,452 | | | € | 125,395 | |
| |
| | | 2004
| |
| | | 4th Quarter
| | | 3rd Quarter
| | | 2nd Quarter
| | | 1st Quarter
| |
| | | (Euro € in thousands, unless otherwise noted) | |
Income Statement Components - Quarter Ended | | | | | | | | | | | | | | | | |
| | | | |
Premiums earned | | € | 4,140 | | | € | 4,233 | | | € | 4,172 | | | € | 4,295 | |
Net investment income | | € | 1,435 | | | € | 2,294 | | | € | 1,642 | | | € | 2,198 | |
Change in fair value of foreign currency put options | | € | (6 | ) | | € | (96 | ) | | € | (18 | ) | | € | — | |
Total expenses | | € | 3,679 | | | € | 1,476 | | | € | 1,462 | | | € | 1,768 | |
Net income | | € | 2,703 | | | € | 3,942 | | | € | 3,535 | | | € | 3,781 | |
| | | | |
Net income(U.S.$ in thousands) | | $ | 3,489 | | | $ | 4,822 | | | $ | 4,260 | | | $ | 4,726 | |
| | | | |
Balance Sheet Components | | | | | | | | | | | | | | | | |
| | | | |
Assets | | | | | | | | | | | | | | | | |
Cash and investments, at fair value | | € | 169,165 | | | € | 164,558 | | | € | 161,129 | | | € | 162,621 | |
Total assets | | € | 179,134 | | | € | 175,731 | | | € | 172,402 | | | € | 170,600 | |
| | | | |
Liabilities and Shareholders Equity | | | | | | | | | | | | | | | | |
Reserve for losses and LAE | | € | 12,126 | | | € | 10,656 | | | € | 10,497 | | | € | 10,031 | |
Unearned premiums | | € | 26,859 | | | € | 29,363 | | | € | 31,748 | | | € | 33,903 | |
Shareholders equity | | € | 121,494 | | | € | 117,142 | | | € | 111,691 | | | € | 109,386 | |
10
THE PMI GROUP, INC. AND SUBSIDIARIES
APPENDIX C - BUSINESS SEGMENTS RESULTS OF OPERATIONS BY QUARTER
| | | | | | | | | | | | | | | | |
| | | 2005
| |
| | | 4th Quarter
| | | 3rd Quarter
| | | 2nd Quarter
| | | 1st Quarter
| |
| | | (Dollars in thousands) | |
U.S. Mortgage Insurance Operations(5) | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 201,160 | | | $ | 158,866 | | | $ | 152,564 | | | $ | 154,538 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Revenues | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 166,778 | | | $ | 166,052 | | | $ | 168,248 | | | $ | 164,112 | |
Net investment income | | | 26,168 | | | | 25,046 | | | | 27,546 | | | | 25,579 | |
Equity in earnings from unconsolidated subsidiaries(1) | | | 4,583 | | | | 5,217 | | | | 4,937 | | | | 4,074 | |
Net realized investment gains | | | 378 | | | | 2,597 | | | | 1,167 | | | | 420 | |
Other income (loss) | | | (3 | ) | | | 3 | | | | (5 | ) | | | 4 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total revenues | | | 197,904 | | | | 198,915 | | | | 201,893 | | | | 194,189 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Losses and expenses | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 63,159 | | | | 61,667 | | | | 65,496 | | | | 63,118 | |
Amortization of deferred policy acquisition costs | | | 14,113 | | | | 14,478 | | | | 15,030 | | | | 16,026 | |
Other underwriting and operating expenses | | | 29,057 | | | | 25,260 | | | | 25,278 | | | | 23,554 | |
Interest expense | | | 1 | | | | 3 | | | | — | | | | 1 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total losses and expenses | | | 106,330 | | | | 101,408 | | | | 105,804 | | | | 102,699 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income before income taxes | | | 91,574 | | | | 97,507 | | | | 96,089 | | | | 91,490 | |
Income taxes | | | 21,696 | | | | 27,977 | | | | 26,400 | | | | 25,149 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
| | | | — | | | | — | | | | — | | | | — | |
Net income | | $ | 69,878 | | | $ | 69,530 | | | $ | 69,689 | | | $ | 66,341 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
International Operations(6) | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 44,913 | | | $ | 47,197 | | | $ | 47,185 | | | $ | 39,185 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Revenues | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 39,781 | | | $ | 38,979 | | | $ | 38,141 | | | $ | 35,435 | |
Net investment income | | | 14,499 | | | | 14,844 | | | | 14,058 | | | | 13,756 | |
Net realized investment gains (losses) | | | (221 | ) | | | (27 | ) | | | (18 | ) | | | 340 | |
Other income (loss) | | | 778 | | | | 1,287 | | | | 873 | | | | (113 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total revenues | | | 54,837 | | | | 55,083 | | | | 53,054 | | | | 49,418 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Losses and expenses | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 1,601 | | | | (365 | ) | | | 1,739 | | | | 1,363 | |
Amortization of deferred policy acquisition costs | | | 3,274 | | | | 3,269 | | | | 3,779 | | | | 4,417 | |
Other underwriting and operating expenses | | | 12,663 | | | | 11,648 | | | | 10,539 | | | | 7,005 | |
Interest expense | | | 9 | | | | — | | | | — | | | | — | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total losses and expenses | | | 17,547 | | | | 14,552 | | | | 16,057 | | | | 12,785 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income before income taxes | | | 37,290 | | | | 40,531 | | | | 36,997 | | | | 36,633 | |
Income taxes | | | 10,251 | | | | 12,514 | | | | 11,747 | | | | 11,485 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net income | | $ | 27,039 | | | $ | 28,017 | | | $ | 25,250 | | | $ | 25,148 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Financial Guaranty(7) | | | | | | | | | | | | | | | | |
Equity in earnings from unconsolidated subsidiaries(1) | | $ | 21,453 | | | $ | 13,691 | | | $ | 23,761 | | | $ | 20,846 | |
Income taxes | | | 2,208 | | | | 1,135 | | | | 2,254 | | | | 1,956 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net income | | $ | 19,245 | | | $ | 12,556 | | | $ | 21,507 | | | $ | 18,890 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Other(8) | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 27 | | | $ | 19 | | | $ | 13 | | | $ | 23 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Revenues | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 18 | | | $ | 19 | | | $ | 19 | | | $ | 20 | |
Net investment income | | | 4,832 | | | | 4,537 | | | | 4,143 | | | | 4,455 | |
Equity in earnings (losses) from unconsolidated subsidiaries(1) | | | (165 | ) | | | (388 | ) | | | (416 | ) | | | 292 | |
Net realized investment gains (losses) | | | (4 | ) | | | (2,897 | ) | | | 354 | | | | (39 | ) |
Other income | | | 4,283 | | | | 2,649 | | | | 5,383 | | | | 5,644 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total revenues | | | 8,964 | | | | 3,920 | | | | 9,483 | | | | 10,372 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Losses and expenses | | | | | | | | | | | | | | | | |
Other underwriting and operating expenses | | | 17,354 | | | | 17,607 | | | | 18,600 | | | | 15,086 | |
Interest expense | | | 4,644 | | | | 8,455 | | | | 8,472 | | | | 9,552 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total losses and expenses | | | 21,998 | | | | 26,062 | | | | 27,072 | | | | 24,638 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loss before income tax benefit | | | (13,034 | ) | | | (22,142 | ) | | | (17,589 | ) | | | (14,266 | ) |
Income tax benefit | | | (4,587 | ) | | | (7,750 | ) | | | (5,728 | ) | | | (5,045 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net loss | | $ | (8,447 | ) | | $ | (14,392 | ) | | $ | (11,861 | ) | | $ | (9,221 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
11
THE PMI GROUP, INC. AND SUBSIDIARIES
APPENDIX C - BUSINESS SEGMENTS RESULTS OF OPERATIONS BY QUARTER (Continued)
| | | | | | | | | | | | | | | | |
| | | 2004
| |
| | | 4th Quarter
| | | 3rd Quarter
| | | 2nd Quarter
| | | 1st Quarter
| |
| | | (Dollars in thousands) | |
U.S. Mortgage Insurance Operations(5) | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 153,916 | | | $ | 143,732 | | | $ | 147,407 | | | $ | 153,064 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Revenues | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 168,313 | | | $ | 162,276 | | | $ | 154,392 | | | $ | 149,023 | |
Net investment income | | | 25,496 | | | | 24,332 | | | | 27,944 | | | | 24,458 | |
Equity in earnings from unconsolidated subsidiaries(1) | | | 4,569 | | | | 3,707 | | | | 3,676 | | | | 3,328 | |
Net realized investment gains (losses) | | | (12 | ) | | | 1,672 | | | | (166 | ) | | | 1,087 | |
Other income (loss) | | | 15 | | | | (24 | ) | | | (25 | ) | | | 81 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total revenues | | | 198,381 | | | | 191,963 | | | | 185,821 | | | | 177,977 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Losses and expenses | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 58,355 | | | | 60,092 | | | | 55,755 | | | | 58,956 | |
Amortization of deferred policy acquisition costs | | | 16,585 | | | | 18,003 | | | | 18,109 | | | | 19,433 | |
Other underwriting and operating expenses | | | 27,258 | | | | 23,100 | | | | 24,888 | | | | 26,137 | |
Legal settlement refund(3) | | | — | | | | (2,574 | ) | | | — | | | | — | |
Interest expense | | | 12 | | | | 13 | | | | 17 | | | | 21 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total losses and expenses | | | 102,210 | | | | 98,634 | | | | 98,769 | | | | 104,547 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income before income taxes | | | 96,171 | | | | 93,329 | | | | 87,052 | | | | 73,430 | |
Income taxes | | | 26,328 | | | | 25,528 | | | | 23,790 | | | | 19,822 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net income | | $ | 69,843 | | | $ | 67,801 | | | $ | 63,262 | | | $ | 53,608 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
International Operations(6) | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 46,156 | | | $ | 43,238 | | | $ | 43,460 | | | $ | 40,323 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Revenues | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 33,979 | | | $ | 32,829 | | | $ | 33,255 | | | $ | 36,259 | |
Net investment income | | | 12,789 | | | | 11,848 | | | | 10,646 | | | | 11,807 | |
Net realized investment gains (losses) | | | (263 | ) | | | 256 | | | | 377 | | | | 225 | |
Other income | | | 3,044 | | | | 296 | | | | 2,399 | | | | 1,602 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total revenues | | | 49,549 | | | | 45,229 | | | | 46,677 | | | | 49,893 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Losses and expenses | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 1,737 | | | | 746 | | | | 777 | | | | 864 | |
Amortization of deferred policy acquisition costs | | | 3,065 | | | | 3,225 | | | | 3,135 | | | | 3,662 | |
Other underwriting and operating expenses | | | 10,235 | | | | 7,346 | | | | 6,940 | | | | 6,867 | |
Interest expense | | | — | | | | 12 | | | | 60 | | | | 1 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total losses and expenses | | | 15,037 | | | | 11,329 | | | | 10,912 | | | | 11,394 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income before income taxes | | | 34,512 | | | | 33,900 | | | | 35,765 | | | | 38,499 | |
Income taxes | | | 10,274 | | | | 10,218 | | | | 10,799 | | | | 11,470 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net income | | $ | 24,238 | | | $ | 23,682 | | | $ | 24,966 | | | $ | 27,029 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Financial Guaranty(7) | | | | | | | | | | | | | | | | |
Equity in earnings from unconsolidated subsidiaries(1) | | $ | 16,156 | | | $ | 17,061 | | | $ | 19,699 | | | $ | 14,928 | |
Income taxes | | | 1,689 | | | | 1,820 | | | | 2,220 | | | | 1,413 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net income | | $ | 14,467 | | | $ | 15,241 | | | $ | 17,479 | | | $ | 13,515 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Other(8) | | | | | | | | | | | | | | | | |
Net premiums written | | $ | 31 | | | $ | 9 | | | $ | 9 | | | $ | 17 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Revenues | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 20 | | | $ | 18 | | | $ | 16 | | | $ | 20 | |
Net investment income | | | 4,706 | | | | 5,775 | | | | 5,032 | | | | 3,776 | |
Equity in earnings (losses) from unconsolidated subsidiaries(1) | | | (975 | ) | | | 353 | | | | 210 | | | | 842 | |
Net realized investment losses | | | — | | | | (374 | ) | | | (143 | ) | | | (37 | ) |
Realized loss on equity investment held for sale(2) | | | (20,420 | ) | | | — | | | | — | | | | — | |
Other income | | | 5,345 | | | | 6,146 | | | | 7,424 | | | | 7,168 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total revenues | | | (11,324 | ) | | | 11,918 | | | | 12,539 | | | | 11,769 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Losses and expenses | | | | | | | | | | | | | | | | |
Other underwriting and operating expenses | | | 20,272 | | | | 16,545 | | | | 17,790 | | | | 17,316 | |
Interest expense | | | 8,640 | | | | 8,612 | | | | 8,745 | | | | 8,493 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total losses and expenses | | | 28,912 | | | | 25,157 | | | | 26,535 | | | | 25,809 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loss from continuing operations before income tax benefit | | | (40,236 | ) | | | (13,239 | ) | | | (13,996 | ) | | | (14,040 | ) |
Income tax benefit from continuing operations | | | (13,339 | ) | | | (9,158 | ) | | | (4,964 | ) | | | (5,451 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Loss from continuing operations after income tax benefit | | | (26,897 | ) | | | (4,081 | ) | | | (9,032 | ) | | | (8,589 | ) |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income from discontinued operations before income taxes(4) | | | — | | | | — | | | | — | | | | 5,756 | |
Income taxes from discontinued operations(4) | | | — | | | | — | | | | — | | | | 1,958 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Income from discontinued operations after income taxes(4) | | | — | | | | — | | | | — | | | | 3,798 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Gain on sale of discontinued operations, net of income taxes(4) | | | (1,105 | ) | | | — | | | | — | | | | 30,108 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Net income (loss) | | $ | (28,002 | ) | | $ | (4,081 | ) | | $ | (9,032 | ) | | $ | 25,317 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
|
12
