The PMI Group, Inc. Reports Second Quarter 2005 Net Income of $104.6 Million; Net Income Per Diluted Share of $1.04; Quarterly and Year to Date Net Income from Continuing Operations the Highest in the Company's History.WALNUT CREEK Walnut Creek, residential city (1990 pop. 60,569), Contra Costa co., W Calif., in the San Francisco Bay area; inc. 1914. It is the trade and shipping center of an extensive agricultural area where walnuts are among the major product. , Calif. -- The PMI Group The PMI Group (NYSE: PMI) is a provider of credit enhancement products that promote homeownership and the provision of services essential to the building of strong communities. , Inc. (NYSE NYSE See: New York Stock Exchange :PMI See Private Mortgage Insurance. ) (the "Company") today reported record net income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the second quarter of 2005 and the first half of 2005. These results were driven by the Company's success in executing its diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. strategy and the resulting financial performance from its U.S. Mortgage Insurance Operations, International Operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. and Financial Guaranty As a verb, to agree to be responsible for the payment of another's debt or the performance of another's duty, liability, or obligation if that person does not perform as he or she is legally obligated to do; to assume the responsibility of a guarantor; to warrant. segment. The Company announced that consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: net income for the second quarter totaled $104.6 million compared to $96.7 million for the same period a year ago. Consolidated net income per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share was $1.04 in the second quarter of 2005, compared to net income of $0.93 per diluted share for the same period a year ago, an increase of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 12 percent. The net income results combined with the common share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. activity for the second quarter of 2005 resulted in a book value per share of $35.29 at June June: see month. 30, 2005, compared to a book value per share of $33.37 at December December: see month. 31, 2004 and $30.28 at June 30, 2004, representing increases of 5.8 percent and 16.5 percent, respectively. Consolidated net income from continuing operations for the first half of 2005 totaled $205.7 million compared to $182.2 million for the same period a year ago, representing a 12.9 percent increase. Consolidated net income from continuing operations for the first half of 2004 does not include the financial results of American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Pioneer Title Insurance Company, which was designated as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. in the fourth quarter of 2003 and sold in the first quarter of 2004. Second Quarter 2005 Highlights --Combined(1) insurance in force grew to $269.2 billion at June 30, 2005 from $242.4 billion at June 30, 2004; --Net income for U.S. Mortgage Insurance Operations(2) grew by 10 percent to $69.7 million in the second quarter of 2005, compared to $63.3 million in the second quarter of 2004; --U.S. Mortgage Insurance Operations realized a 9 percent increase in earned premiums Earned premium is the portion of an insurance written premium which is considered "earned" by the insurer, based on the part of the policy period that the insurance has been in effect, and during which the insurer has been exposed to loss. in the second quarter of 2005 to $168.2 million compared to $154.4 million in the same period for 2004. Additionally, the U.S. Mortgage Insurance Operations realized reduced expenditures for the amortization of policy acquisition costs and other underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. and operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the quarter and year to date of $2.7 million and $8.7 million, respectively, compared to the same periods a year ago; --U.S. Mortgage Insurance Operations continued to experience positive credit trends that resulted in a 2 percent decrease in the delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. loan inventory from March 31, 2005; the primary default rate declined to 4.51 percent at June 30, 2005 compared to 4.53 percent at March 31, 2005; --The Company's investment in FGIC FGIC See Financial Guaranty Insurance Corporation (FGIC). Corporation ("FGIC") yielded equity in earnings for the quarter and year to date of $20.5 million (after tax) and $38.6 million (after tax), respectively, compared to $16.3 million (after tax) and $29.0 million (after tax) for the same periods a year ago. These increases represent quarterly and year to date growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. of 26% and 33%, respectively, compared to the corresponding periods a year ago; --The Company repurchased approximately 1.8 million common shares in the second quarter of 2005 at an average price per share of $37.54. Purchases of common shares in the quarter totaled approximately $67 million, thereby completing the $100 million common share repurchase program authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: February February: see month. 17, 2005. On July July: see month. 27, 2005, the Company's Board of Directors authorized a new $150 million common share repurchase program and an increase in its annual common share dividend to $0.21 per share. Consolidated Operating Results Consolidated net premiums written for the quarter and year to date totaled $199.8 million and $393.5 million, respectively, compared to $190.9 million and $384.3 million for the same periods a year ago. The increases were due primarily to an increase in average premium rates in U.S. Mortgage Insurance Operations and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. foreign currency exchange rates in International Operations(3). Consolidated premiums earned for the quarter and year to date were $206.4 million and $406.0 million, respectively, compared to $187.7 million and $373.0 million for the same periods a year ago. The increases were due primarily to increases in premiums earned by U.S. Mortgage Insurance Operations and, to a lesser extent, International Operations. Consolidated losses and loss adjustment expenses for the quarter and year to date totaled $67.2 million and $131.7 million, respectively, compared to $56.5 million and $116.4 million for the same periods a year ago. The increases, when compared to the same periods in 2004, were primarily due to higher primary claims paid in U.S. Mortgage Insurance Operations. Consolidated other underwriting and operating expenses for the quarter and year to date totaled $54.4 million and $100.1 million, respectively, compared to $49.6 million and $99.9 million for the same periods a year ago. The increase in the second quarter of 2005 was primarily due to an increase in expenses in International Operations. Consolidated reserve for losses and loss adjustment expenses totaled $364.4 million as of June 30, 2005, relatively unchanged from March 31, 2005 and December 31, 2004. U.S. Mortgage Insurance Operations Net income for U.S. Mortgage Insurance Operations for the quarter and year to date totaled $69.7 million and $136.0 million, respectively, compared to $63.3 million and $116.9 million for the same periods a year ago. The increases were due primarily to higher premiums earned and reduced underwriting and operating expenses, partially offset by higher losses and loss adjustment expenses. Net premiums written for the quarter and year to date totaled $152.6 million and $307.1 million, respectively, compared to $147.4 million and $300.5 million for the same periods a year ago. The increases were due primarily to an increase in average premium rates and to higher primary risk in force. Premiums earned for the quarter and year to date totaled $168.2 million and $332.4 million, respectively, compared to $154.4 million and $303.4 million for the same periods a year ago. The increases were due primarily to the recognition of premiums associated with loan cancellations under non-refundable single and annual premium policies, increases in average premium rates and, to a lesser extent, higher primary risk in force. Equity in earnings from CMG CMG Coastal & Marine Geology (USGS) CMG Chipotle Mexican Grill, Inc. (stock symbol) CMG Companion (of the Order Of) St Michael and St George CMG Computer Measurement Group for the quarter and year to date totaled $4.9 million (pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta ) and $9.0 million (pre-tax), respectively, compared to $3.7 million (pre-tax) and $7.0 million (pre-tax) for the same periods a year ago. The increases compared to the corresponding periods in 2004 were primarily a result of increases in CMG's primary insurance in force and risk in force. Losses and loss adjustment expenses for the quarter and year to date totaled $65.5 million and $128.6 million, respectively, compared to $55.8 million and $114.7 million for the same periods a year ago. The increases were primarily a result of increases in the number of primary claims paid. The increases in the number of primary claims paid were due to a number of factors, including seasoning of PMI's primary insurance portfolio's largest book years, an increased number of claims paid that had previously been late stage delinquencies whose foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. had been delayed by bankruptcy bankruptcy, in law, settlement of the liabilities of a person or organization wholly or partially unable to meet financial obligations. The purposes are to distribute, through a court-appointed receiver, the bankrupt's assets equitably among creditors and, in most protection and higher claims associated with the portion of PMI's portfolio that contains ARMs, high LTV LTV See: Loan-to-value ratio , Alt-A An Alt-A mortgage is a type of U.S. mortgage that, for various reasons, is considered riskier than "prime" and less risky than "subprime," the riskiest category. Alt-A interest rates, which are determined by credit risk, therefore tend to be between that of prime and subprime home and less-than-A quality loans. Amortization of deferred policy acquisition costs for the quarter and year to date totaled $15.0 million and $31.1 million, respectively, compared to $18.1 million and $37.5 million for the same periods a year ago. The decreases were primarily the result of lower levels of new insurance written, increases in policies issued through electronic delivery, and the expense savings from the 2004 field restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). . Other underwriting and operating expenses for the quarter and year to date totaled $25.3 million and $48.8 million, respectively, compared to $24.9 million and $51.1 million for the same periods a year ago. The decrease for the first half of 2005 was due primarily to costs accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. in the first quarter of 2004 related to compensation and related benefits costs, as well as field restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. recorded in the first half of 2004.
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DOMESTIC(4) NEW INSURANCE WRITTEN
(Dollars in billions) Q2 2005 YTD 2005 Q2 2004 YTD 2004
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Domestic primary new insurance
written $11.1 $20.3 $12.9 $22.7
Excluding CMG $9.7 $17.8 $11.4 $20.2
Bulk new insurance written $2.2 $4.1 $1.0 $1.3
Domestic pool new insurance written $3.2 $4.5 $2.6 $6.5
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Domestic primary new insurance written for the quarter and year to date totaled $11.1 billion and $20.3 billion, respectively, compared to $12.9 billion and $22.7 billion for the same periods a year ago. The decreases were driven by lower volumes in the residential mortgage origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real and mortgage insurance markets, partially offset by increased opportunities for bulk insurance writings. Lenders' use of alternative mortgage products which do not require mortgage insurance has continued to negatively impact the size of the mortgage insurance market and PMI's primary flow new insurance written.
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PRIMARY INSURANCE AND RISK IN FORCE
As of As of As of
(Dollars in billions) 6/30/05 3/31/05 6/30/04
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Domestic primary insurance in force $118.1 $118.2 $117.6
Excluding CMG $103.4 $104.0 $104.2
Domestic primary risk in force $29.0 $28.8 $27.8
Excluding CMG $25.6 $25.5 $24.8
Domestic annual primary persistency rate 62.9% 61.7% 53.6%
Excluding CMG 62.0% 60.8% 52.8%
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Domestic primary insurance in force totaled $118.1 billion at June 30, 2005, compared to $117.6 billion a year ago. Domestic primary risk in force totaled $29.0 billion at June 30, 2005, compared to $27.8 billion at the end of the second quarter of 2004 and was driven primarily by a greater number of high LTV loans with deeper coverage and higher average loan balances. The domestic annual persistency rate increased to 62.9% as of June 30, 2005 from 53.6% as of June 30, 2004.
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PRIMARY DEFAULT RATES
As of As of As of
6/30/05 3/31/05 6/30/04
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Domestic primary mortgage insurance 4.03% 4.07% 3.94%
Excluding bulk 3.48% 3.59% 3.39%
Excluding CMG 4.51% 4.53% 4.36%
Excluding CMG and bulk transactions 3.94% 4.04% 3.79%
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At June 30, 2005, the Company's domestic primary insurance default rate, excluding CMG, was 4.51 percent compared to 4.53 percent at March 31, 2005. The decrease was primarily due to a decrease in primary loans in default from 35,716 at March 31, 2005 to 35,030 at June 30, 2005 and a decline in the number of primary insurance policies in force.
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CLAIMS PAID
(Dollars in millions) Q2 2005 YTD 2005 Q2 2004 YTD 2004
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Primary - flow $46.1 $87.8 $36.0 $67.1
Primary - bulk 11.6 25.4 13.8 26.3
----- ----- ----- ------
Total primary 57.7 113.2 49.8 93.4
Total pool and other 4.9 9.6 3.4 7.4
----- ------ ----- -------
Total claims paid $62.6 $122.8 $53.2 $100.8
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Primary claims paid for the quarter and year to date totaled $57.7 million and $113.2 million, respectively, compared to $49.8 million and $93.4 million for the same periods a year ago. The increases in claims paid in the second quarter and first half of 2005 were influenced by the seasoning of our primary insurance portfolio's largest book years, an increased number of claims that had previously been late stage delinquencies whose foreclosure had been delayed by bankruptcy protection and higher claim rates associated with the portion of the portfolio that contain ARMs, high LTV, Alt-A and less-than-A quality loans. International Operations Net income from International Operations for the quarter and year to date totaled $25.3 million and $50.4 million, respectively, compared to $25.0 million and $52.0 million for the same periods a year ago. The decrease in net income for the first half of 2005 was due primarily to a decrease in PMI Europe's premiums earned and increases in PMI Australia's and PMI Europe's underwriting and operating expenses. The change in the average foreign currency exchange rates from the second quarter and the first half of 2005 to the corresponding periods in 2004 favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted International Operations' net income by $1.5 million and $2.0 million, respectively, primarily due to the appreciation of the Australian dollar Noun 1. Australian dollar - the basic unit of money in Australia and Nauru dollar - the basic monetary unit in many countries; equal to 100 cents , offset by the amortization and decline in value of the Company's Australian dollar and Euro put options. PMI Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. Net income from PMI Australia for the quarter and year to date totaled $20.5 million and $41.1 million, respectively, compared to $19.2 million and $39.5 million for the same periods a year ago. The increases were due primarily to an appreciation of the Australian dollar relative to the U.S. dollar. In local currency, net income from PMI Australia for the quarter and year to date totaled AU$26.7 million and AU$53.2 million, respectively, compared to AU$26.8 million and AU$53.4 million for the same periods a year ago. Losses and loss adjustment expenses for PMI Australia continued to experience favorable levels of claim payments and default rates. PMI Australia's default rate at June 30, 2005 was 0.14% compared to 0.15% at June 30, 2004. Claims paid in the second quarter and year to date totaled $0.7 million and $1.1 million, respectively, compared to $0.2 million and $0.4 million for the same periods a year ago. Premiums earned for PMI Australia for the quarter and year to date totaled $29.9 million and $59.3 million, respectively, compared to $26.7 million and $55.6 million for the same periods a year ago. Primary insurance in force for PMI Australia was $119.8 billion at June 30, 2005, compared to $91.5 billion at June 30, 2004. Primary risk in force for PMI Australia was $109.0 billion at June 30, 2005, compared to $82.8 billion at June 30, 2004. Primary new insurance written for PMI Australia for the quarter and year to date totaled $7.4 billion and $15.2 billion, respectively, compared to $8.7 billion and $16.9 billion for the same periods a year ago. The decreases in new insurance written were primarily driven by decreases in mortgage origination activity combined with increasingly competitive pricing. Unearned premiums for PMI Australia were $301.3 million at June 30, 2005, compared to $242.4 million at June 30, 2004. The increase in unearned premiums were due to the higher level of insurance in force combined with the strengthening of the Australian dollar relative to the U.S. dollar. PMI Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). Net income for PMI Europe for the quarter and year to date totaled $2.3 million and $5.4 million, respectively, compared to $4.3 million and $9.0 million for the same periods a year ago. The decreases in the second quarter and first half of 2005 were due primarily to decreases in premiums earned and increases in underwriting and operating expenses. In local currency, net income from PMI Europe for the quarter and year to date totaled EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 1.9 million and EUR 4.2 million, respectively, compared to EUR 3.5 million EUR 7.3, respectively, for the same periods a year ago. Net premiums written for PMI Europe for the quarter and year to date totaled $1.5 million and $3.0 million, respectively, compared to $2.4 million and $5.2 million for the same periods a year ago. The decreases in net premiums written were due to a reduced number of transactions closed in the second quarter and first half of 2005 in the European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. markets which can exhibit considerable variance The discrepancy between what a party to a lawsuit alleges will be proved in pleadings and what the party actually proves at trial. In Zoning law, an official permit to use property in a manner that departs from the way in which other property in the same locality in volume from quarter to quarter. Premiums earned for PMI Europe for the quarter and year to date totaled $4.2 and $8.5 million, respectively, compared to $5.0 million and $10.4 million for the same periods a year ago. The decreases for the quarter and the year to date were due primarily to decreases in premiums earned associated with the Royal & Sun Alliance ("R&SA") mortgage insurance portfolio acquired by PMI Europe in 2004. As this portfolio continues to season, we expect premiums earned and risk in force associated with this portfolio to decline. Underwriting and operating expenses for PMI Europe for the quarter and year to date totaled $2.9 million and $4.5 million, respectively, compared to $1.1 million and $2.7 million for the same periods a year ago. The increases in the second quarter and the first half of 2005 were due to additional provisions for the R&SA performance related obligations and increases in costs associated with expansion efforts. Under the terms of its agreement with R&SA, PMI Europe shares certain economic benefits with R&SA if loss performance of the acquired portfolio reaches agreed-upon levels. Based upon the favorable loss performance to date, PMI Europe has continued to accrue To increase; to augment; to come to by way of increase; to be added as an increase, profit, or damage. Acquired; falling due; made or executed; matured; occurred; received; vested; was created; was incurred. commissions related to this agreement and most likely will continue to do so in the future. PMI Hong Kong Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. PMI's Hong Kong reinsurance The contract made between an insurance company and a third party to protect the insurance company from losses. The contract provides for the third party to pay for the loss sustained by the insurance company when the company makes a payment on the original contract. premiums written for the quarter and year to date totaled $6.3 million and $11.6 million, respectively, compared to $2.6 and $4.4 million for the same periods a year ago. The increases were due primarily to increases in mortgage origination activity in Hong Kong and product expansion into residential mortgages with LTVs between 90.01% and 95.00%. PMI's Hong Kong reinsurance premiums earned for the quarter and year to date totaled $4.1 million and $5.8 million, respectively, compared to $1.5 and $3.5 million for the same periods a year ago. The increase in the second quarter of 2005 was due to increases in mortgage origination activity and policy cancellations during the quarter. Financial Guaranty Financial Guaranty, which includes equity in earnings from the Company's investments in FGIC and RAM Re, reported net income for the quarter and year to date of $21.5 million and $40.4 million, respectively, compared to $17.5 million and $31.0 million for the same periods a year ago. Equity in earnings from FGIC in the second quarter and year to date totaled $22.2 million (pre-tax) and $41.8 million (pre-tax), respectively, compared to $17.9 million (pre-tax) and $31.5 million (pre-tax) in the same periods a year ago. The increase in the second quarter of 2005 was primarily due to increases in premiums earned and, to a lesser extent, higher investment income due to growth in its investment portfolio. The increase in the first half of 2005 was primarily due to increases in premiums earned, refundings and, to a lesser extent, higher investment income due to growth in its investment portfolio. Equity in earnings from RAM Re for the quarter and year to date were $1.6 million (pre-tax) and $2.8 million (pre-tax), respectively, compared to $1.8 million (pre-tax) and $3.1 million (pre-tax) for the same periods a year ago. The Company reports equity in earnings from RAM Re on a one-quarter lag. Other The Other segment consists of revenues and expenses of the holding company, PMI Mortgage Services Co. and SPS (Standby Power System) A UPS system that switches to battery backup upon detection of power failure. See UPS. SPS - Symbolic Programming System. Assembly language for IBM 1620. Holding Corp. ("SPS"). The Net loss in the Other segment for the quarter and year to date totaled $11.9 million and $21.1 million, respectively, compared to a net loss of $9.0 million and a net gain of $16.3 million for the same periods a year ago. The increases in the net loss in the second quarter and year to date were primarily driven by increases in contract underwriting remedy The manner in which a right is enforced or satisfied by a court when some harm or injury, recognized by society as a wrongful act, is inflicted upon an individual. The law of remedies is concerned with the character and extent of relief to which an individual who has brought expenses and by a decline in contract underwriting revenues related to lower mortgage origination and refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. volumes. In January January: see month. 2005, the Company signed a Summary of Terms granting Credit Suisse First Boston Credit Suisse First Boston was originally the trading name of the Financière Crédit Suisse-First Boston, a London-based 50-50 investment banking joint venture formed in 1978 between the First Boston Corporation and Credit Suisse. (USA) an option to buy 100 percent of the outstanding stock of SPS. As of June 30, 2005, our total investment in SPS was $119.3 million, consisting of $110.4 million carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of our equity investment held for sale and $8.9 million in related party receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed , which are current. As a result of reclassifying our investment in SPS as held for sale, effective January 1, 2005, we have recorded equity in earnings from SPS in other income. On July 28, 2005, the Company agreed to extend CSFB's option to acquire the outstanding stock of SPS until August 5, 2005 from the previous expiration date Expiration Date The day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Notes: The expiration date for all listed stock options in the U.S. of July 31, 2005. Equity in earnings from SPS was nominal Trifling, token, or slight; not real or substantial; in name only. Nominal capital, for example, refers to extremely small or negligible funds, the use of which in a particular business is incidental. NOMINAL. Relating to a name. for the second quarter of 2005 and 2004 and was $0.9 million for the first half of 2005 compared to $0.4 million for the corresponding period in 2004. (1) "Combined" includes the results from U.S. Mortgage Insurance Operations, CMG Mortgage Insurance Company and its affiliates ("CMG"), PMI Australia and PMI Europe's primary insurance and credit default swap Credit Default Swap A swap designed to transfer the credit exposure of fixed income products between parties. Notes: The buyer of a credit swap receives credit protection, whereas the seller of the swap guarantees the credit worthiness of the product. transactions. (2) "U.S. Mortgage Insurance Operations" includes the results of PMI Mortgage Insurance Co. and affiliated af·fil·i·ate v. af·fil·i·at·ed, af·fil·i·at·ing, af·fil·i·ates v.tr. 1. To adopt or accept as a member, subordinate associate, or branch: U.S. reinsurance companies ("PMI") and equity in earnings from CMG. (3) "International Operations" includes the results of PMI Australia, PMI Europe and the results of operations from the Hong Kong branch operations. (4) "Domestic" includes results from U.S. Mortgage Insurance Operations and CMG. ABOUT THE PMI GROUP, INC. The PMI Group, Inc. (NYSE:PMI) headquartered in Walnut Creek, California Walnut Creek is a largely affluent suburb several miles east of Oakland in Contra Costa County, California, USA, in the East Bay region of the San Francisco Bay Area. While not as large as the neighboring Concord, Walnut Creek serves as the business and entertainment hub for the is an international provider of credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing products that promote homeownership and facilitate mortgage transactions in the capital markets. Through its wholly owned subsidiaries Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. 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 advocate: see attorney. 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by these forward-looking statements. Risks and uncertainties that could affect the Company are discussed in our Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2004 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.
THE PMI GROUP, INC. AND SUBSIDIARIES
FINANCIAL RESULTS AND STATISTICAL INFORMATION
FOR THE PERIOD ENDED JUNE 30, 2005
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Contents
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Consolidated Statements of Operations and Balance Sheets
Business Segments Results of Operations - Three Months Ended June 30,
2005 and 2004
Business Segments Results of Operations - Six Months Ended June 30,
2005 and 2004
Business Segments Balance Sheets
U.S. Mortgage Insurance Operations Analysis of Reserve for Losses and
LAE and Statistical Information
U.S. Mortgage Insurance Operations and CMG Mortgage Insurance Company
Statistical Information
PMI Australia and PMI Europe Statistical Information
Appendix A - U.S. Mortgage Insurance Operations Supplemental
Statistical Information
Appendix B - PMI Australia and PMI Europe Quarterly Financial
Information
Appendix C - Business Segments Results of Operations by Quarter
Please refer to the following when noted:
(1) For the quarter and six months ended June 30, 2005, the Company's
equity earnings in 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 equity investment
held for sale. Effective January 1, 2005, SPS's equity earnings
are reported in other income.
(2) 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.
(3) In January 2005, the Company signed a Summary of Terms with Credit
Suisse First Boston (USA), Inc. ("CSFB") pursuant to which CSFB
has an option to acquire 100% of the Company's outstanding stock
of SPS. 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 loss of
discontinued operations of equity investment due to the Company's
decision to sell SPS. According to Statement of Financial
Accounting Standards No. 144, Accounting for the Impairment and
Disposal of Long-Lived Assets, we are not permitted to present the
disposal of equity method investments as discontinued operations.
(4) 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.
(5) International Operations include PMI Australia, PMI Europe and the
Company's Hong Kong branch's results of operations.
(6) Financial Guaranty represents our equity investments in FGIC
Corporation and RAM Re.
(7) The "Other" segment includes other income and related operating
expenses of PMI Mortgage Services Co.; investment income, interest
expense and corporate overhead 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 discontinued operations of
APTIC.
(8) The expense ratio is the ratio, expressed as a percentage, of the
sum of amortization of deferred policy acquisition costs and other
underwriting 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.
(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 is for PMI Mortgage Insurance Co.
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
----------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(Dollars and shares, except per share data, in
thousands)
Net premiums written $199,762 $190,876 $393,507 $384,280
=========== =========== =========== ===========
Revenues
Premiums earned $206,408 $187,663 $405,975 $372,965
Net investment income 45,747 43,622 89,537 83,663
Equity in earnings
from unconsolidated
subsidiaries (1) 28,282 23,585 53,494 42,683
Net realized
investment gains 1,503 68 2,224 1,343
Other income 6,251 9,798 11,787 18,649
----------- ----------- ----------- -----------
Total revenues 288,191 264,736 563,017 519,303
----------- ----------- ----------- -----------
Losses and expenses
Losses and loss
adjustment expenses 67,235 56,532 131,717 116,352
Amortization of
deferred policy
acquisition costs 18,809 21,244 39,252 44,339
Other underwriting
and operating
expenses 54,417 49,618 100,062 99,938
Interest expense 8,472 8,822 18,025 17,337
----------- ----------- ----------- -----------
Total losses and
expenses 148,933 136,216 289,056 277,966
----------- ----------- ----------- -----------
Income from continuing
operations before
income taxes 139,258 128,520 273,961 241,337
Income taxes from
continuing operations 34,673 31,845 68,218 59,099
----------- ----------- ----------- -----------
Income from continuing
operations after
income taxes 104,585 96,675 205,743 182,238
----------- ----------- ----------- -----------
Income from
discontinued
operations before
income taxes (2) - - - 5,756
Income taxes from
discontinued
operations (2) - - - 1,958
----------- ----------- ----------- -----------
Income from
discontinued
operations after
income taxes (2) - - - 3,798
----------- ----------- ----------- -----------
Gain on sale of
discontinued
operations, net of
income taxes of
$17,131 (2) - - - 30,108
----------- ----------- ----------- -----------
Net income $104,585 $96,675 $205,743 $216,144
=========== =========== =========== ===========
Diluted weighted
average common shares
outstanding 102,592 105,599 103,246 105,304
=========== =========== =========== ===========
Diluted net income per
share $1.04 $0.93 $2.03 $2.09
=========== =========== =========== ===========
Reconciliation of
earnings per share:
Net income $104,585 $96,675 $205,743 $216,144
Plus: Interest
expense on
contingently
convertible debt,
net of income taxes 1,912 1,942 3,824 3,854
----------- ----------- ----------- -----------
Net income adjusted for
diluted earnings per
share calculation $106,497 $98,617 $209,567 $219,998
=========== =========== =========== ===========
Share data:
Basic weighted
average common
shares outstanding 92,838 95,754 93,370 95,571
Stock options and
other dilutive
components 1,601 1,692 1,723 1,580
Common stock
equivalent shares
related to
contingently
convertible debt 8,153 8,153 8,153 8,153
----------- ----------- ----------- -----------
Diluted weighted
average common shares
outstanding 102,592 105,599 103,246 105,304
=========== =========== =========== ===========
Per share data:
Diluted net income
from continuing
operations per share $1.04 $0.93 $2.03 $1.76
Income from
discontinued
operations after
income taxes - - - 0.04
Gain on sale of
discontinued
operations, net of
income taxes - - - 0.29
----------- ----------- ----------- -----------
Diluted net income per
share $1.04 $0.93 $2.03 $2.09
=========== =========== =========== ===========
----------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
----------------------------------------------------------------------
December
June 30, 31, June 30,
2005 2004 2004
----------- ----------- -----------
(Unaudited) (Unaudited)
(Dollars in thousands, except per
share data)
Assets
Cash and investments, at fair
value $3,675,496 $3,621,550 $3,365,964
Investments in unconsolidated
subsidiaries (1) 965,600 911,604 955,577
Equity investment held for
sale (3) 110,383 109,519 -
Related party receivables 10,562 18,439 47,831
Reinsurance receivables,
reinsurance recoverables and
prepaid premiums 45,875 49,657 45,743
Deferred policy acquisition costs 87,892 92,438 91,816
Other assets 345,499 342,760 347,647
----------- ----------- -----------
Total assets $5,241,307 $5,145,967 $4,854,578
=========== =========== ===========
Liabilities
Reserve for losses and loss
adjustment expenses $364,412 $364,847 $357,028
Unearned premiums 461,461 484,815 460,998
Long-term debt 819,529 819,529 819,543
Other liabilities 357,951 339,021 310,661
----------- ----------- -----------
Total liabilities 2,003,353 2,008,212 1,948,230
Shareholders' equity 3,237,954 3,137,755 2,906,348
----------- ----------- -----------
Total liabilities and
shareholders' equity $5,241,307 $5,145,967 $4,854,578
=========== =========== ===========
Basic shares issued and outstanding
(shares in thousands) 91,761 94,025 95,987
=========== =========== ===========
Book value per share $35.29 $33.37 $30.28
=========== =========== ===========
THE PMI GROUP, INC. AND SUBSIDIARIES
----------------------------------------------------------------------
BUSINESS SEGMENTS RESULTS OF OPERATIONS
----------------------------------------------------------------------
U.S.
Mortgage Inter-
Insurance national Financial Consol-
Operations Operations Guaranty idated
(4) (5) (6) Other (7) Total
--------------------------------------------------
Three Months Ended June 30, 2005 (Unaudited)
--------------------------------------------------
(Dollars in thousands)
Net premiums written $152,564 $47,185 $- $13 $199,762
========== ========== ======== ========= =========
Revenues
Premiums earned $168,248 $38,141 $- $19 $206,408
Net investment
income 27,546 14,058 - 4,143 45,747
Equity in earnings
(losses) from
unconsolidated
subsidiaries (1) 4,937 - 23,761 (416) 28,282
Net realized
investment gains
(losses) 1,167 (18) - 354 1,503
Other income (loss) (5) 873 - 5,383 6,251
---------- ------------------- --------- ---------
Total revenues 201,893 53,054 23,761 9,483 288,191
---------- ------------------- --------- ---------
Losses and expenses
Losses and loss
adjustment
expenses 65,496 1,739 - - 67,235
Amortization of
deferred policy
acquisition costs 15,030 3,779 - - 18,809
Other underwriting
and operating
expenses 25,278 10,539 - 18,600 54,417
Interest expense - - - 8,472 8,472
---------- ---------- -------- --------- ---------
Total losses and
expenses 105,804 16,057 - 27,072 148,933
---------- ---------- -------- --------- ---------
Income (loss) before
income taxes 96,089 36,997 23,761 (17,589) 139,258
Income tax (benefit) 26,400 11,747 2,254 (5,728) 34,673
---------- ---------- -------- --------- ---------
Net income (loss) $69,689 $25,250 $21,507 $(11,861) $104,585
========== ========== ======== ========= =========
Expense ratio (8) 26.4% 30.3%
Loss ratio (8) 38.9% 4.6%
Combined ratio 65.3% 34.9%
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
from
unconsolidated
subsidiaries (1) 3,676 - 19,699 210 23,585
Net realized
investment gains
(losses) (166) 377 - (143) 68
Other income (loss) (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
deferred policy
acquisition costs 18,109 3,135 - - 21,244
Other underwriting
and operating
expenses 24,888 6,940 - 17,790 49,618
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) 29.2% 23.2%
Loss ratio (8) 36.1% 2.3%
Combined ratio 65.3% 25.5%
THE PMI GROUP, INC. AND SUBSIDIARIES
----------------------------------------------------------------------
BUSINESS SEGMENTS RESULTS OF OPERATIONS
----------------------------------------------------------------------
U.S.
Mortgage Inter-
Insurance national Financial Consol-
Operations Operations Guaranty idated
(4) (5) (6) Other (7) Total
--------------------------------------------------
Six Months Ended June 30, 2005 (Unaudited)
--------------------------------------------------
(Dollars in thousands)
Net premiums written $307,103 $86,370 $- $34 $393,507
========== ========== ======== ========= =========
Revenues
Premiums earned $332,360 $73,576 $- $39 $405,975
Net investment
income 53,125 27,813 - 8,599 89,537
Equity in earnings
(losses) from
unconsolidated
subsidiaries (1) 9,011 - 44,608 (125) 53,494
Net realized
investment gains 1,587 322 - 315 2,224
Other income (loss) (1) 760 - 11,028 11,787
---------- ------------------- --------- ---------
Total revenues 396,082 102,471 44,608 19,856 563,017
---------- ------------------- --------- ---------
Losses and expenses
Losses and loss
adjustment
expenses 128,614 3,103 - - 131,717
Amortization of
deferred policy
acquisition costs 31,056 8,196 - - 39,252
Other underwriting
and operating
expenses 48,832 17,543 - 33,687 100,062
Interest expense 1 - - 18,024 18,025
---------- ---------- -------- --------- ---------
Total losses and
expenses 208,503 28,842 - 51,711 289,056
---------- ---------- -------- --------- ---------
Income (loss) before
income taxes 187,579 73,629 44,608 (31,855) 273,961
Income tax (benefit) 51,548 23,232 4,211 (10,773) 68,218
---------- ---------- -------- --------- ---------
Net income (loss) $136,031 $50,397 $40,397 $(21,082) $205,743
========== ========== ======== ========= =========
Expense ratio (8) 26.0% 29.8%
Loss ratio (8) 38.7% 4.2%
Combined ratio 64.7% 34.0%
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
from
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
deferred policy
acquisition costs 37,542 6,797 - - 44,339
Other underwriting
and operating
expenses 51,028 13,807 - 35,103 99,938
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 (2) - - - 5,756 5,756
Income taxes from
discontinued
operations (2) - - - 1,958 1,958
---------- ---------- -------- --------- ---------
Income from
discontinued
operations after
income taxes (2) - - - 3,798 3,798
---------- ---------- -------- --------- ---------
Gain on sale of
discontinued
operations, net of
income taxes (2) - - - 30,108 30,108
---------- ---------- -------- --------- ---------
Net income $116,870 $51,994 $30,994 $16,286 $216,144
========== ========== ======== ========= =========
Expense ratio (8) 29.5% 24.6%
Loss ratio (8) 37.8% 2.4%
Combined ratio 67.3% 27.0%
THE PMI GROUP, INC. AND SUBSIDIARIES
----------------------------------------------------------------------
BUSINESS SEGMENTS BALANCE SHEETS
----------------------------------------------------------------------
U.S.
Mortgage Inter-
Insurance national Financial Consol-
Operations Operations Guaranty idated
(4) (5) (6) Other (7) Total
-------------------------------------------------------
June 30, 2005
-------------------------------------------------------
(Dollars in thousands)
Assets
Cash and
investments,
at fair
value $2,140,727 $1,048,992 $- $485,777 $3,675,496
Investment in
unconsolidated
subsidiaries
(1) 121,558 - 821,308 22,734 965,600
Equity
investment
held for sale
(3) - - - 110,383 110,383
Related party
receivables 1,507 - - 9,055 10,562
Reinsurance
receivables,
recoverables
and prepaid
premiums 23,903 21,972 - - 45,875
Deferred
policy
acquisition
costs 48,738 39,154 - - 87,892
Other assets 208,219 24,800 - 112,480 345,499
----------- ----------- --------- --------- -----------
Total assets $2,544,652 $1,134,918 $821,308 $740,429 $5,241,307
=========== =========== ========= ========= ===========
Liabilities
Reserve for
losses and
loss
adjustment
expenses $338,628 $25,781 $- $3 $364,412
Unearned
premiums 132,809 328,618 - 34 461,461
Long-term debt - - - 819,529 819,529
Other
liabilities 245,481 71,727 16,248 24,495 357,951
----------- ----------- --------- --------- -----------
Total
liabilities 716,918 426,126 16,248 844,061 2,003,353
Shareholders'
equity 1,827,734 708,792 805,060 (103,632) 3,237,954
----------- ----------- --------- --------- -----------
Total
liabilities
and
shareholders'
equity $2,544,652 $1,134,918 $821,308 $740,429 $5,241,307
=========== =========== ========= ========= ===========
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
(3) - - - 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
=========== =========== ========= ========= ===========
June 30, 2004
-------------------------------------------------------
(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
Related party
receivables 2,011 - - 45,820 47,831
Reinsurance
receivables,
recoverables
and prepaid
premiums 30,007 15,736 - - 45,743
Deferred
policy
acquisition
costs 59,866 31,950 - - 91,816
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
Shareholders'
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
=========== =========== ========= ========= ===========
THE PMI GROUP, INC. AND SUBSIDIARIES
----------------------------------------------------------------------
U.S. MORTGAGE INSURANCE OPERATIONS (4) ANALYSIS OF
RESERVE FOR LOSSES AND LAE
----------------------------------------------------------------------
June 30, 2005 March 31, 2005 June 30, 2004
----------------- ------------------- -------------------
Reserve Reserve Reserve
Loans for Loans for Loans for
in Losses and in Losses and in Losses
Default LAE Default LAE Default and LAE
------- --------- --------- --------- --------- ---------
(Dollars in thousands)
Primary
insurance 35,030 $299,379 35,716 $303,792 35,232 $302,099
Pool
insurance 16,623 39,249 16,992 34,685 16,804 32,645
------- --------- --------- --------- --------- ---------
Total 51,653 $338,628 52,708 $338,477 52,036 $334,744
======= ========= ========= ========= ========= =========
Reconciliation of Reserve for Losses and LAE
----------------------------------------------------------------------
June 30, March 31, Reserve
2005 2005 Change
--------- --------- ---------
(Dollars in thousands)
Gross reserve for
losses and LAE:
Primary insurance $299,379 $303,792 $(4,413)
Pool insurance 39,249 34,685 4,564
--------- --------- ---------
Total gross
reserve for
losses and LAE 338,628 338,477 151
Ceded reserve for
losses:
Primary insurance (2,299) (2,158) (141)
Pool insurance (89) (89) -
--------- --------- ---------
Total ceded
reserve for
losses (2,388) (2,247) (141)
--------- --------- ---------
Net reserve for
losses and LAE $336,240 $336,230 $10
========= ========= =========
----------------------------------------------------------------------
U.S. MORTGAGE INSURANCE OPERATIONS (4)
STATISTICAL INFORMATION
----------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Flow insurance
written (in
millions) $7,442 $10,409 $13,745 $18,863
Bulk insurance
written (in
millions) 2,216 998 4,081 1,342
--------- --------- --------- ---------
Primary new
insurance written
(in millions) $9,658 $11,407 $17,826 $20,205
========= ========= ========= =========
Primary new risk
written (in
millions) $2,551 $2,950 $4,621 $5,157
Pool new insurance
written (in
millions) (9) $3,228 $2,550 $4,534 $6,453
Pool new risk
written (in
millions) (9) $60 $64 $101 $139
Product mix as a %
of new insurance
written:
Above 97% LTV's 14% 9% 14% 10%
90.01% to 95%
LTV's 25% 31% 25% 32%
85.01% to 90%
LTV's 43% 40% 41% 40%
90.01% to 95% LTV's
with greater than
or equal to 30%
coverage 21% 26% 21% 26%
85.01% to 90% LTV's
with greater than
or equal to 25%
coverage 38% 33% 35% 33%
ARMs 35% 21% 34% 19%
Monthlies 97% 98% 98% 97%
Refinances 34% 34% 36% 34%
Bulk transactions 23% 9% 23% 7%
Premiums written (in
thousands):
Gross premiums
written $197,850 $188,745 $398,980 $381,587
Ceded premiums, net of
assumed premiums (41,455) (37,824) (84,742) (74,011)
Refunded premiums (3,831) (3,514) (7,135) (7,105)
--------- --------- --------- ---------
Net premiums
written 152,564 147,407 307,103 300,471
Change in unearned
premiums 15,684 6,985 25,257 2,944
--------- --------- --------- ---------
Net
premiums
earned $168,248 $154,392 $332,360 $303,415
========= ========= ========= =========
THE PMI GROUP, INC. AND SUBSIDIARIES
----------------------------------------------------------------------
U.S. MORTGAGE INSURANCE OPERATIONS (4) STATISTICAL INFORMATION
----------------------------------------------------------------------
June 30, March 31, June 30,
2005 2005 2004
------------ ---------- -----------
Primary insurance in force (in
millions) $103,434 $103,997 $104,206
Primary risk in force (in millions) $25,592 $25,507 $24,802
Pool risk in force (in
millions) (9) $2,445 $2,417 $2,535
Risk-to-capital ratio (10) 8.4 to 1 8.1 to 1 8.6 to 1
Insured primary loans 776,721 788,847 807,822
Persistency 62.0% 60.8% 52.8%
Primary loans in default 35,030 35,716 35,232
Primary default rate 4.51% 4.53% 4.36%
Bulk transactions only default rate 8.54% 8.17% 9.01%
Pool default rate 5.65% 5.65% 4.45%
Primary claims paid (year-to-date
in thousands) $113,180 $55,510 $93,364
Number of primary claims paid
(year-to-date) 4,934 2,413 4,029
Average primary claim size (year-
to-date in thousands) $22.9 $23.0 $23.2
Percentage of flow NIW subject to
captive reinsurance arrangements
(year-to-date) 65.7% 61.1% 60.2%
Percentage of primary NIW subject
to captive reinsurance
arrangements (year-to-date) 50.7% 47.1% 56.2%
Percentage of primary IIF subject
to captive reinsurance
arrangements (year-to-date) 53.7% 53.7% 52.2%
Percentage of primary RIF subject
to captive reinsurance
arrangements (year-to-date) 54.6% 53.6% 53.9%
----------------------------------------------------------------------
CMG MORTGAGE INSURANCE COMPANY STATISTICAL INFORMATION
----------------------------------------------------------------------
June 30, March 31, June 30,
2005 2005 2004
------------ ---------- -----------
Primary new insurance written
(year-to-date in millions) $2,495 $1,071 $2,544
Primary insurance in force (in
millions) $14,694 $14,213 $13,358
Primary risk in force (in millions) $3,428 $3,286 $2,991
Insured primary loans 108,066 105,928 102,044
Persistency 70.3% 69.1% 61.0%
Primary loans in default 622 713 587
Primary default rate (year-to-date) 0.58% 0.67% 0.58%
Primary claims paid (year-to-date
in thousands) $1,981 $892 $2,665
Number of primary claims paid
(year-to-date) 100 41 111
Average primary claim size (year-
to-date in thousands) $19.8 $21.8 $24.0
THE PMI GROUP, INC. AND SUBSIDIARIES
----------------------------------------------------------------------
PMI AUSTRALIA STATISTICAL INFORMATION
----------------------------------------------------------------------
June 30, March 31, June 30,
2005 2005 2004
----------- ----------- -----------
Net premiums written (year-to-date
in thousands) $71,775 $32,388 $74,169
Premiums earned (year-to-date in
thousands) $59,319 $29,399 $55,590
Flow insurance written (year-to-
date in millions) $8,685 $3,922 $10,268
RMBS insurance written (year-to-
date in millions) 6,478 3,816 6,648
----------- ----------- -----------
New insurance written (year-to-date
in millions) $15,163 $7,738 $16,916
=========== =========== ===========
Insurance in force (in millions) $119,811 $117,439 $91,467
Risk in force (in millions) $109,025 $106,724 $82,764
Policies in force 973,820 955,922 861,470
Loans in default 1,322 1,276 1,276
Delinquency rate 0.14% 0.13% 0.15%
Claims paid (year-to-date in
thousands) $1,090 $355 $371
Number of claims paid (year-to-
date) 42 18 26
Average claim size (year-to-date in
thousands) $26.0 $19.7 $14.3
----------------------------------------------------------------------
PMI EUROPE STATISTICAL INFORMATION
----------------------------------------------------------------------
June 30, March 31, June 30,
2005 2005 2004
----------- ----------- -----------
Net premiums written (year-to-date
in thousands) $3,027 $1,547 $5,167
Premiums earned (year-to-date in
thousands) $8,507 $4,353 $10,399
New credit default swaps written
(year-to-date in millions) $- $- $2,603
Insurance in force (in millions) $31,213 $31,365 $33,346
Risk in force (in millions) $2,450 $2,405 $3,251
Claims paid including credit
default swaps (year-to-date in
thousands) $1,379 $825 $651
Number of claims paid including
credit default swaps (year-to-
date) 26 20 51
THE PMI GROUP, INC. AND SUBSIDIARIES
----------------------------------------------------------------------
APPENDIX A - U.S. MORTGAGE INSURANCE OPERATIONS (4) SUPPLEMENTAL
STATISTICAL INFORMATION
----------------------------------------------------------------------
6/30/2005 3/31/2005 12/31/2004 9/30/2004 6/30/2004
---------- ---------- ----------- ---------- ----------
Primary
insurance in
force (in
millions)
Flow $89,965 $91,399 $93,263 $93,601 $92,968
Bulk 13,469 12,598 12,058 11,181 11,238
---------- ---------- ----------- ---------- ----------
Total $103,434 $103,997 $105,321 $104,782 $104,206
========== ========== =========== ========== ==========
Primary risk in
force (in
millions)
Flow $22,296 $22,541 $22,885 $22,741 $22,342
Bulk 3,296 2,966 2,773 2,518 2,460
---------- ---------- ----------- ---------- ----------
Total $25,592 $25,507 $25,658 $25,259 $24,802
========== ========== =========== ========== ==========
Primary
policies in
force 776,721 788,847 803,236 805,859 807,822
Primary risk in
force - credit
score
distribution
Flow 619-575 5.9% 6.1% 6.2% 6.4% 6.6%
574 or
below 1.7% 1.7% 1.8% 1.9% 2.0%
Bulk 619-575 17.4% 20.2% 21.1% 21.6% 21.0%
574 or
below 10.9% 12.9% 13.0% 12.7% 12.2%
Total 619-575 7.4% 7.7% 7.8% 7.9% 8.0%
574 or
below 2.9% 3.0% 3.0% 3.0% 3.0%
Primary average
loan size (in
thousands)
Flow $132.2 $131.5 $131.3 $130.5 $129.3
Bulk $139.8 $134.1 $129.8 $127.1 $126.9
Total $133.2 $131.8 $131.1 $130.1 $129.0
Loss severity -
primary
(quarterly)
Flow 83.8% 85.6% 84.9% 77.4% 83.0%
Bulk 87.7% 90.9% 84.6% 78.8% 83.5%
Total 84.6% 86.8% 84.8% 77.8% 83.1%
Alt-A primary
insurance in
force (in
millions)
With FICO
scores of 660
and above $11,800 $10,892 $10,250 $9,421 $8,590
With FICO
scores below
660 and above
619 2,326 2,136 2,029 1,836 1,648
---------- ---------- ----------- ---------- ----------
Total Alt-A
primary
insurance in
force $14,126 $13,028 $12,279 $11,257 $10,238
========== ========== =========== ========== ==========
----------------------------------------------------------------------
NEW INSURANCE WRITTEN AND INSURANCE IN FORCE ANALYSIS
----------------------------------------------------------------------
6/30/2005 3/31/2005 12/31/2004 9/30/2004 6/30/2004
---------- ---------- ----------- ---------- ----------
FICO greater
than 700 and
LTV greater
than 80 (in
millions)
Primary new
insurance
written
(year-to-date) $6,981 $3,049 $16,643 $12,788 $8,633
Primary
insurance in
force $42,829 $42,974 $43,801 $43,862 $43,640
Total portfolio
(in millions)
Primary new
insurance
written
(year-to-date) $17,826 $8,168 $41,213 $30,695 $20,205
Primary
insurance in
force $103,434 $103,997 $105,321 $104,782 $104,206
FICO greater
than 700 and
LTV greater
than 80 as a
percentage of
total
portfolio
Primary new
insurance
written
(year-to-date) 39.2% 37.3% 40.4% 41.7% 42.7%
Primary
insurance in
force 41.4% 41.3% 41.6% 41.9% 41.9%
THE PMI GROUP, INC. AND SUBSIDIARIES
----------------------------------------------------------------------
APPENDIX B - PMI AUSTRALIA AND PMI EUROPE QUARTERLY FINANCIAL
INFORMATION
----------------------------------------------------------------------
----------------------------------------------------------------------
PMI AUSTRALIA
----------------------------------------------------------------------
6/30/05 3/31/05 12/31/04 9/30/04
----------- ----------- ----------- -----------
(Australian $ in thousands, unless
otherwise noted)
Income Statement
Components - Quarter
Ended
Premiums earned $38,929 $37,840 $35,819 $37,109
Net investment income $14,966 $14,705 $14,087 $13,098
Change in fair value
of put options $(422) $(1,338) $(228) $(1,890)
Total expenses $15,104 $13,788 $13,624 $13,413
Net income $26,725 $26,487 $25,447 $24,725
Net income (US$ in
thousands) $20,541 $20,584 $19,272 $17,554
Balance Sheet
Components
Assets
Cash and investments,
at fair value $1,090,399 $1,037,704 $1,027,236 $973,479
Total assets $1,188,574 $1,132,961 $1,116,874 $1,068,080
Liabilities and
Shareholders' Equity
Loss reserves $12,541 $12,549 $12,547 $13,692
Unearned premiums $395,113 $382,781 $378,981 $364,120
Shareholders' equity $730,113 $689,927 $673,124 $642,585
6/30/04 3/31/04 12/31/03 9/30/03
---------- --------- --------- ---------
(Australian $ in thousands, unless
otherwise noted)
Income Statement Components
- Quarter Ended
Premiums earned $37,308 $37,790 $36,766 $32,855
Net investment income $12,677 $12,139 $9,235 $12,309
Change in fair value of put
options $1,311 $- $- $-
Total expenses $12,799 $12,030 $12,160 $(216)
Net income $26,832 $26,518 $21,441 $31,993
Net income (US$ in
thousands) $19,219 $20,265 $15,511 $21,073
Balance Sheet Components
Assets
Cash and investments, at
fair value $924,330 $892,864 $853,920 $816,143
Total assets $1,013,102 $976,723 $935,904 $891,787
Liabilities and
Shareholders' Equity
Loss reserves $13,556 $13,537 $13,536 $13,698
Unearned premiums $346,748 $330,477 $321,441 $297,042
Shareholders' equity $607,781 $586,842 $556,329 $539,141
----------------------------------------------------------------------
PMI EUROPE
----------------------------------------------------------------------
6/30/05 3/31/05 12/31/04 9/30/04
----------- ----------- ----------- -----------
(Euro in thousands, unless otherwise noted)
Income Statement
Components - Quarter
Ended
Premiums earned EUR 3,298 EUR 3,321 EUR 4,140 EUR 4,233
Net investment income EUR 1,951 EUR 2,002 EUR 1,435 EUR 2,294
Change in fair value
of put options EUR 342 EUR (33) EUR (6) EUR (96)
Total expenses EUR 3,168 EUR 2,031 EUR 3,679 EUR 1,476
Net income EUR 1,851 EUR 2,326 EUR 2,703 EUR 3,942
Net income (US$ in
thousands) $ 2,330 $ 3,049 $ 3,489 $ 4,822
Balance Sheet
Components
Assets
Cash and investments,
at fair value EUR 179,698 EUR 172,707 EUR 169,165 EUR 164,558
Total assets EUR 188,840 EUR 182,857 EUR 179,134 EUR 175,731
Liabilities and
Shareholders' Equity
Loss reserves EUR 13,395 EUR 12,807 EUR 12,126 EUR 10,656
Unearned premiums EUR 22,589 EUR 24,719 EUR 26,859 EUR 29,363
Shareholders' equity EUR 131,452 EUR 125,395 EUR 121,494 EUR 117,142
6/30/04 3/31/04 12/31/03 9/30/03
----------- ----------- ----------- -----------
(Euro in thousands, unless otherwise noted)
Income Statement
Components - Quarter
Ended
Premiums earned EUR 4,172 EUR 4,295 EUR 7,765 EUR 1,283
Net investment income EUR 1,642 EUR 2,198 EUR 1,199 EUR 1,491
Change in fair value
of put options EUR (18) EUR - EUR - EUR -
Total expenses EUR 1,462 EUR 1,768 EUR 1,723 EUR 1,144
Net income EUR 3,535 EUR 3,781 EUR 5,955 EUR 1,299
Net income (US$ in
thousands) $ 4,260 $ 4,726 $ 7,089 $ 1,469
Balance Sheet
Components
Assets
Cash and investments,
at fair value EUR 161,129 EUR 162,621 EUR 154,369 EUR 98,847
Total assets EUR 172,402 EUR 170,600 EUR 160,891 EUR 100,878
Liabilities and
Shareholders' Equity
Loss reserves EUR 10,497 EUR 10,031 EUR 9,624 EUR 2,109
Unearned premiums EUR 31,748 EUR 33,903 EUR 36,029 EUR 183
Shareholders' equity EUR 111,691 EUR 109,386 EUR 100,524 EUR 95,289
THE PMI GROUP, INC. AND SUBSIDIARIES
----------------------------------------------------------------------
APPENDIX C - BUSINESS SEGMENTS RESULTS OF OPERATIONS BY QUARTER
----------------------------------------------------------------------
2005
-----------------------
2nd Quarter 1st Quarter
----------- -----------
(Dollars in thousands)
U.S. Mortgage Insurance Operations (4)
----------------------------------------------------------------------
Net premiums written $152,564 $154,538
=========== ===========
Revenues
Premiums earned $168,248 $164,112
Net investment income 27,546 25,579
Equity in earnings from unconsolidated
subsidiaries (1) 4,937 4,074
Net realized investment gains (losses) 1,167 420
Other income (loss) (5) 4
----------- -----------
Total revenues 201,893 194,189
----------- -----------
Losses and expenses
Losses and loss adjustment expenses 65,496 63,118
Amortization of deferred policy acquisition
costs 15,030 16,026
Other underwriting and operating expenses 25,278 23,554
Field operations restructuring charge - -
Legal settlement refund - -
Interest expense - 1
----------- -----------
Total losses and expenses 105,804 102,699
----------- -----------
Income before income taxes 96,089 91,490
Income taxes 26,400 25,149
----------- -----------
Net income $69,689 $66,341
=========== ===========
International Operations (5)
----------------------------------------------------------------------
Net premiums written $47,185 $39,185
=========== ===========
Revenues
Premiums earned $38,141 $35,435
Net investment income 14,058 13,756
Net realized investment gains (losses) (18) 340
Other income (loss) 873 (113)
----------- -----------
Total revenues 53,054 49,418
----------- -----------
Losses and expenses
Losses and loss adjustment expenses 1,739 1,363
Amortization of deferred policy acquisition
costs 3,779 4,417
Other underwriting and operating expenses 10,539 7,005
Interest expense - -
----------- -----------
Total losses and expenses 16,057 12,785
----------- -----------
Income before income taxes 36,997 36,633
Income taxes 11,747 11,485
----------- -----------
Net income $25,250 $25,148
=========== ===========
Financial Guaranty (6)
----------------------------------------------------------------------
Equity in earnings from unconsolidated
subsidiaries (1) $23,761 $20,846
Income taxes 2,254 1,956
----------- -----------
Net income $21,507 $18,890
=========== ===========
Other (7)
----------------------------------------------------------------------
Net premiums written $13 $23
=========== ===========
Revenues
Premiums earned $19 $20
Net investment income 4,143 4,455
Equity in earnings (losses) from
unconsolidated subsidiaries (1) (416) 292
Net realized investment gains (losses) 354 (39)
Realized loss from discontinued operations
of equity investment (3) - -
Other income 5,383 5,644
----------- -----------
Total revenues 9,483 10,372
----------- -----------
Losses and expenses
Other underwriting and operating expenses 18,600 15,086
Interest expense 8,472 9,552
----------- -----------
Total losses and expenses 27,072 24,638
----------- -----------
Loss from continuing operations before income
tax benefit (17,589) (14,266)
Income tax benefit from continuing operations (5,728) (5,045)
----------- -----------
Loss from continuing operations after income
tax benefit (11,861) (9,221)
----------- -----------
Income from discontinued operations before
income taxes (2) - -
Income taxes from discontinued operations (2) - -
----------- -----------
Income from discontinued operations after
income taxes (2) - -
----------- -----------
Gain on sale of discontinued operations, net
of income taxes (2) - -
----------- -----------
Net income (loss) $(11,861) $(9,221)
=========== ===========
2004
---------------------------------------
4th 3rd 2nd 1st
Quarter Quarter Quarter Quarter
--------- --------- --------- ---------
(Dollars in thousands)
U.S. Mortgage Insurance
Operations (4)
----------------------------------------------------------------------
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 22,785 23,445 24,981
Field operations
restructuring charge - 315 1,443 1,156
Legal settlement refund - (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 (5)
----------------------------------------------------------------------
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 (loss) 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 (6)
----------------------------------------------------------------------
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 (7)
----------------------------------------------------------------------
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
gains (losses) - (374) (143) (37)
Realized loss from
discontinued operations of
equity investment (3) (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 (2) - - - 5,756
Income taxes from discontinued
operations (2) - - - 1,958
--------- --------- --------- ---------
Income from discontinued
operations after income taxes
(2) - - - 3,798
--------- --------- --------- ---------
Gain on sale of discontinued
operations, net of income
taxes (2) (1,105) - - 30,108
--------- --------- --------- ---------
Net income (loss) $(28,002) $(4,081) $(9,032) $25,317
========= ========= ========= =========
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