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Segment Reporting | 9 Months Ended
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Sep. 30, 2022
Segment Reporting [Abstract] |
Segment Reporting | Segment Reporting We have two strategic business units that we manage separately—Mortgage and homegenius. Our Mortgage segment derives its revenue from mortgage insurance and other mortgage and risk services, including contract underwriting solutions provided to mortgage lending institutions and mortgage credit investors. Our homegenius segment offers an array of title, real estate and technology products and services to consumers, mortgage lenders, mortgage and real estate investors, GSEs, real estate brokers and agents. In addition, we report as All Other activities that include: (i) income (losses) from assets held by Radian Group, our holding company; (ii) related general corporate operating expenses not attributable or allocated to our reportable segments; and (iii) certain investments in new business opportunities, including activities and investments associated with Radian Mortgage Capital, and other immaterial activities. We allocate corporate operating expenses to both reportable segments based primarily on each segment’s forecasted annual percentage of total revenue, which approximates the estimated percentage of management time spent on each segment. In addition, we allocate all corporate interest expense to our Mortgage segment, due to the capital-intensive nature of our mortgage insurance business. With the primary exception of goodwill and other acquired intangible assets, which all relate to our homegenius segment, and are reviewed as part of our annual goodwill impairment assessment, we do not manage assets by segment. See Note 1 for additional details about our Mortgage and homegenius businesses. Adjusted Pretax Operating Income (Loss) Our senior management, including our Chief Executive Officer (Radian’s chief operating decision maker), uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of each of Radian’s business segments and to allocate resources to the segments. Adjusted pretax operating income (loss) is defined as pretax income (loss) excluding the effects of: (i) net gains (losses) on investments and other financial instruments, except for certain investments attributable to our reportable segments; (ii) gains (losses) on extinguishment of debt; (iii) amortization and impairment of goodwill and other acquired intangible assets; and (iv) impairment of other long-lived assets and other non-operating items, such as impairment of internal-use software, gains (losses) from the sale of lines of business and acquisition-related income and expenses. See Note 4 of Notes to Consolidated Financial Statements in our 2021 Form 10-K for detailed information regarding items excluded from adjusted pretax operating income (loss), including the reasons for their treatment. Although adjusted pretax operating income (loss) excludes certain items that have occurred in the past and are expected to occur in the future, the excluded items represent those that are: (i) not viewed as part of the operating performance of our primary activities or (ii) not expected to result in an economic impact equal to the amount reflected in pretax income (loss). The reconciliation of adjusted pretax operating income (loss) for our reportable segments to consolidated pretax income (loss) is as follows.
Reconciliation of adjusted pretax operating income (loss) by segment
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) |  | 2022 |  | 2021 |  | 2022 |  | 2021
Adjusted pretax operating income (loss) |  |  |  |  |  |  |  |
Mortgage |  | $ | 295,675 |  |  | $ | 165,220 |  |  | $ | 890,036 |  |  | $ | 534,972 |
homegenius |  | (25,536) |  |  | (5,557) |  |  | (56,732) |  |  | (25,208) |
Total adjusted pretax operating income for reportable segments (1) |  | 270,139 |  |  | 159,663 |  |  | 833,304 |  |  | 509,764 |
All Other adjusted pretax operating income |  | 2,581 |  |  | 986 |  |  | 6,397 |  |  | 2,920 |
Net gains (losses) on investments and other financial instruments |  | (16,252) |  |  | 2,098 |  |  | (87,578) |  |  | 12,578 |
Amortization of other acquired intangible assets |  | (1,023) |  |  | (862) |  |  | (2,721) |  |  | (2,587) |
Impairment of other long-lived assets and other non-operating items |  | 16 |  |  | (244) |  |  | 79 |  |  | (4,349) |
Consolidated pretax income |  | $ | 255,461 |  |  | $ | 161,641 |  |  | $ | 749,481 |  |  | $ | 518,326 |
(1)Includes allocated corporate operating expenses and depreciation expense as follows.
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) |  | 2022 |  | 2021 |  | 2022 |  | 2021
Mortgage |  |  |  |  |  |  |  |
Allocated corporate operating expenses (a) |  | $ | 32,457 |  |  | $ | 33,963 |  |  | $ | 101,903 |  |  | $ | 94,177 |
Direct depreciation expense |  | 2,234 |  |  | 2,240 |  |  | 6,803 |  |  | 7,342 |
homegenius |  |  |  |  |  |  |  |
Allocated corporate operating expenses (b) |  | $ | 5,555 |  |  | $ | 4,918 |  |  | $ | 16,554 |  |  | $ | 13,635 |
Direct depreciation expense |  | 646 |  |  | 639 |  |  | 1,932 |  |  | 1,828 |
(a)Includes allocated depreciation expense of $0.7 million and $2.3 million for the three and nine months ended September 30, 2022, respectively, and $0.8 million and $2.5 million for the three and nine months ended September 30, 2021, respectively. (b)Includes allocated depreciation expense of $0.2 million and $0.4 million for the three and nine months ended September 30, 2022, respectively, and $0.1 million and $0.4 million for the three and nine months ended September 30, 2021, respectively. Revenues The reconciliation of revenues for our reportable segments to consolidated revenues is as follows.
Reconciliation of revenues by segment
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) |  | 2022 |  | 2021 |  | 2022 |  | 2021
Revenues |  |  |  |  |  |  |  |
Mortgage |  | $ | 281,033 |  |  | $ | 274,659 |  |  | $ | 855,262 |  |  | $ | 862,757 |
homegenius (1) |  | 25,083 |  |  | 45,091 |  |  | 91,338 |  |  | 104,337 |
Total revenues for reportable segments |  | 306,116 |  |  | 319,750 |  |  | 946,600 |  |  | 967,094 |
All Other revenues |  | 6,396 |  |  | 3,996 |  |  | 17,218 |  |  | 12,100 |
Net gains (losses) on investments and other financial instruments |  | (16,252) |  |  | 2,098 |  |  | (87,578) |  |  | 12,578 |
Elimination of inter-segment revenues |  | (71) |  |  | (86) |  |  | (238) |  |  | (207) |
Total revenues |  | $ | 296,189 |  |  | $ | 325,758 |  |  | $ | 876,002 |  |  | $ | 991,565 |
(1)Includes immaterial inter-segment revenues for the three and nine months ended September 30, 2022 and 2021. The table below, which represents total services revenue on our condensed consolidated statements of operations for the periods indicated, represents the disaggregation of services revenue by revenue type.
Services revenue
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) |  | 2022 |  | 2021 |  | 2022 |  | 2021
homegenius |  |  |  |  |  |  |  |
Title |  | $ | 4,714 |  |  | $ | 12,927 |  |  | $ | 16,012 |  |  | $ | 30,383 |
Real estate |  |  |  |  |  |  |  |
Valuation |  | 6,731 |  |  | 8,435 |  |  | 23,732 |  |  | 19,835 |
Single family rental |  | 5,430 |  |  | 8,539 |  |  | 20,887 |  |  | 17,610 |
Real estate owned asset management |  | 750 |  |  | 571 |  |  | 2,302 |  |  | 1,738 |
Other real estate services |  | 78 |  |  | 67 |  |  | 83 |  |  | 143 |
Technology |  |  |  |  |  |  |  |
Asset management technology platform |  | 1,134 |  |  | 1,199 |  |  | 3,740 |  |  | 4,225 |
Other technology services |  | 905 |  |  | 981 |  |  | 2,957 |  |  | 2,964 |
Mortgage |  | 404 |  |  | 5,027 |  |  | 7,062 |  |  | 13,110 |
All Other |  | — |  |  | 27 |  |  | — |  |  | 124 |
Total services revenue |  | $ | 20,146 |  |  | $ | 37,773 |  |  | $ | 76,775 |  |  | $ | 90,132 |
Revenue recognized related to services made available to customers and billed is reflected in accounts and notes receivable. Accounts and notes receivable include $11.9 million and $20.0 million as of September 30, 2022, and December 31, 2021, respectively, related to services revenue contracts. Revenue recognized related to services performed and not yet billed is recorded in unbilled receivables and reflected in other assets. See Note 2 of Notes to Consolidated Financial Statements in our 2021 Form 10-K for information regarding our accounting policies and the services we offer.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI https://asc.fasb.org/topic&trid=2134510 + Details
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