Radian Group Inc. Notes to Consolidated Financial Statements - (Continued) 20. Quarterly Financial Data (Unaudited) (In thousands, except per share information) 2012 Quarters First Second Third Fourth Year Net premiums earned—insurance. . . . . . . . . . . . . . . . . . $ 167,365 $ 186,779 $ 190,963 $ 193,875 $ 738,982 Net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . 34,713 30,877 25,635 23,112 114,337 Net gains on investments (1) . . . . . . . . . . . . . . . . . . . . . 67,459 26,419 84,659 6,351 184,888 Net change in fair value of derivative instruments (2) . . (72,757) (33,124) (41,056) 2,912 (144,025) Net losses on other financial instruments (3). . . . . . . . . (17,852) (61,862) (740) (1,815) (82,269) Provision for losses (4). . . . . . . . . . . . . . . . . . . . . . . . . . 266,154 210,868 176,352 305,797 959,171 Policy acquisition and other operating expenses. . . . . . 78,200 50,998 63,356 65,994 258,548 Net (loss) income (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . (169,232) (119,259) 14,325 (177,302) (451,468) Diluted net (loss) income per share (6)(7) . . . . . . . . . . . $ (1.28) $ (0.90) $ 0.11 $ (1.34) $ (3.41) Weighted average shares outstanding (6). . . . . . . . . . . . 132,465 132,346 134,033 132,525 132,533 2011 Quarters First Second Third Fourth Year Net premiums earned—insurance. . . . . . . . . . . . . . . . . . $ 203,023 $ 188,934 $ 179,655 $ 184,413 $ 756,025 Net investment income. . . . . . . . . . . . . . . . . . . . . . . . . . 42,240 43,823 38,763 38,694 163,520 Net gains on investments (1) . . . . . . . . . . . . . . . . . . . . . 37,435 44,236 81,640 38,866 202,177 Net change in fair value of derivative instruments (2) . . 243,892 188,726 126,008 69,769 628,395 Net gains on other financial instruments (3) . . . . . . . . . . 75,251 5,047 80,602 32,429 193,329 Provision for losses (4). . . . . . . . . . . . . . . . . . . . . . . . . . 427,373 263,566 249,598 355,984 1,296,521 Change in PDR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,383) (3,102) (1,942) (665) (7,092) Policy acquisition and other operating expenses. . . . . . 60,350 60,341 56,689 51,193 228,573 Net income (loss) (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . 103,006 137,115 183,568 (121,539) 302,150 Diluted net income (loss) per share (6)(7) . . . . . . . . . . . $ 0.77 $ 1.03 $ 1.37 $ (0.92) $ 2.26 Weighted average shares outstanding (6). . . . . . . . . . . . 133,703 133,614 133,513 133,463 133,863  ______________ (1)  The 2012 and 2011 periods reflect realized gains and losses on investments in connection with the continued reallocation  of our investment portfolio and unrealized gains and losses on our trading securities.  (2)  The change in fair value of derivative instruments for  2012 and 2011 reflects the volatility in the cumulative unrealized  (loss) gain attributable to the market’ s perception of our non-performance risk as a result of the changes in our CDS  spread during both years. There was minimal spread tightening in the fourth quarter of 2012. (3)  The 2012 and 2011 periods primarily reflect fair value gains and losses on our  VIE debt.  (4)  The results for the fourth quarter of 2012 include the ef fects of an increase in our IBNR reserve estimate.  The provision  for losses in the fourth quarter of 201 1 was primarily driven by reserves established on new default notices, which  increased consistent with seasonal trends.  (5)  Net income in the third quarter of 2012 reflects increased gains on investments and a decline in the provision for losses in  our mortgage insurance segment. The net loss for the fourth quarter of 201 1 was primarily due to an increase in both the  mortgage insurance and financial guaranty provision for losses.  (6)  Diluted net (loss) income per share and average shares outstanding per the accounting standard regarding earnings per  share. (7)  Net (loss) income per share is computed independently for each period presented. Consequently , the sum of the quarters  may not equal the total net (loss) income per share for the year . 264