MANAGEMENT REPORT We did precisely what we said we were going to do this year. We evolved from a leading mortgage insurance company into a diversified global credit enhancement company. And, while this is stated quite plainly, in reality it marks one of the most significant, and exciting, steps in our company’s history.  It was set in motion through strategic acquisition. Accelerated by a culture that uses its complementary skills and expertise to pursue unique solutions to complex risk management problems — and balanced by a philosophy of risk that  is prudent and disciplined. In a creative, innovative and responsive way, we are capitalizing on the value of the natural synergies that exist within Radian. These synergies enabled us to not only achieve record earnings in our core MI business, but to make significant progress toward our goal of becoming a leading provider of highly structured solutions in U.S. and international capital markets. Over the course of the last few years, we saw opportunities in serving the capital markets that weren’t being addressed. True to our nature, rather than being shaped by outside forces, we determined to define our space, creating new parameters and expanding past boundaries in the process. This vision came to life through the highly aggressive diversification strategy that took concrete form when we closed the $581.5 million stock acquisition of Enhance Financial Services Group Inc. on February 28, 2001. Its principal operating entities included Enhance Reinsurance Company, a leading provider of financial guaranty reinsurance, and Asset Guaranty Insurance Company, a direct writer  of financial guaranty insurance on asset-backed securities, > 6