>24 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The calculation of the basic and diluted net income per share was as follows (in thousands, except per-share amounts): responsible for 42.0% of gross written premiums. This customer concentration results from the small number of primary insurance companies licensed to write financial guaranty insurance. The Company evaluates performance based on net income. Summarized financial information concerning the Company’s operating segments as of and for the year-to-date periods indicated, is presented in the following tables: the United States. Private mortgage insurance primarily protects lenders from default-related losses on residential first mortgage loans made to home buyers who make downpayments of less than 20% of the purchase price and facilitates the sale of these mortgages in the secondary market. The mortgage services segment deals primarily with credit-based servicing and securitization of assets in underserved markets, in particular, the purchase and servicing of and securitization of special assets, including sub-performing/non-performing and seller financed residential mortgages and delinquent consumer assets. In addition, mortgage services includes the results of RadianExpress, an Internet-based settlement company that provides real estate information products and services to the first and second mortgage industry. The financial guaranty segment provides credit-related insurance coverage to meet the needs of customers in a wide variety of domestic and international markets. The Company’s insurance businesses within this segment include the assumption of reinsurance from the monoline financial guaranty insurers for both municipal bonds and structured finance obligations. The Company also provides direct financial guaranty insurance for municipal bonds, structured finance, trade credit reinsurance and excess-SIPC insurance. The Company’s reportable segments are strategic business units, which are managed separately, as each business requires different marketing and sales expertise. Certain corporate expenses have been allocated to the segments. In the mortgage insurance segment, the highest state concentration of risk is California. At December 31, 2001, California accounted for 16.6% of Mortgage Insurance’s total direct primary insurance in force and 11.3% of Mortgage Insurance’s total direct pool insurance in force. California accounted for 16.0% of Mortgage Insurance’s direct primary new insurance written in 2001.  The largest single customer of Mortgage Insurance (including branches and affiliates of such customer) measured by new insurance written, accounted for 12.6% of new insurance written during 2001 compared to 11.2% in 2000 and 12.2% in 1999. In the financial guaranty segment, the Company derives a substantial portion of its premiums written from a small number of primary insurers. In 2001, 34.0% of gross written premiums were derived from two primary insurers. Four primary insurers were The Company has three reportable segments: mortgage insurance, mortgage services, and financial guaranty. The mortgage insurance segment provides private mortgage insurance and risk management services to mortgage lending institutions located throughout The Company is required to present, as a component of comprehensive income, the amounts from transactions and other events that are currently excluded from the statements of income and are recorded directly to stockholders’ equity. SEGMENT REPORTING COMPREHENSIVE INCOME December 31, 2001  Mortgage Mortgage Financial  (in thousands) Insurance Services Guaranty Consolidated  Net premiums written $ 640,414 $ 143,230 $ 783,644 Net premiums earned $ 609,425 $ 106,455 $ 715,880 Net investment income 97,110 $ 127 50,250 147,487 Equity in net income of affiliates — 42,517 (1,208) 41,309 Other income 20,412 19,122 2,991 42,525 Total revenues 726,947 61,766 158,488 947,201 Provision  for losses 179,146 28,990 208,136  Policy acquisition  costs 62,439 21,823 84,262  Other operating  expenses 91,967 18,942 21,607 132,516 Interest expense 10,454 1,330 6,019 17,803 Total expenses 344,006 20,272 78,439 442,717 Net gains (losses) 4,451 (1,034) (2,370) 1,047 Pretax income 387,392 40,460 77,679 505,531 Income tax provision 107,394 16,184 21,534 145,112  Net income $ 279,998 $ 24,276 $ 56,145 $ 360,419 Total assets $2,783,705 $202,505 $1,452,416 $4,438,626 Deferred policy acquisition costs 76,035 — 75,002 151,037  Reserve for losses 465,444 — 123,199 588,643  Unearned  premiums 106,151 — 407,781 513,932  2001 2000 1999  Net income $360,419 $248,938 $148,138  Preferred stock dividend adjustment (3,300) (3,300) (3,300)  Net income available to common stockholders $357,119 $245,638 $144,838  Average diluted stock options outstanding 5,924.1 3,852.6 4,176.2  Average exercise  price per share $ 25.05 $ 15.59 $ 13.42  Average market price  per share –  diluted basis $ 36.63 $ 27.66 $ 23.17 Weighted average  common shares outstanding 90,474 75,268 73,950  Increase in shares due to exercise  of options –  diluted basis 1,484 1,030 1,762  Average shares outstanding – diluted 91,958 76,298 75,712  Net income  per share – basic $ 3.95 $ 3.26 $ 1.96  Net income  per share – diluted $ 3.88 $ 3.22 $ 1.91