Radian Group Inc. CONSOLIDATED BALANCE SHEETS  December 31, 2012 December 31, 2011 ($ in thousands, except share and per share amounts) ASSETS Investments Fixed-maturities held to maturity—at amortized cost (fair value $676 and $2,748) . . $ 679 $ 2,640 Fixed-maturities available for sale—at fair value (amortized cost $39,481 and $120,757) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,696 118,733 Equity securities available for sale—at fair value (cost $88,260 and $114,425) . . . . . 112,139 128,424 Trading securities—at fair value (including variable interest entity (“VIE”) securities of $0 and $94,521). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,094,622 4,211,059 Short-term investments—at fair value (including VIE investments of $0 and $149,981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 777,532 1,261,703 Other invested assets—(including VIE assets at fair value of $78,006 and $0) . . . . . 126,750 61,000 Total investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,152,418 5,783,559 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,555 35,589 Restricted cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,226 27,020 Deferred policy acquisition costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88,202 139,906 Accrued investment income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,349 32,262 Accounts and notes receivable (less allowance of $0 and $0) . . . . . . . . . . . . . . . . . . . . . . 87,519 102,647 Property and equipment, at cost (less accumulated depreciation of $98,909 and $96,403) 7,456 11,044 Derivative assets (including VIE derivative assets of $1,585 and $1,602) . . . . . . . . . . . . . 13,609 17,212 Deferred income taxes, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 15,975 Reinsurance recoverables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,204 157,985 Other assets (including VIE other assets of $99,337 and $105,903) . . . . . . . . . . . . . . . . . . 374,662 333,566 Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,903,200 $ 6,656,765 LIABILITIES AND STOCKHOLDERS’ EQUITY Unearned premiums. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 648,682 $ 637,372 Reserve for losses and loss adjustment expenses (“LAE”). . . . . . . . . . . . . . . . . . . . . . . . . 3,149,936 3,310,902 Reserve for premium deficiency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,685 3,644 Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 663,571 818,584 VIE debt—at fair value (including $0 and $0 of non-recourse debt) . . . . . . . . . . . . . . . . . 108,858 228,240 Derivative liabilities (including VIE derivative liabilities of $70,467 and $19,501). . . . . 266,873 126,006 Accounts payable and accrued expenses (including VIE accounts payable of $366 and $530) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325,270 349,726 Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,166,875 5,474,474 Commitments and Contingencies (Note 19) Stockholders’ equity Common stock: par value $.001 per share; 325,000,000 shares authorized; 151,131,173 and 150,666,446 shares issued at December 31, 2012 and 2011, respectively; 133,647,216 and 133,199,159 shares outstanding at December 31, 2012 and 2011, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 151 Treasury stock, at cost: 17,483,957 and 17,467,287 shares at December 31, 2012 and 2011, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (892,094 ) (892,052 ) Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,967,414 1,966,565 Retained (deficit) earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (355,241) 96,227 Accumulated other comprehensive income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,095 11,400 Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 736,325 1,182,291 Total liabilities and stockholders’ equity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,903,200 $ 6,656,765 See Notes to Consolidated Financial Statements. 162