This excerpt taken from the MTG 10-Q filed Nov 21, 2007.
Summary Sherman balance sheets and income statements at the dates and for the periods indicated appear below.
Sherman Summary Balance Sheet:
Sherman Summary Income Statement:
In September 2007, the Company sold a portion of its interest in Sherman Financial Group LLC (Sherman) to an entity owned by Shermans senior management. The interest sold by the Company represented approximately 16% of Shermans equity. The Company received a cash payment of $240.8 million in the sale and is entitled to a contingent payment if the management entitys after-tax return on the interests it purchased exceeds approximately 16% annually over a period that can end as late as December 31, 2013. The Company recorded a $162.9 million pre-tax gain on this sale, which is reflected in the Companys results of operations for the third quarter of 2007 as a realized gain. After the sale, the Company owns approximately 24.25% of Shermans interests, and Shermans management owns approximately 54.0%. Radian, which also sold interests in Sherman to the management entity, owns the balance of Sherman. The Company will continue to account for this investment under the equity method of accounting.