Radian Finalizes Settlement with IRS on 2000 to 2007 Examination & Announces Webcast of Second Quarter Conference Call on Jul...
18 Juillet 2018 - 10:30PM
Business Wire
-- Company expects settlement and related tax
benefits to increase June 30, 2018 book value per share by $0.35
--
Radian Group Inc. announced today that it has finalized a
settlement with the Internal Revenue Service (IRS) related to the
IRS’s examination of Radian’s 2000 through 2007 consolidated
federal income tax returns. Under the terms of the settlement,
which remain subject to U.S. Tax Court approval, Radian is expected
to submit $31 million of its $89 million qualified deposit to the
U.S. Treasury.
Radian expects to realize tax benefits of approximately $74
million, which includes both the impact of the settlement with the
IRS as well as the reversal of certain previously accrued state and
local tax liabilities.
The company estimates that the settlement and related tax
benefits will result in an increase to Radian’s net income per
share of $0.34 and book value per share of $0.35, in the second
quarter of 2018. In addition, the impact of the settlement is
expected to decrease total available holding company liquidity by
approximately $31 million. This settlement will not impact adjusted
diluted net operating income per share.
BACKGROUND ON IRS MATTER
As previously disclosed, Radian contested adjustments resulting
from the examination by the IRS of the company’s 2000 through 2007
consolidated federal income tax returns. The IRS had opposed the
recognition of certain tax losses and deductions that were
generated through Radian’s investment in a portfolio of noneconomic
REMIC (Real Estate Mortgage Investment Conduit) residual interests
and had proposed denying the associated tax benefits of those
items. Radian appealed the proposed adjustments to the Internal
Revenue Service Office of Appeals and made qualified deposits with
the U.S. Treasury of approximately $89 million, in order to avoid
the accrual of incremental above-market-rate interest with respect
to the proposed adjustments. The company received Notices of
Deficiency in September 2014 that asserted unpaid taxes and
penalties of $157 million for the 2000 through 2007 tax years and
also reflected additional amounts due of $105 million, which were
primarily associated with the disallowance of the previously filed
carryback of our 2008 net operating loss (NOL). The settlement will
resolve all issues and conclude all disputes relating to this IRS
matter.
SECOND QUARTER 2018 CONFERENCE CALL
Radian will hold a conference call on Thursday, July 26, 2018,
at 10:00 a.m. Eastern time to discuss the company’s second quarter
2018 results, which will be announced prior to the market open on
the same day.
The conference call will be broadcast live over the Internet at
http://www.radian.biz/page?name=Webcasts or at www.radian.biz. The
call may also be accessed by dialing 800.288.8976 inside the U.S.,
or 612.332.0228 for international callers, using passcode 451857 or
by referencing Radian.
A replay of the webcast will be available on the Radian website
approximately two hours after the live broadcast ends for a period
of one year. A replay of the conference call will be available
approximately two and a half hours after the call ends for a period
of two weeks, using the following dial-in numbers and passcode:
800.475.6701 inside the U.S., or 320.365.3844 for international
callers, passcode 451857.
In addition to the information provided in the company's
earnings news release, other statistical and financial information,
which is expected to be referred to during the conference call,
will be available on Radian's website under Investors >Quarterly
Results, or by clicking on
http://www.radian.biz/page?name=QuarterlyResults.
ABOUT RADIAN
Radian Group Inc. (NYSE: RDN), headquartered in Philadelphia,
provides private mortgage insurance, risk management products and
real estate services to financial institutions. Radian offers
products and services through two business segments:
- Mortgage Insurance, through its
principal mortgage insurance subsidiary Radian Guaranty Inc. This
private mortgage insurance helps protect lenders from
default-related losses, facilitates the sale of low-downpayment
mortgages in the secondary market and enables homebuyers to
purchase homes more quickly with downpayments less than 20%.
- Mortgage and Real Estate Services,
through its principal services subsidiary Clayton, as well as
Entitle Direct, Green River Capital, Red Bell Real Estate and
ValuAmerica. These solutions include information and services that
financial institutions, investors and government entities use to
evaluate, acquire, securitize, service and monitor loans and
asset-backed securities.
Additional information may be found at www.radian.biz.
FORWARD-LOOKING STATEMENTS
All statements in this Current Report on Form 8-K that address
events, developments or results that we expect or anticipate may
occur in the future are “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, Section 21E
of the Exchange Act and the U.S. Private Securities Litigation
Reform Act of 1995. In most cases, forward-looking statements may
be identified by words such as “anticipate,” “may,” “will,”
“could,” “should,” “would,” “expect,” “intend,” “plan,” “goal,”
“contemplate,” “believe,” “estimate,” “predict,” “project,”
“potential,” “continue,” “seek,” “strategy,” “future,” “likely” or
the negative or other variations on these words and other similar
expressions. These statements, which may include, without
limitation, projections regarding our future performance and
financial condition, are made on the basis of management’s current
views and assumptions with respect to future events. Any
forward-looking statement is not a guarantee of future performance
and actual results could differ materially from those contained in
the forward-looking statement. These statements speak only as of
the date they were made, and we undertake no obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. We operate in a
changing environment where new risks emerge from time to time and
it is not possible for us to predict all risks that may affect us.
The forward-looking statements, as well as our prospects as a
whole, are subject to risks and uncertainties that could cause
actual results to differ materially from those set forth in the
forward-looking statements. These risks and uncertainties include,
without limitation:
- the possibility that our estimated
liability may not be accurate due to, among other things, the IRS
assessing interest at an amount that is different than our current
estimated liability and potential additional true-ups of the
settlement amounts;
- our ability to obtain approval from the
U.S. Tax court for the settlement terms reached between Radian and
the IRS and, if such approval is not obtained, the possibility that
we would need to make further adjustments, which could be material,
to our tax provision and liabilities; and
- the impact of potential audits or
examinations of future tax periods.
For more information regarding these risks and uncertainties as
well as certain additional risks that we face, you should refer to
the Risk Factors detailed in Item 1A of our Annual Report on Form
10-K for the year ended December 31, 2017, and subsequent reports
filed from time to time with the U.S. Securities and Exchange
Commission. We caution you not to place undue reliance on these
forward-looking statements, which are current only as of the date
on which we issued this press release. We do not intend to, and we
disclaim any duty or obligation to, update or revise any
forward-looking statements to reflect new information or future
events or for any other reason.
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Radian Group Inc.Emily Riley, 215-231-1035emily.riley@radian.biz
Radian (NYSE:RDN)
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