Event Brief of Q2 2004 The PMI Group, Inc. Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

CORPORATE PARTICIPANTS

. Glen Corso, The PMI Group, Inc., Investor and Corporate Relations

. Steve Smith, The PMI Group, Inc., President & COO - PMI Mortgage

Insurance Co., President & CEO . Brad Shuster, The PMI Group, Inc., President & CEO, PMI Capital Corporation . Don Lofe, The PMI Group, Inc., EVP & CFO

OVERVIEW

Net income per share earnings totaled $0.99 for 2Q04 and $2.22 for 1H04. Consolidated net income in 2Q04 and YTD totaled $96.7m and $216.1m respectively, vs. $69.5m and $159.1m for the same periods a year ago. Looking forward, PMI continues to expect total originations for 2004 to range between $2.0-$2.3 trillion, with an expectation that the market will be towards the upper end of that range. Q&A Focus: PMI Australia, FGIC, Fairbanks, tax ratios, & expectations.

FINANCIAL DATA

A. Key Data From Call 1. 2Q04 EPS = $0.99. 2. 1H04 EPS = $2.22.

3. 2Q04 consolidated net income = $96.7m. 4. 1H04 consolidated net income = $216.1m. 5. 2Q04 consolidated premiums earned = $187.7m.

6. 1H04 consolidated premiums earned = $373m.

PRESENTATION SUMMARY

S1. Results (S.S.) 1. Consolidated Results: 1. Net income per share earnings totaled $0.99 for 2Q04 and $2.22 for 1H04.

1. By comparison, PMI's net income per share earnings were $0.77, and $1.77 for the same periods a year ago. 2. Consolidated net income in 2Q04 and YTD totaled $96.7m and $216.1m respectively, vs. $69.5m and $159.1m for the same periods a year ago. 3. Combined insurance in force at 06/30/04 was $242.4b vs. $192.7b at 06/30/03. 1. This increase was a result of growth of insurance in force for PMI Australia, and PMI Europe's acquisition of the UK

Lenders Mortgage Insurance portfolio from Royal & Sun Alliance.

4. Consolidated premiums earned for 2Q04 grew nearly 12% to

$187.7m, vs. $168.2m in 2Q03. 5. Consolidated premiums earned for 1H04 were $373m, vs. $344.2m for 1H03. 1. The increase for 2Q04 was a result of increases in premium earned for the US mortgage insurance operations and the international operations. 2. The YTD increase was due primarily to the increase in premiums earned from international operations. 2. US Mortgage Insurance Operations:

1. There was a $7.4m increase in reported net income for 2Q04 vs.

2Q03. 2. Excluding $100,000 in net realized investment gains, and a $1.3m of net realized investment losses, net income in 2Q04 increased by $8.9m, or 16%. 1. The income growth was a result of increases in premium earned and net investment income.

3. Insurance in force in the domestic portfolio, including CMG

increased by $2.4b vs. 2Q03. 1. This is a welcomed turnaround from the decreases that PMI has experienced in the past several quarters.

2. The increase was the result of new insurance written, primarily flow business, outpacing policy cancellations over the previous 12 months. 4. As stated in the 07/13/04 financial guidance announcement, PMI expects growth in primary mortgage insurance in force at

12/31/2004 to increase between 2-7% over 2003. 5. Further positive trends for 2Q04 included $9.4m increase in premium earned, and a $5.6m increase in net investment income. 6. As for incurred losses, PMI's loss and loss adjustment expenses for US mortgage insurance operations totaled $56m for 2Q04, and $115m for 1H04. 1. These totals compare to $56m and $103m for the same periods in 2003. 7. As announced on 07/13/04, PMI expects incurred losses in the US mortgage insurance operations to be between $220-240m for 2004. 3. Initiatives: 1. As 2Q04 concluded, PMI announced three initiatives that will continue its success in organizing around its customers in maintaining a flexible, operationally efficient infrastructure. 1. These initiatives, which include two key technology systems developments and a restructuring of the Co.'s fuel operations will ensure a keen focus on its customers, operational excellence, and delivery of product solutions with ease of use. 2. When combined with the Co.'s fuel underwriting changes announced earlier this year, it is anticipated that these efforts would result in a $5-6m pretax savings in 2005. 3. PMI expects the charges associated with these efforts to be $3-4m pretax in 2004. 4. Thus far, PMI has incurred pretax expenses of $1.1m, and $2.6m for 2Q04 and YTD respectively for these efforts. 4. Guidance: 1. Looking forward, PMI continues to expect total originations for 2004 to range between $2.0-$2.3 trillion, with an expectation that the market will be towards the upper end of that range. 2. Expectations for the 2004 purchase money mortgage market is that it will range from $1.2 trillion to slightly more than $1.3 trillion. 1. Somewhat larger than 2003 purchase market. 3. PMI continues to believe that the refinance activity will trend lower and that mortgage interest rates will trend higher in 2H04. 4. The percentage of new insurance written and insurance in force to borrowers with FICO scores greater than 700 has remained approx. 42% over the past 24 months.

S2. Results (PMI Capital) (B.S.) 1. Highlights: 1. PMI Capital Corporation which consists of international operations and Financial Guaranty segments, as well as certain strategic investments recorded YTD earnings approx. double what they were for the same period in 2003. 2. PMI Capital Corporation's 2Q04 performance was highlighted by strong results in both segments. 3. International operations reported an $8.4m increase in net income over 2Q03, and $21.2m increase for 1H04, over 1H03. 4. In the Financial Guaranty Segment, PMI Capital Corporation reported net income for 2Q04 of $17.5m vs. $0.8m in 2Q03, $31m for 1H04 vs. $0.99m in 1H03.

1. The increase was largely the result of the Co.'s 42% investment in FGIC. 2. International Operations: 1. Reported net income for 2Q04 and YTD of $25m and $52m respectively. 1. These net income totals represented increases of 51% for 2Q04 and 69% YTD vs. the same periods a year ago. 2. PMI Australia: 1. Net income from PMI Australia for 2Q04 and YTD totaled $19.2m and $39.5m respectively, representing increases of $5.5m or 40% for 2Q04, and $13.7m or 53% YTD vs. the same periods a year ago. 1. These increases are largely a result of increases in …