Press Release Details

Highlights

• MBIA Inc.’s Adjusted Book Value (ABV), a non-GAAP measure, was $36.81 per share at December 31, 2010 compared with $37.22 per share at September 30, 2010 and $38.94 at December 31, 2009.
• MBIA Inc. recorded net income available to common shareholders of $451 million, or $2.24 per share, for the fourth quarter of 2010, compared with a net loss of $240 million, or $1.16 per share, in the fourth quarter of 2009.
• MBIA Inc.’s adjusted pre-tax loss, a non-GAAP measure, was $311 million in the fourth quarter of 2010 compared with an adjusted pre-tax loss of $541 million in the fourth quarter of 2009.
• During the fourth quarter of 2010, MBIA Insurance Corp. (MBIA Corp.) reached agreements with five counterparties for commutations of transactions including multi-sector CDOs, multi-sector CDO-squareds, structured CMBS pools, commercial real estate CDOs and high-yield corporate CDOs. The agreements eliminated $15.7 billion in gross insured exposure in exchange for one-time payments by MBIA Corp. that were consistent with its aggregate statutory loss reserve for these transactions.

ARMONK, N.Y.--(BUSINESS WIRE)-- MBIA Inc. (NYSE: MBI) (the Company) today reported Adjusted Book Value (ABV) per share (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) of $36.81 as of December 31, 2010, compared with $37.22 as of September 30, 2010. During the fourth quarter, the Company modified its calculation of ABV as described in the attached Explanation of Non-GAAP Financial Measures. Book value per share was $14.18 as of December 31, 2010.

Net income available to common shareholders for the fourth quarter of 2010 was $451 million, or $2.24 per share, compared with a net loss of $240 million, or $1.16 per share, in the fourth quarter of 2009. Net income in the fourth quarter of 2010 was driven primarily by a $1.1 billion pre-tax unrealized net gain on the fair value of insured derivatives resulting primarily from the reversal of the mark-to-market on commuted transactions.

The adjusted pre-tax loss, a non-GAAP measure (defined in the attached Explanation of Non-GAAP Financial Measures), for the fourth quarter of 2010 was $311 million compared with an adjusted pre-tax loss of $541 million in the fourth quarter of 2009. The Company believes that ABV and adjusted pre-tax income provide investors with additional views of its operating results that management finds useful in measuring financial performance.

“The fourth quarter and full year 2010 represented the thirteenth quarter and fourth year, respectively, in which our company’s results reflected the impact of having insured securitizations primarily consisting of ineligible mortgages,” said MBIA Inc. President and Chief Financial Officer Chuck Chaplin. “Since 2007, we have paid $9.1 billion in gross claims on mortgage securitizations, CDOs and other transactions, demonstrating the value of bond insurance to investors. Investors in uninsured securities in the same general asset classes have sustained substantial cash losses, while those who hold securities wrapped by MBIA Corp. and National Public Finance Guarantee Corp. haven’t suffered a single dollar of loss. This fact provides simple and obvious evidence for the value in uncertain times of the bond insurance we provided. Meanwhile, our insurance companies continue to have adequate resources to meet all expected future claims obligations,” Mr. Chaplin continued. “The commutations and terminations of $15.7 billion of exposure in the fourth quarter improved the balance sheet position of MBIA Corp. and eliminated the volatility associated with the commuted policies, while National has been steadily improving its capital position.

“Importantly, we recently won dismissal of one of the lawsuits challenging the separation of MBIA Corp. and National,” said Mr. Chaplin. “Although the decision is being appealed, we remain confident that in all of the cases challenging our Transformation, the courts will find that the New York State Insurance Department acted properly and within its authority in approving the separation of our companies.”

Full Year 2010 Results

MBIA Inc.’s Adjusted Book Value (ABV) per share was $36.81 as of December 31, 2010, compared with $38.94 as of December 31, 2009. Net income available to common shareholders for the full year 2010 was $53 million, or $0.26 per share, compared with net income of $623 million, or $2.99 per share, for the full year 2009. Net income in 2010 was impacted primarily by a $607 million pre-tax unrealized net loss on the fair value of insured derivatives resulting primarily from a change in the market perception of MBIA Corp.’s credit risk. By contrast, in 2009 the Company recorded a $1.7 billion pre-tax unrealized net gain on the fair value of insured derivatives. The adjusted pre-tax loss for the full year 2010 was $377 million compared with an adjusted pre-tax loss of $877 million in 2009. The adjusted pre-tax loss in 2010 declined relative to 2009 primarily due to lower net investment losses related to other-than-temporary impairments and lower losses on insured exposures.

Fourth Quarter 2010 Segment Results

The following is a summary of book value and ABV per share data as of December 31, 2010 and pre-tax results by segment for the fourth quarter:

								Structured
			U.S. Public					Finance and					Advisory
$ in millions except per share data			Finance					International					Services					Corporate					Wind-down					Consolidated
12/31/10 BV per share			$	15.48				$	6.17				$	0.14				$	(4.15	)			$	(3.46	)			$	14.18
09/30/10 BV per share			$	15.80				$	4.97				$	0.15				$	(1.20	)			$	(7.16	)			$	12.56
Change in BV per share			$	(0.32	)			$	1.20				$	( 0.01	)			$	(2.95	)			$	3.70				$	1.62
12/31/10 ABV per share			$	23.23				$	18.96				$	0.14				$	(4.14	)			$	(1.38	)			$	36.81
09/30/10 ABV per share			$	23.17				$	20.04				$	0.15				$	(1.19	)			$	(4.95	)			$	37.22
Change in ABV per share			$	0.06				$	(1.08	)			$	( 0.01	)			$	(2.95	)			$	3.57				$	(0.41	)
4Q 2010 Pre-tax Income			$	103				$	371				$	(3	)			$	34				$	42				$	552
4Q 2009 Pre-tax Income			$	186				$	(430	)			$	0				$	35				$	5				$	(205	)
4Q 2010 Adj. Pre-tax Income			$	103				$	(487	)			$	(3	)			$	34				$	42				$	(311	)
4Q 2009 Adj. Pre-tax Income			$	186				$	(766	)			$	0				$	35				$	5				$	(541	)

U.S. Public Finance Results

The Company’s U.S. public finance insurance business is conducted through its National Public Finance Guarantee Corp. (National) subsidiary. National recorded $103 million of adjusted pre-tax income in the fourth quarter of 2010 compared with $186 million of adjusted pre-tax income in the fourth quarter of 2009. Lower adjusted pre-tax income in the fourth quarter of 2010 resulted from increased loss and loss adjustment expenses as well as declines in premiums earned, fees and reimbursements and net investment income. Despite positive pre-tax income, National’s book value declined in the quarter due to a $138 million unrealized loss on investments recorded directly in Other Comprehensive Income (OCI).

National's insured portfolio generated total premiums earned of $112 million in the fourth quarter of 2010 compared with $137 million in total premiums earned in the fourth quarter of 2009.

Net investment income for National declined 17 percent to $54 million in the fourth quarter of 2010 from $65 million in the comparable period of 2009 due to lower average yields. Over the same period, National’s investment portfolio increased in size by 4 percent, from $5.3 billion at December 31, 2009 to $5.5 billion at December 31, 2010. National’s investment portfolio remains liquid, averaging Double-A credit quality.

National’s loss and loss adjustment expenses totaled $31 million in the fourth quarter, compared with $2 million in the fourth quarter of 2009. Loss and loss adjustment expenses in the fourth quarter of 2010 were driven primarily by a transaction backed by a not-for-profit entity.

National’s amortization of deferred acquisition costs totaled $23 million in the fourth quarter of 2010, down 12 percent from $26 million in the fourth quarter of 2009, reflecting slower amortization and fewer refundings within its insured portfolio in the fourth quarter of 2010 compared with the fourth quarter of 2009. Operating expenses were $17 million in the fourth quarter of 2010, down 11 percent from $19 million in the comparable period of 2009.

As of December 31, 2010, National’s statutory capital was $2.4 billion and its claims-paying resources totaled $5.6 billion.

Structured Finance and International Insurance Results

The Structured Finance and International Insurance business is conducted through MBIA Corp. and its subsidiaries.

The adjusted pre-tax loss for the Structured Finance and International Insurance segment for the fourth quarter of 2010 was $487 million compared with an adjusted pre-tax loss of $766 million in the fourth quarter of 2009. Premiums earned, net investment income, fees and reimbursements, and premiums and fees on insured derivatives totaled $167 million in the fourth quarter of 2010. Losses, credit impairments (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) and loss-related expenses on insured exposures totaled $563 million in the fourth quarter while operating expenses and all other line items in the aggregate had a net $91 million negative impact on the adjusted pre-tax loss.

During the fourth quarter of 2010, the Company increased its expectations for losses on insured exposures in the Structured Finance and International Insurance segment. The following is a summary of all insured portfolio economic loss activity in the fourth quarter. Economic losses for a reporting period represent the change in the Company’s estimate of the present value of expected net future claims payments without regard to the manner in which they are presented in the Company’s financial statements.

4Q 2010 Economic Loss Activity
($ in thousands)			RMBS			ABS CDOs			CMBS			Other			Total
Change in Expected Payments			$457,674			($185,067)			$603,965			$21,967			$898,539
Change in Expected Salvage			(337,008)			2,687			(82)			(1,360)			(335,763)
Total Economic Losses			$120,666			($182,380)			$603,883			$20,607			$562,776

In the fourth quarter, the Company increased its expectations of future losses on RMBS exposures. The Company increased its expectations of future claims payments by $458 million as early stage delinquencies in the underlying mortgage pools did not decline as anticipated during the quarter. However, this increase was partially offset by additional expected recoveries of $337 million, primarily from contractual claims related to ineligible mortgages. The Company’s estimates for expected recoveries related to “putbacks” of ineligible mortgages totaled $2.5 billion as of December 31, 2010. However, based on the Company’s assessment of the strength of its contract claims, the Company believes it is entitled to collect the full amount of its cumulative incurred losses, which totaled $4.4 billion as of December 31, 2010, from those securitization sponsors against whom it is pursuing litigation.

The Company reduced its estimate of economic losses on multi-sector ABS CDOs by $182 million in the fourth quarter, as previously established loss reserves and credit impairments on certain transactions commuted in the quarter exceeded the sum of cash payments made to counterparties in connection with the commutations and all other net adjustments to expected losses on such transactions.

In the fourth quarter of 2010, the Company estimated $604 million of incremental economic losses on certain insured transactions backed by pools of commercial mortgage-backed securities (CMBS). The increase was due to modest deterioration in the performance of the assets underlying these insured transactions and changes in modeling assumptions that resulted in an increase in modeled losses, even though there were relatively few property liquidations and only minor erosion in the deductibles of several pools.

The following is a summary of the $563 million in fourth quarter economic losses categorized on the basis of how they are reflected in the Company’s financial statements:

4Q 2010 Economic Losses
$ in thousands
Change in Expected Payments			$416,879
Change in Insurance Recoveries			(338,061)
Loss & LAE Expense on Policies Subject to Insurance Accounting			78,818
Credit Impairments on Insured VIEs			107,218
Credit Impairments on Insured Credit Derivatives			369,294
LAE on Insured Credit Derivatives			7,446
Credit Impairments and LAE on Insured Credit Derivatives			376,740
Total Economic Losses			$562,776

The $377 million of credit impairments and loss adjustment expenses on insured credit derivatives estimated by the Company in the fourth quarter of 2010 consisted of the previously mentioned $604 million of incremental economic losses on transactions backed by pools of commercial mortgage-backed securities offset by a reduction of approximately $227 million in economic losses on multi-sector ABS CDO transactions, primarily as a result of commutations during the quarter.

In the fourth quarter of 2010, MBIA Corp. paid a total of $290 million in net claims in connection with its second-lien residential mortgage exposures. Net claims on insured RMBS have been trending downward each quarter since peaking at $636 million in the second quarter of 2009.

During the fourth quarter, MBIA Corp. reached agreements with five counterparties for commutations of transactions including multi-sector CDOs, multi-sector CDO-squareds, structured CMBS pools, commercial real estate CDOs and high-yield corporate CDOs. The agreements eliminated $15.7 billion in gross insured exposure. In the first quarter of 2011, MBIA Corp. reached an agreement for the commutation of $3.3 billion of additional gross insured exposure, primarily comprising structured CMBS pools. Since the fourth quarter of 2008, the Company has commuted $28.0 billion of its multi-sector CDO, multi-sector CDO-squared, corporate CDO, CRE CDO and CMBS pool gross insured exposure for payments that were consistent with its aggregate statutory loss reserve for those transactions. The commutations significantly reduce the potential future volatility of the structured finance insured portfolio.

As of December 31, 2010, the Company’s net derivative liability (the cumulative negative mark-to-market) with respect to insured credit derivatives was $4.4 billion for all non-consolidated VIE insured credit derivatives. The Company considers approximately $2.4 billion of the $4.4 billion net derivative liability to be credit impaired. The Company expects the unimpaired portion of the unrealized gains and losses in fair value (marks-to-market) to be reversed prior to or upon the maturities of the insured credit derivatives.

As of December 31, 2010, MBIA Corp.’s statutory balance sheet reflected $3.3 billion in cash and invested assets including $524 million of cash and short-term investments. Cash, short-term investments and other highly liquid investments available to meet liquidity demands totaled $1.2 billion as of December 31, 2010, excluding amounts held by subsidiaries. The Company believes that MBIA Corp.’s liquidity resources will adequately provide for anticipated cash outflows.

MBIA Corp. had statutory capital of $2.7 billion and claims-paying resources totaling $5.2 billion at December 31, 2010.

Advisory Services

The Company’s Advisory Services business is conducted in its Cutwater Asset Management subsidiaries. Cutwater recorded a pre-tax loss of $3 million in the fourth quarter driven by expenses associated with infrastructure enhancements to support its growth plans.

Cutwater’s average assets under management in the fourth quarter were $41.6 billion, down 4 percent from $43.2 billion in the third quarter of 2010 reflecting seasonality in its local government investment pools business and lower balances managed for MBIA Inc. and its subsidiaries. Average assets under management in the fourth quarter comprised $25.4 billion from third-party clients and $16.2 billion managed for MBIA Inc. and its subsidiaries. Third-party average assets under management decreased 4 percent from the third quarter of 2010 and increased 2 percent from the fourth quarter of 2009. For the full year 2010, third-party average assets under management increased 10 percent from 2009.

Corporate Segment

The Corporate segment comprises MBIA Inc.’s holding company activities and certain subsidiaries, including Optinuity Alliance Resources Corp.

The Corporate segment recorded pre-tax income of $34 million in the fourth quarter of 2010 compared with pre-tax income of $35 million in the fourth quarter of 2009. Pre-tax income in the fourth quarters of 2010 and 2009 was driven by positive marks-to-market on outstanding warrants issued on MBIA Inc. common stock.

As of December 31, 2010, the Corporate segment had $358 million in cash and short-term investments.

During the fourth quarter of 2010, the Corporate segment converted the $600 million inter-segment loan it made to the Asset Liability Products segment within Wind-Down Operations in the fourth quarter of 2008 to a capital contribution in settlement of the full outstanding principal balance of the loan. The conversion enhances the liquidity position of the Asset Liability Products segment.

The Company did not repurchase any of its common stock during the fourth quarter. As of December 31, 2010, approximately $73 million of repurchase authorization remained available under the Company's $1.0 billion share buyback program.

Wind-Down Operations

Wind-Down Operations comprise the Company’s Asset Liability Management and Conduit businesses, both of which are in run-off.

Pre-tax income for Wind-Down Operations was $42 million in the fourth quarter of 2010 compared with pre-tax income of $5 million in the fourth quarter of 2009. Pre-tax income in the fourth quarter of 2010 was driven by a $62 million net gain on financial instruments at fair value and foreign exchange resulting primarily from increased values of interest rate swaps not designated as hedges.

This segment repurchased $24 million par amount of medium-term notes at discounts during the fourth quarter, resulting in net gains on the extinguishment of debt that totaled $8 million.

Conference Call

The Company will host a webcast and conference call for investors tomorrow, Wednesday, March 2, 2011 at 8:00 AM (EST) to discuss its fourth quarter and full year 2010 financial results and other matters relating to the Company. The webcast and conference call will consist of brief remarks followed by a question and answer session.

The dial-in number for the call is (877) 694-4769 in the U.S. and (404) 665-9935 from outside the U.S. The conference call code is 38143671. A live webcast of the conference call will also be accessible on www.mbia.com.

A replay of the call will be available approximately two hours after the completion of the call on March 2 until 11:59 p.m. on March 16 by dialing (800) 642-1687 in the U.S. or (706) 645-9291 from outside the U.S. The replay call code is also 38143671. In addition, a recording of the call will be available on the Company's website approximately two hours after the completion of the call.

Forward-Looking Statements

This release includes statements that are not historical or current facts and are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “believe,” “anticipate,” “project,” “plan,” “expect,” “intend,” “will likely result,” “looking forward” or “will continue,” and similar expressions identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected, including, among other risks, the possibility that the Company will not realize the estimated amount of the insurance loss recoveries arising from its contractual claims related to ineligible mortgages, the possibility that the Company will experience severe losses or liquidity needs due to increased deterioration in its insurance portfolios; the possibility that loss reserve estimates are not adequate to cover potential claims; the Company’s ability to fully implement its Strategic Plan as outlined in the Company’s most recent Annual Report on Form 10-K; the Company’s ability to favorably resolve litigation claims against the Company; an inability to achieve high, stable credit ratings; and changes in general economic and competitive conditions. These and other factors that could affect financial performance or could cause actual results to differ materially from estimates contained in or underlying the Company’s forward-looking statements are discussed under the “Risk Factors” section in MBIA Inc.’s most recent Annual Report on Form 10-K, which may be updated or amended in the Company’s subsequent filings with the Securities and Exchange Commission. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only to their respective dates. The Company undertakes no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such result is not likely to be achieved.

MBIA Inc., headquartered in Armonk, New York is a holding company whose subsidiaries provide financial guarantee insurance, as well as related reinsurance, advisory and portfolio services, for the public and structured finance markets, and asset management advisory services. The Company services its clients around the globe with offices in New York, Denver, San Francisco, Paris, London, Madrid and Mexico City. Please visit MBIA's website at www.mbia.com.

Explanation of Non-GAAP Financial Measures

The following are explanations of why MBIA believes that the non-GAAP financial measures used in this press release, which serve to supplement GAAP information, are meaningful to investors.

Adjusted Book Value: Adjusted Book Value (“ABV”), a non-GAAP measure, is used by the Company to supplement its analysis of GAAP book value. The Company uses ABV as a measure of fundamental value and considers the change in ABV an important measure of periodic financial performance. ABV adjusts GAAP book value to remove the impact of certain items which the Company believes will reverse over time, as well as to add in the impact of certain items which the Company believes will be realized in GAAP book value in future periods. The Company has limited such adjustments to those items that it deems to be important to fundamental value and performance and which the likelihood and amount can be reasonably estimated. ABV assumes no new business activity. The Company has presented ABV to allow investors and analysts to evaluate the Company using the same measure that MBIA’s management regularly uses to measure financial performance. ABV is not a substitute for and should not be viewed in isolation from GAAP book value.

In the fourth quarter of 2010, after completing a review of the components of ABV, the Company removed the Wind-Down Operations future spread adjustment and the loss provision adjustment. The Wind-Down Operations future spread adjustment adjusted book value to reflect the net present value of asset and liability cash flows within the Company’s Wind-Down Operations assuming that the cash flow profile of the business would remain constant to maturity. The Company believes this adjustment is no longer meaningful in its analysis of the performance and value of the Company as it intends to actively manage the run-off of its wind-down operations, resulting in uncertain future cash flows. The loss provision adjustment to book value represented a formulaic estimate of potential future losses based on the Company’s practice prior to 2009 of recording a general loss reserve for unidentified claims based on 12 percent of net earned premium. While current U.S. GAAP no longer permits such a reserve, the Company maintained this concept in the calculation of ABV to account for a potential level of unknown loss development in future periods. The Company believes this adjustment is no longer meaningful in light of current GAAP for financial guarantee insurance contracts, which requires probability-weighted loss reserves based on all possible outcomes across our entire financial guarantee insurance portfolio, our practice of calculating and including in ABV credit impairments on insured credit derivatives, and the considerable volatility in the Company’s losses over the last several years.

ABV is calculated on a consolidated basis and a segment basis. ABV by segment provides information about each segment’s contribution to consolidated ABV and is calculated using the same formula.

ABV per share represents that amount of ABV allocated to each common share outstanding at the measurement date.

Credit Impairments on Insured Derivatives: Credit impairments on insured derivatives represent the present value of the Company’s estimate of expected future claim payments for such transactions, using a discount rate required by statutory accounting principles. Since the Company’s insured credit derivatives have similar terms, conditions, risks, and economic profiles to its financial guarantee insurance policies, the Company evaluates them for impairment periodically in the same way that it estimates loss and LAE for its financial guarantee insurance policies. Credit impairments on insured derivatives are equal to the Company’s statutory losses for such contracts.

Credit impairments on insured derivatives may differ from the fair values recorded in the Company’s financial statements. The Company expects that the majority of its exposure written in derivative form will not be settled at fair value. The fair value of an insured derivative contract will be influenced by a variety of market and transaction-specific factors that may be unrelated to potential future claim payments. In the absence of credit impairments or the termination of derivatives at losses, the cumulative unrealized losses recorded from fair valuing insured derivatives should reverse before or at the maturity of the contracts. Contracts also may be settled prior to maturity at amounts that may be more or less than their recorded fair values. Those settlements can result in realized gains or losses, and the reversal of unrealized losses. For these reasons, the Company believes its disclosure of credit impairments on insured derivatives provides additional meaningful information to investors about potential realized losses on these contracts.

Adjusted Pre-tax Income: Adjusted pre-tax income, a non-GAAP measure, is used by the Company to supplement its analysis of GAAP pre-tax income. The Company uses adjusted pre-tax income as a measure of fundamental periodic financial performance. Adjusted pre-tax income adjusts GAAP pre-tax income to remove the effects of consolidating insured VIEs and gains and losses related to fair valuing insured credit derivatives, which the Company believes will reverse over time, and adds in changes in the present value of insurance claims the Company expects to pay on insured credit derivatives based on its ongoing insurance loss monitoring.

MBIA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
								December 31, 2010							December 31, 2009
Assets
	Investments:
		Fixed-maturity securities held as available-for-sale, at fair value (amortized cost
			$9,597,732 and $10,366,737)(includes hybrid financial instruments
			at fair value $0 and $30,690)						$	9,020,928						$	9,330,413
		Fixed-maturity securities at fair value								25,041							-
		Investments pledged as collateral, at fair value (amortized cost $547,800 and $587,648)								551,688							557,245
		Short-term investments held as available for sale, at fair value (amortized
			cost $2,072,955 and $2,696,724)							2,070,320							2,688,208
		Other investments (includes investments at fair value of $256,820 and $252,608)								258,981							255,491
				Total investments						11,926,958							12,831,357
	Cash and cash equivalents									365,841							803,243
	Accrued investment income									95,320							94,821
	Premiums receivable									1,589,005							2,020,619
	Deferred acquisition costs									412,001							469,550
	Prepaid reinsurance premiums									97,270							357,773
	Insurance loss recoverable									2,531,494							2,444,754
	Reinsurance recoverable on paid and unpaid losses									15,111							61,996
	Goodwill									31,371							31,371
	Property and equipment, at cost (less accumulated depreciation of $135,127 and $139,076)									71,385							76,834
	Receivable for investments sold									7,948							18,088
	Derivative assets									3,780							865,708
	Current income taxes									41,388							545,883
	Deferred income taxes, net									907,531							716,615
	Other assets									45,195							50,448
	Assets of consolidated VIEs:
		Cash								763,891							-
		Investments held-to-maturity, at amortized cost (fair value $3,908,991 and $2,800,400)								4,187,644							3,131,765
		Fixed-maturity securities held as available-for-sale, at fair value
			(amortized cost $188,937 and $754,096)							189,554							516,369
		Fixed-maturity securities at fair value								5,240,742							128,112
		Loans receivable at fair value								2,183,364							481,622
		Loan repurchase commitments								835,047							-
		Derivative assets								699,072							-
		Other assets								38,099							53,844
				Total assets					$	32,279,011						$	25,700,772
Liabilities and Equity
	Liabilities:
		Unearned premium revenue							$	4,145,234						$	4,955,256
		Loss and loss adjustment expense reserves								1,129,358							1,580,021
		Reinsurance premiums payable								71,151							239,154
		Investment agreements								2,005,326							2,725,958
		Medium-term notes (includes financial instruments carried at
			fair value $116,310 and $109,768)							1,739,507							2,285,047
		Securities sold under agreements to repurchase								470,570							501,871
		Short-term debt								64,768							18,112
		Long-term debt								1,850,532							2,223,536
		Deferred fee revenue								9,995							11,061
		Payable for investments purchased								2,173							15,780
		Derivative liabilities								4,616,509							4,593,760
		Other liabilities								272,391							304,066
		Liabilities of consolidated VIEs:
			Variable interest entity notes (includes financial instruments carried
				at fair value $6,679,982 and $0)						10,589,989							3,179,712
			Long-term debt							360,000							433,132
			Derivative liabilities							2,104,242							9,104
			Other liabilities							968							18,326
				Total liabilities						29,432,713							23,093,896
	Equity:
		Common stock								274,720							274,827
		Additional paid-in capital								3,063,914							3,057,733
		Retained earnings								2,123,566							2,393,282
		Accumulated other comprehensive loss								(405,484	)						(940,871	)
		Treasury stock								(2,224,577	)						(2,194,873	)
				Total shareholders' equity of MBIA Inc.						2,832,139							2,590,098
		Preferred stock of subsidiary								14,159							16,778
				Total equity						2,846,298							2,606,876
				Total liabilities and equity					$	32,279,011						$	25,700,772

MBIA INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(in thousands)
											Structured
							U.S.				Finance and
	Three Months Ended December 31, 2010						Public Finance				International					Advisory										Wind-down										Intercompany
							Insurance				Insurance					Services					Corporate					Operations					Subtotal					Eliminations					Consolidated
	Revenues:
		Premiums earned:
			Scheduled premiums earned				$	79,748			$	56,758				$	-				$	-				$	-				$	136,506				$	(18,697	)			$	117,809
			Refunding premiums earned					32,146				413					-					-					-					32,559					(5,825	)				26,734
				Total premiums earned				111,894				57,171					-					-					-					169,065					(24,522	)				144,543
		Net investment income						54,192				36,496					24					3,809					22,011					116,532					(1,135	)				115,397
		Fees and reimbursements						2,179				29,975					17,590					18,088					-					67,832					(56,272	)				11,560
		Change in fair value of insured derivatives:
			Realized gains (losses) and other settlements on
				insured derivatives				122				(616,394	)				-					-					-					(616,272	)				(20	)				(616,292	)
			Unrealized gains on insured derivatives					43				1,110,443					-					-					-					1,110,486					-					1,110,486
				Net change in fair value of insured derivatives				165				494,049					-					-					-					494,214					(20	)				494,194
		Net gains on financial instruments at fair value
			and foreign exchange					5,883				4,466					49					51,079					61,918					123,395					-					123,395
		Net investment losses related to other-than-temporary impairments:
			Investment losses related to other-than-temporary
				impairments				-				(498	)				-					-					(18,616	)				(19,114	)				-					(19,114	)
			Other-than-temporary impairments recognized in
				accumulated other comprehensive loss				-				(898	)				-					-					(1,064	)				(1,962	)				-					(1,962	)
				Net investment losses related to other-than-temporary
				impairments				-				(1,396	)				-					-					(19,680	)				(21,076	)				-					(21,076	)
		Net gains (losses) on extinguishment of debt						-				-					-					(77	)				8,009					7,932					-					7,932
		Other net realized gains						-				10,084					-					-					497					10,581					-					10,581
		Revenues of consolidated VIEs:
			Net investment income					-				20,674					-					-					3,609					24,283					-					24,283
			Net gains (losses) on financial instruments at fair value
				and foreign exchange				-				(66,116	)				-					-					8,913					(57,203	)				4,806					(52,397	)
			Net investment losses related to other-than-temporary
				impairments:
				Investment losses related to other-than-temporary impairments				-				-					-					-					-					-					-					-
				Other-than-temporary impairments recognized in
				accumulated other comprehensive loss				-				-					-					-					-					-					-					-
				Net investment losses related to other-than-temporary
				impairments				-				-					-					-					-					-					-					-
			Net gains on extinguishment of debt					-				-					-					-					7,375					7,375					-					7,375
			Other net realized losses					-				(1,881	)				-					-					-					(1,881	)				-					(1,881	)
			Total revenues					174,313				583,522					17,663					72,899					92,652					941,049					(77,143	)				863,906
	Expenses:
		Losses and loss adjustment						30,778				78,818					-					-					-					109,596					-					109,596
		Amortization of deferred acquisition costs						23,206				37,826					-					-					-					61,032					(44,927	)				16,105
		Operating						17,001				39,341					20,729					23,284					2,805					103,160					(21,559	)				81,601
		Interest						-				33,540					-					16,080					41,025					90,645					(11,913	)				78,732
		Expenses of consolidated VIEs:
			Operating					-				12,531					-					-					1,794					14,325					(4,224	)				10,101
			Interest					-				10,361					-					-					5,061					15,422					-					15,422
			Total expenses					70,985				212,417					20,729					39,364					50,685					394,180					(82,623	)				311,557
	Pre-tax income (loss)						$	103,328			$	371,105				$	(3,066	)			$	33,535				$	41,967				$	546,869				$	5,480					552,349
		Provision for income taxes																																								101,502
	Net income																																									450,847
		Preferred stock dividends of subsidiary																																								-
	Net income available to common shareholders																																								$	450,847

MBIA INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(in thousands)
											Structured
							U.S.				Finance and
	Three Months Ended December 31, 2009						Public Finance				International					Advisory									Wind-down										Intercompany
							Insurance				Insurance					Services				Corporate					Operations					Subtotal					Eliminations					Consolidated
	Revenues:
		Premiums earned:
			Scheduled premiums earned				$	95,066			$	49,226				$	-			$	-				$	-				$	144,292				$	(27,596	)			$	116,696
			Refunding premiums earned					41,949				8,191					-				-					-					50,140					(8,365	)				41,775
				Total premiums earned				137,015				57,417					-				-					-					194,432					(35,961	)				158,471
		Net investment income						65,075				28,524					26				5,669					36,296					135,590					(12,967	)				122,623
		Fees and reimbursements						13,990				101,224					15,413				-					1					130,628					(40,455	)				90,173
		Change in fair value of insured derivatives:
			Realized gains (losses) and other settlements on
				insured derivatives				543				(200,181	)				-				-					-					(199,638	)				-					(199,638	)
			Unrealized gains on insured derivatives					35				427,649					-				-					-					427,684					-					427,684
				Net change in fair value of insured derivatives				578				227,468					-				-					-					228,046					-					228,046
		Net gains (losses) on financial instruments at fair value
			and foreign exchange					16,534				(1,480	)				281				48,128					34,747					98,210					-					98,210
		Net investment losses related to other-than-temporary impairments:
			Investment losses related to other-than-temporary
				impairments				-				(6,383	)				-				-					(10,414	)				(16,797	)				-					(16,797	)
			Other-than-temporary impairments recognized in
				accumulated other comprehensive loss				-				(3,041	)				-				-					(6,371	)				(9,412	)				-					(9,412	)
				Net investment losses related to other-than-temporary
				impairments				-				(9,424	)				-				-					(16,785	)				(26,209	)				-					(26,209	)
		Net gains (losses) on extinguishment of debt						-				(30	)				-				1,159					617					1,746					(12	)				1,734
		Other net realized losses						-				(36,779	)				-				(1	)				(318	)				(37,098	)				-					(37,098	)
		Revenues of consolidated VIEs:
			Net investment income					-				3,370					-				-					4,508					7,878					-					7,878
			Net losses on financial instruments at fair value
				and foreign exchange				-				(1,382	)				-				-					(314	)				(1,696	)				-					(1,696	)
			Net investment losses related to other-than-temporary
				impairments:
				Investment losses related to other-than-temporary impairments				-				(2,385	)				-				-					1					(2,384	)				-					(2,384	)
				Other-than-temporary impairments recognized in
				accumulated other comprehensive loss				-				355					-				-					(2,068	)				(1,713	)				-					(1,713	)
				Net investment losses related to other-than-temporary
				impairments				-				(2,030	)				-				-					(2,067	)				(4,097	)				-					(4,097	)
			Net gains on extinguishment of debt					-				-					-				-					14,628					14,628					-					14,628
			Other net realized gains (losses)					-				-					-				-					-					-					-					-
			Total revenues					233,192				366,878					15,720				54,955					71,313					742,058					(89,395	)				652,663
	Expenses:
		Losses and loss adjustment						2,195				658,768					-				-					-					660,963					-					660,963
		Amortization of deferred acquisition costs						26,275				47,650					-				-					-					73,925					(58,845	)				15,080
		Operating						19,024				29,407					15,243				3,388					5,544					72,606					(6,115	)				66,491
		Interest						-				34,994					-				16,814					56,974					108,782					(22,436	)				86,346
		Expenses of consolidated VIEs:
			Operating					-				59					-				-					764					823					(685	)				138
			Interest					-				25,846					-				-					2,947					28,793					-					28,793
			Total expenses					47,494				796,724					15,243				20,202					66,229					945,892					(88,081	)				857,811
	Pre-tax income (loss)						$	185,698			$	(429,846	)			$	477			$	34,753				$	5,084				$	(203,834	)			$	(1,314	)				(205,148	)
		Provision for income taxes																																							34,921
	Net loss																																								(240,069	)
		Preferred stock dividends of subsidiary																																							339
	Net loss available to common shareholders																																							$	(240,408	)

MBIA INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(in thousands)
												Structured
							U.S.					Finance and
	Twelve Months Ended December 31, 2010						Public Finance					International					Advisory										Wind-down										Intercompany
							Insurance					Insurance					Services					Corporate					Operations					Subtotal					Eliminations					Consolidated
	Revenues:
		Premiums earned:
			Scheduled premiums earned				$	335,414				$	247,123				$	-				$	-				$	-				$	582,537				$	(78,623	)			$	503,914
			Refunding premiums earned					110,229					4,300					-					-					-					114,529					(24,226	)				90,303
				Total premiums earned				445,643					251,423					-					-					-					697,066					(102,849	)				594,217
		Net investment income						230,240					124,710					90					15,441					94,480					464,961					(7,653	)				457,308
		Fees and reimbursements						21,863					204,319					67,947					83,239					-					377,368					(217,475	)				159,893
		Change in fair value of insured derivatives:
			Realized gains (losses) and other settlements on
				insured derivatives				482					(162,791	)				-					-					-					(162,309	)				(20	)				(162,329	)
			Unrealized losses on insured derivatives					(13	)				(606,839	)				-					-					-					(606,852	)				-					(606,852	)
				Net change in fair value of insured derivatives				469					(769,630	)				-					-					-					(769,161	)				(20	)				(769,181	)
		Net gains (losses) on financial instruments at fair value
			and foreign exchange					54,643					135,221					2,182					(28,355	)				(75,975	)				87,716					-					87,716
		Net investment losses related to other-than-temporary impairments:
			Investment losses related to other-than-temporary
				impairments				-					(856	)				-					-					(205,503	)				(206,359	)				-					(206,359	)
			Other-than-temporary impairments recognized in
				accumulated other comprehensive loss				-					(4,499	)				-					-					146,678					142,179					-					142,179
				Net investment losses related to other-than-temporary
				impairments				-					(5,355	)				-					-					(58,825	)				(64,180	)				-					(64,180	)
		Net gains (losses) on extinguishment of debt						-					-					-					(404	)				35,934					35,530					-					35,530
		Other net realized gains (losses)						(101	)				28,609					(137	)				(1	)				475					28,845					-					28,845
		Revenues of consolidated VIEs:
			Net investment income					-					52,562					-					-					20,048					72,610					-					72,610
			Net gains on financial instruments at fair value
				and foreign exchange				-					269,707					-					-					50,768					320,475					21,630					342,105
			Net investment losses related to other-than-temporary
				impairments:
				Investment losses related to other-than-temporary impairments				-					-					-					-					-					-					-					-
				Other-than-temporary impairments recognized in
				accumulated other comprehensive loss				-					-					-					-					-					-					-					-
				Net investment losses related to other-than-temporary
				impairments				-					-					-					-					-					-					-					-
			Net gains on extinguishment of debt					-					-					-					-					25,060					25,060					-					25,060
			Other net realized losses					-					(76,125	)				-					-					-					(76,125	)				-					(76,125	)
			Total revenues					752,757					215,441					70,082					69,920					91,965					1,200,165					(306,367	)				893,798
	Expenses:
		Losses and loss adjustment						72,522					159,422					-					-					-					231,944					-					231,944
		Amortization of deferred acquisition costs						86,041					149,822					-					-					-					235,863					(177,296	)				58,567
		Operating						63,769					132,915					70,918					102,389					13,338					383,329					(92,851	)				290,478
		Interest						-					135,953					-					65,361					175,375					376,689					(51,761	)				324,928
		Expenses of consolidated VIEs:
			Operating					-					26,538					-					-					3,301					29,839					(5,834	)				24,005
			Interest					-					42,063					-					-					17,041					59,104					-					59,104
			Total expenses					222,332					646,713					70,918					167,750					209,055					1,316,768					(327,742	)				989,026
	Pre-tax income (loss)						$	530,425				$	(431,272	)			$	(836	)			$	(97,830	)			$	(117,090	)			$	(116,603	)			$	21,375					(95,228	)
		Benefit for income taxes																																									(147,757	)
	Net income																																										52,529
		Preferred stock dividends of subsidiary																																									-
	Net income available to common shareholders																																									$	52,529

MBIA INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS
(in thousands)
												Structured
							U.S.					Finance and
	Twelve Months Ended December 31, 2009						Public Finance					International					Advisory										Wind-down										Intercompany
							Insurance					Insurance					Services					Corporate					Operations					Subtotal					Eliminations					Consolidated
	Revenues:
		Premiums earned:
			Scheduled premiums earned				$	409,101				$	322,554				$	-				$	-				$	-				$	731,655				$	(122,444	)			$	609,211
			Refunding premiums earned					153,618					10,369					-					-					-					163,987					(26,862	)				137,125
				Total premiums earned				562,719					332,923					-					-					-					895,642					(149,306	)				746,336
		Net investment income						217,116					220,801					48					22,919					188,634					649,518					(82,066	)				567,452
		Fees and reimbursements						15,568					234,121					54,313					-					1,440					305,442					(159,952	)				145,490
		Change in fair value of insured derivatives:
			Realized gains (losses) and other settlements on
				insured derivatives				929					(167,031	)				-					-					-					(166,102	)				-					(166,102	)
			Unrealized gains (losses) on insured derivatives					(143	)				1,650,588					-					-					-					1,650,445					-					1,650,445
				Net change in fair value of insured derivatives				786					1,483,557					-					-					-					1,484,343					-					1,484,343
		Net gains (losses) on financial instruments at fair value
			and foreign exchange					23,223					59,592					(245	)				(3,012	)				145,770					225,328					-					225,328
		Net investment losses related to other-than-temporary impairments:
			Investment losses related to other-than-temporary
				impairments				-					(6,383	)				-					-					(524,477	)				(530,860	)				-					(530,860	)
			Other-than-temporary impairments recognized in
				accumulated other comprehensive loss				-					(3,041	)				-					-					172,826					169,785					-					169,785
				Net investment losses related to other-than-temporary
				impairments				-					(9,424	)				-					-					(351,651	)				(361,075	)				-					(361,075	)
		Net gains on extinguishment of debt						-					13,517					-					3,701					203,072					220,290					5,146					225,436
		Other net realized gains (losses)						-					(64,679	)				-					(2	)				4,184					(60,497	)				-					(60,497	)
		Revenues of consolidated VIEs:
			Net investment income					-					66,408					-					-					21,606					88,014					-					88,014
			Net gains (losses) on financial instruments at fair value
				and foreign exchange				-					9,459					-					-					(13,382	)				(3,923	)				-					(3,923	)
			Net investment losses related to other-than-temporary
				impairments:
				Investment losses related to other-than-temporary impairments				-					(263,517	)				-					-					(11,305	)				(274,822	)				-					(274,822	)
				Other-than-temporary impairments recognized in
				accumulated other comprehensive loss				-					170,724					-					-					(2,068	)				168,656					-					168,656
				Net investment losses related to other-than-temporary
				impairments				-					(92,793	)				-					-					(13,373	)				(106,166	)				-					(106,166	)
			Net gains on extinguishment of debt					-					-					-					-					44,023					44,023					-					44,023
			Other net realized losses					-					(40,740	)				-					-					-					(40,740	)				-					(40,740	)
			Total revenues					819,412					2,212,742					54,116					23,606					230,323					3,340,199					(386,178	)				2,954,021
	Expenses:
		Losses and loss adjustment						93,901					770,236					-					-					-					864,137					-					864,137
		Amortization of deferred acquisition costs						116,130					216,477					-					-					-					332,607					(250,864	)				81,743
		Operating						58,403					178,139					48,673					24,373					34,160					343,748					(28,231	)				315,517
		Interest						-					137,094					-					68,949					274,116					480,159					(106,008	)				374,151
		Expenses of consolidated VIEs:
			Operating					-					300					-					-					3,706					4,006					(3,291	)				715
			Interest					-					86,907					-					-					13,970					100,877					-					100,877
			Total expenses					268,434					1,389,153					48,673					93,322					325,952					2,125,534					(388,394	)				1,737,140
	Pre-tax income (loss)						$	550,978				$	823,589				$	5,443				$	(69,716	)			$	(95,629	)			$	1,214,665				$	2,216					1,216,881
		Provision for income taxes																																									582,821
	Net income																																										634,060
		Preferred stock dividends of subsidiary																																									10,823
	Net income available to common shareholders																																									$	623,237

MBIA INC. AND SUBSIDIARIES
ADJUSTED PRE-TAX INCOME
(in thousands)
												Structured
									U.S. Public			Finance and
									Finance			International			Advisory						Wind-Down			Intercompany
Three months ended December 31, 2010									Insurance			Insurance			Services			Corporate			Operations			Eliminations			Consolidated
Revenues:
	Net premiums earned								111,894			60,965			-			-			-			(24,522)			148,337
	Net investment income								54,192			44,539			24			3,809			22,011			(872)			123,703
	Fees and reimbursements								2,179			29,975			17,590			18,088			-			(53,053)			14,779
	Premiums and fees on insured derivatives								122			31,537			-			-			-			(20)			31,639
	Net gains on financial instruments at fair
		value and foreign exchange							5,883			5,571			49			51,079			61,918			-			124,500
	Net investment losses related to other-than-temporary
		impairments							-			(1,396)			-			-			(19,680)			-			(21,076)
	Net gains (losses) on extinguishment of debt								-			-			-			(77)			8,009			-			7,932
	Other net realized gains								-			10,084			-			-			497			-			10,581
	VIE Revenues								-			-			-			-			19,897			-			19,897
		Total revenues							174,270			181,275			17,663			72,899			92,652			(78,467)			460,292
Expenses:
	Losses and loss adjustment								30,778			186,036			-			-			-			-			216,814
	Insured credit derivative impairments								-			369,294			-			-			-			-			369,294
	Amortization of deferred acquisition costs								23,206			39,901			-			-			-			(44,927)			18,180
	Operating								17,001			39,341			20,729			23,284			2,805			(21,559)			81,601
	Interest								-			33,540			-			16,080			41,025			(11,913)			78,732
	VIE expenses								-			-			-			-			6,855			(266)			6,589
		Total expenses							70,985			668,112			20,729			39,364			50,685			(78,665)			771,210
Adjusted pre-tax income (loss)									103,285			(486,837)			(3,066)			33,535			41,967			198			(310,918)
Additions to adjusted pre-tax income (loss):
	Impact of consolidating certain VIEs								-			71,071			-			-			-			5,282			76,353
	Mark-to-market on insured credit derivatives								43			1,065,277			-			-			-			-			1,065,320
Subtractions from adjusted pre-tax income (loss):
	Impairments on insured credit derivatives								-			278,406			-			-			-			-			278,406
GAAP pre-tax income (loss)									103,328			371,105			(3,066)			33,535			41,967			5,480			552,349
												Structured
									U.S. Public			Finance and
									Finance			International			Advisory						Wind-Down			Intercompany
Three months ended December 31, 2009									Insurance			Insurance			Services			Corporate			Operations			Eliminations			Consolidated
Revenues:
	Net premiums earned								137,015			57,451			-			-			-			(35,961)			158,505
	Net investment income								65,075			28,524			26			5,669			36,296			(12,967)			122,623
	Fees and reimbursements								13,990			101,183			15,413			-			1			(40,455)			90,132
	Premiums and fees on insured derivatives								543			29,364			-			-			-			-			29,907
	Net gains (losses) on financial instruments at fair
		value and foreign exchange							16,534			(1,480)			281			48,128			34,747			-			98,210
	Net investment losses related to other-than-temporary
		impairments							-			(9,998)			-			-			(16,785)			-			(26,783)
	Net gains on extinguishment of debt								-			(30)			-			1,159			617			(12)			1,734
	Other net realized losses								-			(36,779)			-			(1)			(318)			-			(37,098)
	VIE Revenues								-			-			-			-			16,755			-			16,755
		Total revenues							233,157			168,235			15,720			54,955			71,313			(89,395)			453,985
Expenses:
	Losses and loss adjustment								2,195			678,988			-			-			-			-			681,183
	Insured credit derivative impairments								-			142,866			-			-			-			-			142,866
	Amortization of deferred acquisition costs								26,275			47,650			-			-			-			(58,845)			15,080
	Operating								19,024			29,407			15,243			3,388			5,544			(6,115)			66,491
	Interest								-			34,994			-			16,814			56,974			(22,436)			86,346
	VIE expenses								-			-			-			-			3,711			(685)			3,026
		Total expenses							47,494			933,905			15,243			20,202			66,229			(88,081)			994,992
Adjusted pre-tax income (loss)									185,663			(765,670)			477			34,753			5,084			(1,314)			(541,007)
Additions to adjusted pre-tax income (loss):
	Impact of consolidating certain VIEs								-			(5,146)			-			-			-			-			(5,146)
	Mark-to-market on insured credit derivatives								35			427,649			-			-			-			-			427,684
Subtractions from adjusted pre-tax income (loss):
	Impairments on insured credit derivatives								-			86,679			-			-			-			-			86,679
GAAP pre-tax income (loss)									185,698			(429,846)			477			34,753			5,084			(1,314)			(205,148)

MBIA INC. AND SUBSIDIARIES
ADJUSTED PRE-TAX INCOME
(in thousands)
													Structured
									U.S. Public				Finance and
									Finance				International				Advisory								Wind-Down				Intercompany
Twelve months ended December 31, 2010									Insurance				Insurance				Services				Corporate				Operations				Eliminations				Consolidated
Revenues:
	Net premiums earned								445,643				291,850				-				-				-				(102,849	)			634,644
	Net investment income								230,240				170,204				90				15,441				94,480				(6,461	)			503,994
	Fees and reimbursements								21,863				204,319				67,947				83,239				-				(213,936	)			163,432
	Premiums and fees on insured derivatives								482				297,862				-				-				-				(20	)			298,324
	Net gains (losses) on financial instruments at fair
		value and foreign exchange							54,643				162,534				2,182				(28,355	)			(75,975	)			-				115,029
	Net investment losses related to other-than-temporary
		impairments							-				(5,355	)			-				-				(58,825	)			-				(64,180	)
	Net gains (losses) on extinguishment of debt								-				-				-				(404	)			35,934				-				35,530
	Other net realized gains (losses)								(101	)			28,609				(137	)			(1	)			475				-				28,845
	VIE Revenues								-				-				-				-				95,876				-				95,876
		Total revenues							752,770				1,150,023				70,082				69,920				91,965				(323,266	)			1,811,494
Expenses:
	Losses and loss adjustment								72,522				238,021				-				-				-				-				310,543
	Insured credit derivative impairments								-				1,177,546				-				-				-				-				1,177,546
	Amortization of deferred acquisition costs								86,041				157,388				-				-				-				(177,296	)			66,133
	Operating								63,769				132,915				70,918				102,389				13,338				(92,851	)			290,478
	Interest								-				135,953				-				65,361				175,375				(51,761	)			324,928
	VIE expenses								-				-				-				-				20,342				(1,555	)			18,787
		Total expenses							222,332				1,841,823				70,918				167,750				209,055				(323,463	)			2,188,415
Adjusted pre-tax income (loss)									530,438				(691,800	)			(836	)			(97,830	)			(117,090	)			197				(376,921	)
Additions to adjusted pre-tax income (loss):
	Impact of consolidating certain VIEs								-				221,897				-				-				-				21,178				243,075
	Mark-to-market on insured credit derivatives								(13	)			(679,101	)			-				-				-				-				(679,114	)
Subtractions from adjusted pre-tax income (loss):
	Impairments on insured credit derivatives								-				(717,732	)			-				-				-				-				(717,732	)
GAAP pre-tax income (loss)									530,425				(431,272	)			(836	)			(97,830	)			(117,090	)			21,375				(95,228	)
													Structured
									U.S. Public				Finance and
									Finance				International				Advisory								Wind-Down				Intercompany
Twelve months ended December 31, 2009									Insurance				Insurance				Services				Corporate				Operations				Eliminations				Consolidated
Revenues:
	Net premiums earned								562,719				333,085				-				-				-				(149,306	)			746,498
	Net investment income								217,116				220,907				48				22,919				188,634				(82,066	)			567,558
	Fees and reimbursements								15,568				234,121				54,313				-				1,440				(159,952	)			145,490
	Premiums and fees on insured derivatives								929				122,482				-				-				-				-				123,411
	Net gains (losses) on financial instruments at fair
		value and foreign exchange							23,223				59,592				(245	)			(3,012	)			145,770				-				225,328
	Net investment losses related to other-than-temporary
		impairments							-				(94,543	)			-				-				(351,651	)			-				(446,194	)
	Net gains on extinguishment of debt								-				13,517				-				3,701				203,072				5,146				225,436
	Other net realized gains (losses)								-				(64,679	)			-				(2	)			4,184				-				(60,497	)
	VIE Revenues								-				-				-				-				38,874				-				38,874
		Total revenues							819,555				824,482				54,116				23,606				230,323				(386,178	)			1,565,904
Expenses:
	Losses and loss adjustment								93,901				785,893				-				-				-				-				879,794
	Insured credit derivative impairments								-				777,411				-				-				-				-				777,411
	Amortization of deferred acquisition costs								116,130				216,477				-				-				-				(250,864	)			81,743
	Operating								58,403				178,139				48,673				24,373				34,160				(28,231	)			315,517
	Interest								-				137,094				-				68,949				274,116				(106,008	)			374,151
	VIE expenses								-				-				-				-				17,676				(3,291	)			14,385
		Total expenses							268,434				2,095,014				48,673				93,322				325,952				(388,394	)			2,443,001
Adjusted pre-tax income (loss)									551,121				(1,270,532	)			5,443				(69,716	)			(95,629	)			2,216				(877,097	)
Additions to adjusted pre-tax income (loss):
	Impact of consolidating certain VIEs								-				(44,365	)			-				-				-				-				(44,365	)
	Mark-to-market on insured credit derivatives								(143	)			1,650,588				-				-				-				-				1,650,445
Subtractions from adjusted pre-tax income (loss):
	Impairments on insured credit derivatives								-				(487,898	)			-				-				-				-				(487,898	)
GAAP pre-tax income (loss)									550,978				823,589				5,443				(69,716	)			(95,629	)			2,216				1,216,881

MBIA INC. AND SUBSIDIARIES
Components of Adjusted Book Value per Share
						December 31, 2010
											Structured
						U.S. Public					Finance and
						Finance					International					Advisory								Wind-down
						Insurance					Insurance					Services				Corporate				Operations				Consolidated
Reported Book Value						$	15.48				$	6.17				$	0.14			($4.15	)			($3.46	)			$	14.18
Plus:		Cumulative unrealized loss on insured
		credit derivatives, after tax					0.00					14.58					0.00			0.00				0.00					14.58
Less:		Cumulative impairments on insured
		credit derivatives, after tax (1)					0.00					(8.69	)				0.00			0.00				0.00					(8.69	)
Reverse:		Unrealized (gains) losses included in OCI					0.21					(0.03	)				0.00			0.01				2.08					2.27
Reverse:		Impact of consolidating certain VIEs (2)					0.00					0.50					0.00			0.00				0.00					0.50
Plus:		Net unearned premium revenue, after tax (1) (3)					7.54					6.43					0.00			0.00				0.00					13.97
Adjusted Book Value (4)						$	23.23				$	18.96				$	0.14			($4.14	)			($1.38	)			$	36.81
						December 31, 2009
											Structured
						U.S. Public					Finance and
						Finance					International					Advisory								Wind-down
						Insurance					Insurance					Services				Corporate				Operations				Consolidated
Reported Book Value						$	13.52				$	7.75				$	0.37			($1.02	)			($7.96	)			$	12.66
Plus:		Cumulative unrealized loss on insured
		credit derivatives, after tax					0.00					12.09					0.00			0.00				0.00					12.09
Less:		Cumulative impairments on insured
		credit derivatives, after tax (1)					0.00					(5.89	)				0.00			0.00				0.00					(5.89	)
Reverse:		Unrealized (gains) losses included in OCI					(0.05	)				1.03					0.00			0.00				4.08					5.06
Plus:		Net unearned premium revenue, after tax (1) (3)					8.32					6.70					0.00			0.00				0.00					15.02
Adjusted Book Value (4)						$	21.79				$	21.68				$	0.37			($1.02	)			($3.88	)			$	38.94

(1)		At December 31, 2010 and December 31, 2009 the discount rate on Financial Guarantee installment premiums was the risk-free rate as defined by accounting principles
		for Financial Guarantee insurance contracts and the discount rate was 5.00% on Insured Derivative installment revenue and impairments.
(2)		Represents the impact on consolidated total equity of VIEs that are not considered a business enterprise of the Company.
(3)		The amounts consist of Financial Guarantee premiums, Insured Derivative revenue and deferred commitment/structuring fees, net of deferred acquisition costs.
(4)		A non-GAAP measure.

Net Income (Loss) per Common Share:
								Three Months Ended								Twelve Months Ended
								December 31								December 31
								2010				2009				2010				2009
					Basic			$	2.25			($1.16	)			$	0.26			$	2.99
					Diluted			$	2.24			($1.16	)			$	0.26			$	2.99
Weighted-Average Number of Common Shares Outstanding:
					Basic				199,987,373			207,756,174					202,421,433				208,156,622
					Diluted				200,848,214			207,756,174					203,021,134				208,156,622

INSURANCE OPERATIONS
Selected Financial Data Computed on a Statutory Basis
(dollars in millions)
	National Public Finance Guarantee Corporation
							December 31, 2010			December 31, 2009 (6)
	Policyholders' surplus						$ 907.7			$ 591.2
	Contingency reserve						1,473.5			1,403.9
	Statutory capital						2,381.2			1,995.1
	Unearned premium reserve						2,872.6			3,125.5
	Present value of installment premiums (1)						282.1			270.3
	Premium resources (2)						3,154.7			3,395.8
	Loss and loss adjustment expense reserves (1)						95.9			136.0
	Total claims-paying resources						$ 5,631.8			$ 5,526.9
	Gross debt service outstanding						$777,365.9			$865,328.0
	Capital ratio (3)						326:1			434:1
	Claims-paying ratio (4)						172:1			199:1
	MBIA Insurance Corporation
							December 31, 2010			December 31, 2009 (6)
	Policyholders' surplus						$ 1,074.7			$ 1,885.1
	Contingency reserve						1,655.7			1,447.7
	Statutory capital						2,730.4			3,332.8
	Unearned premium reserve						703.1			726.1
	Present value of installment premiums (5)						1,655.0			1,739.5
	Premium resources (2)						2,358.1			2,465.6
	Loss and loss adjustment expense reserves (5)						155.3			561.0
	Total claims-paying resources						$ 5,243.8			$ 6,359.4
	Gross debt service outstanding						$247,665.2			$300,864.7
	Capital ratio (3)						91:1			90:1
	Claims-paying ratio (4)						56:1			55:1

(1)		At December 31, 2010 and December 31, 2009 the discount rates were 4.19% and 5.09%, respectively.
(2)		The amounts consist of Financial Guarantee premiums and Insured Derivative premiums.
(3)		Gross debt service outstanding divided by statutory capital.
(4)		Gross debt service outstanding divided by the sum of statutory capital, unearned premium reserve (after-tax), present
		value of installment premiums (after-tax) and loss and loss adjustment expense.
(5)		At December 31, 2010 and December 31, 2009 the discount rates were 5.93% and 6.51%, respectively.
(6)		Changed as a result of certain updates described in the Company’s Current Report on Form 8-K filed on June 4, 2010.

 

Source: MBIA Inc.