PURCHASE, N.Y.--(BUSINESS WIRE)--
MBIA Inc. (NYSE: MBI) (the Company) today reported combined operating
income (a non-GAAP measure defined in the attached Explanation of
Non-GAAP Financial Measures) of $34 million for the three months ended
March 31, 2015 compared with combined operating income of $40 million in
the same period of 2014. The decline in combined operating income for
the three months ended March 31, 2015 was primarily the result of a
decrease in net investment income and a larger reduction in loss
reserves in the first quarter of 2014 than in the first quarter of 2015,
partially offset by an increase in premiums earned net of deferred
acquisition cost amortization.
Adjusted Book Value (ABV) per share (a non-GAAP measure defined in the
attached Explanation of Non-GAAP Financial Measures) was $25.78 as of
March 31, 2015 compared with $24.87 as of December 31, 2014. The
increase in ABV per share was primarily driven by a decrease in common
shares outstanding resulting from share repurchases. The Company
repurchased 8.6 million of its common shares during the first quarter of
2015.
Consolidated GAAP net income was $69 million, or $0.37 per diluted
share, for the first quarter of 2015 compared with consolidated net
income of $256 million, or $1.32 per diluted share, in the same period
of 2014. The decrease in consolidated net income in the first quarter of
2015 was primarily due to lower net gains on insured derivatives,
partially offset by a lower provision for income taxes, gains on foreign
exchange and lower losses on insured exposures.
Operating income and ABV per share provide investors with other views of
the Company’s operating results that management uses in measuring
financial performance. Reconciliations of ABV per share to book value
per share, and operating income to net income, calculated in accordance
with GAAP, are attached.
“We continue to make progress toward more normal operations,” said MBIA
Inc. President and Chief Financial Officer Chuck Chaplin. “Since
National began writing new business in the third quarter of 2014, we
have wrapped $614 million of par and its earnings have been stable. We
also made progress at the holding company on debt reduction and
repurchased over 10 million of our shares since the beginning of the
year at prices we consider advantageous. MBIA Corp.’s statutory net
income was positive and capital was stable as loss volatility continued
its decline.”
U.S. Public Finance Insurance Results
The Company’s U.S. public finance insurance business is conducted
through its National Public Finance Guarantee Corporation (National)
subsidiary. The U.S. public finance insurance segment recorded $56
million of operating income in the first quarter of 2015 compared with
$61 million of operating income in the same period of 2014.
Total premiums earned in the U.S. public finance insurance segment were
$85 million in the first quarter of 2015, up 31 percent from $65 million
of total premiums earned in the same period of 2014, reflecting a 123
percent increase in refunded premiums earned partially offset by a 17
percent decline in scheduled premiums earned. The decline in scheduled
premiums earned resulted from portfolio amortization and high refunding
volume over the past several years.
National wrote $38 million par amount of primary new insurance during
the first quarter of 2015 and wrote or is committed to write $241
million since the end of the first quarter, for a total of $614 million
of par since the third quarter of 2014. Premiums written since the third
quarter of 2014 totaled $8 million.
Net investment income for the U.S. public finance insurance segment was
$29 million in the first quarter of 2015, down from $33 million in the
first quarter of 2014 primarily due to lower average yields, lower
average investment balances following a dividend payment to MBIA Inc. in
the fourth quarter of 2014 and tax payments.
Other net realized losses for the U.S. public finance insurance segment
were $4 million in the first quarter of 2015 as a result of an
impairment charge on the Company’s former headquarters facility in
Armonk, New York. The property was sold after the end of the first
quarter of 2015. There were no other net realized gains or losses in the
same period of 2014.
The U.S. public finance insurance segment recorded a benefit of $6
million to losses and LAE in the first quarter of 2015 compared with a
benefit of $14 million in the first quarter of 2014. The benefit in
losses and LAE for the first quarter of 2015 primarily related to
decreases in reserves for certain municipal utilities and general
obligation bonds. The benefit in losses and LAE for the first quarter of
2014 primarily related to decreases in reserves associated with certain
general obligation bonds.
The amortization of deferred acquisition costs totaled $18 million in
the first quarter of 2015 compared with $14 million in the same period
of 2014. The increase in the amortization of deferred acquisition costs
was due to higher refunding activity in 2015.
National’s operating expenses were $16 million in the first quarter of
2015, compared with $13 million in the same period of 2014. The increase
in operating expenses in the first quarter of 2015 was driven by
increased headcount and higher allocated compensation expenses as
National expands its new business activities.
National had qualified statutory capital of $3.3 billion and
claims-paying resources totaling $4.9 billion as of March 31, 2015.
Corporate
The corporate segment is responsible for general corporate activities,
including managing the holding company’s balance sheet and expense base,
providing support services to MBIA’s other operating businesses and
other business development activities. Shared support services are
provided by MBIA Services Corporation on a fee-for-service basis.
The corporate segment recorded an operating loss of $22 million in the
first quarter of 2015 compared with an operating loss of $21 million in
the same period of 2014. The increase in the corporate segment's
operating loss was primarily driven by a lower benefit from income
taxes, lower net investment income and higher losses on financial
instruments at fair value and foreign exchange, partially offset by
lower net realized losses and lower interest expense. In the first
quarter of 2014, the corporate segment recorded a net realized loss of
$5 million on an investment. There were no similar net realized gains or
losses in the corporate segment in the first quarter of 2015.
As of March 31, 2015, MBIA Inc. held cash and liquid assets of $567
million, excluding $193 million of assets in its tax escrow account.
During the first quarter of 2015, $228 million was released to MBIA Inc.
from the tax escrow account in accordance with the Company’s tax sharing
agreement.
The Company’s consolidated net operating loss carryforward for income
tax purposes as of March 31, 2015 was approximately $3.1 billion.
During the first quarter of 2015, the Company repurchased 8.6 million of
its common shares at an average price of $8.83 per share. In the second
quarter of 2015 through May 5, 2015, the Company repurchased an
additional 1.9 million common shares at an average price of $9.15 per
share. As of May 5, 2015, there was $95 million of remaining authorized
capacity under the Company’s 2014 share repurchase program.
International and Structured Finance Insurance Results
The international and structured finance insurance business is primarily
conducted through MBIA Corp. and includes the results of MBIA Insurance
Corporation, the New York-regulated insurer on a stand-alone basis and
its subsidiaries, MBIA UK Insurance Limited and MBIA Mexico S.A. de C.V.
The Company does not measure operating income of this segment. The
international and structured finance insurance segment’s contribution to
consolidated GAAP net income was a net loss of $2 million in the first
quarter of 2015, compared with net income of $254 million in the same
period of 2014. The change was driven by lower net gains on the fair
value of insured derivatives, partially offset by a benefit from income
taxes in the first quarter of 2015 compared with a provision for income
taxes in the same period of the prior year, as well as lower loss and
LAE expenses.
MBIA Corp.’s statutory net income for the first quarter of 2015 was $3
million. Statutory net losses and LAE incurred for the first quarter of
2015 totaled $18 million compared with net losses and LAE incurred of
$70 million in the comparable period of the prior year. The qualified
statutory capital of MBIA Insurance Corporation as of March 31, 2015 was
$857 million and claims-paying resources totaled $2.6 billion.
As of March 31, 2015, MBIA Insurance Corporation’s (excluding its
subsidiaries and branches) liquidity position totaled $415 million
consisting of cash and invested assets. Based on MBIA Corp.’s liquidity
position and its assessment of payment risks on insured exposures, the
Company believes that MBIA Corp.’s liquidity resources, including
expected cash inflows, will adequately provide for anticipated cash
outflows, including expected future claim payments.
Conference Call
The Company will host a webcast and conference call for investors
tomorrow, Tuesday, May 12, 2015 at 8:00 AM (EDT) to discuss its first
quarter 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 31617213. 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 May 12 until 11:59 p.m. on May 26 by dialing
(800) 585-8367 in the U.S. or (404) 537-3406 from outside the U.S. The
replay call code is also 31617213. 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
The information contained in this press release should be read in
conjunction with our filings made with the Securities and Exchange
Commission. 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,”
“estimate,” “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 and uncertainties, the possibility that the Company will
experience increased credit losses or impairments on public finance
obligations we insure issued by state, local and territorial governments
and finance authorities that are experiencing fiscal stress, the
possibility that MBIA Corp. will have inadequate liquidity to pay
expected claims as a result of increased losses on certain structured
finance transactions, in particular residential mortgage-backed
securities transactions that include a substantial number of ineligible
mortgage loans, or a delay or failure in collecting expected recoveries,
the possibility that loss reserve estimates are not adequate to cover
potential claims, a disruption in the cash flow from our subsidiaries or
an inability to access capital and our exposure to significant
fluctuations in liquidity and asset values within the global credit
markets as a result of collateral posting requirements, our ability to
fully implement our strategic plan, including our ability to maintain
high stable ratings for National and generate investor demand for our
financial guarantees, deterioration in the economic environment and
financial markets in the United States or abroad, and adverse
developments in European sovereign credit performance, real estate
market performance, credit spreads, interest rates and foreign currency
levels, the effects of governmental regulation, including insurance
laws, securities laws, tax laws, legal precedents and accounting rules;
and uncertainties that have not been identified at this time. 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 and Quarterly Report on Form 10-Q, 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 Purchase, New York is a holding company
whose subsidiaries provide financial guarantee insurance for the public
and structured finance markets. Please visit MBIA's website at www.mbia.com.
Explanation of Non-GAAP Financial Measures
The following are explanations of why the Company 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 by removing the GAAP book value
amounts for items that are not expected to impact shareholder value and
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.
ABV per share represents that amount of ABV allocated to each common
share outstanding at the measurement date.
Claims-paying Resources (CPR): CPR is a key measure of the
resources available to National and MBIA Corp. to pay claims under their
respective insurance policies. CPR consists of total financial resources
and reserves calculated on a statutory basis. CPR has been a common
measure used by financial guarantee insurance companies to report and
compare resources and continues to be used by MBIA’s management to
evaluate changes in such resources. The Company has provided CPR to
allow investors and analysts to evaluate National and MBIA Corp. using
the same measure that MBIA’s management uses to evaluate their resources
to pay claims under their respective insurance policies. There is no
directly comparable GAAP measure.
Combined Operating Income: The sum of Operating Income of the
U.S. public finance insurance (National) and corporate segments net of
eliminations. See “Operating Income” definition.
Operating Income: Operating Income is a useful measurement of
performance because it measures income from the Company’s core operating
segments, unaffected by investment portfolio realized gains and losses,
gains and losses on financial instruments at fair value and foreign
exchange, and realized gains and losses on extinguishment of debt.
Operating Income also excludes net income of the Company’s non-core
operating segments. The Company’s non-core segments include the
activities of its international and structured finance insurance,
advisory services and conduit segments. Trends in the underlying
profitability of the Company’s businesses can be more clearly identified
without the fluctuating effects of the excluded items noted above.
Operating Income is disclosed on an after-tax basis and adjustments to
net income are typically tax-effected at 35% unless a specific
adjustment, or component thereof, is not taxable. Operating Income as
defined by the Company does not include all revenues and expenses
required by GAAP. Operating Income is not a substitute for and should
not be viewed in isolation from GAAP net income.
Operating Income per share represents that amount of Operating Income
allocated to each fully diluted weighted-average common share
outstanding for the measurement period.
|
|
|
MBIA INC. AND SUBSIDIARIES
|
|
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
(In millions except share and per share amounts)
|
|
|
|
|
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
|
Assets
|
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
|
|
Fixed-maturity securities held as available-for-sale, at fair value
(amortized cost $5,155 and $5,036)
|
|
$
|
5,279
|
|
|
$
|
5,129
|
|
|
|
Investments carried at fair value
|
|
|
217
|
|
|
|
207
|
|
|
|
Investments pledged as collateral, at fair value (amortized cost
$217 and $441)
|
|
|
183
|
|
|
|
408
|
|
|
|
Short-term investments held as available-for-sale, at fair value
(amortized cost $1,114 and $1,069)
|
|
|
1,117
|
|
|
|
1,069
|
|
|
|
Other investments (includes investments at fair value of $13 and $13)
|
|
|
17
|
|
|
|
17
|
|
|
|
|
|
Total investments
|
|
|
6,813
|
|
|
|
6,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
596
|
|
|
|
729
|
|
|
Premiums receivable
|
|
|
848
|
|
|
|
875
|
|
|
Deferred acquisition costs
|
|
|
204
|
|
|
|
217
|
|
|
Insurance loss recoverable
|
|
|
527
|
|
|
|
533
|
|
|
Assets held for sale
|
|
|
22
|
|
|
|
802
|
|
|
Deferred income taxes, net
|
|
|
969
|
|
|
|
1,028
|
|
|
Other assets
|
|
|
232
|
|
|
|
229
|
|
|
Assets of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
Cash
|
|
|
31
|
|
|
|
53
|
|
|
|
Investments held-to-maturity, at amortized cost (fair value $2,635
and $2,632)
|
|
|
2,742
|
|
|
|
2,757
|
|
|
|
Fixed-maturity securities at fair value
|
|
|
1,061
|
|
|
|
421
|
|
|
|
Loans receivable at fair value
|
|
|
1,480
|
|
|
|
1,431
|
|
|
|
Loan repurchase commitments
|
|
|
385
|
|
|
|
379
|
|
|
|
Derivative assets
|
|
|
5
|
|
|
|
-
|
|
|
|
|
|
Total assets
|
|
$
|
15,915
|
|
|
$
|
16,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Unearned premium revenue
|
|
$
|
1,874
|
|
|
$
|
1,986
|
|
|
|
Loss and loss adjustment expense reserves
|
|
|
499
|
|
|
|
506
|
|
|
|
Investment agreements
|
|
|
538
|
|
|
|
547
|
|
|
|
Medium-term notes (includes financial instruments carried at fair
value of $180 and $197)
|
|
|
1,108
|
|
|
|
1,201
|
|
|
|
Long-term debt
|
|
|
1,828
|
|
|
|
1,810
|
|
|
|
Derivative liabilities
|
|
|
391
|
|
|
|
437
|
|
|
|
Liabilities held for sale
|
|
|
-
|
|
|
|
772
|
|
|
|
Other liabilities
|
|
|
266
|
|
|
|
271
|
|
|
|
Liabilities of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
|
Variable interest entity notes (includes financial instruments
carried at fair value of $2,653 and $2,047)
|
|
|
5,395
|
|
|
|
4,804
|
|
|
|
|
Derivative liabilities
|
|
|
76
|
|
|
|
-
|
|
|
|
|
|
Total liabilities
|
|
|
11,975
|
|
|
|
12,334
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Preferred stock, par value $1 per share; authorized
shares--10,000,000; issued and outstanding--none
|
|
|
-
|
|
|
|
-
|
|
|
|
Common stock, par value $1 per share; authorized
shares--400,000,000; issued shares--281,670,699
|
|
|
|
|
|
|
|
|
|
and 281,352,782
|
|
|
282
|
|
|
|
281
|
|
|
|
Additional paid-in capital
|
|
|
3,124
|
|
|
|
3,128
|
|
|
|
Retained earnings
|
|
|
2,927
|
|
|
|
2,858
|
|
|
|
Accumulated other comprehensive income (loss), net of tax of $4 and
$7
|
|
|
22
|
|
|
|
21
|
|
|
|
Treasury stock, at cost--98,097,072 and 89,409,887 shares
|
|
|
(2,436
|
)
|
|
|
(2,359
|
)
|
|
|
|
|
Total shareholders' equity of MBIA Inc.
|
|
|
3,919
|
|
|
|
3,929
|
|
|
|
Preferred stock of subsidiary and noncontrolling interest
|
|
|
21
|
|
|
|
21
|
|
|
|
|
|
Total equity
|
|
|
3,940
|
|
|
|
3,950
|
|
|
|
|
|
Total liabilities and equity
|
|
$
|
15,915
|
|
|
$
|
16,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MBIA INC. AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
|
(In millions except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Premiums earned:
|
|
|
|
|
|
|
|
|
|
Scheduled premiums earned
|
|
$
|
55
|
|
|
$
|
69
|
|
|
|
|
Refunding premiums earned
|
|
|
46
|
|
|
|
19
|
|
|
|
|
|
Premiums earned (net of ceded premiums of $4 and $2)
|
|
|
101
|
|
|
|
88
|
|
|
|
Net investment income
|
|
|
37
|
|
|
|
50
|
|
|
|
Fees and reimbursements
|
|
|
1
|
|
|
|
4
|
|
|
|
Change in fair value of insured derivatives:
|
|
|
|
|
|
|
|
|
|
Realized gains (losses) and other settlements on insured derivatives
|
|
|
(9
|
)
|
|
|
(369
|
)
|
|
|
|
Unrealized gains (losses) on insured derivatives
|
|
|
37
|
|
|
|
838
|
|
|
|
|
|
Net change in fair value of insured derivatives
|
|
|
28
|
|
|
|
469
|
|
|
|
Net gains (losses) on financial instruments at fair value and
foreign exchange
|
|
|
30
|
|
|
|
(55
|
)
|
|
|
Net gains (losses) on extinguishment of debt
|
|
|
-
|
|
|
|
1
|
|
|
|
Other net realized gains (losses)
|
|
|
20
|
|
|
|
1
|
|
|
|
Revenues of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
12
|
|
|
|
12
|
|
|
|
|
Net gains (losses) on financial instruments at fair value and
foreign exchange
|
|
|
(10
|
)
|
|
|
3
|
|
|
|
|
Net gains (losses) on extinguishment of debt
|
|
|
-
|
|
|
|
4
|
|
|
|
|
|
|
Total revenues
|
|
|
219
|
|
|
|
577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Losses and loss adjustment
|
|
|
(6
|
)
|
|
|
50
|
|
|
|
Amortization of deferred acquisition costs
|
|
|
13
|
|
|
|
10
|
|
|
|
Operating
|
|
|
35
|
|
|
|
46
|
|
|
|
Interest
|
|
|
50
|
|
|
|
54
|
|
|
|
Expenses of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
4
|
|
|
|
3
|
|
|
|
|
Interest
|
|
|
10
|
|
|
|
10
|
|
|
|
|
|
|
Total expenses
|
|
|
106
|
|
|
|
173
|
|
|
Income (loss) before income taxes
|
|
|
113
|
|
|
|
404
|
|
|
Provision (benefit) for income taxes
|
|
|
44
|
|
|
|
148
|
|
|
Net income (loss)
|
|
$
|
69
|
|
|
$
|
256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.37
|
|
|
$
|
1.33
|
|
|
|
Diluted
|
|
$
|
0.37
|
|
|
$
|
1.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
181,735,876
|
|
|
|
189,033,982
|
|
|
|
Diluted
|
|
|
182,736,415
|
|
|
|
190,263,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMBINED
|
|
OPERATING INCOME (LOSS) RECONCILIATION(4)
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
Net income (loss)
|
|
$
|
69
|
|
|
$
|
256
|
|
|
|
Less: net income of Non-Core Segments, including eliminations
|
|
|
(3
|
)
|
|
|
253
|
|
|
|
Less: after-tax adjustments:
|
|
|
|
|
|
|
|
|
|
Mark-to-market gains (losses) on financial instruments(1)
|
|
|
(17
|
)
|
|
|
(35
|
)
|
|
|
|
Foreign exchange gains (losses)(1)
|
|
|
42
|
|
|
|
(2
|
)
|
|
|
|
Net gains (losses) on sales of investments(1)
|
|
|
-
|
|
|
|
1
|
|
|
|
|
Other net realized gains (losses)(2)
|
|
|
13
|
|
|
|
-
|
|
|
|
|
Tax valuation allowance on adjustments(3)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
Operating income (loss)
|
|
$
|
34
|
|
|
$
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. PUBLIC FINANCE INSURANCE (NATIONAL)
|
|
OPERATING INCOME (LOSS) RECONCILIATION(4)
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
Net income (loss)
|
|
$
|
57
|
|
|
$
|
61
|
|
|
|
Less: after-tax adjustments:
|
|
|
|
|
|
|
|
|
|
Net gains (losses) on sales of investments(1)
|
|
|
1
|
|
|
|
-
|
|
|
|
Operating income (loss)
|
|
$
|
56
|
|
|
$
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORPORATE
|
|
OPERATING INCOME (LOSS) RECONCILIATION(4)
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
2015
|
|
2014
|
|
|
Net income (loss)
|
|
$
|
15
|
|
|
$
|
(58
|
)
|
|
|
Less: after-tax adjustments:
|
|
|
|
|
|
|
|
|
|
Mark-to-market gains (losses) on financial instruments(1)
|
|
|
(17
|
)
|
|
|
(35
|
)
|
|
|
|
Foreign exchange gains (losses)(1)
|
|
|
42
|
|
|
|
(2
|
)
|
|
|
|
Net gains (losses) on sales of investments(1)
|
|
|
(1
|
)
|
|
|
1
|
|
|
|
|
Other net realized gains (losses)(2)
|
|
|
13
|
|
|
|
-
|
|
|
|
|
Tax valuation allowance on adjustments(3)
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
Operating income (loss)
|
|
$
|
(22
|
)
|
|
$
|
(21
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Gross amounts are reported within "Net gains (losses) on financial
instruments at fair value and foreign exchange" and the corresponding
|
|
|
|
|
tax effects are reported within "Provision (benefit) for income
taxes" on the Company's consolidated statements of operations.
|
|
|
(2)
|
|
Relates to the after-tax gain on the sale of Cutwater.
|
|
|
(3)
|
|
Reported within "Provision (benefit) for income taxes" on the
Company's consolidated statements of operations.
|
|
|
(4)
|
|
A non-GAAP measure; please see Explanation of Non-GAAP Financial
Measures.
|
|
|
|
|
|
|
|
|
MBIA INC. AND SUBSIDIARIES
|
|
|
|
Components of Adjusted Book Value per
Share: (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
March 31, 2015
|
|
As of
December 31, 2014
|
|
|
|
|
|
|
|
Reported Book Value per Share
|
|
|
$
|
21.35
|
|
|
$
|
20.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reverse book value of Non-Core Segments (after-tax) (1)
|
|
|
|
1.41
|
|
|
|
1.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reverse net unrealized (gains) losses included in other
comprehensive income (after-tax)
|
|
|
|
(0.29
|
)
|
|
|
(0.15
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Add net unearned premium revenue (after-tax) (2) (3)
|
|
|
|
3.31
|
|
|
|
3.39
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Book Value per Share
|
|
|
$
|
25.78
|
|
|
$
|
24.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The book value for Non-Core Segments, primarily the international
and structured finance insurance segment, does not provide
significant economic or shareholder value to MBIA Inc. Amounts are
net of any deferred taxes available to MBIA Inc.
|
|
|
(2)
|
|
Consists of financial guarantee premiums, net of deferred
acquisition costs.
|
|
|
(3)
|
|
The discount rate on financial guarantee installment premiums was
the risk-free rate as defined by the accounting principles for
financial guarantee insurance contracts.
|
|
|
(4)
|
|
A non-GAAP measure; please see Explanation of Non-GAAP Financial
Measures.
|
|
|
|
INSURANCE OPERATIONS
|
|
|
|
Selected Financial Data Computed on a
Statutory Basis
|
|
|
|
|
|
|
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
National Public Finance Guarantee
Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
|
|
Policyholders' surplus
|
|
$
|
2,278
|
|
|
$
|
2,190
|
|
|
|
Contingency reserves
|
|
|
1,051
|
|
|
|
1,076
|
|
|
|
|
Statutory capital
|
|
|
3,329
|
|
|
|
3,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unearned premium reserve
|
|
|
1,289
|
|
|
1,375
|
|
|
|
Present value of installment premiums (1)
|
|
|
216
|
|
|
|
216
|
|
|
|
|
Premium resources (2)
|
|
|
1,505
|
|
|
|
1,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and loss adjustment expense reserves (1)
|
|
|
(17
|
)
|
|
|
(13
|
)
|
|
|
Salvage reserves
|
|
|
102
|
|
|
|
106
|
|
|
|
|
Gross loss and loss adjustment expense reserves
|
|
|
85
|
|
|
|
93
|
|
|
|
Total claims-paying resources
|
|
$
|
4,919
|
|
|
$
|
4,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt service outstanding
|
|
$
|
331,837
|
|
|
$
|
352,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital ratio (3)
|
|
|
100:1
|
|
|
|
108:1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claims-paying ratio (4)
|
|
|
76:1
|
|
|
|
80:1
|
|
|
|
|
|
|
|
|
|
|
|
|
MBIA Insurance Corporation
(5)
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
|
|
Policyholders’ surplus
|
|
$
|
549
|
|
|
$
|
542
|
|
|
|
Contingency reserves
|
|
|
308
|
|
|
|
317
|
|
|
|
|
Statutory capital
|
|
|
857
|
|
|
|
859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unearned premium reserve
|
|
|
412
|
|
|
434
|
|
|
|
Present value of installment premiums (6)
|
|
|
619
|
|
|
|
662
|
|
|
|
|
Premium resources (2)
|
|
|
1,031
|
|
|
|
1,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and loss adjustment expense reserves (6)
|
|
|
(239
|
)
|
|
|
(237
|
)
|
|
|
Salvage reserves
|
|
|
924
|
|
|
|
938
|
|
|
|
|
Gross loss and loss adjustment expense reserves
|
|
|
685
|
|
|
|
701
|
|
|
|
Total claims-paying resources
|
|
$
|
2,573
|
|
|
$
|
2,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt service outstanding
|
|
$
|
69,922
|
|
|
$
|
74,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital ratio (3)
|
|
|
82:1
|
|
|
|
87:1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claims-paying ratio (4)
|
|
|
32:1
|
|
|
|
33:1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
As of March 31, 2015 and December 31, 2014, the discount rate was
2.90%.
|
|
|
(2)
|
|
The amounts consist of financial guarantee premiums and insured
derivative premiums.
|
|
|
(3)
|
|
Net debt service outstanding divided by statutory capital.
|
|
|
(4)
|
|
Net debt service outstanding divided by the sum of statutory
capital, unearned premium reserve (after-tax), present
|
|
|
|
|
value of installment premiums (after-tax), net loss and loss
adjustment expense reserves and salvage reserves.
|
|
|
(5)
|
|
The table reflects MBIA Insurance Corporation including its
subsidiary MBIA UK Limited.
|
|
|
(6)
|
|
As of March 31, 2015 and December 31, 2014, the discount rate was
5.17%.
|
MBIA Inc.
Media
Kevin Brown, +1-914-765-3648
or
MBIA
Inc.
Investor Relations:
Greg Diamond,
+1-914-765-3190
Source: MBIA Inc.