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 $16 million for the three months ended
March 31, 2016 compared with Combined Operating Income of $34 million in
the same period of 2015. The decline in Combined Operating Income for
the three months ended March 31, 2016 was primarily the result of a
decrease in net premiums earned and an increase in losses and loss
adjustment expenses (LAE).
Adjusted Book Value (ABV) per share (a non-GAAP measure defined in the
attached Explanation of Non-GAAP Financial Measures) increased to $31.74
as of March 31, 2016 from $29.69 as of December 31, 2015. The increase
in ABV per share was driven primarily by a decrease in common shares
outstanding resulting from share repurchases. The Company repurchased 15
million of its common shares during the first quarter of 2016.
Operating Income and ABV per share provide investors with 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.
Consolidated GAAP net loss was $78 million, or $(0.58) per diluted
share, for the first quarter of 2016 compared with consolidated net
income of $69 million, or $0.37 per diluted share, in the same period of
2015. The unfavorable comparison was primarily due to foreign exchange
related losses on financial instruments and mark-to-market losses on
insured derivatives.
|
|
|
|
Amount
(in millions)
|
|
GAAP Net Loss: First Quarter 2016
|
|
|
($78
|
)
|
|
Quarter-over-Quarter Changes:
|
|
|
|
|
Net gains (losses) on financial instruments at fair value and
foreign exchange
|
|
|
($99
|
)
|
|
Net change in fair value of insured derivatives
|
|
|
($56
|
)
|
|
All other (after-tax)
|
|
|
$8
|
|
GAAP Net Income: First Quarter 2015
|
|
|
$69
|
|
|
|
|
|
|
|
Statements from Company Representative
“National’s new business platform continues to expand,” said Bill
Fallon, MBIA’s Chief Operating Officer. “We are making steady headway
with our expanded new business team despite the ongoing challenging
business environment for our industry.” Mr. Fallon added, “We continue
to strive for appropriate resolutions for our Puerto Rico credits but
progress remains slow as the debates rage as to the appropriate course
of action for U.S. Congress to implement. We are also continuing with
our financial progress with another quarter of operating income. The
GAAP net loss for the quarter was driven by two large fair value items,
as shown in the above table. MBIA Inc.’s liquidity position remains
among our highest priorities, and we expect that continuing payments
from National will satisfy MBIA Inc.’s future liquidity needs. Of note,
our first quarter share repurchases drove an increase of $2.05 of our
Adjusted Book Value for the quarter continuing our efforts to increase
shareholder value as our new business efforts ramp up.”
U.S. Public Finance Insurance Results
The Company’s U.S. public finance insurance business is conducted
through its subsidiary, National Public Finance Guarantee Corporation
(National).
The U.S. Public Finance Insurance segment recorded GAAP net income of
$41 million for the first quarter of 2016 versus $57 million for the
first quarter of 2015. The decline in GAAP net income was primarily due
to a decline in premiums earned and an unfavorable variance of $15
million for losses and LAE.
The U.S. Public Finance Insurance segment recorded $37 million of
Operating Income in the first quarter of 2016 compared with $56 million
of Operating Income in the same period of 2015. The decline in Operating
Income was also primarily due to a decline in premiums earned and an
unfavorable variance of $15 million for losses and LAE.
Total net premiums earned in the U.S. Public Finance Insurance segment
were $58 million in the first quarter of 2016, down 32 percent from $85
million of total premiums earned in the same period of 2015. Premiums
earned from refunded transactions decreased 36 percent and scheduled
premiums earned declined by 26 percent. The decline in scheduled
premiums earned resulted from portfolio amortization and high refunding
volume over the last year.
National wrote $158 million gross par amount of new insurance during the
first quarter of 2016, equal to the amount written during the fourth
quarter of 2015 and up from $38 million in the first quarter of 2015.
Gross premiums written during the first quarter of 2016 were $1.3
million, which was also the same as the fourth quarter of 2015 and up
from $195 thousand in the first quarter of 2015.
Net investment income for the U.S. Public Finance Insurance segment was
$31 million in the first quarter of 2016, 7 percent higher than the
first quarter of 2015. The increase was primarily due to a higher
average investment yield, partially offset by lower average investment
balances, driven by tax payments and a dividend payment to MBIA Inc. in
the fourth quarter of 2015.
The U.S. Public Finance Insurance segment recorded loss and LAE of $9
million in the first quarter of 2016 compared to a benefit of $6 million
in the first quarter of 2015. The unfavorable comparison in losses and
LAE was primarily due to the increase in loss reserves for certain
Puerto Rico credits in the first quarter of 2016.
The amortization of deferred acquisition costs totaled $12 million in
the first quarter of 2016 compared with $18 million in the same period
of 2015. The decrease in the amortization of deferred acquisition costs
corresponds to lower premiums earned.
National’s operating expenses were $15 million in the first quarter of
2016, down 6 percent from the $16 million in the same period of 2015,
notwithstanding increases in National’s headcount to expand and enhance
new business production capabilities.
National had statutory capital of $3.4 billion and claims-paying
resources totaling $4.7 billion as of March 31, 2016. National’s insured
portfolio declined by $11 billion during the quarter, ending the quarter
with $150 billion of gross par outstanding.
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 a GAAP net loss of $84 million in the
first quarter of 2016 versus net income of $15 million in the first
quarter of 2015. The adverse variance was primarily due to a $116
million unfavorable change in net gains (losses) on financial
instruments at fair value and foreign exchange that was primarily due to
adverse changes from foreign exchange.
The corporate segment recorded an Operating Loss of $21 million in the
first quarter of 2016 compared with an Operating Loss of $22 million in
the same period of 2015.
As of March 31, 2016, MBIA Inc. held cash and liquid assets of $371
million, excluding $218 million of assets in its tax escrow account.
During the first quarter of 2016, $105 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, 2016 was approximately $2.7 billion.
During the first quarter of 2016, the Company repurchased 15 million of
its common shares at an average price of $6.30 per share. The Company
has not repurchased any additional shares since February 25, 2016. As of
May 5, 2016, there was $100 million of remaining authorized capacity
under the Company’s current share repurchase program.
International and Structured Finance Insurance Results
The international and structured finance insurance business is conducted
primarily 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 for this segment. The
international and structured finance insurance segment’s contribution to
consolidated GAAP net loss was a net loss of $31 million in the first
quarter of 2016, compared with a net loss of $2 million in the same
period of 2015. The higher net loss was driven by a $56 million
unfavorable variance related to the net change in fair value on insured
derivatives.
MBIA Corp.’s statutory net loss for the first quarter of 2016 was $55
million compared to statutory net income of $3 million for the first
quarter of 2015. The unfavorable variance was driven by a $42 million
increase in losses and LAE incurred. The statutory capital of MBIA
Insurance Corporation as of March 31, 2016 was $844 million and
claims-paying resources totaled $2.4 billion.
As of March 31, 2016, the liquidity position of MBIA Insurance
Corporation (excluding its subsidiaries and branches) totaled $278
million consisting of cash and invested assets.
Conference Call
The Company will host a webcast and conference call for investors
tomorrow, Tuesday, May 10, 2016 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 91611568. 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 10 until 11:59 p.m. on May 24 by dialing
(800) 585-8367 in the U.S. or (404) 537-3406 from outside the U.S. The
replay call code is also 91611568. 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 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/Loss: Operating Income/Loss is a useful
measurement of performance because it measures income/loss 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/Loss also excludes net
income/loss of the Company’s non-core operating segments. The Company’s
non-core segment includes the activities of its international and
structured finance insurance segment. 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/loss is disclosed on an after-tax basis and adjustments
to net income/loss are typically tax-effected at 35% unless a specific
adjustment, or component thereof, is not taxable. Operating Income/Loss
as defined by the Company does not include all revenues and expenses
required by GAAP. Operating Income/Loss is not a substitute for and
should not be viewed in isolation from GAAP net income/loss.
Operating Income/Loss per share represents that amount of Operating
Income/Loss 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, 2016
|
|
|
December 31, 2015
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
|
|
Fixed-maturity securities held as available-for-sale, at fair
value (amortized
cost $5,120 and $5,155)
|
|
|
$
|
5,210
|
|
|
|
$
|
5,145
|
|
|
|
Investments carried at fair value
|
|
|
|
164
|
|
|
|
|
177
|
|
|
|
Investments pledged as collateral, at fair value (amortized cost
$216 and $322)
|
|
|
|
191
|
|
|
|
|
291
|
|
|
|
Short-term investments held as available-for-sale, at fair value
(amortized cost
$931 and $720)
|
|
|
|
931
|
|
|
|
|
721
|
|
|
|
Other investments (includes investments at fair value of $6 and $13)
|
|
|
|
10
|
|
|
|
|
16
|
|
|
|
Total investments
|
|
|
|
6,506
|
|
|
|
|
6,350
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
285
|
|
|
|
|
464
|
|
|
|
Premiums receivable
|
|
|
|
747
|
|
|
|
|
792
|
|
|
|
Deferred acquisition costs
|
|
|
|
158
|
|
|
|
|
168
|
|
|
|
Insurance loss recoverable
|
|
|
|
409
|
|
|
|
|
577
|
|
|
|
Deferred income taxes, net
|
|
|
|
939
|
|
|
|
|
951
|
|
|
|
Other assets
|
|
|
|
143
|
|
|
|
|
156
|
|
|
|
Assets of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
47
|
|
|
|
|
58
|
|
|
|
Investments held-to-maturity, at amortized cost (fair value $525 and
$2,401)
|
|
|
|
890
|
|
|
|
|
2,689
|
|
|
|
Fixed-maturity securities at fair value
|
|
|
|
848
|
|
|
|
|
932
|
|
|
|
Loans receivable at fair value
|
|
|
|
1,368
|
|
|
|
|
1,292
|
|
|
|
Loan repurchase commitments
|
|
|
|
399
|
|
|
|
|
396
|
|
|
|
Other assets
|
|
|
|
12
|
|
|
|
|
11
|
|
|
|
Total assets
|
|
|
$
|
12,751
|
|
|
|
$
|
14,836
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Unearned premium revenue
|
|
|
$
|
1,510
|
|
|
|
$
|
1,591
|
|
|
|
Loss and loss adjustment expense reserves
|
|
|
|
525
|
|
|
|
|
516
|
|
|
|
Long-term debt
|
|
|
|
1,919
|
|
|
|
|
1,889
|
|
|
|
Medium-term notes (includes financial instruments carried at fair
value of
$165 and $161)
|
|
|
|
1,048
|
|
|
|
|
1,016
|
|
|
|
Investment agreements
|
|
|
|
452
|
|
|
|
|
462
|
|
|
|
Derivative liabilities
|
|
|
|
358
|
|
|
|
|
314
|
|
|
|
Other liabilities
|
|
|
|
170
|
|
|
|
|
211
|
|
|
|
Liabilities of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
Variable interest entity notes (includes financial instruments
carried at fair
value of $2,204 and $2,362)
|
|
|
|
3,094
|
|
|
|
|
5,051
|
|
|
|
Derivative liabilities
|
|
|
|
36
|
|
|
|
|
45
|
|
|
|
Total liabilities
|
|
|
|
9,112
|
|
|
|
|
11,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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--283,390,167
and
281,833,618
|
|
|
|
283
|
|
|
|
|
282
|
|
|
|
Additional paid-in capital
|
|
|
|
3,147
|
|
|
|
|
3,138
|
|
|
|
Retained earnings
|
|
|
|
2,960
|
|
|
|
|
3,038
|
|
|
|
Accumulated other comprehensive income (loss), net of tax of $15 and
$51
|
|
|
|
5
|
|
|
|
|
(61
|
)
|
|
|
Treasury stock, at cost--146,112,863 and 130,303,241 shares
|
|
|
|
(2,768
|
)
|
|
|
|
(2,668
|
)
|
|
|
Total shareholders' equity of MBIA Inc.
|
|
|
|
3,627
|
|
|
|
|
3,729
|
|
|
|
Preferred stock of subsidiary
|
|
|
|
12
|
|
|
|
|
12
|
|
|
|
Total equity
|
|
|
|
3,639
|
|
|
|
|
3,741
|
|
|
|
Total liabilities and equity
|
|
|
$
|
12,751
|
|
|
|
$
|
14,836
|
|
|
|
|
|
|
|
|
|
|
|
MBIA INC. AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
|
|
(In millions except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Premiums earned:
|
|
|
|
|
|
|
|
|
|
Scheduled premiums earned
|
|
|
$
|
45
|
|
|
|
$
|
55
|
|
|
Refunding premiums earned
|
|
|
|
30
|
|
|
|
|
46
|
|
|
Premiums earned (net of ceded premiums of $2 and $4)
|
|
|
|
75
|
|
|
|
|
101
|
|
|
Net investment income
|
|
|
|
39
|
|
|
|
|
37
|
|
|
Fees and reimbursements
|
|
|
|
1
|
|
|
|
|
1
|
|
|
Change in fair value of insured derivatives:
|
|
|
|
|
|
|
|
|
|
Realized gains (losses) and other settlements on insured derivatives
|
|
|
|
(14
|
)
|
|
|
|
(9
|
)
|
|
Unrealized gains (losses) on insured derivatives
|
|
|
|
(14
|
)
|
|
|
|
37
|
|
|
Net change in fair value of insured derivatives
|
|
|
|
(28
|
)
|
|
|
|
28
|
|
|
Net gains (losses) on financial instruments at fair value and
foreign exchange
|
|
|
|
(69
|
)
|
|
|
|
30
|
|
|
Investment losses related to other-than-temporary impairments
|
|
|
|
(1
|
)
|
|
|
|
-
|
|
|
Net gains (losses) on extinguishment of debt
|
|
|
|
2
|
|
|
|
|
-
|
|
|
Other net realized gains (losses)
|
|
|
|
(1
|
)
|
|
|
|
20
|
|
|
Revenues of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
|
15
|
|
|
|
|
12
|
|
|
Net gains (losses) on financial instruments at fair value and
foreign exchange
|
|
|
|
(1
|
)
|
|
|
|
(10
|
)
|
|
Total revenues
|
|
|
|
32
|
|
|
|
|
219
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment
|
|
|
|
22
|
|
|
|
|
(6
|
)
|
|
Amortization of deferred acquisition costs
|
|
|
|
10
|
|
|
|
|
13
|
|
|
Operating
|
|
|
|
35
|
|
|
|
|
35
|
|
|
Interest
|
|
|
|
50
|
|
|
|
|
50
|
|
|
Expenses of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
|
4
|
|
|
|
|
4
|
|
|
Interest
|
|
|
|
12
|
|
|
|
|
10
|
|
|
Total expenses
|
|
|
|
133
|
|
|
|
|
106
|
|
|
Income (loss) before income taxes
|
|
|
|
(101
|
)
|
|
|
|
113
|
|
|
Provision (benefit) for income taxes
|
|
|
|
(23
|
)
|
|
|
|
44
|
|
|
Net income (loss)
|
|
|
$
|
(78
|
)
|
|
|
$
|
69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
(0.58
|
)
|
|
|
$
|
0.37
|
|
|
Diluted
|
|
|
$
|
(0.58
|
)
|
|
|
$
|
0.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
135,814,835
|
|
|
|
|
181,735,876
|
|
|
Diluted
|
|
|
|
135,814,835
|
|
|
|
|
182,736,415
|
|
|
|
|
|
|
COMBINED
|
|
OPERATING INCOME (LOSS) RECONCILIATION(5)
|
|
(In millions except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
2016
|
|
|
2015
|
|
Net income (loss) and net income (loss) per diluted common share
|
|
|
$
|
|
|
|
(78
|
)
|
|
$
|
|
|
(0.58
|
)
|
|
|
$
|
|
|
|
69
|
|
|
$
|
|
|
0.37
|
|
|
Less: net income (loss) of the international and structured finance
insurance
segment, including eliminations
|
|
|
|
|
|
|
(35
|
)
|
|
|
|
|
(0.26
|
)
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
(0.02
|
)
|
|
Less: after-tax adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-market gains (losses) on financial instruments(1)
|
|
|
|
|
|
|
(35
|
)
|
|
|
|
|
(0.26
|
)
|
|
|
|
|
|
|
(17
|
)
|
|
|
|
|
(0.09
|
)
|
|
Foreign exchange gains (losses)(1)
|
|
|
|
|
|
|
(18
|
)
|
|
|
|
|
(0.13
|
)
|
|
|
|
|
|
|
42
|
|
|
|
|
|
0.23
|
|
|
Net gains (losses) on sales of investments(1)
|
|
|
|
|
|
|
4
|
|
|
|
|
|
0.03
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Net investment losses related to other-than-temporary impairments
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Net gains (losses) on extinguishment of debt
|
|
|
|
|
|
|
1
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Other net realized gains (losses)(2)
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
|
|
13
|
|
|
|
|
|
0.07
|
|
|
Foreign tax credit adjustment(3)
|
|
|
|
|
|
|
(9
|
)
|
|
|
|
|
(0.07
|
)
|
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Operating income (loss) and operating income (loss) per diluted
common
share
|
|
|
$
|
|
|
|
16
|
|
|
$
|
|
|
0.12
|
|
|
|
$
|
|
|
|
34
|
|
|
$
|
|
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares
|
|
|
|
|
|
|
136,445,319
|
|
(4)
|
|
|
|
|
|
182,736,415
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. PUBLIC FINANCE INSURANCE (NATIONAL)
|
|
|
|
|
OPERATING INCOME (LOSS) RECONCILIATION(5)
|
|
|
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
Net income (loss)
|
|
|
|
|
$
|
41
|
|
|
$
|
57
|
|
|
|
|
Less: after-tax adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains (losses) on sales of investments(1)
|
|
|
|
|
|
4
|
|
|
|
1
|
|
|
|
|
Operating income (loss)
|
|
|
|
|
$
|
37
|
|
|
$
|
56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORPORATE
|
|
|
|
|
OPERATING INCOME (LOSS) RECONCILIATION(5)
|
|
|
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
Net income (loss)
|
|
|
|
|
$
|
(84)
|
|
|
$
|
15
|
|
|
|
|
Less: after-tax adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-market gains (losses) on financial instruments(1)
|
|
|
|
|
|
(35)
|
|
|
|
(17)
|
|
|
|
|
Foreign exchange gains (losses)(1)
|
|
|
|
|
|
(18)
|
|
|
|
42
|
|
|
|
|
Net gains (losses) on sales of investments(1)
|
|
|
|
|
|
-
|
|
|
|
(1)
|
|
|
|
|
Net investment losses related to other-than-temporary impairments
|
|
|
|
|
|
(1)
|
|
|
|
-
|
|
|
|
|
Net gains (losses) on extinguishment of debt
|
|
|
|
|
|
1
|
|
|
|
-
|
|
|
|
|
Other net realized gains (losses)(2)
|
|
|
|
|
|
(1)
|
|
|
|
13
|
|
|
|
|
Foreign tax credit adjustment(3)
|
|
|
|
|
|
(9)
|
|
|
|
-
|
|
|
|
|
Operating income (loss)
|
|
|
|
|
$
|
(21)
|
|
|
$
|
(22)
|
|
|
|
|
|
|
|
|
|
|
(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 impact from the sale of Cutwater.
|
|
|
|
|
(3)
|
|
Reported within "Provision (benefit) for income taxes" on the
Company's consolidated statements of operations.
|
|
|
|
|
(4)
|
|
Includes GAAP diluted weighted average number of common shares of
135,814,835 and the dilutive effect of common stock equivalents of
630,484 shares.
|
|
|
|
|
(5)
|
|
A non-GAAP measure; please see Explanation of Non-GAAP Financial
Measures.
|
|
|
|
|
|
|
MBIA INC. AND SUBSIDIARIES
|
|
|
|
Components of Adjusted Book Value per
Share: (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
March 31, 2016
|
|
As of
December 31, 2015
|
|
|
|
|
|
|
Reported Book Value per Share
|
|
|
$
|
26.42
|
|
|
$
|
24.61
|
|
|
|
|
|
|
|
|
|
|
Reverse book value of international and structured finance insurance
segment (after-tax) (1)
|
|
|
|
2.18
|
|
|
|
1.61
|
|
Reverse net unrealized (gains) losses included in other
comprehensive income (loss) (after-tax)
|
|
|
|
(0.26
|
)
|
|
|
0.20
|
|
Add net unearned premium revenue (after-tax) (2)
|
|
|
|
3.40
|
|
|
|
3.27
|
|
Adjusted Book Value per Share
|
|
|
$
|
31.74
|
|
|
$
|
29.69
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The book value for 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. The discount rate on financial guarantee
installment premiums was the risk-free rate as defined by the
accounting principles for financial guarantee insurance contracts.
|
|
|
(3)
|
|
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, 2016
|
|
December 31, 2015
|
|
|
|
Policyholders' surplus
|
|
|
$
|
2,550
|
|
|
$
|
2,478
|
|
|
|
|
Contingency reserves
|
|
|
|
879
|
|
|
|
910
|
|
|
|
|
|
|
Statutory capital
|
|
|
|
3,429
|
|
|
|
3,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unearned premium reserve
|
|
|
|
982
|
|
|
1,042
|
|
|
|
|
Present value of installment premiums (1)
|
|
|
|
197
|
|
|
|
197
|
|
|
|
|
|
|
Premium resources (2)
|
|
|
|
1,179
|
|
|
|
1,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and loss adjustment expense reserves (1)
|
|
|
|
1
|
|
|
|
(30
|
)
|
|
|
|
Salvage reserves
|
|
|
|
101
|
|
|
|
102
|
|
|
|
|
|
|
Gross loss and loss adjustment expense reserves
|
|
|
|
102
|
|
|
|
72
|
|
|
|
|
Total claims-paying resources
|
|
|
$
|
4,710
|
|
|
$
|
4,699
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt service outstanding
|
|
|
$
|
242,156
|
|
|
$
|
259,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital ratio (3)
|
|
|
|
71:1
|
|
|
|
77:1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claims-paying ratio (4)
|
|
|
|
56:1
|
|
|
|
61:1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MBIA Insurance Corporation
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2016
|
|
December 31, 2015
|
|
|
|
Policyholders’ surplus
|
|
|
$
|
571
|
|
|
$
|
609
|
|
|
|
|
Contingency reserves
|
|
|
|
273
|
|
|
|
276
|
|
|
|
|
|
|
Statutory capital
|
|
|
|
844
|
|
|
|
885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unearned premium reserve
|
|
|
|
356
|
|
|
356
|
|
|
|
|
Present value of installment premiums (6) (8)
|
|
|
|
496
|
|
|
|
520
|
|
|
|
|
|
|
Premium resources (2)
|
|
|
|
852
|
|
|
|
876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and loss adjustment expense reserves (6)
|
|
|
|
(289
|
)
|
|
|
(332
|
)
|
|
|
|
Salvage reserves (7)
|
|
|
|
972
|
|
|
|
994
|
|
|
|
|
|
|
Gross loss and loss adjustment expense reserves
|
|
|
|
683
|
|
|
|
662
|
|
|
|
|
Total claims-paying resources
|
|
|
$
|
2,379
|
|
|
$
|
2,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt service outstanding
|
|
|
$
|
53,544
|
|
|
$
|
57,682
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital ratio (3)
|
|
|
|
63:1
|
|
|
|
65:1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claims-paying ratio (4)
|
|
|
|
26:1
|
|
|
|
27:1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Calculated using a discount rate of 3.04% as of March 31, 2016 and
December 31, 2015.
|
|
|
|
(2)
|
|
Includes financial guarantee and insured credit derivative related
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)
|
|
Calculated using a discount rate of 5.18% as of March 31, 2016 and
December 31, 2015.
|
|
|
|
(7)
|
|
This amount primarily consists of expected recoveries related to the
Company's excess spread and put-backs.
|
|
|
|
(8)
|
|
Based on the Company's estimate of the remaining life for its
insured exposures.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20160509006502/en/
MBIA Inc.
Greg Diamond, 914-765-3190
Investor and Media
Relations
greg.diamond@mbia.com
Source: MBIA Inc.