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 $87 million or $0.52 per diluted share
for the year ended December 31, 2015 compared to $185 million or $0.97
per diluted share for the year ended December 31, 2014. The decline in
Combined Operating Income for 2015 compared to 2014 was driven primarily
by the release of a $61 million tax reserve and the receipt of an $18
million recovery on an errors and omissions insurance policy that both
occurred in 2014 and a $15 million unfavorable variance in losses and
loss adjustment expenses.
Combined Operating Income for the fourth quarter of 2015 was $10 million
or $0.07 per diluted share compared to $22 million or $0.12 per diluted
share for the fourth quarter of 2014. The decline in Combined Operating
Income for the three months ended December 31, 2015 compared to the
fourth quarter of 2014 was driven primarily by the $15 million
unfavorable variance in losses and loss adjustment expenses.
Adjusted Book Value (ABV) per share (a non-GAAP measure defined in the
attached Explanation of Non-GAAP Financial Measures) was $29.69 as of
December 31, 2015 compared to $24.87 as of December 31, 2014. The
largest factor contributing to the increase in ABV per share since
year-end 2014 was the decrease in common shares outstanding due to share
repurchases. During 2015, the Company repurchased 39.9 million of its
common shares, which reduced common shares outstanding to 152 million at
year-end 2015.
Combined Operating Income and ABV per share provide investors with two
perspectives of the Company’s financial results that management uses in
measuring the Company’s financial performance. Reconciliations of ABV
per share to book value per share, and Combined Operating Income to net
income, calculated in accordance with GAAP, are attached.
MBIA Inc. reported Consolidated GAAP net income of $180 million or $1.06
per diluted share for the year ended December 31, 2015 compared to $569
million or $2.76 per diluted share for the prior year. The decline in
Consolidated GAAP net income was primarily due to a $330 million
reduction in the net change of the fair value of insured credit
derivatives.
Consolidated GAAP net income was $82 million, or $0.54 per diluted
share, for the fourth quarter of 2015 compared to consolidated net
income of $20 million, or $0.10 per diluted share, for the fourth
quarter of 2014. The increase in consolidated net income was primarily
due to the increase in net investment income of consolidated variable
interest entities; a favorable variance in the fair value of interest
rates swaps; and a favorable variance in realized gains (losses) and
other settlements on insured credit derivatives, which was driven by
losses paid in the fourth quarter of 2014.
Statements from Company Representatives
“We remain confident in the financial stability of National and the
holding company, notwithstanding our disappointment with the decline in
Combined Operating Income for this quarter,” said MBIA Inc. President
and Chief Financial Officer Chuck Chaplin. “National is well-positioned
for future growth. In addition, the significant reduction in our common
shares outstanding that has resulted from our buyback activities will
magnify the effects of future growth for MBIA’s shareholders,” Mr.
Chaplin continued.
National Public Finance Guarantee Corporation Chief Executive Officer
Bill Fallon said, “On the new business front, we’ve continued to build
momentum. Our fourth quarter policies and premiums written both improved
over the prior quarter. On the remediation front, National continues to
devote significant resources to resolving our Puerto Rico exposures.
We’ve reached an important agreement with PREPA, which remains subject
to certain conditions before it can be implemented and we continue to
work with our other Puerto Rico credits in an effort to address their
financial and liquidity challenges.”
U.S. Public Finance Insurance Segment Results
The Company’s U.S. Public Finance insurance business is conducted
through National Public Finance Guarantee Corporation (“National”), its
primary operating subsidiary. The U.S. Public Finance Insurance segment
recorded GAAP net income of $51 million for the fourth quarter of 2015
versus $63 million for the fourth quarter of 2014. The decline in GAAP
net income was primarily due to an unfavorable variance of $15 million
for losses and loss adjustment expenses.
The U.S. Public Finance Insurance segment’s Operating Income was $44
million in the fourth quarter of 2015 compared to $56 million for the
fourth quarter of 2014. As with GAAP net income, the decline was
primarily due to the $15 million unfavorable variance in losses and loss
adjustment expenses.
Net premiums earned were $78 million in the fourth quarter of 2015, down
5 percent from $82 million in the fourth quarter of 2014. The decline
resulted from a decrease in scheduled premiums earned that was partially
offset by a 15 percent increase in refunded premiums earned.
National insured $158 million of par value in the primary and secondary
markets, combined, during the fourth quarter of 2015 and almost $600
million of par value for the year. Low interest rates, narrow credit
spreads and competitive insurance pricing continue to adversely impact
our opportunity to insure significantly greater amounts of new business
at attractive returns.
Net investment income for the segment was $30 million, up 3 percent from
$29 million for the fourth quarter of 2014 as a 20 basis points increase
in average investment yields was partially offset by an 8 percent
decline in average invested assets.
The U.S. Public Finance Insurance segment’s losses and loss adjustment
expenses were $10 million for the fourth quarter of 2015 compared to a
$5 million benefit in the fourth quarter of 2014.
National had statutory capital of $3.4 billion and claims-paying
resources totaling $4.7 billion as of December 31, 2015.
Corporate Segment Results
The corporate segment includes general corporate activities and also
provides support services, including asset and capital management
services, to MBIA’s other operating businesses.
The corporate segment recorded a GAAP net loss of $15 million in the
fourth quarter of 2015 versus $31 million in the fourth quarter of 2014.
The lower GAAP net loss was primarily due to a favorable variance in the
fair value of interest rate swaps.
The corporate segment’s Operating Loss was $34 million for each of the
fourth quarters of 2015 and 2014.
As of December 31, 2015, MBIA Inc. held cash and liquid assets of $416
million, which excludes $296 million (at market value) of liquid assets
in its tax escrow account. Subsequent to December 31, 2015, $105 million
was released from the tax escrow account to MBIA Inc.
The Company’s consolidated net operating loss carryforward for income
tax purposes as of December 31, 2015 was $2.8 billion.
During the fourth quarter of 2015, the Company repurchased 1 million
shares of its common stock at an average price of $6.50 per share.
During 2015, the Company repurchased 39.9 million of its common shares
at an average price of $7.60 per share. Since year-end 2015, the Company
repurchased an additional 14.9 million of its common shares, which
completed its share repurchase authorization. As of February 25, 2016,
137 million of the Company’s common shares were outstanding. The Company
also retired a combined $128 million par value of MBIA Inc. debt and
Global Funding MTNs during 2015 through debt repurchases and maturity
payments.
Subsequent to quarter-end, on February 23, the Company’s Board of
Directors approved a new share repurchase authorization for the Company
or its subsidiaries to repurchase up to $100 million of its common
shares. Repurchases by the Company or its subsidiaries under the new
repurchase authorization will be subject to available liquidity, general
market and economic conditions, alternate uses for its capital and other
factors. Acquisitions in the repurchase program may be made from time to
time in open market transactions, block trades or in private
transactions in accordance with applicable securities laws and
regulations and other legal requirements. There is no minimum number of
shares that the Company is required to repurchase and the repurchase
program may be suspended or discontinued at any time without prior
notice.
International and Structured Finance Insurance Results
The International and Structured Finance Insurance segment business is
primarily conducted through MBIA Corp. Unless otherwise indicated or the
context otherwise requires, references to “MBIA Corp.” are to MBIA
Insurance Corporation, together with its subsidiaries, MBIA UK Insurance
Limited and MBIA Mexico S.A. de C.V.
The Company uses statutory accounting to measure the financial
performance of this segment. MBIA Insurance Corporation’s statutory net
income was $25 million for the year 2015, compared to a net loss of $35
million for the year 2014. Statutory net losses and loss adjustment
expenses incurred for 2015 was $105 million compared to $222 million for
2014. The statutory capital of MBIA Insurance Corporation as of December
31, 2015 was $885 million and claims-paying resources totaled $2.4
billion.
As of December 31, 2015, MBIA Insurance Corporation’s liquidity position
(excluding its subsidiaries and branches) totaled $264 million
consisting of cash and liquid invested assets, down from $399 million as
of September 30, 2015. During the fourth quarter of 2015, MBIA Insurance
Corp. paid a claim of $149 million under our insurance coverage of the
Zohar I CDO. We are currently working with Patriarch Partners and other
parties to implement a plan to reduce the amount of Zohar II CDO notes
outstanding prior to its maturity of January 20, 2017 and to also
maximize recoveries of the claims we paid on the Zohar I CDO. The plan
also includes ways to increase MBIA Insurance Corp.’s liquidity.
Conference Call
The Company will host a webcast and conference call for investors
tomorrow, Tuesday, March 1, 2016 at 8:00 AM (ET) to discuss its fourth
quarter and full year 2015 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 48832913. A
live webcast of the conference call will also be accessible on www.mbia.com.
A replay of the conference call will become available approximately two
hours after the end of the call on and will remain available until 11:59
p.m. (ET) on March 15 by dialing (800) 585-8367 in the U.S. or (404)
537-3406 from outside the U.S. The code for the replay of the call is
48832913. In addition, a recorded replay of the call will become
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 (Loss): The sum of Operating Income
(Loss) of the U.S. public finance insurance (National) and corporate
segments net of eliminations. See “Operating Income (Loss)” definition.
Operating Income (Loss): Operating Income (Loss) 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 (Loss) 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 (Loss) 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 (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.
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
|
|
(In millions except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
December 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)
|
|
$
|
5,145
|
|
|
$
|
5,129
|
|
|
Investments carried at fair value
|
|
|
177
|
|
|
|
207
|
|
|
Investments pledged as collateral, at fair value (amortized cost
$322 and $441)
|
|
|
291
|
|
|
|
408
|
|
|
Short-term investments held as available-for-sale, at fair value
(amortized cost $720 and $1,069)
|
|
|
721
|
|
|
|
1,069
|
|
|
Other investments (includes investments at fair value of $13 and $13)
|
|
|
16
|
|
|
|
17
|
|
|
Total investments
|
|
|
6,350
|
|
|
|
6,830
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
464
|
|
|
|
729
|
|
|
Premiums receivable
|
|
|
792
|
|
|
|
875
|
|
|
Deferred acquisition costs
|
|
|
168
|
|
|
|
217
|
|
|
Insurance loss recoverable
|
|
|
577
|
|
|
|
533
|
|
|
Assets held for sale
|
|
|
-
|
|
|
|
802
|
|
|
Deferred income taxes, net
|
|
|
951
|
|
|
|
1,028
|
|
|
Other assets
|
|
|
175
|
|
|
|
229
|
|
|
Assets of consolidated variable interest entities:
|
|
|
|
|
|
|
|
Cash
|
|
|
58
|
|
|
|
53
|
|
|
Investments held-to-maturity, at amortized cost (fair value $2,401
and $2,632)
|
|
|
2,689
|
|
|
|
2,757
|
|
|
Fixed-maturity securities at fair value
|
|
|
932
|
|
|
|
421
|
|
|
Loans receivable at fair value
|
|
|
1,292
|
|
|
|
1,431
|
|
|
Loan repurchase commitments
|
|
|
396
|
|
|
|
379
|
|
|
Derivative assets
|
|
|
11
|
|
|
|
-
|
|
|
Total assets
|
|
$
|
14,855
|
|
|
$
|
16,284
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
Unearned premium revenue
|
|
$
|
1,591
|
|
|
$
|
1,986
|
|
|
Loss and loss adjustment expense reserves
|
|
|
516
|
|
|
|
506
|
|
|
Long-term debt
|
|
|
1,908
|
|
|
|
1,810
|
|
|
Medium-term notes (includes financial instruments carried at fair
value of $161 and $197)
|
|
|
1,016
|
|
|
|
1,201
|
|
|
Investment agreements
|
|
|
462
|
|
|
|
547
|
|
|
Derivative liabilities
|
|
|
314
|
|
|
|
437
|
|
|
Liabilities held for sale
|
|
|
-
|
|
|
|
772
|
|
|
Other liabilities
|
|
|
211
|
|
|
|
271
|
|
|
Liabilities of consolidated variable interest entities:
|
|
|
|
|
|
|
|
Variable interest entity notes (includes financial instruments
carried at fair value of $2,362 and $2,047)
|
|
|
5,051
|
|
|
|
4,804
|
|
|
Derivative liabilities
|
|
|
45
|
|
|
|
-
|
|
|
Total liabilities
|
|
|
11,114
|
|
|
|
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--281,833,618
|
|
|
|
|
|
|
|
and 281,352,782
|
|
|
282
|
|
|
|
281
|
|
|
Additional paid-in capital
|
|
|
3,138
|
|
|
|
3,128
|
|
|
Retained earnings
|
|
|
3,038
|
|
|
|
2,858
|
|
|
Accumulated other comprehensive income (loss), net of tax of $51 and
$7
|
|
|
(61
|
)
|
|
|
21
|
|
|
Treasury stock, at cost--130,303,241 and 89,409,887 shares
|
|
|
(2,668
|
)
|
|
|
(2,359
|
)
|
|
Total shareholders' equity of MBIA Inc.
|
|
|
3,729
|
|
|
|
3,929
|
|
|
Preferred stock of subsidiary and noncontrolling interest
|
|
|
12
|
|
|
|
21
|
|
|
Total equity
|
|
|
3,741
|
|
|
|
3,950
|
|
|
Total liabilities and equity
|
|
$
|
14,855
|
|
|
$
|
16,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MBIA INC. AND SUBSIDIARIES
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In millions except share and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Years Ended December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums earned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scheduled premiums earned
|
|
$
|
46
|
|
|
$
|
62
|
|
|
$
|
199
|
|
|
$
|
258
|
|
|
Refunding premiums earned
|
|
|
50
|
|
|
|
42
|
|
|
|
173
|
|
|
|
139
|
|
|
Premiums earned (net of ceded premiums
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of $2, $3, $9 and $12)
|
|
|
96
|
|
|
|
104
|
|
|
|
372
|
|
|
|
397
|
|
|
Net investment income
|
|
|
40
|
|
|
|
43
|
|
|
|
152
|
|
|
|
179
|
|
|
Fees and reimbursements
|
|
|
2
|
|
|
|
15
|
|
|
|
6
|
|
|
|
40
|
|
|
Change in fair value of insured derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized gains (losses) and other settlements on insured
|
|
|
|
|
|
|
|
|
|
|
|
|
|
derivatives
|
|
|
2
|
|
|
|
(27
|
)
|
|
|
(28
|
)
|
|
|
(444
|
)
|
|
Unrealized gains (losses) on insured derivatives
|
|
|
36
|
|
|
|
40
|
|
|
|
157
|
|
|
|
903
|
|
|
Net change in fair value of insured derivatives
|
|
|
38
|
|
|
|
13
|
|
|
|
129
|
|
|
|
459
|
|
|
Net gains (losses) on financial instruments at fair value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
foreign exchange
|
|
|
43
|
|
|
|
15
|
|
|
|
63
|
|
|
|
78
|
|
|
Investment losses related to other-than-temporary impairments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment losses related to other-than-temporary impairments
|
|
|
(2
|
)
|
|
|
(6
|
)
|
|
|
(12
|
)
|
|
|
(99
|
)
|
|
Other-than-temporary impairments recognized in accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
other comprehensive income (loss)
|
|
|
(1
|
)
|
|
|
5
|
|
|
|
(1
|
)
|
|
|
84
|
|
|
Net investment losses related to other-than-temporary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
impairments
|
|
|
(3
|
)
|
|
|
(1
|
)
|
|
|
(13
|
)
|
|
|
(15
|
)
|
|
Net gains (losses) on extinguishment of debt
|
|
|
-
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
3
|
|
|
Other net realized gains (losses)
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
17
|
|
|
|
28
|
|
|
Revenues of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
49
|
|
|
|
13
|
|
|
|
86
|
|
|
|
50
|
|
|
Net gains (losses) on financial instruments at fair value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
foreign exchange
|
|
|
33
|
|
|
|
16
|
|
|
|
42
|
|
|
|
50
|
|
|
Net gains (losses) on extinguishment of debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
|
Other net realized gains (losses)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3
|
)
|
|
Total revenues
|
|
|
297
|
|
|
|
215
|
|
|
|
853
|
|
|
|
1,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment
|
|
|
44
|
|
|
|
51
|
|
|
|
123
|
|
|
|
133
|
|
|
Amortization of deferred acquisition costs
|
|
|
13
|
|
|
|
13
|
|
|
|
50
|
|
|
|
44
|
|
|
Operating
|
|
|
38
|
|
|
|
54
|
|
|
|
140
|
|
|
|
195
|
|
|
Interest
|
|
|
50
|
|
|
|
52
|
|
|
|
199
|
|
|
|
210
|
|
|
Expenses of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
3
|
|
|
|
2
|
|
|
|
13
|
|
|
|
8
|
|
|
Interest
|
|
|
10
|
|
|
|
9
|
|
|
|
39
|
|
|
|
39
|
|
|
Total expenses
|
|
|
158
|
|
|
|
181
|
|
|
|
564
|
|
|
|
629
|
|
|
Income (loss) before income taxes
|
|
|
139
|
|
|
|
34
|
|
|
|
289
|
|
|
|
641
|
|
|
Provision (benefit) for income taxes
|
|
|
57
|
|
|
|
14
|
|
|
|
109
|
|
|
|
72
|
|
|
Net income (loss)
|
|
$
|
82
|
|
|
$
|
20
|
|
|
$
|
180
|
|
|
$
|
569
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.54
|
|
|
$
|
0.10
|
|
|
$
|
1.06
|
|
|
$
|
2.94
|
|
|
Diluted
|
|
$
|
0.54
|
|
|
$
|
0.10
|
|
|
$
|
1.06
|
|
|
$
|
2.76
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
147,099,167
|
|
|
|
187,242,789
|
|
|
|
163,936,318
|
|
|
|
188,171,503
|
|
|
Diluted
|
|
|
147,955,862
|
|
|
|
188,272,683
|
|
|
|
164,869,788
|
|
|
|
190,898,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMBINED
|
|
OPERATING INCOME (LOSS) RECONCILIATION(4)
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Years Ended December 31,
|
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net income (loss)
|
|
$
|
82
|
|
|
$
|
20
|
|
|
$
|
180
|
|
|
$
|
569
|
|
|
Less: net income of Non-Core Segments, including eliminations
|
|
|
46
|
|
|
|
(12
|
)
|
|
|
10
|
|
|
|
230
|
|
|
Less: after-tax adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-market gains (losses) on financial instruments(1)
|
|
|
10
|
|
|
|
(19
|
)
|
|
|
29
|
|
|
|
(15
|
)
|
|
|
Foreign exchange gains (losses)(1)
|
|
|
10
|
|
|
|
22
|
|
|
|
39
|
|
|
|
62
|
|
|
|
Net gains (losses) on sales of investments(1)
|
|
|
8
|
|
|
|
2
|
|
|
|
12
|
|
|
|
28
|
|
|
|
Net investment losses related to OTTI
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(8
|
)
|
|
|
(10
|
)
|
|
|
Net gains (losses) on extinguishment of debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
Other net realized gains (losses)(2)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
11
|
|
|
|
-
|
|
|
|
Tax valuation allowance on adjustments(3)
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
|
|
87
|
|
|
Operating income (loss)
|
|
$
|
10
|
|
|
$
|
22
|
|
|
$
|
87
|
|
|
$
|
185
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. PUBLIC FINANCE INSURANCE (NATIONAL)
|
|
OPERATING INCOME (LOSS) RECONCILIATION(4)
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Years Ended December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net income (loss)
|
|
$
|
51
|
|
|
$
|
63
|
|
|
$
|
191
|
|
|
$
|
222
|
|
|
Less: after-tax adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gains (losses) on sales of investments(1)
|
|
|
7
|
|
|
|
2
|
|
|
|
9
|
|
|
|
11
|
|
|
|
Net investment losses related to OTTI
|
|
|
-
|
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(10
|
)
|
|
|
Tax valuation allowance on adjustments(3)
|
|
|
-
|
|
|
|
5
|
|
|
|
-
|
|
|
|
-
|
|
|
Operating income (loss)
|
|
$
|
44
|
|
|
$
|
56
|
|
|
$
|
188
|
|
|
$
|
221
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORPORATE
|
|
OPERATING INCOME (LOSS) RECONCILIATION(4)
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
Years Ended December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net income (loss)
|
|
$
|
(15
|
)
|
|
$
|
(31
|
)
|
|
$
|
(21
|
)
|
|
$
|
118
|
|
|
Less: after-tax adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-market gains (losses) on financial instruments(1)
|
|
|
10
|
|
|
|
(19
|
)
|
|
|
29
|
|
|
|
(15
|
)
|
|
|
Foreign exchange gains (losses)(1)
|
|
|
10
|
|
|
|
22
|
|
|
|
39
|
|
|
|
62
|
|
|
|
Net gains (losses) on sales of investments(1)
|
|
|
1
|
|
|
|
-
|
|
|
|
3
|
|
|
|
17
|
|
|
|
Net investment losses related to OTTI
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
(2
|
)
|
|
|
-
|
|
|
|
Net gains (losses) on extinguishment of debt
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2
|
|
|
|
Other net realized gains (losses)(2)
|
|
|
(1
|
)
|
|
|
-
|
|
|
|
11
|
|
|
|
-
|
|
|
|
Tax valuation allowance on adjustments(3)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
87
|
|
|
Operating income (loss)
|
|
$
|
(34
|
)
|
|
$
|
(34
|
)
|
|
$
|
(101
|
)
|
|
$
|
(35
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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)
|
|
Primarily 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: (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
December 31, 2015
|
|
As of
December 31, 2014
|
|
|
|
|
|
|
Reported Book Value per Share
|
|
$
|
24.61
|
|
$
|
20.47
|
|
|
|
|
|
|
|
|
|
|
|
Reverse book value of Non-Core Segments (after-tax) (1)
|
|
|
1.61
|
|
|
1.16
|
|
|
|
|
|
|
|
|
|
|
|
Reverse net unrealized (gains) losses included in other
comprehensive income (after-tax)
|
|
|
0.20
|
|
|
(0.15
|
)
|
|
|
|
|
|
|
|
|
|
|
Add net unearned premium revenue (after-tax) (2)
|
|
|
3.27
|
|
|
3.39
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Book Value per Share
|
|
$
|
29.69
|
|
$
|
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. 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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
December 31, 2014
|
|
Policyholders' surplus
|
|
$
|
2,478
|
|
$
|
2,190
|
|
Contingency reserves
|
|
|
910
|
|
|
1,076
|
|
Statutory capital
|
|
|
3,388
|
|
|
3,266
|
|
|
|
|
|
|
|
|
|
Unearned premium reserve
|
|
|
1,042
|
|
|
1,375
|
|
Present value of installment premiums (1)
|
|
|
197
|
|
|
216
|
|
Premium resources (2)
|
|
|
1,239
|
|
|
1,591
|
|
|
|
|
|
|
|
|
|
Net loss and loss adjustment expense reserves (1)
|
|
|
(30)
|
|
|
(13)
|
|
Salvage reserves
|
|
|
102
|
|
|
106
|
|
Gross loss and loss adjustment expense reserves
|
|
|
72
|
|
|
93
|
|
Total claims-paying resources
|
|
$
|
4,699
|
|
$
|
4,950
|
|
|
|
|
|
|
|
|
|
Net debt service outstanding
|
|
$
|
259,436
|
|
$
|
352,033
|
|
|
|
|
|
|
|
|
|
Capital ratio (3)
|
|
|
77:1
|
|
|
108:1
|
|
|
|
|
|
|
|
|
|
Claims-paying ratio (4)
|
|
|
61:1
|
|
|
80:1
|
|
|
|
|
|
|
|
|
|
MBIA Insurance Corporation
(5)
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
December 31, 2014
|
|
Policyholders’ surplus
|
|
$
|
609
|
|
$
|
542
|
|
Contingency reserves
|
|
|
276
|
|
|
317
|
|
Statutory capital
|
|
|
885
|
|
|
859
|
|
|
|
|
|
|
|
|
|
Unearned premium reserve
|
|
|
356
|
|
|
434
|
|
Present value of installment premiums (6)
|
|
|
520
|
|
|
662
|
|
Premium resources (2)
|
|
|
876
|
|
|
1,096
|
|
|
|
|
|
|
|
|
|
Net loss and loss adjustment expense reserves (6)
|
|
|
(332)
|
|
|
(237)
|
|
Salvage reserves
|
|
|
992
|
|
|
938
|
|
Gross loss and loss adjustment expense reserves
|
|
|
660
|
|
|
701
|
|
Total claims-paying resources
|
|
$
|
2,421
|
|
$
|
2,656
|
|
|
|
|
|
|
|
|
|
Net debt service outstanding
|
|
$
|
57,682
|
|
$
|
74,645
|
|
|
|
|
|
|
|
|
|
Capital ratio (3)
|
|
|
65:1
|
|
|
87:1
|
|
|
|
|
|
|
|
|
|
Claims-paying ratio (4)
|
|
|
27:1
|
|
|
33:1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
As of December 31, 2015 and 2014, the discount rates were 3.04% and
2.90%, respectively.
|
|
|
|
|
|
|
(2)
|
|
The amounts consist of financial guarantee premiums and insured
derivative premiums.
|
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(3)
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Net debt service outstanding divided by statutory capital.
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(4)
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Net debt service outstanding divided by the sum of statutory
capital, unearned premium reserve (after-tax), present
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value of installment premiums (after-tax), net loss and loss
adjustment expense reserves and salvage reserves.
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(5)
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The table reflects MBIA Insurance Corporation including its
subsidiary MBIA UK Limited.
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(6)
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As of December 31, 2015 and 2014, the discount rates were 5.18% and
5.17%, respectively.
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View source version on businesswire.com: http://www.businesswire.com/news/home/20160229006841/en/
MBIA Inc.
Investor and Media Relations:
Greg
Diamond, +1-914-765-3190
Source: MBIA Inc.