PURCHASE, N.Y.--(BUSINESS WIRE)--
MBIA Inc. (NYSE:MBI) (the Company) today reported a consolidated GAAP
net loss of $1.6 billion, or $(13.50) per diluted common share, for 2017
compared to a consolidated GAAP net loss of $338 million, or $(2.54) per
diluted common share, for 2016. The adverse year-over-year comparison
was primarily due to the full valuation allowance on the Company’s net
deferred tax asset that was established in the second quarter of 2017
that drove the $945 million unfavorable change in its tax provision as
well as $463 million of additional loss and loss adjustment expenses.
The increased loss and loss adjustment expenses were primarily from
Puerto Rico insured credits.
Book value per share was $15.44 as of December 31, 2017 compared with
$23.87 as of December 31, 2016. The decrease in book value per share
since year-end 2016 was mainly due to the consolidated net loss for the
year, partially offset by the reduction of shares outstanding from the
repurchase of 43.0 million MBIA common shares during 2017.
The Company also reported an Adjusted Net Loss (a non-GAAP measure,
formerly labeled, Combined Operating Income (Loss), defined in the
attached Explanation of Non-GAAP Financial Measures) of $410 million or
$(3.45) per diluted share for 2017 compared with Adjusted Net Income of
$30 million or $0.23 per diluted share for 2016. The Company has adopted
the new name of Adjusted Net Income (Loss) to better conform with
supplemental SEC guidance regarding non-GAAP measures; there was no
change to the definition or calculation of this measure. The negative
comparison for 2017 was primarily due to increased loss and loss
adjustment expenses at National, primarily due to its Puerto Rico
exposures.
Adjusted Book Value (ABV) per share (a non-GAAP measure defined in the
attached Explanation of Non-GAAP Financial Measures) was $29.32 as of
December 31, 2017 compared with $31.88 as of December 31, 2016. The
decrease in ABV per share since year-end 2016 was primarily due to the
full valuation allowance on the Company’s net deferred tax asset that
was established in the second quarter of 2017 and additional loss and
loss adjustment expense reserves at National, partially offset by the
reduction of shares outstanding from the repurchase of 43.0 million MBIA
common shares during 2017.
Adjusted Net Income (Loss) 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 Adjusted Net Income (Loss) to net income,
calculated in accordance with GAAP, are attached.
Statement from Company Representative
Bill Fallon, MBIA’s Chief Executive Officer noted, “The Company’s 2017
financial results have been significantly and adversely affected by the
full valuation allowance against our net deferred tax asset and
meaningful increases to our loss reserves that were primarily associated
with our Puerto Rico exposures, where the timing of debt resolution
remains uncertain. While the decision to cease writing new business at
National was extremely disappointing, it did not have a material impact
on this year’s financial results. Nonetheless, we have seized several
opportunities to enhance shareholder value by significantly reducing
expenses, improving the liquidity of our holding company and purchasing
MBIA Inc. common shares at attractive prices.”
Fourth Quarter Results
The Company recorded a consolidated GAAP net loss of $37 million, or
$(0.39) per diluted common share, for the fourth quarter of 2017
compared with a consolidated net loss of $265 million, or $(2.01) per
diluted common share, for the fourth quarter of 2016. The lower loss
this year was primarily due to a pretax impairment loss related to the
sale of MBIA UK that was included in the results for the fourth quarter
of 2016 and mark-to-market and debt buyback gains, partially offset by
higher loss and loss adjustment expenses at National, primarily related
to its Puerto Rico exposures.
The Company reported an Adjusted Net Loss for the fourth quarter of 2017
of $167 million or $(1.52) per diluted share compared with an Adjusted
Net Loss of $6 million or $(0.05) per diluted share for the fourth
quarter of 2016. The $161 million adverse comparison for the
year-over-year quarters was primarily due to National’s higher loss and
loss adjustment expenses, primarily related to its insurance of Puerto
Rico debt.
MBIA Inc.
As of December 31, 2017, MBIA Inc.’s liquidity position totaled $419
million consisting primarily of cash and cash equivalents and liquid
short-term invested assets. In December of 2017, MBIA Inc. repurchased
the 100 million Euro denominated MBIA Global Funding LLC medium-term
note maturing in 2021 at a 16% discount to par.
During the fourth quarter of 2017, National purchased 31.3 million of
MBIA Inc. common shares at an average price of $7.17 per share.
Subsequent to year-end, National purchased another 2 million shares of
MBIA Inc. stock at an average price of $7.25 per share. As of February
22, 2018, there was $236 million remaining under the Company’s $250
million share repurchase authorization that was approved on November 3,
2017 and 88.8 million of the Company’s common shares were outstanding.
National Public Guarantee Financial Corporation
National had statutory capital of $2.8 billion and claims-paying
resources totaling $4.1 billion as of December 31, 2017. National’s
total fixed maturity investments plus cash and cash equivalents had a
total market value of $3.5 billion as of December 31, 2017. National’s
insured portfolio declined by $10 billion during the quarter, ending the
quarter with $72 billion of gross par outstanding. National ended the
quarter with a leverage ratio of gross par to statutory capital of 26 to
1, down from 32 to 1 as of year-end 2016.
MBIA Insurance Corporation
The statutory capital of MBIA Insurance Corporation as of December 31,
2017 was $464 million and claims-paying resources totaled $1.5 billion.
As of December 31, 2017, MBIA Insurance Corporation’s liquidity position
(excluding resources from its subsidiary and branch) totaled $145
million consisting primarily of cash and cash equivalents and liquid
short-term invested assets.
Conference Call
The Company will host a webcast and conference call for investors
tomorrow, Friday, March 2, 2018 at 8:00 AM (ET) to discuss its full year
and fourth quarter 2017 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 6197033. 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 completion of the call on March 2 and will remain
available until 11:59 p.m. on March 16 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 6197033. 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
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,” “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 factors, the possibility that MBIA Inc. or
National will experience increased credit losses or impairments on
public finance obligations issued by state, local and territorial
governments and finance authorities that are experiencing unprecedented
fiscal stress; the possibility that loss reserve estimates are not
adequate to cover potential claims; MBIA Inc.’s or National’s ability to
fully implement their strategic plan; and changes in general economic
and competitive conditions. These and other factors that could affect
financial performance or could cause actual results to differ materially
from estimates contained in or underlying MBIA Inc.’s or National’s
forward-looking statements are discussed under the “Risk Factors”
section in MBIA Inc.’s most recent Annual Report on Form 10-K, which may
be updated or amended in MBIA Inc.’s subsequent filings with the
Securities and Exchange Commission. MBIA Inc. and National caution
readers not to place undue reliance on any such forward-looking
statements, which speak only to their respective dates. National and
MBIA Inc. undertake 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.
Adjusted Net Income (Loss): Adjusted Net Income (Loss) is a
useful measurement of performance because it measures income from the
Company excluding its international and structured finance insurance
segment, which is not part of our ongoing business strategy. Also
excluded from Adjusted Net Income (Loss) are 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. Adjusted Net Income (Loss) eliminates the tax
provision (benefit) as a result of the establishment of a full valuation
allowance against the Company’s net deferred tax asset in 2017. Trends
in the underlying profitability of the Company’s businesses can be more
clearly identified without the fluctuating effects of the excluded items
previously noted. Adjusted Net Income (Loss) as defined by the Company
does not include all revenues and expenses required by GAAP. Adjusted
Net Income (Loss) is not a substitute for and should not be viewed in
isolation from GAAP net income.
Adjusted Net Income (Loss) per share represents that amount of Adjusted
Net 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, 2017
|
|
December 31, 2016
|
|
Assets
|
|
|
|
|
|
|
|
Investments:
|
|
|
|
|
|
|
|
|
Fixed-maturity securities held as available-for-sale, at fair value
(amortized cost $3,728 and $4,713)
|
|
$
|
3,712
|
|
$
|
4,694
|
|
|
Investments carried at fair value
|
|
|
200
|
|
|
146
|
|
|
Investments pledged as collateral, at fair value (amortized cost
$147 and $234)
|
|
|
148
|
|
|
233
|
|
|
Short-term investments held as available-for-sale, at fair value
(amortized cost $589 and $552)
|
|
|
589
|
|
|
552
|
|
|
Other investments (includes investments at fair value of $4 and $5)
|
|
|
6
|
|
|
8
|
|
|
Total investments
|
|
|
4,655
|
|
|
5,633
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
122
|
|
|
163
|
|
Premiums receivable
|
|
|
369
|
|
|
409
|
|
Deferred acquisition costs
|
|
|
95
|
|
|
118
|
|
Insurance loss recoverable
|
|
|
511
|
|
|
504
|
|
Assets held for sale
|
|
|
-
|
|
|
555
|
|
Deferred income taxes, net
|
|
|
-
|
|
|
970
|
|
Other assets
|
|
|
128
|
|
|
113
|
|
Assets of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
Cash
|
|
|
24
|
|
|
24
|
|
|
Investments held-to-maturity, at amortized cost (fair value $916 and
$876)
|
|
|
890
|
|
|
890
|
|
|
Investments carried at fair value
|
|
|
182
|
|
|
255
|
|
|
Loans receivable at fair value
|
|
|
1,679
|
|
|
1,066
|
|
|
Loan repurchase commitments
|
|
|
407
|
|
|
404
|
|
|
Other assets
|
|
|
33
|
|
|
33
|
|
|
Total assets
|
|
$
|
9,095
|
|
$
|
11,137
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Unearned premium revenue
|
|
$
|
752
|
|
$
|
958
|
|
|
Loss and loss adjustment expense reserves
|
|
|
979
|
|
|
541
|
|
|
Long-term debt
|
|
|
2,121
|
|
|
1,986
|
|
|
Medium-term notes (includes financial instruments carried at fair
value of $115 and $101)
|
|
|
765
|
|
|
895
|
|
|
Investment agreements
|
|
|
337
|
|
|
399
|
|
|
Derivative liabilities
|
|
|
262
|
|
|
299
|
|
|
Liabilities held for sale
|
|
|
-
|
|
|
346
|
|
|
Other liabilities
|
|
|
165
|
|
|
233
|
|
|
Liabilities of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
Variable interest entity notes (includes financial instruments
carried at fair value of $1,069
|
|
|
|
|
|
|
|
|
and $1,351)
|
|
|
2,289
|
|
|
2,241
|
|
|
Total liabilities
|
|
|
7,670
|
|
|
7,898
|
|
|
|
|
|
|
|
|
|
|
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--283,717,973
|
|
|
|
|
|
|
|
|
and 283,989,999
|
|
|
284
|
|
|
284
|
|
|
Additional paid-in capital
|
|
|
3,171
|
|
|
3,160
|
|
|
Retained earnings
|
|
|
1,095
|
|
|
2,700
|
|
|
Accumulated other comprehensive income (loss), net of tax of $16 and
$37
|
|
|
(19)
|
|
|
(128)
|
|
|
Treasury stock, at cost--192,233,526 and 148,789,168 shares
|
|
|
(3,118)
|
|
|
(2,789)
|
|
|
Total shareholders' equity of MBIA Inc.
|
|
|
1,413
|
|
|
3,227
|
|
|
Preferred stock of subsidiary
|
|
|
12
|
|
|
12
|
|
|
Total equity
|
|
|
1,425
|
|
|
3,239
|
|
|
Total liabilities and equity
|
|
$
|
9,095
|
|
$
|
11,137
|
|
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,
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Premiums earned:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scheduled premiums earned
|
|
$
|
25
|
|
|
$
|
37
|
|
|
$
|
107
|
|
|
$
|
168
|
|
|
|
Refunding premiums earned
|
|
|
30
|
|
|
|
38
|
|
|
|
94
|
|
|
|
132
|
|
|
|
Premiums earned (net of ceded premiums
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of $1, $2, $6 and $7)
|
|
|
55
|
|
|
|
75
|
|
|
|
201
|
|
|
|
300
|
|
|
|
Net investment income
|
|
|
32
|
|
|
|
37
|
|
|
|
154
|
|
|
|
152
|
|
|
|
Fees and reimbursements
|
|
|
6
|
|
|
|
4
|
|
|
|
15
|
|
|
|
28
|
|
|
|
Change in fair value of insured derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized gains (losses) and other settlements on insured
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
derivatives
|
|
|
(10
|
)
|
|
|
(20
|
)
|
|
|
(51
|
)
|
|
|
(40
|
)
|
|
|
Unrealized gains (losses) on insured derivatives
|
|
|
10
|
|
|
|
21
|
|
|
|
-
|
|
|
|
21
|
|
|
|
Net change in fair value of insured derivatives
|
|
|
-
|
|
|
|
1
|
|
|
|
(51
|
)
|
|
|
(19
|
)
|
|
|
Net gains (losses) on financial instruments at fair value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
foreign exchange
|
|
|
31
|
|
|
|
101
|
|
|
|
(24
|
)
|
|
|
84
|
|
|
|
Net investment losses related to other-than-temporary impairments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment losses related to other-than-temporary impairments
|
|
|
(21
|
)
|
|
|
-
|
|
|
|
(101
|
)
|
|
|
(1
|
)
|
|
|
Other-than-temporary impairments recognized in accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
other comprehensive income (loss)
|
|
|
(1
|
)
|
|
|
(4
|
)
|
|
|
(5
|
)
|
|
|
(4
|
)
|
|
|
Net investment losses related to other-than-temporary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
impairments
|
|
|
(22
|
)
|
|
|
(4
|
)
|
|
|
(106
|
)
|
|
|
(5
|
)
|
|
|
Net gains (losses) on extinguishment of debt
|
|
|
19
|
|
|
|
-
|
|
|
|
28
|
|
|
|
5
|
|
|
|
Other net realized gains (losses)
|
|
|
(5
|
)
|
|
|
(279
|
)
|
|
|
31
|
|
|
|
(282
|
)
|
|
|
Revenues of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
7
|
|
|
|
6
|
|
|
|
27
|
|
|
|
31
|
|
|
|
Net gains (losses) on financial instruments at fair value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
foreign exchange
|
|
|
128
|
|
|
|
-
|
|
|
|
130
|
|
|
|
-
|
|
|
|
Other net realized gains (losses)
|
|
|
-
|
|
|
|
-
|
|
|
|
28
|
|
|
|
-
|
|
|
|
Total revenues
|
|
|
251
|
|
|
|
(59
|
)
|
|
|
433
|
|
|
|
294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses and loss adjustment
|
|
|
214
|
|
|
|
71
|
|
|
|
683
|
|
|
|
220
|
|
|
|
Amortization of deferred acquisition costs
|
|
|
-
|
|
|
|
10
|
|
|
|
23
|
|
|
|
40
|
|
|
|
Operating
|
|
|
24
|
|
|
|
40
|
|
|
|
106
|
|
|
|
137
|
|
|
|
Interest
|
|
|
49
|
|
|
|
49
|
|
|
|
197
|
|
|
|
197
|
|
|
|
Expenses of consolidated variable interest entities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
2
|
|
|
|
4
|
|
|
|
10
|
|
|
|
14
|
|
|
|
Interest
|
|
|
20
|
|
|
|
5
|
|
|
|
75
|
|
|
|
25
|
|
|
|
Total expenses
|
|
|
309
|
|
|
|
179
|
|
|
|
1,094
|
|
|
|
633
|
|
|
Income (loss) before income taxes
|
|
|
(58
|
)
|
|
|
(238
|
)
|
|
|
(661
|
)
|
|
|
(339
|
)
|
|
Provision (benefit) for income taxes
|
|
|
(21
|
)
|
|
|
27
|
|
|
|
944
|
|
|
|
(1
|
)
|
|
Net income (loss)
|
|
$
|
(37
|
)
|
|
$
|
(265
|
)
|
|
$
|
(1,605
|
)
|
|
$
|
(338
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.39
|
)
|
|
$
|
(2.01
|
)
|
|
$
|
(13.50
|
)
|
|
$
|
(2.54
|
)
|
|
|
Diluted
|
|
$
|
(0.39
|
)
|
|
$
|
(2.01
|
)
|
|
$
|
(13.50
|
)
|
|
$
|
(2.54
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
96,040,601
|
|
|
|
131,906,086
|
|
|
|
118,930,282
|
|
|
|
133,001,088
|
|
|
|
Diluted
|
|
|
96,040,601
|
|
|
|
131,906,086
|
|
|
|
118,930,282
|
|
|
|
133,001,088
|
|
|
ADJUSTED NET INCOME (LOSS) RECONCILIATION(1)
|
|
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Years Ended
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Net income (loss)
|
|
|
$
|
(37
|
)
|
|
$
|
(265
|
)
|
|
$
|
(1,605
|
)
|
|
$
|
(338
|
)
|
|
Less: operating income adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes of the international and structured
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
finance insurance segment and eliminations
|
|
|
|
83
|
|
|
|
(339
|
)
|
|
|
(185
|
)
|
|
|
(475
|
)
|
|
Adjustments to income before income taxes of the U.S. public finance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
insurance and corporate segments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mark-to-market gains (losses) on financial instruments
|
(2
|
)
|
|
|
35
|
|
|
|
62
|
|
|
|
64
|
|
|
|
12
|
|
|
Foreign exchange gains (losses)
|
(2
|
)
|
|
|
(6
|
)
|
|
|
34
|
|
|
|
(63
|
)
|
|
|
11
|
|
|
Net gains (losses) on sales of investments
|
(2
|
)
|
|
|
-
|
|
|
|
9
|
|
|
|
14
|
|
|
|
60
|
|
|
Net investment losses related to OTTI
|
|
|
|
(22
|
)
|
|
|
(4
|
)
|
|
|
(106
|
)
|
|
|
(5
|
)
|
|
Net gains (losses) on extinguishment of debt
|
|
|
|
19
|
|
|
|
-
|
|
|
|
28
|
|
|
|
5
|
|
|
Other net realized gains (losses)
|
|
|
|
-
|
|
|
|
(1
|
)
|
|
|
(3
|
)
|
|
|
(5
|
)
|
|
Adjusted net income adjustment to the (provision) benefit for
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
income tax
|
(3
|
)
|
|
|
21
|
|
|
|
(20
|
)
|
|
|
(944
|
)
|
|
|
29
|
|
|
Adjusted net income (loss)
|
|
|
$
|
(167
|
)
|
|
$
|
(6
|
)
|
|
$
|
(410
|
)
|
|
$
|
30
|
|
|
(1)
|
|
A non-GAAP measure; please see Explanation of Non-GAAP Financial
Measures.
|
|
(2)
|
|
Reported within "Net gains (losses) on financial instruments at fair
value and foreign exchange" on the Company's consolidated statements
of
|
|
|
|
|
|
operations.
|
|
(3)
|
|
Reported within "Provision (benefit) for income taxes" on the
Company's consolidated statements of operations.
|
|
COMPONENTS OF ADJUSTED BOOK VALUE PER
SHARE(1)
|
|
|
|
|
|
|
As of
December 31, 2017
|
|
As of
December 31, 2016
|
|
|
|
|
|
|
Reported Book Value per Share
|
$
|
15.44
|
|
$
|
23.87
|
|
|
|
Reverse book value of the MBIA Corp. legal entity (2)
|
|
8.84
|
|
|
5.07
|
|
|
|
|
Book value after MBIA Corp. legal entity adjustment
|
|
24.28
|
|
|
28.94
|
|
|
|
Other book value adjustments:
|
|
|
|
|
|
|
|
|
Reverse net unrealized (gains) losses included in other
comprehensive income (loss)
|
|
0.26
|
|
|
0.24
|
|
|
|
|
Add net unearned premium revenue (3)
|
|
4.78
|
|
|
4.31
|
|
|
|
|
Add tax effect on unrealized (gains) losses and unearned premium
revenue (4)
|
|
-
|
|
|
(1.61
|
)
|
|
|
|
Total other book value adjustments per share
|
|
5.04
|
|
|
2.94
|
|
|
Adjusted book value per share
|
$
|
29.32
|
|
$
|
31.88
|
|
|
(1)
|
|
A non-GAAP measure; please see Explanation of Non-GAAP Financial
Measures.
|
|
(2)
|
|
The book value of the MBIA Corp. legal entity does not provide
significant economic or shareholder value to MBIA Inc.
|
|
(3)
|
|
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.
|
|
(4)
|
|
As of December 31, 2017, ABV per share was adjusted by applying a
zero effective tax rate to the book value adjustments.
|
|
INSURANCE OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
Selected Financial Data Computed on a
Statutory Basis
|
|
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
National Public Finance Guarantee
Corporation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
Policyholders' surplus
|
|
|
$
|
2,166
|
|
|
$
|
2,731
|
|
|
Contingency reserves
|
|
|
|
594
|
|
|
|
745
|
|
|
Statutory capital
|
|
|
2,760
|
|
|
|
3,476
|
|
|
|
|
|
|
|
|
|
|
|
Unearned premiums
|
|
|
|
585
|
|
|
|
786
|
|
|
Present value of installment premiums (1)
|
|
|
|
164
|
|
|
|
187
|
|
|
Premium resources (2)
|
|
|
749
|
|
|
|
973
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and loss adjustment expense reserves (1)
|
|
|
|
227
|
|
|
|
(98
|
)
|
|
Salvage reserves
|
|
|
|
387
|
|
|
|
256
|
|
|
Gross loss and loss adjustment expense reserves
|
|
|
614
|
|
|
|
158
|
|
|
Total claims-paying resources
|
|
|
$
|
4,123
|
|
|
$
|
4,607
|
|
|
|
|
|
|
|
|
|
|
|
Net debt service outstanding
|
|
|
$
|
129,668
|
|
|
$
|
185,099
|
|
|
|
|
|
|
|
|
|
|
|
Capital ratio (3)
|
|
|
|
47:1
|
|
|
|
53:1
|
|
|
|
|
|
|
|
|
|
|
|
Claims-paying ratio (4)
|
|
|
|
33:1
|
|
|
|
43:1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MBIA Insurance Corporation
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
|
Policyholders’ surplus
|
|
|
$
|
237
|
|
|
$
|
238
|
|
|
Contingency reserves
|
|
|
|
227
|
|
|
|
254
|
|
|
Statutory capital
|
|
|
464
|
|
|
|
492
|
|
|
|
|
|
|
|
|
|
|
|
Unearned premiums
|
|
|
|
195
|
|
|
|
319
|
|
|
Present value of installment premiums (6) (8)
|
|
|
|
192
|
|
|
|
424
|
|
|
Premium resources (2)
|
|
|
387
|
|
|
|
743
|
|
|
|
|
|
|
|
|
|
|
|
Net loss and loss adjustment expense reserves (6)
|
|
|
|
(792
|
)
|
|
|
(207
|
)
|
|
Salvage reserves (7)
|
|
|
|
1,428
|
|
|
|
917
|
|
|
Gross loss and loss adjustment expense reserves
|
|
|
636
|
|
|
|
710
|
|
|
Total claims-paying resources
|
|
|
$
|
1,487
|
|
|
$
|
1,945
|
|
|
|
|
|
|
|
|
|
|
|
Net debt service outstanding
|
|
|
$
|
20,151
|
|
|
$
|
43,215
|
|
|
|
|
|
|
|
|
|
|
|
Capital ratio (3)
|
|
|
|
43:1
|
|
|
|
88:1
|
|
|
|
|
|
|
|
|
|
|
|
Claims-paying ratio (4)
|
|
|
|
14:1
|
|
|
|
22:1
|
|
|
(1)
|
|
Calculated using a discount rate of 3.25% as of December 31, 2017
and 3.18% as of December 31, 2016.
|
|
(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 Insurance Limited for December 31, 2016 only.
|
|
(6)
|
|
Calculated using a discount rate of 5.20% as of December 31, 2017
and 5.15% as of December 31, 2016.
|
|
(7)
|
|
This amount primarily consists of expected recoveries related to the
Company's excess spread, put-backs and CDOs.
|
|
(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/20180301006533/en/
MBIA Inc.
Greg Diamond, 914-765-3190
Investor and Media
Relations
greg.diamond@mbia.com
Source: MBIA Inc.