Results Consistent with Previously Announced Estimates; New Capital Plan Positions Company for Continued Market Leadership
ARMONK, N.Y., Jan 31, 2008 (BUSINESS WIRE) -- MBIA Inc. (NYSE: MBI), the holding company for MBIA Insurance
Corporation ("the Company"), today reported financial results for its
fourth quarter and full year ended December 31, 2007.
The results, as compared with the same period of the prior year,
were as follows:
-- Net loss for the full year 2007 was $1.9 billion, compared
with net income of $819.3 million in 2006.
-- Net loss per share for the full year 2007 was $15.22, compared
with net income per share of $5.99 in 2006.
Gary Dunton, MBIA Chairman and Chief Executive Officer, said, "We
are disappointed in our operating results for the year, as the
performance of our insured prime, second-lien mortgage portfolio and
three insured CDO-squared transactions led to unprecedented loss
reserving and impairment activity. The effect of these reserving and
impairment activities on our capital position will be more than offset
by the successful completion of our capital plan, which will increase
our capital position by well over $2 billion. We have raised $1.5
billion to date through our $1 billion surplus notes offering and the
Warburg Pincus' $500 million investment in MBIA common stock, which
closed yesterday. Additionally, we have a commitment from Warburg
Pincus to backstop a $500 million rights offering, and we are
considering this and other steps to raise equity. We believe that
these steps, along with reduced capital requirements resulting from
slower business growth, will result in our capital position surpassing
rating agency Triple-A requirements as currently articulated and will
allow us to continue serving the needs of our clients and investors."
The decline in net income for the year was primarily due to the
previously announced pre-tax net loss which amounted to $3.5 billion,
or on an after-tax basis, $2.3 billion or $18.04 per share, on
financial instruments at fair value ("mark-to-market") and foreign
exchange. Significantly wider spreads and ratings downgrades of
securities backing Collateralized Debt Obligations ("CDO") during the
fourth quarter adversely affected the mark-to-market valuation of the
Company's insured credit derivatives portfolio. As MBIA previously
announced on January 9, 2008, the Company estimates a credit
impairment of $200 million included in the pre-tax net loss of $3.5
billion on its insured credit derivatives portfolio for three
CDO-squared transactions on which the Company expects to incur actual
losses in the future. MBIA continues to believe that the balance of
the mark-to-market losses are not predictive of future claims and, in
the absence of further credit impairment, the cumulative marks should
reverse over the remaining life of the insured credit derivatives.
Additionally, the mark-to-market does not affect rating agency
evaluations of MBIA's capital adequacy, except to the extent of
impairments.
Also contributing to the Company's pre-tax net loss was $713.5
million of pre-tax loss and loss adjustment expense comprising case
loss activity of $613.5 million and a special addition of $100 million
to the unallocated loss reserve for MBIA's prime, second-lien mortgage
exposure. The case loss activity reflects MBIA's best estimate of
probable and reasonably estimable losses.
Mark-to-market losses during the fourth quarter on insured credit
derivatives that were reinsured for MBIA by Channel Re (a financial
guarantee reinsurer in which MBIA has a 17.4 percent equity ownership
interest) resulted in the Company adjusting the carrying value of its
ownership interest from $85.7 million to zero. The adjustment is
reflected in net losses on financial instruments at fair value. Absent
further credit impairment, MBIA believes that substantially all of the
mark-to-market losses on the business reinsured by Channel Re are not
predictive of future claims and should reverse over time; therefore,
the carrying value of MBIA's investment in Channel Re would be
adjusted accordingly in the future.
Operating income per share, a non-GAAP measure (defined in the
attached Explanation of Non-GAAP Financial Measures) that excludes the
effects of non-cash net realized gains and losses, net gains and
losses on financial instruments at fair value (with the exception of
credit impairment) and foreign exchange, was as follows:
-- After-tax operating income for 2007 declined to $192.9 million
from $793.7 million in 2006.
-- Operating income per share was $1.52 in 2007 compared with
$5.81 in 2006.
Excluding accelerated income from refunded issues, operating
income per share in 2007 was down 81 percent to $0.95 from $5.10 in
2006. The decline in operating income per share was primarily due to
the $713.5 million of loss reserving activity and the $200 million of
credit impairments in the insured derivatives portfolio in the fourth
quarter.
Net loss for the fourth quarter of 2007 was $2.3 billion compared
with net income of $181.0 million for the same period of 2006. For the
fourth quarter of 2007, net loss per share was $18.61 compared with
net income per share of $1.32 for the fourth quarter of 2006.
After-tax operating loss for the fourth quarter of 2007 was $407.8
million compared with after-tax operating income of $179.2 million for
the fourth quarter of 2006. Operating loss per share was $3.30 for the
fourth quarter of 2007, compared with operating income per share of
$1.31 for the fourth quarter of 2006. Excluding accelerated income
from refunded issues, operating loss per share for the fourth quarter
of 2007 was $3.38, compared with operating income per share of $1.16
for the same period of 2006.
Earnings per diluted share
information
-------------------------------------
Three Months Years Ended
Ended December 31 December 31
----------------- --------------
2007 2006 2007 2006
--------- ------- -------- -----
Net income (loss) ($18.61) $1.32 ($15.22) $5.99
Income from discontinued operations 0.00 0.02 0.00 0.04
--------- ------- -------- -----
Net income (loss) from continuing
operations (18.61) 1.30 (15.22) 5.95
Net realized gains (losses) 0.13 (0.02) 0.26 0.07
Net gains (losses) on financial
instruments at fair value and
foreign exchange (16.49) 0.02 (18.04) 0.07
Estimated credit impairment on
insured derivatives 1.05 0.00 1.03 0.00
--------- ------- -------- -----
Operating income (loss) ($ 3.30) $1.31 $1.52 $5.81
(Numbers may not add due to rounding)
Insurance Operations
For 2007, Adjusted Direct Premium ("ADP"), a non-GAAP measure
(defined in the attached Explanation of Non-GAAP Financial Measures),
grew 45 percent to $1,496.9 million from $1,030.8 million in 2006. For
the fourth quarter, despite challenging conditions in the structured
and public finance markets, MBIA wrote $262.4 million of ADP, which
was down 38 percent from the fourth quarter of 2006.
Adjusted Direct Premiums
-------------------------------------------------------------
(dollars in millions)
Three Months Years Ended
Ended December 31 December 31
---------------------- --------------------------
2007 2006 % Change 2007 2006 % Change
------ ------ -------- -------- -------- --------
Global Public
Finance
United States $147.6 $130.9 13% $406.7 $320.1 27%
Non-United States 2.7 125.0 (98%) 190.4 258.8 (26%)
------ ------ -------- -------- -------- --------
Total 150.3 255.9 (41%) 597.1 578.9 3%
Global Structured
Finance
United States 84.1 126.7 (34%) 696.6 290.1 140%
Non-United States 28.0 38.6 (27%) 203.2 161.8 26%
------ ------ -------- -------- -------- --------
Total 112.1 165.3 (32%) 899.8 451.9 99%
Total $262.4 $421.2 (38%) $1,496.9 $1,030.8 45%
Global Public Finance
Full Year 2007: In 2007, MBIA's global public finance ADP
production increased 3 percent over 2006. U.S. public finance was up
27 percent, while non-U.S. public finance was down 26 percent.
The increase in U.S. public finance production reflects increases
in the Company's market share, to 24.7 percent from 23.1 percent, and
total insured volume for the year, which was up 6.0 percent versus
2006. While many sectors contributed to the increase for the year, the
most significant increases in ADP primarily came from military
housing, higher education and state and local sales tax-backed deals.
The credits that contributed the most ADP for the year included
financings for two military housing projects and three credits in
Puerto Rico: a sales tax-backed issue, a general obligation issue and
debt issued for the Highway and Transportation Authority.
The increased ADP production for U.S. public finance reflected
favorable market conditions that lasted through the first half of the
fourth quarter, with greater business production in the utilities and
enterprise finance sectors, and particularly in the military housing
sector.
In the fourth quarter of 2007, MBIA's non-U.S. public finance ADP
production reflects very little ADP written compared with a very
strong fourth quarter of 2006. Six non-U.S. public finance credits
contributed more than half of the non-U.S. public finance ADP
production for the year. All of these transactions were insured during
the first half of 2007, including financings for a Public Finance
Initiative ("PFI") project for a hospital in England, three separate
deals for United Kingdom gas, electric and water utilities, an
electric utility in Mexico and a windmill farm for an electric company
in Germany.
4th Quarter: For the fourth quarter, MBIA's global public finance
ADP production declined 41 percent compared with the same period of
2006. U.S. public finance production increased 13 percent in the
fourth quarter, while non-U.S. production declined 98 percent.
In the U.S. public finance markets, MBIA's fourth quarter ADP
production was in line with fourth quarter production in the prior
year for most sectors, including electric and gas utilities, general
obligation, health care, higher education, municipal revenue and
transportation. The exception was military housing, where the Company
insured a record seven high quality deals in the fourth quarter of
2007, including the largest single privatization debt issuance for the
U.S. Navy. MBIA's participation in this project helped provide access
to private capital for the U.S. Navy to build and renovate housing
into state-of-the-art communities for military families. MBIA has
maintained a leadership position in this sector for several years.
Market conditions deteriorated quite rapidly in the U.S. public
finance market late in the fourth quarter, with several issuers
postponing debt offerings. New issue volume increased 43 percent in
October, then declined 31 and 41 percent in November and December,
respectively, compared with the same months in 2006. Insured
penetration was 50 percent in October, declining to 42 percent in
November and 30 percent in December. MBIA's market share in December
was 22 percent, though the Company saw reduced demand for its
insurance during the second half of the month.
For MBIA's non-U.S. public finance business, which continues to be
uneven and less predictable, fourth quarter 2007 ADP production of
just $2.7 million was adversely affected by growing concerns about the
U.S. mortgage and housing markets.
In January 2008, volume and insured penetration continued to be
below 2007's averages. However, MBIA continued to issue insurance
policies on U.S. public finance transactions totaling $0.7 billion of
net par and $4.4 million of ADP, which compares to $2.2 billion of net
par and $8.4 million of ADP for the same period of 2007. MBIA believes
that the Company's continued insurance activity validates the
fundamental benefits that bond insurance provides to the municipal
market despite the turbulence throughout the credit markets, the
rating agencies' rating actions during the month and the publicity
around these issues and around monolines in general.
Global Structured Finance
Full Year 2007: MBIA's global structured finance ADP production
for 2007 was up 99 percent compared with 2006. U.S. structured finance
was up 140 percent and non-U.S. structured finance was up 26 percent.
The increase in global structured finance ADP represented particular
strength from several asset classes including Commercial
Mortgage-Backed Securities ("CMBS") pools, CDOs with corporate
investment grade collateral, multi-sector CDOs, intellectual property,
operating asset and consumer contract receivables securitizations and
commercial real estate CDOs.
The increased ADP production for U.S. structured finance reflects
strong production in the second and third quarters, which accounted
for 70 percent of the full year's ADP for global structured finance.
On a full year basis, most sectors had favorable variances, but the
largest contributors were in CMBS pools, investment grade corporate
CDOs, multi-sector CDOs and direct Residential Mortgage-Backed
Securities ("RMBS"). No domestic RMBS transactions were insured in the
second half of 2007. The only multi-sector asset-backed CDOs insured
after the first half of the year had subordination levels at or above
50 percent.
The 26 percent increase in non-U.S. structured finance ADP
production resulted primarily from larger increases in investment
grade CDOs, prime residential first mortgages and operating asset
securitizations, other consumer asset-backed and residential home
equity lines of credit transactions. The five deals that contributed
the most non-U.S. structured finance ADP in 2007 accounted for over 40
percent of MBIA's full year 2007 non-U.S. structured finance ADP, and
they were all insured during the first three quarters of 2007. These
deals include a securitization for a portfolio of aircraft, three CDOs
with investment grade corporate credits as collateral and a
securitization of remittances for a bank in Central Asia.
4th Quarter: Given the weakening structured finance market in the
fourth quarter, global structured finance ADP production declined 32
percent compared with the fourth quarter of 2006. U.S. structured
finance production decreased 34 percent in the fourth quarter and
non-U.S. production declined 27 percent.
In the U.S. structured finance business, MBIA's fourth quarter
2007 ADP production primarily consisted of an intellectual property
securitization and a structured insurance securitization.
Additionally, the Company insured two CMBS pools in the fourth quarter
of 2007, and did not insure any RMBS transactions or CDOs during the
period.
In MBIA's non-U.S. structured finance business, fourth quarter
2007 ADP production of $28.0 million primarily consisted of two RMBS
transactions in Mexico, a securitization of bank remittances in
Kazakhstan and a securitization of commercial mortgage loan pools in
Germany.
In January 2008, securitization volume continued to decline in the
U.S. structured finance market, and the Company expects to write
little or no U.S. RMBS or multi-sector CDO business for the
foreseeable future. Through January 25, 2008, MBIA provided insurance
on global structured finance transactions totaling $25.2 million of
net par and $1.5 million of ADP, which compares to $2.2 billion of net
par and $14.1 million of ADP for the same period of 2007. Based upon
the current pipeline of deals, MBIA's non-U.S. structured finance
business is expected to contribute more heavily to its global
structured finance production in 2008. While the Company is seeing
opportunities in the secondary and conduit markets, overall,
structured finance ADP production in 2008 is expected to be
significantly less than 2007 levels.
Insurance Operations Results
In 2007, total premiums earned, which include scheduled premiums
earned and refunding premiums earned, were $855.6 million in 2007
compared with $852.6 million in 2006. Scheduled premiums earned in
2007 increased 6 percent to $734.8 million from $691.1 million in
2006, reflecting growth in production, while premiums from refundings
decreased 25 percent. Even with more modest premium production during
the fourth quarter, expected future premium earnings increased by
$375.6 million in 2007 totaling approximately $5.5 billion at year
end. While premiums collected for new policies contribute relatively
little to the premiums earned in the quarter in which they are
originated, they are an important source of future earnings.
The 25 percent decline in premiums earned from refundings, to
$120.8 million in 2007 from $161.5 million in 2006., The decline is
largely due to the decrease of advanced refundings of U.S. public
finance transactions during the third and fourth quarters of 2007, as
spreads between tax-exempt interest rates and rates on Treasury
securities, which are used to defease advanced refunding deals, have
widened markedly. The acceleration of premiums into earnings due to
refundings accounted for 14 percent of total premiums earned for the
year, compared with 19 percent in 2006. Earned premiums from
refundings accelerate value for shareholders as compared with
transactions that remain on the books for the full term of the deal.
For 2007, pre-tax net investment income decreased 1 percent to
$572.8 million from $581.1 million in 2006. The decrease is related to
lower average invested assets primarily due to the $1 billion of
dividends that were paid by the insurance company to the holding
company in December 2006 and April 2007. For the fourth quarter 2007,
pre-tax net investment income was level with the fourth quarter of
2006.
MBIA's fees and reimbursements were down 38 percent for the year
to $20.8 million from $33.5 million in 2006. In 2006, the Company
received two large expense reimbursements from Eurotunnel and a third
from another remediation. In the fourth quarter of 2007, fees and
reimbursements were $1.2 million, $3.1 million less than last year's
fourth quarter.
Total insurance expenses in 2007 increased to $1.1 billion from
$379.3 million during the prior year. For the fourth quarter, total
insurance expenses increased to $808.4 million from $104.8 million.
The increases for both periods were largely the result of the $736.7
million loss and loss adjustment expense ("LAE") incurred for the
fourth quarter of 2007, described below.
Gross insurance expenses, which are prior to any expense
deferrals, were down 8 percent for the year to $248.0 million from
$268.4 million in 2006. For the fourth quarter of 2007, gross
insurance expenses decreased 19 percent, from $79.3 million to $64.6
million. The decrease in the fourth quarter of 2007 was primarily due
to the acceleration of expenses in the fourth quarter of 2006 related
to certain existing long-term incentive compensation awards and the
adoption of a new retirement plan, as well as a decline in loss
prevention expenses.
In 2007, the Company incurred $800.3 million in loss and LAE,
compared with $80.9 million in 2006. The 2007 expenses consist of
MBIA's loss reserving formula of 12 percent of scheduled premiums
earned or $86.8 million, and two fourth quarter additions totaling
$713.5 million. Total fourth quarter loss and LAE amounted to $736.7
million. The Company's loss reserving formula of 12 percent of
scheduled premiums earned resulted in an unallocated loss reserve
addition of $23.1 million for the quarter. The Company also added
$613.5 million in case loss activity, which represents MBIA's
assessment of probable and reasonably estimable losses for the
Company's insured exposure to prime, second-lien RMBS transactions
consisting of home equity lines of credit and closed-end second-lien
mortgages. The Company also established a special addition of $100
million to the unallocated loss reserve to reflect MBIA's estimate of
probable losses as a result of the adverse developments in the
residential mortgage market related to prime, second-lien mortgage
exposure, but which have not yet been specifically identified to
individual policies. After the fourth quarter loss reserving activity,
MBIA's unallocated loss reserve totaled $334.5 million at December 31,
2007.
The overall credit quality of the insured portfolio remained high
with 82.5 percent of the total book of business having underlying
ratings of A or better as of December 31, 2007, versus 81.1 percent a
year ago. More significantly, the Triple-A-rated content of the
outstanding insurance portfolio has increased to 24.6 percent from
20.9 percent at the end of 2006. Also, the percentage of the portfolio
rated below investment grade on an S&P priority basis decreased to 1.4
percent as of December 31, 2007 from 1.9 percent as of December 31,
2006. (MBIA's below investment grade net par exposure includes $10.6
billion of home equity lines of credit and closed-end second RMBS and
multi-sector CDOs of high grade CDOs, which were not rated below
investment grade under the S&P priority basis as of December 31,
2007.) The largest reduction in the below investment grade-rated
portion of the insured portfolio resulted from the elimination of
MBIA's $1.6 billion exposure to Eurotunnel during 2007. Based on
MBIA's internal ratings, the percentage of the portfolio rated below
investment grade increased to 2.1 percent as of December 31, 2007,
from 1.2 percent as of December 31, 2006.
MBIA's pre-tax operating income from insurance operations for
2007, which excludes the effects of net realized gains and losses and
net gains and losses on financial instruments at fair value (with the
exception of credit impairment) and foreign exchange, declined 85
percent to $167.0 million compared with $1.1 billion for 2006. The
decline was due to the fourth quarter 2007 additional loss activity of
$713.5 million and credit impairment in the insured derivatives
portfolio of $200 million.
Investment Management Services
For 2007, pre-tax operating income for Investment Management
Services was up 9 percent, from $101.2 million to $110.0 million due
to higher average assets under management ("AUM"). The market value of
average AUM for 2007, including conduit assets of $4.3 billion, was
$66.1 billion, up 18 percent from $56.0 billion for 2006. Strong
growth in the asset liability products segment from increased volume
of investment agreements and medium-term notes, and increased balances
managed in the municipal investment pool and customized asset
management business in the advisory services segment, contributed to
the increase in AUM.
Within the advisory services segment, MBIA was the investment
manager of the structured investment vehicle ("SIV") named
Hudson-Thames, acting under an investment management agreement and at
the direction of an independent board of directors. Launched at the
end of 2006, Hudson-Thames had $2 billion of assets at its peak. MBIA
also invested $15.8 million in the capital notes of Hudson-Thames,
representing 12 percent of the capital notes. During the summer of
2007, adverse conditions in the structured finance and SIV markets
inhibited Hudson-Thames from issuing new senior notes (primarily
commercial paper) to repay maturing notes. During the fourth quarter,
at the direction of the Hudson-Thames board of directors, all of the
remaining assets of Hudson-Thames were sold, all of its senior
liabilities were fully paid, and in December 2007, Hudson-Thames
ceased operations. Overall results for 2007 reflect the impairment of
MBIA's capital notes and unreimbursed expenses, which combined totaled
$8.2 million, of which $3.7 million was recorded in the fourth
quarter.
Corporate
For 2007, the corporate pre-tax operating loss increased 4 percent
to $89.0 million from a loss of $85.8 million in 2006. The increased
operating loss reflects a $10 million increase in corporate expenses
during 2007, primarily related to higher expense allocations from the
insurance company, partially offset by $6.4 million in insurance
recoveries. The insurance recoveries represent payments under the
Company's directors' and officers' insurance policies, under which
MBIA is being reimbursed for a portion of the expenses it has incurred
for regulatory investigations and related litigation in prior periods.
For the fourth quarter of 2007, the pre-tax operating loss was $25.8
million, 5 percent greater than the $24.7 million loss for the fourth
quarter of 2006. At December 31, 2007, MBIA Inc. had cash and
investments totaling $433.9 million.
Gains and Losses
In 2007, MBIA recorded net realized gains of $51.3 million for all
business operations, compared with net realized gains of $15.4 million
in 2006. For the fourth quarter of 2007, MBIA recorded net realized
gains of $24.1 million compared with $5.1 million of net realized
losses for the fourth quarter of 2006. The year-over-year changes were
primarily due to customary activity associated with the management of
the Company's investment portfolio.
Consistent with its policy for evaluating all of its investments
to assess whether any declines in fair value below amortized cost are
other than temporary, MBIA identified two holdings totaling $37
million in amortized cost in the asset liability products segment for
which the Company took a $20 million write-down in the fourth quarter
of 2007. Both holdings are structured finance assets, one of which is
a SIV managed by a third party, and the other is an uninsured CDO.
The Company recorded pre-tax net losses on financial instruments
at fair value and foreign exchange of $3.5 billion for all business
operations in 2007, compared with pre-tax net gains of $14.5 million
in 2006. For the fourth quarter, net losses were $3.1 billion in 2007
compared with a net gain of $4.0 million in 2006.
The $3.5 billion net loss in 2007 includes a non-cash net loss of
$3.7 billion for MBIA's insured credit derivatives portfolio,
partially offset by a non-cash $0.2 billion net gain from the
Investment Management Services operations' derivatives portfolio. When
MBIA writes credit protection in the form of a credit default swap,
the Company accounts for the transaction under the requirements of
SFAS 133, "Accounting for Derivative Instruments and Hedging
Activities." Under SFAS 133, these transactions must be
marked-to-market and the change in fair value recorded in the
Company's income statement. The majority of these credit default swaps
provide guarantees for structured finance transactions with underlying
collateral of CDOs backed by various assets including residential
mortgage-backed securities, commercial real estate securities
(structured CMBS pools) and other asset-backed securities, corporate
bonds and loans. These transactions are typically underwritten at or
above a Triple-A underlying rating level.
Approximately two-thirds of the Company's fourth quarter $3.4
billion mark-to-market loss on the insured credit derivatives
portfolio resulted from wider spreads for CMBS and RMBS collateral and
the remaining one-third was primarily due to ratings downgrades of the
collateral comprising insured credit derivatives for multi-sector CDO
structures.
MBIA's insured credit derivatives contracts have similar terms and
conditions to the Company's financial guarantee insurance contracts,
and the Company is not required to post collateral to a counterparty,
thereby avoiding the liquidity risks more typical of market standard
credit default swaps. MBIA manages its insured credit derivatives
portfolio the same way it manages its other insurance contracts,
including the same monitoring process to detect impairment. As a
result of the Company's fourth quarter review for losses, the Company
estimated that $200 million of its fourth quarter mark-to-market
represents estimated credit impairment related to three CDO-squared
transactions on which MBIA expects to incur actual claims in the
future. However, MBIA continues to believe that the balance of the
mark-to-market losses are not predictive of future claims and, in the
absence of further credit impairment, the cumulative marks should
reverse over the remaining life of the insured credit derivatives.
As mentioned earlier, during the fourth quarter of 2007, MBIA
adjusted its 17.4 percent equity ownership interest in Channel Re from
a carrying value of $85.7 million to zero. Channel Re has been placed
on review for a possible downgrade by Moody's and Standard & Poor's.
If Channel Re is downgraded, MBIA believes that upon completion of its
capital plan, it will still have sufficient capital to cover the
rating agencies' stated capital requirements.
Operating Return On Equity
MBIA's operating return on equity, a non-GAAP measure (which is
defined in the attached Explanation of Non-GAAP Financial Measures),
was 2.9 percent at December 31, 2007 and 12.1 percent at December 31,
2006.
Book Value and Adjusted Book Value
MBIA's book value per share at December 31, 2007 decreased to
$29.11 from $53.43 at December 31, 2006, which includes a $19.24
impact from the third and fourth quarters' mark-to-market from the
Company's structured credit derivatives portfolio. Adjusted book value
("ABV") per share at December 31, 2007 declined 20 percent to $60.31
from $75.72 at December 31, 2006. ABV is a non-GAAP measure (which is
defined in the attached Explanation of Non-GAAP Financial Measures).
Share Repurchase
MBIA repurchased $660 million shares of its common stock in the
first three quarters of 2007 at a price below the volume weighted
average price for the period. During the third quarter, the Company
halted its share repurchase activity in light of the growing concerns
over the mortgage and structured finance markets. While approximately
$340 million remains available under the Company's $1 billion share
buyback program, which was authorized by MBIA's board of directors in
February 2007, the Company has suspended its share repurchase program.
Corporate Developments
Capital Plan In the fourth quarter of 2007, the rating agencies
reassessed and revised their Triple-A capital requirements for
monoline financial guarantee companies as a result of stress in the
subprime mortgage market. As a result, in January 2008, MBIA announced
a comprehensive plan to raise over $2 billion in capital, the elements
of which include a $1 billion investment commitment from Warburg
Pincus; a $1 billion issuance of surplus notes; the net release of
capital that supports amortizing and maturing transactions,
reinsurance and a dividend reduction. As of January 30, 2008, the
Company had successfully concluded the sale of $1 billion in surplus
notes, completed its $500 million sale of common stock to Warburg
Pincus, announced the Company's dividend reduction and other capital
generation and preservation plans. Additionally, MBIA has a commitment
from Warburg Pincus to backstop a $500 million rights offering, and the Company is considering this and other steps to raise equity.
New Income Statement Format: Beginning with fiscal year 2007
results, MBIA reformatted its Consolidated Statement of Income from a
segmented structure that presents revenue and expense results for each
business operation to a structure that combines and presents these
results in consolidated form. In the interest of clarity, MBIA will
provide results for fiscal year 2007 on both a segmented basis and a
consolidated basis in its Operating Supplement, available at
www.mbia.com.
Conference Call
MBIA will host a conference call/webcast for investors tomorrow at
11 a.m. EST. The call will consist of prepared commentary followed by
a listen-only question and answer session. The call can be heard live
via phone or via webcast access at www.mbia.com. Participants will
have the ability to submit questions using a dialog box on the webcast
screen. Questions may also be submitted in advance and during the call
to ConferenceCallQuestions@mbia.com. The dial-in number for
listen-only access is (877) 694-4769 in the U.S. and (973) 582-2849
from outside the U.S. The conference call code is 30885235. A replay
of the conference call will be available approximately one hour after
the end of the January 31 call until 5:00 p.m. on February 14 by
dialing (800) 642-1687 in the U.S. or (706) 645-9291 from outside the
U.S. The replay call code is also 30885235. In addition, a recording
of the call will be available on MBIA's Web site approximately two
hours after the completion of the conference call.
MBIA Inc., through its subsidiaries, is a leading financial
guarantor and provider of specialized financial services. MBIA's
innovative and cost-effective products and services meet the credit
enhancement, financial and investment needs of its public and private
sector clients, domestically and internationally. MBIA Inc.'s
principal operating subsidiary, MBIA Insurance Corporation, has the
following financial strength ratings: Triple-A from Fitch Ratings with
a stable outlook; Triple-A from Standard & Poor's Ratings Services
with a negative outlook; and Triple-A on review for possible downgrade
from Moody's Investors Service. Please visit MBIA's Web site at
www.mbia.com.
This news release contains forward-looking statements. Important
factors such as general market conditions and the competitive
environment could cause actual results to differ materially from those
projected in these forward-looking statements. Risk factors are
detailed in MBIA's 10K, which is available on MBIA's website,
www.mbia.com. The Company undertakes no obligation to revise or update
any forward-looking statements to reflect changes in events or
expectations.
Explanation of Non-GAAP Financial Measures
The following are explanations of why MBIA believes that the
non-GAAP financial measures typically used in the Company's press
releases, which serve to supplement GAAP information, are meaningful
to investors.
Operating Income (Loss) and Operating Income (Loss) Per Share: The
Company believes operating income (loss) and operating income (loss)
per share are useful measurements of performance because they measure
income from operations, unaffected by investment portfolio realized
gains and losses, gains and losses on financial instruments at fair
value (with the exception of credit impairments on insured
derivatives) and foreign exchange and other non-operating items.
Operating income (loss) and operating income (loss) per share are also
provided to assist research analysts and investors who use this
information in their analysis of the Company.
Adjusted Direct Premiums ("ADP"): The Company believes adjusted
direct premiums are a meaningful measure of the total value of the
insurance business written during a reporting period since it
represents the present value of all premiums collected and expected to
be collected on policies closed during the period. As such, it gives
investors an opportunity to measure the value of new business
activities in a given period and compare it to new business activities
in other periods. Other measures, such as premiums written and
premiums earned, include the value of premiums resulting from business
closed in prior periods and do not provide the same information to
investors.
Operating Return on Equity ("ROE"): The Company believes operating
return on equity is a useful measurement of performance because it
measures return on equity based upon income from operations and
shareholders' equity, unaffected by investment portfolio realized
gains and losses, gains and losses on financial instruments at fair
value (with the exception of credit impairments on insured
derivatives) and foreign exchange, unrealized gains and losses, and
non-recurring items. Operating return on equity is also provided to
assist research analysts and investors who use this information in
their analysis of the Company.
Adjusted Book Value ("ABV"): The Company believes the presentation
of adjusted book value, which includes items that are expected to be
realized in future periods, provides additional information that gives
a comprehensive measure of the value of the Company. Since the Company
expects these items to affect future results and, in general, they do
not require any additional future performance obligation on the
Company's part, ABV provides an indication of the Company's value in
the absence of any new business activity. ABV is not a substitute for
GAAP book value but does provide investors with additional information
when viewed in conjunction with GAAP book value.
MBIA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
----------------------------------------------------------------------
(dollars in thousands)
December 31, December 31,
2007 2006
------------ ------------
Assets
--------------------------------------------
Investments:
Fixed-Maturity Securities Held as
Available-for-Sale, at Fair Value
(Amortized Cost $30,199,471 and
$27,327,315)(2007 includes
hybrid financial instruments at fair
value $596,537) $29,589,098 $27,755,667
Investments Held-To-Maturity, at Amortized
Cost
(Fair Value $5,036,465 and $5,187,766) 5,053,987 5,213,464
Investments Pledged as Collateral, at Fair
Value
(Amortized Cost $1,243,245 and $176,179) 1,227,153 175,834
Short-Term Investments, at Amortized Cost 5,464,708 2,960,646
Other Investments 730,711 971,707
------------ ------------
Total Investments 42,065,657 37,077,318
Cash and Cash Equivalents 263,732 269,277
Accrued Investment Income 590,060 526,468
Deferred Acquisition Costs 472,516 449,556
Prepaid Reinsurance Premiums 325,555 363,140
Reinsurance Recoverable on Unpaid Losses 82,041 46,941
Goodwill 79,406 79,406
Property and Equipment (Net of Accumulated
Depreciation) 104,036 105,950
Receivable for Investments Sold 111,130 77,593
Derivative Assets 1,715,881 521,278
Current Income Taxes 142,763 -
Deferred Income Taxes, Net 1,177,158 -
Other Assets 178,639 246,103
------------ ------------
Total Assets $47,308,574 $39,763,030
============ ============
Liabilities and Shareholders' Equity
--------------------------------------------
Liabilities:
Deferred Premium Revenue $3,138,396 $3,129,620
Loss and Loss Adjustment Expense Reserves 1,246,423 537,037
Investment Agreements 16,107,909 12,482,976
Commercial Paper 850,315 745,996
Medium-Term Notes (2007 includes hybrid
financial instruments
at fair value $374,575) 12,830,777 10,951,378
Variable Interest Entity Floating Rate
Notes 1,355,792 1,451,928
Securities Sold Under Agreements to
Repurchase 1,163,899 169,432
Short-Term Debt 13,383 40,898
Long-Term Debt 1,225,280 1,215,289
Current Income Taxes - 6,970
Deferred Income Taxes, Net - 476,189
Deferred Fee Revenue 15,059 14,862
Payable for Investments Purchased 41,359 319,640
Derivative Liabilities 5,006,549 400,318
Other Liabilities 664,128 616,243
------------ ------------
Total Liabilities 43,659,269 32,558,776
Shareholders' Equity:
Common Stock 160,245 158,330
Additional Paid-in Capital 1,649,511 1,533,102
Retained Earnings 4,295,380 6,399,333
Accumulated Other Comprehensive Income
(Loss) (490,829) 321,293
Treasury Stock (1,965,002) (1,207,804)
------------ ------------
Total Shareholders' Equity 3,649,305 7,204,254
------------ ------------
Total Liabilities and Shareholders' Equity $47,308,574 $39,763,030
============ ============
MBIA INC. AND SUBSIDIARIES
STATEMENTS OF INCOME
----------------------------------------------------------------------
(dollars in thousands)
Three Months Ended December 31, 2007
-----------------------------------------------
Investment
Management
Insurance Services Corporate Subtotal
------------ ---------- --------- -------------
Revenues:
Gross Premiums
Written $ 267,480 $ - $ - $ 267,480
Ceded Premiums (29,239) - - (29,239)
------------ ---------- --------- -------------
Net Premiums Written 238,241 - - 238,241
Premiums Earned 209,488 - - 209,488
Net Investment Income 146,815 424,530 (238) 571,107
Fees and
Reimbursements 1,151 11,011 - 12,162
Net Realized Gains 17,189 2,617 4,256 24,062
Net Gains (Losses) on
Financial
Instruments
at Fair Value and
Foreign Exchange (3,368,089) 228,589 925 (3,138,575)
------------ ---------- --------- -------------
Total Revenues (2,993,446) 666,747 4,943 (2,321,756)
------------ ---------- --------- -------------
Expenses:
Losses and Loss
Adjustment 736,690 - - 736,690
Amortization of
Deferred Acquisition
Costs 16,759 - - 16,759
Operating 35,130 26,997 5,405 67,532
Interest Expense 19,849 380,148 20,193 420,190
------------ ---------- --------- -------------
Total Expenses 808,428 407,145 25,598 1,241,171
------------ ---------- --------- -------------
Income (Loss) from
Continuing
Operations before
Income Taxes $(3,801,874) $259,602 $(20,655) $(3,562,927)
============ ========== ========= =============
Benefit for Income
Taxes
Loss from Continuing
Operations
Income from
Discontinued
Operations, Net of
Tax
Net Loss
Three Months Ended
December 31, 2007
--------------------------
Eliminations
(1) Consolidated
------------ ------------
Revenues:
Gross Premiums Written $(10,619) $ 256,861
Ceded Premiums 1,474 (27,765)
----------- ------------
Net Premiums Written (9,145) 229,096
Premiums Earned (9,145) 200,343
Net Investment Income 4,048 575,155
Fees and Reimbursements (2,853) 9,309
Net Realized Gains - 24,062
Net Gains (Losses) on Financial
Instruments
at Fair Value and Foreign Exchange - (3,138,575)
----------- ------------
Total Revenues (7,950) (2,329,706)
----------- ------------
Expenses:
Losses and Loss Adjustment - 736,690
Amortization of Deferred Acquisition Costs - 16,759
Operating (7,726) 59,806
Interest Expense (224) 419,966
----------- ------------
Total Expenses (7,950) 1,233,221
----------- ------------
Income (Loss) from Continuing
Operations before Income Taxes $ - $(3,562,927)
===========
Benefit for Income Taxes (1,260,677)
------------
Loss from Continuing Operations (2,302,250)
Income from Discontinued Operations, Net
of Tax -
------------
Net Loss $(2,302,250)
============
Three Months Ended December 31, 2006
-----------------------------------------
Investment
Management
Insurance Services Corporate Subtotal
--------- ---------- --------- ----------
Revenues:
Gross Premiums Written $275,128 $ - $ - $275,128
Ceded Premiums (22,853) - - (22,853)
--------- ---------- --------- ----------
Net Premiums Written 252,275 - - 252,275
Premiums Earned 204,234 - - 204,234
Net Investment Income 146,624 331,307 3,715 481,646
Fees and Reimbursements 4,259 11,816 - 16,075
Net Realized Gains (Losses) (6,951) 466 1,430 (5,055)
Net Gains (Losses) on
Financial Instruments
at Fair Value and Foreign
Exchange (452) 4,439 (7) 3,980
--------- ---------- --------- ----------
Total Revenues 347,714 348,028 5,138 700,880
--------- ---------- --------- ----------
Expenses:
Losses and Loss Adjustment 20,054 - - 20,054
Amortization of Deferred
Acquisition Costs 15,850 - - 15,850
Operating 46,295 22,867 8,235 77,397
Interest Expense 22,561 294,431 20,189 337,181
--------- ---------- --------- ----------
Total Expenses 104,760 317,298 28,424 450,482
--------- ---------- --------- ----------
Income (Loss) from
Continuing
Operations before Income
Taxes $242,954 $ 30,730 $(23,286) $250,398
========= ========== ========= ==========
Provision for Income Taxes
Income from Continuing
Operations
Income from Discontinued
Operations, Net of Tax
Gain on Sale of
Discontinued Operations,
Net of Tax
Net Income
Three Months Ended December
31, 2006
---------------------------
Eliminations
(1) Consolidated
------------ ------------
Revenues:
Gross Premiums Written $ (8,398) $ 266,730
Ceded Premiums 1,793 (21,060)
----------- ------------
Net Premiums Written (6,605) 245,670
Premiums Earned (6,605) 197,629
Net Investment Income 3,685 485,331
Fees and Reimbursements (2,933) 13,142
Net Realized Gains (Losses) - (5,055)
Net Gains (Losses) on Financial
Instruments
at Fair Value and Foreign Exchange - 3,980
----------- ------------
Total Revenues (5,853) 695,027
----------- ------------
Expenses:
Losses and Loss Adjustment - 20,054
Amortization of Deferred Acquisition Costs - 15,850
Operating (5,832) 71,565
Interest Expense (21) 337,160
----------- ------------
Total Expenses (5,853) 444,629
----------- ------------
Income (Loss) from Continuing
Operations before Income Taxes $ - $ 250,398
===========
Provision for Income Taxes 71,914
------------
Income from Continuing Operations 178,484
Income from Discontinued Operations, Net
of Tax 2,472
Gain on Sale of Discontinued Operations,
Net of Tax 29
------------
Net Income $ 180,985
============
(1) Eliminations include:
(a)Elimination of intercompany premium income and expense.
(b)Elimination of intercompany asset management fees and expenses.
(c)Elimination of intercompany interest income and expense pertaining
to intercompany receivables and payables.
MBIA INC. AND SUBSIDIARIES
STATEMENTS OF INCOME
----------------------------------------------------------------------
(dollars in thousands)
Year Ended December 31, 2007
-----------------------------------------------
Investment
Management
Insurance Services Corporate Subtotal
------------ ---------- --------- -------------
Revenues:
Gross Premiums
Written $ 998,863 $ - $ - $ 998,863
Ceded Premiums (106,474) - - (106,474)
------------ ---------- --------- -------------
Net Premiums
Written 892,389 - - 892,389
Premiums Earned 855,624 - - 855,624
Net Investment
Income 572,786 1,582,287 14,212 2,169,285
Fees and
Reimbursements 20,832 48,004 - 68,836
Net Realized Gains
(Losses) 55,644 668 (4,988) 51,324
Net Gains (Losses)
on Financial
Instruments
at Fair Value and
Foreign Exchange (3,715,617) 199,565 1,076 (3,514,976)
Insurance Recoveries - - 6,400 6,400
------------ ---------- --------- -------------
Total Revenues (2,210,731) 1,830,524 16,700 (363,507)
------------ ---------- --------- -------------
Expenses:
Losses and Loss
Adjustment 800,345 - - 800,345
Amortization of
Deferred
Acquisition Costs 66,873 - - 66,873
Operating 133,259 105,349 28,865 267,473
Interest Expense 81,810 1,414,944 80,740 1,577,494
------------ ---------- --------- -------------
Total Expenses 1,082,287 1,520,293 109,605 2,712,185
------------ ---------- --------- -------------
Income (Loss) from
Continuing
Operations before
Income Taxes $(3,293,018) $ 310,231 $(92,905) $(3,075,692)
============ ========== ========= =============
Benefit for Income
Taxes
Loss from Continuing
Operations
Income from
Discontinued
Operations, Net of
Tax
Net Loss
Year Ended December 31,
2007
---------------------------
Eliminations
(1) Consolidated
------------ ------------
Revenues:
Gross Premiums Written $(37,964) $ 960,899
Ceded Premiums 6,357 (100,117)
----------- ------------
Net Premiums Written (31,607) 860,782
Premiums Earned (31,607) 824,017
Net Investment Income 14,555 2,183,840
Fees and Reimbursements (11,995) 56,841
Net Realized Gains (Losses) - 51,324
Net Gains (Losses) on Financial
Instruments
at Fair Value and Foreign Exchange - (3,514,976)
Insurance Recoveries - 6,400
----------- ------------
Total Revenues (29,047) (392,554)
----------- ------------
Expenses:
Losses and Loss Adjustment - 800,345
Amortization of Deferred Acquisition Costs - 66,873
Operating (28,601) 238,872
Interest Expense (446) 1,577,048
----------- ------------
Total Expenses (29,047) 2,683,138
----------- ------------
Income (Loss) from Continuing
Operations before Income Taxes $ - $(3,075,692)
===========
Benefit for Income Taxes (1,147,244)
------------
Loss from Continuing Operations (1,928,448)
Income from Discontinued Operations, Net
of Tax -
------------
Net Loss $(1,928,448)
============
Year Ended December 31, 2006
---------------------------------------------
Investment
Management
Insurance Services Corporate Subtotal
----------- ---------- --------- ------------
Revenues:
Gross Premiums Written $ 921,964 $ - $ - $ 921,964
Ceded Premiums (107,287) - - (107,287)
Net Premiums Written 814,677 - - 814,677
Premiums Earned 852,603 - - 852,603
Net Investment Income 581,103 1,167,241 13,462 1,761,806
Fees and
Reimbursements 33,498 44,299 - 77,797
Net Realized Gains 5,615 6,060 3,763 15,438
Net Gains on Financial
Instruments
at Fair Value and
Foreign Exchange 904 13,162 428 14,494
Insurance Recoveries - - - -
----------- ---------- --------- ------------
Total Revenues 1,473,723 1,230,762 17,653 2,722,138
----------- ---------- --------- ------------
Expenses:
Losses and Loss
Adjustment 80,889 - - 80,889
Amortization of
Deferred Acquisition
Costs 66,012 - - 66,012
Operating 155,863 85,419 18,614 259,896
Interest Expense 76,490 1,024,903 80,685 1,182,078
----------- ---------- --------- ------------
Total Expenses 379,254 1,110,322 99,299 1,588,875
----------- ---------- --------- ------------
Income (Loss) from
Continuing
Operations before
Income Taxes $1,094,469 $ 120,440 $(81,646) $1,133,263
=========== ========== ========= ============
Provision for Income
Taxes
Income from Continuing
Operations
Income from
Discontinued
Operations, Net of
Tax
Gain on Sale of
Discontinued
Operations, Net of
Tax
Net Income
Year Ended December 31,
2006
---------------------------
Eliminations
(1) Consolidated
------------ ------------
Revenues:
Gross Premiums Written $ (36,711) $ 885,253
Ceded Premiums 8,696 (98,591)
Net Premiums Written (28,015) 786,662
Premiums Earned (28,015) 824,588
Net Investment Income 20,540 1,782,346
Fees and Reimbursements (11,322) 66,475
Net Realized Gains - 15,438
Net Gains on Financial Instruments
at Fair Value and Foreign Exchange - 14,494
Insurance Recoveries - -
----------- ------------
Total Revenues (18,797) 2,703,341
----------- ------------
Expenses:
Losses and Loss Adjustment - 80,889
Amortization of Deferred Acquisition Costs - 66,012
Operating (18,593) 241,303
Interest Expense (204) 1,181,874
----------- ------------
Total Expenses (18,797) 1,570,078
----------- ------------
Income (Loss) from Continuing
Operations before Income Taxes $ - $ 1,133,263
===========
Provision for Income Taxes 320,080
------------
Income from Continuing Operations 813,183
Income from Discontinued Operations, Net
of Tax 6,076
Gain on Sale of Discontinued Operations,
Net of Tax 29
------------
Net Income $ 819,288
============
(1) Eliminations include:
(a) Elimination of intercompany premium income and expense.
(b) Elimination of intercompany asset management fees and expenses.
(c) Elimination of intercompany interest income and expense
pertaining to intercompany receivables and payables.
MBIA INC. AND SUBSIDIARIES
Reconciliation of Adjusted Direct Premiums to Gross Premiums Written
----------------------------------------------------------------------
(dollars in millions)
Three Months Ended Years Ended
December 31 December 31
------------------------- -------------------------
2007 2006 2007 2006
------------ ------------ ------------ ------------
Adjusted Direct
Premiums (1) $262.4 $421.2 $1,496.9 $1,030.8
Adjusted
Assumed
Premiums 0.0 0.8 0.0 6.5
------------ ------------ ------------ ------------
Adjusted Gross
Premiums 262.4 422.0 1,496.9 1,037.3
Present Value
of Estimated
Future
Installment
Premiums (2) (161.4) (305.3) (1,104.8) (686.6)
------------ ------------ ------------ ------------
Gross Upfront
Premiums Written 101.0 116.7 392.1 350.7
Gross
Installment
Premiums
Written 166.5 158.4 606.8 571.3
------------ ------------ ------------ ------------
Gross Premiums
Written $267.5 $275.1 $998.9 $922.0
============ ============ ============ ============
(1) A non-GAAP measure.
(2) At December 31, 2007 and December 31, 2006 the discount rate was
5.06% and 5.10%, respectively.
Three Months Ended Years Ended
December 31 December 31
------------------------- -------------------------
Net Income (Loss)
per Common
Share: 2007 2006 2007 2006
----------------- ------------ ------------ ------------ ------------
Basic ($18.61) $1.36 ($15.22) $6.17
Diluted ($18.61) $1.32 ($15.22) $5.99
Weighted-Average Number of
Common Shares Outstanding:
(shares in thousands)
Basic 123,739,225 132,898,187 126,670,332 132,794,334
Diluted 123,739,225 137,042,313 126,670,332 136,694,798
Components of Net Income (Loss)
per Diluted Share
-------------------------------
Net Income (Loss) ($18.61) $1.32 ($15.22) $5.99
Income from
Discontinued
Operations 0.00 0.02 0.00 0.04
------------ ------------ ------------ ------------
Net Income (Loss)
from Continuing
Operations (18.61) 1.30 (15.22) 5.95
Net Realized
Gains (Losses) 0.13 (0.02) 0.26 0.07
Net Gains
(Losses) on
Financial
Instruments at
Fair Value and
Foreign
Exchange (16.49) 0.02 (18.04) 0.07
Estimated
Credit
Impairment on
Insured
Derivatives
(2) 1.05 0.00 1.03 0.00
------------ ------------ ------------ ------------
Operating Income
(Loss) (3) ($3.30) $1.31 $1.52 $5.81
============ ============ ============ ============
(1)May not add due to rounding.
(2)In 2007, operating income has been reduced by $200.0 million for
estimated credit impairments related to three CDO squared
transactions.
(3)A non-GAAP measure.
MBIA INC. AND SUBSIDIARIES
Components of Adjusted Book Value per
Share
---------------------------------------
December 31, December 31,
2007 2006
-------------- --------------
Book Value $29.11 $53.43
After-tax Value of:
Deferred Premium Revenue 16.27 15.09
Prepaid Reinsurance Premiums (1.69) (1.75)
Deferred Acquisition Costs (2.45) (2.17)
------ ------
Net Deferred Premium Revenue 12.13 11.17
Present Value of Installment
Premiums (1) 13.68 11.13
Asset/Liability Products Adjustment 8.78 2.92
Loss Provision (2) (3.39) (2.93)
------- --------
Adjusted Book Value (3) $60.31 $75.72
======= ========
(1)At December 31, 2007 and December 31, 2006 the discount rate was
5.06% and 5.10%, respectively.
(2)The loss provision is calculated by applying 12% to the following
items on an after-tax basis:
(a) deferred premium revenue; (b) prepaid reinsurance premiums;
and, (c) the present value of installment premiums.
(3)A non-GAAP measure.
CONSOLIDATED INSURANCE OPERATIONS
Selected Financial Data Computed on a
Statutory Basis
------------------------------------------
(dollars in millions)
December 31, December 31,
2007 2006
-------------- ------------
Capital and Surplus $3,666.1 $4,080.7
Contingency Reserve 2,718.9 2,478.0
-------------- ------------
Capital Base 6,385.0 6,558.7
Unearned Premium Reserve 3,762.8 3,507.2
Present Value of Installment Premiums
(1) 2,638.6 2,309.5
-------------- ------------
Premium Resources 6,401.4 5,816.7
Loss and Loss Adjustment Expense
Reserves 926.1 100.6
Soft Capital Credit Facilities 850.0 850.0
-------------- ------------
Total Claims-paying Resources $14,562.5 $13,326.0
============== ============
Net Debt Service Outstanding $1,021,925.2 $939,969.0
Capital Ratio (2) 160:1 143:1
Claims-paying Ratio (3) 83:1 83:1
(1)At December 31, 2007 and December 31, 2006 the discount rate was
5.06% and 5.10%, respectively.
(2)Net debt service outstanding divided by the capital base.
(3)Net debt service outstanding divided by the sum of the capital
base, unearned premium reserve (after-tax), present value of
installment premiums (after-tax), loss and loss adjustment expense
reserves and soft capital credit facilities.
SOURCE: MBIA Inc.
MBIA Inc.
Media:
Willard Hill, 914-765-3860
or
Elizabeth James, 914-765-3889
or
Investors:
Greg Diamond, 914-765-3190
