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Mbia Inc (MBI) SEC Filing 10-K Annual report for the fiscal year ending Monday, December 31, 2012

Mbia Inc

CIK: 814585 Ticker: MBI

Exhibit 99.1

MBIA Inc. Reports Fourth Quarter and Full Year 2012 Financial Results

Highlights

  • MBIA Inc.’s (the Company’s) Adjusted Book Value (ABV), a non-GAAP measure, was $30.68 per share at December 31, 2012 compared with $30.64 per share at September 30, 2012 and $34.50 per share at December 31, 2011.
  • MBIA Inc.’s adjusted pre-tax income, a non-GAAP measure, was $110 million for the fourth quarter of 2012 compared with an adjusted pre-tax loss of $252 million for the fourth quarter of 2011.
  • MBIA Inc. recorded net income available to common shareholders of $636 million, or $3.26 per share, for the fourth quarter of 2012, compared with a net loss of $626 million, or $3.23 per share, for the fourth quarter of 2011.
  • MBIA Inc.’s net income available to common shareholders for the twelve months ended December 31, 2012 was $1.2 billion, or $6.33 per share, compared with a net loss of $1.3 billion, or $6.69 per share, for the twelve months ended December 31, 2011.

ARMONK, N.Y.--(BUSINESS WIRE)--February 27, 2013--MBIA Inc. (NYSE: MBI) today reported Adjusted Book Value (ABV) per share (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) of $30.68 per share at December 31, 2012 compared with $30.64 per share at September 30, 2012 and $34.50 per share at December 31, 2011. Book value per share was $16.22 as of December 31, 2012.

MBIA Inc.’s adjusted pre-tax income (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) for the fourth quarter of 2012 was $110 million compared with an adjusted pre-tax loss of $252 million for the fourth quarter of 2011. The improvement in adjusted pre-tax income for the three months ended December 31, 2012 was driven primarily by lower net losses on insured exposures. ABV and adjusted pre-tax income (loss) provide investors with additional views of the Company’s operating results that management finds useful in measuring financial performance. Reconciliations of adjusted book value to book value calculated in accordance with GAAP and adjusted pre-tax income (loss) to pre-tax income (loss) calculated in accordance with GAAP are attached.

Net income available to common shareholders for the fourth quarter of 2012 was $636 million, or $3.26 per share, compared with a net loss of $626 million, or $3.23 per share, for the fourth quarter of 2011. The improvement in net income was primarily the result of changes in the fair value of insured credit derivatives. In the three months ended December 31, 2012, the Company recorded a $411 million net gain on insured credit derivatives compared with a $1.7 billion net loss on insured credit derivatives in the comparable period of 2011. The net gain on insured credit derivatives in the fourth quarter of 2012 resulted from unrealized gains driven by a less favorable market perception of MBIA Insurance Corporation's (MBIA Corp.) credit quality, favorable movements in credit spreads and pricing on collateral within the transactions and shorter weighted-average lives due to the passage of time, partially offset by collateral erosion. The net loss on insured credit derivatives in the fourth quarter of 2011 resulted primarily from an improved market perception of MBIA Corp.'s credit quality. In 2011, realized losses associated with settlement and claim payments on multi-sector CDO and CMBS transactions were largely offset by the reversal of previously booked unrealized losses on those transactions. The Company is required to adjust the values of its derivative liabilities for the market's perception of its non-performance risk. A decrease in the value of the derivative liabilities attributable to an increase in non-performance risk is reflected as an unrealized gain while an increase in the value of the derivative liabilities attributable to a decline in non-performance risk is reflected as an unrealized loss on the income statement.

“Our ongoing objective is to put our firm on a stable financial footing so that we can pursue growth in the future,” said MBIA Inc. President and Chief Financial Officer Chuck Chaplin. “In the fourth quarter we were able to amend our senior debt indentures to reduce risk and permit the holding company greater financial flexibility going forward. In 2013, most of our attention will continue to be on collecting outstanding recoverables arising from ineligible mortgages on securitizations we insured, remediating and reducing potentially volatile insured exposures and resolving litigation over the formation of National.”

Full Year 2012 Results

     
$ in millions   2012     2011
Full Year Net Income (Loss) $ 1,234 $ (1,319)
Full Year Adj. Pre-tax Income (Loss)   $ (708)     $ (497)


Net income available to common shareholders for the twelve months ended December 31, 2012 was $1.2 billion, or $6.33 per share, compared with a net loss of $1.3 billion, or $6.69 per share, for the twelve months ended December 31, 2011. The improvement in net income was primarily the result of $1.5 billion of net gains on insured credit derivatives in the year ended December 31, 2012, compared with $2.8 billion of net losses on insured credit derivatives for the year ended December 31, 2011. The net gains on insured credit derivatives in 2012 were principally associated with the reversal of unrealized losses from commutations, the effects of MBIA’s nonperformance risk on its derivative liabilities and the result of favorable movements in credit spreads and pricing on collateral in the insured transactions, partially offset by settlements and claim payments. The net losses on insured credit derivatives in 2011 principally resulted from favorable changes in the market’s perception of MBIA Corp.’s credit risk on its derivative liabilities, reduced collateral pricing and collateral erosion, partially offset by the reversal of unrealized losses from settlements prior to maturities and terminations.

The adjusted pre-tax loss for the twelve months ended December 31, 2012 was $708 million compared with an adjusted pre-tax loss of $497 million for the twelve months ended December 31, 2011. The unfavorable change for the twelve months ended December 31, 2012 was primarily due to lower net investment income, an increase in legal and litigation related costs and increased losses on insured exposures.


The following information was filed by Mbia Inc (MBI) on Wednesday, February 27, 2013 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Document And Entity Information
Schedule I (summary Of Investments Other Than Investments In Related Parties) (detail)
Schedule Ii (condensed Balance Sheets) (detail)
Schedule Ii (condensed Statements Of Comprehensive Income) (detail)
Schedule Ii (condensed Statements Of Operations) (detail)
Schedule Ii (notes To Condensed Financial Statements) (detail)
Schedule Ii - Condensed Statements Of Cash Flows (detail)
Schedule Iv (reinsurance) (detail)
Consolidated Balance Sheets
Consolidated Balance Sheets (parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Changes In Shareholders' Equity
Consolidated Statements Of Changes In Shareholders' Equity (parenthetical)
Consolidated Statements Of Comprehensive Income (loss)
Consolidated Statements Of Comprehensive Income (loss) (parenthetical)
Consolidated Statements Of Operations
Consolidated Statements Of Operations (parenthetical)
Business Developments And Risks And Uncertainties
Business Developments And Risks And Uncertainties (narrative) (detail)
Business Segments
Business Segments (additional Information) (detail)
Business Segments (summary Of Company's Segment Results) (detail)
Business Segments (summary Of Premiums Earned On Financial Guarantees And Insured Derivatives By Geographic Location Of Risk) (detail)
Business Segments (summary Of Segments Within Wind-down Operations) (detail)
Business Segments (tables)
Commitments And Contingencies
Commitments And Contingencies (detail)
Common And Preferred Stock
Common And Preferred Stock (detail)
Debt
Debt (aggregate Maturity Of Debt Obligations) (detail)
Debt (long-term Debt) (detail)
Debt (maturity Of Vie Notes, By Segment) (detail)
Debt (narrative) (detail)
Debt (principal Payments Due Under Investment Agreement Obligations) (detail)
Debt (principal Payments Due Under Medium-term Note Obligations Based On Contractual Maturity) (detail)
Debt (tables)
Derivative Instruments
Derivative Instruments (credit Derivatives Sold) (detail)
Derivative Instruments (effect Of Derivative Instruments On Consolidated Statements Of Operations) (detail)
Derivative Instruments (narrative) (detail)
Derivative Instruments (tables)
Derivative Instruments (total Fair Value Of Company's Derivative Assets And Liabilities By Instrument And Balance Sheet Location, Before Counterparty Netting) (detail)
Earnings Per Share
Earnings Per Share (schedule Of Basic And Diluted Earnings Per Share) (detail)
Earnings Per Share (tables)
Fair Value Of Financial Instruments
Fair Value Of Financial Instruments (changes In Fair Value Included In Company's Consolidated Statements Of Operations) (detail)
Fair Value Of Financial Instruments (changes In Level 3 Assets And Liabilities Measured At Fair Value On Recurring Basis) (detail)
Fair Value Of Financial Instruments (company's Assets And Liabilities Measured At Fair Value On Recurring Basis) (detail)
Fair Value Of Financial Instruments (difference Between Aggregate Fair Value And Aggregate Remaining Contractual Principal Balance Outstanding) (detail)
Fair Value Of Financial Instruments (fair Value And Carrying Value Of Assets And Liabilities That Are Disclosed At Fair Value But Not Reported At Fair Value On Company's Consolidated Balance Sheets) (detail)
Fair Value Of Financial Instruments (gains And Losses (realized And Unrealized) Included In Earnings Relating To Level 3 Assets And Liabilities) (detail)
Fair Value Of Financial Instruments (narrative) (detail)
Fair Value Of Financial Instruments (quantitative Information Regarding Significant Unobservable Inputs For Assets And Liabilities Measured At Fair Value On Recurring Basis) (detail)
Fair Value Of Financial Instruments (tables)
Income Taxes
Income Taxes (change In Unrecognized Tax Benefits ("utb") And Related Interest And Penalties To Income Tax) (detail)
Income Taxes (deferred Tax Assets And Liabilities) (detail)
Income Taxes (effective Income Tax Rate Reconciliation From Statutory Rate Due To Tax Effect) (detail)
Income Taxes (income (loss) From Operations Before Provision (benefit) For Income Tax) (detail)
Income Taxes (income Tax Expense (benefit) On Income (loss) And Shareholders' Equity) (detail)
Income Taxes (narrative) (detail)
Income Taxes (tables)
Insurance In Force
Insurance In Force (narrative) (detail)
Insurance In Force (schedule Of Geographical Distribution Of Insurance In Force) (detail)
Insurance In Force (schedule Of Insurance In Force By Type Of Bond, Excluding Transactions Guaranteed By Mbia Corp. On Behalf Of Various Investment Management Services Affiliated Companies) (detail)
Insurance In Force (summary Of Company's Reinsurance Agreements For U.s. Public Finance And Structured Finance And International Insurance Operations) (detail)
Insurance In Force (summary Of Components Of Financial Guarantee Net Premiums Earned, Including Premiums Assumed From And Ceded To Other Companies) (detail)
Insurance In Force (tables)
Insurance Premiums
Insurance Premiums (narrative) (detail)
Insurance Premiums (roll Forward Of Premiums Receivable) (detail)
Insurance Premiums (tables)
Insurance Premiums (undiscounted Future Amount Of Premiums Expected To Be Collected And Period Which Those Collections Are Expected To Occur) (detail)
Insurance Premiums (unearned Premium Revenue Balance And Future Expected Premium Earnings) (detail)
Insurance Regulations And Dividends
Insurance Regulations And Dividends (detail)
Investments
Investments (available-for-sale And Held-to-maturity Securities In Consolidated Investment Portfolio) (detail)
Investments (average Credit Ratings And Fair Value And Percentage Of Guaranteed Abs Mbs And Corporate Obligations Below Investment Grade) (detail)
Investments (credit Losses Recognized In Earnings Related To Otti Losses Recognized In Accumulated Other Comprehensive Income (loss)) (detail)
Investments (distribution Of Securities By Contractual Maturity Of Afs And Htm) (detail)
Investments (distribution Of Securities By Percentage Of Fair Value Below Book Value By More Than 5%) (detail)
Investments (fair Values And Gross Unrealized Losses By Credit Rating Category Of Abs, Mbs And Corporate Obligations) (detail)
Investments (gross Realized Gains And Losses From Sales Of Available For Sale Securities) (detail)
Investments (gross Unrealized Losses Related To Afs And Htm Investments) (detail)
Investments (narrative) (detail)
Investments (net Unrealized Gains (losses), Including Portion Of Other-than-temporary Impairments Included In Accumulated Other Comprehensive Income (loss) (detail)
Investments (securities Held In Unrealized Loss Position And Insured By Financial Guarantor And Related Insurance Loss Reserve On Company Insured Investments) (detail)
Investments (significant Inputs Used In Measurement Of Credit Losses On Securities) (detail)
Investments (tables)
Long-term Incentive Plans
Long-term Incentive Plans (narrative) (detail)
Long-term Incentive Plans (number Of Options Granted) (detail)
Long-term Incentive Plans (number Of Restricted Share Awards Granted) (detail)
Long-term Incentive Plans (number Of Significant Options Granted And Assumptions Used For Valuing Option Grants) (detail)
Long-term Incentive Plans (outstanding Stock Options) (detail)
Long-term Incentive Plans (restricted Shares Outstanding) (detail)
Long-term Incentive Plans (stock Options Outstanding) (detail)
Long-term Incentive Plans (tables)
Loss And Loss Adjustment Expense Reserves
Loss And Loss Adjustment Expense Reserves (loss And Lae Activity) (narrative) (detail)
Loss And Loss Adjustment Expense Reserves (present Value Of Probability-weighted Future Claim Payments And Recoveries) (detail)
Loss And Loss Adjustment Expense Reserves (rmbs Recoveries) (narrative) (detail)
Loss And Loss Adjustment Expense Reserves (rmbs Reserves) (narrative) (detail)
Loss And Loss Adjustment Expense Reserves (schedule Of Company's Second-lien Rmbs Exposure, Gross Undiscounted Claim Liability And Potential Recoveries, Excluding Amounts Related To Consolidated Vie's) (detail)
Loss And Loss Adjustment Expense Reserves (schedule Of Expenses Related To Remedial Actions For Insured Obligations) (detail)
Loss And Loss Adjustment Expense Reserves (schedule Of Financial Guarantees And Related Claim Liability) (detail)
Loss And Loss Adjustment Expense Reserves (schedule Of Insurance Loss Recoverable And Changes In Recoveries On Unpaid Losses) (detail)
Loss And Loss Adjustment Expense Reserves (schedule Of Loss And Loss Adjustment Expenses Reserves) (detail)
Loss And Loss Adjustment Expense Reserves (schedule Of Losses And Loss Adjustment Expenses) (detail)
Loss And Loss Adjustment Expense Reserves (schedule Of Total Estimated Recoveries From Ineligible Second-lien Mortgage Loans) (detail)
Loss And Loss Adjustment Expense Reserves (summary Of Credit Impairments Related To Derivatives) (narrative) (detail)
Loss And Loss Adjustment Expense Reserves (tables)
Pension And Profit Sharing Plans
Pension And Profit Sharing Plans (detail)
Recent Accounting Pronouncements
Related Party Transactions
Related Party Transactions (detail)
Schedule I - Summary Of Investments, Other Than Investments In Related Parties
Schedule Ii - Condensed Financial Information
Schedule Iv - Reinsurance
Significant Accounting Policies
Significant Accounting Policies (narrative) (detail)
Significant Accounting Policies (policies)
Significant Accounting Policies (tables)
Significant Accounting Policies (useful Lives Of Each Class Of Assets) (detail)
Subsequent Events
Variable Interest Entities
Variable Interest Entities (narrative) (detail)
Variable Interest Entities (summary Of Nonconsolidated Vies Assets And Liabilities) (detail)
Variable Interest Entities (tables)
Ticker: MBI
CIK: 814585
Form Type: 10-K Annual Report
Accession Number: 0001193125-13-080289
Submitted to the SEC: Wed Feb 27 2013 5:06:52 PM EST
Accepted by the SEC: Wed Feb 27 2013
Period: Monday, December 31, 2012
Industry: Surety Insurance

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