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

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.”

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.