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Mbia Inc (MBI) SEC Filing 10-K Annual report for the fiscal year ending Wednesday, December 31, 2014

Mbia Inc

CIK: 814585 Ticker: MBI

Exhibit 99.1

MBIA Inc. Reports Fourth Quarter and Full Year 2014 Financial Results

PURCHASE, N.Y.--(BUSINESS WIRE)--March 2, 2015--MBIA Inc. (NYSE:MBI) (the Company) today reported combined operating income (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) of $185 million for the year ended December 31, 2014 compared with a combined operating loss of $15 million in 2013. The improvement in combined operating income for the year ended December 31, 2014 was primarily the result of decreases in insurance losses and loss adjustment expenses (LAE) and lower operating expenses partially offset by lower premiums earned, a decline in net investment income and reduced fees and reimbursements.

The Company’s combined operating income for the fourth quarter of 2014 was $22 million compared with a combined operating loss of $383 thousand for the same period of 2013. The increase in combined operating income for the three months ended December 31, 2014 compared with the same period of 2013 was driven primarily by a lower provision for income taxes.

Adjusted Book Value (ABV) per share (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) was $24.87 as of December 31, 2014 compared with $24.05 as of December 31, 2013. The increase in ABV per share was primarily driven by combined operating income and a decrease in common shares outstanding resulting from share repurchases. The Company repurchased 3.3 million of its common shares during 2014.

As the Company returns its emphasis to value creation following a period where value conservation was its primary goal, it is supplementing its GAAP results by reporting its operating income (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures). Previously, the Company had used adjusted pre-tax income, a non-GAAP measure, to supplement the analysis of its results. The Company’s current version of operating income differs from the version used prior to its adoption of adjusted pre-tax income. The Company has also revised its definition of ABV to remove the impact of its non-core international and structured finance insurance, advisory services and conduit segments. Operating income and ABV per share provide investors with alternative views of the Company’s operating results that management finds useful in measuring financial performance. Reconciliations of ABV per share to book value per share, and operating income to net income, calculated in accordance with GAAP, are attached.

Consolidated GAAP net income was $20 million, or $0.10 per diluted share, for the fourth quarter of 2014 compared with consolidated net income of $132 million, or $0.68 per diluted share, for the same period of 2013. The decrease in reported consolidated net income in the fourth quarter of 2014 was primarily due to lower unrealized gains on insured derivatives, partially offset by a lower provision for income taxes. The Company recorded consolidated net income of $569 million, or $2.76 per diluted common share for the year ended December 31, 2014, compared with consolidated net income of $250 million, or $1.29 per diluted common share, for the full year 2013. The increase in consolidated net income for the full year 2014 compared with the prior year was primarily attributable to higher net gains on insured derivatives and a reduction in operating expenses.

“This is the third quarter in a row in which we saw positive operating income, cash flow and ABV growth, and the first full year of positive earnings since before the financial crisis,” said MBIA Inc. President and Chief Financial Officer Chuck Chaplin. “Our expense reduction efforts are paying off.”

“National Public Finance is again competing for new municipal bond insurance business, although new business production to date has been lower than we expected, primarily due to the low interest rate environment and competitive pricing levels. Low yields also limit our investment income. However, National’s capital position continues to strengthen, leaving us well-positioned when rates begin to increase,” Mr. Chaplin continued. “The capital position of MBIA Insurance Corp. also improved.”

U.S. Public Finance Insurance Results

The Company’s U.S. public finance insurance business is conducted through its National Public Finance Guarantee Corporation (National) subsidiary. The U.S. public finance insurance segment recorded $56 million of operating income in the fourth quarter of 2014 compared with $60 million of operating income in the same period of 2013.

Total premiums earned in the U.S. public finance insurance segment were $82 million in the fourth quarter of 2014, down 5 percent from $86 million of total premiums earned in the same period of 2013, reflecting a 5 percent decline in scheduled premiums earned and a 4 percent decline in refunded premiums earned. The decline in scheduled premiums earned resulted from portfolio amortization and high refunding volume over the past several years.

In addition to $300 million in the third quarter of 2014, National wrote approximately $43 million par amount of primary new insurance during the fourth quarter of 2014, and $26 million in January and February of 2015. Low interest rates, narrow spreads and competitive pricing levels continue to limit new business opportunities.

Net investment income for the U.S. public finance insurance segment was $29 million in the fourth quarter of 2014, down from $33 million in the fourth quarter of 2013 primarily due to lower average investment yields.


The following information was filed by Mbia Inc (MBI) on Monday, March 2, 2015 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
Business Developments And Risks And Uncertainties (assets And Liabilities Held For Sale) (detail)
Consolidated Balance Sheets
Consolidated Balance Sheets (parenthetical)
Consolidated Statement Of Changes In Shareholders' Equity
Consolidated Statement Of Changes In Shareholders' Equity (parenthetical)
Consolidated Statement Of Comprehensive Income (loss)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Operations
Consolidated Statements Of Operations (parenthetical)
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income (changes In The Components Of Aoci) (detail)
Accumulated Other Comprehensive Income (details Of The Reclassification From Aoci) (detail)
Accumulated Other Comprehensive Income (tables)
Business Developments And Risks And Uncertainties
Business Developments And Risks And Uncertainties (narrative) (detail)
Business Developments And Risks And Uncertainties (tables)
Business Segments
Business Segments (narrative) (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 (tables)
Commitments And Contingencies
Commitments And Contingencies (narrative) (detail)
Common And Preferred Stock
Common And Preferred Stock (narrative) (detail)
Debt
Debt (aggregate Maturity Of Debt Obligations) (detail)
Debt (long-term Debt) (detail)
Debt (narrative) (detail)
Debt (principal Payments For Investment Agreements, Mtns And Vie Obligations) (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 (computation Of Basic And Diluted Earnings Per Share) (detail)
Earnings Per Share (narrative) (detail)
Earnings Per Share (tables)
Fair Value Of Financial Instruments
Fair Value Of Financial Instruments (aggregate Fair Value And Remaining Contractual Principal Balance Outstanding On Fair Value Option) (detail)
Fair Value Of Financial Instruments (changes In Level 3 Assets And Liabilities Measured At Fair Value On A 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 (fair Value Hierarchy Table Presents The Company's Assets And Liabilities At Fair Value Not Recorded On The Company's Consolidated Balance Sheet) (detail)
Fair Value Of Financial Instruments (gains And Losses On Fair Value Option Included In The Company's Consolidated Statements Of Operations) (detail)
Fair Value Of Financial Instruments (narrative) (detail)
Fair Value Of Financial Instruments (quantitative Information Regarding The Significant Unobservable Inputs For Certain Assets And Liabilities Measured At Fair Value On A Recurring Basis) (detail)
Fair Value Of Financial Instruments (realized And Unrealized Gains And Losses Included In Earnings Pertaining To Level 3 Assets And Liabilities) (detail)
Fair Value Of Financial Instruments (tables)
Income Taxes
Income Taxes (change In Unrecognized Tax Benefits) (detail)
Income Taxes (components Of Deferred Tax Assets And Liabilities) (detail)
Income Taxes (income Before Income Taxes) (detail)
Income Taxes (income Tax Rate Reconciliation) (detail)
Income Taxes (income Taxes And Related Effective Tax Rates) (detail)
Income Taxes (income Taxes 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 Earnings) (detail)
Insurance Regulations And Dividends
Insurance Regulations And Dividends (narrative) (detail)
Investments
Investments (amortized Cost And Fair Value Of Available-for-sale And Held-to-maturity Investment Portfolios) (detail)
Investments (average Credit Ratings For Securities Rated Below Investment Grade Without The Effect Of Financial Guarantees) (detail)
Investments (credit Losses Recognized In Earnings Related To Otti Losses Recognized In Accumulated Other Comprehensive Income (loss)) (detail)
Investments (credit Ratings Of Asset-backed And Mortgage-backed Securities And Corporate Obligations In Available-for-sale Investments For Which Fair Value Was Less Than Amortized Cost) (detail)
Investments (distribution By Contractual Maturity Of Available-for-sale And Held-to-maturity Investments) (detail)
Investments (distribution Of Securities By Percentage Of Fair Value Below Book Value By More Than 5% For A Continuous Twelve Month Period Or Longer) (detail)
Investments (gross Unrealized Losses Related To Available-for-sale And Held-to-maturity Investments) (detail)
Investments (narrative) (detail)
Investments (net Realized Gains (losses) From Sales Of Available-for-sale Securities) (detail)
Investments (securities Held In Unrealized Loss Position And Insured By Financial Guarantor) (detail)
Investments (tables)
Long-term Incentive Plans
Long-term Incentive Plans (narrative) (detail)
Long-term Incentive Plans (outstanding And Exercisable 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 (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, Before The Elimination Of 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 Present Value Of The Probability-weighted Future Claim Payments And Recoveries) (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 (narrative) (detail)
Pension And Profit- Sharing Plans
Recent Accounting Pronouncements
Related Party Transactions
Related Party Transactions (narrative) (detail)
Schedule I- Investments
Schedule I- Investments (detail)
Schedule Ii (condensed Balance Sheets) (detail)
Schedule Ii (condensed Statements Of Comprehensive Income (loss)) (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 Ii- Parent Company Financials
Schedule Iv - (reinsurance) (detail)
Schedule Iv - Reinsurance
Significant Accounting Policies
Significant Accounting Policies (policies)
Significant Accounting Policies (tables)
Significant Accounting Policies (useful Lives Of Each Class Of Assets) (details)
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: 0001193125-15-073382
Submitted to the SEC: Mon Mar 02 2015 4:38:49 PM EST
Accepted by the SEC: Mon Mar 02 2015
Period: Wednesday, December 31, 2014
Industry: Surety Insurance

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