MBIA Inc. Reports Second Quarter 2011 Financial Results

MBIA Inc. (NYSE: MBI) (the Company) today reported Adjusted Book Value (ABV) per share (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) of $37.22 as of June 30, 2011, compared with $35.57 as of March 31, 2011. Book value per share was $9.56 as of June 30, 2011.

Adjusted pre-tax income, a non-GAAP measure (defined in the attached Explanation of Non-GAAP Financial Measures), for the second quarter of 2011 was $161 million compared with adjusted pre-tax income of $48 million for the second quarter of 2010. The increase in adjusted pre-tax income for the three months ended June 30, 2011 relative to the comparable quarter of 2010 resulted principally from a reduction in insurance losses driven by the early settlements of insured credit default swaps at amounts below previously established credit impairments, partially offset by losses related to fair valuing interest rate swaps and adverse changes in foreign currency exchange rates in the Company’s wind-down operations. ABV and adjusted pre-tax income provide investors with additional views of the Company’s operating results that management finds useful in measuring financial performance.

Net income available to common shareholders for the second quarter of 2011 was $137 million, or $0.68 per share, compared with net income of $1.3 billion, or $6.32 per share, for the second quarter of 2010. The Company’s results for the second quarter of 2011 were driven by a gain on insured credit derivatives associated with commutation activity, and a $283 million income tax provision benefit related to a change in the Company’s projection of its full year effective tax rate.

"Overall, our results for the second quarter were positive,” said MBIA Inc. President and Chief Financial Officer Chuck Chaplin. "New delinquencies in our second lien mortgage book were consistent with our expectations, and payments continued to be somewhat below what our models predicted. We also achieved substantial reductions in future volatility by commuting a number of CDO transactions. Reductions in statutory reserves for RMBS and ABS CDOs more than offset increases in reserves for CMBS. Although we had a setback in our Transformation-related litigation, we continued to make progress in our residential mortgage putback cases.”

Second Quarter 2011 Segment Results

The following is a summary of pre-tax results by segment for the second quarter:

($ in millions)							Structured
		U.S. Public					Finance and						Advisory
		Finance					International						Services						Corporate						Wind-down						Consolidated
2Q 2011 Pre-tax Income		$	144				$	(125	)				$	(3	)				$	(2	)				$	(168	)				$	(147	)
2Q 2010 Pre-tax Income		$	128				$	1,829					$	0					$	(9	)				$	11					$	1,968
2Q 2011 Adj. Pre-tax Income		$	144				$	189					$	(3	)				$	(2	)				$	(168	)				$	161
2Q 2010 Adj. Pre-tax Income		$	128				$	(86	)				$	0					$	(9	)				$	11					$	48

U.S. Public Finance Results

The Company’s U.S. public finance insurance business is conducted through its National Public Finance Guarantee Corp. (National) subsidiary.

National recorded $144 million of adjusted pre-tax income in the second quarter of 2011 compared with $128 million of adjusted pre-tax income in the second quarter of 2010. The increase in adjusted pre-tax income resulted from an improvement in loss and loss adjustment expenses.

National's insured portfolio generated total premiums earned of $106 million in the second quarter of 2011 compared with $119 million in total premiums earned in the second quarter of 2010. The decline in total premiums earned resulted from amortization of National’s insured portfolio and lower refunding activity in the quarter.

Net investment income for National declined 3 percent to $54 million in the second quarter of 2011 from $56 million in the comparable period of 2010 due to lower average yields. Since the second quarter of 2010, National’s investment portfolio increased in size by 1 percent, to $5.4 billion at June 30, 2011.

Fees and reimbursements were $1.6 million in the second quarter of 2011 compared with $2.8 million in the second quarter of 2010. The decline in fees and reimbursements was primarily attributable to lower waiver and consent fees in the second quarter of 2011.

National recorded a net benefit to loss and loss adjustment expenses of $9 million in the second quarter of 2011 compared with loss and loss adjustment expenses of $10 million in the second quarter of 2010. The net benefit in the second quarter of 2011 was primarily the result of a decrease in loss reserves on an insured affordable housing transaction following its remediation.

Operating expenses were $19 million in the second quarter of 2011, up 15 percent from $17 million in the comparable period of 2010. The increase in operating expenses was driven by higher legal and allocated overhead expenses, partially offset by lower compensation expenses.

As of June 30, 2011, National’s statutory capital was $2.6 billion and its claims-paying resources totaled $5.7 billion.

Structured Finance and International Insurance Results

The Structured Finance and International Insurance business is conducted through MBIA Corp. and its subsidiaries.

Adjusted pre-tax income for the Structured Finance and International Insurance segment for the second quarter of 2011 was $189 million compared with an adjusted pre-tax loss of $86 million for the second quarter of 2010. Premiums earned, net investment income, fees and reimbursements, and premiums and fees on insured derivatives totaled $145 million in the second quarter of 2011. Losses, credit impairments (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) and loss-related expenses on insured exposures were a benefit of $150 million in the second quarter while all other line items in the aggregate had a net $106 million negative impact on adjusted pre-tax income.

The following is a summary of all insured portfolio economic loss activity in the second quarter. Economic losses for a reporting period represent the change in the Company’s estimate of the present value of expected net future claims payments without regard to the manner in which they are presented in the Company’s financial statements.

2Q 2011 Economic Loss (Benefit) Activity
($ in thousands)			RMBS				ABS CDOs				CMBS				Other				Total
Change in Expected Payments			$52,549				($409,411)				$233,092				$44,570				($79,200)
Change in Expected Salvage			(68,575)				9,435				(36)				(11,677)				(70,853)
Total Economic Losses (Benefit)			($16,026)				($399,976)				$233,056				$32,893				($150,053)

In the second quarter, the Company increased its expectations of future payments on RMBS exposures by $53 million. However, the increase in expected future claims payments was more than offset by additional expected recoveries of $69 million primarily from contractual claims related to ineligible mortgages. The Company’s estimates for expected recoveries related to "putbacks” of ineligible mortgages totaled $2.7 billion as of June 30, 2011. However, based on the Company’s assessment of the strength of its contract claims, the Company continues to believe it is entitled to collect the full amount of its cumulative incurred losses, which totaled $4.6 billion as of June 30, 2011, from those securitization sponsors against whom it is pursuing litigation.

Since the end of the first quarter of 2011, MBIA Corp. has reached agreements with five counterparties for commutations of transactions including multi-sector CDOs and investment grade corporate CDOs. Commutation agreements with two of the parties were closed in the second quarter, an agreement with one counterparty was reached during the second quarter and subsequently closed in the third quarter, while agreements with the remaining two counterparties were reached and are expected to close in the third quarter. When fully consummated, the five commutation agreements will have eliminated $8.7 billion in gross insured exposure.

In the second quarter of 2011, the Company estimated $233 million of incremental economic losses on certain insured transactions backed by pools of commercial mortgage-backed securities (CMBS). While the Company continues to observe evidence of improving trends in the CMBS market overall, including a deceleration in the pace of increases in delinquency rates and an increase in material loan modifications, these positive factors were offset by some deductible erosion and projected deterioration in several insured transactions.

Certain losses are on policies subject to insurance accounting while other categories of loss relate to insured VIEs or insured credit derivatives for which GAAP specifies alternative accounting. The following is a summary of second quarter economic losses based on those categories:

2Q 2011 Economic Losses (Benefit)
($ in thousands)
Change in Expected Payments			$69,696
Change in Insurance Recoveries			(10,833)
Loss & LAE Expense on Policies Subject to Insurance Accounting			58,863
Credit Impairments on Insured VIEs			9,868
Credit Impairments on Insured Credit Derivatives			(219,555)
LAE on Insured Credit Derivatives			771
Credit Impairments and LAE on Insured Credit Derivatives			(218,784)
Total Economic Losses (Benefit)			($150,053)

In the second quarter of 2011, MBIA Corp. paid a total of $237 million in claims and LAE, net of reinsurance and collections, in connection with its residential mortgage exposures compared to $231 million in the first quarter of 2011 and $407 million in the second quarter of 2010.

The Company’s net derivative liability (the cumulative negative mark-to-market) with respect to insured credit derivatives was $5.7 billion as of June 30, 2011. The Company currently has approximately $2.0 billion in statutory loss reserves in connection with these insured credit derivatives. The Company expects the $3.7 billion unimpaired portion of the unrealized net loss in fair value (mark-to-market) to be reversed prior to or upon the maturities of the insured credit derivatives.

As of June 30, 2011, MBIA Corp.’s statutory balance sheet reflected $2.6 billion in cash and invested assets including $815 million of cash and short-term investments. Cash, short-term investments and other highly liquid investments available to meet liquidity demands totaled $1.1 billion as of June 30, 2011, excluding amounts held by subsidiaries. The Company believes that MBIA Corp.’s liquidity resources will adequately provide for anticipated cash outflows.

MBIA Corp. had statutory capital of $2.9 billion and claims-paying resources totaling $4.3 billion at June 30, 2011.

Advisory Services

The Company’s Advisory Services business is primarily conducted in its Cutwater Asset Management subsidiaries. Cutwater recorded a pre-tax loss of $3 million in the second quarter of 2011 driven by expenses associated with positioning it for future growth.

Cutwater’s average assets under management in the second quarter were $39.8 billion, down 3 percent from $41.0 billion in the first quarter of 2011. Third-party average assets under management in the second quarter totaled $25.5 billion, down 3 percent from $26.2 billion in the first quarter of 2011.

Corporate Segment

The Corporate segment comprises MBIA Inc.’s holding company activities and certain subsidiaries, including Optinuity Alliance Resources Corp. The Corporate segment recorded a pre-tax loss of $2 million in the second quarter of 2011 compared with a pre-tax loss of $9 million in the second quarter of 2010. The Corporate segment’s pre-tax results were positively impacted in the second quarters of 2011 and 2010 by marks-to-market of $12 million and $9 million, respectively, on outstanding warrants on MBIA Inc. common stock.

As of June 30, 2011, the corporate activities of MBIA Inc. had $255 million of cash and highly liquid assets available for general corporate liquidity purposes.

The Company repurchased approximately 3 million shares of its common stock at an average price of $8.27 during the second quarter. As of June 30, 2011, approximately $48 million of repurchase authorization remained available under the Company's $1.0 billion share buyback program.

Wind-down Operations

The Company’s wind-down operations comprise its Asset Liability Management (ALM) and Conduit businesses, both of which are in run-off.

The Company’s wind-down operations recorded a pre-tax loss of $168 million in the second quarter of 2011 compared with pre-tax income of $11 million in the second quarter of 2010. The pre-tax loss in the second quarter of 2011 was driven by a $133 million net loss on financial instruments at fair value and foreign exchange, primarily from mark-to-market losses resulting from a combination of an improved market perception of MBIA Corp.’s credit quality as well as adverse movements in interest rates and currency exchange rates.

During the second quarter, the ALM business repaid an additional $200 million of its original $2.0 billion secured loan from MBIA Corp. The remaining outstanding balance of the secured loan was $600 million as of June 30, 2011.

Conference Call

The Company will host a webcast and conference call for investors tomorrow, Wednesday, August 10, 2011 at 8:00 AM (EDT) to discuss its second quarter 2011 financial results and other matters relating to the Company. The webcast and conference call will consist of brief remarks followed by a question and answer session.

The dial-in number for the call is (877) 694-4769 in the U.S. and (404) 665-9935 from outside the U.S. The conference call code is 84149049. A live webcast of the conference call will also be accessible on www.mbia.com.

A replay of the call will be available approximately two hours after the completion of the call on August 10 until 11:59 p.m. on August 24 by dialing (855) 859-2056 in the U.S. or (404) 537-3406 from outside the U.S. The replay call code is also 84149049. In addition, a recording of the call will be available on the Company's website approximately two hours after the completion of the call.

Forward-Looking Statements

This release includes statements that are not historical or current facts and are "forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "believe,” "anticipate,” "project,” "plan,” "expect,” "intend,” "will likely result,” "looking forward” or "will continue,” and similar expressions identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected, including, among other risks and uncertainties, the possibility that the Company will experience severe losses or liquidity needs due to increased deterioration in its insurance portfolios and in particular, due to the performance of CDOs including multi-sector, CMBS and CRE CDOs and RMBS, uncertainty regarding whether the Company will realize, or will be delayed in realizing, insurance loss recoveries expected in disputes with sellers/servicers of RMBS transactions at the levels recorded in its financial statements, the possibility that loss reserve estimates are not adequate to cover potential claims, the Company’s ability to access capital and the Company’s exposure to significant fluctuations in liquidity and asset values within the global credit markets, the Company’s ability to fully implement its strategic plan, including its ability to achieve high stable ratings for National or any other insurance subsidiaries, and the Company’s ability to commute certain of its insured exposures, including as a result of limited available liquidity, the Company’s ability to favorably resolve litigation claims against the Company, and changes in general economic and competitive conditions. These and other factors that could affect financial performance or could cause actual results to differ materially from estimates contained in or underlying the Company’s forward-looking statements are discussed under the "Risk Factors” section in MBIA Inc.’s most recent Annual Report on Form 10-K, which may be updated or amended in the Company’s subsequent filings with the Securities and Exchange Commission. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only to their respective dates. The Company undertakes no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such result is not likely to be achieved.

MBIA Inc., headquartered in Armonk, New York is a holding company whose subsidiaries provide financial guarantee insurance, as well as related reinsurance, advisory and portfolio services, for the public and structured finance markets, and asset management advisory services. The Company services its clients around the globe with offices in New York, Denver, San Francisco, Paris, London, Madrid and Mexico City. Please visit MBIA's website at www.mbia.com.

Explanation of Non-GAAP Financial Measures

The following are explanations of why MBIA believes that the non-GAAP financial measures used in this press release, which serve to supplement GAAP information, are meaningful to investors.

Adjusted Book Value: Adjusted Book Value (ABV), a non-GAAP measure, is used by the Company to supplement its analysis of GAAP book value. The Company uses ABV as a measure of fundamental value and considers the change in ABV an important measure of periodic financial performance. ABV adjusts GAAP book value to remove the impact of certain items which the Company believes will reverse over time, as well as to add in the impact of certain items which the Company believes will be realized in GAAP book value in future periods. The Company has limited such adjustments to those items that it deems to be important to fundamental value and performance and which the likelihood and amount can be reasonably estimated. ABV assumes no new business activity. The Company has presented ABV to allow investors and analysts to evaluate the Company using the same measure that MBIA’s management regularly uses to measure financial performance. ABV is not a substitute for and should not be viewed in isolation from GAAP book value.

ABV is calculated on a consolidated basis and a segment basis. ABV by segment provides information about each segment’s contribution to consolidated ABV and is calculated using the same formula.

ABV per share represents that amount of ABV allocated to each common share outstanding at the measurement date.

Adjusted Pre-tax Income: Adjusted pre-tax income, a non-GAAP measure, is used by the Company to supplement its analysis of GAAP pre-tax income. The Company uses adjusted pre-tax income as a measure of fundamental periodic financial performance. Adjusted pre-tax income adjusts GAAP pre-tax income to remove the effects of consolidating insured VIEs and gains and losses related to fair valuing insured credit derivatives, which the Company believes will reverse over time, and adds in changes in the present value of insurance claims the Company expects to pay on insured credit derivatives based on its ongoing insurance loss monitoring and loss adjustment expenses. Adjusted pre-tax income is not a substitute for and should not be viewed in isolation from GAAP pre-tax income and the Company’s definition of adjusted pre-tax income may differ from that used by other companies.

Claims-paying Resources (CPR): CPR is a key measure of the resources available to National and MBIA Corp. to pay claims under their respective insurance policies. CPR consists of total financial resources and reserves calculated on a statutory basis. CPR has been a common measure used by financial guarantee insurance companies to report and compare resources and continues to be used by MBIA’s management to evaluate changes in such resources. The Company has provided CPR to allow investors and analysts to evaluate National and MBIA Corp. using the same measure that MBIA’s management uses to evaluate their resources to pay claims under their respective insurance policies. There is no directly comparable GAAP measure.

Credit Impairments on Insured Derivatives: Credit impairments on insured derivatives represent actual payments for the period plus the present value of the Company’s estimate of expected future claim payments for such transactions, using a discount rate required by statutory accounting principles, plus loss adjustment expenses. Since the Company’s insured credit derivatives have similar terms, conditions, risks, and economic profiles to its financial guarantee insurance policies, the Company evaluates them for impairment periodically in the same way that it estimates loss and LAE for its financial guarantee insurance policies. Credit impairments on insured derivatives are equal to the Company’s statutory losses and loss adjustment expenses for such contracts.

Credit impairments on insured derivatives may differ from the fair values recorded in the Company’s financial statements. The Company expects that the majority of its exposure written in derivative form will not be settled at fair value. The fair value of an insured derivative contract will be influenced by a variety of market and transaction-specific factors that may be unrelated to potential future claim payments. In the absence of credit impairments or the termination of derivatives at losses, the cumulative unrealized losses recorded from fair valuing insured derivatives should reverse before or at the maturity of the contracts. Contracts also may be settled prior to maturity at amounts that may be more or less than their recorded fair values. Those settlements can result in realized gains or losses, and the reversal of unrealized losses. For these reasons, the Company believes its disclosure of credit impairments on insured derivatives provides additional meaningful information to investors about potential realized losses on these contracts.

MBIA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in thousands)
							June 30, 2011						December 31, 2010
Assets
	Investments:
		Fixed-maturity securities held as available-for-sale, at fair value (amortized cost
		$8,467,567 and $9,678,603)					$	8,155,038					$	9,092,060
		Fixed-maturity securities at fair value						182,484						25,041
		Investments pledged as collateral, at fair value (amortized cost $581,564 and $547,800)						598,777						551,688
		Short-term investments held as available-for-sale, at fair value (amortized
		cost $1,761,299 and $2,072,955)						1,753,991						2,070,320
		Other investments (includes investments at fair value of $158,332 and $185,688)						160,399						187,849
		Total investments						10,850,689						11,926,958
	Cash and cash equivalents							626,063						365,841
	Accrued investment income							91,495						95,320
	Premiums receivable							1,428,620						1,589,005
	Deferred acquisition costs							374,590						412,001
	Prepaid reinsurance premiums							93,539						97,270
	Insurance loss recoverable							2,657,509						2,531,494
	Reinsurance recoverable on paid and unpaid losses							19,709						15,111
	Goodwill							31,371						31,371
	Property and equipment, at cost (less accumulated depreciation of $136,032 and $135,127)							69,669						71,385
	Receivable for investments sold							75,954						7,948
	Derivative assets							2,737						3,780
	Current income taxes							-						41,388
	Deferred income taxes, net							1,574,162						907,531
	Other assets							45,559						45,195
	Assets of consolidated VIEs:
		Cash						734,877						763,891
		Investments held-to-maturity, at amortized cost (fair value $3,702,516 and $3,759,915)						3,934,051						4,038,568
		Fixed-maturity securities held as available-for-sale, at fair value
		(amortized cost $278,709 and $338,013)						280,026						338,630
		Fixed-maturity securities at fair value						4,835,141						5,240,742
		Loans receivable at fair value						2,320,278						2,183,364
		Loan repurchase commitments						905,480						835,047
		Derivative assets						680,534						699,072
		Other assets						36,148						38,099
		Total assets					$	31,668,201					$	32,279,011
Liabilities and Equity
	Liabilities:
		Unearned premium revenue					$	3,801,242					$	4,145,234
		Loss and loss adjustment expense reserves						864,725						1,129,358
		Reinsurance premiums payable						69,186						71,151
		Investment agreements						1,632,515						2,005,326
		Medium-term notes (includes financial instruments carried at
		fair value $205,577 and $116,310)						1,763,519						1,739,507
		Securities sold under agreements to repurchase						386,701						470,570
		Short-term debt						-						64,768
		Long-term debt						1,842,694						1,850,532
		Current income taxes						22,521						-
		Deferred fee revenue						8,719						9,995
		Payable for settlement of derivatives and investments purchased						235,192						2,173
		Derivative liabilities						5,933,848						4,616,509
		Other liabilities						232,511						272,391
		Liabilities of consolidated VIEs:
		Variable interest entity notes (includes financial instruments carried
		at fair value $6,538,581 and $6,679,982)						10,448,587						10,589,989
		Long-term debt						360,000						360,000
		Derivative liabilities						2,160,476						2,104,242
		Other liabilities						720						968
		Total liabilities						29,763,156						29,432,713
	Equity:
		Common stock						274,922						274,720
		Additional paid-in capital						3,065,734						3,063,914
		Retained earnings						985,993						2,123,566
		Accumulated other comprehensive loss						(195,339	)					(405,484	)
		Treasury stock						(2,250,668	)					(2,224,577	)
		Total shareholders' equity of MBIA Inc.						1,880,642						2,832,139
		Preferred stock of subsidiary and noncontrolling interest						24,403						14,159
		Total equity						1,905,045						2,846,298
		Total liabilities and equity					$	31,668,201					$	32,279,011

MBIA INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS (Unaudited)
(in thousands)
	Three Months Ended June 30, 2011						U.S. Public Finance Insurance				Structured Finance and International Insurance				Advisory Services				Corporate				Wind-down Operations				Subtotal				Intercompany Eliminations				Consolidated
	Revenues:
		Premiums earned:
		Scheduled premiums earned					$	75,196			$	54,921			$	-			$	-			$	-			$	130,117			$	(14,228	)		$	115,889
		Refunding premiums earned						30,942				8,047				-				-				-				38,989				(5,732	)			33,257
			Total premiums earned					106,138				62,968				-				-				-				169,106				(19,960	)			149,146
		Net investment income						54,108				17,026				20				(734	)			19,816				90,236				4,845				95,081
		Fees and reimbursements						1,590				26,721				16,959				22,489				-				67,759				(57,201	)			10,558
		Change in fair value of insured derivatives:
			Realized gains (losses) and other settlements on
			insured derivatives					1,461				(192,695	)			-				-				-				(191,234	)			(4	)			(191,238	)
			Unrealized gains (losses) on insured derivatives					(3	)			115,742				-				-				-				115,739				-				115,739
			Net change in fair value of insured derivatives					1,458				(76,953	)			-				-				-				(75,495	)			(4	)			(75,499	)
		Net gains (losses) on financial instruments at fair value
		and foreign exchange						13,840				536				19				16,103				(133,482	)			(102,984	)			-				(102,984	)
		Investment losses related to other-than-temporary impairments:
			Investment losses related to other-than-temporary
			impairments					-				(1,875	)			-				-				(3,977	)			(5,852	)			117				(5,735	)
			Other-than-temporary impairments recognized in
			accumulated other comprehensive loss					-				55				-				-				(14,047	)			(13,992	)			-				(13,992	)
			Net investment losses related to other-than-temporary
			impairments					-				(1,820	)			-				-				(18,024	)			(19,844	)			117				(19,727	)
		Net losses on extinguishment of debt						-				-				-				(26	)			-				(26	)			-				(26	)
		Other net realized gains (losses)						-				(490	)			-				122				489				121				-				121
		Revenues of consolidated VIEs:
			Net investment income					-				13,224				-				-				3,395				16,619				-				16,619
			Net gains on financial instruments at fair value
			and foreign exchange					-				17,441				-				-				1,301				18,742				3,376				22,118
			Other net realized gains					-				-				-				-				-				-				2,722				2,722
			Total revenues					177,134				58,653				16,998				37,954				(126,505	)			164,234				(66,105	)			98,129
	Expenses:
		Losses and loss adjustment						(8,780	)			58,863				-				-				-				50,083				-				50,083
		Amortization of deferred acquisition costs						22,438				40,475				-				-				-				62,913				(40,246	)			22,667
		Operating						19,321				32,398				19,918				25,111				2,657				99,405				(24,434	)			74,971
		Interest						-				33,524				-				14,420				33,038				80,982				(6,076	)			74,906
		Expenses of consolidated VIEs:
			Operating					-				7,384				-				-				697				8,081				(1,183	)			6,898
			Interest					-				10,520				-				-				4,694				15,214				-				15,214
			Total expenses					32,979				183,164				19,918				39,531				41,086				316,678				(71,939	)			244,739
	Pre-tax income (loss)						$	144,155			$	(124,511	)		$	(2,920	)		$	(1,577	)		$	(167,591	)		$	(152,444	)		$	5,834				(146,610	)
		Benefit for income taxes																																		(283,155	)
	Net income																																		$	136,545

MBIA INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS (Unaudited)
(in thousands)
													Structured Finance and International Insurance
									U.S. Public Finance Insurance
	Three Months Ended June 30, 2010																Advisory Services								Wind-down Operations								Intercompany Eliminations
																					Corporate								Subtotal								Consolidated
	Revenues:
		Premiums earned:
			Scheduled premiums earned						$	86,261			$	64,273			$	-			$	-			$	-			$	150,534			$	(19,715	)		$	130,819
			Refunding premiums earned							33,026				99				-				-				-				33,125				(7,619	)			25,506
				Total premiums earned						119,287				64,372				-				-				-				183,659				(27,334	)			156,325
		Net investment income								55,712				23,618				(115	)			2,164				25,424				106,803				625				107,428
		Fees and reimbursements								2,790				26,644				17,611				20,979				-				68,024				(56,919	)			11,105
		Change in fair value of insured derivatives:
			Realized gains (losses) and other settlements on
				insured derivatives						103				(64,251	)			-				-				-				(64,148	)			-				(64,148	)
			Unrealized gains on insured derivatives							46				1,537,880				-				-				-				1,537,926				-				1,537,926
				Net change in fair value of insured derivatives						149				1,473,629				-				-				-				1,473,778				-				1,473,778
		Net gains (losses) on financial instruments at fair value
			and foreign exchange							1,323				(16,478	)			49				8,512				4,876				(1,718	)			-				(1,718	)
		Investment losses related to other-than-temporary impairments:
			Investment losses related to other-than-temporary
				impairments						-				(94	)			-				-				(21,668	)			(21,762	)			-				(21,762	)
			Other-than-temporary impairments recognized in
				accumulated other comprehensive loss						-				(1,267	)			-				-				9,907				8,640				-				8,640
				Net investment losses related to other-than-temporary
				impairments						-				(1,361	)			-				-				(11,761	)			(13,122	)			-				(13,122	)
		Net gains (losses) on extinguishment of debt								-				-				-				(9	)			17,552				17,543				-				17,543
		Other net realized gains (losses)								(12	)			19,572				(137	)			-				(255	)			19,168				-				19,168
		Revenues of consolidated VIEs:
			Net investment income							-				10,392				-				-				2,267				12,659				-				12,659
			Net gains on financial instruments at fair value
				and foreign exchange						-				264,145				-				-				20,915				285,060				5,806				290,866
			Net gains on extinguishment of debt							-				-				-				-				3,530				3,530				-				3,530
			Total revenues							179,249				1,864,533				17,408				31,646				62,548				2,155,384				(77,822	)			2,077,562
	Expenses:
		Losses and loss adjustment								10,263				(82,803	)			-				-				-				(72,540	)			-				(72,540	)
		Amortization of deferred acquisition costs								24,252				38,419				-				-				-				62,671				(48,641	)			14,030
		Operating								16,855				32,257				17,698				24,969				4,462				96,241				(27,736	)			68,505
		Interest								-				33,844				-				16,168				42,926				92,938				(12,043	)			80,895
		Expenses of consolidated VIEs:
			Operating							-				3,503				-				-				578				4,081				147				4,228
			Interest							-				10,275				-				-				3,686				13,961				-				13,961
			Total expenses							51,370				35,495				17,698				41,137				51,652				197,352				(88,273	)			109,079
	Pre-tax income (loss)								$	127,879			$	1,829,038			$	(290	)		$	(9,491	)		$	10,896			$	1,958,032			$	10,451				1,968,483
		Provision for income taxes																																				673,167
	Net income																																				$	1,295,316

MBIA INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS (Unaudited)
(in thousands)
							U.S. Public Finance Insurance				Structured Finance and International Insurance				Advisory Services				Corporate				Wind-down Operations				Subtotal				Intercompany Eliminations				Consolidated
	Six Months Ended June 30, 2011
	Revenues:
		Premiums earned:
			Scheduled premiums earned				$	151,686			$	122,081			$	-			$	-			$	-			$	273,767			$	(30,123	)		$	243,644
			Refunding premiums earned					43,428				8,109				-				-				-				51,537				(8,837	)			42,700
				Total premiums earned				195,114				130,190				-				-				-				325,304				(38,960	)			286,344
		Net investment income						112,150				48,451				38				(469	)			40,973				201,143				8,269				209,412
		Fees and reimbursements						3,200				54,069				31,715				45,571				-				134,555				(110,046	)			24,509
		Change in fair value of insured derivatives:
			Realized gains (losses) and other settlements on
				insured derivatives				1,583				(547,204	)			-				-				-				(545,621	)			(8	)			(545,629	)
			Unrealized losses on insured derivatives					(84	)			(1,306,916	)			-				-				-				(1,307,000	)			-				(1,307,000	)
				Net change in fair value of insured derivatives				1,499				(1,854,120	)			-				-				-				(1,852,621	)			(8	)			(1,852,629	)
		Net gains (losses) on financial instruments at fair value
			and foreign exchange					17,426				33,314				38				39,045				(216,335	)			(126,512	)			-				(126,512	)
		Net investment losses related to other-than-temporary impairments:
			Investment losses related to other-than-temporary
				impairments				-				(2,080	)			-				-				(11,327	)			(13,407	)			117				(13,290	)
			Other-than-temporary impairments recognized in
				accumulated other comprehensive loss				-				(1,974	)			-				-				(17,811	)			(19,785	)			-				(19,785	)
				Net investment losses related to other-than-temporary
				impairments				-				(4,054	)			-				-				(29,138	)			(33,192	)			117				(33,075	)
		Net gains (losses) on extinguishment of debt						-				-				-				(41	)			23,484				23,443				2,422				25,865
		Other net realized gains						-				461				-				122				4,148				4,731				-				4,731
		Revenues of consolidated VIEs:
			Net investment income					-				26,365				-				-				7,213				33,578				-				33,578
			Net gains (losses) on financial instruments at fair value
				and foreign exchange				-				(113,024	)			-				-				12,044				(100,980	)			16,421				(84,559	)
			Other net realized gains					-				-				-				-				-				-				2,722				2,722
			Total revenues					329,389				(1,678,348	)			31,791				84,228				(157,611	)			(1,390,551	)			(119,063	)			(1,509,614	)
	Expenses:
		Losses and loss adjustment						(5,435	)			19,365				-				-				-				13,930				-				13,930
		Amortization of deferred acquisition costs						41,920				73,538				-				-				-				115,458				(76,279	)			39,179
		Operating						37,823				69,038				36,187				50,843				5,800				199,691				(49,488	)			150,203
		Interest						-				67,052				-				29,488				65,882				162,422				(12,620	)			149,802
		Expenses of consolidated VIEs:
			Operating					-				17,779				-				-				1,428				19,207				(2,600	)			16,607
			Interest					-				21,044				-				-				9,503				30,547				-				30,547
			Total expenses					74,308				267,816				36,187				80,331				82,613				541,255				(140,987	)			400,268
	Pre-tax income (loss)						$	255,081			$	(1,946,164	)		$	(4,396	)		$	3,897			$	(240,224	)		$	(1,931,806	)		$	21,924				(1,909,882	)
		Benefit for income taxes																																		(772,310	)
	Net loss																																		$	(1,137,572	)

MBIA INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS (Unaudited)
(in thousands)
							U.S. Public Finance Insurance				Structured Finance and International Insurance				Advisory Services				Corporate				Wind-down Operations				Subtotal				Intercompany Eliminations				Consolidated
	Six Months Ended June 30, 2010
	Revenues:
		Premiums earned:
			Scheduled premiums earned				$	173,799			$	131,336			$	-			$	-			$	-			$	305,135			$	(42,014	)		$	263,121
			Refunding premiums earned					59,779				4,340				-				-				-				64,119				(14,098	)			50,021
				Total premiums earned				233,578				135,676				-				-				-				369,254				(56,112	)			313,142
		Net investment income						117,453				57,667				(304	)			7,419				51,912				234,147				(4,795	)			229,352
		Fees and reimbursements						17,402				150,952				33,717				44,466				-				246,537				(113,453	)			133,084
		Change in fair value of insured derivatives:
			Realized gains (losses) and other settlements on
				insured derivatives				205				(98,483	)			-				-				-				(98,278	)			-				(98,278	)
			Unrealized losses on insured derivatives					(38	)			(673,461	)			-				-				-				(673,499	)			-				(673,499	)
				Net change in fair value of insured derivatives				167				(771,944	)			-				-				-				(771,777	)			-				(771,777	)
		Net gains (losses) on financial instruments at fair value
			and foreign exchange					3,885				(14,128	)			973				(17,922	)			(20,332	)			(47,524	)			-				(47,524	)
		Net investment losses related to other-than-temporary impairments:
			Investment losses related to other-than-temporary
				impairments				-				(285	)			-				-				(186,887	)			(187,172	)			-				(187,172	)
			Other-than-temporary impairments recognized in
				accumulated other comprehensive loss				-				(3,604	)			-				-				147,922				144,318				-				144,318
				Net investment losses related to other-than-temporary
				impairments				-				(3,889	)			-				-				(38,965	)			(42,854	)			-				(42,854	)
		Net gains (losses) on extinguishment of debt						-				-				-				(9	)			17,550				17,541				-				17,541
		Other net realized gains (losses)						(101	)			19,573				(137	)			-				(22	)			19,313				-				19,313
		Revenues of consolidated VIEs:
			Net investment income					-				20,772				-				-				7,057				27,829				-				27,829
			Net gains on financial instruments at fair value
				and foreign exchange				-				370,237				-				-				31,068				401,305				12,496				413,801
			Net gains on extinguishment of debt					-				-				-				-				3,530				3,530				-				3,530
			Other net realized losses					-				(74,244	)			-				-				-				(74,244	)			-				(74,244	)
			Total revenues					372,384				(109,328	)			34,249				33,954				51,798				383,057				(161,864	)			221,193
	Expenses:
		Losses and loss adjustment						36,158				105,701				-				-				-				141,859				-				141,859
		Amortization of deferred acquisition costs						46,671				86,841				-				-				-				133,512				(96,734	)			36,778
		Operating						29,804				58,270				31,403				51,986				8,108				179,571				(48,568	)			131,003
		Interest						-				68,581				-				33,049				90,834				192,464				(27,243	)			165,221
		Expenses of consolidated VIEs:
			Operating					-				9,700				-				-				1,112				10,812				(1,161	)			9,651
			Interest					-				20,655				-				-				6,969				27,624				-				27,624
			Total expenses					112,633				349,748				31,403				85,035				107,023				685,842				(173,706	)			512,136
	Pre-tax income (loss)						$	259,751			$	(459,076	)		$	2,846			$	(51,081	)		$	(55,225	)		$	(302,785	)		$	11,842				(290,943	)
		Benefit for income taxes																																		(106,023	)
	Net loss																																		$	(184,920	)

MBIA INC. AND SUBSIDIARIES
ADJUSTED PRE-TAX INCOME
(in thousands)
Three Months Ended June 30, 2011									U.S. Public Finance Insurance				Structured Finance and International Insurance				Advisory Services				Corporate				Wind-down Operations				Intercompany Eliminations				Consolidated
Revenues:
	Net premiums earned								$	106,138			$	67,040			$	-			$	-			$	-			$	(19,960	)		$	153,218
	Net investment income									54,108				25,439				20				(734	)			19,816				4,976				103,625
	Fees and reimbursements									1,590				26,721				16,959				22,489				-				(56,028	)			11,731
	Premiums and fees on insured derivatives									1,461				25,612				-				-				-				(4	)			27,069
	Net gains (losses) on financial instruments at
		fair value and foreign exchange								13,840				688				19				16,103				(133,482	)			-				(102,832	)
	Net investment losses related to other-than-
		temporary impairments								-				(1,819	)			-				-				(18,024	)			-				(19,843	)
	Net losses on extinguishment of debt									-				-				-				(26	)			-				-				(26	)
	Other net realized gains (losses)									-				(490	)			-				122				489				-				121
	VIE Revenues									-				-				-				-				4,696				-				4,696
		Total revenues								177,137				143,191				16,998				37,954				(126,505	)			(71,016	)			177,759
Expenses:
	Losses and loss adjustment									(8,780	)			68,731				-				-				-				-				59,951
	Insured credit derivative impairments and LAE									-				(218,784	)			-				-				-				-				(218,784	)
	Amortization of deferred acquisition costs									22,438				40,471				-				-				-				(40,246	)			22,663
	Operating									19,321				30,616				19,918				25,111				2,657				(24,434	)			73,189
	Interest									-				33,524				-				14,420				33,038				(6,076	)			74,906
	VIE expenses									-				-				-				-				5,391				(263	)			5,128
		Total expenses								32,979				(45,442	)			19,918				39,531				41,086				(71,019	)			17,053
Adjusted pre-tax income (loss)									$	144,158			$	188,633			$	(2,920	)		$	(1,577	)		$	(167,591	)		$	3			$	160,706
Additions to adjusted pre-tax income (loss):
	Impact of consolidating certain VIEs									-				37,553				-				-				-				5,831				43,384
	Mark-to-market on insured credit derivatives									(3	)			87,949				-				-				-				-				87,946
Subtractions from adjusted pre-tax income (loss):
	Impairments and LAE on insured credit derivatives									-				438,646				-				-				-				-				438,646
GAAP pre-tax income (loss)									$	144,155			$	(124,511	)		$	(2,920	)		$	(1,577	)		$	(167,591	)		$	5,834			$	(146,610	)

MBIA INC. AND SUBSIDIARIES
ADJUSTED PRE-TAX INCOME
(in thousands)
Three Months Ended June 30, 2010									U.S. Public Finance Insurance				Structured Finance and International Insurance				Advisory Services				Corporate				Wind-down Operations				Intercompany Eliminations				Consolidated
Revenues:
	Net premiums earned								$	119,287			$	71,574			$	-			$	-			$	-			$	(27,334	)		$	163,527
	Net investment income									55,712				27,657				(115	)			2,164				25,424				897				111,739
	Fees and reimbursements									2,790				26,644				17,611				20,979				-				(57,978	)			10,046
	Premiums and fees on insured derivatives									103				26,127				-				-				-				-				26,230
	Net gains on financial instruments at
		fair value and foreign exchange								1,323				3,622				49				8,513				4,875				-				18,382
	Net investment losses related to other-than-
		temporary impairments								-				(1,361	)			-				-				(11,761	)			-				(13,122	)
	Net gains (losses) on extinguishment of debt									-				-				-				(10	)			17,553				-				17,543
	Other net realized gains (losses)									(12	)			19,572				(137	)			-				(256	)			-				19,167
	VIE Revenues									-				-				-				-				26,713				-				26,713
		Total revenues								179,203				173,835				17,408				31,646				62,548				(84,415	)			380,225
Expenses:
	Losses and loss adjustment									10,263				(203,218	)			-				-				-				-				(192,955	)
	Insured credit derivative impairments and LAE									-				356,571				-				-				-				-				356,571
	Amortization of deferred acquisition costs									24,252				39,093				-				-				-				(48,641	)			14,704
	Operating									16,855				33,207				17,698				24,969				4,462				(27,736	)			69,455
	Interest									-				33,844				-				16,168				42,926				(12,043	)			80,895
	VIE expenses									-				-				-				-				4,264				(472	)			3,792
		Total expenses								51,370				259,497				17,698				41,137				51,652				(88,892	)			332,462
Adjusted pre-tax income (loss)									$	127,833			$	(85,662	)		$	(290	)		$	(9,491	)		$	10,896			$	4,477			$	47,763
Additions to adjusted pre-tax income (loss):
	Impact of consolidating certain VIEs									-				98,116				-				-				-				5,974				104,090
	Mark-to-market on insured credit derivatives									46				1,550,164				-				-				-				-				1,550,210
Subtractions from adjusted pre-tax income (loss):
	Impairments and LAE on insured credit derivatives									-				(266,420	)			-				-				-				-				(266,420	)
GAAP pre-tax income (loss)									$	127,879			$	1,829,038			$	(290	)		$	(9,491	)		$	10,896			$	10,451			$	1,968,483

MBIA INC. AND SUBSIDIARIES
ADJUSTED PRE-TAX INCOME
(in thousands)
Six Months Ended June 30, 2011									U.S. Public Finance Insurance				Structured Finance and International Insurance				Advisory Services				Corporate				Wind-down Operations				Intercompany Eliminations				Consolidated
Revenues:
	Net premiums earned								$	195,114			$	138,953			$	-			$	-			$	-			$	(38,960	)		$	295,107
	Net investment income									112,150				73,711				38				(469	)			40,973				8,662				235,065
	Fees and reimbursements									3,200				54,069				31,715				45,571				-				(108,600	)			25,955
	Premiums and fees on insured derivatives									1,583				57,696				-				-				-				(8	)			59,271
	Net gains (losses) on financial instruments at
		fair value and foreign exchange								17,426				37,089				38				39,045				(216,335	)			-				(122,737	)
	Net investment losses related to other-than-
		temporary impairments								-				(4,053	)			-				-				(29,138	)			-				(33,191	)
	Net gains (losses) on extinguishment of debt									-				-				-				(41	)			23,484				2,422				25,865
	Other net realized gains									-				461				-				122				4,148				-				4,731
	VIE Revenues									-				-				-				-				19,257				-				19,257
		Total revenues								329,473				357,926				31,791				84,228				(157,611	)			(136,484	)			509,323
Expenses:
	Losses and loss adjustment									(5,435	)			31,003				-				-				-				-				25,568
	Insured credit derivative impairments and LAE									-				(34,146	)			-				-				-				-				(34,146	)
	Amortization of deferred acquisition costs									41,920				68,381				-				-				-				(76,279	)			34,022
	Operating									37,823				57,126				36,187				50,843				5,800				(49,488	)			138,291
	Interest									-				67,052				-				29,488				65,882				(12,620	)			149,802
	VIE expenses									-				-				-				-				10,931				(522	)			10,409
		Total expenses								74,308				189,416				36,187				80,331				82,613				(138,909	)			323,946
Adjusted pre-tax income (loss)									$	255,165			$	168,510			$	(4,396	)		$	3,897			$	(240,224	)		$	2,425			$	185,377
Additions to adjusted pre-tax income (loss):
	Impact of consolidating certain VIEs									-				38,800				-				-				-				19,499				58,299
	Mark-to-market on insured credit derivatives									(84	)			(1,502,966	)			-				-				-				-				(1,503,050	)
Subtractions from adjusted pre-tax income (loss):
	Impairments and LAE on insured credit derivatives									-				650,508				-				-				-				-				650,508
GAAP pre-tax income (loss)									$	255,081			$	(1,946,164	)		$	(4,396	)		$	3,897			$	(240,224	)		$	21,924			$	(1,909,882	)

MBIA INC. AND SUBSIDIARIES
ADJUSTED PRE-TAX INCOME
(in thousands)
Six Months Ended June 30, 2010								U.S. Public Finance Insurance				Structured Finance and International Insurance				Advisory Services				Corporate				Wind-down Operations				Intercompany Eliminations				Consolidated
Revenues:
	Net premiums earned							$	233,578			$	148,507			$	-			$	-			$	-			$	(56,112	)		$	325,973
	Net investment income								117,453				82,753				(304	)			7,419				51,912				(4,141	)			255,092
	Fees and reimbursements								17,402				150,953				33,717				44,466				-				(113,244	)			133,294
	Premiums and fees on insured derivatives								205				55,210				-				-				-				-				55,415
	Net gains (losses) on financial instruments at
		fair value and foreign exchange							3,885				5,971				973				(17,921	)			(20,332	)			-				(27,424	)
	Net investment losses related to other-than-
		temporary impairments							-				(3,889	)			-				-				(38,965	)			-				(42,854	)
	Net gains (losses) on extinguishment of debt								-				-				-				(10	)			17,551				-				17,541
	Other net realized gains (losses)								(101	)			19,572				(137	)			-				(23	)			-				19,311
	VIE Revenues								-				-				-				-				41,656				-				41,656
		Total revenues							372,422				459,077				34,249				33,954				51,799				(173,497	)			778,004
Expenses:
	Losses and loss adjustment								36,158				(121,205	)			-				-				-				-				(85,047	)
	Insured credit derivative impairments and LAE								-				562,862				-				-				-				-				562,862
	Amortization of deferred acquisition costs								46,671				88,472				-				-				-				(96,734	)			38,409
	Operating								29,804				59,220				31,403				51,986				8,587				(49,047	)			131,953
	Interest								-				68,580				-				33,049				90,834				(27,243	)			165,220
	VIE expenses								-				-				-				-				7,603				(472	)			7,131
		Total expenses							112,633				657,929				31,403				85,035				107,024				(173,496	)			820,528
Adjusted pre-tax income (loss)								$	259,789			$	(198,852	)		$	2,846			$	(51,081	)		$	(55,225	)		$	(1	)		$	(42,524	)
Additions to adjusted pre-tax income (loss):
	Impact of consolidating certain VIEs								-				15,865				-				-				-				11,843				27,708
	Mark-to-market on insured credit derivatives								(38	)			(685,631	)			-				-				-				-				(685,669	)
Subtractions from adjusted pre-tax income (loss):
	Impairments and LAE on insured credit derivatives								-				(409,542	)			-				-				-				-				(409,542	)
GAAP pre-tax income (loss)								$	259,751			$	(459,076	)		$	2,846			$	(51,081	)		$	(55,225	)		$	11,842			$	(290,943	)

MBIA INC. AND SUBSIDIARIES
Components of Adjusted Book Value per Share
								June 30, 2011			December 31, 2010			Change
Reported Book Value								$9.56			$14.18			($4.62)
Plus:	Cumulative unrealized loss on insured
	credit derivatives, after tax							19.76			14.58			$5.18
Less:	Cumulative impairments on insured
	credit derivatives, after tax (1)							(6.31)			(8.69)			$2.38
Reverse:	Unrealized losses included in OCI							0.74			2.27			($1.53)
Reverse:	Impact of consolidating certain VIEs (2)							0.62			0.50			$0.12
Plus:	Net unearned premium revenue, after tax (1) (3)							12.85			13.97			($1.12)
Adjusted Book Value (4)								$37.22			$36.81			$0.41

(1)		As of June 30, 2011 and December 31, 2010 the discount rate on Financial Guarantee installment premiums was the
		risk-free rate as defined by accounting principles for Financial Guarantee insurance contracts and the discount rate was
		5.00% on Insured Derivative installment revenue and impairments.
(2)		Represents the impact on consolidated total equity of VIEs that are not considered business enterprises of the Company.
(3)		The amounts consist of installment and upfront Financial Guarantee premiums, Insured Derivative revenue and deferred
		commitment/structuring fees, net of deferred acquisition costs.
(4)		A non-GAAP measure.

Net Income (Loss) per Common Share:
							Three Months Ended								Six Months Ended
							June 30								June 30
							2011				2010				2011					2010
				Basic			$0.69				$6.34				($5.70	)				($0.90	)
				Diluted			$0.68				$6.32				($5.70	)				($0.90	)
Weighted-Average Number of Common Shares Outstanding:
				Basic			199,295,797				204,377,833				199,602,865					204,639,226
				Diluted			200,064,679				204,921,673				199,602,865					204,639,226

INSURANCE OPERATIONS
Selected Financial Data Computed on a Statutory Basis
(dollars in millions)
	National Public Finance Guarantee Corporation
						June 30, 2011						December 31, 2010
	Policyholders' surplus					$	1,054.7					$	907.7
	Contingency reserve						1,504.1						1,473.5
	Statutory capital						2,558.8						2,381.2
	Unearned premium reserve						2,742.8						2,872.6
	Present value of installment premiums (1)						268.8						282.1
	Premium resources (2)						3,011.6						3,154.7
	Loss and loss adjustment expense reserves (1)						89.0						95.9
	Total claims-paying resources					$	5,659.4					$	5,631.8
	Net debt service outstanding					$	715,719.8					$	752,420.0
	Capital ratio (3)						280:1						316:1
	Claims-paying ratio (4)						155:1						166:1
	MBIA Insurance Corporation
						June 30, 2011						December 31, 2010
	Policyholders' surplus					$	1,167.1					$	1,074.7
	Contingency reserve						1,738.4						1,655.7
	Statutory capital						2,905.5						2,730.4
	Unearned premium reserve						684.4						703.1
	Present value of installment premiums (5) (6)						1,442.4						1,655.0
	Premium resources (2)						2,126.8						2,358.1
	Loss and loss adjustment expense reserves (5)						(714.3	)					155.3
	Total claims-paying resources					$	4,318.0					$	5,243.8
	Net debt service outstanding (7)					$	216,010.8					$	244,548.5
	Capital ratio (3)						74:1						90:1
	Claims-paying ratio (4)						60:1						55:1

(1)		At June 30, 2011 and December 31, 2010 the discount rate was 4.19%.
(2)		The amounts consist of Financial Guarantee premiums and Insured Derivative premiums.
(3)		Net debt service outstanding divided by statutory capital.
(4)		Net debt service outstanding divided by the sum of statutory capital, unearned premium reserve (after-tax), present
		value of installment premiums (after-tax) and loss and loss adjustment expense.
(5)		At June 30, 2011 and December 31, 2010 the discount rate was 5.93%.
(6)		Excludes $42.4 million present value of future premiums related to policies for which commutation
		agreements were either reached or executed after June 30, 2011.
(7)		Excludes $15.1 billion of gross insured CDO debt service for which commutation agreements were
		either reached or executed after June 30, 2011.