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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 11/05/19 Mbia Inc 10-Q 9/30/19 90:27M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 3.32M 2: EX-31.1 Certification -- §302 - SOA'02 HTML 34K 3: EX-31.2 Certification -- §302 - SOA'02 HTML 34K 4: EX-32.1 Certification -- §906 - SOA'02 HTML 28K 5: EX-32.2 Certification -- §906 - SOA'02 HTML 28K 15: R1 Cover Page HTML 81K 63: R2 Consolidated Balance Sheets HTML 142K 72: R3 Consolidated Balance Sheets (Parenthetical) HTML 62K 46: R4 Consolidated Statements Of Operations HTML 131K 16: R5 Consolidated Statements Of Operations HTML 31K (Parenthetical) 64: R6 Consolidated Statements Of Comprehensive Income HTML 79K (Loss) 73: R7 Consolidated Statement Of Changes In Shareholders' HTML 111K Equity 45: R8 Consolidated Statements Of Cash Flows HTML 153K 17: R9 Business Developments and Risks and Uncertainties HTML 55K 86: R10 Significant Accounting Policies HTML 40K 58: R11 Recent Accounting Pronouncements HTML 42K 31: R12 Variable Interest Entities HTML 196K 40: R13 Loss and Loss Adjustment Expense Reserves HTML 266K 87: R14 Fair Value Of Financial Instruments HTML 1.56M 59: R15 Investments HTML 370K 32: R16 Derivative Instruments HTML 216K 41: R17 Debt HTML 35K 85: R18 Income Taxes HTML 55K 60: R19 Business Segments HTML 331K 11: R20 Earnings Per Share HTML 88K 43: R21 Accumulated Other Comprehensive Income HTML 88K 74: R22 Commitments and Contingencies HTML 87K 65: R23 Subsequent Events HTML 30K 13: R24 Significant Accounting Policies (Policies) HTML 58K 44: R25 Variable Interest Entities (Tables) HTML 180K 75: R26 Loss and Loss Adjustment Expense Reserves (Tables) HTML 242K 66: R27 Fair Value of Financial Instruments (Tables) HTML 1.53M 14: R28 Investments (Tables) HTML 374K 42: R29 Derivative Instruments (Tables) HTML 211K 38: R30 Income Taxes (Tables) HTML 45K 30: R31 Business Segments (Tables) HTML 313K 62: R32 Earnings Per Share (Tables) HTML 84K 89: R33 Accumulated Other Comprehensive Income (Tables) HTML 88K 37: R34 Commitments and Contingencies (Tables) HTML 45K 29: R35 Business Developments And Risks And Uncertainties HTML 48K (Narrative) (Detail) 61: R36 Recent Accounting Pronouncements (Narrative) HTML 27K (Detail) 88: R37 Variable Interest Entities (Narrative) (Detail) HTML 51K 39: R38 Variable Interest Entities (Summary Of HTML 101K Nonconsolidated VIEs Assets And Liabilities) (Detail) 28: R39 Loss And Loss Adjustment Expense Reserves (Loss HTML 42K And LAE Activity) (Narrative) (Detail) 51: R40 Loss And Loss Adjustment Expense Reserves HTML 58K (Schedule Of Losses And Loss Adjustment Expenses Reserves and Recoveries) (Detail) 22: R41 Loss And Loss Adjustment Expense Reserves HTML 49K (Schedule Of Loss And Loss Adjustment Expenses Reserves) (Detail) 68: R42 Loss And Loss Adjustment Expense Reserves HTML 40K (Schedule Of Insurance Loss Recoverable) (Detail) 77: R43 Loss And Loss Adjustment Expense Reserves HTML 99K (Schedule Of Financial Guarantees And Related Claim Liability) (Detail) 49: R44 Fair Value Of Financial Instruments (Narrative) HTML 42K (Detail) 21: R45 Fair Value Of Financial Instruments (Quantitative HTML 81K Information Regarding The Significant Unobservable Inputs For Certain Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Detail) 67: R46 Fair Value Of Financial Instruments (Company's HTML 189K Assets And Liabilities Measured At Fair Value On Recurring Basis) (Detail) 76: R47 Fair Value Of Financial Instruments (Fair Value HTML 76K Hierarchy Table Presents The Company's Assets And Liabilities At Fair Value Not Recorded On The Company's Consolidated Balance Sheet) (Detail) 52: R48 Fair Value Of Financial Instruments (Changes In HTML 164K Level 3 Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Detail) 20: R49 Fair Value Of Financial Instruments (Realized And HTML 55K Unrealized Gains And Losses Included In Earnings Pertaining To Level 3 Assets And Liabilities) (Detail) 25: R50 Fair Value Of Financial Instruments (Gains And HTML 61K Losses On Fair Value Option Included In The Company's Consolidated Statements Of Operations) (Detail) 35: R51 Fair Value Of Financial Instruments (Aggregate HTML 59K Fair Value And Remaining Contractual Principal Balance Outstanding On Fair Value Option) (Detail) 81: R52 Investments (Narrative) (Detail) HTML 48K 53: R53 Investments (Amortized Cost And Fair Value Of HTML 94K Available-For-Sale and Held-To-Maturity Investment Portfolios) (Detail) 26: R54 Investments (Distribution By Contractual Maturity HTML 91K Of Available-For-Sale and Held-To-Maturity Investments) (Detail) 36: R55 Investments (Gross Unrealized Losses Related To HTML 79K Available-For-Sale And Held-To-Maturity Investments) (Detail) 82: R56 Investments (Distribution Of Securities By HTML 47K Percentage Of Fair Value Below Book Value By More Than 5% For A Continuous Twelve Month Period Or Longer) (Detail) 54: R57 Investments (Credit Losses Recognized In Earnings HTML 34K Related To OTTI Losses Recognized In Accumulated Other Comprehensive Income (Loss)) (Detail) 27: R58 Investments (Securities Held In Unrealized Loss HTML 37K Position And Insured By Financial Guarantor) (Detail) 34: R59 Investments (Net Realized Gains (Losses) From HTML 36K Sales Of Available-For-Sale Securities) (Detail) 79: R60 Investments (Portion Of Unrealized Gains And HTML 38K Losses On Equity Investments Held) (Detail) 69: R61 Derivative Instruments (Narrative) (Detail) HTML 37K 18: R62 Derivative Instruments (Credit Derivatives Sold) HTML 63K (Detail) 47: R63 Derivative Instruments (Total Fair Value Of HTML 70K Company's Derivative Assets And Liabilities By Instrument And Balance Sheet Location, Before Counterparty Netting) (Detail) 80: R64 Derivative Instruments (Effect Of Derivative HTML 46K Instruments On Consolidated Statements Of Operations) (Detail) 70: R65 Debt (Narrative) (Detail) HTML 53K 19: R66 Income Taxes (Narrative) (Detail) HTML 41K 48: R67 Income Taxes (Income Taxes And Related Effective HTML 39K Tax Rates) (Detail) 78: R68 Business Segments (Narrative) (Detail) HTML 29K 71: R69 Business Segments (Summary Of Company's Segment HTML 127K Results) (Detail) 57: R70 Earnings Per Share (Narrative) (Detail) HTML 30K 84: R71 Earnings Per Share (Computation Of Basic And HTML 65K Diluted Earnings Per Share) (Detail) 33: R72 Accumulated Other Comprehensive Income (Changes In HTML 52K The Components Of AOCI) (Detail) 23: R73 Accumulated Other Comprehensive Income (Details Of HTML 50K The Reclassification From AOCI) (Detail) 56: R74 Commitments and Contingencies (Narrative) (Detail) HTML 35K 83: R75 Commitments and Contingencies (Lease Disclosures) HTML 39K (Detail) 50: XML IDEA XML File -- Filing Summary XML 173K 24: XML XBRL Instance -- d803810d10q_htm XML 10.24M 90: EXCEL IDEA Workbook of Financial Reports XLSX 128K 7: EX-101.CAL XBRL Calculations -- mbi-20190930_cal XML 210K 8: EX-101.DEF XBRL Definitions -- mbi-20190930_def XML 1.26M 9: EX-101.LAB XBRL Labels -- mbi-20190930_lab XML 1.55M 10: EX-101.PRE XBRL Presentations -- mbi-20190930_pre 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10-Q |
i ☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i ☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i Connecticut |
i 06-1185706 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
i 1 Manhattanville Road, Suite 301, i Purchase, i New York
|
i 10577 | |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
i Common Stock |
i MBI |
i New York Stock Exchange |
i Large accelerated filer |
☒ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
i ☐ | |||
|
|
Emerging growth company |
i ☐ |
PAGE |
||||||
Item 1. |
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1 |
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2 |
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3 |
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4 |
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5 |
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6 |
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6 |
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8 |
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10 |
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11 |
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13 |
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19 |
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36 |
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40 |
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43 |
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43 |
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44 |
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48 |
||||||
49 |
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50 |
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54 |
||||||
Item 2. |
55 |
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Item 3. |
85 |
|||||
Item 4. |
86 |
|||||
Item 1. |
87 |
|||||
Item 1A. |
87 |
|||||
Item 2. |
89 |
|||||
Item 6. |
90 |
|||||
91 |
• |
increased credit losses or impairments on public finance obligations that National Public Finance Guarantee Corporation (“National”) insures issued by state, local and territorial governments and finance authorities and other providers of public services, located in the U.S. or abroad, that are experiencing fiscal stress; |
• |
the possibility that loss reserve estimates are not adequate to cover potential claims; |
• |
a disruption in the cash flow from National or an inability to access the capital markets and our exposure to significant fluctuations in liquidity and asset values in the global credit markets as a result of collateral posting requirements; |
• |
our ability to fully implement our strategic plan; |
• |
the possibility that MBIA Insurance Corporation will have inadequate liquidity or resources to timely pay claims as a result of higher than expected losses on certain insured transactions or as a result of a delay or failure in collecting expected recoveries, which could lead the New York State Department of Financial Services (“NYSDFS”) to put MBIA Insurance Corporation into a rehabilitation or liquidation proceeding under Article 74 of the New York Insurance Law and/or take such other actions as the NYSDFS may deem necessary to protect the interests of MBIA Insurance Corporation’s policyholders; |
• |
deterioration in the economic environment and financial markets in the United States or abroad, real estate market performance, credit spreads, interest rates and foreign currency levels; and |
• |
the effects of changes to governmental regulation, including insurance laws, securities laws, tax laws, legal precedents and accounting rules. |
|
||||||||
Assets |
||||||||
Investments: |
||||||||
Fixed-maturity securities held as
available-for-sale, at fair value (amortized cost $ i 2,734 and $ i 3,601) |
$ |
i 2,840 |
$ |
i 3,565 |
||||
Investments carried at fair value |
i 217 |
i 222 |
||||||
Investments pledged as collateral, at fair value (amortized cost $ i 14 and $ i 46)
|
i 10 |
i 43 |
||||||
Short-term investments, at fair value (amortized cost $ i 429 and $ i 241)
|
i 428 |
i 241 |
||||||
Other investments at amortized cost |
i - |
i 1 |
||||||
Total investments |
i 3,495 |
i 4,072 |
||||||
Cash and cash equivalents |
i 76 |
i 222 |
||||||
Premiums receivable |
i 273 |
i 296 |
||||||
Deferred acquisition costs |
i 63 |
i 74 |
||||||
Insurance loss recoverable |
i 1,843 |
i 1,595 |
||||||
Other assets |
i 224 |
i 122 |
||||||
Assets of consolidated variable interest entities: |
||||||||
Cash |
i 5 |
i 58 |
||||||
Investments
held-to-maturity, at amortized cost (fair value $ i 977 and $ i 925) |
i 890 |
i 890 |
||||||
Investments carried at fair value |
i 88 |
i 157 |
||||||
Loans receivable at fair value |
i 146 |
i 172 |
||||||
Loan repurchase commitments |
i 478 |
i 418 |
||||||
Other assets |
i 25 |
i 31 |
||||||
Total assets |
$ |
i 7,606 |
$ |
i 8,107 |
||||
Liabilities and Equity |
||||||||
Liabilities: |
||||||||
Unearned premium revenue |
$ | i 499 |
$ | i 587 |
||||
Loss and loss adjustment expense reserves |
i 859 |
i 965 |
||||||
Long-term debt |
i 2,199 |
i 2,249 |
||||||
Medium-term notes (includes financial instruments carried at fair value of $ i 106 and $ i 102) |
i 670 |
i 722 |
||||||
Investment agreements |
i 310 |
i 311 |
||||||
Derivative liabilities |
i 194 |
i 199 |
||||||
Other liabilities |
i 195 |
i 198 |
||||||
Liabilities of consolidated variable interest entities: |
||||||||
Variable interest entity notes (includes financial instruments carried at fair value of $ i 472 and $ i 480) |
i 1,632 |
i 1,744 |
||||||
Total liabilities |
i 6,558 |
i 6,975 |
||||||
Commitments and contingencies (Refer to Note 14: Commitments and Contingencies) |
i | i | ||||||
Equity: |
||||||||
Preferred stock, par value $ i i 1 /
per share; authorized
shares-- i i 10,000,000 / ; issuedand outstanding -- i i i i none / / / |
i - |
i - |
||||||
Common stock, par value $ i i 1 /
per share; authorized shares-- i i 400,000,000 / ; issued shares-- i 283,625,689
and i 283,625,689 |
i 284 |
i 284 |
||||||
Additional paid-in capital |
i 2,997 |
i 3,025 |
||||||
Retained earnings |
i 850 |
i 966 |
||||||
Accumulated other comprehensive income (loss), net of tax of $ i 21 and $ i 8
|
( i 43 |
) | ( i 156 |
) | ||||
Treasury stock, at cost-- i 203,157,759 and i 193,803,976 shares |
( i 3,053 |
) | ( i 3,000 |
) | ||||
Total shareholders’ equity of MBIA Inc. |
i 1,035 |
i 1,119 |
||||||
Preferred stock of subsidiary |
i 13 |
i 13 |
||||||
Total equity |
i 1,048 |
i 1,132 |
||||||
Total liabilities and equity |
$ |
i 7,606 |
$ |
i 8,107 |
||||
|
2018 |
|
2019 |
2018 | ||||||||||||
Revenues |
||||||||||||||||
Premiums earned: |
||||||||||||||||
Scheduled premiums earned |
$ |
i 17 |
$ | i 44 |
$ | i 52 |
$ | i 96 |
||||||||
Refunding premiums earned |
i 3 |
i 18 |
i 13 |
i 42 |
||||||||||||
Premiums earned (net of ceded premiums of $ i 1, $ i 1, $ i 4
and $ i 4) |
i 20 |
i 62 |
i 65 |
i 138 |
||||||||||||
Net investment income |
i 27 |
i 31 |
i 89 |
i 96 |
||||||||||||
Fees and reimbursements |
i - |
i 17 |
i 1 |
i 23 |
||||||||||||
Change in fair value of insured derivatives: |
||||||||||||||||
Realized gains (losses) and other settlements on insured derivatives |
( i 9 |
) |
( i 5 |
) |
( i 10 |
) |
( i 49 |
) | ||||||||
Unrealized gains (losses) on insured derivatives |
i 9 |
i 4 |
i 23 |
i 36 |
||||||||||||
Net change in fair value of insured derivatives |
i - |
( i 1 |
) |
i 13 |
( i 13 |
) | ||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
i 44 |
i 5 |
i 40 |
i 18 |
||||||||||||
Net investment losses related to other-than-temporary impairments: |
||||||||||||||||
Other-than-temporary impairments recognized in accumulated other comprehensive income (loss) |
i - |
( i 1 |
) |
( i 37 |
) |
( i 3 |
) | |||||||||
Net investment losses related to other-than-temporary impairments |
i - |
( i 1 |
) | ( i 37 |
) |
( i 3 |
) | |||||||||
Net gains (losses) on extinguishment of debt |
( i 1 |
) |
i 3 |
( i 1 |
) |
i 3 |
||||||||||
Other net realized gains (losses) |
- |
i 1 |
i 2 |
i - |
||||||||||||
Revenues of consolidated variable interest entities: |
||||||||||||||||
Net investment income |
i 10 |
i 9 |
i 30 |
i 25 |
||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
i 76 |
i 12 |
i 112 |
i 29 |
||||||||||||
Other net realized gains (losses) |
( i 4 |
) |
( i 33 |
) |
( i 62 |
) |
( i 126 |
) | ||||||||
Total revenues |
i 172 |
i 105 |
i 252 |
i 190 |
||||||||||||
Expenses |
||||||||||||||||
Losses and loss adjustment |
( i 13 |
) |
i 46 |
i 89 |
i 177 |
|||||||||||
Amortization of deferred acquisition costs |
i 3 |
i 9 |
i 9 |
i 17 |
||||||||||||
Operating |
i 23 |
i 18 |
i 68 |
i 57 |
||||||||||||
Interest |
i 50 |
i 52 |
i 154 |
i 155 |
||||||||||||
Expenses of consolidated variable interest entities: |
||||||||||||||||
Operating |
i 2 |
i 3 |
i 6 |
i 8 |
||||||||||||
Interest |
i 18 |
i 22 |
i 63 |
i 63 |
||||||||||||
Total expenses |
i 83 |
i 150 |
i 389 |
i 477 |
||||||||||||
Income (loss) before income taxes |
i 89 |
( i 45 |
) |
( i 137 |
) |
( i 287 |
) | |||||||||
Provision (benefit) for income taxes |
i 18 |
i - |
( i 21 |
) |
i 2 |
|||||||||||
Net income (loss) |
$ |
i 71 |
$ |
( i 45 |
) |
$ |
( i 116 |
) |
$ |
( i 289 |
) | |||||
Net income (loss) per common share |
||||||||||||||||
Basic |
$ | i 0.86 |
$ | ( i 0.50 |
) |
$ | ( i 1.40 |
) |
$ | ( i 3.24 |
) | |||||
Diluted |
$ | i 0.86 |
$ | ( i 0.50 |
) |
$ | ( i 1.40 |
) |
$ | ( i 3.24 |
) | |||||
Weighted average number of common shares outstanding |
||||||||||||||||
Basic |
i 78,686,542 |
i 89,490,267 |
i 82,813,523 |
i 89,075,892 |
||||||||||||
Diluted |
i 78,686,542 |
i 89,490,267 |
i 82,813,523 |
i 89,075,892 |
|
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||
|
2018 |
2019 |
2018 | |||||||||||||
Net income (loss) |
$ |
i 71 |
$ |
( i 45 |
) |
$ |
( i 116 |
) |
$ |
( i 289 |
) | |||||
Other comprehensive income (loss): |
|
|
|
|
||||||||||||
Unrealized gains (losses) on available-for-sale securities: |
|
|
|
|
||||||||||||
Unrealized gains (losses) arising during the |
i 39 |
( i 4 |
) |
i 164 |
( i 61 |
) | ||||||||||
Provision (benefit) for income taxes |
( i 11 |
) |
i - |
i 29 |
i 5 |
|||||||||||
Total |
i 50 |
( i 4 |
) |
i 135 |
( i 66 |
) | ||||||||||
Reclassification adjustments for (gains) losses included in net income (loss) |
i 8 |
( i 2 |
) |
( i 15 |
) |
( i 3 |
) | |||||||||
Available-for-sale securities with other-than-temporary impairments: |
|
|
|
|
||||||||||||
Other-than-temporary impairments and unrealized gains (losses) arising during the period |
( i 32 |
) |
i 25 |
( i 2 |
) |
i 48 |
||||||||||
Reclassification adjustments for (gains) losses included in net income (loss) |
( i 42 |
) |
i 2 |
( i 5 |
) |
i 3 |
||||||||||
Foreign currency translation: |
|
|
|
|
||||||||||||
Foreign currency translation gains (losses) |
i 1 |
i - |
i 1 |
i 2 |
||||||||||||
Instrument-specific credit risk of liabilities measured at fair value: |
|
|
|
|
||||||||||||
Unrealized gains (losses) arising during the period |
( i 27 |
) |
i 28 |
( i 27 |
) |
( i 4 |
) | |||||||||
Reclassification adjustments for (gains) losses included in net income (loss) |
i 3 |
i - |
i 26 |
i - |
||||||||||||
Total other comprehensive income (loss) |
( i 39 |
) |
i 49 |
i 113 |
( i 20 |
) | ||||||||||
Comprehensive income (loss) |
$ |
i 32 |
$ |
i 4 |
$ |
( i 3 |
) |
$ |
( i 309 |
) | ||||||
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||||||
|
2018 |
|
2019 |
|
2018 | |||||||||||
Common shares |
||||||||||||||||
Balance at beginning of period |
i 283,625,689 |
i 283,625,689 |
i 283,625,689 |
i 283,717,973 |
||||||||||||
Common shares issued (cancelled), net |
i - |
i - |
i - |
( i 92,284 |
) | |||||||||||
Balance at end of period |
i 283,625,689 |
i 283,625,689 |
i 283,625,689 |
i 283,625,689 |
||||||||||||
Common stock amount |
||||||||||||||||
Balance at beginning and end of period |
$ | i 284 |
$ | i 284 |
$ | i 284 |
$ | i 284 |
||||||||
Additional paid-in capital |
||||||||||||||||
Balance at beginning of period |
$ | i 2,995 |
$ | i 3,154 |
$ | i 3,025 |
$ | i 3,171 |
||||||||
Treasury shares issued for warrant exercises |
i - |
i - |
i - |
( i 21 |
) | |||||||||||
Share-based compensation |
i 2 |
i 1 |
( i 28 |
) | i 5 |
|||||||||||
Balance at end of period |
$ | i 2,997 |
$ | i 3,155 |
$ | i 2,997 |
$ | i 3,155 |
||||||||
Retained earnings |
||||||||||||||||
Balance at beginning of period |
$ | i 779 |
$ | i 1,018 |
$ | i 966 |
$ | i 1,095 |
||||||||
ASU 2016-01 transition adjustment |
i - |
i - |
i - |
i 164 |
||||||||||||
ASU 2018-02 transition adjustment |
i - |
i - |
i - |
i 3 |
||||||||||||
Net income (loss) |
i 71 |
( i 45 |
) | ( i 116 |
) | ( i 289 |
) | |||||||||
Balance at end of period |
$ | i 850 |
$ | i 973 |
$ | i 850 |
$ | i 973 |
||||||||
Accumulated other comprehensive income (loss) |
||||||||||||||||
Balance at beginning of period |
$ | ( i 4 |
) | $ | ( i 255 |
) | $ | ( i 156 |
) | $ | ( i 19 |
) | ||||
ASU 2016-01 transition adjustment |
i - |
i - |
i - |
( i 164 |
) | |||||||||||
ASU 2018-02 transition adjustment |
i - |
i - |
i - |
( i 3 |
) | |||||||||||
Other comprehensive income (loss) |
( i 39 |
) | i 49 |
i 113 |
( i 20 |
) | ||||||||||
Balance at end of period |
$ | ( i 43 |
) | $ | ( i 206 |
) | $ | ( i 43 |
) | $ | ( i 206 |
) | ||||
Treasury shares |
||||||||||||||||
Balance at beginning of period |
( i 198,824,693 |
) | ( i 192,963,698 |
) | ( i 193,803,976 |
) | ( i 192,233,526 |
) | ||||||||
Treasury shares issued for warrant exercises |
i - |
i - |
i - |
i 1,277,620 |
||||||||||||
Treasury shares acquired under share repurchase program |
( i 4,341,232 |
) | i - |
( i 10,273,891 |
) | ( i 1,961,711 |
) | |||||||||
Share-based compensation |
i 8,166 |
i 27,669 |
i 920,108 |
( i 18,412 |
) | |||||||||||
Balance at end of period |
( i 203,157,759 |
) | ( i 192,936,029 |
) | ( i 203,157,759 |
) | ( i 192,936,029 |
) | ||||||||
Treasury stock amount |
||||||||||||||||
Balance at beginning of period |
$ | ( i 3,014 |
) | $ | ( i 3,098 |
) | $ | ( i 3,000 |
) | $ | ( i 3,118 |
) | ||||
Treasury shares issued for warrant exercises |
i - |
i - |
i - |
i 34 |
||||||||||||
Treasury shares acquired under share repurchase program |
( i 39 |
) |
i - |
( i 93 |
) |
( i 14 |
) | |||||||||
Share-based compensation |
|
|
i - |
|
|
|
i - |
|
|
|
i 40 |
|
|
|
i - |
|
Balance at end of period |
$ | ( i 3,053 |
) | $ | ( i 3,098 |
) | $ | ( i 3,053 |
) | $ | ( i 3,098 |
) | ||||
Total shareholders’ equity of MBIA Inc. |
||||||||||||||||
Balance at beginning of period |
$ | i 1,040 |
$ | i 1,103 |
$ | i 1,119 |
$ | i 1,413 |
||||||||
Period change |
( i 5 |
) | i 5 |
( i 84 |
) | ( i 305 |
) | |||||||||
Balance at end of period |
$ |
i 1,035 |
$ |
i 1,108 |
$ |
i 1,035 |
$ |
i 1,108 |
||||||||
Preferred stock of subsidiary shares |
||||||||||||||||
Balance at beginning and end of period |
i 1,315 |
i 1,315 |
i 1,315 |
i 1,315 |
||||||||||||
Preferred stock of subsidiary amount |
||||||||||||||||
Balance at beginning and end of period |
$ | i 13 |
$ | i 12 |
$ | i 13 |
$ | i 12 |
||||||||
Total equity |
$ |
i 1,048 |
$ |
i 1,120 |
$ |
i 1,048 |
$ |
i 1,120 |
||||||||
| ||||||||
2018 | ||||||||
Cash flows from operating activities: |
||||||||
Premiums, fees and reimbursements received |
$ | i 19 |
$ | i 73 |
||||
Investment income received |
i 143 |
i 162 |
||||||
Insured derivative commutations and losses paid |
( i 11 |
) | ( i 49 |
) | ||||
Financial guarantee losses and loss adjustment expenses paid |
( i 477 |
) | ( i 367 |
) | ||||
Proceeds from recoveries and reinsurance |
i 117 |
i 46 |
||||||
Operating and employee related expenses paid |
( i 60 |
) | ( i 68 |
) | ||||
Interest paid, net of interest converted to principal |
( i 144 |
) | ( i 119 |
) | ||||
Income taxes (paid) received |
( i 2 |
) | ( i 1 |
) | ||||
Net cash provided (used) by operating activities |
( i 415 |
) | ( i 323 |
) | ||||
Cash flows from investing activities: |
||||||||
Purchases of available-for-sale investments |
( i 1,759 |
) | ( i 1,684 |
) | ||||
Sales of available-for-sale investments |
i 1,875 |
i 1,647 |
||||||
Paydowns and maturities of available-for-sale investments |
i 722 |
i 245 |
||||||
Purchases of investments at fair value |
( i 129 |
) | ( i 142 |
) | ||||
Sales, paydowns, maturities and other proceeds of investments at fair value |
i 583 |
i 162 |
||||||
Sales, paydowns and maturities (purchases) of short-term investments, net |
( i 131 |
) | i 269 |
|||||
Paydowns and maturities of loans receivable |
i 68 |
i 365 |
||||||
Consolidation of variable interest entities |
i 72 |
i - |
||||||
Deconsolidation of variable interest entities |
( i 2 |
) | ( i 7 |
) | ||||
(Payments) proceeds for derivative settlements |
( i 95 |
) | ( i 19 |
) | ||||
Net cash provided (used) by investing activities |
i 1,204 |
i 836 |
||||||
Cash flows from financing activities: |
||||||||
Proceeds from investment agreements |
i 11 |
i 9 |
||||||
Principal paydowns of investment agreements |
( i 13 |
) | ( i 30 |
) | ||||
Principal paydowns of medium-term notes |
( i 57 |
) | ( i 62 |
) | ||||
Principal paydowns of variable interest entity notes |
( i 671 |
) | ( i 382 |
) | ||||
Principal paydowns of long-term debt |
|
|
( i 150 |
) |
|
|
i - |
|
Purchases of treasury stock |
( i 96 |
) | ( i 15 |
) | ||||
Other financing |
( i 12 |
) | i - |
|||||
Net cash provided (used) by financing activities |
( i 988 |
) | ( i 480 |
) | ||||
Net increase (decrease) in cash and cash equivalents |
( i 199 |
) | i 33 |
|||||
Cash and cash equivalents—beginning of period |
i 280 |
i 146 |
||||||
Cash and cash equivalents—end of period |
$ | i 81 |
$ | i 179 |
||||
Reconciliation of net income (loss) to net cash provided (used) by operating activities: |
||||||||
Net income (loss) |
$ | ( i 116 |
) | $ | ( i 289 |
) | ||
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: |
||||||||
Change in: |
||||||||
Premiums receivable |
i 40 |
i 54 |
||||||
Deferred acquisition costs |
i 9 |
i 18 |
||||||
Accrued investment income |
|
|
i 19 |
|
|
|
i 9 |
|
Unearned premium revenue |
( i 88 |
) | ( i 142 |
) | ||||
Loss and loss adjustment expense reserves |
( i 34 |
) | i 50 |
|||||
Insurance loss recoverable |
( i 249 |
) | ( i 192 |
) | ||||
Accrued interest payable |
i 75 |
i 113 |
||||||
Accrued expenses |
i 5 |
( i 10 |
) | |||||
Net investment losses related to other-than-temporary impairments |
i 37 |
i 3 |
||||||
Unrealized (gains) losses on insured derivatives |
( i 23 |
) | ( i 36 |
) | ||||
Net (gains) losses on financial instruments at fair value and foreign exchange |
( i 152 |
) | ( i 47 |
) | ||||
Other net realized (gains) losses |
i 60 |
i 126 |
||||||
Deferred income tax provision (benefit) |
( i 29 |
) | i 1 |
|||||
Interest on variable interest entities, net |
( i 4 |
) | i 14 |
|||||
Other operating |
i 35 |
i 5 |
||||||
Total adjustments to net income (loss) |
( i 299 |
) | ( i 34 |
) | ||||
Net cash provided (used) by operating activities |
$ | ( i 415 |
) | $ | ( i 323 |
) | ||
|
||||||||||||||||||||||||
|
Carrying Value of Assets |
Carrying Value of Liabilities | ||||||||||||||||||||||
In millions |
Maximum Exposure to Loss |
Investments (1) |
Premiums Receivable (2) |
Insurance Loss Recoverable (3) |
Unearned Premium Revenue (4) |
Loss and Loss Adjustment Expense Reserves (5) | ||||||||||||||||||
Insurance: |
|
|
|
|
|
|
||||||||||||||||||
Global structured finance: |
||||||||||||||||||||||||
Mortgage-backed residential |
$ | i 2,320 |
$ | i 15 |
$ | i 17 |
$ | i 99 |
$ | i 15 |
$ | i 447 |
||||||||||||
Mortgage-backed commercial |
i 32 |
i - |
i - |
i - |
i - |
i - |
||||||||||||||||||
Consumer asset-backed |
i 406 |
i - |
i 1 |
i 2 |
i 1 |
i 10 |
||||||||||||||||||
Corporate asset-backed |
i 1,057 |
i - |
i 7 |
i 795 |
i 8 |
i - |
||||||||||||||||||
Total global structured finance |
i 3,815 |
i 15 |
i 25 |
i 896 |
i 24 |
i 457 |
||||||||||||||||||
Global public finance |
i 2,076 |
i - |
i 8 |
i - |
i 10 |
i - |
||||||||||||||||||
Total insurance |
$ |
i 5,891 |
$ |
i 15 |
$ |
i 33 |
$ |
i 896 |
$ |
i 34 |
$ |
i 457 |
(1) - | Reported within “Investments” on MBIA’s consolidated balance sheets. |
(2) - | Reported within “Premiums receivable” on MBIA’s consolidated balance sheets. |
(3) - | Reported within “Insurance loss recoverable” on MBIA’s consolidated balance sheets. |
(4) - | Reported within “Unearned premium revenue” on MBIA’s consolidated balance sheets. |
(5) - | Reported within “Loss and loss adjustment expense reserves” on MBIA’s consolidated balance sheets. |
|
||||||||||||||||||||||||
|
Carrying Value of Assets |
Carrying Value of Liabilities | ||||||||||||||||||||||
In millions |
Maximum Exposure to Loss |
Investments (1) |
Premiums Receivable (2) |
Insurance Loss Recoverable (3) |
Unearned Premium Revenue (4) |
Loss and Loss Adjustment Expense Reserves (5) | ||||||||||||||||||
Insurance: |
|
|
|
|
|
|
||||||||||||||||||
Global structured finance: |
||||||||||||||||||||||||
Mortgage-backed residential |
$ | i 3,103 |
$ | i 17 |
$ | i 19 |
$ | i 128 |
$ | i 17 |
$ | i 345 |
||||||||||||
Mortgage-backed commercial |
i 52 |
i - |
i - |
i - |
i - |
i - |
||||||||||||||||||
Consumer asset-backed |
i 560 |
i - |
i 3 |
i 1 |
i 2 |
i 12 |
||||||||||||||||||
Corporate asset-backed |
i 1,338 |
i - |
i 9 |
i 858 |
i 10 |
i - |
||||||||||||||||||
Total global structured finance |
i 5,053 |
i 17 |
i 31 |
i 987 |
i 29 |
i 357 |
||||||||||||||||||
Global public finance |
i 2,231 |
i - |
i 9 |
i - |
i 12 |
i - |
||||||||||||||||||
Total insurance |
$ | i 7,284 |
$ | i 17 |
$ | i 40 |
$ | i 987 |
$ | i 41 |
$ | i 357 |
|
(1) - | Reported within “Investments” on MBIA’s consolidated balance sheets. |
(2) - | Reported within “Premiums receivable” on MBIA’s consolidated balance sheets. |
(3) - | Reported within “Insurance loss recoverable” on MBIA’s consolidated balance sheets. |
(4) - | Reported within “Unearned premium revenue” on MBIA’s consolidated balance sheets. |
(5) - | Reported within “Loss and loss adjustment expense reserves” on MBIA’s consolidated balance sheets. |
As of September 30, 2019 |
As of December 31, 2018 | ||||||||||||||||
In millions |
Balance Sheet Line Item |
Balance Sheet Line Item | |||||||||||||||
|
Insurance loss recoverable |
Loss and LAE reserves (2) |
Insurance loss recoverable |
Loss and reserves (2) |
|||||||||||||
U.S. Public Finance Insurance |
|
|
|
|
|||||||||||||
Before VIE eliminations |
$ | i 945 |
$ | i 438 |
$ | i 571 |
$ | i 551 |
|||||||||
VIE eliminations |
i - |
( i 64 |
) | i - |
i - |
||||||||||||
Total U.S. public finance insurance |
i 945 |
i 374 |
i 571 |
i 551 |
|||||||||||||
International and Structured Finance Insurance: |
|||||||||||||||||
Before VIE eliminations (1) |
i 1,389 |
i 797 |
i 1,461 |
i 668 |
|||||||||||||
VIE eliminations (1) |
( i 491 |
) |
( i 312 |
) | ( i 437 |
) | ( i 254 |
) | |||||||||
Total international and structured finance insurance |
i 898 |
i 485 |
i 1,024 |
i 414 |
|||||||||||||
Total |
$ | i 1,843 |
$ | i 859 |
$ | i 1,595 |
$ | i 965 |
(1) - | Includes loan repurchase commitments of $ i 478 million and $ i 418 million as of September 30, 2019 and December 31, 2018, respectively. |
(2) - | Amounts are net of expected recoveries. |
In millions |
Changes in Loss and LAE Reserves for the Nine Months Ended September 30, 2019 |
|||||||||||||||||||||||||||||||||
|
Loss Payments |
Accretion of Claim Liability Discount |
Changes in Discount Rates |
Changes in Assumptions |
|
Changes in Unearned Premium Revenue |
Changes in LAE Reserves |
Other |
||||||||||||||||||||||||||
$ | i 965 |
$ | ( i 425 |
) | |
$ | i 14 |
|
$ | ( i 59 |
) | |
$ | i 369 |
|
$ | i 24 |
|
$ | ( i 23 |
) | |
$ |
( i 6 |
) |
|
$ | i 859 |
(1) - | Amounts are net of expected recoveries of unpaid claims. |
Changes in Insurance Loss Recoverable for the Nine Months Ended September 30, 2019 |
||||||||||||||||||||||||||||
In millions |
Collections for Cases |
Accretion of Recoveries |
Changes in Discount Rates |
Changes in Assumptions (1) |
Other (2) |
Gross Reserve as of | ||||||||||||||||||||||
Insurance loss recoverable |
$ | i 1,595 |
$ | ( i 110 |
) | $ | i 27 |
$ | i 87 |
$ | i 216 |
$ | i 28 |
$ | i 1,843 |
(1) - | Includes amounts related to paid claims and LAE that are expected to be recovered in the future. |
(2) - | Primarily changes in amount and timing of collections. |
Surveillance Categories | |||||||||||||||||||
$ in millions |
Caution List Low |
Caution List Medium |
Caution List High |
Classified List |
Total | ||||||||||||||
Number of policies |
i 46 |
i 19 |
i - |
i 216 |
i 281 | ||||||||||||||
Number of issues (1) |
i 13 |
i 5 |
i - |
i 97 |
i 115 | ||||||||||||||
Remaining weighted average contract period (in years) |
i 7.2 |
i 7.2 |
- |
i 8.0 |
i 7.7 | ||||||||||||||
Gross insured contractual payments outstanding: (2) |
|||||||||||||||||||
Principal |
$ | i 1,625 |
$ | i 256 |
$ | i - |
$ | i 3,850 |
$ | i 5,731 | |||||||||
Interest |
i 2,173 |
i 117 |
i - |
i 1,669 |
i 3,959 | ||||||||||||||
Total |
$ | i 3,798 |
$ | i 373 |
$ | i - |
$ | i 5,519 |
$ |
i 9,690 | |||||||||
Gross Claim Liability (3) |
$ | i - |
$ | i - |
$ | i - |
$ | i 944 |
$ | i 944 | |||||||||
Less: |
|||||||||||||||||||
Gross Potential Recoveries (4) |
i - |
i - |
i - |
i 2,321 |
i 2,321 | ||||||||||||||
Discount, net (5) |
i - |
i - |
i - |
( i 417 |
) | ( i 417) | |||||||||||||
Net claim liability (recoverable) |
$ | i - |
$ | i - |
$ | i - |
$ | ( i 960 |
) | $ | ( i 960) | ||||||||
Unearned premium revenue |
$ | i 7 |
$ | i 3 |
$ | i - |
$ | i 39 |
$ | i 49 | |||||||||
Reinsurance recoverable on paid and unpaid losses (6) |
$ | i 16 |
(1) - | An “issue” represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments on the insured debt. |
(2) - | Represents contractual principal and interest payments due by the issuer of the obligations insured by MBIA. |
(3) - | The gross claim liability with respect to Puerto Rico exposures are net of expected recoveries for policies in a net payable position. |
(4) - | Gross potential recoveries with respect to certain Puerto Rico exposures are net of the claim liability for policies in a net recoverable position. |
(5) - |
Represents discount related to Gross Claim Liability and Gross Potential Recoveries. |
(6) - | Included in “Other assets” on the Company’s consolidated balance sheets. |
|
Surveillance Categories | |||||||||||||||||||
$ in millions |
Caution List Low |
Caution List Medium |
Caution List High |
Classified List |
Total | |||||||||||||||
Number of policies |
i 50 |
i 18 |
i - |
i 233 |
i 301 |
|||||||||||||||
Number of issues (1) |
i 16 |
i 4 |
i - |
i 102 |
i 122 |
|||||||||||||||
Remaining weighted average contract period (in years) |
i 6.7 |
i 8.0 |
- |
i 9.7 |
i 8.9 |
|||||||||||||||
Gross insured contractual payments outstanding: (2) |
|
|
|
|
|
|||||||||||||||
Principal |
$ | i 1,604 |
$ | i 249 |
$ | i - |
$ |
i 5,353 |
$ |
i 7,206 |
||||||||||
Interest |
i 2,118 |
i 123 |
i - |
i 5,414 |
i 7,655 |
|||||||||||||||
Total |
$ | i 3,722 |
$ | i 372 |
$ | i - |
$ | i 10,767 |
$ | i 14,861 |
||||||||||
Gross Claim Liability (3) |
$ | i - |
$ | i - |
$ | i - |
$ | i 1,085 |
$ | i 1,085 |
||||||||||
Less: |
|
|
|
|
|
|||||||||||||||
Gross Potential Recoveries (4) |
i - |
i - |
i - |
i 2,363 |
i 2,363 |
|||||||||||||||
Discount, net (5) |
i - |
i - |
i - |
( i 670) |
( i 670) |
|||||||||||||||
Net claim liability (recoverable) |
$ | i - |
$ | i - |
$ | i - |
$ | ( i 608) |
$ | ( i 608) |
||||||||||
Unearned premium revenue |
$ | i 5 |
$ | i 4 |
$ | i - |
$ | i 63 |
$ | i 72 |
||||||||||
Reinsurance recoverable on paid and unpaid losses (6) |
|
|
|
|
$ | i 21 |
(1) - | An “issue” represents the aggregate of financial guarantee policies that share the same revenue source for purposes of making debt service payments on the insured debt. |
(2) - | Represents contractual principal and interest payments due by the issuer of the obligations insured by MBIA. |
(3) - | The gross claim liability with respect to Puerto Rico exposures are net of expected recoveries for policies in a net payable position. |
(4) - | Gross potential recoveries with respect to certain Puerto Rico exposures are net of the claim liability for policies in a net recoverable position. |
(5) - | Represents discount related to Gross Claim Liability and Gross Potential Recoveries. |
(6) - | Included in “Other assets” on the Company’s consolidated balance sheets. |
In millions |
Fair Value as of September 30, 2019 |
Valuation Techniques |
Unobservable Input |
Range (Weighted Average) |
||||||||
Assets of consolidated VIEs: |
||||||||||||
Loans receivable at fair value |
$ | i 146 |
Market prices adjusted for financial VIE obligations |
Impact of financial guarantee (1) |
- i 12% - i 83% ( i 21%)
|
|||||||
Loan repurchase commitments |
i 478 |
Discounted cash flow |
Recovery rates (2) |
|||||||||
Breach rates (2) |
||||||||||||
Liabilities |
||||||||||||
Variable interest entity notes |
i 348 |
Market prices of VIE assets adjusted for financial guarantees provided |
Impact of financial guarantee |
i 34% - i 72% ( i 59%)
|
||||||||
Credit |
||||||||||||
CMBS |
i 10 |
Direct Price Model |
Nonperformance risk |
i 54% - i 54% ( i 54%) |
||||||||
Other derivative liabilities |
i 30 |
Discounted cash flow |
Cash flows |
$ i 0 - $ i 49 ($ i 25)(3) |
(1) - | Negative percentage represents financial guarantee policies in a receivable position. |
(2) - | Recovery rates and breach rates include estimates about potential variations in the outcome of litigation with a counterparty. |
(3) - | Midpoint of cash flows are used for the weighted average. |
In millions |
Fair Value as of December 31, 2018 |
Valuation Techniques |
Unobservable Input |
Range (Weighted Average) |
||||||||
Assets of consolidated VIEs: |
||||||||||||
Loans value |
$ | i 172 |
Market prices adjusted for financial guarantees provided to VIE obligations |
Impact of financial guarantee (1) |
- i 17% - i 75% ( i 7%)
|
|||||||
Loan repurchase commitments |
i 418 |
Discounted cash flow |
Recovery rates (2) |
|||||||||
Breach rates (2) |
||||||||||||
Liabilities of consolidated VIEs: |
||||||||||||
Variable interest entity notes |
i 366 |
Market prices of VIE assets adjusted provided |
Impact of financial guarantee |
i 0% - i 63% ( i 39%)
|
||||||||
Credit liabilities: |
||||||||||||
CMBS |
i 33 |
Direct Price Model |
Nonperformance risk |
i 54% - i 54% ( i 54%) |
||||||||
Other derivative liabilities |
i 7 |
Discounted cash flow |
Cash flows |
$ i 0 - $ i 49 ($ i 25)(3) |
(1) - | Negative percentage represents financial guarantee policies in a receivable position. |
(2) - | Recovery rates and breach rates include estimates about potential variations in the outcome of litigation with a counterparty. |
(3) - | Midpoint of cash flows are used for the weighted average. |
Fair Value Measurements at Reporting Date Using |
||||||||||||||||
In millions |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
|
Significant Unobservable Inputs (Level 3) |
|
Counterparty and Cash Collateral Netting |
|
Balance as of |
||||||||
Assets: |
||||||||||||||||
Fixed-maturity investments: |
||||||||||||||||
U.S. Treasury and |
$ | i 775 |
$ | i 99 |
$ | - |
$ | - |
$ | i 874 |
||||||
State and municipal bonds |
- |
i 230 |
- |
- |
i 230 |
|||||||||||
Foreign governments |
- |
i 9 |
- |
- |
i 9 |
|||||||||||
Corporate obligations |
- |
i 1,333 |
- |
- |
i 1,333 |
|||||||||||
Mortgage-backed securities: |
||||||||||||||||
Residential mortgage-backed agency |
- |
i 310 |
- |
- |
i 310 |
|||||||||||
Residential mortgage-backed non-agency |
- |
i 21 |
- |
- |
i 21 |
|||||||||||
Commercial mortgage-backed |
- |
i 26 |
- |
- |
i 26 |
|||||||||||
Asset-backed securities: |
||||||||||||||||
Collateralized debt |
- |
i 130 |
- |
- |
i 130 |
|||||||||||
Other asset-backed |
- |
i 280 |
i 1 |
- |
i 281 |
|||||||||||
Total fixed-maturity investments |
i 775 |
i 2,438 |
i 1 |
- |
i 3,214 |
|||||||||||
Money market securities |
i 164 |
- |
- |
- |
i 164 |
|||||||||||
Perpetual debt and equity securities |
i 28 |
i 37 |
- |
- |
i 65 |
|||||||||||
Fixed-income fund |
- |
- |
- |
- |
i 52 |
(1) | ||||||||||
Cash and cash equivalents |
i 76 |
- |
- |
- |
i 76 |
|||||||||||
Derivative assets: |
||||||||||||||||
Non-insured derivative assets: |
||||||||||||||||
Interest rate derivatives |
- |
i 2 |
- |
- |
i 2 |
Fair Value Measurements at Reporting Date Using |
|||||||||||||||||||||
In millions |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Counterparty and Cash Collateral Netting |
Balance as of |
||||||||||||||||
Assets of consolidated VIEs: |
|
|
|
|
|||||||||||||||||
Corporate obligations |
- |
i 8 |
- |
|
- |
|
i 8 |
||||||||||||||
Mortgage-backed securities: |
|||||||||||||||||||||
Residential mortgage-backed non-agency |
- |
i 47 |
- |
- |
i 47 |
||||||||||||||||
Commercial mortgage-backed |
- |
i 16 |
- |
- |
i 16 |
||||||||||||||||
Asset-backed securities: |
|||||||||||||||||||||
Collateralized debt obligations |
- |
i 6 |
- |
- |
i 6 |
||||||||||||||||
Other asset-backed |
i - |
i 11 |
- |
- |
i 11 |
||||||||||||||||
Cash |
i 5 |
- |
- |
- |
i 5 |
||||||||||||||||
Loans receivable at fair value: |
|||||||||||||||||||||
Residenti al loan s receivable |
- |
- |
i 146 |
- |
i 146 |
||||||||||||||||
Loan repurchase commitments |
- |
- |
i 478 |
- |
i 478 |
||||||||||||||||
Other assets: |
|||||||||||||||||||||
Currency derivative s |
- |
- |
i 8 |
- |
i 8 |
||||||||||||||||
Other |
- |
- |
i 17 |
- |
i 17 |
||||||||||||||||
Total assets |
$ |
i 1,048 |
$ |
i 2,565 |
$ |
i 650 |
$ |
- |
$ |
i 4,315 |
|||||||||||
Liabilities: |
|||||||||||||||||||||
Medium-term notes |
$ | - |
$ | - |
$ | i 106 |
$ | - |
$ | i 106 |
|||||||||||
Derivative liabilities: |
|||||||||||||||||||||
Insured derivatives: |
|||||||||||||||||||||
Credit derivatives |
- |
i 2 |
i 10 |
- |
i 12 |
||||||||||||||||
Non-insured derivatives: |
|||||||||||||||||||||
Interest rate derivatives |
- |
i 152 |
- |
- |
i 152 |
||||||||||||||||
Other |
- |
- |
i 30 |
- |
i 30 |
||||||||||||||||
Other liabilities: |
|||||||||||||||||||||
Other payable |
- |
- |
i 4 |
- |
i 4 |
||||||||||||||||
Liabilities of consolidated VIEs: |
|||||||||||||||||||||
Variable interest entity notes |
- |
i 124 |
i 348 |
- |
i 472 |
||||||||||||||||
Total liabilities |
$ |
- |
$ |
i 278 |
$ |
i 498 |
$ |
i - |
$ |
i 776 |
(1) - | Investment that was measured at fair value by applying the net asset value per share practical expedient, and was required not to be classified in the fair value hierarchy. |
Fair Value Measurements at Reporting Date Using |
||||||||||||||||
In millions |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Balance as of December 31, 2018 |
||||||||||||
Assets: |
||||||||||||||||
Fixed-maturity investments: |
||||||||||||||||
U.S. Treasury and government agency |
$ | i 1,028 |
$ | i 90 |
$ | - |
$ | i 1,118 |
||||||||
State and municipal bonds |
- |
i 728 |
- |
i 728 |
||||||||||||
Foreign governments |
- |
i 9 |
- |
i 9 |
||||||||||||
Corporate obligations |
- |
i 1,410 |
- |
i 1,410 |
||||||||||||
Mortgage-backed securities: |
||||||||||||||||
Residential mortgage-backed agency |
- |
i 219 |
- |
i 219 |
||||||||||||
Residential mortgage-backed non-agency |
- |
i 28 |
- |
i 28 |
||||||||||||
Commercial mortgage-backed |
- |
i 47 |
i 7 |
i 54 |
||||||||||||
Asset-backed securities: |
||||||||||||||||
Collateralized debt obligations |
- |
i 121 |
- |
i 121 |
||||||||||||
Other asset-backed |
- |
i 181 |
i 3 |
i 184 |
||||||||||||
Total fixed-maturity investments |
i 1,028 |
i 2,833 |
i 10 |
i 3,871 |
||||||||||||
Money market securities |
- |
- |
- |
i 67 |
(1) | |||||||||||
Perpetual debt and equity securities |
i 23 |
i 35 |
- |
i 58 |
||||||||||||
Fixed-income fund |
- |
- |
- |
i 75 |
(1) | |||||||||||
Cash and cash equivalents |
i 222 |
- |
- |
i 222 |
||||||||||||
Derivative assets: |
||||||||||||||||
Non-insured derivative assets: |
||||||||||||||||
Interest rate derivatives |
- |
i 2 |
- |
i 2 |
|
Fair Value Measurements at Reporting Date Using |
|
|||||||||||||||
In millions |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
Balance as of December 31, 2018 |
|||||||||||||
Assets of consolidated VIEs: |
|
|
|
|
|
|
|||||||||||
Corporate obligations |
- |
i 9 |
i 5 |
i 14 |
|||||||||||||
Mortgage-backed securities: |
|||||||||||||||||
Residential mortgage-backed non-agency |
- |
i 92 |
- |
i 92 |
|||||||||||||
Commercial mortgage-backed |
- |
i 34 |
- |
i 34 |
|||||||||||||
Asset-backed securities: |
|||||||||||||||||
Collateralized debt obligations |
- |
i 6 |
i 1 |
i 7 |
|||||||||||||
Other asset-backed |
- |
i 10 |
- |
i 10 |
|||||||||||||
Cash |
i 58 |
- |
- |
i 58 |
|||||||||||||
Loans receivable at fair value: |
|||||||||||||||||
Residential loans receivable |
- |
- |
i 172 |
i 172 |
|||||||||||||
Loan repurchase commitments |
- |
- |
i 418 |
i 418 |
|||||||||||||
Other assets: |
|||||||||||||||||
Currency derivatives |
- |
- |
i 17 |
i 17 |
|||||||||||||
Other |
- |
- |
i 14 |
i 14 |
|||||||||||||
Total assets |
$ |
i 1,331 |
$ |
i 3,021 |
$ |
i 637 |
$ |
i 5,131 |
|||||||||
Liabilities: |
|||||||||||||||||
Medium-term notes |
$ | - |
$ | - |
$ | i 102 |
$ | i 102 |
|||||||||
Derivative liabilities: |
|||||||||||||||||
Insured derivatives: |
|||||||||||||||||
Credit derivatives |
- |
i 2 |
i 33 |
i 35 |
|||||||||||||
Non-insured derivatives: |
|||||||||||||||||
Interest rate derivatives |
- |
i 157 |
- |
i 157 |
|||||||||||||
Other |
- |
- |
i 7 |
i 7 |
|||||||||||||
Other liabilities: |
|||||||||||||||||
Other payable |
- |
- |
i 5 |
i 5 |
|||||||||||||
Liabilities of consolidated VIEs: |
|||||||||||||||||
Variable interest entity notes |
- |
i 114 |
i 366 |
i 480 |
|||||||||||||
Total liabilities |
$ |
- |
$ |
i 273 |
$ |
i 513 |
$ |
i 786 |
(1) | - Investment that was measured at fair value by applying the net asset value per share practical expedient, and was required not to be classified in the fair value hierarchy. |
| |||||||||||||||||||||
Fair Value Measurements at Reporting Date Using |
| ||||||||||||||||||||
In millions |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|
|
| |||||||||||||||
Assets: |
|
|
|
|
|
| |||||||||||||||
Other investments |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
| ||||||||||
Assets of consolidated VIEs: |
| ||||||||||||||||||||
Investments held-to-maturity |
- |
- |
i 977 |
i 977 |
i 890 |
| |||||||||||||||
Total assets |
$ | - |
$ | - |
$ | i 977 |
$ | i 977 |
$ | i 890 |
| ||||||||||
Liabilities: |
| ||||||||||||||||||||
Long-term debt |
$ | - |
$ | i 1,092 |
$ | - |
$ | i 1,092 |
$ | i 2,199 |
| ||||||||||
Medium-term notes |
- |
- |
i 400 |
i 400 |
i 564 |
| |||||||||||||||
Investment agreements |
- |
- |
i 414 |
i 414 |
i 310 |
| |||||||||||||||
Liabilities of consolidated VIEs: |
| ||||||||||||||||||||
Variable interest entity notes |
- |
i 290 |
i 977 |
i 1,267 |
i 1,160 |
| |||||||||||||||
Total liabilities |
$ | - |
$ | i 1,382 |
$ | i 1,791 |
$ | i 3,173 |
$ | i 4,233 |
| ||||||||||
Financial Guarantees: |
| ||||||||||||||||||||
Gross liability (recoverable) |
$ | - |
$ | - |
$ | i 1,236 |
$ | i 1,236 |
$ | ( i 485 |
) | | |||||||||
Ceded |
- |
- |
i 78 |
i 78 |
i 21 |
| |||||||||||||||
| |||||||||||||||||||||
Fair Value Measurements at Reporting Date Using |
| ||||||||||||||||||||
In millions |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|
|
| |||||||||||||||
Assets: |
| ||||||||||||||||||||
Other investments |
$ | - |
$ | i 1 |
$ | - |
$ | i 1 |
$ | i 1 |
| ||||||||||
Assets of consolidated VIEs: |
| ||||||||||||||||||||
Investments held-to-maturity |
- |
- |
i 925 |
i 925 |
i 890 |
| |||||||||||||||
| |||||||||||||||||||||
Total assets |
$ | - |
$ | i 1 |
$ | i 925 |
$ | i 926 |
$ | i 891 |
| ||||||||||
Liabilities: |
| ||||||||||||||||||||
Long-term debt |
$ | - |
$ | i 1,101 |
$ | - |
$ | i 1,101 |
$ | i 2,249 |
| ||||||||||
Medium-term notes |
- |
- |
i 422 |
i 422 |
i 620 |
| |||||||||||||||
Investment agreements |
- |
- |
i 388 |
i 388 |
i 311 |
| |||||||||||||||
Liabilities of consolidated VIEs: |
| ||||||||||||||||||||
Variable interest entity notes |
- |
i 378 |
i 925 |
i 1,303 |
i 1,264 |
| |||||||||||||||
| |||||||||||||||||||||
Total liabilities |
$ | - |
$ | i 1,479 |
$ | i 1,735 |
$ | i 3,214 |
$ | i 4,444 |
| ||||||||||
Financial Guarantees: |
| ||||||||||||||||||||
Gross liability (recoverable) |
$ | - |
$ | - |
$ | i 993 |
$ | i 993 |
$ | ( i 43 |
) |
| |||||||||
Ceded |
- |
- |
i 65 |
i 65 |
i 35 |
|
In millions |
Balance, Beginning of Period |
Realized Gains / (Losses) |
Unrealized Gains / (Losses) Included in Earnings |
Unrealized Gains / (Losses) Included in OCI |
Foreign Exchange Recognized in OCI or Earnings |
Purchases |
Issuances |
Settlements |
Sales |
Transfers into Level 3 (1) |
Transfers out of Level 3 (1) |
Ending Balance |
Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets still held as of September 30, 2019 | |||||||||||||||||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed |
$ | i 4 |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | ( i 1 |
) | $ | - |
$ | - |
$ | ( i 3 |
) | $ | i - |
$ | - |
||||||||||||||||||||||||
Other asset-backed |
i 1 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i 1 |
- |
|||||||||||||||||||||||||||||||||||||||
Assets of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans receivable- residential |
i 154 |
- |
( i 3 |
) | - |
- |
- |
- |
( i 5 |
) | - |
- |
- |
i 146 |
( i 3 |
) | ||||||||||||||||||||||||||||||||||||
Loan repurchase |
i 428 |
- |
i 50 |
- |
- |
- |
- |
- |
- |
- |
- |
i 478 |
i 50 |
|||||||||||||||||||||||||||||||||||||||
Currency derivatives |
i 11 |
- |
( i 4 |
) | - |
i 1 |
- |
- |
- |
- |
- |
- |
i 8 |
( i 4 |
) | |||||||||||||||||||||||||||||||||||||
Other |
i 15 |
- |
i 2 |
- |
- |
- |
- |
- |
- |
- |
- |
i 17 |
i 2 |
|||||||||||||||||||||||||||||||||||||||
Total assets |
$ | i 613 |
$ | i - |
$ | i 45 |
$ | i - |
$ | i 1 |
$ | i - |
$ | i - |
$ | ( i 6 |
) | $ | i - |
$ | i - |
$ | ( i 3 |
) | $ | i 650 |
$ | i 45 |
In millions |
Balance, Beginning of Period |
Realized (Gains) / Losses |
Unrealized (Gains) / Losses Included in Earnings |
Unrealized (Gains) / Losses Included in Credit Risk in OCI |
Foreign Exchange Recognized in OCI or Earnings |
Purchases |
Issuances |
Settlements |
Sales |
Transfers into Level 3 (1) |
Transfers out of Level 3 (1) |
Ending Balance |
Change in Unrealized (Gains) Losses for the Period Included in Earnings for Liabilities still held as of September 30, 2019 | |||||||||||||||||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Medium-term notes |
$ | i 110 |
$ | - |
$ | i 3 |
$ | ( i 5) |
$ | ( i 2 |
) | $ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | i 106 |
$ | i 1 |
|||||||||||||||||||||||||
Credit derivatives |
i 18 |
i 10 |
( i 9 |
) | - |
- |
- |
- |
( i 9 |
) | - |
- |
- |
i 10 |
( i 9 |
) | ||||||||||||||||||||||||||||||||||||
Other derivatives |
i 16 |
- |
i 14 |
- |
- |
- |
- |
- |
- |
- |
- |
i 30 |
i 14 |
|||||||||||||||||||||||||||||||||||||||
Other payable |
i 3 |
- |
i 1 |
- |
- |
- |
- |
- |
- |
- |
- |
i 4 |
i 1 |
|||||||||||||||||||||||||||||||||||||||
Liabilities of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
VIE notes |
i 342 |
i 14 |
( i 9 |
) | i 10 |
( i 2 |
) | - |
i 3 |
( i 10 |
) | - |
- |
- |
i 348 |
( i 11 |
) | |||||||||||||||||||||||||||||||||||
Total liabilities |
$ | i 489 |
$ | i 24 |
$ | i - |
$ | i 5 |
$ | ( i 4 |
) | $ | i - |
$ | i 3 |
$ | ( i 19 |
) | $ | i - |
$ | i - |
$ | i - |
$ | i 498 |
$ | ( i 4 |
) |
(1) - | Transferred in and out at the end of the period. |
In millions |
Balance, Beginning of Period |
Realized Gains / (Losses) |
Unrealized Gains / (Losses) Included in Earnings |
Unrealized Gains / (Losses) Included in OCI |
Foreign Exchange Recognized in OCI or Earnings |
Purchases |
Issuances |
Settlements |
Sales |
Transfers into Level 3 (1) |
Transfers out of Level 3 (1) |
Ending Balance |
Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets still held as of September 30, 2018 | |||||||||||||||||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
i 7 |
$ |
- |
$ |
i 7 |
$ |
- |
||||||||||||||||||||||||||
Other asset-backed |
i 6 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
( i 2 |
) | i 4 |
- |
||||||||||||||||||||||||||||||||||||||
Assets of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate obligations |
i 5 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i 5 |
- |
|||||||||||||||||||||||||||||||||||||||
Collateralized debt obligations |
i 1 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i 1 |
- |
|||||||||||||||||||||||||||||||||||||||
Loans receivable-residential |
i 683 |
- |
i 20 |
- |
- |
- |
- |
( i 24 |
) | ( i 251 |
) | - |
- |
i 428 |
i 21 |
|||||||||||||||||||||||||||||||||||||
Loan repurchase |
i 415 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i 415 |
- |
|||||||||||||||||||||||||||||||||||||||
Currency derivatives |
i 14 |
- |
i 2 |
- |
( i 2 |
) | - |
- |
- |
- |
- |
- |
i 14 |
- |
||||||||||||||||||||||||||||||||||||||
Other |
i 14 |
- |
i 1 |
- |
- |
- |
- |
- |
- |
- |
- |
i 15 |
i 1 |
|||||||||||||||||||||||||||||||||||||||
Total assets |
$ | i 1,138 |
$ | i - |
$ | i 23 |
$ | i - |
$ | ( i 2 |
) | $ | i - |
$ | i - |
$ | ( i 24 |
) | $ | ( i 251 |
) | $ | i 7 |
$ | ( i 2 |
) | $ | i 889 |
$ | i 22 |
||||||||||||||||||||||
In millions |
Balance, Beginning of Period |
Realized (Gains) / Losses |
Unrealized (Gains) / Losses Included in Earnings |
Unrealized (Gains) / Losses Included in OCI |
Foreign Exchange Recognized in OCI or Earnings |
Purchases |
Issuances |
Settlements |
Sales |
Transfers into Level 3 (1) |
Transfers out of Level 3 (1) |
Ending Balance |
Change in Unrealized (Gains) Losses for the Period Included in Earnings for Liabilities still held as of September 30, 2018 | |||||||||||||||||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Medium-term notes |
$ | i 149 |
$ | ( i 5) |
$ | ( i 1 |
) | $ | i 11 |
$ | ( i 1 |
) | $ | - |
$ | - |
$ | ( i 30 |
) | $ | - |
$ | - |
$ | - |
$ | i 123 |
$ | ( i 2 |
) | ||||||||||||||||||||||
Credit derivatives |
i 31 |
i 6 |
( i 4 |
) | - |
- |
- |
- |
( i 6 |
) | - |
- |
- |
i 27 |
( i 4 |
) | ||||||||||||||||||||||||||||||||||||
Other derivatives |
i 4 |
- |
i 3 |
- |
- |
- |
- |
- |
- |
- |
- |
i 7 |
i 3 |
|||||||||||||||||||||||||||||||||||||||
Other payable |
i 5 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i 5 |
- |
|||||||||||||||||||||||||||||||||||||||
Liabilities of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
VIE notes |
i 389 |
i 10 |
i 3 |
( i 11 |
) | i 5 |
- |
i 1 |
( i 15 |
) | - |
- |
- |
i 382 |
i 8 |
|||||||||||||||||||||||||||||||||||||
Total liabilities |
$ | i 578 |
$ | i 11 |
$ | i 1 |
$ | i - |
$ | i 4 |
$ | i - |
$ | i 1 |
$ | ( i 51 |
) |
$ | i - |
$ | i - |
$ | i - |
$ | i 544 |
$ | i 5 |
(1) - | Transferred in and out at the end of the period. |
In millions |
Balance, Beginning of Year |
Realized Gains / (Losses) |
Unrealized Gains / (Losses) Included in Earnings |
Unrealized Gains / (Losses) Included in OCI |
Foreign Exchange Recognized in OCI or Earnings |
Purchases |
Issuances |
Settlements |
Sales |
Transfers into Level 3 (1) |
Transfers out of Level 3 (1) |
Ending Balance |
Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets still held as of September 30, 2019 | |||||||||||||||||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed |
$ | i 7 |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | ( i 4 |
) | $ | - |
$ | - |
$ | ( i 3 |
) | $ | i - |
$ | - |
||||||||||||||||||||||||
Other asset-backed |
i 3 |
( i 1 |
) | - |
- |
- |
- |
- |
( i 1 |
) | - |
- |
- |
i 1 |
- |
|||||||||||||||||||||||||||||||||||||
Assets of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate obligations |
i 5 |
- |
- |
- |
- |
- |
- |
( i 2 |
) | - |
- |
( i 3 |
) | i - |
- |
|||||||||||||||||||||||||||||||||||||
Collateralized debt obligations |
i 1 |
- |
- |
- |
- |
- |
- |
- |
( i 1 |
) | - |
- |
i - |
- |
||||||||||||||||||||||||||||||||||||||
Loans receivable-residential |
i 172 |
- |
i 40 |
- |
- |
- |
- |
( i 18 |
) | ( i 48 |
) | - |
- |
i 146 |
i 35 |
|||||||||||||||||||||||||||||||||||||
Loan repurchase commitments |
i 418 |
- |
i 60 |
- |
- |
- |
- |
- |
- |
- |
- |
i 478 |
i 60 |
|||||||||||||||||||||||||||||||||||||||
Currency derivatives |
i 17 |
- |
( i 9 |
) | - |
- |
- |
- |
- |
- |
- |
- |
i 8 |
( i 9 |
) | |||||||||||||||||||||||||||||||||||||
Other |
i 14 |
- |
i 3 |
- |
- |
- |
- |
- |
- |
- |
- |
i 17 |
i 3 |
|||||||||||||||||||||||||||||||||||||||
Total assets |
$ | i 637 |
$ | ( i 1 |
) | $ | i 94 |
$ | i - |
$ | i - |
$ | i - |
$ | i - |
$ | ( i 25 |
) | $ | ( i 49 |
) | $ | i - |
$ | ( i 6 |
) | $ | i 650 |
$ | i 89 |
||||||||||||||||||||||
In millions |
Balance, Beginning of Year |
Realized (Gains) / Losses |
Unrealized (Gains) / Losses Included in Earnings |
Unrealized (Gains) / Losses Included in Credit Risk in OCI |
Foreign Exchange Recognized in OCI or Earnings |
Purchases |
Issuances |
Settlements |
Sales |
Transfers into Level 3 (1) |
Transfers out of Level 3 (1) |
Ending Balance |
Change in Unrealized (Gains) Losses for the Period Included in Earnings for Liabilities still held as of September 30, 2019 | |||||||||||||||||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Medium-term notes |
$ | i 102 |
$ | - |
$ | i 8 |
$ | i 1 |
$ | ( i 2 |
) | $ | - |
$ | - |
$ | ( i 3 |
) | $ | - |
$ | - |
$ | - |
$ | i 106 |
$ | i 1 |
||||||||||||||||||||||||
Credit derivatives |
i 33 |
i 11 |
( i 23 |
) | - |
- |
- |
- |
( i 11 |
) | - |
- |
- |
i 10 |
( i 23 |
) | ||||||||||||||||||||||||||||||||||||
Other derivatives |
i 7 |
- |
i 23 |
- |
- |
- |
- |
- |
- |
- |
- |
i 30 |
i 23 |
|||||||||||||||||||||||||||||||||||||||
Other payable |
i 5 |
- |
i 2 |
- |
- |
- |
- |
( i 3 |
) | - |
- |
- |
i 4 |
i 2 |
||||||||||||||||||||||||||||||||||||||
Liabilities of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
VIE notes |
i 366 |
i 21 |
i 33 |
i 3 |
( i 1 |
) | - |
i 7 |
( i 21 |
) | ( i 60 |
) | - |
- |
i 348 |
i 32 |
||||||||||||||||||||||||||||||||||||
Total liabilities |
$ |
i 513 |
$ |
i 32 |
$ |
i 43 |
$ |
i 4 |
$ |
( i 3 |
) |
$ |
i - |
$ |
i 7 |
$ |
( i 38 |
) |
$ |
( i 60 |
) |
$ |
i - |
$ |
i - |
$ |
i 498 |
$ |
i 35 |
(1) - | Transferred in and out at the end of the period. |
In millions |
Balance, Beginning of Year |
Realized Gains / (Losses) |
Unrealized Gains / (Losses) Included in Earnings |
Unrealized Gains / (Losses) Included in OCI |
Foreign Exchange Recognized in OCI or Earnings |
Purchases |
Issuances |
Settlements |
Sales |
Transfers into Level 3 (1) |
Transfers out of Level 3 (1) |
Ending Balance |
Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets still held as of September 30, 2018 | |||||||||||||||||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate obligations |
$ | i 2 |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | ( i 2 |
) | $ | i - |
$ | - |
|||||||||||||||||||||||||
Commercial mortgage- backed |
i 7 |
- |
- |
- |
- |
- |
- |
- |
- |
i 7 |
( i 7 |
) | i 7 |
- |
||||||||||||||||||||||||||||||||||||||
Other asset- backed |
i 5 |
- |
- |
- |
- |
i 5 |
- |
( i 2 |
) | ( i 2 |
) | - |
( i 2 |
) | i 4 |
- |
||||||||||||||||||||||||||||||||||||
Assets of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate obligations |
- |
- |
- |
- |
- |
- |
- |
( i 1 |
) | - |
i 6 |
- |
i 5 |
- |
||||||||||||||||||||||||||||||||||||||
Commercial mortgage- backed |
i 6 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
( i 6) |
i - |
- |
|||||||||||||||||||||||||||||||||||||||
Collateralized debt obligations |
i 1 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i - |
i 1 |
- |
|||||||||||||||||||||||||||||||||||||||
Loans receivable-residential |
i 759 |
- |
i 26 |
- |
- |
- |
- |
( i 106 |
) | ( i 251 |
) | - |
- |
i 428 |
i 23 |
|||||||||||||||||||||||||||||||||||||
Loans receivable-corporate |
i 920 |
- |
i 11 |
- |
- |
- |
- |
( i 6 |
) | ( i 925 |
) | - |
- |
i - |
- |
|||||||||||||||||||||||||||||||||||||
Loan repurchase commitments |
i 407 |
- |
i 8 |
- |
- |
- |
- |
- |
- |
- |
- |
i 415 |
i 8 |
|||||||||||||||||||||||||||||||||||||||
Currency derivatives |
i 19 |
- |
( i 3 |
) | - |
( i 2 |
) | - |
- |
- |
- |
- |
- |
i 14 |
( i 5 |
) | ||||||||||||||||||||||||||||||||||||
Other |
i 14 |
- |
i 1 |
- |
- |
- |
- |
- |
- |
- |
- |
i 15 |
i 1 |
|||||||||||||||||||||||||||||||||||||||
Total assets |
$ | i 2,140 |
$ | i - |
$ | i 43 |
$ | i - |
$ | ( i 2 |
) | $ | i 5 |
$ | i - |
$ | ( i 115 |
) | $ | ( i 1,178 |
) | $ | i 13 |
$ | ( i 17) |
$ | i 889 |
$ | i 27 |
|||||||||||||||||||||||
In millions |
Balance, Beginning of Year |
Realized (Gains) / Losses |
Unrealized (Gains) / Losses Included in Earnings |
Unrealized (Gains) / Losses Included in OCI |
Foreign Exchange Recognized in OCI or Earnings |
Purchases |
Issuances |
Settlements |
Sales |
Transfers into Level 3 (1) |
Transfers out of Level 3 (1) |
Ending Balance |
Change in Unrealized (Gains) Losses for the Period Included in Earnings for Liabilities still held as of September 30, 2018 | |||||||||||||||||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Medium-term notes |
$ | i 115 |
$ | ( i 5) |
$ | ( i 1) |
$ | i 51 |
$ | ( i 7) |
$ | - |
$ | - |
$ | ( i 30) |
$ | - |
$ | - |
$ | - |
$ | i 123 |
$ | ( i 8) |
||||||||||||||||||||||||||
Credit derivatives |
i 63 |
i 49 |
( i 36) |
- |
- |
- |
- |
( i 49) |
- |
- |
- |
i 27 |
( i 36) |
|||||||||||||||||||||||||||||||||||||||
Other derivatives |
i 4 |
- |
i 3 |
- |
- |
- |
- |
- |
- |
- |
- |
i 7 |
i 3 |
|||||||||||||||||||||||||||||||||||||||
Other payable |
i 7 |
- |
i 2 |
- |
- |
- |
- |
( i 4) |
- |
- |
- |
i 5 |
i 2 |
|||||||||||||||||||||||||||||||||||||||
Liabilities of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
VIE notes |
i 406 |
i 22 |
( i 12) |
( i 10) |
i 3 |
- |
i 7 |
( i 34) |
- |
- |
- |
i 382 |
( i 9) |
|||||||||||||||||||||||||||||||||||||||
Total liabilities |
$ | i 595 |
$ | i 66 |
$ | ( i 44) |
$ | i 41 |
$ | ( i 4) |
$ | i - |
$ | i 7 |
$ | ( i 117) |
$ | i - |
$ | i - |
$ | i - |
$ | i 544 |
$ | ( i 48) |
(1) - |
Transferred in and out at the end of the period. |
Three Months Ended September 30, 2019 |
Three Months Ended September 30, 2018 | ||||||||||||||||
In millions |
Total Gains (Losses) Included in Earnings |
Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets and Liabilities still held as of 2019
|
Total Gains (Losses) Included in Earnings |
Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets and Liabilities still held as of 2018
|
|||||||||||||
Revenues: |
|||||||||||||||||
Unrealized gains (losses) on insured derivatives |
$ |
i 9 |
$ |
i 9 |
$ |
i 4 |
$ |
i 4 |
|||||||||
Realized gains (losses) and other settlements on insured derivatives |
( i 10 |
) |
i - |
( i 6 |
) |
i - |
|||||||||||
Net gains (losses) on instruments at fair and foreign exchange |
( i 15 |
) |
( i 15 |
) |
i 4 |
( i 1 |
) | ||||||||||
Other net realized gains (losses) |
( i 1 |
) |
( i 1 |
) |
- |
- |
|||||||||||
Revenues of consolidated VIEs: |
|||||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
i 43 |
i 56 |
i 3 |
i 14 |
|||||||||||||
Total |
$ |
i 26 |
$ |
i 49 |
$ |
i 5 |
$ |
i 17 |
|||||||||
Nine Months Ended September 30, 2019 |
Nine Months Ended September 30, 2018 | ||||||||||||||||
In millions |
Total Gains (Losses) Included in Earnings |
Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets and Liabilities
still held as of 2019 |
Total Gains (Losses) Included in Earnings |
Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets and Liabilities
still held as of September 30, 2018 |
|||||||||||||
Revenues: |
|||||||||||||||||
Unrealized gains (losses) on insured derivatives |
$ |
i 23 |
$ |
i 23 |
$ |
i 36 |
$ |
i 36 |
|||||||||
Realized gains (losses) and other settlements on insured derivatives |
( i 11 |
) |
i - |
( i 49 |
) |
i - |
|||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 24 |
) |
( i 24 |
) |
i 10 |
i 5 |
|||||||||||
Net investment losses related to other-than-temporary impairments |
( i 1 |
) |
i - |
- |
i - |
||||||||||||
Other net realized gains (losses) |
( i 2 |
) |
( i 2 |
) |
( i 2 |
) |
( i 2 |
) | |||||||||
Revenues of consolidated VIEs: |
|||||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
i 41 |
i 57 |
i 28 |
i 36 |
|||||||||||||
Total |
$ |
i 26 |
$ |
i 54 |
$ |
i 23 |
$ |
i 75 |
|||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||||
In millions |
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Investments carried at fair value (1) |
$ |
i 2 |
$ |
i 1 |
$ |
i 13 |
$ |
( i 4 |
) | ||||||||
Fixed-maturity securities held at fair value-VIE (2) |
i 38 |
( i 7 |
) |
i 94 |
( i 19 |
) | |||||||||||
Loans receivable at fair value: |
|||||||||||||||||
Residential mortgage loans (2) |
( i 3 |
) |
( i 3 |
) |
i 40 |
( i 79 |
) | ||||||||||
Corporate loans (2) |
i - |
i - |
i - |
i 11 |
|||||||||||||
Loan repurchase commitments (2) |
i 50 |
i - |
i 60 |
i 9 |
|||||||||||||
Other assets-VIE (2) |
i 2 |
i 1 |
i 3 |
i 1 |
|||||||||||||
Medium-term notes (1) |
( i 1 |
) |
i 7 |
( i 1 |
) |
i 14 |
|||||||||||
Other liabilities (3) |
i - |
i - |
( i 2 |
) |
( i 2 |
) | |||||||||||
Variable interest entity notes (2) |
i 3 |
i 23 |
( i 77 |
) |
i 106 |
(1) - |
Reported within “Net gains (losses) on financial instruments at fair value and foreign exchange” on MBIA’s consolidated statements of operations. |
(2) - |
Reported within “Net gains (losses) on financial instruments at fair value and foreign exchange-VIE” on MBIA’s consolidated statements of operations. |
(3) - |
Reported within “Other net realized gains (losses)” on MBIA’s consolidated statements of operations. |
As of September 30, 2019 |
As of December 31, 2018 |
|||||||||||||||||||||||
Contractual |
Contractual |
|||||||||||||||||||||||
Outstanding |
Fair |
Outstanding |
Fair |
|||||||||||||||||||||
In millions |
Principal |
Value |
Difference |
Principal |
Value |
Difference |
||||||||||||||||||
Loans receivable at fair value: |
||||||||||||||||||||||||
Residential mortgage loans |
$ | i 109 |
$ | i 109 |
$ | i - |
$ | i 168 |
$ | i 164 |
$ | i 4 |
||||||||||||
Residential mortgage loans (90 days or more past due) |
i 147 |
i 37 |
i 110 |
i 153 |
i 8 |
i 145 |
||||||||||||||||||
Total loans receivable and other instruments at fair value |
$ | i 256 |
$ | i 146 |
$ | i 110 |
$ | i 321 |
$ | i 172 |
$ | i 149 |
||||||||||||
Variable interest entity notes |
$ | i 1,183 |
$ | i 472 |
$ | i 711 |
$ | i 1,295 |
$ | i 480 |
$ | i 815 |
||||||||||||
Medium-term notes |
$ | i 109 |
$ | i 106 |
$ | i 3 |
$ | i 114 |
$ | i 102 |
$ | i 12 |
In millions |
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
Other-Than- Temporary Impairments (1) | |||||||||||||||
AFS Investments |
||||||||||||||||||||
Fixed-maturity investments: |
||||||||||||||||||||
U.S. Treasury and government agency |
$ | i 807 |
$ | i 59 |
$ | ( i 1 |
) | $ | i 865 |
$ | i - |
|||||||||
State and municipal bonds |
i 205 |
i 24 |
i - |
i 229 |
i - |
|||||||||||||||
Foreign governments |
i 8 |
i - |
i - |
i 8 |
i - |
|||||||||||||||
Corporate obligations |
i 1,239 |
i 58 |
( i 34 |
) | i 1,263 |
( i 33 |
) | |||||||||||||
Mortgage-backed securities: |
||||||||||||||||||||
Residential mortgage-backed agency |
i 297 |
i 4 |
( i 1 |
) | i 300 |
i - |
||||||||||||||
Residential mortgage-backed non-agency |
i 25 |
i 1 |
( i 5 |
) | i 21 |
i - |
||||||||||||||
Commercial mortgage-backed |
i 23 |
i 1 |
i - |
i 24 |
i - |
|||||||||||||||
Asset-backed securities: |
||||||||||||||||||||
Collateralized debt obligations |
i 129 |
i - |
( i 2 |
) | i 127 |
i - |
||||||||||||||
Other asset-backed |
i 275 |
i 1 |
i - |
i 276 |
i - |
|||||||||||||||
Total AFS investments |
$ | i 3,008 |
$ | i 148 |
$ | ( i 43 |
) | $ | i 3,113 |
$ | ( i 33 |
) | ||||||||
HTM Investments |
||||||||||||||||||||
Assets of consolidated VIEs: |
||||||||||||||||||||
Corporate obligations |
$ | i 890 |
$ | i 87 |
$ | i - |
$ | i 977 |
$ | i - |
||||||||||
Total HTM investments |
$ | i 890 |
$ | i 87 |
$ | i - |
$ | i 977 |
$ | i - |
||||||||||
(1) - | Represents unrealized gains or losses on OTTI securities recognized in AOCI, which includes the non-credit component of impairments, as well as all subsequent changes in fair value of such impaired securities reported in AOCI. |
In millions |
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
Other-Than- Temporary Impairments (1) | |||||||||||||||
AFS Investments |
||||||||||||||||||||
Fixed-maturity investments: |
||||||||||||||||||||
U.S. Treasury and government agency |
$ | i 1,093 |
$ | i 26 |
$ | ( i 10 |
) | $ | i 1,109 |
$ | i - |
|||||||||
State and municipal bonds |
i 641 |
i 97 |
( i 11 |
) | i 727 |
i 42 |
||||||||||||||
Foreign governments |
i 9 |
i - |
i - |
i 9 |
i - |
|||||||||||||||
Corporate obligations |
i 1,473 |
i 6 |
( i 131 |
) | i 1,348 |
( i 68 |
) | |||||||||||||
Mortgage-backed securities: |
||||||||||||||||||||
Residential mortgage-backed agency |
i 218 |
i 1 |
( i 5 |
) | i 214 |
i - |
||||||||||||||
Residential mortgage-backed non-agency |
i 30 |
i 1 |
( i 4 |
) | i 27 |
i - |
||||||||||||||
Commercial mortgage-backed |
i 53 |
i - |
( i 2 |
) | i 51 |
i - |
||||||||||||||
Asset-backed securities: |
||||||||||||||||||||
Collateralized debt obligations |
i 122 |
i - |
( i 3 |
) | i 119 |
i - |
||||||||||||||
Other asset-backed |
i 178 |
i - |
( i 1 |
) | i 177 |
i - |
||||||||||||||
Total AFS investments |
$ | i 3,817 |
$ | i 131 |
$ | ( i 167 |
) | $ | i 3,781 |
$ | ( i 26 |
) | ||||||||
HTM Investments |
||||||||||||||||||||
Assets of consolidated VIEs: |
||||||||||||||||||||
Corporate obligations |
$ | i 890 |
$ | i 35 |
$ | i - |
$ | i 925 |
$ | i - |
||||||||||
Total HTM investments |
$ | i 890 |
$ | i 35 |
$ | i - |
$ | i 925 |
$ | i - |
||||||||||
(1) - | Represents unrealized gains or losses on OTTI securities recognized in AOCI, which includes the non-credit component of impairments, as well as all subsequent changes in fair value of such impaired securities reported in AOCI. |
|
AFS Securities |
HTM Securities |
||||||||||||||
|
|
|
Consolidated VIEs |
|||||||||||||
In millions |
Amortized Cost |
Fair Value |
Amortized Cost |
Fair Value |
||||||||||||
Due in one year or less |
$ | i 598 |
$ | i 599 |
$ | i - |
$ | i - |
||||||||
Due after one year through five years |
i 496 |
i 503 |
i - |
i - |
||||||||||||
Due after five years through ten years |
i 436 |
i 423 |
i - |
i - |
||||||||||||
Due after ten years |
i 729 |
i 840 |
i 890 |
i 977 |
||||||||||||
Mortgage-backed and asset-backed |
i 749 |
i 748 |
i - |
i - |
||||||||||||
Total fixed-maturity investments |
$ | i 3,008 |
$ | i 3,113 |
$ | i 890 |
$ | i 977 |
||||||||
|
||||||||||||||||||||||||
|
Less than 12 Months |
12 Months or Longer |
Total |
|||||||||||||||||||||
|
Fair |
Unrealized |
Fair |
Unrealized |
Fair |
Unrealized |
||||||||||||||||||
In millions |
Value |
Losses |
Value |
Losses |
Value |
Losses |
||||||||||||||||||
AFS Investments |
|
|
|
|
|
|
||||||||||||||||||
Fixed-maturity investments: |
|
|
|
|
|
|
||||||||||||||||||
U.S. Treasury and government agency |
$ | i 102 |
$ | i - |
$ | i 84 |
$ | ( i 1 |
) |
$ | i 186 |
$ | ( i 1 |
) | ||||||||||
State and municipal bonds |
i 5 |
i - |
i 26 |
i - |
i 31 |
i - |
||||||||||||||||||
Foreign governments |
i 5 |
i - |
i - |
i - |
i 5 |
i - |
||||||||||||||||||
Corporate obligations |
i 182 |
( i 1 |
) |
i 55 |
( i 33 |
) |
i 237 |
( i 34 |
) | |||||||||||||||
Mortgage-backed securities: |
|
|
|
|
|
|
||||||||||||||||||
Residential mortgage-backed agency |
i 35 |
( i 1 |
) |
i 32 |
i - |
i 67 |
( i 1 |
) | ||||||||||||||||
Residential mortgage-backed non-agency |
i - |
i - |
i 11 |
( i 5 |
) |
i 11 |
( i 5 |
) | ||||||||||||||||
Commercial mortgage-backed |
i 6 |
i - |
i - |
i - |
i 6 |
i - |
||||||||||||||||||
Asset-backed securities: |
|
|
|
|
|
|
||||||||||||||||||
Collateralized debt obligations |
i 43 |
i - |
i 68 |
( i 2 |
) |
i 111 |
( i 2 |
) | ||||||||||||||||
Other asset-backed |
i 16 |
i - |
i 9 |
i - |
i 25 |
i - |
||||||||||||||||||
Total AFS investments |
$ | i 394 |
$ | ( i 2 |
) |
$ | i 285 |
$ | ( i 41 |
) |
$ | i 679 |
$ | ( i 43 |
) | |||||||||
|
|||||||||||||||||||||||
|
Less than 12 Months |
12 Months or Longer |
Total | ||||||||||||||||||||
|
Fair |
Unrealized |
Fair |
Unrealized |
Fair |
Unrealized | |||||||||||||||||
In millions |
Value |
Losses |
Value |
Losses |
Value |
Losses | |||||||||||||||||
AFS Investments |
|
|
|
|
|
| |||||||||||||||||
Fixed-maturity investments: |
|
|
|
|
|
| |||||||||||||||||
U.S. Treasury and government agency |
$ | i 231 |
$ | ( i 1 |
) |
$ | i 278 |
$ | ( i 9 |
) | $ | i 509 |
$ | ( i 10) | |||||||||
State and municipal bonds |
i 60 |
( i 1 |
) |
i 135 |
( i 10 |
) | i 195 |
( i 11) | |||||||||||||||
Foreign governments |
i 5 |
i - |
i 2 |
i - |
i 7 |
i - | |||||||||||||||||
Corporate obligations |
i 900 |
( i 41 |
) |
i 335 |
( i 90 |
) | i 1,235 |
( i 131) | |||||||||||||||
Mortgage-backed securities: |
|
|
|
|
|
| |||||||||||||||||
Residential mortgage-backed agency |
i 29 |
( i 1 |
) |
i 118 |
( i 4 |
) | i 147 |
( i 5) | |||||||||||||||
Residential mortgage-backed non-agency |
i 2 |
i - |
i 13 |
( i 4 |
) | i 15 |
( i 4) | ||||||||||||||||
Commercial mortgage-backed |
i 24 |
i - |
i 21 |
( i 2 |
) | i 45 |
( i 2) | ||||||||||||||||
Asset-backed securities: |
|
|
|
|
|
| |||||||||||||||||
Collateralized debt obligations |
i 98 |
( i 3 |
) |
i 7 |
i - |
i 105 |
( i 3) | ||||||||||||||||
Other asset-backed |
i 127 |
i - |
i 35 |
( i 1 |
) | i 162 |
( i 1) | ||||||||||||||||
Total AFS investments |
$ | i 1,476 |
$ | ( i 47 |
) |
$ | i 944 |
$ | ( i 120 |
) | $ | i 2,420 |
$ | ( i 167) | |||||||||
|
AFS Securities |
|||||||||||
Percentage of Fair Value Below Book Value |
Number of Securities |
Book Value (in millions) |
Fair Value (in millions) |
|||||||||
> 5% to 15% |
i 9 |
$ | i 19 |
$ | i 19 |
|||||||
> 15% to 25% |
i 1 |
i 1 |
i - |
|||||||||
> 25% to 50% |
i 2 |
i 14 |
i 10 |
|||||||||
> 50% |
i 3 |
i 63 |
i 30 |
|||||||||
Total |
i 15 |
$ | i 97 |
$ | i 59 |
|||||||
In millions |
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||||
Credit Losses Recognized in Earnings Related to Other-Than- Temporary Impairments |
2019 |
2018 |
2019 |
2018 | |||||||||||
Beginning balance |
$ | i 74 |
$ | i 34 |
$ | i 37 |
$ | i 32 | |||||||
Additions for credit loss impairments recognized in the current period on securities previously impaired |
i - |
i 1 |
i 37 |
i 3 | |||||||||||
Ending balance |
$ | i 74 |
$ | i 35 |
$ | i 74 |
$ | i 35 | |||||||
In millions |
Fair Value |
Unrealized Loss |
Insurance Loss Reserve (2) | |||||||
Mortgage-backed: |
|
|
| |||||||
MBIA (1) |
$ | i 11 |
$ | ( i 5) |
$ | i 19 | ||||
(1) - | Includes investments insured by MBIA Corp. and National. |
(2) - | Insurance loss reserve estimates are based on the proportion of par value owned to the total amount of par value insured. |
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
In millions |
2019 |
2018 |
2019 |
2018 | ||||||||||||
Proceeds from sales |
$ | i 508 |
$ | i 583 |
$ | i 1,875 |
$ | i 1,647 |
||||||||
Gross realized gains |
$ | i 79 |
$ | i 1 |
$ | i 100 |
$ | i 4 |
||||||||
Gross realized losses |
$ | i - |
$ | ( i 2 |
) | $ | ( i 3 |
) | $ | ( i 15 |
) |
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
In millions |
2019 |
2018 |
2019 |
2018 | ||||||||||||
Net gains (losses) recognized during the period on equity securities |
$ | i 2 |
$ | i 3 |
$ | i 9 |
$ | i 3 |
||||||||
Less: |
|
|
|
|
||||||||||||
Net gains (losses) recognized during the period on equity securities sold during the period |
i - |
i - |
i 1 |
i 1 |
||||||||||||
Unrealized gains (losses) recognized during the period on equity securities still held at the reporting date |
$ | i 2 |
$ | i 3 |
$ | i 8 |
$ | i 2 |
||||||||
$ in millions |
As of September 30, 2019 |
|||||||||||||||||||||||||||||||
Notional Value |
||||||||||||||||||||||||||||||||
Credit Derivatives Sold |
Weighted Average Remaining Expected Maturity |
AAA |
AA |
A |
BBB |
Below Investment Grade |
Total Notional |
Fair Asset (Liability) |
||||||||||||||||||||||||
Insured credit default swaps |
i 0.3 |
$ | i - |
$ | i - |
$ | i - |
$ | i - |
$ | i 34 |
$ | i 34 |
$ | ( i 10 |
) | ||||||||||||||||
Insured swaps |
i 14.8 Years |
i - |
i 66 |
i 1,295 |
i 461 |
i - |
i 1,822 |
( i 2 |
) | |||||||||||||||||||||||
Total notional |
$ | i - |
$ | i 66 |
$ | i 1,295 |
$ | i 461 |
$ | i 34 |
$ | i 1,856 |
||||||||||||||||||||
Total fair value |
$ | i - |
$ | i - |
$ | ( i 1 |
) | $ | ( i 1 |
) | $ | ( i 10 |
) | $ | ( i 12 |
) |
$ in millions |
As of December 31, 2018 |
|||||||||||||||||||||||||||||||
Notional Value |
||||||||||||||||||||||||||||||||
Credit Derivatives Sold |
Weighted Average Remaining Expected Maturity |
AAA |
AA |
A |
BBB |
Below Investment Grade |
Total Notional |
Fair Asset (Liability) | ||||||||||||||||||||||||
Insured credit default swaps |
i 1.0 Years |
$ | i - |
$ | i - |
$ | i - |
$ | i - |
$ | i 70 |
$ | i 70 |
$ | ( i 33 |
) | ||||||||||||||||
Insured swaps |
i 15.7 Years |
i - |
i 74 |
i 1,463 |
i 896 |
i - |
i 2,433 |
( i 2 |
) | |||||||||||||||||||||||
Total notional |
$ | i - |
$ | i 74 |
$ | i 1,463 |
$ | i 896 |
$ | i 70 |
$ | i 2,503 |
||||||||||||||||||||
Total fair value |
$ | i - |
$ | i - |
$ | ( i 1 |
) | $ | ( i 1 |
) | $ | ( i 33 |
) | $ | ( i 35 |
) | ||||||||||||||||
In millions |
Derivative Assets (1) |
Derivative Liabilities (1) | |||||||||||||||||
Derivative Instruments |
Notional Amount Outstanding |
Balance Sheet Location |
Fair Value |
Balance Sheet Location |
Fair Value | ||||||||||||||
Not designated as hedging instruments: |
|||||||||||||||||||
Insured credit default swaps |
$ | i 34 |
Other assets |
$ | i - |
Derivative liabilities |
$ | ( i 10) | |||||||||||
Insured swaps |
i 1,822 |
Other assets |
i - |
Derivative liabilities |
( i 2) | ||||||||||||||
Interest rate swaps |
i 440 |
Other assets |
i 2 |
Derivative liabilities |
( i 152) | ||||||||||||||
Interest rate swaps-embedded |
i 227 |
Medium-term notes |
i - |
Medium-term notes |
( i 17) | ||||||||||||||
Currency swaps-VIE |
i 56 |
Other assets-VIE |
i 8 |
Derivative liabilities-VIE |
i - | ||||||||||||||
All other |
i 49 |
Other assets |
i - |
Derivative liabilities |
( i 30) | ||||||||||||||
Total non-designated derivatives |
$ | i 2,628 |
$ | i 10 |
$ | ( i 211) |
(1) - | In accordance with the accounting guidance for derivative instruments and hedging activities, the balance sheet location of the Company’s embedded derivative instruments is determined by the location of the related host contract. |
In millions |
Derivative Assets (1) |
Derivative Liabilities (1) |
||||||||||||||||||
Derivative Instruments |
Notional Amount Outstanding |
Balance Sheet Location |
Fair Value |
Balance Sheet Location |
Fair Value |
|||||||||||||||
Not designated as |
||||||||||||||||||||
Insured credit default swaps |
$ | i 70 |
Other assets |
$ | - |
Derivative liabilities |
$ | ( i 33 |
) | |||||||||||
Insured swaps |
i 2,433 |
Other assets |
- |
Derivative liabilities |
( i 2 |
) | ||||||||||||||
Interest rate swaps |
i 712 |
Other assets |
i 2 |
Derivative liabilities |
( i 157 |
) | ||||||||||||||
Interest rate swaps-embedded |
i 293 |
Medium-term notes |
- |
Medium-term notes |
( i 13 |
) | ||||||||||||||
Currency swaps-VIE |
i 62 |
Other assets-VIE |
i 16 |
Derivative liabilities-VIE |
- |
|||||||||||||||
All other |
i 49 |
Other assets |
- |
Derivative liabilities |
( i 7 |
) | ||||||||||||||
Total non-designated derivatives |
$ | i 3,619 |
$ | i 18 |
$ | ( i 212 |
) | |||||||||||||
(1) - | In accordance with the accounting guidance for derivative instruments and hedging activities, the balance sheet location of the Company’s embedded derivative instruments is determined by the location of the related host contract. |
In millions |
||||||||||
Derivatives Not Designated as |
Three Months Ended September 30, |
|||||||||
Hedging Instruments |
Location of Gain (Loss) Recognized in Income on Derivative |
2019 |
2018 |
|||||||
Insured credit default swaps |
Unrealized gains (losses) on insured derivatives |
$ |
i 9 |
$ |
i 4 |
|||||
Insured credit default swaps |
Realized gains (losses) and other settlements on insured derivatives |
( i 10) |
( i 5) |
|||||||
Interest rate swaps |
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 30) |
i 7 |
|||||||
Currency swaps-VIE |
Net gains (losses) on financial instruments at fair value and foreign exchange-VIE |
( i 3) |
i - |
|||||||
All other |
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 14) |
( i 4) |
|||||||
Total |
$ |
( i 48) |
$ |
i 2 |
||||||
In millions |
||||||||||
Derivatives Not Designated as |
Nine Months Ended September 30, |
|||||||||
Hedging Instruments |
Location of Gain (Loss) Recognized in Income on Derivative |
2019 |
2018 |
|||||||
Insured credit default swaps |
Unrealized gains (losses) on insured derivatives |
$ |
i 23 |
$ |
i 36 |
|||||
Insured credit default swaps |
Realized gains (losses) and other settlements on insured derivatives |
( i 11) |
( i 49) |
|||||||
Interest rate swaps |
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 85) |
i 33 |
|||||||
Currency swaps-VIE |
Net gains (losses) on financial instruments at fair value and foreign exchange-VIE |
( i 8) |
( i 5) |
|||||||
All other |
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 23) |
( i 4) |
|||||||
Total |
$ |
( i 104) |
$ |
i 11 |
||||||
Three Months Ended September 30, |
Nine Months Ended September 30, | |||||||||||||||
In millions |
2019 |
2018 |
2019 |
2018 | ||||||||||||
Income (loss) before income taxes |
$ | i 89 |
$ | ( i 45) |
$ | ( i 137) |
$ | ( i 287) |
||||||||
Provision (benefit) for income taxes |
$ | i 18 |
$ | i - |
$ | ( i 21) |
$ | i 2 |
||||||||
Effective tax rate |
|
i 20.2% |
i 0.0% |
|
i 15.3% |
- i 0.7% |
• | MBIA Inc.; |
• | GFL; |
• | IMC; |
• | MZ Funding LLC; and |
• | LaCrosse Financial Products, LLC, a wholly-owned affiliate, to which MBIA Insurance Corporation has written insurance policies guaranteeing the obligations under CDS. Certain policies cover payments potentially due under CDS, including termination payments that may become due in certain circumstances, including the occurrence of certain insolvency or payment defaults under the CDS or derivatives contracts by the insured counterparty or by the guarantor. |
Three Months Ended September 30, 2019 |
||||||||||||||||||||
In millions |
U.S. Public Finance Insurance |
Corporate |
International and Structured Finance Insurance |
Eliminations |
Consolidated |
|||||||||||||||
Revenues (1) |
$ | i 30 |
$ | i 6 |
$ | i 11 |
$ | i - |
$ | i 47 |
||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
i 78 |
( i 20) |
( i 14) |
i - |
i 44 |
|||||||||||||||
Net gains (losses) on extinguishment of debt |
i - |
( i 1) |
i - |
i - |
( i 1) |
|||||||||||||||
Other net realized gains (losses) |
i - |
( i 1) |
i 1 |
i - |
i - |
|||||||||||||||
Revenues of consolidated VIEs |
i 32 |
i - |
i 50 |
i - |
i 82 |
|||||||||||||||
Inter-segment revenues (2) |
i 7 |
i 15 |
i 6 |
( i 28) |
i - |
|||||||||||||||
Total revenues |
i 147 |
( i 1) |
i 54 |
( i 28) |
i 172 |
|||||||||||||||
Losses and loss adjustment |
( i 90) |
i - |
i 77 |
i - |
( i 13) |
|||||||||||||||
Operating |
i 4 |
i 15 |
i 7 |
i - |
i 26 |
|||||||||||||||
Interest |
i - |
i 17 |
i 33 |
i - |
i 50 |
|||||||||||||||
Expenses of consolidated VIEs |
i - |
i - |
i 20 |
i - |
i 20 |
|||||||||||||||
Inter-segment expenses (2) |
i 14 |
i 6 |
i 8 |
( i 28) |
i i - / |
|||||||||||||||
Total expenses |
( i 72) |
i 38 |
i 145 |
( i 28) |
i 83 |
|||||||||||||||
Income (loss) before income taxes |
$ | i 219 |
$ | ( i 39) |
$ | ( i 91) |
$ | i - |
$ | i 89 |
||||||||||
Identifiable assets |
$ | i 4,271 |
$ | i 939 |
$ | i 4,678 |
$ | ( i 2,282) |
(3) |
$ | i 7,606 |
|||||||||
(1) - | Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements and other fees. |
(2) - | Represents intercompany premium income and expense and intercompany interest income and expense pertaining to intercompany receivables and payables. |
(3) - | Consists primarily of intercompany reinsurance balances and repurchase agreements. |
|
Three Months Ended September 30, 2018 |
|||||||||||||||||||
In millions |
U.S. Public Finance Insurance |
Corporate |
International and Structured Finance Insurance |
Eliminations |
Consolidated |
|||||||||||||||
Revenues (1) |
$ | i 45 |
$ | i 7 |
$ | i 58 |
$ | i - |
$ | i 110 |
||||||||||
Net change in fair value of insured derivatives |
i - |
i - |
( i 1) |
i - |
( i 1) |
|||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
i 1 |
i 17 |
( i 13) |
i - |
i 5 |
|||||||||||||||
Net investment losses related to other-than-temporary impairments |
( i 1) |
i - |
i - |
i - |
( i 1) |
|||||||||||||||
Net gains (losses) on extinguishment of debt |
i - |
i 3 |
i - |
i - |
i 3 |
|||||||||||||||
Other net realized gains (losses) |
i - |
i - |
i 1 |
i - |
i 1 |
|||||||||||||||
Revenues of consolidated VIEs |
i - |
i - |
( i 12) |
i - |
( i 12) |
|||||||||||||||
Inter-segment revenues (2) |
i 7 |
i 11 |
i 6 |
( i 24) |
i - |
|||||||||||||||
Total revenues |
i 52 |
i 38 |
i 39 |
( i 24) |
i 105 |
|||||||||||||||
Losses and loss adjustment |
i 48 |
i - |
( i 2) |
i - |
i 46 |
|||||||||||||||
Operating |
i 5 |
i 13 |
i 9 |
i - |
i 27 |
|||||||||||||||
Interest |
i - |
i 20 |
i 32 |
i - |
i 52 |
|||||||||||||||
Expenses of consolidated VIEs |
i - |
i - |
i 25 |
i - |
i 25 |
|||||||||||||||
Inter-segment expenses (2) |
i 10 |
i 5 |
i 9 |
( i 24) |
i - |
|||||||||||||||
Total expenses |
i 63 |
i 38 |
i 73 |
( i 24) |
i 150 |
|||||||||||||||
Income (loss) before income taxes |
$ | ( i 11) |
$ | i - |
$ | ( i 34) |
$ | i - |
$ | ( i 45) |
||||||||||
Identifiable assets |
$ | i 4,453 |
$ | i 1,062 |
$ | i 5,058 |
$ | ( i 2,180) |
(3) |
$ | i 8,393 |
|||||||||
|
|
(1) - | Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements and other fees. |
(2) - | Represents intercompany premium income and expense and intercompany interest income and expense pertaining to intercompany receivables and payables. |
(3) - | Consists primarily of intercompany reinsurance balances and repurchase agreements. |
|
Nine Months Ended September 30, 2019 |
|||||||||||||||||||
In millions |
U.S. Public Finance Insurance |
Corporate |
International and Structured Finance Insurance |
Eliminations |
Consolidated |
|||||||||||||||
Revenues (1) |
$ | i 106 |
$ | i 21 |
$ | i 28 |
$ | i - |
$ | i 155 |
||||||||||
Net change in fair value of insured derivatives |
|
|
i - |
|
|
|
i - |
|
|
|
i 13 |
|
|
|
i - |
|
|
|
i 13 |
|
Net gains (losses) on financial instruments at fair value and foreign exchange |
i 135 |
( i 71) |
( i 24) |
i - |
i 40 |
|||||||||||||||
Net investment losses related to other-than-temporary impairments |
|
|
( i 37) |
|
|
|
i - |
|
|
|
i - |
|
|
|
i - |
|
|
|
( i 37) |
|
Net gains (losses) on extinguishment of debt |
|
|
i - |
|
|
|
( i 1) |
|
|
|
i - |
|
|
|
i - |
|
|
|
( i 1) |
|
Other net realized gains (losses) |
i 1 |
( i 2) |
i 3 |
i - |
i 2 |
|||||||||||||||
Revenues of consolidated VIEs |
i 38 |
i - |
i 41 |
i 1 |
i 80 |
|||||||||||||||
Inter-segment revenues (2) |
i 22 |
i 48 |
i 15 |
( i 85) |
i - |
|||||||||||||||
Total revenues |
i 265 |
( i 5) |
i 76 |
( i 84) |
i 252 |
|||||||||||||||
Losses and loss adjustment |
|
|
( i 34) |
|
|
|
i - |
|
|
|
i 123 |
|
|
|
i - |
|
|
|
i 89 |
|
Operating |
i 8 |
i 53 |
i 16 |
i - |
i 77 |
|||||||||||||||
Interest |
i - |
i 56 |
i 98 |
i - |
i 154 |
|||||||||||||||
Expenses of consolidated VIEs |
i - |
i - |
i 69 |
i - |
i 69 |
|||||||||||||||
Inter-segment expenses (2) |
|
|
i 41 |
|
|
|
i 17 |
|
|
|
i 26 |
|
|
|
( i 84) |
|
|
|
i - |
|
Total expenses |
i 15 |
i 126 |
i 332 |
( i 84) |
i 389 |
|||||||||||||||
Income (loss) before income taxes |
$ | i 250 |
$ | ( i 131) |
$ | ( i 256) |
$ | i - |
$ | ( i 137) |
||||||||||
Identifiable assets |
$ | i 4,271 |
$ | i 939 |
$ | i 4,678 |
$ | ( i 2,282) |
(3) |
$ | i 7,606 |
|||||||||
|
|
|
|
(1) - | Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements and other fees. |
(2) - | Represents intercompany premium income and expense and intercompany interest income and expense pertaining to intercompany receivables and payables. |
(3) - | Consists primarily of intercompany reinsurance balances and repurchase agreements. |
|
Nine Months Ended September 30, 2018 |
|||||||||||||||||||
In millions |
U.S. Public Finance Insurance |
Corporate |
International and Structured Finance Insurance |
Eliminations |
Consolidated |
|||||||||||||||
Revenues (1) |
$ | i 139 |
$ | i 20 |
$ | i 98 |
$ | i - |
$ | i 257 |
||||||||||
Net change in fair value of insured derivatives |
i - |
i - |
( i 13) |
i - |
( i 13) |
|||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 13) |
i 48 |
( i 17) |
i - |
i 18 |
|||||||||||||||
Net investment losses related to other-than-temporary impairments |
( i 3) |
i - |
i - |
i - |
( i 3) |
|||||||||||||||
Net gains (losses) on extinguishment of debt |
i - |
i 3 |
i - |
i - |
i 3 |
|||||||||||||||
Other net realized gains (losses) |
i - |
( i 2) |
i 2 |
i - |
i - |
|||||||||||||||
Revenues of consolidated VIEs |
i - |
i - |
( i 72) |
i - |
( i 72) |
|||||||||||||||
Inter-segment revenues (2) |
i 20 |
i 36 |
i 18 |
( i 74) |
i - |
|||||||||||||||
Total revenues |
i 143 |
i 105 |
i 16 |
( i 74) |
i 190 |
|||||||||||||||
Losses and loss adjustment |
i 184 |
i - |
( i 7) |
i - |
i 177 |
|||||||||||||||
Operating |
i 14 |
i 39 |
i 21 |
i - |
i 74 |
|||||||||||||||
Interest |
i - |
i 60 |
i 95 |
i - |
i 155 |
|||||||||||||||
Expenses of consolidated VIEs |
i - |
i - |
i 71 |
i - |
i 71 |
|||||||||||||||
Inter-segment expenses (2) |
i 34 |
i 14 |
i 27 |
( i 75) |
i - |
|||||||||||||||
Total expenses |
i 232 |
i 113 |
i 207 |
( i 75) |
i 477 |
|||||||||||||||
Income (loss) before income taxes |
$ | ( i 89) |
$ | ( i 8) |
$ | ( i 191) |
$ | i 1 |
$ | ( i 287) |
||||||||||
Identifiable assets |
$ | i 4,453 |
$ | i 1,062 |
$ | i 5,058 |
$ | ( i 2,180) |
$ | i 8,393 |
||||||||||
|
|
(1) - | Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements and other fees. |
(2) - | Represents intercompany premium income and expense and intercompany interest income and expense pertaining to intercompany receivables and payables. |
(3) - | Consists primarily of intercompany reinsurance balances and repurchase agreements. |
In millions except per share amounts |
2019 |
2018 |
2019 |
2018 |
|||||||||
Basic earnings per share: |
|||||||||||||
Net income (loss) |
$ |
i 71 |
$ |
( i 45 |
) |
$ |
( i 116 |
) |
$ |
( i 289 |
) | ||
Less: undistributed earnings allocated to participating securities |
i 4 |
- |
- |
- |
|||||||||
Net income (loss) available to common shareholders |
i 67 |
( i 45 |
) |
( i 116 |
) |
( i 289 |
) | ||||||
Basic weighted average shares (1) |
78.7 |
89.5 |
82.8 |
89.1 |
|||||||||
Net income (loss) per basic common share |
$ | i 0.86 |
$ | ( i 0.50 |
) | $ | ( i 1.40 |
) |
$ | ( i 3.24 |
) | ||
Diluted earnings per share: |
|||||||||||||
Net income (loss) |
$ |
i 71 |
$ |
( i 45 |
) |
$ |
( i 116 |
) |
$ |
( i 289 |
) | ||
Less: undistributed earnings allocated to participating securities |
i 4 |
- |
- |
- |
|||||||||
Net income (loss) available to common shareholders |
i 67 |
( i 45) |
( i 116 |
) |
( i 289 |
) | |||||||
Diluted weighted average shares |
78.7 |
89.5 |
82.8 |
89.1 |
|||||||||
Net income (loss) per diluted common share |
$ | i 0.86 |
$ | ( i 0.50 |
) | $ | ( i 1.40 |
) |
$ | ( i 3.24 |
) | ||
Potentially dilutive securities excluded from the calculation of diluted EPS because of antidilutive affect |
i 4.5 |
i 1.4 |
i 4.5 |
i 1.4 |
(1) - | Includes i 1.1 million and i 0.9 million
of participating securities that met the service condition and were eligible to receive nonforfeitable dividends or dividend equivalents for the three months ended September 30, 2019 and 2018, respectively. Includes i 1.0 million and i 0.8 million
of participating securities that met the service condition and were eligible to receive nonforfeitable dividends or dividend equivalents for the nine months ended September 30, 2019 and 2018, respectively. |
In millions |
Unrealized Gains (Losses) on AFS Securities, Net |
Currency Translation, Net |
Instrument-Specific Credit Risk of Liabilities Measured at Fair Value, Net |
Total |
||||||||||||
Balance, December 31, 2018 |
$ |
( i 39) |
$ | ( i 7) |
$ | ( i 110) |
$ |
( i 156) |
||||||||
Other comprehensive income (loss) reclassifications |
i 133 |
i 1 |
( i 27) |
i 107 |
||||||||||||
Amounts reclassified from AOCI |
( i 20) |
i - |
i 26 |
i 6 |
||||||||||||
Net period other comprehensive |
i 113 |
i 1 |
( i 1) |
i 113 |
||||||||||||
Balance, September 30, 2019 |
$ | i 74 |
$ | ( i 6) |
$ | ( i 111) |
$ | ( i 43 ) |
||||||||
In millions |
Amounts Reclassified from AOCI |
|||||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||
Details about AOCI Components |
201 9 |
2018 |
201 9 |
2018 |
Affected Line Item o n the Consolidated S tatements of O perations | |||||||||||||
Unrealized gains (losses) on AFS securities: |
||||||||||||||||||
Realized gains (losses) on sale of securities |
$ | ( i 7) |
$ | i 2 |
$ | i 16 |
$ | i 4 |
Net gains (losses) on financial at fair value and | |||||||||
OTTI |
i 42 |
( i 2) |
i 5 |
( i 3) |
Net investment losses related to | |||||||||||||
Amortization on securities |
( i 1) |
i - |
( i 1) |
( i 1) |
Net investment income | |||||||||||||
Total unrealized gains (losses) on AFS securities |
i 34 |
i - |
i 20 |
i - |
||||||||||||||
Instrument-specific credit risk of liabilities: |
||||||||||||||||||
Settlement of liabilities |
( i 3) |
i - |
( i 26) |
i - |
Net gains (losses) on financial at fair value and | |||||||||||||
Total reclassifications for the period |
$ | i 31 |
$ | i - |
$ | ( i 6) |
$ | i - |
Net income (loss) |
$ in millions |
As of |
Balance Sheet Location |
||||||
Right-of-use asset |
$ | Other assets |
||||||
Lease liability |
$ | i 22 |
Other liabilities |
|||||
Weighted average remaining lease term (years) |
i 8.2 |
|||||||
Discount rate used for operating leases |
i 7.5 |
% |
||||||
Total future minimum lease payments |
$ | i 33 |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||||
In millions except per share amounts |
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Net income (loss) |
$ | 71 |
$ | (45 |
) | $ | (116 |
) | $ | (289 |
) | ||||||
Net income (loss) per diluted share |
$ | 0.86 |
$ | (0.50 |
) | $ | (1.40 |
) | $ | (3.24 |
) | ||||||
Adjusted net income (loss) (1) |
$ | 115 |
$ | (32 |
) | $ | 78 |
$ | (144 |
) | |||||||
Adjusted net income (loss) per diluted share (1) |
$ | 1.46 |
$ | (0.35 |
) | $ | 0.94 |
$ | (1.62 |
) | |||||||
Cost of shares repurchased |
$ | 40 |
$ | - |
$ | 94 |
$ | 14 |
(1) | - Adjusted net income (loss) and adjusted net income (loss) per diluted share are non-GAAP measures. Refer to the following “Results of Operations” section for a discussion of adjusted net income (loss) and adjusted net income (loss) per diluted share and a reconciliation of GAAP net income (loss) to adjusted net income (loss) and GAAP net income (loss) per diluted share to adjusted net income (loss) per diluted share. |
• | On January 1, 2019 and July 1, 2019, the Commonwealth of Puerto Rico and certain of its instrumentalities (“Puerto Rico”), defaulted on scheduled debt service for National insured bonds and National paid gross claims in the aggregate of $393 million. |
• | In February of 2019, the Plan of Adjustment for the Puerto Rico Sales Tax Financing Corporation (“COFINA”) was implemented. National insured bondholders were given the option of commuting their insurance policy and receiving uninsured COFINA bonds or placing their new uninsured COFINA bonds into National Custodial Trusts (the “Trusts”) and continue to benefit from a National insurance policy. As a result, seven Trusts were formed and consolidated as variable interest entities (“VIEs”) by the Company. National tendered and commuted $182 million market value of National insured COFINA bonds it owned for new uninsured COFINA bonds, which in conjunction with other tendered and commuted bonds, resulted in a reduction to National’s insured exposure to COFINA. Since the closing date and initial distribution of cash and bonds, National has elected to sell all of the new uninsured bonds held in the Trusts during the second and third quarters of 2019. The sale of bonds held in the Trusts resulted in a further reduction to National’s exposure to COFINA. Since this transaction was implemented through September 30, 2019, National’s COFINA gross par outstanding, gross par outstanding plus capital appreciation bonds (“CABs”) accreted interest and debt service outstanding declined by approximately $648 million, $1.1 billion and $4.0 billion, respectively. |
• | In July of 2019, MBIA Corp. consummated a financing facility (the “Refinanced Facility”) between MZ Funding LLC (“MZ Funding”) and certain purchasers, pursuant to which the purchasers or their affiliates (collectively, the “Senior Lenders”), agreed to refinance the outstanding insured senior notes of MZ Funding, and MBIA Inc. received amended subordinated notes of MZ Funding (the Senior Lenders and MBIA Inc. being referred to herein as, the “Lenders”). In connection with the refinancing transaction, MZ Funding and MBIA Corp. entered into an amended and restated credit agreement (the “New Credit Agreement” and the loans thereunder, the “MBIA Loans”). MBIA Corp. issued new financial guarantee insurance policies (the “MBIA Corp. Policies”) insuring the Refinanced Facility. Refer to the “Liquidity” section for additional information on the Refinanced Facility. |
• | In September of 2019, National agreed to join the restructuring support agreement, as amended (“RSA”), with the Puerto Rico Electric Power Authority (“PREPA”), other monoline insurers, a group of uninsured PREPA bondholders, Puerto Rico, and the Financial Oversight and Management Board for Puerto Rico. The restructuring transaction described in the RSA is intended to, among other things, provide a framework for the consensual resolution of the treatment of National’s insured PREPA revenue bonds in PREPA’s recovery plan. Upon consummation of the restructuring transaction, PREPA’s revenue bonds will be exchanged into new securitization bonds issued by a special purpose entity and secured by a segregated transition charge assessed on customer’s electricity bills. The closing of the restructuring transaction is subject to a number of conditions, including the Title III Court’s approval of the RSA and settlement described therein, support of a minimum of 67% of voting bondholders for a plan of adjustment that includes the proposed treatment of PREPA revenue bonds and confirmation of such plan by the Title III Court, and execution of acceptable documentation and legal opinions. |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||||
In millions except per share amounts |
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Total revenues |
$ | 172 |
$ | 105 |
$ | 252 |
$ | 190 |
|||||||||
Total expenses |
83 |
150 |
389 |
477 |
|||||||||||||
Income (loss) before income taxes |
89 |
(45 |
) | (137 |
) | (287 |
) | ||||||||||
Provision (benefit) for income taxes |
18 |
- |
(21 |
) | 2 |
||||||||||||
Net income (loss) |
$ | 71 |
$ | (45 |
) | $ | (116 |
) | $ | (289 |
) | ||||||
Net income (loss) per common share: |
|||||||||||||||||
Basic |
$ | 0.86 |
$ | (0.50 |
) | $ | (1.40 |
) | $ | (3.24 |
) | ||||||
Diluted |
$ | 0.86 |
$ | (0.50 |
) | $ | (1.40 |
) | $ | (3.24 |
) | ||||||
Weighted average number of common shares outstanding: |
|||||||||||||||||
Basic |
78.7 |
89.5 |
82.8 |
89.1 |
|||||||||||||
Diluted |
78.7 |
89.5 |
82.8 |
89.1 |
• | Mark-to-market gains (losses) on financial instruments mark-to-market gains (losses) on financial instruments that primarily include interest rate swaps and hybrid financial instruments. Also eliminated are the mark-to-market gains (losses) on warrants issued by the Company. All of these amounts fluctuate based on market interest rates, credit spreads, MBIA Inc.’s common stock price and other market factors. |
• | Foreign exchange gains (losses) non-functional currencies. Given the possibility of volatility in foreign exchange markets, we exclude the impact of foreign exchange gains (losses) to provide a measurement of comparability of adjusted net income (loss). |
• | Net gains (losses) on sales of investments, OTTI and extinguishment of debt |
• | Income taxes pre-tax adjustments. |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||||
In millions except share and per share amounts |
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Net income (loss) |
$ | 71 |
$ | (45 |
) | $ | (116 |
) | $ | (289 |
) | ||||||
Less: adjusted net income (loss) adjustments: |
|||||||||||||||||
Income (loss) before income taxes of our international and structured finance insurance segment and eliminations |
(94 |
) | (34 |
) | (257 |
) | (190 |
) | |||||||||
Adjustments to income before income taxes of our U.S. public finance insurance and corporate segments: |
|||||||||||||||||
Mark-to-market gains (losses) on financial instruments(1) |
(31 |
) | 18 |
(69 |
) | 45 |
|||||||||||
Foreign exchange gains (losses) (1) |
16 |
2 |
18 |
15 |
|||||||||||||
Net gains (losses) on sales of investments (1) |
78 |
(1 |
) | 125 |
(12 |
) | |||||||||||
Net investment losses related to OTTI |
- |
(1 |
) | (37 |
) | (3 |
) | ||||||||||
Net gains (losses) on extinguishment of debt |
(1 |
) | 3 |
(1 |
) | 3 |
|||||||||||
Other net realized gains (losses) |
(1 |
) | - |
(2 |
) | (2 |
) | ||||||||||
Adjusted net income adjustment to the (provision) benefit for income tax (2) |
(11 |
) | - |
29 |
(1 |
) | |||||||||||
Adjusted net income (loss) |
$ | 115 |
$ | (32 |
) | $ | 78 |
$ | (144 |
) | |||||||
Adjusted net income (loss) per diluted common share (3) |
$ | 1.46 |
$ | (0.35 |
) | $ | 0.94 |
$ | (1.62 |
) | |||||||
Gain (loss) related to our U.S. public finance insurance segment VIE consolidations included in adjusted net income (loss) |
37 |
- |
17 |
- |
|||||||||||||
Gain (loss) related to our U.S. public finance insurance segment VIE consolidations per diluted common share included in adjusted net income (loss) per diluted common share |
0.46 |
- |
0.20 |
- |
(1) - | Reported within “Net gains (losses) on financial instruments at fair value and foreign exchange” on the Company’s consolidated statements of operations. |
(2) - | Reported within “Provision (benefit) for income taxes” on the Company’s consolidated statements of operations. |
(3) - | Adjusted net income (loss) per diluted common share is calculated by taking operating income (loss) divided by the GAAP weighted average number of diluted common shares outstanding. |
|
• | Negative Book value of MBIA Corp. |
• | Net unrealized (gains) losses on available-for-sale (“AFS”) securities excluding MBIA Corp. |
• | Net unearned premium revenue in excess of expected losses of National |
• | Gain (loss) related to National VIE consolidations |
In millions except share and per share amounts |
As of September 30, 2019 |
As of December 31, 2018 |
|||||||
Total shareholders’ equity of MBIA Inc. |
$ | 1,035 |
$ | 1,119 |
|||||
Common shares outstanding |
80,467,930 |
89,821,713 |
|||||||
GAAP book value per share |
$ | 12.86 |
$ | 12.46 |
|||||
Management’s adjustments described above: |
|||||||||
Remove negative book value per share of MBIA Corp. |
(15.08 |
) | (10.93 |
) | |||||
Remove net unrealized gains (losses) on available-for-sale securities included in other comprehensive income (loss) |
1.14 |
(0.46 |
) | ||||||
Include net unearned premium revenue in excess of expected losses |
3.54 |
3.53 |
|||||||
Remove gain (loss) related to National VIE consolidations |
- |
- |
Three Months Ended September 30, |
Percent |
Nine Months Ended September 30, |
Percent |
||||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
|||||||||||||||||||
Net premiums earned |
$ | 14 |
$ | 24 |
-42% |
$ | 50 |
$ | 75 |
-33% |
|||||||||||||||
Net investment income |
23 |
27 |
-15% |
76 |
83 |
-8% |
|||||||||||||||||||
Fees and reimbursements |
- |
1 |
-100% |
2 |
2 |
-% |
|||||||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
78 |
1 |
n/m |
135 |
(14 |
) | n/m |
||||||||||||||||||
Net investment losses related to other-than-temporary impairments |
- |
(1 |
) | -100% |
(37 |
) | (3 |
) | n/m |
||||||||||||||||
Other net realized gains (losses) |
- |
- |
-% |
1 |
- |
n/m |
|||||||||||||||||||
Revenues of consolidated VIEs: |
|||||||||||||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
32 |
- |
n/m |
81 |
- |
n/m |
|||||||||||||||||||
Other net realized gains (losses) |
- |
- |
-% |
(43 |
) | - |
n/m |
||||||||||||||||||
Total revenues |
147 |
52 |
n/m |
265 |
143 |
85% |
|||||||||||||||||||
Losses and loss adjustment |
(90 |
) | 48 |
n/m |
(34 |
) | 184 |
-118% |
|||||||||||||||||
Amortization of deferred acquisition costs |
4 |
6 |
-33% |
13 |
17 |
-24% |
|||||||||||||||||||
Operating |
14 |
9 |
56% |
36 |
31 |
16% |
|||||||||||||||||||
Total expenses |
(72 |
) | 63 |
n/m |
15 |
232 |
-94% |
||||||||||||||||||
Income (loss) before income taxes |
$ | 219 |
$ | (11 |
) | n/m |
$ | 250 |
$ | (89 |
) | n/m |
|||||||||||||
Three Months Ended September 30, |
Percent |
Nine Months Ended September 30, |
Percent |
||||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
|||||||||||||||||||
Losses and loss adjustment expenses (1) |
$ | (90 |
) | $ | 48 |
n/m |
$ | (34 |
) | $ | 184 |
-118% |
|||||||||||||
(1) - | As a result of consolidation of VIEs, loss and LAE includes the elimination of an expense of $15 million and a benefit of $9 million for the three and nine months ended September 30, 2019, respectively. |
n/m | - Percent change not meaningful. |
In millions |
Percent Change |
||||||||||||
Assets: |
|||||||||||||
Insurance loss recoverable |
$ | 945 |
$ | 571 |
65% |
||||||||
Reinsurance recoverable on paid and unpaid losses (1) |
10 |
16 |
-38% |
||||||||||
Liabilities: |
|||||||||||||
Loss and LAE reserves |
374 |
551 |
-32% |
||||||||||
Insurance loss recoverable - ceded (2) |
20 |
15 |
33% |
||||||||||
Net reserve (salvage) |
$ | (561 |
) | $ | (21 |
) | n/m |
||||||
(1) - | Reported within “Other assets” on our consolidated balance sheets. |
(2) - | Reported within “Other liabilities” on our consolidated balance sheets. |
n/m | - Percent change not meaningful. |
Three Months Ended September 30, |
Percent |
Nine Months Ended September 30, |
Percent |
||||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
|||||||||||||||||||
Gross expenses |
$ | 14 |
$ | 10 |
40% |
$ | 36 |
$ | 32 |
13% |
|||||||||||||||
Amortization of deferred acquisition costs |
$ | 4 |
$ | 6 |
-33% |
$ | 13 |
$ | 17 |
-24% |
|||||||||||||||
Operating |
14 |
9 |
56% |
36 |
31 |
16% |
|||||||||||||||||||
Total insurance operating expenses |
$ | 18 |
$ | 15 |
20% |
$ | 49 |
$ | 48 |
2% |
|||||||||||||||
Gross Par Outstanding | |||||||||||||||||
In millions |
|||||||||||||||||
Rating |
Amount |
% |
Amount |
% |
|||||||||||||
AAA |
$ | 2,815 |
5.5% |
$ | 3,108 |
5.4% |
|||||||||||
AA |
20,265 |
39.6% |
22,162 |
38.3% |
|||||||||||||
A |
15,870 |
31.0% |
18,495 |
32.0% |
|||||||||||||
BBB |
8,526 |
16.6% |
9,166 |
15.8% |
|||||||||||||
Below investment grade |
3,778 |
7.3% |
4,934 |
8.5% |
|||||||||||||
Total |
$ | 51,254 |
100.0% |
$ | 57,865 |
100.0% |
|||||||||||
In millions |
Gross Par Outstanding |
Gross Par Outstanding Plus CABs Accreted Interest |
Debt Service Outstanding |
National Internal Rating |
||||||||||||
Puerto Rico Electric Power Authority (PREPA) |
$ | 968 |
$ | 968 |
$ | 1,340 |
d |
|||||||||
Puerto Rico Commonwealth GO |
485 |
485 |
600 |
d |
||||||||||||
Puerto Rico Public Buildings Authority (PBA) (2) |
170 |
170 |
233 |
d |
||||||||||||
Puerto Rico Highway and Transportation Authority Transportation Revenue (PRHTA) |
523 |
523 |
909 |
d |
||||||||||||
Puerto Rico Highway and Transportation Authority - Subordinated Transportation Revenue (PRHTA) |
27 |
27 |
36 |
d |
||||||||||||
Puerto Rico Sales Tax Financing Corporation (COFINA) |
36 |
(1) |
65 |
220 |
d |
|||||||||||
Puerto Rico Highway and Transportation Authority Highway Revenue (PRHTA) |
54 |
(1) |
56 |
77 |
d |
|||||||||||
University of Puerto Rico System Revenue |
76 |
76 |
105 |
d |
||||||||||||
Inter American University of Puerto Rico Inc. |
21 |
21 |
28 |
a3 |
||||||||||||
Total |
$ | 2,360 |
$ | 2,391 |
$ | 3,548 |
||||||||||
(1) - | Includes CABs that reflect the gross par amount at the time of issuance of the insurance policy. |
(2) - | Additionally secured by the guarantee of the Commonwealth of Puerto Rico. |
|
2020 |
2021 |
2022 |
2023 |
Thereafter |
Total |
||||||||||||||||||||||
Puerto Rico Electric Power Authority (PREPA) |
$ | - |
$ | 115 |
$ | 140 |
$ | 140 |
$ | 137 |
$ | 808 |
$ | 1,340 |
||||||||||||||
Puerto Rico Commonwealth GO |
- |
223 |
82 |
19 |
14 |
262 |
600 |
|||||||||||||||||||||
Puerto Rico Public Buildings Authority (PBA) |
- |
10 |
24 |
9 |
27 |
163 |
233 |
|||||||||||||||||||||
Puerto Rico Highway and Transportation Authority Transportation Revenue (PRHTA) |
- |
27 |
27 |
27 |
36 |
792 |
909 |
|||||||||||||||||||||
Puerto Rico Highway and Transportation Authority - Subordinated Transportation Revenue (PRHTA) |
- |
1 |
1 |
9 |
1 |
24 |
36 |
|||||||||||||||||||||
Puerto Rico Sales Tax Financing Corporation (COFINA) |
- |
- |
- |
- |
- |
220 |
220 |
|||||||||||||||||||||
Puerto Rico Highway and Transportation Authority Highway Revenue (PRHTA) |
- |
16 |
4 |
2 |
4 |
51 |
77 |
|||||||||||||||||||||
University of Puerto Rico System Revenue |
- |
7 |
7 |
7 |
12 |
72 |
105 |
|||||||||||||||||||||
Inter American University of Puerto Rico Inc. |
2 |
3 |
3 |
3 |
3 |
14 |
28 |
|||||||||||||||||||||
Total |
$ | 2 |
$ | 402 |
$ | 288 |
$ | 216 |
$ | 234 |
$ | 2,406 |
$ | 3,548 |
||||||||||||||
Three Months Ended September 30, |
Percent |
Nine Months Ended September 30, |
Percent |
||||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
|||||||||||||||||||
Net investment income |
$ | 9 |
$ | 9 |
-% |
$ | 28 |
$ | 27 |
4% |
|||||||||||||||
Fees |
12 |
9 |
33% |
41 |
29 |
41% |
|||||||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
(20 |
) | 17 |
n/m |
(71 |
) | 48 |
n/m |
|||||||||||||||||
Net gains (losses) on extinguishment of debt |
(1 |
) | 3 |
-133% |
(1 |
) | 3 |
-133% |
|||||||||||||||||
Other net realized gains (losses) |
(1 |
) | - |
n/m |
(2 |
) | (2 |
) | -% |
||||||||||||||||
Total revenues |
(1 |
) | 38 |
-103% |
(5 |
) | 105 |
-105% |
|||||||||||||||||
Operating |
16 |
14 |
14% |
56 |
41 |
37% |
|||||||||||||||||||
Interest |
22 |
24 |
-8% |
70 |
72 |
-3% |
|||||||||||||||||||
Total expenses |
38 |
38 |
-% |
126 |
113 |
12% |
|||||||||||||||||||
Income (loss) before income taxes |
$ | (39 |
) | $ | - |
n/m |
$ | (131 |
) | $ | (8 |
) | n/m |
||||||||||||
Three Months Ended September 30, |
Percent |
Nine Months Ended September 30, |
Percent |
||||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
|||||||||||||||||||
Net premiums earned |
$ | 7 |
$ | 40 |
-83% |
$ | 20 |
$ | 71 |
-72% |
|||||||||||||||
Net investment income |
2 |
1 |
100% |
6 |
4 |
50% |
|||||||||||||||||||
Fees and reimbursements |
8 |
23 |
-65% |
17 |
41 |
-59% |
|||||||||||||||||||
Change in fair value of insured derivatives: |
|||||||||||||||||||||||||
Realized gains (losses) and other settlements on insured derivatives |
(9 |
) | (5 |
) | 80% |
(10 |
) | (49 |
) | -80% |
|||||||||||||||
Unrealized gains (losses) on insured derivatives |
9 |
4 |
125% |
23 |
36 |
-36% |
|||||||||||||||||||
Net change in fair value of insured derivatives |
- |
(1 |
) | -100% |
13 |
(13 |
) | n/m |
|||||||||||||||||
Net gains (losses) on financial instruments at fair |
|||||||||||||||||||||||||
value and foreign exchange |
(14 |
) | (13 |
) | 8% |
(24 |
) | (17 |
) | 41% |
|||||||||||||||
Other net realized gains (losses) |
1 |
1 |
-% |
3 |
2 |
50% |
|||||||||||||||||||
Revenues of consolidated VIEs: |
|||||||||||||||||||||||||
Net investment income |
10 |
9 |
11% |
30 |
25 |
20% |
|||||||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
44 |
12 |
n/m |
31 |
29 |
7% |
|||||||||||||||||||
Other net realized gains (losses) |
(4 |
) | (33 |
) | -88% |
(20 |
) | (126 |
) | -84% |
|||||||||||||||
Total revenues |
54 |
39 |
38% |
76 |
16 |
n/m |
|||||||||||||||||||
Losses and loss adjustment |
77 |
(2 |
) | n/m |
123 |
(7 |
) | n/m |
|||||||||||||||||
Amortization of deferred acquisition costs |
7 |
11 |
-36% |
16 |
26 |
-38% |
|||||||||||||||||||
Operating |
6 |
5 |
20% |
19 |
16 |
19% |
|||||||||||||||||||
Interest |
33 |
32 |
3% |
100 |
96 |
4% |
|||||||||||||||||||
Expenses of consolidated VIEs: |
|||||||||||||||||||||||||
Operating |
2 |
3 |
-33% |
6 |
8 |
-25% |
|||||||||||||||||||
Interest |
20 |
24 |
-17% |
68 |
68 |
-% |
|||||||||||||||||||
Total expenses |
145 |
73 |
99% |
332 |
207 |
60% |
|||||||||||||||||||
Income (loss) before income taxes |
$ | (91 |
) | $ | (34 |
) | n/m |
$ | (256 |
) | $ | (191 |
) | 34% |
|||||||||||
Three Months Ended September 30, |
Percent |
Nine Months Ended September 30, |
Percent |
||||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
|||||||||||||||||||
Net premiums earned: |
|||||||||||||||||||||||||
U.S. |
$ | 1 |
$ | 2 |
-50% |
$ | 4 |
$ | 7 |
-43% |
|||||||||||||||
Non-U.S. |
6 |
38 |
-84% |
16 |
64 |
-75% |
|||||||||||||||||||
Total net premiums earned |
$ | 7 |
$ | 40 |
-83% |
$ | 20 |
$ | 71 |
-72% |
|||||||||||||||
VIEs (eliminated in consolidation) |
$ | (3 |
) | $ | 2 |
n/m |
$ | - |
$ | 5 |
-100% |
Three Months Ended September 30, |
Percent |
Nine Months Ended September 30, |
Percent |
||||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
|||||||||||||||||||
Losses and loss adjustment expenses (1) |
$ | 77 |
$ | (2 |
) | n/m |
$ | 123 |
$ | (7 |
) | n/m |
|||||||||||||
In millions |
Percent Change |
||||||||||||
Assets: |
|||||||||||||
Insurance loss recoverable |
$ | 898 |
$ | 1,024 |
-12% |
||||||||
Reinsurance recoverable on paid and unpaid losses (1) |
6 |
5 |
20% |
||||||||||
Liabilities: |
|||||||||||||
Loss and LAE reserves |
485 |
414 |
17% |
||||||||||
Insurance loss recoverable - ceded (2) |
1 |
- |
n/m |
||||||||||
Net reserve (salvage) |
$ | (418 |
) | $ | (615 |
) | -32% |
||||||
Three Months Ended September 30, |
Percent |
Nine Months Ended September 30, |
Percent |
||||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
|||||||||||||||||||
Gross expenses |
$ | 6 |
$ | 5 |
20% |
$ | 19 |
$ | 16 |
19% |
|||||||||||||||
Amortization of deferred acquisition costs |
$ | 7 |
$ | 11 |
-36% |
$ | 16 |
$ | 26 |
-38% |
|||||||||||||||
Operating |
6 |
5 |
20% |
19 |
16 |
19% |
|||||||||||||||||||
Total insurance operating expenses |
$ | 13 |
$ | 16 |
-19% |
$ | 35 |
$ | 42 |
-17% |
|||||||||||||||
In millions |
Gross Par Outstanding as of |
|||||||||||
Collateral Type |
Percent Change |
|||||||||||
HELOC Second-lien |
$ | 411 |
$ | 511 |
-20% |
|||||||
CES Second-lien |
143 |
591 |
-76% |
|||||||||
Alt-A First-lien(1) |
914 |
983 |
-7% |
|||||||||
Subprime First-lien |
356 |
439 |
-19% |
|||||||||
Prime First-lien |
13 |
15 |
-13% |
|||||||||
Total |
$ | 1,837 |
$ | 2,539 |
-28% |
|||||||
(1) - | Includes international exposure of $238 million and $245 as of September 30, 2019 and December 31, 2018, respectively. |
Three Months Ended September 30, |
Nine Months Ended September 30, | ||||||||||||||||
In millions |
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Income (loss) before income taxes |
$ | 89 |
$ | (45 |
) | $ | (137 |
) | $ | (287 |
) | ||||||
Provision (benefit) for income taxes |
$ | 18 |
$ | - |
$ | (21 |
) | $ | 2 |
||||||||
Effective tax rate |
20.2% |
-% |
15.3% |
-0.7% |
In millions except per share amounts |
Nine Months Ended September 30, |
|||||||
2018 |
||||||||
Number of shares repurchased |
10.3 |
2.0 |
||||||
Average price paid per share |
$ | 9.11 |
$ | 7.25 |
||||
Remaining authorization as of September 30 |
$ | 108 |
$ | 236 |
In millions |
As of September 30, 2019 |
As of December 31, 2018 |
||||||
Policyholders’ surplus |
$ | 2,012 |
$ | 1,998 |
||||
Contingency reserves |
495 |
522 |
||||||
Statutory capital |
2,507 |
2,520 |
||||||
Unearned premiums |
426 |
496 |
||||||
Present value of installment premiums (1) |
142 |
150 |
||||||
Premium resources (2) |
568 |
646 |
||||||
Net loss and LAE reserves (1) |
(162) |
71 |
||||||
Salvage reserves (1) |
825 |
607 |
||||||
Gross loss and LAE reserves |
663 |
678 |
||||||
Total claims-paying resources |
$ | 3,738 |
$ | 3,844 |
||||
In millions |
As of September 30, 2019 |
As of December 31, 2018 |
||||||
Policyholders’ surplus |
$ | 340 |
$ | 356 |
||||
Contingency reserves |
193 |
199 |
||||||
Statutory capital |
533 |
555 |
||||||
Unearned premiums |
97 |
109 |
||||||
Present value of installment premiums (1) (4) |
120 |
139 |
||||||
Premium resources (2) |
217 |
248 |
||||||
Net loss and LAE reserves (1) |
(761) |
(865) |
||||||
Salvage reserves (1) (3) |
1,352 |
1,402 |
||||||
Gross loss and LAE reserves |
591 |
537 |
||||||
Total claims-paying resources |
$ | 1,341 |
$ | 1,340 |
||||
• | principal and interest receipts on assets held in its investment portfolio, including proceeds from the sale of assets; |
• | recoveries associated with insurance loss payments; and |
• | installment premiums. |
• | payments of operating expenses, taxes and investment portfolio asset purchases; |
• | loss payments and LAE on insured transactions; and |
• | payments of dividends. |
• | dividends from National; |
• | release of funds under the tax sharing agreement; |
• | available cash and liquid assets not subject to collateral posting requirements; |
• | principal and interest receipts on assets held in its investment portfolio, including proceeds from the sale of assets; and |
• | access to capital markets. |
• | servicing outstanding unsecured corporate debt obligations and MTNs; |
• | meeting collateral posting requirements under investment agreements and derivative arrangements; |
• | payments related to interest rate swaps; |
• | payments of operating expenses; and |
• | funding share repurchases and debt buybacks. |
• | recoveries associated with insurance loss payments; |
• | installment premiums and fees; and |
• | principal and interest receipts on assets held in its investment portfolio, including the proceeds from the sale of assets. |
• | loss and LAE or commutation payments on insured transactions; |
• | repayment of the Refinanced Facility; and |
• | payments of operating expenses. |
Nine Months Ended September 30, |
|||||||||||||
In millions |
2019 |
2018 |
Percent Change |
||||||||||
Statement of cash flow data: |
|||||||||||||
Net cash provided (used) by: |
|||||||||||||
Operating activities |
$ | (415 |
) | $ | (323 |
) | 28% |
||||||
Investing activities |
1,204 |
836 |
44% |
||||||||||
Financing activities |
(988 |
) | (480 |
) | 106% |
||||||||
Cash and cash equivalents - beginning of period |
280 |
146 |
92% |
||||||||||
Cash and cash equivalents - end of period |
$ | 81 |
$ | 179 |
-55% |
||||||||
As of September 30, |
As of December 31, |
Percent |
|||||||||||
In millions |
2019 |
2018 |
Change |
||||||||||
Available-for-sale investments:(1) |
|||||||||||||
U.S. public finance insurance: |
|||||||||||||
Amortized cost |
$ | 2,210 |
$ | 2,704 |
-18% |
||||||||
Unrealized net gain (loss) |
19 |
(64 |
) | -130% |
|||||||||
Fair value |
2,229 |
2,640 |
-16% |
||||||||||
Corporate: |
|||||||||||||
Amortized cost |
619 |
921 |
-33% |
||||||||||
Unrealized net gain (loss) |
73 |
24 |
n/m |
||||||||||
Fair value |
692 |
945 |
-27% |
||||||||||
International and structured finance insurance: |
|||||||||||||
Amortized cost |
179 |
192 |
-7% |
||||||||||
Unrealized net gain (loss) |
13 |
4 |
n/m |
||||||||||
Fair value |
192 |
196 |
-2% |
||||||||||
Total available-for-sale investments: |
|||||||||||||
Amortized cost |
3,008 |
3,817 |
-21% |
||||||||||
Unrealized net gain (loss) |
105 |
(36 |
) | n/m |
|||||||||
Total available-for-sale investments at fair value |
3,113 |
3,781 |
-18% |
||||||||||
Investments carried at fair value: (2) |
|||||||||||||
U.S. public finance insurance |
280 |
198 |
41% |
||||||||||
Corporate |
94 |
73 |
29% |
||||||||||
International and structured finance insurance |
8 |
19 |
-58% |
||||||||||
Total investments carried at fair value |
382 |
290 |
32% |
||||||||||
Other investments at amortized cost: |
|||||||||||||
U.S. public finance insurance |
- |
1 |
-100% |
||||||||||
Consolidated investments at carrying value |
$ | 3,495 |
$ | 4,072 |
-14% |
||||||||
(1) - | Unrealized gains and losses, net of applicable deferred income taxes, are reflected in accumulated other comprehensive income in shareholders’ equity. |
(2) - | Changes in fair value and realized gains and losses from the sale of these investments are reflected in net income. |
n/m | - Percent change not meaningful. |
International |
|||||||||||||||||
U.S. Public |
and Structured |
||||||||||||||||
Finance |
Finance |
||||||||||||||||
Insurance |
Corporate |
Insurance |
Total |
||||||||||||||
Weighted average credit quality ratings |
Aa |
Aa |
Aa |
Aa |
|||||||||||||
Investment grade percentage |
95% |
99% |
92% |
96% |
Change in Interest Rates | |||||||||||||||||||||||||
300 Basis |
200 Basis |
100 Basis |
100 Basis |
200 Basis |
300 Basis |
||||||||||||||||||||
Point |
Point |
Point |
Point |
Point |
Point |
||||||||||||||||||||
In millions |
Decrease |
Decrease |
Decrease |
Increase |
Increase |
Increase |
|||||||||||||||||||
Estimated change in fair value |
$ | 262 |
$ | 148 |
$ | 64 |
$ | (52 |
) | $ | (95 |
) | $ | (129 |
) |
Change in Credit Spreads |
||||||||||||
50 Basis |
50 Basis |
200 Basis |
||||||||||
Point |
Point |
Point |
||||||||||
In millions |
Decrease |
Increase |
Increase |
|||||||||
Estimated change in fair value |
$ | 17 |
$ | (17) |
$ | (58) |
Total Number |
Maximum |
||||||||||||||||
Total |
Average |
of Shares |
Amount That May |
||||||||||||||
Number |
Price |
Purchased as |
Be Purchased |
||||||||||||||
of Shares |
Paid Per |
Part of Publicly |
Under the Plan |
||||||||||||||
Month |
Purchased (1) |
Share |
Announced Plan |
(in millions) |
|||||||||||||
July |
45,194 |
$ | 9.27 |
45,072 |
$ | 148 |
|||||||||||
August |
3,203,755 |
9.10 |
3,203,628 |
118 |
|||||||||||||
September |
1,092,653 |
9.17 |
1,092,532 |
108 |
|||||||||||||
4,341,602 |
$ | 9.12 |
4,341,232 |
$ | 108 |
(1) | - 122 shares in July, 127 shares in August and 121 shares in September were repurchased in open market transactions as investments in the Company’s non-qualified deferred compensation plan. |
* 10.1 |
||||
* 10.2 |
||||
* 10.3 |
||||
* 10.4 |
||||
* 10.5 |
||||
* 10.6 |
||||
* 10.7 |
||||
* 10.8 |
||||
* 10.9 |
||||
* 10.10 |
||||
**31.1. |
||||
**31.2. |
||||
***32.1. |
||||
***32.2. |
||||
**101.INS. |
XBRL Instance Document – the instance document does not appear in the Interactive Data File because iXBRL tags are embedded within the Inline XBRL document. | |||
**101.SCH. |
XBRL Taxonomy Extension Schema Document. | |||
**101.CAL. |
XBRL Taxonomy Extension Calculation Linkbase Document. | |||
**101.DEF. |
XBRL Taxonomy Extension Definition Linkbase Document. | |||
**101.LAB. |
XBRL Taxonomy Extension Label Linkbase Document. | |||
**101.PRE. |
XBRL Taxonomy Extension Presentation Linkbase Document. | |||
**104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
* | Incorporated by reference to MBIA Inc.’s Current Report on Form 8-K filed with the U.S. Securities Exchange Commission on July 10, 2019. |
** | Filed herewith. |
*** | Furnished herewith. |
MBIA Inc. Registrant | ||
Date: November 5, 2019 |
||
Chief Financial Officer | ||
Date: November 5, 2019 |
||
Controller (Chief Accounting Officer) |
This ‘10-Q’ Filing | Date | Other Filings | ||
---|---|---|---|---|
1/15/33 | ||||
1/20/22 | ||||
3/31/21 | ||||
3/31/20 | 10-Q | |||
1/23/20 | SC 13G/A | |||
1/14/20 | ||||
1/1/20 | ||||
12/31/19 | 10-K, 11-K, 4 | |||
11/29/19 | ||||
11/21/19 | ||||
11/8/19 | 4 | |||
11/7/19 | ||||
Filed on: | 11/5/19 | 8-K | ||
11/1/19 | ||||
10/29/19 | ||||
10/21/19 | ||||
10/18/19 | ||||
10/17/19 | ||||
10/15/19 | ||||
10/9/19 | ||||
10/8/19 | ||||
10/7/19 | ||||
10/1/19 | ||||
For Period end: | 9/30/19 | |||
9/27/19 | ||||
9/26/19 | ||||
9/20/19 | ||||
9/17/19 | ||||
9/9/19 | 8-K | |||
9/1/19 | ||||
8/23/19 | ||||
8/8/19 | ||||
8/6/19 | 10-Q, 8-K | |||
8/2/19 | ||||
7/31/19 | ||||
7/24/19 | ||||
7/22/19 | ||||
7/15/19 | ||||
7/10/19 | 8-K | |||
7/9/19 | ||||
7/2/19 | ||||
7/1/19 | 4 | |||
6/30/19 | 10-Q | |||
6/27/19 | ||||
6/20/19 | ||||
6/18/19 | ||||
6/17/19 | ||||
6/5/19 | ||||
5/20/19 | ||||
5/9/19 | ||||
5/6/19 | ||||
5/3/19 | 8-K | |||
5/2/19 | ||||
4/29/19 | ||||
4/24/19 | ||||
4/16/19 | ||||
3/26/19 | UPLOAD | |||
3/19/19 | ||||
3/12/19 | 10-K/A | |||
2/15/19 | ||||
2/12/19 | ||||
2/4/19 | ||||
1/28/19 | ||||
1/14/19 | ||||
1/10/19 | ||||
1/1/19 | ||||
12/31/18 | 10-K, 10-K/A, 11-K | |||
12/21/18 | ||||
11/5/18 | ||||
10/23/18 | ||||
10/19/18 | ||||
10/18/18 | ||||
10/3/18 | 4 | |||
9/30/18 | 10-Q | |||
9/13/18 | ||||
9/7/18 | ||||
8/8/18 | 10-Q, 8-K | |||
7/30/18 | ||||
7/9/18 | ||||
6/11/18 | ||||
6/5/18 | ||||
5/21/18 | ||||
5/9/18 | 10-Q, 8-K | |||
5/2/18 | 8-K, DEF 14A | |||
4/23/18 | ||||
3/11/18 | ||||
2/9/18 | SC 13G, SC 13G/A | |||
1/30/18 | ||||
11/22/17 | ||||
11/21/17 | ||||
11/3/17 | ||||
9/14/17 | ||||
7/19/17 | ||||
7/18/17 | ||||
7/2/17 | ||||
6/28/17 | 4 | |||
6/3/17 | ||||
5/21/17 | ||||
5/5/17 | 8-K | |||
5/3/17 | 8-K, DEF 14A | |||
3/31/17 | 10-Q | |||
1/10/17 | 8-K | |||
6/30/16 | 10-Q | |||
1/15/16 | ||||
11/2/15 | 3, 4, 8-K | |||
1/15/13 | 8-K | |||
12/31/09 | 10-K, 11-K | |||
List all Filings |