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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 8/06/19 Mbia Inc 10-Q 6/30/19 90:33M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 3.37M 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 12: R1 Document and Entity Information HTML 81K 13: R2 Consolidated Balance Sheets HTML 141K 14: R3 Consolidated Balance Sheets (Parenthetical) HTML 62K 15: R4 Consolidated Statements Of Operations HTML 128K 16: R5 Consolidated Statements Of Operations HTML 31K (Parenthetical) 17: R6 Consolidated Statements Of Comprehensive Income HTML 80K (Loss) 18: R7 Consolidated Statement Of Changes In Shareholders' HTML 112K Equity 19: R8 Consolidated Statements Of Cash Flows HTML 150K 20: R9 Business Developments and Risks and Uncertainties HTML 50K 21: R10 Significant Accounting Policies HTML 37K 22: R11 Recent Accounting Pronouncements HTML 39K 23: R12 Variable Interest Entities HTML 216K 24: R13 Loss and Loss Adjustment Expense Reserves HTML 357K 25: R14 Fair Value Of Financial Instruments HTML 2.22M 26: R15 Investments HTML 607K 27: R16 Derivative Instruments HTML 279K 28: R17 Debt HTML 32K 29: R18 Income Taxes HTML 61K 30: R19 Business Segments HTML 515K 31: R20 Earnings Per Share HTML 83K 32: R21 Accumulated Other Comprehensive Income HTML 114K 33: R22 Commitments and Contingencies HTML 64K 34: R23 Subsequent Events HTML 30K 35: R24 Significant Accounting Policies (Policies) HTML 42K 36: R25 Variable Interest Entities (Tables) HTML 199K 37: R26 Loss and Loss Adjustment Expense Reserves (Tables) HTML 334K 38: R27 Fair Value of Financial Instruments (Tables) HTML 1.79M 39: R28 Investments (Tables) HTML 607K 40: R29 Derivative Instruments (Tables) HTML 273K 41: R30 Income Taxes (Tables) HTML 48K 42: R31 Business Segments (Tables) HTML 495K 43: R32 Earnings Per Share (Tables) HTML 80K 44: R33 Accumulated Other Comprehensive Income (Tables) HTML 115K 45: R34 Commitments and Contingencies (Tables) HTML 45K 46: R35 Business Developments And Risks And Uncertainties HTML 39K (Narrative) (Detail) 47: R36 Recent Accounting Pronouncements (Narrative) HTML 27K (Detail) 48: R37 Variable Interest Entities (Narrative) (Detail) HTML 50K 49: R38 Variable Interest Entities (Summary Of HTML 101K Nonconsolidated VIEs Assets And Liabilities) (Detail) 50: R39 Loss And Loss Adjustment Expense Reserves (Loss HTML 43K 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) 52: R41 Loss And Loss Adjustment Expense Reserves HTML 49K (Schedule Of Loss And Loss Adjustment Expenses Reserves) (Detail) 53: R42 Loss And Loss Adjustment Expense Reserves HTML 40K (Schedule Of Insurance Loss Recoverable) (Detail) 54: R43 Loss And Loss Adjustment Expense Reserves HTML 99K (Schedule Of Financial Guarantees And Related Claim Liability) (Detail) 55: R44 Fair Value Of Financial Instruments (Narrative) HTML 41K (Detail) 56: R45 Fair Value Of Financial Instruments (Quantitative HTML 83K Information Regarding The Significant Unobservable Inputs For Certain Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Detail) 57: R46 Fair Value Of Financial Instruments (Company's HTML 183K Assets And Liabilities Measured At Fair Value On Recurring Basis) (Detail) 58: R47 Fair Value Of Financial Instruments (Fair Value HTML 77K Hierarchy Table Presents The Company's Assets And Liabilities At Fair Value Not Recorded On The Company's Consolidated Balance Sheet) (Detail) 59: R48 Fair Value Of Financial Instruments (Changes In HTML 165K Level 3 Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Detail) 60: R49 Fair Value Of Financial Instruments (Realized And HTML 57K Unrealized Gains And Losses Included In Earnings Pertaining To Level 3 Assets And Liabilities) (Detail) 61: R50 Fair Value Of Financial Instruments (Gains And HTML 63K Losses On Fair Value Option Included In The Company's Consolidated Statements Of Operations) (Detail) 62: R51 Fair Value Of Financial Instruments (Aggregate HTML 59K Fair Value And Remaining Contractual Principal Balance Outstanding On Fair Value Option) (Detail) 63: R52 Investments (Narrative) (Detail) HTML 47K 64: R53 Investments (Amortized Cost And Fair Value Of HTML 94K Available-For-Sale and Held-To-Maturity Investment Portfolios) (Detail) 65: R54 Investments (Distribution By Contractual Maturity HTML 90K Of Available-For-Sale and Held-To-Maturity Investments) (Detail) 66: R55 Investments (Gross Unrealized Losses Related To HTML 78K Available-For-Sale And Held-To-Maturity Investments) (Detail) 67: 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) 68: R57 Investments (Credit Losses Recognized In Earnings HTML 34K Related To OTTI Losses Recognized In Accumulated Other Comprehensive Income (Loss)) (Detail) 69: R58 Investments (Securities Held In Unrealized Loss HTML 37K Position And Insured By Financial Guarantor) (Detail) 70: R59 Investments (Net Realized Gains (Losses) From HTML 36K Sales Of Available-For-Sale Securities) (Detail) 71: R60 Investments (Portion Of Unrealized Gains And HTML 38K Losses On Equity Investments Held) (Detail) 72: R61 Derivative Instruments (Narrative) (Detail) HTML 37K 73: R62 Derivative Instruments (Credit Derivatives Sold) HTML 62K (Detail) 74: 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) 75: R64 Derivative Instruments (Effect Of Derivative HTML 46K Instruments On Consolidated Statements Of Operations) (Detail) 76: R65 Debt (Narrative) (Detail) HTML 38K 77: R66 Income Taxes (Narrative) (Detail) HTML 45K 78: R67 Income Taxes (Income Taxes And Related Effective HTML 39K Tax Rates) (Detail) 79: R68 Business Segments (Narrative) (Detail) HTML 29K 80: R69 Business Segments (Summary Of Company's Segment HTML 115K Results) (Detail) 81: R70 Earnings Per Share (Narrative) (Detail) HTML 30K 82: R71 Earnings Per Share (Computation Of Basic And HTML 54K Diluted Earnings Per Share) (Detail) 83: R72 Accumulated Other Comprehensive Income (Changes In HTML 52K The Components Of AOCI) (Detail) 84: R73 Accumulated Other Comprehensive Income (Details Of HTML 48K The Reclassification From AOCI) (Detail) 85: R74 Commitments and Contingencies (Narrative) (Detail) HTML 34K 86: R75 Commitments and Contingencies (Lease Disclosures) HTML 39K (Detail) 88: XML IDEA XML File -- Filing Summary XML 173K 11: XML XBRL Instance -- d743642d10q_htm XML 12.23M 87: EXCEL IDEA Workbook of Financial Reports XLSX 129K 7: EX-101.CAL XBRL Calculations -- mbi-20190630_cal XML 207K 8: EX-101.DEF XBRL Definitions -- mbi-20190630_def XML 1.21M 9: EX-101.LAB XBRL Labels -- mbi-20190630_lab XML 1.51M 10: EX-101.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. |
||||||
1 |
||||||
2 |
||||||
3 |
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4 |
||||||
5 |
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6 |
||||||
6 |
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8 |
||||||
9 |
||||||
10 |
||||||
13 |
||||||
19 |
||||||
36 |
||||||
40 |
||||||
43 |
||||||
43 |
||||||
44 |
||||||
47 |
||||||
48 |
||||||
49 |
||||||
51 |
||||||
Item 2. |
52 |
|||||
Item 3. |
81 |
|||||
Item 4. |
81 |
|||||
Item 1. |
82 |
|||||
Item 1A. |
82 |
|||||
Item 2. |
83 |
|||||
Item 5. |
83 |
|||||
Item 6. |
84 |
|||||
85 |
• | 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 3,122 and $ i 3,601) |
$ |
i 3,255 |
$ |
i 3,565 |
||||
Investments carried at fair value |
i 227 |
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 332 and $ i 241)
|
i 332 |
i 241 |
||||||
Other investments at amortized cost |
i 1 |
i 1 |
||||||
Total investments |
i 3,825 |
i 4,072 |
||||||
Cash and cash equivalents |
i 409 |
i 222 |
||||||
Premiums receivable |
i 281 |
i 296 |
||||||
Deferred acquisition costs |
i 65 |
i 74 |
||||||
Insurance loss recoverable |
i 1,623 |
i 1,595 |
||||||
Other assets |
i 152 |
i 122 |
||||||
Assets of consolidated variable interest entities: |
||||||||
Cash |
i 69 |
i 58 |
||||||
Investments held-to-maturity, at amortized cost (fair value $ i 967 and $ i 925) |
i 890 |
i 890 |
||||||
Investments carried at fair value |
i 624 |
i 157 |
||||||
Loans receivable at fair value |
i 154 |
i 172 |
||||||
Loan repurchase commitments |
i 428 |
i 418 |
||||||
Other assets |
i 127 |
i 31 |
||||||
Total assets |
$ |
i 8,647 |
$ |
i 8,107 |
||||
Liabilities and Equity |
||||||||
Liabilities: |
||||||||
Unearned premium revenue |
$ |
i 520 |
$ |
i 587 |
||||
Loss and loss adjustment expense reserves |
i 998 |
i 965 |
||||||
Long-term debt |
i 2,315 |
i 2,249 |
||||||
Medium-term notes (includes financial instruments carried at fair value of $ i 110 and $ i 102)
|
i 679 |
i 722 |
||||||
Investment agreements |
i 305 |
i 311 |
||||||
Derivative liabilities |
i 222 |
i 199 |
||||||
Other liabilities |
i 215 |
i 198 |
||||||
Liabilities of consolidated variable interest entities: |
||||||||
Variable interest entity notes (includes financial instruments carried at fair value of $ i 1,120 and $ i 480) |
i 2,340 |
i 1,744 |
||||||
Total liabilities |
i 7,594 |
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 / ;
issued and outstanding— i i i i no / / / ne
|
i - |
i - |
||||||
Common stock, par value $ i i 1 /
per share; authorized i i 400,000,000 / ;
issued i 283,625,689 and i 283,625,689 |
i 284 |
i 284 |
||||||
Additional paid-in capital |
i 2,995 |
i 3,025 |
||||||
Retained earnings |
i 779 |
i 966 |
||||||
Accumulated other comprehensive income (loss), net of tax of $ i 32 and $ i 8
|
( i 4) |
( i 156) |
||||||
Treasury stock, at cost i 198,824,693 and i 193,803,976 shares |
( i 3,014) |
( i 3,000) |
||||||
Total shareholders’ equity of MBIA Inc. |
i 1,040 |
i 1,119 |
||||||
Preferred stock of subsidiary |
i 13 |
i 13 |
||||||
Total equity |
i 1,053 |
i 1,132 |
||||||
Total liabilities and equity |
$ |
i 8,647 |
$ |
i 8,107 |
||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2018 |
2019 |
2018 |
||||||||||||||
Revenues |
||||||||||||||||
Premiums earned: |
||||||||||||||||
Scheduled premiums earned |
$ |
i 17 |
$ |
i 29 |
$ |
i 35 |
$ |
i 52 |
||||||||
Refunding premiums earned |
i 5 |
i 7 |
i 10 |
i 24 |
||||||||||||
Premiums earned (net of ceded premiums of $ i 1, $ i 1,
$ i 2 and $ i 3) |
i 22 |
i 36 |
i 45 |
i 76 |
||||||||||||
Net investment income |
i 30 |
i 34 |
i 62 |
i 65 |
||||||||||||
Fees and reimbursements |
i 1 |
- |
i 1 |
i 6 |
||||||||||||
Change in fair value of insured derivatives: |
||||||||||||||||
Realized gains (losses) and other settlements on insured derivatives |
( i 1) |
( i 25) |
( i 1) |
( i 44) |
||||||||||||
Unrealized gains (losses) on insured derivatives |
i - |
i 18 |
i 14 |
i 32 |
||||||||||||
Net change in fair value of insured derivatives |
( i 1) |
( i 7) |
i 13 |
( i 12) |
||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 26) |
i 22 |
( i 4) |
i 13 |
||||||||||||
Net investment losses related to other-than-temporary impairments: |
||||||||||||||||
Other-than-temporary impairments recognized in accumulated other comprehensive income (loss) |
( i 9) |
( i 1) |
( i 37) |
( i 2) |
||||||||||||
Net investment losses related to other-than-temporary impairments |
( i 9) |
( i 1) |
( i 37) |
( i 2) |
||||||||||||
Other net realized gains (losses) |
i 1 |
- |
i 2 |
( i 1) |
||||||||||||
Revenues of consolidated variable interest entities: |
||||||||||||||||
Net investment income |
i 10 |
i 8 |
i 20 |
i 16 |
||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
i 18 |
i 13 |
i 36 |
i 17 |
||||||||||||
Other net realized gains (losses) |
( i 16) |
( i 93) |
( i 58) |
( i 93) |
||||||||||||
Total revenues |
i 30 |
i 12 |
i 80 |
i 85 |
||||||||||||
Expenses |
||||||||||||||||
Losses and loss adjustment |
i 140 |
i 59 |
i 102 |
i 131 |
||||||||||||
Amortization of deferred acquisition costs |
i 2 |
i 4 |
i 6 |
i 8 |
||||||||||||
Operating |
i 19 |
i 19 |
i 45 |
i 39 |
||||||||||||
Interest |
i 52 |
i 52 |
i 104 |
i 103 |
||||||||||||
Expenses of consolidated variable interest entities: |
||||||||||||||||
Operating |
i 1 |
i 3 |
i 4 |
i 5 |
||||||||||||
Interest |
i 23 |
i 21 |
i 45 |
i 41 |
||||||||||||
Total expenses |
i 237 |
i 158 |
i 306 |
i 327 |
||||||||||||
Income (loss) before income taxes |
( i 207) |
( i 146) |
(226) |
( i 242) |
||||||||||||
Provision (benefit) for income taxes |
( i 37) |
- |
( i 39) |
i 2 |
||||||||||||
Net income (loss) |
$ |
( i 170) |
$ |
( i 146) |
$ |
( i 187) |
$ |
( i 244) |
||||||||
Net income (loss) per common share |
||||||||||||||||
Basic |
$ |
( i 2.02) |
$ |
( i 1.64) |
$ |
( i 2.20) |
$ |
( i 2.75) |
||||||||
Diluted |
$ |
( i 2.02) |
$ |
( i 1.64) |
$ |
( i 2.20) |
$ |
( i 2.75) |
||||||||
Weighted average number of common shares outstanding |
||||||||||||||||
Basic |
i 84,275,261 |
i 89,131,760 |
i 84,911,215 |
i 88,865,272 |
||||||||||||
Diluted |
i 84,275,261 |
i 89,131,760 |
i 84,911,215 |
i 88,865,272 |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2018 |
2019 |
2018 |
||||||||||||||
Net income (loss) |
$ |
( i 170) |
$ |
( i 146) |
$ |
( i 187) |
$ |
( i 244) |
||||||||
Other comprehensive income (loss): |
||||||||||||||||
Unrealized gains (losses) on available-for-sale securities: |
||||||||||||||||
Unrealized gains (losses) arising during the period |
i 46 |
( i 14) |
i 125 |
( i 57) |
||||||||||||
Provision (benefit) for income taxes |
i 36 |
i - |
i 40 |
i 5 |
||||||||||||
Total |
i 10 |
( i 14) |
i 85 |
( i 62) |
||||||||||||
Reclassification adjustments for (gains) losses included in net income (loss) |
i 16 |
i - |
( i 23) |
( i 1) |
||||||||||||
Available-for-sale securities with other-than-temporary impairments: |
||||||||||||||||
Other-than-temporary impairments and unrealized gains (losses) arising during the period |
i 19 |
i 17 |
i 30 |
i 23 |
||||||||||||
Reclassification adjustments for (gains) losses included in net income (loss) |
i 9 |
i - |
i 37 |
i 1 |
||||||||||||
|
||||||||||||||||
Foreign currency translation: |
||||||||||||||||
Foreign currency translation gains (losses) |
( i 1) |
i 1 |
i - |
i 2 |
||||||||||||
Instrument-specific credit risk of liabilities measured at fair value: |
||||||||||||||||
Unrealized gains (losses) arising during the period |
( i 2) |
( i 18) |
i - |
( i 32) |
||||||||||||
Reclassification adjustments for (gains) losses included in net income (loss) |
i 19 |
i - |
i 23 |
i - |
||||||||||||
Total other comprehensive income (loss) |
i 70 |
( i 14) |
i 152 |
( i 69) |
||||||||||||
Comprehensive income (loss) |
$ |
( i 100) |
$ |
( i 160) |
$ |
( i 35) |
$ |
( i 313) |
||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2018 |
2019 |
2018 |
||||||||||||||
Common shares |
||||||||||||||||
Balance at beginning of period |
i 283,625,689 |
i 283,569,254 |
i 283,625,689 |
i 283,717,973 |
||||||||||||
Common shares issued (cancelled), net |
i - |
i 56,435 |
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 2,996 |
$ |
i 3,174 |
$ |
i 3,025 |
$ |
i 3,171 |
||||||||
Treasury shares issued for warrant exercises |
i - |
( i 21) |
i - |
( i 21) |
||||||||||||
Share-based compensation |
( i 1) |
i 1 |
( i 30) |
i 4 |
||||||||||||
Balance at end of period |
$ |
i 2,995 |
$ |
i 3,154 |
$ |
i 2,995 |
$ |
i 3,154 |
||||||||
Retained earnings |
||||||||||||||||
Balance at beginning of period |
$ |
i 949 |
$ |
i 1,164 |
$ |
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 170) |
( i 146) |
( i 187) |
( i 244) |
||||||||||||
Balance at end of period |
$ |
i 779 |
$ |
i 1,018 |
$ |
i 779 |
$ |
i 1,018 |
||||||||
Accumulated other comprehensive income (loss) |
||||||||||||||||
Balance at beginning of period |
$ |
( i 74) |
$ |
( i 241) |
$ |
( 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 70 |
( i 14) |
i 152 |
( i 69) |
||||||||||||
Balance at end of period |
$ |
( i 4) |
$ |
( i 255) |
$ |
( i 4) |
$ |
( i 255) |
||||||||
Treasury shares |
||||||||||||||||
Balance at beginning of period |
( i 193,446,168) |
( i 194,243,689) |
( i 193,803,976) |
( i 192,233,526) |
||||||||||||
Treasury shares issued for warrant exercises |
i - |
i 1,277,620 |
i - |
i 1,277,620 |
||||||||||||
Treasury shares acquired under share repurchase program |
( i 5,445,053) |
i - |
( i 5,932,659) |
( i 1,961,711) |
||||||||||||
Share-based compensation |
i 66,528 |
i 2,371 |
i 911,942 |
( i 46,081) |
||||||||||||
Balance at end of period |
( i 198,824,693) |
( i 192,963,698) |
( i 198,824,693) |
( i 192,963,698) |
||||||||||||
Treasury stock amount |
||||||||||||||||
Balance at beginning of period |
$ |
( i 2,967) |
$ |
( i 3,133) |
$ |
( i 3,000) |
$ |
( i 3,118) |
||||||||
Treasury shares issued for warrant exercises |
- |
i 34 |
- |
i 34 |
||||||||||||
Treasury shares acquired under share repurchase program |
( i 50) |
i - |
( i 54) |
( i 14) |
||||||||||||
Share-based compensation |
i 3 |
i 1 |
i 40 |
i - |
||||||||||||
Balance at end of period |
$ |
( i 3,014) |
$ |
( i 3,098) |
$ |
( i 3,014) |
$ |
( i 3,098) |
||||||||
Total shareholders’ equity of MBIA Inc. |
||||||||||||||||
Balance at beginning of period |
$ |
i 1,188 |
$ |
i 1,248 |
$ |
i 1,119 |
$ |
i 1,413 |
||||||||
Period change |
( i 148) |
( i 145) |
( i 79) |
( i 310) |
||||||||||||
Balance at end of period |
$ |
i 1,040 |
$ |
i 1,103 |
$ |
i 1,040 |
$ |
i 1,103 |
||||||||
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 1,053 |
$ |
i 1,115 |
$ |
i 1,053 |
$ |
i 1,115 |
||||||||
Six Months Ended June 30, |
||||||||
2018 |
||||||||
Cash flows from operating activities: |
||||||||
Premiums, fees and reimbursements received |
$ |
i 14 |
$ |
i 26 |
||||
Investment income received |
i 91 |
i 112 |
||||||
Insured derivative commutations and losses paid |
( i 1) |
( i 44) |
||||||
Financial guarantee losses and loss adjustment expenses paid |
( i 115) |
( i 116) |
||||||
Proceeds from recoveries and reinsurance |
i 91 |
i 32 |
||||||
Operating and employee related expenses paid |
( i 44) |
( i 52) |
||||||
Interest paid, net of interest converted to principal |
( i 91) |
( i 83) |
||||||
Income taxes (paid) received |
( i 2) |
( i 1) |
||||||
Net cash provided (used) by operating activities |
( i 57) |
( i 126) |
||||||
Cash flows from investing activities: |
||||||||
Purchases of available-for-sale investments |
( i 1,410) |
( i 1,158) |
||||||
Sales of available-for-sale investments |
i 1,367 |
i 1,064 |
||||||
Paydowns and maturities of available-for-sale investments |
i 567 |
i 181 |
||||||
Purchases of investments at fair value |
( i 104) |
( i 96) |
||||||
Sales, paydowns, maturities and other proceeds of investments at fair value |
i 237 |
i 108 |
||||||
Sales, paydowns and maturities (purchases) of short-term investments, net |
( i 72) |
i 185 |
||||||
Paydowns and maturities of loans receivable |
i 64 |
i 88 |
||||||
Consolidation of variable interest entities |
i 72 |
i - |
||||||
Deconsolidation of variable interest entities |
( i 2) |
( i 7) |
||||||
(Payments) proceeds for derivative settlements |
( i 15) |
( i 14) |
||||||
Collateral (to) from counterparties |
( i 21) |
i - |
||||||
Net cash provided (used) by investing activities |
i 683 |
i 351 |
||||||
Cash flows from financing activities: |
||||||||
Proceeds from investment agreements |
i 7 |
i 5 |
||||||
Principal paydowns of investment agreements |
( i 13) |
( i 28) |
||||||
Principal paydowns of medium-term notes |
( i 56) |
( i 36) |
||||||
Principal paydowns of variable interest entity notes |
( i 301) |
( i 100) |
||||||
Purchases of treasury stock |
( i 58) |
( i 15) |
||||||
Other financing |
( i 7) |
i - |
||||||
Net cash provided (used) by financing activities |
( i 428) |
( i 174) |
||||||
Net increase (decrease) in cash and cash equivalents |
i 198 |
i 51 |
||||||
Cash and cash equivalents—beginning of period |
i 280 |
i 146 |
||||||
Cash and cash equivalents—end of period |
$ |
i 478 |
$ |
i 197 |
||||
Reconciliation of net income (loss) to net cash provided (used) by operating activities: |
||||||||
Net income (loss) |
$ |
( i 187) |
$ |
( i 244) |
||||
Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: |
||||||||
Change in: |
||||||||
Premiums receivable |
i 34 |
i 16 |
||||||
Deferred acquisition costs |
i 7 |
i 9 |
||||||
Unearned premium revenue |
( i 67) |
( i 74) |
||||||
Loss and loss adjustment expense reserves |
i 103 |
i 57 |
||||||
Insurance loss recoverable |
( i 28 |
) | ( i 9) |
|||||
Accrued interest payable |
i 56 |
i 70 |
||||||
Accrued expenses |
( i 3) |
( i 14) |
||||||
Net investment losses related to other-than-temporary impairments |
i 37 |
i - |
||||||
Unrealized (gains) losses on insured derivatives |
( i 14) |
( i 32) |
||||||
Net (gains) losses on financial instruments at fair value and foreign exchange |
( i 32) |
( i 30) |
||||||
Other net realized (gains) losses |
i 56 |
i 94 |
||||||
Deferred income tax provision (benefit) |
( i 41) |
i 1 |
||||||
Interest on variable interest entities, net |
i - |
i 12 |
||||||
Other operating |
i 22 |
i 18 |
||||||
Total adjustments to net income (loss) |
i 130 |
i 118 |
||||||
Net cash provided (used) by operating activities |
$ |
( i 57) |
$ |
( i 126) |
||||
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 2,441 |
$ |
i 16 |
$ |
i 17 |
$ |
i 98 |
$ |
i 15 |
$ |
i 426 |
||||||||||||
Mortgage-backed commercial |
i 38 |
i - |
i - |
i - |
i - |
i - |
||||||||||||||||||
Consumer asset-backed |
i 427 |
i - |
i 2 |
i 2 |
i 1 |
i 10 |
||||||||||||||||||
Corporate asset-backed |
i 1,114 |
i - |
i 8 |
i 862 |
i 9 |
i - |
||||||||||||||||||
Total global structured finance |
i 4,020 |
i 16 |
i 27 |
i 962 |
i 25 |
i 436 |
||||||||||||||||||
Global public finance |
i 2,169 |
i - |
i 8 |
i - |
i 10 |
i - |
||||||||||||||||||
Total insurance |
$ |
i 6,189 |
$ |
i 16 |
$ |
i 35 |
$ |
i 962 |
$ |
i 35 |
$ |
i 436 |
||||||||||||
(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 June 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 LAE reserves (2) |
||||||||||||||
U.S. Public Finance Insurance |
|||||||||||||||||
Before VIE eliminations |
$ |
i 659 |
$ |
i 577 |
$ |
i 571 |
$ |
i 551 |
|||||||||
VIE eliminations |
i - |
( i 49) |
i - |
i - |
|||||||||||||
Total U.S. public finance insurance |
i 659 |
i 528 |
i 571 |
i 551 |
|||||||||||||
International and Structured Finance Insurance: |
|||||||||||||||||
Before VIE eliminations (1) |
i 1,404 |
i 764 |
i 1,461 |
i 668 |
|||||||||||||
VIE eliminations (1) |
( i 440) |
( i 294) |
( i 437) |
( i 254) |
|||||||||||||
Total international and structured finance insurance |
i 964 |
i 470 |
i 1,024 |
i 414 |
|||||||||||||
Total |
$ |
i 1,623 |
$ |
i 998 |
$ |
i 1,595 |
$ |
i 965 |
|||||||||
(1) - | Includes loan repurchase commitments of $ i 428 million and $ i 418
million as of June 30, 2019 and December 31, 2018, respectively. |
(2) - | Amounts are net of expected recoveries. |
In millions |
Changes in Loss and LAE Reserves for the Six Months Ended June 30, 2019 |
|||||||||||||||||||||||||||||||||
Gross Loss 2018 (1) |
Loss Payments |
Accretion of Claim Liability Discount |
Changes in Discount Rates |
Changes in Assumptions |
Changes in Unearned Premium Revenue |
Changes in LAE Reserves |
Other |
(1) |
||||||||||||||||||||||||||
$ |
i 965 |
$ |
( i 92) |
$ |
i 10 |
$ |
( i 29) |
$ |
i 135 |
$ |
i 21 |
$ |
( i 13 |
) | $ |
i 1 |
$ |
i 998 |
(1) - | Amounts are net of expected recoveries of unpaid claims. |
Changes in Insurance Loss Recoverable for the Six Months Ended June 30, 2019 |
|||||||||||||||||||||||||||||
In millions |
Gross Reserve as of December 31, 2018 |
Collections for Cases |
Accretion of Recoveries |
Changes in Discount Rates |
Changes in Assumptions |
Other (1) |
Gross Reserve as of 2019 |
||||||||||||||||||||||
Insurance loss recoverable |
$ |
i 1,595 |
$ |
( i 88) |
$ |
i 19 |
$ |
i 54 |
$ |
i 33 |
(2) |
$ |
i 10 |
$ |
i 1,623 |
||||||||||||||
(1) - | Primarily changes in amount and timing of collections. |
(2) - | Includes amounts related to paid claims and LAE that are expected to be recovered in the future. |
Surveillance Categories |
||||||||||||||||||||
$ in millions |
Caution List Low |
Caution List Medium |
Caution List High |
Classified List |
Total |
|||||||||||||||
Number of policies |
i 45 |
i 19 |
i - |
i 224 |
i 288 |
|||||||||||||||
Number of issues (1) |
i 13 |
i 5 |
i - |
i 96 |
i 114 |
|||||||||||||||
Remaining weighted average contract period (in years) |
i 6.5 |
i 7.5 |
- |
i 7.6 |
i 7.3 |
|||||||||||||||
Gross insured contractual payments outstanding: (2) |
||||||||||||||||||||
Principal |
$ | i 1,492 |
$ | i 256 |
$ | i - |
$ | i 4,167 |
$ | i 5,915 |
||||||||||
Interest |
i 2,050 |
i 118 |
i - |
i 1,767 |
i 3,935 |
|||||||||||||||
Total |
$ |
i 3,542 |
$ |
i 374 |
$ |
i - |
$ |
i 5,934 |
$ |
i 9,850 |
||||||||||
Gross Claim Liability (3) |
$ |
i - |
$ |
i - |
$ |
i - |
$ |
i 1,131 |
$ |
i 1,131 |
||||||||||
Less: |
||||||||||||||||||||
Gross Potential Recoveries (4) |
i - |
i - |
i - |
i 2,230 |
i 2,230 |
|||||||||||||||
Discount, net (5) |
i - |
i - |
i - |
( i 486) |
( i 486) |
|||||||||||||||
Net claim liability (recoverable) |
$ |
i - |
$ |
i - |
$ |
i - |
$ |
( i 613) |
$ |
( i 613) |
||||||||||
Unearned premium revenue |
$ |
i 5 |
$ |
i 3 |
$ |
i - |
$ |
i 40 |
$ |
i 48 |
||||||||||
Reinsurance recoverable on paid and unpaid losses (6) |
$ |
i 20 |
(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 |
||||||||||||||||||||
Caution |
Caution |
Caution |
||||||||||||||||||
List |
List |
List |
Classified |
|||||||||||||||||
$ in millions |
Low |
Medium |
High |
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 June 30, 2019 |
Valuation Techniques |
Unobservable Input |
Range (Weighted Average) |
||||||||||
Assets of consolidated VIEs: |
||||||||||||||
Loans receivable at fair value |
$ | i 154 |
Market prices adjusted for financial guarantees provided to VIE obligations |
Impact of financial guarantee (1) |
-10% - i 59% ( i 16 %) |
|||||||||
Loan repurchase commitments |
i 428 |
Discounted cash flow |
Recovery rates (2) |
|||||||||||
Breach rates (2) |
||||||||||||||
Liabilities of consolidated VIEs: |
||||||||||||||
Variable interest entity notes |
i 342 |
Market prices of VIE assets adjusted for financial guarantees provided |
Impact of financial guarantee |
i 30% - i 65% ( i 53 %) |
||||||||||
Credit derivative liabilities: |
||||||||||||||
CMBS |
i 18 |
Direct Price Model |
Nonperformance risk |
i 54% - i 54% ( i 54 %) |
||||||||||
Other derivative liabilities |
i 16 |
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 |
Valuation Techniques |
Unobservable Input |
Range (Weighted Average) |
|||||||||||
Asset s of consolidated VIEs: |
||||||||||||||
Loans receivable at fair value |
$ |
i 172 |
Market prices adjusted for financial guarantees provided to VIE obligations |
Impact of financial guarantee (1) |
- 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 for financial guarantees provided |
Impact of financial guarantee |
i 0 % - i 63 % ( i 39%) |
||||||||||
Credit derivative 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 June 30, 2019 |
||||||||||||||||
Assets: |
|||||||||||||||||||||
Fixed-maturity investments: |
|||||||||||||||||||||
U.S. Treasury and government agency |
$ |
i 1,041 |
$ |
i 96 |
$ |
- |
$ |
- |
$ |
i 1,137 |
|||||||||||
State and municipal bonds |
- |
i 384 |
- |
- |
i 384 |
||||||||||||||||
Foreign governments |
- |
i 10 |
- |
- |
i 10 |
||||||||||||||||
Corporate obligations |
- |
i 1,307 |
- |
- |
i 1,307 |
||||||||||||||||
Mortgage-backed securities: |
|||||||||||||||||||||
Residential mortgage-backed agency |
- |
i 315 |
- |
- |
i 315 |
||||||||||||||||
Residential mortgage-backed non-agency |
- |
i 24 |
- |
- |
i 24 |
||||||||||||||||
Commercial mortgage- backed |
- |
i 27 |
i 4 |
- |
i 31 |
||||||||||||||||
Asset-backed securities: |
|||||||||||||||||||||
Collateralized debt obligations |
- |
i 113 |
- |
- |
i 113 |
||||||||||||||||
Other asset-backed |
- |
i 237 |
i 1 |
- |
i 238 |
||||||||||||||||
Total fixed-maturity investments |
i 1,041 |
i 2,513 |
i 5 |
- |
i 3,559 |
||||||||||||||||
Money market securities |
i 137 |
- |
- |
- |
i 137 |
||||||||||||||||
Perpetual debt and equity securities |
i 27 |
i 35 |
- |
- |
i 62 |
||||||||||||||||
Fixed-income fund |
- |
- |
- |
- |
i 66 |
(1) | |||||||||||||||
Cash and cash equivalents |
i 409 |
- |
- |
- |
i 409 |
||||||||||||||||
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 June 30, 2019 |
||||||||||||||||
Assets of consolidated VIEs: |
|||||||||||||||||||||
State and municipal bonds |
- |
i 534 |
- |
- |
i 534 |
||||||||||||||||
Corporate obligations |
- |
i 8 |
- |
- |
i 8 |
||||||||||||||||
Mortgage-backed securities: |
|||||||||||||||||||||
Residential mortgage-backed non-agency |
- |
i 47 |
- |
- |
i 47 |
||||||||||||||||
Commercial mortgage-backed |
- |
i 19 |
- |
- |
i 19 |
||||||||||||||||
Asset-backed securities: |
|||||||||||||||||||||
Collateralized debt obligations |
- |
i 6 |
- |
- |
i 6 |
||||||||||||||||
Other asset-backed |
- |
i 10 |
- |
- |
i 10 |
||||||||||||||||
Cash |
i 69 |
- |
- |
- |
i 69 |
||||||||||||||||
Loans receivable at fair value: |
|||||||||||||||||||||
Residential loans receivable |
- |
- |
i 154 |
- |
i 154 |
||||||||||||||||
Loan repurchase commitments |
- |
- |
i 428 |
- |
i 428 |
||||||||||||||||
Other assets: |
|||||||||||||||||||||
Currency derivatives |
- |
- |
i 11 |
- |
i 11 |
||||||||||||||||
Other |
- |
- |
i 15 |
- |
i 15 |
||||||||||||||||
Total assets |
$ |
i 1,683 |
$ |
i 3,174 |
$ |
i 613 |
$ |
- |
$ |
i 5,536 |
|||||||||||
Liabilities: |
|||||||||||||||||||||
Medium-term notes |
$ |
- |
$ |
- |
$ |
i 110 |
$ |
- |
$ |
i 110 |
|||||||||||
Derivative liabilities: |
|||||||||||||||||||||
Insured derivatives: |
|||||||||||||||||||||
Credit derivatives |
- |
i 2 |
i 18 |
- |
i 20 |
||||||||||||||||
Non-insured derivatives: |
|||||||||||||||||||||
Interest rate derivatives |
- |
i 199 |
- |
( i 13) |
i 186 |
||||||||||||||||
Other |
- |
- |
i 16 |
- |
i 16 |
||||||||||||||||
Other liabilities: |
|||||||||||||||||||||
Other payable |
- |
- |
i 3 |
- |
i 3 |
||||||||||||||||
Liabilities of consolidated VIEs: |
|||||||||||||||||||||
Variable interest entity notes |
- |
i 778 |
i 342 |
- |
i 1,120 |
||||||||||||||||
Total liabilities |
$ |
- |
$ |
i 979 |
$ |
i 489 |
$ |
( i 13) |
$ |
i 1,455 |
|||||||||||
(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 - |
- |
- |
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) |
Fair Value Balance as of |
Carry Value Balance as of |
||||||||||||||||
Assets: |
|||||||||||||||||||||
Other investments |
$ |
- |
$ |
- |
$ |
i 1 |
$ |
i 1 |
$ |
i 1 |
|||||||||||
Assets of consolidated VIEs: |
|||||||||||||||||||||
Investments held-to-maturity |
- |
- |
i 967 |
i 967 |
i 890 |
||||||||||||||||
Total assets |
$ |
- |
$ |
- |
$ |
i 968 |
$ |
i 968 |
$ |
i 891 |
|||||||||||
Liabilities: |
|||||||||||||||||||||
Long-term debt |
$ |
- |
$ |
i 1,219 |
$ |
- |
$ |
i 1,219 |
$ |
i 2,315 |
|||||||||||
Medium-term notes |
- |
- |
i 393 |
i 393 |
i 569 |
||||||||||||||||
Investment agreements |
- |
- |
i 398 |
i 398 |
i 305 |
||||||||||||||||
Liabilities of consolidated VIEs: |
|||||||||||||||||||||
Variable interest entity notes |
- |
i 336 |
i 967 |
i 1,303 |
i 1,220 |
||||||||||||||||
Total liabilities |
$ |
- |
$ |
i 1,555 |
$ |
i 1,758 |
$ |
i 3,313 |
$ |
i 4,409 |
|||||||||||
Financial Guarantees: |
|||||||||||||||||||||
Gross liability (recoverable) |
$ |
- |
$ |
- |
$ |
i 1,317 |
$ |
i 1,317 |
$ |
( i 105) |
|||||||||||
Ceded |
- |
- |
i 79 |
i 79 |
i 30 |
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 June 30, 2019 |
|||||||||||||||||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage- backed |
$ | i 6 |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | ( i 2) |
$ | - |
$ | - |
$ | - |
$ | i 4 |
$ | - |
||||||||||||||||||||||||||
Other asset- backed |
i 2 |
( 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 206 |
- |
i 1 |
- |
- |
- |
- |
( i 5) |
( i 48) |
- |
- |
i 154 |
( i 1) |
|||||||||||||||||||||||||||||||||||||||
Loan repurchase commitments |
i 420 |
- |
i 8 |
- |
- |
- |
- |
- |
- |
- |
- |
i 428 |
i 8 |
|||||||||||||||||||||||||||||||||||||||
Currency derivatives |
i 14 |
- |
( i 3) |
- |
- |
- |
- |
- |
- |
- |
- |
i 11 |
( i 3) |
|||||||||||||||||||||||||||||||||||||||
Other |
i 15 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i 15 |
- |
|||||||||||||||||||||||||||||||||||||||
Total assets |
$ | i 669 |
$ | ( i 1) |
$ | i 6 |
$ | i - |
$ | i - |
$ | i - |
$ | i - |
$ | ( i 9) |
$ | ( i 49) |
$ | i - |
$ | ( i 3) |
$ | i 613 |
$ | i 4 |
||||||||||||||||||||||||||
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 June 30, 2019 |
|||||||||||||||||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Medium-term notes |
$ | i 106 |
$ | - |
$ | ( i 5) |
$ | i 10 |
$ | i 2 |
$ | - |
$ | - |
$ | ( i 3) |
$ | - |
$ | - |
$ | - |
$ | i 110 |
$ | ( i 2) |
||||||||||||||||||||||||||
Credit derivatives |
i 19 |
i 1 |
- |
- |
- |
- |
- |
( i 2) |
- |
- |
- |
i 18 |
- |
|||||||||||||||||||||||||||||||||||||||
Other derivatives |
i 7 |
- |
i 9 |
- |
- |
- |
- |
- |
- |
- |
- |
i 16 |
i 9 |
|||||||||||||||||||||||||||||||||||||||
Other payable |
i 3 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i 3 |
- |
|||||||||||||||||||||||||||||||||||||||
Liabilities of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
VIE notes |
i 397 |
( i 2) |
i 10 |
( i 1) |
i 1 |
- |
- |
( i 3) |
( i 60) |
- |
- |
i 342 |
i 10 |
|||||||||||||||||||||||||||||||||||||||
Total liabilities |
$ | i 532 |
$ | ( i 1) |
$ | i 14 |
$ | i 9 |
$ | i 3 |
$ | i - |
$ | i - |
$ | ( i 8) |
$ | ( i 60) |
$ | i - |
$ | i - |
$ | i 489 |
$ | i 17 |
||||||||||||||||||||||||||
(1) - | Transferred in and out at the end of the period. |
Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Three Months Ended |
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
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 June 30, 2018 |
|||||||||||||||||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed |
$ | i 7 |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | ( i 7) |
$ | - |
$ | - |
||||||||||||||||||||||||||
Other asset-backed |
i 4 |
- |
- |
- |
- |
i 2 |
- |
- |
- |
- |
- |
i 6 |
- |
|||||||||||||||||||||||||||||||||||||||
Assets of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate obligations |
i 3 |
- |
- |
- |
- |
- |
- |
( i 1) |
- |
i 3 |
- |
i 5 |
- |
|||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed |
i 6 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
( i 6) |
- |
- |
|||||||||||||||||||||||||||||||||||||||
Collateralized debt obligations |
i 1 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i 1 |
- |
|||||||||||||||||||||||||||||||||||||||
Loans receivable- residential |
i 737 |
- |
( i 14) |
- |
- |
- |
- |
( i 40) |
- |
- |
- |
i 683 |
( i 14) |
|||||||||||||||||||||||||||||||||||||||
Loans receivable- corporate |
i 925 |
- |
- |
- |
- |
- |
- |
- |
( i 925) |
- |
- |
- |
- |
|||||||||||||||||||||||||||||||||||||||
Loan repurchase commitments |
i 407 |
- |
i 8 |
- |
- |
- |
- |
- |
- |
- |
- |
i 415 |
i 8 |
|||||||||||||||||||||||||||||||||||||||
Currency derivatives |
i 13 |
- |
( i 2) |
- |
i 3 |
- |
- |
- |
- |
- |
- |
i 14 |
i 1 |
|||||||||||||||||||||||||||||||||||||||
Other |
i 14 |
- |
i - |
- |
i - |
- |
- |
- |
- |
- |
- |
i 14 |
- |
|||||||||||||||||||||||||||||||||||||||
Total assets |
$ |
i 2,117 |
$ |
i - |
$ |
( i 8) |
$ |
i - |
$ |
i 3 |
$ |
i 2 |
$ |
i - |
$ |
( i 41) |
$ |
( i 925) |
$ |
i 3 |
$ |
( i 13) |
$ |
i 1,138 |
$ |
( i 5) |
||||||||||||||||||||||||||
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 June 30, 2018 |
|||||||||||||||||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Medium-term notes |
$ |
i 146 |
$ |
- |
$ |
( i 1) |
$ |
i 15 |
$ |
( i 11) |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
i 149 |
$ |
( i 12) |
||||||||||||||||||||||||||
Credit derivatives |
i 49 |
i 25 |
( i 18) |
- |
- |
- |
- |
( i 25) |
- |
- |
- |
i 31 |
( i 18) |
|||||||||||||||||||||||||||||||||||||||
Other derivatives |
i 4 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i 4 |
- |
|||||||||||||||||||||||||||||||||||||||
Other payable |
i 5 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i 5 |
- |
|||||||||||||||||||||||||||||||||||||||
Liabilities of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
VIE notes |
i 400 |
i 4 |
( i 12) |
i 9 |
( i 7) |
- |
i 1 |
( i 6) |
- |
- |
- |
i 389 |
( i 19) |
|||||||||||||||||||||||||||||||||||||||
Total liabilities |
$ |
i 604 |
$ |
i 29 |
$ |
( i 31) |
$ |
i 24 |
$ |
( i 18) |
$ |
i - |
$ |
i 1 |
$ |
( i 31) |
$ |
i - |
$ |
i - |
$ |
i - |
$ |
i 578 |
$ |
( i 49) |
||||||||||||||||||||||||||
(1) - |
Transferred in and out at the end of the period. |
Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Six Months Ended |
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
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 |
|||||||||||||||||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial mortgage-backed |
$ | i 7 |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | - |
$ | ( i 3) |
$ | - |
$ | - |
$ | - |
$ | i 4 |
$ | - |
||||||||||||||||||||||||||
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 43 |
- |
- |
- |
- |
( i 13) |
( i 48) |
- |
- |
i 154 |
i 38 |
|||||||||||||||||||||||||||||||||||||||
Loan repurchase commitments |
i 418 |
- |
i 10 |
- |
- |
- |
- |
- |
- |
- |
- |
i 428 |
i 10 |
|||||||||||||||||||||||||||||||||||||||
Currency derivatives |
i 17 |
- |
( i 5) |
- |
( i 1) |
- |
- |
- |
- |
- |
- |
i 11 |
( i 6) |
|||||||||||||||||||||||||||||||||||||||
Other |
i 14 |
- |
i 1 |
- |
- |
- |
- |
- |
- |
- |
- |
i 15 |
i 1 |
|||||||||||||||||||||||||||||||||||||||
Total assets |
$ |
i 637 |
$ |
( i 1) |
$ |
i 49 |
$ |
i - |
$ |
( i 1) |
$ |
i - |
$ |
i - |
$ |
( i 19) |
$ |
( i 49) |
$ |
i - |
$ |
( i 3) |
$ |
i 613 |
$ |
i 43 |
||||||||||||||||||||||||||
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 June 30, 2019 |
|||||||||||||||||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Medium-term notes |
$ |
i 102 |
$ |
- |
$ |
i 5 |
$ |
i 6 |
$ |
- |
$ |
- |
$ |
- |
$ |
( i 3) |
$ |
- |
$ |
- |
$ |
- |
$ |
i 110 |
$ |
i 4 |
||||||||||||||||||||||||||
Credit derivatives |
i 33 |
i 1 |
( i 14) |
- |
- |
- |
- |
( i 2) |
- |
- |
- |
i 18 |
( i 14) |
|||||||||||||||||||||||||||||||||||||||
Other derivatives |
i 7 |
- |
i 9 |
- |
- |
- |
- |
- |
- |
- |
- |
i 16 |
i 9 |
|||||||||||||||||||||||||||||||||||||||
Other payable |
i 5 |
- |
i 1 |
- |
- |
- |
- |
( i 3) |
- |
- |
- |
i 3 |
i 1 |
|||||||||||||||||||||||||||||||||||||||
Liabilities of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
VIE notes |
i 366 |
i 7 |
i 42 |
( i 7) |
i 1 |
- |
i 4 |
( i 11) |
( i 60) |
- |
- |
i 342 |
i 43 |
|||||||||||||||||||||||||||||||||||||||
Total liabilities |
$ |
i 513 |
$ |
i 8 |
$ |
i 43 |
$ |
( i 1) |
$ |
i 1 |
$ |
i - |
$ |
i 4 |
$ |
( i 19) |
$ |
( i 60 |
) | $ |
i - |
$ |
i - |
$ |
i 489 |
$ |
i 43 |
|||||||||||||||||||||||||
Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Six Months Ended |
||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||||||||
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 June 30, 2018 |
|||||||||||||||||||||||||||||||||||||||
Assets: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate obligations |
$ |
i 2 |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
( i 2) |
$ |
i - |
$ |
- |
||||||||||||||||||||||||||
Commercial mortgage-backed |
i 7 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
( i 7) |
i - |
- |
|||||||||||||||||||||||||||||||||||||||
Other asset-backed |
i 5 |
- |
- |
- |
- |
i 5 |
- |
( i 1) |
( i 3) |
- |
- |
i 6 |
- |
|||||||||||||||||||||||||||||||||||||||
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 6 |
- |
- |
- |
- |
( i 82) |
- |
- |
- |
i 683 |
i 6 |
|||||||||||||||||||||||||||||||||||||||
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 5) |
- |
- |
- |
- |
- |
- |
- |
- |
i 14 |
( i 5) |
|||||||||||||||||||||||||||||||||||||||
Other |
i 14 |
- |
i - |
- |
- |
- |
- |
- |
- |
- |
- |
i 14 |
- |
|||||||||||||||||||||||||||||||||||||||
Total assets |
$ |
i 2,140 |
$ |
i - |
$ |
i 20 |
$ |
i - |
$ |
i - |
$ |
i 5 |
$ |
i - |
$ |
( i 90) |
$ |
( i 928) |
$ |
i 6 |
$ |
( i 15) |
$ |
i 1,138 |
$ |
i 9 |
||||||||||||||||||||||||||
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 June 30, 2018 |
|||||||||||||||||||||||||||||||||||||||
Liabilities: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
Medium-term notes |
$ |
i 115 |
$ |
- |
$ |
- |
$ |
i 40 |
$ |
( i 6) |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
- |
$ |
i 149 |
$ |
( i 6) |
||||||||||||||||||||||||||
Credit derivatives |
i 63 |
i 44 |
( i 32) |
- |
- |
- |
- |
( i 44) |
- |
- |
- |
i 31 |
( i 32) |
|||||||||||||||||||||||||||||||||||||||
Other derivatives |
i 4 |
- |
- |
- |
- |
- |
- |
- |
- |
- |
- |
i 4 |
- |
|||||||||||||||||||||||||||||||||||||||
Other payable |
i 7 |
- |
i 2 |
- |
- |
- |
- |
( i 4) |
- |
- |
- |
i 5 |
i 2 |
|||||||||||||||||||||||||||||||||||||||
Liabilities of consolidated VIEs: |
||||||||||||||||||||||||||||||||||||||||||||||||||||
VIE notes |
i 406 |
i 12 |
( i 16) |
i 1 |
( i 2) |
- |
i 6 |
( i 18) |
- |
- |
- |
i 389 |
( i 18) |
|||||||||||||||||||||||||||||||||||||||
Total liabilities |
$ |
i 595 |
$ |
i 56 |
$ |
( i 46) |
$ |
i 41 |
$ |
( i 8) |
$ |
i - |
$ |
i 6 |
$ |
( i 66) |
$ |
i - |
$ |
i - |
$ |
i - |
$ |
i 578 |
$ |
( i 54) |
||||||||||||||||||||||||||
(1) - |
Transferred in and out at the end of the period. |
Three Months Ended June 30, 2019 |
Three Months Ended June 30, 2018 |
|||||||||||||||
In millions |
Total Gains (Losses) Included in Earnings |
Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets 2019
|
Total Gains (Losses) Included in Earnings |
Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets and 2018 |
||||||||||||
Revenues: |
||||||||||||||||
Unrealized gains (losses) on insured derivatives |
$ |
i - |
$ |
i - |
$ |
i 18 |
$ |
i 18 |
||||||||
Realized gains (losses) and other settlements on insured derivatives |
( i 1) |
i - |
( i 25) |
i - |
||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 6) |
( i 7) |
i 12 |
i 12 |
||||||||||||
Net investment losses related to other-than-temporary impairments |
( i 1) |
i - |
i - |
i - |
||||||||||||
Revenues of consolidated VIEs: |
||||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 3 |
) | ( i 6) |
i 10 |
i 14 |
|||||||||||
Total |
$ |
( i 11 |
) | $ |
( i 13) |
$ |
i 15 |
$ |
i 44 |
|||||||
Six Months Ended June 30, 2019 |
Six Months Ended June 30, 2018 |
|||||||||||||||
In millions |
Total Gains (Losses) Included in Earnings |
Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets 2019 |
Total Gains (Losses) Included in Earnings |
Change in Unrealized Gains (Losses) for the Period Included in Earnings for Assets 2018 |
||||||||||||
Revenues: |
||||||||||||||||
Unrealized gains (losses) on insured derivatives |
$ |
i 14 |
$ |
i 14 |
$ |
i 32 |
$ |
i 32 |
||||||||
Realized gains (losses) and other settlements on insured derivatives |
( i 1) |
i - |
( i 44 |
) |
i - |
|||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 14) |
( i 13) |
i 6 |
i 6 |
||||||||||||
Net investment losses related to other-than-temporary impairments |
|
|
( i 1) |
|
|
i - |
|
|
|
i - |
|
|
|
i - |
| |
Other net realized gains (losses) |
( i 1) |
( i 1) |
( i 2) |
( i 2) |
||||||||||||
Revenues of consolidated VIEs: |
||||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 2 |
) |
i - |
i 26 |
i 27 |
|||||||||||
Total |
$ |
( i 5 |
) |
$ |
i - |
$ |
i 18 |
$ |
i 63 |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
In millions |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Investments carried at fair value (1) |
$ |
i 4 |
$ |
( i 3 |
) |
$ |
i 11 |
$ |
( i 5 |
) | ||||||
Fixed-maturity securities held at fair value-VIE (2) |
i 26 |
( i 6 |
) |
i 56 |
( i 12 |
) | ||||||||||
Loans receivable at fair value: |
||||||||||||||||
Residential mortgage loans (2) |
i 1 |
( i 54 |
) |
i 43 |
( i 76 |
) | ||||||||||
Corporate loans (2) |
i - |
i - |
i - |
i 11 |
||||||||||||
Loan repurchase commitments (2) |
i 9 |
i 9 |
i 10 |
i 9 |
||||||||||||
Medium-term notes (1) |
i 3 |
i 12 |
( i 5 |
) |
i 6 |
|||||||||||
Other liabilities (3) |
( i 1 |
) |
i - |
( i 1 |
) |
( i 2 |
) | |||||||||
Variable interest entity notes (2) |
( i 24 |
) |
i 56 |
( i 80 |
) |
i 83 |
(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 June 30, 2019 |
As of December 31, 2018 |
|||||||||||||||||||||||
In millions |
Contractual Outstanding Principal |
Fair Value |
Difference |
Contractual Outstanding Principal |
Fair Value |
Difference |
||||||||||||||||||
Loans receivable at fair value: |
||||||||||||||||||||||||
Residential mortgage loans |
$ |
i 115 |
$ |
i 115 |
$ |
i - |
$ |
i 168 |
$ |
i 164 |
$ |
i 4 |
||||||||||||
Residential mortgage loans (90 days or more past due) |
i 152 |
i 39 |
i 113 |
i 153 |
i 8 |
i 145 |
||||||||||||||||||
Total loans receivable and other instruments at fair value |
$ |
i 267 |
$ |
i 154 |
$ |
i 113 |
$ |
i 321 |
$ |
i 172 |
$ |
i 149 |
||||||||||||
Variable interest entity notes |
$ |
i 1,854 |
$ |
i 1,120 |
$ |
i 734 |
$ |
i 1,295 |
$ |
i 480 |
$ |
i 815 |
||||||||||||
Medium-term notes |
$ |
i 113 |
$ |
i 110 |
$ |
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 1,081 |
$ |
i 46 |
$ |
( i 2 |
) |
$ |
i 1,125 |
$ |
i - |
|||||||||
State and municipal bonds |
i 289 |
i 96 |
( i 1 |
) |
i 384 |
i 74 |
||||||||||||||
Foreign governments |
i 9 |
i - |
i - |
i 9 |
i - |
|||||||||||||||
Corporate obligations |
i 1,244 |
i 34 |
( i 37 |
) |
i 1,241 |
( i 33 |
) | |||||||||||||
Mortgage-backed securities: |
||||||||||||||||||||
Residential mortgage-backed agency |
i 304 |
i 2 |
( i 1 |
) |
i 305 |
i - |
||||||||||||||
Residential mortgage-backed non-agency |
i 27 |
i 1 |
( i 4 |
) |
i 24 |
i - |
||||||||||||||
Commercial mortgage-backed |
i 29 |
i - |
i - |
i 29 |
i - |
|||||||||||||||
Asset-backed securities: |
||||||||||||||||||||
Collateralized debt obligations |
i 112 |
i - |
( i 2 |
) |
i 110 |
i - |
||||||||||||||
Other asset-backed |
i 231 |
i 1 |
i - |
i 232 |
i - |
|||||||||||||||
Total AFS investments |
$ |
i 3,326 |
$ |
i 180 |
$ |
( i 47 |
) |
$ |
i 3,459 |
$ |
i 41 |
|||||||||
HTM Investments |
||||||||||||||||||||
Assets of consolidated VIEs: |
||||||||||||||||||||
Corporate obligations |
$ |
i 890 |
$ |
i 77 |
$ |
i - |
$ |
i 967 |
$ |
i - |
||||||||||
Total HTM investments |
$ |
i 890 |
$ |
i 77 |
$ |
i - |
$ |
i 967 |
$ |
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 726 |
$ |
i 749 |
$ |
i - |
$ |
i - |
||||||||
Due after one year through five years |
i 705 |
i 764 |
i - |
i - |
||||||||||||
Due after five years through ten years |
i 448 |
i 431 |
i - |
i - |
||||||||||||
Due after ten years |
i 744 |
i 815 |
i 890 |
i 967 |
||||||||||||
Mortgage-backed and asset-backed |
i 703 |
i 700 |
i - |
i - |
||||||||||||
Total fixed-maturity investments |
$ |
i 3,326 |
$ |
i 3,459 |
$ |
i 890 |
$ |
i 967 |
||||||||
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 118 |
$ |
i - |
$ |
i 153 |
$ |
( i 2 |
) |
$ |
i 271 |
$ |
( i 2 |
) | ||||||||||
State and municipal bonds |
i - |
i - |
i 57 |
( i 1 |
) |
i 57 |
( i 1 |
) | ||||||||||||||||
Foreign governments |
i 3 |
i - |
i - |
i - |
i 3 |
i - |
||||||||||||||||||
Corporate obligations |
i 52 |
( i 1 |
) |
i 212 |
( i 36 |
) |
i 264 |
( i 37 |
) | |||||||||||||||
Mortgage-backed securities: |
||||||||||||||||||||||||
Residential mortgage-backed agency |
i 26 |
i - |
i 94 |
( i 1 |
) |
i 120 |
( i 1 |
) | ||||||||||||||||
Residential mortgage-backed non-agency |
i - |
i - |
i 12 |
( i 4 |
) |
i 12 |
( i 4 |
) | ||||||||||||||||
Commercial mortgage-backed |
i 1 |
i - |
i - |
i - |
i 1 |
i - |
||||||||||||||||||
Asset-backed securities: |
||||||||||||||||||||||||
Collateralized debt obligations |
i 68 |
( i 1 |
) |
i 22 |
( i 1 |
) |
i 90 |
( i 2 |
) | |||||||||||||||
Other asset-backed |
i 28 |
i - |
i 29 |
i - |
i 57 |
i - |
||||||||||||||||||
Total AFS investments |
$ |
i 296 |
$ |
( i 2 |
) |
$ |
i 579 |
$ |
( i 45 |
) |
$ |
i 875 |
$ |
( i 47 |
) | |||||||||
31, 2018 |
||||||||||||||||||||||||
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 10 |
$ |
i 14 |
$ |
i 13 |
|||||||
> 15% to 25% |
i 2 |
i 1 |
i 1 |
|||||||||
> 25% to 50% |
i 2 |
i 14 |
i 10 |
|||||||||
> 50% |
i 3 |
i 63 |
i 30 |
|||||||||
Total |
i 17 |
$ |
i 92 |
$ |
i 54 |
|||||||
In millions |
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||
Credit Losses Recognized in Earnings Related to Other-Than-Temporary Impairments |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Beginning balance |
$ | i 65 |
$ | i 33 |
$ | i 37 |
$ | i 32 |
||||||||
Additions for credit loss impairments recognized in the current period on securities previously impaired |
i 9 |
i 1 |
i 37 |
i 2 |
||||||||||||
Ending balance |
$ | i 74 |
$ | i 34 |
$ | i 74 |
$ | i 34 |
||||||||
In millions |
Fair Value |
Unrealized Loss |
Insurance Loss Reserve (2) |
|||||||||
Mortgage-backed: |
||||||||||||
MBIA (1) |
$ | i 12 |
$ | ( i 4 |
) | $ |
i 18 |
|||||
(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 June 30, |
Six Months Ended June 30, |
|||||||||||||||
In millions |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Proceeds from sales |
$ | i 684 |
$ | i 413 |
$ | i 1,367 |
$ | i 1,064 |
||||||||
Gross realized gains |
$ |
i 16 |
$ |
i 1 |
$ |
i 21 |
$ |
i 3 |
||||||||
Gross realized losses |
$ |
( i 2 |
) | $ |
( i 7 |
) |
$ |
( i 3 |
) | $ |
( i 13 |
) |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
In millions |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Net gains (losses) recognized during the period on equity securities |
$ | i 2 |
$ | i - |
$ | i 7 |
$ | i - |
||||||||
Less: |
||||||||||||||||
Net gains (losses) recognized during the period on equity securities sold during the period |
i - |
i 1 |
i 1 |
i 1 |
||||||||||||
Unrealized gains (losses) recognized during the period on equity securities still held at the reporting date |
$ | i 2 |
$ | ( i 1) |
$ | i 6 |
$ | ( i 1) |
$ in millions |
As of June 30, 2019 |
|||||||||||||||||||||||||||||||
Notional Value |
||||||||||||||||||||||||||||||||
Credit Derivatives Sold |
Weighted Average Remaining Expected Maturity |
AAA |
AA |
A |
BBB |
Below Investment Grade |
Total Notional |
Fair Value Asset (Liability) |
||||||||||||||||||||||||
Insured credit default swaps |
i 0.5 Years |
$ | i - |
$ | i - |
$ | i - |
$ | i - |
$ | i 52 |
$ | i 52 |
$ | ( i 18) |
|||||||||||||||||
Insured swaps |
i 14.8 Years |
i - |
i 68 |
i 1,419 |
i 460 |
i - |
i 1,947 |
( i 2) |
||||||||||||||||||||||||
Total notional |
$ | i - |
$ | i 68 |
$ | i 1,419 |
$ | i 460 |
$ | i 52 |
$ | i 1,999 |
||||||||||||||||||||
Total fair value |
$ | i - |
$ | i - |
$ | ( i 1) |
$ | ( i 1) |
$ | ( i 18) |
$ | ( i 20) |
||||||||||||||||||||
$ 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 Value 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 52 |
Other assets |
$ |
i - |
Derivative liabilities |
$ |
( i 18) |
||||||||
Insured swaps |
i 1,947 |
Other assets |
i - |
Derivative liabilities |
( i 2) |
|||||||||||
Interest rate swaps |
i 681 |
Other assets |
i 2 |
Derivative liabilities |
( i 199) |
|||||||||||
Interest rate swaps-embedded |
i 235 |
Medium-term notes |
i - |
Medium-term notes |
( i 18) |
|||||||||||
Currency swaps-VIE |
i 60 |
Other assets-VIE |
i 11 |
Derivative liabilities-VIE |
i - |
|||||||||||
All other |
i 49 |
Other assets |
i - |
Derivative liabilities |
( i 16) |
|||||||||||
Total non-designated derivatives |
$ |
i 3,024 |
$ |
i 13 |
$ |
( i 253) |
||||||||||
(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 hedging instruments: |
||||||||||||||||
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 June 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 1 |
$ |
i 18 |
|||||
Insured credit default swaps |
Realized gains (losses) and other settlements on insured derivatives |
( i 1 |
) | ( i 25 |
) | |||||
Interest rate swaps |
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 35 |
) | i 7 |
||||||
Currency swaps-VIE |
|
Net gains (losses) on financial instruments at fair value and foreign exchange-VIE |
|
|
( i 2 |
) |
|
|
i - |
|
All other |
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 9 |
) | i - |
||||||
Total |
$ |
( i 46 |
) | $ |
i - |
|||||
In millions |
||||||||||
Derivatives Not Designated as |
Six Months Ended June 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 14 |
$ |
i 32 |
|||||
Insured credit default swaps |
Realized gains (losses) and other settlements on insured derivatives |
( i 1 |
) |
( i 44 |
) | |||||
Interest rate swaps |
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 55 |
) |
i 25 |
||||||
Currency swaps-VIE |
Net gains (losses) on financial instruments at fair value and foreign exchange-VIE |
( i 5 |
) |
( i 5 |
) | |||||
All other |
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 9 |
) |
i - |
||||||
Total |
$ |
( i 56 |
) |
$ |
i 8 |
|||||
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
In millions |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Income (loss) before income taxes |
$ |
(207 |
) | $ |
(146 |
) |
$ |
(226 |
) | $ |
(242 |
) | ||||
Provision (benefit) for income taxes |
$ |
(37 |
) | $ |
i - |
$ |
(39 |
) | $ |
i 2 |
||||||
Effective tax rate |
i 17.9% |
i 0.0% |
i 17.3% |
- i 0.8% |
• | 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 June 30, 2019 |
||||||||||||||||||||
In millions |
U.S. Public Finance Insurance |
Corporate |
International and Structured Finance Insurance |
Eliminations |
Consolidated |
|||||||||||||||
Revenues (1) |
$ |
i 38 |
$ |
i 8 |
$ |
i 7 |
$ |
i - |
$ |
i 53 |
||||||||||
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 17 |
( i 33) |
( i 10) |
i - |
( i 26) |
|||||||||||||||
Net investment losses related to other-than-temporary impairments |
( i 9) |
i - |
i - |
i - |
( i 9) |
|||||||||||||||
Other net realized gains (losses) |
i - |
i - |
i 1 |
i - |
i 1 |
|||||||||||||||
Revenues of consolidated VIEs |
i 20 |
i - |
( i 9) |
i 1 |
i 12 |
|||||||||||||||
Inter-segment revenues (2) |
i 8 |
i 14 |
i 6 |
( i 28) |
i - |
|||||||||||||||
Total revenues |
i 74 |
( i 11) |
( i 6) |
( i 27) |
i 30 |
|||||||||||||||
Losses and loss adjustment |
i 106 |
i - |
i 34 |
i - |
i 140 |
|||||||||||||||
Operating |
i 2 |
i 16 |
i 3 |
i - |
i 21 |
|||||||||||||||
Interest |
i - |
i 20 |
i 32 |
i - |
i 52 |
|||||||||||||||
Expenses of consolidated VIEs |
i - |
i - |
i 24 |
i - |
i 24 |
|||||||||||||||
Inter-segment expenses (2) |
i 12 |
i 5 |
i 10 |
( i 27) |
i - |
|||||||||||||||
Total expenses |
i 120 |
i 41 |
i 103 |
( i 27) |
i 237 |
|||||||||||||||
Income (loss) before income taxes |
$ |
( i 46) |
$ |
( i 52) |
$ |
( i 109) |
$ |
i - |
$ |
(207) |
||||||||||
Identifiable assets |
$ |
i 5,011 |
$ |
i 1,123 |
$ |
i 4,678 |
$ |
( i 2,165) |
(3) |
$ |
i 8,647 |
|||||||||
(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 June 30, 2018 |
||||||||||||||||||||
In millions |
U.S. Public Finance Insurance |
Corporate |
International and Structured Finance Insurance |
Eliminations |
Consolidated |
|||||||||||||||
Revenues (1) |
$ |
i 41 |
$ |
i 7 |
$ |
i 22 |
$ |
i - |
$ |
i 70 |
||||||||||
Net change in fair value of insured derivatives |
i - |
i - |
( i 7) |
i - |
( i 7) |
|||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 8) |
i 28 |
i 2 |
i - |
i 22 |
|||||||||||||||
Net investment losses related to other-than-temporary impairments |
( i 1) |
i - |
i - |
i - |
( i 1) |
|||||||||||||||
Revenues of consolidated VIEs |
i - |
i - |
( i 72) |
i - |
( i 72) |
|||||||||||||||
Inter-segment revenues (2) |
i 6 |
i 11 |
i 6 |
( i 23) |
i - |
|||||||||||||||
Total revenues |
i 38 |
i 46 |
( i 49) |
( i 23) |
i 12 |
|||||||||||||||
Losses and loss adjustment |
i 59 |
i - |
i - |
i - |
i 59 |
|||||||||||||||
Operating |
i 6 |
i 13 |
i 4 |
i - |
i 23 |
|||||||||||||||
Interest |
i - |
i 20 |
i 32 |
i - |
i 52 |
|||||||||||||||
Expenses of consolidated VIEs |
i - |
i - |
i 24 |
i - |
i 24 |
|||||||||||||||
Inter-segment expenses (2) |
i 9 |
i 3 |
i 12 |
( i 24) |
i - |
|||||||||||||||
Total expenses |
i 74 |
i 36 |
i 72 |
( i 24) |
i 158 |
|||||||||||||||
Income (loss) before income taxes |
$ |
( i 36) |
$ |
i 10 |
$ |
( i 121) |
$ |
i 1 |
$ |
(146) |
||||||||||
Identifiable assets |
$ |
i 4,412 |
$ |
i 1,100 |
$ |
i 5,248 |
$ |
( i 2,030) |
(3) |
$ |
i 8,730 |
|||||||||
(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. |
Six Months Ended June 30, 2019 |
||||||||||||||||||||
In millions |
U.S. Public Finance Insurance |
Corporate |
International and Structured Finance Insurance |
Eliminations |
Consolidated |
|||||||||||||||
Revenues (1) |
$ |
i 76 |
$ |
i 15 |
$ |
i 17 |
$ |
i - |
$ |
i 108 |
||||||||||
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 57 |
( i 51) |
( i 10) |
i - |
( i 4 |
) | ||||||||||||||
Net investment losses related to other-than-temporary impairments |
( i 37) |
i - |
i - |
i - |
( i 37 |
) | ||||||||||||||
Other net realized gains (losses) |
i 1 |
( i 1) |
i 2 |
i - |
i 2 |
|||||||||||||||
Revenues of consolidated VIEs |
i 6 |
i - |
( i 9) |
i 1 |
( i 2 |
) | ||||||||||||||
Inter-segment revenues (2) |
i 15 |
i 33 |
i 9 |
( i 57) |
i - |
|||||||||||||||
Total revenues |
i 118 |
( i 4) |
i 22 |
( i 56) |
i 80 |
|||||||||||||||
Losses and loss adjustment |
i 56 |
i - |
i 46 |
i - |
i 102 |
|||||||||||||||
Operating |
i 4 |
i 38 |
i 9 |
i - |
i 51 |
|||||||||||||||
Interest |
i - |
i 39 |
i 65 |
i - |
i 104 |
|||||||||||||||
Expenses of consolidated VIEs |
i - |
i - |
i 49 |
i - |
i 49 |
|||||||||||||||
Inter-segment expenses (2) |
i 27 |
i 11 |
i 18 |
( i 56) |
i - |
|||||||||||||||
Total expenses |
i 87 |
i 88 |
i 187 |
( i 56) |
i 306 |
|||||||||||||||
Income (loss) before income taxes |
$ |
i 31 |
$ |
( i 92) |
$ |
( i 165) |
$ |
- |
$ |
( i 226 |
) | |||||||||
Identifiable assets |
$ |
5,011 |
$ |
1,123 |
$ |
4,678 |
$ |
(2,165) |
(3) |
$ |
8,647 |
|||||||||
(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. |
Six Months Ended June 30, 2018 |
||||||||||||||||||||
In millions |
U.S. Public Finance Insurance |
Corporate |
International and Structured Finance Insurance |
Eliminations |
Consolidated |
|||||||||||||||
Revenues (1) |
$ |
i 94 |
$ |
i 14 |
$ |
i 39 |
$ |
i - |
$ |
i 147 |
||||||||||
Net change in fair value of insured derivatives |
i - |
i - |
( i 12) |
i - |
( i 12) |
|||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
( i 14) |
i 31 |
( i 4) |
i - |
i 13 |
|||||||||||||||
Net investment losses related to other-than-temporary impairments |
( i 2) |
i - |
i - |
i - |
( i 2) |
|||||||||||||||
Other net realized gains (losses) |
i - |
( i 2) |
i 1 |
i - |
( i 1) |
|||||||||||||||
Revenues of consolidated VIEs |
i - |
i - |
( i 60) |
i - |
( i 60) |
|||||||||||||||
Inter-segment revenues (2) |
i 13 |
i 24 |
i 13 |
( i 50) |
i - |
|||||||||||||||
Total revenues |
i 91 |
i 67 |
( i 23) |
( i 50) |
i 85 |
|||||||||||||||
Losses and loss adjustment |
i 136 |
i - |
( i 5) |
i - |
i 131 |
|||||||||||||||
Operating |
i 9 |
i 26 |
i 12 |
i - |
i 47 |
|||||||||||||||
Interest |
i - |
i 40 |
i 63 |
i - |
i 103 |
|||||||||||||||
Expenses of consolidated VIEs |
i - |
i - |
i 46 |
i - |
i 46 |
|||||||||||||||
Inter-segment expenses (2) |
i 24 |
i 9 |
i 18 |
( i 51) |
i - |
|||||||||||||||
Total expenses |
i 169 |
i 75 |
i 134 |
( i 51) |
i 327 |
|||||||||||||||
Income (loss) before income taxes |
$ |
( i 78) |
$ |
( i 8) |
$ |
( i 157) |
$ |
i 1 |
$ |
(242) |
||||||||||
Identifiable assets |
$ |
4,412 |
$ |
1,100 |
$ |
5,248 |
$ |
(2,030) |
(3) |
$ |
8,730 |
|||||||||
(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 June 30, |
Six Months Ended June 30, |
|||||||||||||||
In millions except per share amounts |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Basic earnings per share: |
||||||||||||||||
Net income (loss) available to common shareholders |
$ |
( i 170) |
$ |
( i 146) |
$ |
( i 187) |
$ |
( i 244) |
||||||||
Basic weighted average shares (1) |
84.3 |
89.1 |
84.9 |
88.9 |
||||||||||||
Net income (loss) per basic common share |
$ |
( i 2.02) |
$ |
( i 1.64) |
$ |
( i 2.20) |
$ |
( i 2.75) |
||||||||
Diluted earnings per share: |
||||||||||||||||
Net income (loss) available to common shareholders |
$ |
( i 170) |
$ |
( i 146) |
$ |
( i 187) |
$ |
( i 244) |
||||||||
Diluted weighted average shares |
84.3 |
89.1 |
84.9 |
88.9 |
||||||||||||
Net income (loss) per diluted common share |
$ |
( i 2.02) |
$ |
( i 1.64) |
$ |
( i 2.20) |
$ |
( i 2.75) |
||||||||
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 of
participating securities that met the service condition and were eligible to receive nonforfeitable dividends or dividend equivalents for the three months ended June 30, 2019 and 2018 respectively. Includes i 1.1 million and i 0.8 million i 1.0 million and i 0.8 million |
In millions |
Unrealized Gains (Losses) on AFS Securities, Net |
Foreign 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 |
) |
$ |
(156 |
) | ||||||
Other comprehensive income (loss) before reclassifications |
i 115 |
i - |
i - |
i 115 |
||||||||||||
Amounts reclassified from AOCI |
i 14 |
i - |
i 23 |
i 37 |
||||||||||||
Net period other comprehensive income (loss) |
i 129 |
i - |
i 23 |
152 |
||||||||||||
Balance, June 30, 2019 |
$ |
i 90 |
$ |
( i 7) |
$ |
( i 87 |
) |
$ |
( i 4) |
|||||||
In millions |
Amounts Reclassified from AOCI |
||||||||||||||||||
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||||||||||||||
Details about AOCI Components |
2019 |
2018 |
2019 |
2018 |
Affected Line Item on the Consolidated Statements of Operations | ||||||||||||||
Unrealized gains (losses) on AFS securities: |
|||||||||||||||||||
Realized gains (losses) on sale of securities |
$ |
( i 16) |
$ |
i - |
$ |
i 23 |
$ |
i 1 |
Net gains (losses) on financial instruments at fair value and foreign exchange | ||||||||||
OTTI |
( i 9) |
i - |
( i 37) |
( i 1) |
Net investment losses related to OTTI | ||||||||||||||
Total unrealized gains (losses) on AFS securities |
( i 25) |
i - |
( i 14) |
i - |
|||||||||||||||
Instrument-specific credit risk of liabilities: |
|||||||||||||||||||
Settlement of liabilities |
( i 19) |
i - |
( i 23) |
i - |
Net gains (losses) on financial instruments at fair value and foreign exchange | ||||||||||||||
Total reclassifications for the period |
$ |
( i 44) |
$ |
i - |
$ |
( i 37) |
$ |
i - |
Net income (loss) | ||||||||||
$ in millions |
As of |
Balance Sheet Location |
||||||
Right-of-use asset |
$ |
i 22 |
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 34 |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
In millions except per share amounts |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Net income (loss) |
$ | (170) |
$ | (146) |
$ | (187) |
$ | (244) |
||||||||
Net income (loss) per diluted share |
$ | (2.02) |
$ | (1.64) |
$ | (2.20) |
$ | (2.75) |
||||||||
Adjusted net income (loss) (1) |
$ | (76) |
$ | (51) |
$ | (37) |
$ | (112) |
||||||||
Adjusted net income (loss) per diluted share (1) |
$ | (0.90) |
$ | (0.58) |
$ | (0.44) |
$ | (1.27) |
||||||||
Cost of shares repurchased |
$ | 50 |
$ | - |
$ | 54 |
$ | 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 some of the new uninsured bonds held in the Trusts during the second quarter of 2019. The sale of bonds held in the Trusts results in a further reduction to National’s exposure to COFINA. Since this transaction was implemented through June 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 $279 million, $472 million and $1.7 billion, respectively. In addition, National sold all of the new taxable uninsured bonds held in the Trusts, which further reduced National’s COFINA gross par outstanding, gross par outstanding plus CABs accreted interest and debt service outstanding by approximately $100 million, $179 million and $618 million, respectively, in July of 2019. |
• | 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”), have 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. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
In millions except for per share amounts |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Total revenues |
$ | 30 |
$ | 12 |
$ | 80 |
$ | 85 |
||||||||
Total expenses |
237 |
158 |
306 |
327 |
||||||||||||
Income (loss) before income taxes |
(207) |
(146) |
(226) |
(242) |
||||||||||||
Provision (benefit) for income taxes |
(37) |
- |
(39) |
2 |
||||||||||||
Net income (loss) |
$ | (170) |
$ | (146) |
$ | (187) |
$ | (244) |
||||||||
Net income (loss) per common share: |
||||||||||||||||
Basic |
$ | (2.02) |
$ | (1.64) |
$ | (2.20) |
$ | (2.75) |
||||||||
Diluted |
$ | (2.02) |
$ | (1.64) |
$ | (2.20) |
$ | (2.75) |
||||||||
Weighted average number of common shares outstanding: |
||||||||||||||||
Basic |
84.3 |
89.1 |
84.9 |
88.9 |
||||||||||||
Diluted |
84.3 |
89.1 |
84.9 |
88.9 |
• | Mark-to-market gains (losses) on financial instruments – We remove the impact of 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) – We remove foreign exchange gains (losses) on the remeasurement of certain assets and liabilities and transactions in 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 – We remove gains (losses) on the sale of investments, net investment losses related to OTTI and net gains (losses) on extinguishment of debt since the timing of these transactions are subject to management’s assessment of market opportunities and capital liquidity positions. |
• | Income taxes – We remove the tax impact of maintaining a full valuation allowance against the Company’s net deferred tax asset. The Company applies a zero effective tax rate for federal income tax purposes to its pre-tax adjustments. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
In millions except share and per share amounts |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Net income (loss) |
$ | (170) |
$ | (146) |
$ | (187) |
$ | (244) |
||||||||
Less: adjusted net income (loss) adjustments: |
||||||||||||||||
Income (loss) before income taxes of our international and structured finance insurance segment and eliminations |
(108) |
(120) |
(163) |
(156) |
||||||||||||
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) |
(22) |
5 |
(38) |
27 |
||||||||||||
Foreign exchange gains (losses) (1) |
(5) |
26 |
2 |
13 |
||||||||||||
Net gains (losses) on sales of investments (1) |
14 |
(6) |
47 |
(11) |
||||||||||||
Net investment losses related to OTTI |
(9) |
(1) |
(37) |
(2) |
||||||||||||
Other net realized gains (losses) |
- |
- |
(1) |
(2) |
||||||||||||
Adjusted net income adjustment to the (provision) benefit for income tax (2) |
36 |
1 |
40 |
(1) |
||||||||||||
Adjusted net income (loss) |
$ | (76) |
$ | (51) |
$ | (37) |
$ | (112) |
||||||||
Adjusted net income (loss) per diluted common share (3) |
$ | (0.90) |
$ | (0.58) |
$ | (0.44) |
$ | (1.27) |
||||||||
Gain (loss) related to our U.S. public finance insurance segment VIE consolidations included in adjusted net income (loss) |
(7) |
- |
(20) |
- |
||||||||||||
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 |
(0.08) |
- |
(0.23) |
- |
(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. – We remove the negative book value of MBIA Corp. based on our view that given MBIA Corp.’s current financial condition, the regulatory regime in which it operates, the priority given to its policyholders, surplus note holders and preferred stock holders with respect to the distribution of assets, and its legal structure, it is not and will not likely be in a position to upstream any economic benefit to MBIA Inc. Further, MBIA Inc. does not face any material financial liability arising from MBIA Corp. |
• | Net unrealized (gains) losses on available-for-sale (“AFS”) securities excluding MBIA Corp. – We remove net unrealized gains and losses on AFS securities recorded in accumulated other comprehensive income since they will reverse from GAAP book value when such securities mature. Gains and losses from sales and OTTI of AFS securities are recorded in book value through earnings. |
• | Net unearned premium revenue in excess of expected losses of National - We include net unearned premium revenue in excess of expected losses. Net unearned premium revenue in excess of expected losses consists of the financial guarantee unearned premium revenue of National in excess of expected insurance losses, net of reinsurance and deferred acquisition costs. In accordance with GAAP, a loss reserve on a financial guarantee policy is only recorded when expected losses exceed the amount of unearned premium revenue recorded for that policy. As a result, we only add to GAAP book value the amount of unearned premium revenue in excess of expected losses for each policy in order to reflect the full amount of our expected losses. The Company’s net unearned premium revenue will be recognized in GAAP book value in future periods, however, actual amounts
could differ from estimated amounts due to such factors as credit defaults and policy terminations, among others. |
• | Gain (loss) related to National VIE consolidations – We remove the impact of VIE consolidations by National. GAAP requires the Company to consolidate certain VIEs as a result of the Company’s insurance policies. However, since the Company does not own such VIEs, management uses certain measures adjusted to remove the impact of VIE consolidations for National in order to reflect financial exposure limited to its financial guarantee contracts. |
In millions except share and per share amounts |
As of |
As of |
||||||
Total shareholders’ equity of MBIA Inc. |
$ | 1,040 |
$ | 1,119 |
||||
Common shares outstanding |
84,800,996 |
89,821,713 |
||||||
GAAP book value per share |
$ | 12.26 |
$ | 12.46 |
||||
Management’s adjustments described above: |
||||||||
Remove negative book value per share of MBIA Corp. |
(13.07) |
(10.93) |
||||||
Remove net unrealized gains (losses) on available-for-sale securities included in other comprehensive income (loss) |
1.43 |
(0.46) |
||||||
Include net unearned premium revenue in excess of expected losses |
3.46 |
3.53 |
||||||
Remove gain (loss) related to National VIE consolidations |
(0.24) |
- |
Three Months Ended June 30, |
Percent |
Six Months Ended June 30, |
Percent |
|||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
||||||||||||||||||
Net premiums earned |
$ | 18 |
$ | 19 |
-5% |
$ | 36 |
$ | 51 |
-29% |
||||||||||||||
Net investment income |
26 |
29 |
-10% |
53 |
56 |
-5% |
||||||||||||||||||
Fees and reimbursements |
1 |
- |
n/m |
2 |
1 |
100% |
||||||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
17 |
(9) |
n/m |
57 |
(15) |
n/m |
||||||||||||||||||
Net investment losses related to other-than-temporary impairments |
(9) |
(1) |
n/m |
(37) |
(2) |
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 |
21 |
- |
n/m |
49 |
- |
n/m |
||||||||||||||||||
Other net realized gains (losses) |
- |
- |
n/m |
(43) |
- |
n/m |
||||||||||||||||||
Total revenues |
74 |
38 |
95% |
118 |
91 |
30% |
||||||||||||||||||
Losses and loss adjustment |
106 |
59 |
80% |
56 |
136 |
-59% |
||||||||||||||||||
Amortization of deferred acquisition costs |
5 |
4 |
25% |
9 |
11 |
-18% |
||||||||||||||||||
Operating |
9 |
11 |
-18% |
22 |
22 |
-% |
||||||||||||||||||
Total expenses |
120 |
74 |
62% |
87 |
169 |
-49% |
||||||||||||||||||
Income (loss) before income taxes |
$ | (46) |
$ | (36) |
28% |
$ | 31 |
$ | (78) |
-140% |
||||||||||||||
Three Months Ended June 30, |
Percent |
Six Months Ended June 30, |
Percent |
|||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
||||||||||||||||||
Losses and loss adjustment expenses (1) |
$ | 106 |
$ | 59 |
80% |
$ | 56 |
$ | 136 |
-59% |
||||||||||||||
(1) - | As a result of consolidation of VIEs, loss and loss adjustment expense for the three and six months ended June 30, 2019 include the elimination of a loss and LAE benefit of $27 million and $24 million, respectively. |
In millions |
Percent Change |
|||||||||||
Assets: |
||||||||||||
Insurance loss recoverable |
$ | 659 |
$ | 571 |
15% |
|||||||
Reinsurance recoverable on paid and unpaid losses (1) |
14 |
16 |
-13% |
|||||||||
Liabilities: |
||||||||||||
Loss and LAE reserves |
528 |
551 |
-4% |
|||||||||
Insurance loss recoverable - ceded (2) |
17 |
15 |
13% |
|||||||||
Net reserve (salvage) |
$ | (128) |
$ | (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 June 30, |
Percent |
Six Months Ended June 30, |
Percent |
|||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
||||||||||||||||||
Gross expenses |
$ | 10 |
$ | 11 |
-9% |
$ | 23 |
$ | 22 |
5% |
||||||||||||||
Amortization of deferred acquisition costs |
$ | 5 |
$ | 4 |
25% |
$ | 9 |
$ | 11 |
-18% |
||||||||||||||
Operating |
9 |
11 |
-18% |
22 |
22 |
-% |
||||||||||||||||||
Total insurance operating expenses |
$ | 14 |
$ | 15 |
-7% |
$ | 31 |
$ | 33 |
-6% |
||||||||||||||
Gross Par Outstanding |
||||||||||||||||
In millions |
||||||||||||||||
Rating |
Amount |
% |
Amount |
% |
||||||||||||
AAA |
$ | 3,006 |
5.4% |
$ | 3,108 |
5.4% |
||||||||||
AA |
21,272 |
39.0% |
22,162 |
38.3% |
||||||||||||
A |
17,115 |
31.4% |
18,495 |
32.0% |
||||||||||||
BBB |
8,601 |
15.8% |
9,166 |
15.8% |
||||||||||||
Below investment grade |
4,556 |
8.4% |
4,934 |
8.5% |
||||||||||||
Total |
$ | 54,550 |
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) |
$ | 1,089 |
$ | 1,089 |
$ | 1,489 |
d |
|||||||||
Puerto Rico Commonwealth GO |
598 |
(1) |
605 |
737 |
d |
|||||||||||
Puerto Rico Public Buildings Authority (PBA) (2) |
182 |
182 |
252 |
d |
||||||||||||
Puerto Rico Highway and Transportation Authority Transportation Revenue (PRHTA) |
523 |
523 |
922 |
d |
||||||||||||
Puerto Rico Highway and Transportation Authority - Subordinated Transportation Revenue (PRHTA) |
27 |
27 |
37 |
d |
||||||||||||
Puerto Rico Sales Tax Financing Corporation (COFINA) |
405 |
(1) |
732 |
2,493 |
d |
|||||||||||
Puerto Rico Highway and Transportation Authority Highway Revenue (PRHTA) |
66 |
(1) |
68 |
91 |
d |
|||||||||||
University of Puerto Rico System Revenue |
79 |
79 |
109 |
d |
||||||||||||
Inter American University of Puerto Rico Inc. |
21 |
21 |
28 |
a3 |
||||||||||||
Total |
$ | 2,990 |
$ | 3,326 |
$ | 6,158 |
||||||||||
(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) |
$ | 150 |
$ | 115 |
$ | 140 |
$ | 140 |
$ | 137 |
$ | 807 |
$ | 1,489 |
||||||||||||||
Puerto Rico Commonwealth GO |
137 |
223 |
82 |
19 |
14 |
262 |
737 |
|||||||||||||||||||||
Puerto Rico Public Buildings Authority (PBA) |
20 |
10 |
24 |
9 |
26 |
163 |
252 |
|||||||||||||||||||||
Puerto Rico Highway and Transportation Authority Transportation Revenue (PRHTA) |
13 |
26 |
27 |
27 |
36 |
793 |
922 |
|||||||||||||||||||||
Puerto Rico Highway and Transportation Authority - Subordinated Transportation Revenue (PRHTA) |
1 |
1 |
1 |
9 |
1 |
24 |
37 |
|||||||||||||||||||||
Puerto Rico Sales Tax Financing Corporation (COFINA) |
- |
- |
- |
- |
- |
2,493 |
2,493 |
|||||||||||||||||||||
Puerto Rico Highway and Transportation Authority Highway Revenue (PRHTA) |
15 |
16 |
3 |
2 |
4 |
51 |
91 |
|||||||||||||||||||||
University of Puerto Rico System Revenue |
4 |
7 |
7 |
6 |
12 |
73 |
109 |
|||||||||||||||||||||
Inter American University of Puerto Rico Inc. |
2 |
3 |
3 |
3 |
3 |
14 |
28 |
|||||||||||||||||||||
Total |
$ | 342 |
$ | 401 |
$ | 287 |
$ | 215 |
$ | 233 |
$ | 4,680 |
$ | 6,158 |
||||||||||||||
Three Months Ended June 30, |
Percent |
Six Months Ended June 30, |
Percent |
|||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
||||||||||||||||||
Net investment income |
$ | 9 |
$ | 9 |
-% |
$ | 19 |
$ | 18 |
6% |
||||||||||||||
Fees |
13 |
9 |
44% |
29 |
20 |
45% |
||||||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
(33) |
28 |
n/m |
(51) |
31 |
n/m |
||||||||||||||||||
Other net realized gains (losses) |
- |
- |
-% |
(1) |
(2) |
-50% |
||||||||||||||||||
Total revenues |
(11) |
46 |
-124% |
(4) |
67 |
-106% |
||||||||||||||||||
Operating |
17 |
12 |
42% |
40 |
27 |
48% |
||||||||||||||||||
Interest |
24 |
24 |
-% |
48 |
48 |
-% |
||||||||||||||||||
Total expenses |
41 |
36 |
14% |
88 |
75 |
17% |
||||||||||||||||||
Income (loss) before income taxes |
$ | (52) |
$ | 10 |
n/m |
$ | (92) |
$ | (8) |
n/m |
||||||||||||||
Three Months Ended June 30, |
Percent |
Six Months Ended June 30, |
Percent |
|||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
||||||||||||||||||
Net premiums earned |
$ | 6 |
$ | 21 |
-71% |
$ | 13 |
$ | 31 |
-58% |
||||||||||||||
Net investment income |
2 |
2 |
-% |
4 |
3 |
33% |
||||||||||||||||||
Fees and reimbursements |
5 |
4 |
25% |
9 |
18 |
-50% |
||||||||||||||||||
Change in fair value of insured derivatives: |
||||||||||||||||||||||||
Realized gains (losses) and other settlements on insured derivatives |
(1) |
(25) |
-96% |
(1) |
(44) |
-98% |
||||||||||||||||||
Unrealized gains (losses) on insured derivatives |
- |
18 |
-100% |
14 |
32 |
-56% |
||||||||||||||||||
Net change in fair value of insured derivatives |
(1) |
(7) |
-86% |
13 |
(12) |
n/m |
||||||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
(10) |
3 |
n/m |
(10) |
(4) |
150% |
||||||||||||||||||
Other net realized gains (losses) |
1 |
- |
n/m |
2 |
1 |
100% |
||||||||||||||||||
Revenues of consolidated VIEs: |
||||||||||||||||||||||||
Net investment income |
10 |
8 |
25% |
20 |
16 |
25% |
||||||||||||||||||
Net gains (losses) on financial instruments at fair value and foreign exchange |
(3) |
13 |
-123% |
(13) |
17 |
n/m |
||||||||||||||||||
Other net realized gains (losses) |
(16) |
(93) |
-83% |
(16) |
(93) |
-83% |
||||||||||||||||||
Total revenues |
(6) |
(49) |
-88% |
22 |
(23) |
n/m |
||||||||||||||||||
Losses and loss adjustment |
34 |
- |
n/m |
46 |
(5) |
n/m |
||||||||||||||||||
Amortization of deferred acquisition costs |
4 |
7 |
-43% |
9 |
15 |
-40% |
||||||||||||||||||
Operating |
6 |
6 |
-% |
13 |
11 |
18% |
||||||||||||||||||
Interest |
34 |
33 |
3% |
67 |
64 |
5% |
||||||||||||||||||
Expenses of consolidated VIEs: |
||||||||||||||||||||||||
Operating |
1 |
3 |
-67% |
4 |
5 |
-20% |
||||||||||||||||||
Interest |
24 |
23 |
4% |
48 |
44 |
9% |
||||||||||||||||||
Total expenses |
103 |
72 |
43% |
187 |
134 |
40% |
||||||||||||||||||
Income (loss) before income taxes |
$ | (109) |
$ | (121) |
-10% |
$ | (165) |
$ | (157) |
|
||||||||||||||
Three Months Ended June 30, |
Percent |
Six Months Ended June 30, |
Percent |
|||||||||||||||||||||
In millions |
2019 |
2018 |
Change |
2019 |
2018 |
Change |
||||||||||||||||||
Net premiums earned: |
|
|||||||||||||||||||||||
U.S. |
$ | 1 |
$ | 2 |
-50% |
$ | 3 |
$ | 5 |
-40% |
||||||||||||||
Non-U.S. |
5 |
19 |
-74% |
10 |
26 |
-62% |
||||||||||||||||||
Total net premiums earned |
$ | 6 |
$ | 21 |
-71% |
$ | 13 |
$ | 31 |
-58% |
||||||||||||||
VIEs (eliminated in consolidation) |
$ | 2 |
$ | 2 |
-% |
$ | 3 |
$ | 3 |
-% |
Three Months Ended June 30, |
Percent Change |
Six Months Ended June 30, |
Percent Change |
|||||||||||||||||||||
In millions |
2019 |
2018 |
2019 |
2018 |
||||||||||||||||||||
Losses and loss adjustment expenses (1) |
$ | 34 |
$ | - |
100% |
$ | 46 |
$ | (5) |
n/m |
(1) - | As a result of consolidation of VIEs, these amounts include the elimination of loss and LAE expense of $22 million and a loss and LAE benefit of $11 for the three months ended June 30, 2019 and 2018, respectively, and loss and LAE expense of $36 million and a loss and LAE benefit of $19 million for the six months ended June 30, 2019 and 2018, respectively. |
In millions |
Percent Change |
|||||||||||
Assets: |
||||||||||||
Insurance loss recoverable |
$ | 964 |
$ | 1,024 |
-6% |
|||||||
Reinsurance recoverable on paid and unpaid losses (1) |
6 |
5 |
20% |
|||||||||
Liabilities: |
||||||||||||
Loss and LAE reserves |
470 |
414 |
13% |
|||||||||
Net reserve (salvage) |
$ |
(500) |
$ | (615) |
-19% |
|||||||
(1) - | Reported within “Other assets” on our consolidated balance sheets. |
Three Months Ended June 30, |
Percent Change |
Six Months Ended June 30, |
Percent Change |
|||||||||||||||||||||
In millions |
2019 |
2018 |
2019 |
2018 |
||||||||||||||||||||
Gross expenses |
$ | 6 |
$ | 6 |
-% |
$ | 13 |
$ | 11 |
18% |
||||||||||||||
Amortization of deferred acquisition costs |
$ | 4 |
$ | 7 |
-43% |
$ | 9 |
$ | 15 |
-40% |
||||||||||||||
Operating |
6 |
6 |
-% |
13 |
11 |
18% |
||||||||||||||||||
Total insurance operating expenses |
$ |
10 |
$ |
13 |
-23% |
$ |
22 |
$ |
26 |
-15% |
||||||||||||||
In millions |
Gross Par Outstanding as of |
|||||||||||
Collateral Type |
Percent Change |
|||||||||||
HELOC Second-lien |
$ | 441 |
$ | 511 |
-14% |
|||||||
CES Second-lien |
153 |
591 |
-74% |
|||||||||
Alt-A First-lien (1) |
941 |
983 |
-4% |
|||||||||
Subprime First-lien |
390 |
439 |
-11% |
|||||||||
Prime First-lien |
13 |
15 |
-13% |
|||||||||
Total |
$ | 1,938 |
$ | 2,539 |
-24% |
|||||||
(1) - | Includes international exposure of $245 million as of June 30, 2019 and December 31, 2018. |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
In millions |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Income (loss) before income taxes |
$ | (207) |
$ | (146) |
$ | (226) |
$ | (242) |
||||||||
Provision (benefit) for income taxes |
$ | (37) |
$ | - |
$ | (39) |
$ | 2 |
||||||||
Effective tax rate |
17.9% |
-% |
17.3% |
-0.8% |
In millions except per share amounts |
Six Months Ended June 30, |
|||||||
2018 |
||||||||
Number of shares repurchased |
5.9 |
2.0 |
||||||
Average price paid per share |
$ | 9.10 |
$ | 7.25 |
||||
Remaining authorization as of June 30 |
$ | 148 |
$ | 236 |
In millions |
As of June 30, 2019 |
As of December 31, 2018 |
||||||
Policyholders’ surplus |
$ | 1,934 |
$ | 1,998 |
||||
Contingency reserves |
511 |
522 |
||||||
Statutory capital |
2,445 |
2,520 |
||||||
Unearned premiums |
459 |
496 |
||||||
Present value of installment premiums (1) |
147 |
150 |
||||||
Premium resources (2) |
606 |
646 |
||||||
Net loss and LAE reserves (1) |
170 |
71 |
||||||
Salvage reserves (1) |
626 |
607 |
||||||
Gross loss and LAE reserves |
796 |
678 |
||||||
Total claims-paying resources |
$ | 3,847 |
$ | 3,844 |
||||
In millions |
As of June 30, 2019 |
As of December 31, 2018 |
||||||
Policyholders’ surplus |
$ | 301 |
$ | 356 |
||||
Contingency reserves |
198 |
199 |
||||||
Statutory capital |
499 |
555 |
||||||
Unearned premiums |
105 |
109 |
||||||
Present value of installment premiums (1) (4) |
127 |
139 |
||||||
Premium resources (2) |
232 |
248 |
||||||
Net loss and LAE reserves (1) |
(778) |
(865) |
||||||
Salvage reserves (1) (3) |
1,370 |
1,402 |
||||||
Gross loss and LAE reserves |
592 |
537 |
||||||
Total claims-paying resources |
$ | 1,323 |
$ | 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 Facility; and |
• | payments of operating expenses. |
Six Months Ended June 30, |
Percent Change |
|||||||||||
In millions |
2019 |
2018 |
||||||||||
Statement of cash flow data: |
||||||||||||
Net cash provided (used) by: |
||||||||||||
Operating activities |
$ | (57) |
$ | (126) |
-55% |
|||||||
Investing activities |
683 |
351 |
95% |
|||||||||
Financing activities |
(428) |
(174) |
146% |
|||||||||
Cash and cash equivalents—beginning of period |
280 |
146 |
92% |
|||||||||
Cash and cash equivalents—end of period |
$ | 478 |
$ | 197 |
143% |
|||||||
As of June 30, |
As of December 31, |
Percent |
||||||||||
In millions |
2019 |
2018 |
Change |
|||||||||
Available-for-sale investments: (1) |
||||||||||||
U.S. public finance insurance: |
||||||||||||
Amortized cost |
$ | 2,273 |
$ | 2,704 |
-16% |
|||||||
Unrealized net gain (loss) |
63 |
(64) |
n/m |
|||||||||
Fair value |
2,336 |
2,640 |
-12% |
|||||||||
Corporate: |
||||||||||||
Amortized cost |
844 |
921 |
-8% |
|||||||||
Unrealized net gain (loss) |
60 |
24 |
150% |
|||||||||
Fair value |
904 |
945 |
-4% |
|||||||||
International and structured finance insurance: |
||||||||||||
Amortized cost |
209 |
192 |
9% |
|||||||||
Unrealized net gain (loss) |
10 |
4 |
150% |
|||||||||
Fair value |
219 |
196 |
12% |
|||||||||
Total available-for-sale investments: |
||||||||||||
Amortized cost |
3,326 |
3,817 |
-13% |
|||||||||
Unrealized net gain (loss) |
133 |
(36) |
n/m |
|||||||||
Total available-for-sale investments at fair value |
3,459 |
3,781 |
-9% |
|||||||||
Investments carried at fair value: (2) |
||||||||||||
U.S. public finance insurance |
299 |
198 |
51% |
|||||||||
Corporate |
66 |
73 |
-10% |
|||||||||
International and structured finance insurance |
- |
19 |
-100% |
|||||||||
Total investments carried at fair value |
365 |
290 |
26% |
|||||||||
Other investments at amortized cost: |
||||||||||||
U.S. public finance insurance |
- |
1 |
-100% |
|||||||||
Corporate |
1 |
- |
n/m |
|||||||||
Total other investments at amortized cost |
1 |
1 |
-% |
|||||||||
Consolidated investments at carrying value |
$ | 3,825 |
$ | 4,072 |
-6% |
|||||||
(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 |
90% |
|
100% |
91% |
93% |
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 |
$ | 186 |
$ | 104 |
$ | 44 |
$ | (33) |
$ | (57) |
$ | (75) |
Change in Credit Spreads |
||||||||||||
50 Basis |
50 Basis |
200 Basis |
||||||||||
Point |
Point |
Point |
||||||||||
In millions |
Decrease |
Increase |
Increase |
|||||||||
Estimated change in fair value |
$ | 14 |
$ | (15) |
$ | (59) |
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) |
||||||||||||
April |
117 |
$ | 9.50 |
- |
$ | 198 |
||||||||||
May |
2,317,283 |
9.04 |
2,317,159 |
177 |
||||||||||||
June |
3,128,015 |
9.17 |
3,127,894 |
148 |
||||||||||||
5,445,415 |
$ | 9.12 |
5,445,053 |
$ | 148 |
(1) - | 117 shares in April, 124 shares in May and 121 shares in June 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. |
Interactive data files pursuant to Rule 405 of Regulation S-T: |
* | Incorporated by reference to MBIA Inc.’s Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on July 10, 2019. |
** | Filed herewith. |
*** | Furnished herewith. |
MBIA Inc. Registrant | ||
Date: August 6, 2019 |
||
Chief Financial Officer | ||
Date: August 6, 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 | |||
1/1/20 | ||||
12/31/19 | 10-K, 11-K, 4 | |||
11/30/19 | ||||
10/3/19 | ||||
9/1/19 | ||||
8/30/19 | 4 | |||
Filed on: | 8/6/19 | 8-K | ||
8/2/19 | ||||
7/31/19 | ||||
7/30/19 | ||||
7/24/19 | ||||
7/22/19 | ||||
7/15/19 | ||||
7/10/19 | 8-K | |||
7/2/19 | ||||
7/1/19 | 4 | |||
For Period end: | 6/30/19 | |||
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 | |||
2/15/19 | ||||
2/12/19 | ||||
2/4/19 | ||||
1/24/19 | ||||
1/21/19 | ||||
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 | |||
9/13/18 | ||||
9/7/18 | ||||
8/8/18 | 10-Q, 8-K | |||
7/30/18 | ||||
7/9/18 | ||||
6/30/18 | 10-Q | |||
6/11/18 | ||||
6/5/18 | ||||
5/21/18 | ||||
5/9/18 | 10-Q, 8-K | |||
4/23/18 | ||||
3/11/18 | ||||
2/9/18 | SC 13G, SC 13G/A | |||
1/30/18 | ||||
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 | |||
8/4/16 | 3, 4, 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 |