MBIA Inc. (NYSE: MBI) (the Company) today reported adjusted pre-tax income (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) of $39 million for the second quarter of 2014 compared with an adjusted pre-tax loss of $160 million for the same period of 2013. MBIA Inc. recorded consolidated net income of $120 million, or $0.45 per diluted share, for the second quarter of 2014 compared with a consolidated net loss of $178 million, or $0.94 per diluted share, for the same period of 2013.
Adjusted Book Value (ABV) per share (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) was $27.05 as of June 30, 2014 compared with $26.64 as of March 31, 2014 and $27.78 as of December 31, 2013.
“Our risk-reduction efforts continued in the second quarter of 2014, and we are increasingly seeing the results in our financial metrics,” said MBIA Inc. President and Chief Financial Officer Chuck Chaplin. “We had our first adjusted pre-tax gain since the fourth quarter of 2012 and had positive consolidated operating cash flow. Net payments on second-lien exposures in MBIA Corp., which began a long decline in the second quarter of 2009, resulted in net recoveries in this quarter for the first time and adjusted book value was higher than the level in the preceding quarter.”
“In National, earnings improved relative to last year’s second quarter. Consistent with the underwriting and pricing discipline in our business plan, we did not write any new business in the face of continued low interest rates, narrow spreads and competitive pricing levels throughout the second quarter,” Mr. Chaplin continued. “Stress affecting our exposures to the Commonwealth of Puerto Rico continued in the quarter, and we’re closely monitoring the situation. Whatever the outcome, investors holding National-wrapped bonds will receive all of their contractually-due payments, which we believe will increase appreciation of the value of insurance in the marketplace.”