As of June 30, 2012, National’s statutory capital was $3.0 billion and its claims-paying resources (as described in the attached Explanation of Non-GAAP Financial Measures) totaled $5.7 billion.Structured Finance and International Insurance Results The structured finance and international insurance business is primarily conducted through MBIA Corp. and its subsidiaries. The structured finance and international insurance segment had an adjusted pre-tax loss of $300 million for the second quarter of 2012 compared with adjusted pre-tax income of $188 million for the second quarter of 2011. Premiums earned, net investment income, fees and reimbursements, and premiums and fees on insured derivatives totaled $138 million in the second quarter of 2012. All other line items in the aggregate, except losses and credit impairments (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures), had a net $132 million negative impact on the adjusted pre-tax loss. Losses, credit impairments and loss-related expenses on insured exposures totaled $306 million in the second quarter of 2012, compared with a benefit of $150 million in the second quarter of 2011. The following is a summary of MBIA Corp.’s insured portfolio economic loss activity in the second quarter. Economic losses for a reporting period represent the change in the Company’s estimate of the present value of expected net future claims payments without regard to the manner in which they are presented in the Company’s financial statements.
|2Q 2012 Economic Loss (Benefit)|
|($ in millions)||RMBS||ABS CDOs||CMBS||Other*||Total|
|Change in Expected Payments||$41||$2||$175||$66||$284|
|Change in Expected Salvage||26||(2)||(4)||2||22|
|Total Economic Losses (Benefit)||$67||$0||$171||$68||$306|
|* includes first-lien RMBS|