As of June 30, 2012, MBIA Corp.’s statutory balance sheet reflected $1.3 billion in cash and invested assets including $534 million of cash, short-term investments and other highly liquid investments available to meet liquidity demands, and excluding amounts held by subsidiaries. The payments made to counterparties in connection with commutations of insured exposures since the end of 2011 were primarily funded through increases to the outstanding balance of a secured loan from National to MBIA Corp., which currently totals $1.6 billion. The Company believes that MBIA Corp.’s liquidity resources, including expected cash inflows, will adequately provide for anticipated cash outflows.MBIA Corp. had statutory capital of $1.7 billion and claims-paying resources totaling $5.2 billion at June 30, 2012. Advisory Services The Company’s Advisory Services business is primarily conducted in its Cutwater Asset Management subsidiaries. Cutwater recorded pre-tax income of $299 thousand in the second quarter of 2012 compared with a pre-tax loss of $3 million in the second quarter of 2011. The improvement in pre-tax income in the second quarter of 2012 compared with the second quarter of 2011 was primarily the result of a $4 million non-recurring fee from a non-insurance affiliate. Cutwater’s third-party average assets under management in the second quarter totaled $20.0 billion, down 5 percent from $21.0 billion in the first quarter of 2012. Corporate Segment The Corporate segment comprises MBIA Inc.’s holding company activities and certain subsidiaries, including Optinuity Alliance Resources Corporation. The Corporate segment recorded pre-tax income of $28 million in the second quarter of 2012 compared with a pre-tax loss of $1 million in the second quarter of 2011. The improvement in the Corporate segment's pre-tax income was driven by a $35 million fee paid by the Company’s conduit segment in the second quarter of 2012 for administrative and other services. The fees for these services may vary significantly from period to period.