MBIA Inc. (NYSE: MBI) today reported Adjusted Book Value (ABV) per share (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) of $30.68 per share at December 31, 2012 compared with $30.64 per share at September 30, 2012 and $34.50 per share at December 31, 2011. Book value per share was $16.22 as of December 31, 2012. MBIA Inc.’s adjusted pre-tax income (a non-GAAP measure defined in the attached Explanation of Non-GAAP Financial Measures) for the fourth quarter of 2012 was $110 million compared with an adjusted pre-tax loss of $252 million for the fourth quarter of 2011. The improvement in adjusted pre-tax income for the three months ended December 31, 2012 was driven primarily by lower net losses on insured exposures. ABV and adjusted pre-tax income (loss) provide investors with additional views of the Company’s operating results that management finds useful in measuring financial performance. Reconciliations of adjusted book value to book value calculated in accordance with GAAP and adjusted pre-tax income (loss) to pre-tax income (loss) calculated in accordance with GAAP are attached. Net income available to common shareholders for the fourth quarter of 2012 was $636 million, or $3.26 per share, compared with a net loss of $626 million, or $3.23 per share, for the fourth quarter of 2011. The improvement in net income was primarily the result of changes in the fair value of insured credit derivatives. In the three months ended December 31, 2012, the Company recorded a $411 million net gain on insured credit derivatives compared with a $1.7 billion net loss on insured credit derivatives in the comparable period of 2011. The net gain on insured credit derivatives in the fourth quarter of 2012 resulted from unrealized gains driven by a less favorable market perception of MBIA Insurance Corporation's (MBIA Corp.) credit quality, favorable movements in credit spreads and pricing on collateral within the transactions and shorter weighted-average lives due to the passage of time, partially offset by collateral erosion. The net loss on insured credit derivatives in the fourth quarter of 2011 resulted primarily from an improved market perception of MBIA Corp.'s credit quality. In 2011, realized losses associated with settlement and claim payments on multi-sector CDO and CMBS transactions were largely offset by the reversal of previously booked unrealized losses on those transactions. The Company is required to adjust the values of its derivative liabilities for the market's perception of its non-performance risk. A decrease in the value of the derivative liabilities attributable to an increase in non-performance risk is reflected as an unrealized gain while an increase in the value of the derivative liabilities attributable to a decline in non-performance risk is reflected as an unrealized loss on the income statement.