MBIA Inc. Reports Solid Increase in 2000 Net Income; Operating Earnings Per Share Up 8 Percent for 2000

Business Wire, Feb 6, 2001

Business Editors

ARMONK, N.Y.--(BUSINESS WIRE)--Feb. 6, 2001

MBIA Inc. (NYSE: MBI), holding company for MBIA Insurance Corporation, reported today that 2000 diluted earnings per share increased 67 percent to $5.33 from $3.19. Excluding one-time charges of $1.69 per share in 1999, diluted earnings per share rose 9 percent. Net income for 2000 increased 65 percent to $528.6 million from $320.5 million in 1999. Excluding one-time charges of $169.5 million in 1999, net income rose 8 percent. In 1999, the company took one-time after-tax charges primarily to write-down its investment in Capital Asset Holdings and to increase its unallocated loss reserve.

Diluted operating earnings per share for 2000 were $5.12, an 8 percent increase from $4.72. For 2000, diluted core earnings, which exclude the net income effects of net realized gains, premiums earned from refunded issues and nonrecurring items, rose 13 percent to $4.91 per share from $4.34 in 1999.

MBIA chairman and chief executive officer, Jay Brown, said, "We reported acceptable operational and financial results for the fourth quarter and the year as we continued to build toward our long-term financial targets. Our insurance operations showed strong growth in our structured finance and international businesses, which helped offset reduced activity in the domestic municipal market. We were very pleased by our investment management operations, which had a record year in assets under management and operating earnings. Looking forward, the company is well positioned to take advantage of very favorable growth prospects domestically and internationally across all of our business lines."

Fourth quarter net income increased 7 percent to $136.2 million from $126.9 million in 1999's fourth quarter. Diluted earnings per share increased 9 percent to $1.38 from $1.27 in the 1999 fourth quarter. Excluding the one-time $0.05 per share tax benefit in the fourth quarter of 1999, diluted earnings per share increased 13 percent.

Diluted operating earnings per share for the fourth quarter were $1.32, up 9 percent from $1.21 per share in the year-ago period. Fourth quarter diluted core earnings rose 11 percent to $1.26 per share from $1.14 in the same 1999 quarter.

Adjusted book value per share as of December 31, 2000 increased 15 percent to $60.40 from $52.51. Adjusted book value includes the after-tax effects of net deferred premium revenue less deferred acquisition costs, the present value of future installment premiums, and unrealized gains or losses on investment contract liabilities. Book value per share increased 21 percent to $42.89 from $35.34 a year earlier.

Insurance Operations

MBIA's insurance operations income in 2000 increased 36 percent to $698.3 million from $514.5 million. Excluding a one-time pre-tax charge of $152.7 million to increase loss reserves in 1999, insurance operations net income rose 5 percent. In the fourth quarter insurance operations income was up 5 percent to $179.9 million compared with $171.0 million in last year's fourth quarter.

Full year 2000 adjusted gross premiums, which consist of both upfront premiums written and the present value of estimated installment premiums for new business writings, increased 11 percent to $802.9 million from $724.0 million in 1999. In the public finance business, adjusted gross premiums decreased 5 percent to $360.7 million from $378.2 million. For structured finance, adjusted gross premium increased 22 percent to $277.7 million from $228.5 million. The company's international operations posted a 40 percent increase in adjusted gross premiums to $164.5 million from $117.3 million.

For the fourth quarter, adjusted gross premiums were $203.7 million, an increase of 10 percent from $185.9 million in last year's fourth quarter. In the public finance business, adjusted gross premiums for the fourth quarter decreased 8 percent to $85.5 million from $93.4 million. Fourth quarter adjusted gross premiums for the structured finance business increased 43 percent to $94.2 million from $66.0 million. In the international business, adjusted gross premiums decreased to $24.0 million, down 9 percent from $26.5 million.

Gross premiums written for 2000 increased 10 percent to $687.4 million from $624.9 million. Gross premiums written in the fourth quarter were $177.3 million, a 4 percent increase from $170.4 million a year ago. Gross premiums written consist of premiums received for business originated in the current period, assumed premiums for international and other reinsurance transactions, and installment premiums for current and prior period business.

For the year, premiums earned were $446.4 million compared with $442.8 million in 1999, including $34.0 million and $64.2 million, respectively, of premiums earned from refundings. Premiums earned during the fourth quarter increased 5 percent to $119.3 million compared with $113.3 million in the 1999 period. These amounts include $11.3 million and $11.8 million, respectively, of premiums earned from refundings.