MBIA To Use S&P's New Definition for Core Earnings in Quarterly Earnings Reports

Business Wire, July 29, 2002

Business Editors

ARMONK, N.Y.--(BUSINESS WIRE)--July 29, 2002

MBIA Inc. (NYSE: MBI) announced today that it will modify its definition of core earnings to conform to Standard and Poor's (S&P) definition of core earnings as previously announced at its June investor conference.

Starting with the second quarter earnings release on August 6, 2002, MBIA will report core earnings as defined by S&P, which includes stock option grant expenses, net realized gains or losses, and premiums earned from refunded issues, and excludes the change in fair value of derivative instruments.

MBIA will also adopt the recognition provision of FASB Statement No.123 ("Accounting for Stock-Based Compensation") that requires the recognition of the cost of stock options, granted in the current year, in the income statement. The full year income statement effect of expensing stock options granted this year will be approximately $.01 per share. In addition, the amortization of prior year stock option expenses will approximate $.06 per share on a pro-forma basis, resulting in a total full year effect upon core earnings of $.07 per share.

Historically, MBIA's definition of core earnings excluded the net income effects of net realized gains or losses, premiums earned from refunded issues and changes in the fair value of derivative instruments.

"Financial transparency is very important to MBIA, and we wholeheartedly endorse S&P's definition of core earnings for greater uniformity and clarity. Although the assumptions underlying the valuation of stock options can be debated, expensing stock options is the right thing to do in order to produce a complete picture of our compensation expenses," noted Neil Budnick, MBIA's chief financial officer.

The attached exhibit shows MBIA's first quarter results if the new definition of core earnings had been adopted.

MBIA Inc., through its subsidiaries, is the world's preeminent financial guarantor and a leading provider of specialized financial services. MBIA provides innovative and cost-effective products and services that meet the credit enhancement, financial and investment needs of its public and private sector clients, domestically and internationally. MBIA Inc.'s principal operating subsidiary, MBIA Insurance Corporation, has a financial strength rating of Triple-A from Moody's Investors Service, Standard & Poor's Ratings Services, Fitch Ratings, and Rating and Investment Information, Inc. Please visit MBIA's web site at http://www.mbia.com.

Components of Net Income Per Share
----------------------------------
                                             Three Months Ended
                                                  March 31
                                            ------------------
                                             2002       2001
                                            ------------------

MBIA's Historical Presentation
------------------------------

Net income                                   $1.03      $0.78

      Cumulative effect of
       accounting changes (a)                (0.05)     (0.09)
                                            -------    -------

Reported income before accounting
 changes                                      1.08       0.87

      Net realized gains (losses)             0.00      (0.01)

      Change in fair value of
       derivative instruments                 0.05      (0.03)
                                            -------    -------

Operating income                              1.04       0.90

      Earnings from refunded
       issues                                 0.06       0.04
                                            -------    -------

Core income                                  $0.98      $0.86
                                            =======    =======






MBIA's New Core Earnings
------------------------
Net income                                   $1.03 (b)  $0.78

      Cumulative effect of
       accounting changes (a)                (0.05)     (0.09)
                                            -------    -------

Reported income before
 accounting changes                           1.08       0.87

      Change in fair value of
       derivative instruments                 0.05      (0.03)

      Amortization of prior years'
       stock option grants (c)                0.02       0.02
                                            -------    -------

Core income                                  $1.01      $0.88
                                            =======    =======

(a) The cumulative effect of accounting changes in the first

quarter of 2002 and 2001 represent the adoption of FASB

Statement No. 142 ("Goodwill and Other Intangible Assets") and

FASB Statement No. 133 ("Accounting for Derivative Instruments

and Hedging Activities"), respectively.

(b) In accordance with FASB Statement No. 123 ("Accounting for

Stock-Based Compensation"), the first quarter 2002 includes

after tax stock option grant expenses of $400,350.

(c) Under FASB Statement 123, only stock option expenses resulting