MBIA to Adopt FASB 148 for Stock-Based Compensation in Quarterly Earnings Reports

Business Wire, Jan 16, 2003

Business Editors

ARMONK, N.Y.--(BUSINESS WIRE)--Jan. 16, 2003

MBIA Inc. (NYSE:MBI) announced today that it implemented FASB Statement No.148 ("Accounting for Stock-Based Compensation -- Transition and Disclosure") in the fourth quarter of 2002.

The effect of adopting Statement 148, which allows for the expensing of stock options granted in previous years, will be approximately 5 cents per share for all of 2002 and 6 cents per share for all of 2003.

"Full disclosure is very important to MBIA and the FASB's latest statement allows us to expense the fair value of stock-based awards not only for the current year, but also for prior years. Up until now, accounting rules did not permit us to include the expenses resulting from prior year employee stock option grants. This new method more accurately shows the full effect of stock-based incentives in our financial statements," said Neil Budnick, MBIA's chief financial officer.

As previously announced, MBIA adopted the fair value method of accounting in FASB Statement No. 123 ("Accounting for Stock-Based Compensation") in the second quarter of 2002 recognizing the fair value of stock options granted after January 1, 2002 as an expense.

FASB Statement No. 148 amends Statement No. 123 and provides three transition methods for companies that adopt Statement 123's fair value method of accounting for stock options. MBIA has decided to utilize the "Modified Prospective" transition method which reflects the expense of stock-based employee awards granted, modified or settled during the current and prior years.

MBIA Inc., through its subsidiaries, is a leading financial guarantor and provider of specialized financial services. MBIA's innovative and cost-effective products and services 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.