MBIA Inc. (NYSE: MBI) today reported Adjusted Book Value (ABV) per share (a non-GAAP measure) of $40.01 as of June 30, 2009 compared with $40.06 as of December 31, 2008. Book value per share as of June 30, 2009 was $13.30 compared to $4.78 as of December 31, 2008.

The increase in book value per share is primarily due to a decrease in the cumulative unrealized loss on insured credit derivatives of $6.19 per share. Other elements of net income contributed $1.33 to book value per share. ABV per share was essentially unchanged over the first six months of 2009, as increased impairments on insured credit derivatives were offset by the other elements of net income.

Net income available to common shareholders for the first half of 2009 was $1.6 billion, or $7.64 per share, compared with a net loss of $706.4 million, or $3.33 per share, during the same period in 2008. For the second quarter of 2009, net income available to common shareholders was $894.7 million, or $4.30 per share, compared with net income of $1.7 billion, or $7.14 per share, for the second quarter of 2008. Net income in the second quarter of 2009 was primarily the result of a net decrease in loss reserves, as a $353.7 million increase to incurred losses on insured second-lien residential mortgage backed securities (RMBS) was more than offset by $1.1 billion in estimated recoveries recorded in connection with ineligible mortgage loans in certain insured second-lien residential mortgage loan securitizations. The Company also recorded $423.8 million in unrealized gains on insured credit derivatives and $116.3 million in gains on the extinguishment of debt. Partially offsetting these positive amounts in the second quarter were $113.7 million in pre-tax other-than-temporary impairments, primarily on structured investments in the Company’s Asset Liability Management (ALM) investment portfolio.

“The performance of insured RMBS continued to deteriorate in the second quarter, and we expect continued high levels of claims payments for the balance of 2009,” said President and Chief Financial Officer Chuck Chaplin. “We believe MBIA Insurance Corp. has more than adequate resources to cover these expected payments. In addition, our embedded earnings stream continued to be evident, and we made progress in growing the asset management Advisory Services business. While litigation has slowed the progress toward re-establishing our position in the municipal bond insurance business, we continue to believe that we will ultimately prevail, and have laid the groundwork to resume writing new business.”

The following is a summary of results for the first six months and second quarter of 2009, as well as book value and ABV per share data:

The contribution to MBIA Inc.’s book value per share attributable to the U.S. Public Finance Insurance segment was $11.84 as of June 30, 2009 compared with $10.97 as of December 31, 2008 (pro forma). The contribution to ABV per share was $19.81 as of June 30, 2009 as compared with $18.95 (pro forma) as of December 31, 2008. The increase in both book value and ABV per share is the result of net income for the segment. The U.S. Public Finance insurance business is conducted in the National Public Finance Guarantee Corporation (National) subsidiary.

While the U.S. Public Finance Insurance segment wrote virtually no new business in the first half of the year, the existing book of business performed as expected and generated scheduled premiums earned of $217.7 million in the first six months of 2009 and $104.0 million in the second quarter, up 78 percent and 73 percent, respectively, from the first half and second quarter of 2008. The growth was primarily the result of the previously announced reinsurance transaction with Financial Guaranty Insurance Corp. (FGIC) in 2008. Refunded premiums earned totaled $65.2 million for the first half of 2009, down 28 percent from $90.1 million in the first half of 2008. Refunded premiums earned were $29.0 million in the second quarter of 2009, down 65 percent from $83.8 million in the second quarter of 2008. Refundings were unusually high in the second quarter of 2008 as municipal issuers converted from auction rate securities to fixed rate debt.

Pre-tax net investment income for the U.S. Public Finance Insurance segment was $91.1 million for the first six months of 2009 and $60.0 million in the second quarter. National’s investment portfolio averaged Double-A credit quality, and totaled $5.1 billion as of June 30, 2009. National’s investment portfolio comprised 46 percent taxable securities and 54 percent tax-exempt securities as of quarter-end.

Loss and loss adjustment expenses for the U.S. Public Finance Insurance segment totaled $63.0 million in the first half of 2009 and $5.3 million in the second quarter. Approximately $55.3 million of the loss in the first half of the year was attributable to a Texas affordable housing transaction that was first recognized in the first quarter.

Expenses in the U.S. Public Finance Insurance segment for the first half of 2009 consisted of $56.7 million from the amortization of deferred acquisition costs associated with ceding commissions paid to MBIA Corp. and $28.4 million in operating expenses. In the second quarter, the amortization of deferred acquisition costs totaled $28.5 million and operating expenses were $20.6 million. No expenses were deferred in the first half of 2009 as there was virtually no new business written in the segment.

The contribution to MBIA Inc.’s book value per share attributable to the Structured Finance and International Insurance segment was $11.67 as of June 30, 2009, compared with $5.16 as of December 31, 2008 (pro forma). The contribution to ABV per share was $24.85 as of June 30, 2009, as compared with $25.17 (pro forma) as of December 31, 2008. The increase in book value per share reflects net income for the segment driven by unrealized net gains (marks-to-market) on insured derivatives. The modest reduction in ABV per share reflects the impact of impairments on insured credit derivatives. The Structured Finance and International Insurance business is conducted in MBIA Corp. and its subsidiaries.

While there was no new business written in the Structured Finance and International Insurance segment in the first half of 2009, the existing book of business generated $198.6 million in scheduled premiums earned in the first six months of the year and $79.5 million in scheduled premiums earned in the second quarter. Refunded premiums earned totaled $2.0 million in the first half of the year and $1.3 million in the second quarter.

Pre-tax net investment income for the Structured Finance and International Insurance segment was $191.2 million in the first half of 2009 and $84.5 million in the second quarter. Both the second quarter and first six months of the year were affected by a lower level of invested assets due to claims payments and, to a lesser extent, by lower average yields resulting from MBIA Corp.’s shift toward a greater proportion of cash and short-term investments.

Fee income for the Structured Finance and International Insurance segment totaled $90.4 million in the first six months of 2009 and $48.4 million in the second quarter. Fees in the second quarter included $28.5 million representing the amortization of ceding commission income received by MBIA Corp. from National in connection with the Company’s Transformation.

Realized gains and other settlements on insured derivatives totaled $63.6 million in the first half of 2009 and $31.9 million in the second quarter, consisting almost entirely of premiums attributable to insured credit derivatives.

The Structured Finance and International Insurance segment recognized $423.6 million in pre-tax unrealized net gains (marks-to-market) on insured credit derivatives in the second quarter of 2009. Pre-tax unrealized net gains on insured credit derivatives totaled $2.0 billion for the first six months of 2009. The table below estimates the attributes of the second quarter unrealized net gain on insured credit derivatives.

	Spread Changes	Credit Migration	Collateral Erosion	Time to Maturity	Change in Libor	Non- Performance Risk	Other	Total
$ millions
Multi-sector CDO	2	(85)	(621)	17	77	(51)	416	(245)
Multi-sector CDO-squared	(1)	(8)	4	(11)	95	(114)	65	30
Commercial Real Estate/CMBS	540	(85)	10	194	306	(785)	47	227
Corporate	2,097	(33)	(67)	231	153	(1,966)	(25)	390
Other	(3)	0	6	39	12	(216)	183	21
Total	2,635	(211)	(668)	470	643	(3,132)	686	423

During the second quarter spreads on collateral narrowed, remaining time to maturity decreased and the discount rate increased. These positive effects were partially offset by the impact of MBIA Corp.’s and its reinsurers’ non-performance risk on all factors affecting the fair value. The market’s perception of MBIA’s and its reinsurers’ default risk, as measured by credit default swap spreads, was essentially unchanged in the second quarter.

Pre-tax net investment losses from other-than-temporary impairments in the Structured Finance and International Insurance segment totaled $6.2 million in the second quarter. An additional $85.4 million of pre-tax non-credit-related impairments on debt securities were charged directly to equity through other comprehensive income from the application of the recently issued accounting guidance on the recognition and presentation of other-than-temporary impairments.

The Structured Finance and International Insurance segment incurred a $734.6 million net benefit to loss and loss adjustment expenses in the second quarter of 2009 as it recorded approximately $1.1 billion in estimated recoveries in connection with ineligible mortgages in certain insured second-lien residential mortgage loan securitizations that are subject to a contractual obligation by the seller/servicer to repurchase or replace the mortgages. The anticipated recoveries arise from a forensic review of 23,765 defaulted mortgage loans in 24 insured second-lien mortgage loan securitizations. These 24 securitizations contain a total of 496,917 mortgage loans. The 23,765 defaulted mortgage loans reviewed thus far represent approximately 27 percent of the total number of mortgage loans in these securitizations that are currently delinquent or defaulted. Based on this review, the Company has concluded that the delinquent and defaulted loans that were reviewed breached the representations and warranties in the related insured RMBS securitization and that, as a result, the seller/servicer is contractually obligated to repurchase these ineligible loans at a price equal to their outstanding principal balance plus accrued interest or to replace them with eligible mortgage loans. While the Company believes that these mortgage loans are subject to a repurchase or replacement obligation by the seller/servicers, successful challenges of such determinations by the seller/servicers could result in the Company recovering less than the amount of its estimated recoveries. The Company is continuing to review and evaluate additional mortgage loans in its insured RMBS pools and expects that there will be additional mortgages in these or in other transactions that are subject to a repurchase or replacement obligation by the seller/servicer. In addition, recoveries and damages from legal actions that MBIA has filed against certain of the seller/servicers could result in recoveries that are substantially higher than the amount currently recognized as recoveries. Partially offsetting the $1.1 billion in pre-tax recoveries was a $353.7 million increase in losses incurred, reflecting additional deterioration in the performance of these insured exposures.

As part of the ongoing review of the performance expectations for its insured portfolio, the Company monitors and discloses a non-GAAP measure that it refers to as “credit impairments.” Credit impairments represent the present value of future expected loss payments on insured credit derivatives, net of recoveries. In the second quarter of 2009, the Company estimated $287.0 million in incremental credit impairments on its multi-sector CDO exposures. Although the Company’s income statement includes the change in fair value of insured credit derivatives, it regards the changes in credit impairment estimates as critical information for investors since the credit impairment estimates reflect the present value of amounts it expects to pay in claims net of recoveries with respect to insured credit derivatives. The aggregate total credit impairment for the Company’s outstanding insured credit derivatives was $1.6 billion as of the end of the second quarter. The total impairment amount on insured credit derivatives is analogous to case loss reserves on financial guarantee policies as both represent the present value of future expected loss payments net of recoveries.

Other than the credit impairments, the Company expects the unrealized gains and losses in fair value (marks-to-market) to be reversed prior to or upon the maturities of the insured credit derivatives. As of June 30, 2009, the Company carried a net derivative liability (the cumulative mark-to-market on insured credit derivatives) of $3.4 billion for all insured credit derivatives.

While the Company believes that its current estimates for loss reserves and credit impairments on insured credit derivatives for its housing-related exposures reflect expected losses, it will continue to monitor the performance of the collateral underlying these exposures and adjust its loss reserves and credit impairment estimates in future periods should expectations change.

The Structured Finance and International Insurance segment’s insured portfolio declined in size in the second quarter of 2009, to $216.6 billion as of June 30, 2009, down from $224.8 billion as of March 31, 2009. During the second quarter, nine insured credit derivative transactions representing $9.4 billion in net par exposure either matured or were contractually terminated prior to maturity without payments by MBIA. There were no material commutations of insured credit derivative exposures requiring a payment by MBIA in the quarter. The reduction in net par resulting from amortization, terminations and maturities during the quarter was partially offset by the reassumption of approximately $1.3 billion in previously ceded exposure as a result of a commutation agreement with one reinsurer.

The Structured Finance and International Insurance segment’s gross insurance operating expenses (prior to deferrals or the amortization of previously deferred amounts) were $104.9 million in the first half of 2009 and $35.7 million in the second quarter. While cost-reduction efforts have resulted in lower compensation-related expenses, the segment has experienced increases in consulting, legal and loss prevention expenses, a significant portion of which are related to efforts to obtain recoveries on improperly originated and serviced transactions. As there was no new business written in the segment during the first half of 2009, no expenses were deferred.

During the second quarter of 2009, MBIA Corp. paid a total of $644.6 million in net claims primarily in connection with its second-lien residential mortgage exposures. As of June 30, 2009, MBIA Corp.’s statutory balance sheet reflected $5.6 billion in cash and invested assets including $1.3 billion of cash and short-term investments available to meet demands on its liquidity. In addition, MBIA Corp.’s other invested assets included a $2.0 billion inter-company secured loan facility, $1.7 billion in long-term investments and other assets, and $583 million in investments in subsidiaries.

MBIA Insurance Corp.’s statutory capital and surplus was $2.9 billion at June 30, 2009. In addition, MBIA’s statutory contingency reserve was $1.3 billion. MBIA Corp.’s claims-paying resources totaled $7.8 billion as of June 30, 2009.

The Investment Management Services business’ contribution to book value per share improved from ($10.53) as of December 31, 2008 to ($9.28) as of June 30, 2009. The improvement resulted from a reduction in unrealized losses in Other Comprehensive Income. ABV per share declined slightly, from ($3.26) to ($3.72) due to the impact of lower expected future spread income from asset impairments.

Ending assets under management in the Advisory Services business were $34.9 billion as of June 30, 2009, a 5 percent increase from $33.1 billion as of March 31, 2009 and a 9 percent increase from $31.9 billion as of year-end 2008. Excluding assets managed for affiliates, assets under management in the Advisory Services business increased 9 percent in the second quarter of 2009 and 18 percent in the first six months of the year. The growth reflects the Company’s success in adding new clients despite a difficult business environment.

The ALM and conduit businesses continued to wind-down throughout the first half of 2009. As of June 30, 2009, the Company had $8.8 billion in outstanding guaranteed investment contract, medium term note and repurchase agreement liabilities (all at book value) related to its ALM business, down from $9.7 billion as of March 31, 2009 and $12.3 billion as of December 31, 2008. Total invested assets in the ALM business were $8.1 billion as of June 30, 2009, excluding unrealized losses, of which $1.3 billion consisted of cash and short-term investments. The Company believes that its liquidity resources, along with cash flows generated from the ALM assets, will adequately provide for the cash outflows and collateral posting requirements of the ALM business, irrespective of ratings.

Assets under management in the conduit business totaled $1.8 billion as of June 30, 2009, down from $2.1 billion as of March 31, 2009 and $2.4 billion as of December 31, 2008. Conduit assets declined due to the maturity and scheduled amortization of transactions and the repurchase of a medium-term note.

First half and second quarter 2009 results for the IMS operation, excluding gains and losses, reflected the negative impact of lower ALM contract balances, negative net interest spread resulting from sales of assets and reinvestment in cash to meet termination payments and collateralization requirements as well as the additional cost of liquidity borrowings from external and intercompany sources.

In the second quarter, the pre-tax net gain for the IMS operation on financial instruments at fair value and foreign exchange was $114.7 million, net realized gains were $18.7 million and net investment losses from other-than-temporary impairments totaled $107.4 million. An additional $158.4 million of pre-tax non-credit-related impairments on debt securities were charged directly to equity through other comprehensive income from the application of the recently issued accounting guidance on the recognition and presentation of other-than-temporary impairments. The pre-tax net gain on financial instruments at fair value and foreign exchange was primarily the result of gains on interest rate swaps in the ALM portfolio, while the investment losses primarily resulted from the recognition of other-than-temporary impairments to securities held in the ALM asset portfolio. There were no impairments to conduit assets. Pre-tax net gains on the extinguishment of debt totaled $115.1 million in the second quarter and resulted from the repurchase of medium-term notes at discounts.

The contribution to MBIA Inc.’s book value per share attributable to the Corporate segment was $(0.93) as of June 30, 2009, compared with $(0.82) as of December 31, 2008. The contribution to consolidated ABV per share was $(0.93) as of June 30, 2009, as compared with $(0.80) as of December 31, 2008.

MBIA Inc. purchased 39 percent of the outstanding preferred shares of MBIA Insurance Corporation during the second quarter through the combination of a tender offer and open market transactions. The purchase price of the preferred shares totaled $10.8 million, or 10 percent of their liquidation preference amount of $108.2 million. The Company also repurchased $1.7 million of its 4.50% Notes due June 2010 and $7.0 million of its 9.375% Notes due February 2011 at discounts during the second quarter, resulting in gains totaling $1.2 million. The Company did not repurchase any shares of its common stock during the second quarter.

As of June 30, 2009 the Corporate segment of MBIA Inc. had $378.0 million in cash and short-term investments, an amount sufficient to meet approximately the next 2.4 years of debt service and operating expense requirements.

As of June 30, 2009, the Company carried a net deferred tax asset of $1.3 billion on its consolidated balance sheet. The amount of the net deferred tax asset, which can be used to offset future income, is driven by cumulative mark-to-market unrealized losses recorded on the Company’s insured credit derivative and investment portfolios. Capital losses, primarily associated with the write-down due to other-than-temporary impairments and sale of assets in the ALM portfolio and MBIA Corp., can only be used to offset available realized capital gains. Consequently, the Company has increased its previously established valuation allowance by $23.7 million in the second quarter to a total of $90.9 million for the year against the portion of the deferred tax asset related to other-than-temporary impairments and realized capital losses expected to be carried forward. In addition, $29.9 million of the valuation allowance that was established in prior periods has been reversed as part of the cumulative effect adjustment of adopting new accounting guidance on the recognition and presentation of other-than-temporary impairments. As of June 30, 2009, the Company has a valuation allowance totaling $412.3 million. The Company continues to have no net deferred tax asset recorded for the realized capital losses on the sales of, and other-than-temporary impairments on, assets in the investment portfolio. The Company believes that the income expected in the future will be sufficient to allow it to realize the full value of the remaining net deferred tax asset. However, the Company’s valuation allowance may increase or decrease in the future depending on the nature and amount of future earnings of appropriate character for tax purposes.

MBIA Inc. will host a webcast and conference call for investors tomorrow, Thursday, August 6, 2009 at 8:00 AM (EDT) to discuss its second quarter 2009 financial results and other matters relating to the Company. The webcast and conference call will consist of brief remarks followed by a question and answer session.

The dial-in number for the call is (877) 694-4769 in the U.S. and (404) 665-9935 from outside the U.S. The conference call code is 20124515. A live webcast of the conference call will also be accessible on www.mbia.com.

A replay of the call will be available approximately two hours after the completion of the call on August 6 until 5:00 p.m. on August 20 by dialing (800) 642-1687 in the U.S. or (706) 645-9291 from outside the U.S. The replay call code is also 20124515. In addition, a recording of the call will be available on MBIA Inc.'s Web site approximately two hours after the completion of the call.

This release includes statements that are not historical or current facts and are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words “believe,” “anticipate,” “project,” “plan,” “expect,” “intend,” “will likely result,” “looking forward” or “will continue,” and similar expressions identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected, including, among other risks, the possibility that the Company will experience severe losses due to increased deterioration in its insurance portfolios; significant fluctuations in liquidity and asset values with the global credit markets; the Company’s ability to fully implement its Strategic Plan as outlined in the Company’s most recent Annual Report on Form 10-K; further changes in the Company’s credit ratings; and changes in general economic and competitive conditions. These and other factors that could affect financial performance or could cause actual results to differ materially from estimates contained in or underlying the Company’s forward-looking statements are discussed under the “Risk Factors” section in MBIA Inc.’s most recent Annual Report on Form 10-K, which may be updated or amended in the Company’s subsequent filings with the Securities and Exchange Commission. MBIA cautions readers not to place undue reliance on any such forward-looking statements, which speak only to their respective dates. The Company undertakes no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such result is not likely to be achieved.

MBIA Inc., headquartered in Armonk, New York is a holding company whose subsidiaries provide financial guarantee insurance, fixed-income asset management, and other specialized financial services. The Company services its clients around the globe, with offices in New York, Denver, San Francisco, Paris, London, Madrid, Mexico City and Sydney. Please visit MBIA's Web site at www.mbia.com.

The following are explanations of why MBIA believes that the non-GAAP financial measures used in this press release, which serve to supplement GAAP information, are meaningful to investors.

Adjusted Book Value (“ABV”): The Company believes the presentation of ABV, which includes items that are expected to impact shareholders’ equity in future periods and, in general, do not require any additional future performance obligation on the Company’s part and excludes gains and losses due to market value changes that have not been realized through sales or impairments of assets or extinguishment of liabilities, provides additional information that gives a comprehensive measure of the value of the Company. ABV is not a substitute for GAAP book value but does provide investors with additional information when viewed in conjunction with GAAP book value.

Credit Impairments: Although MBIA’s income statement includes the change in fair value of insured credit derivatives, the Company believes the estimation of credit impairments, which are the present value of future expected loss and loss adjustment expense payments, net of recoveries, on insured credit derivatives, provides additional important information for investors. Other than the impairments, the Company expects the gains and losses in fair value of insured credit derivatives to reverse over time.


MBIA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (Unaudited)
(dollars in thousands)


	June 30, 2009		December 31, 2008

Assets
Investments:
Fixed-maturity securities held as available-for-sale, at fair value
(amortized cost $11,907,958 and $13,245,574) (includes hybrid
financial instruments at fair value $29,428 and $25,498)	$9,797,192		$11,223,716
Investments held-to-maturity, at amortized cost
(fair value $2,295,828 and $3,109,248)	2,843,238		3,156,969
Investments pledged as collateral, at fair value
(amortized cost $848,303 and $1,101,929)	736,615		845,887
Short-term investments held as available-for-sale, at fair value
(amortized cost $3,403,448 and $4,728,090)	3,365,229		4,693,283
Short-term investments held-to-maturity, at amortized cost (fair value
$1,113,431 and $485,857)	1,114,288		498,865
Other investments	417,248		220,412
Total investments	18,273,810		20,639,132

Cash and cash equivalents	899,599		2,279,783
Accrued investment income	119,982		201,688
Premiums receivable	2,130,976		7,744
Deferred acquisition costs	514,194		560,632
Prepaid reinsurance premiums	450,667		216,609
Receivable for insurance loss recoveries	1,745,144		458,512
Reinsurance recoverable on paid and unpaid losses	52,100		173,548
Goodwill	76,938		76,938
Property and equipment (net of accumulated depreciation)	103,942		105,364
Receivable for investments sold	304,118		77,464
Derivative assets	754,890		911,188
Current income taxes	64,194		240,871
Deferred income taxes, net	1,274,821		2,374,164
Other assets	531,092		706,812
Total assets	$27,296,467		$29,030,449


Liabilities and Equity

Liabilities:
Unearned premium revenue	$ 5,336,856		$ 3,424,402
Loss and loss adjustment expense reserves	1,260,652		1,557,884
Reinsurance premiums payable	297,153		8,672
Investment agreements	3,026,784		4,666,944
Medium-term notes (includes financial instruments at
fair value $122,006 and $176,261)	4,135,921		6,339,527
Variable interest entity notes	2,637,031		1,791,597
Securities sold under agreements to repurchase	690,661		802,938
Long-term debt	2,516,725		2,396,059
Deferred fee revenue	86,523		44,989
Payable for investments purchased	36,671		239
Derivative liabilities	4,189,241		6,470,874
Other liabilities	300,311		504,306
Total liabilities	24,514,529		28,008,431

Equity:
Common stock	274,885		273,200
Additional paid-in capital	3,054,045		3,050,506
Retained earnings	3,361,494		1,629,187
Accumulated other comprehensive loss	(1,741,199	)	(1,775,954	)
Treasury stock	(2,184,065	)	(2,182,519	)
Total shareholders' equity of MBIA Inc.	2,765,160		994,420
Preferred stock of subsidiary	16,778		27,598
Total equity	2,781,938		1,022,018

Total liabilities and equity	$27,296,467		$29,030,449


MBIA INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS (Unaudited)
(in thousands)

Three months ended June 30, 2009	U.S. Public Finance Insurance (National)		Structured Finance and International Insurance (MBIA Corp.)			Investment Management Services			Corporate			Subtotal			Intercompany Eliminations			Consolidated
Revenues:
Scheduled premiums earned	$	103,973	$	79,544		$	-		$	-		$	183,517		$	(30,391	)	$	153,126
Refunded premiums earned		29,028		1,289			-			-			30,317			(5,495	)		24,822
Total premiums earned		133,001		80,833			-			-			213,834			(35,886	)		177,948

Net investment income		60,028		84,468			52,082			4,082			200,660			(21,372	)		179,288
Fees and reimbursements		333		48,442			12,088			-			60,863			(39,057	)		21,806
Realized gains and other settlements
on insured derivatives		130		31,906			-			-			32,036			-			32,036
Unrealized gains on insured derivatives		188		423,598			-			-			423,786			-			423,786
Net change in fair value of insured derivatives		318		455,504			-			-			455,822			-			455,822
Net gains (losses) on financial instruments
at fair value and foreign exchange		-		12,298			114,720			(2,639	)		124,379			-			124,379
Net realized gains		7,019		604			18,746			3,853			30,222			-			30,222

Investment losses - other than temporary impairments		-		(91,586	)		(265,832	)		-			(357,418	)		-			(357,418	)
Non-credit related losses on investments not expected to be
sold (recognized in accumulated other comprehensive loss)		-		85,369			158,383			-			243,752			-			243,752
Net investment losses - other than temporary impairments		-		(6,217	)		(107,449	)		-			(113,666	)		-			(113,666	)
Net gains on extinguishment of debt		-		-			115,138			1,165			116,303			-			116,303

Total revenues		200,699		675,932			205,325			6,461			1,088,417			(96,315	)		992,102

Expenses:
Loss and LAE incurred		5,250		(734,561	)		-			-			(729,311	)		-			(729,311	)
Amortization of deferred acquisition costs		28,477		58,484			-			-			86,961			(60,894	)		26,067
Operating		20,574		39,310			20,741			7,203			87,828			(7,877	)		79,951
Interest		-		53,022			69,157			17,839			140,018			(27,544	)		112,474

Total expenses		54,301		(583,745	)		89,898			25,042			(414,504	)		(96,315	)		(510,819	)

Pre-tax income (loss)	$	146,398	$	1,259,677		$	115,427		$	(18,581	)	$	1,502,921		$	-			1,502,921

Provision for income taxes																			604,907

Net income																			898,014

Preferred stock dividends of subsidiary																			3,271

Net income available to common shareholders																		$	894,743

Three months ended June 30, 2008			Insurance			Investment Management Services			Corporate			Subtotal			Intercompany Eliminations			Consolidated
Revenues:
Scheduled premiums earned			$	153,865		$	-		$	-		$	153,865		$	(8,229	)	$	145,636
Refunded premiums earned				87,757			-			-			87,757			-			87,757
Total premiums earned				241,622			-			-			241,622			(8,229	)		233,393

Net investment income				148,067			253,175			7,707			408,949			8,397			417,346
Fees and reimbursements				2,453			14,235			-			16,688			(4,132	)		12,556
Realized gains and other settlements
on insured derivatives				34,304			-			-			34,304			-			34,304
Unrealized gains on insured derivatives				3,324,313			-			-			3,324,313			-			3,324,313
Net change in fair value of insured derivatives				3,358,617			-			-			3,358,617			-			3,358,617
Net gains (losses) on financial instruments
at fair value and foreign exchange				102,287			(69,952	)		54,450			86,785			-			86,785
Net realized gains (losses)				22,762			(407,568	)		1,509			(383,297	)		-			(383,297	)

Investment losses - other than temporary impairments				-			(436,164	)		-			(436,164	)		-			(436,164	)
Non-credit related losses on investments not expected to be
sold (recognized in accumulated other comprehensive loss)				-			-			-			-			-			-
Net investment losses - other than temporary impairments				-			(436,164	)		-			(436,164	)		-			(436,164	)
Net gains on extinguishment of debt				-			65,676			-			65,676			-			65,676

Total revenues				3,875,808			(580,598	)		63,666			3,358,876			(3,964	)		3,354,912

Expenses:
Loss and LAE incurred				22,344			-			-			22,344			-			22,344
Amortization of deferred acquisition costs				22,977			-			-			22,977			-			22,977
Operating				41,034			23,844			4,877			69,755			(3,433	)		66,322
Interest				46,664			241,826			19,956			308,446			(531	)		307,915

Total expenses				133,019			265,670			24,833			423,522			(3,964	)		419,558

Pre-tax income (loss)			$	3,742,789		$	(846,268	)	$	38,833		$	2,935,354		$	-			2,935,354

Provision for income taxes																			1,234,994

Net income																		$	1,700,360


MBIA INC. AND SUBSIDIARIES
STATEMENTS OF OPERATIONS (Unaudited)
(in thousands)

Six months ended June 30, 2009	U.S. Public Finance Insurance (National)			Structured Finance and International Insurance (MBIA Corp.)			Investment Management Services			Corporate			Subtotal			Intercompany Eliminations			Consolidated
Revenues:
Scheduled premiums earned	$	217,672		$	198,578		$	-		$	-		$	416,250		$	(68,149	)	$	348,101
Refunded premiums earned		65,175			2,035			-			-			67,210			(8,694	)		58,516
Total premiums earned		282,847			200,613			-			-			483,460			(76,843	)		406,617

Net investment income		91,128			191,248			122,356			11,329			416,061			(47,871	)		368,190
Fees and reimbursements		577			90,368			24,103			-			115,048			(74,022	)		41,026
Realized gains and other settlements
on insured derivatives		186			63,632			-			-			63,818			-			63,818
Unrealized gains (losses) on insured derivatives		(167	)		2,033,117			-			-			2,032,950			-			2,032,950
Net change in fair value of insured derivatives		19			2,096,749			-			-			2,096,768			-			2,096,768
Net gains (losses) on financial instruments
at fair value and foreign exchange		-			12,496			160,705			(11,443	)		161,758			-			161,758
Net realized gains		7,019			8,926			45,572			2,894			64,411			-			64,411

Investment losses - other than temporary impairments		-			(125,730	)		(461,677	)		-			(587,407	)		-			(587,407	)
Non-credit related losses on investments not expected to be
sold (recognized in accumulated other comprehensive loss)		-			85,369			158,383			-			243,752			-			243,752
Net investment losses - other than temporary impairments		-			(40,361	)		(303,294	)		-			(343,655	)		-			(343,655	)
Net gains on extinguishment of debt		-			488			118,815			1,940			121,243			5,158			126,401

Total revenues		381,590			2,560,527			168,257			4,720			3,115,094			(193,578	)		2,921,516

Expenses:
Loss and LAE incurred		62,998			(98,584	)		-			-			(35,586	)		-			(35,586	)
Amortization of deferred acquisition costs		56,733			116,021			-			-			172,754			(125,987	)		46,767
Operating		28,364			104,859			38,234			15,545			187,002			(14,512	)		172,490
Interest		-			107,972			164,444			35,574			307,990			(58,237	)		249,753

Total expenses		148,095			230,268			202,678			51,119			632,160			(198,736	)		433,424

Pre-tax income (loss)	$	233,495		$	2,330,259		$	(34,421	)	$	(46,399	)	$	2,482,934		$	5,158			2,488,092

Provision for income taxes																				889,430

Net income																				1,598,662

Preferred stock dividends of subsidiary																				7,213

Net income available to common shareholders																			$	1,591,449


Six months ended June 30, 2008				Insurance			Investment Management Services			Corporate			Subtotal			Intercompany Eliminations			Consolidated
Revenues:
Scheduled premiums earned				$	310,013		$	-		$	-		$	310,013		$	(16,857	)	$	293,156
Refunded premiums earned					95,552			-			-			95,552			-			95,552
Total premiums earned					405,565			-			-			405,565			(16,857	)		388,708

Net investment income					300,700			603,036			14,864			918,600			13,810			932,410
Fees and reimbursements					2,269			25,085			-			27,354			(7,506	)		19,848
Realized gains and other settlements
on insured derivatives					68,062			-			-			68,062			-			68,062
Unrealized losses on insured derivatives					(252,790	)		-			-			(252,790	)		-			(252,790	)
Net change in fair value of insured derivatives					(184,728	)		-			-			(184,728	)		-			(184,728	)
Net gains (losses) on financial instruments
at fair value and foreign exchange					162,058			(9,980	)		11,269			163,347			-			163,347
Net realized gains (losses)					42,114			(369,673	)		868			(326,691	)		-			(326,691	)

Investment losses - other than temporary impairments					-			(659,779	)		-			(659,779	)		-			(659,779	)
Non-credit related losses on investments not expected to be
sold (recognized in accumulated other comprehensive loss)					-			-			-			-			-			-
Net investment losses - other than temporary impairments					-			(659,779	)		-			(659,779	)		-			(659,779	)
Net gains on extinguishment of debt					-			79,217			-			79,217			-			79,217

Total revenues					727,978			(332,094	)		27,001			422,885			(10,553	)		412,332

Expenses:
Loss and LAE incurred					309,952			-			-			309,952			-			309,952
Amortization of deferred acquisition costs					38,529			-			-			38,529			-			38,529
Operating					87,303			40,371			12,053			139,727			(9,948	)		129,779
Interest					93,411			565,660			40,090			699,161			(605	)		698,556

Total expenses					529,195			606,031			52,143			1,187,369			(10,553	)		1,176,816

Pre-tax income (loss)				$	198,783		$	(938,125	)	$	(25,142	)	$	(764,484	)	$	-			(764,484	)

Benefit for income taxes																				(58,111	)

Net loss																			$	(706,373	)

MBIA INC. AND SUBSIDIARIES

Components of Adjusted Book Value per Share

		June 30, 2009
		National Public Finance Guarantee Corporation		MBIA Insurance Corporation		Investment Management Services		Corporate		Consolidated


Reported Book Value		$11.84		$11.67		($9.28	)	($0.93	)	$13.30

Plus:	Cumulative unrealized loss on insured credit derivatives, after tax	0.00		10.74		0.00		0.00		10.74

Less:	Cumulative impairments on insured credit derivatives, after tax	0.00		(4.98	)	0.00		0.00		(4.98	)

Reverse:	Unrealized (gains) losses included in OCI	0.20		1.54		6.94		0.00		8.68

Analytic Book Value		12.04		18.97		(2.34	)	(0.93	)	27.74

Plus:	Net unearned premium revenue, after tax^{(1) (2)}	8.93		6.80		0.00		0.00		15.73

Plus:	Asset/Liability products adjustment	0.00		0.00		(1.38	)	0.00		(1.38	)

Plus:	Loss provision⁽³⁾	(1.16	)	(0.92	)	0.00		0.00		(2.08	)
Adjusted Book Value ⁽⁴⁾		$19.81		$24.85		($3.72	)	($0.93	)	$40.01

		December 31, 2008
		National Public Finance Guarantee Corporation		MBIA Insurance Corporation		Investment Management Services		Corporate		Consolidated

Reported Book Value		$10.97		$5.16		($10.53	)	($0.82	)	$4.78

Plus:	Cumulative unrealized loss on insured credit derivatives, after tax	0.00		16.92		0.00		0.00		16.92

Less:	Cumulative impairments on insured credit derivatives, after tax	0.00		(3.78	)	0.00		0.00		(3.78	)

Reverse:	Unrealized (gains) losses included in OCI	(0.02	)	1.18		7.85		0.02		9.03

Analytic Book Value		10.95		19.48		(2.68	)	(0.80	)	26.95

Plus:	Net unearned premium revenue, after tax^{(1) (2)}	9.42		6.38		0.00		0.00		15.80

Plus:	Asset/Liability products adjustment	0.00		0.00		(0.58	)	0.00		(0.58	)

Plus:	Loss provision⁽³⁾	(1.42	)	(0.69	)	0.00		0.00		(2.11	)
Adjusted Book Value ⁽⁴⁾		$18.95		$25.17		($3.26	)	($0.80	)	$40.06


INSURANCE OPERATIONS

Selected Financial Data Computed on a Statutory Basis
(dollars in millions)

National Public Finance Guarantee Corporation
			Proforma
	June 30, 2009		December 31, 2008

Capital and surplus	$	353.6	$	416.0
Contingency reserve		1,367.9		1,357.0

Capital base		1,721.5		1,773.0

Unearned premium reserve		3,321.7		3,479.0
Present value of installment premiums ⁽¹⁾		302.2		298.0

Premium resources⁽²⁾		3,623.9		3,777.0

Loss and loss adjustment expense reserves		147.3		179.0

Total claims-paying resources	$	5,492.7	$	5,729.0


Net debt service outstanding	$	874,233.0	$	908,087.0

Capital ratio⁽³⁾		508:1		512:1

Claims-paying ratio⁽⁴⁾		207:1		206:1

MBIA Insurance Corporation
			Proforma
	June 30, 2009		December 31, 2008

Capital and surplus	$	2,927.4	$	3,087.0
Contingency reserve		1,315.1		1,238.0

Capital base		4,242.5		4,325.0

Unearned premium reserve		730.1		691.0
Present value of installment premiums ⁽¹⁾		1,947.8		2,088.0

Premium resources⁽²⁾		2,677.9		2,779.0

Loss and loss adjustment expense reserves		857.5		1,692.0

Total claims-paying resources	$	7,777.9	$	8,796.0


Net debt service outstanding	$	284,183.5	$	290,261.0

Capital ratio⁽³⁾		67:1		67:1

Claims-paying ratio⁽⁴⁾		42:1		37:1

CONTACT:
MBIA Inc., Media:
Kevin Brown, +1-914-765-3648
or
MBIA Inc., Media:
Elizabeth James, +1-914-765-3889
or
MBIA Inc., Investor Relations:
Greg Diamond +1-914-765-3190

113 King Street, Armonk, New York	10504
(Address of principal executive offices)	(Zip Code)

		MBIA INC.



		By:	/s/ Ram D. Wertheim
			Ram D. Wertheim
			Chief Legal Officer

Date:	August 6, 2009

Net Income (Loss) per Common Share:

	Three Months Ended		Six Months Ended
	June 30		June 30
	2009	2008	2009	2008
Basic	$4.30	$7.14	$7.64	($3.33	)
Diluted	$4.30	$7.14	$7.64	($3.33	)

Weighted-Average Number of Common Shares Outstanding:
Basic	208,097,729	238,152,768	208,287,929	212,242,994
Diluted	208,097,729	238,152,768	208,287,929	212,242,994

$ in millions except per share data	U.S. Public Finance		Structured Finance and International		Investment Management Services			Corporate			Consolidated
YTD Pre-tax Income	$	233	$	2,330	$	(34	)	$	(46	)	$	2,488
Q2 Pre-tax Income	$	146	$	1,260	$	115		$	(19	)	$	1,503

6/30/09 BV per share	$	11.84	$	11.67	$	(9.28	)	$	(0.93	)	$	13.30
12/31/08 BV per share	$	10.97	$	5.16	$	(10.53	)	$	(0.82	)	$	4.78

6/30/09 ABV per share	$	19.81	$	24.85	$	(3.72	)	$	(0.93	)	$	40.01
12/31/08 ABV per share	$	18.95	$	25.17	$	(3.26	)	$	(0.80	)	$	40.06

		⁽¹⁾		The amounts consist of Financial Guarantee premiums and Insured Derivative revenue.
		⁽²⁾		At June 30, 2009 the discount rate on Financial Guarantee installment premiums was the risk free rate as defined by SFAS 163 and the discount rate on Insured Derivative installment revenue was 5.03%. At December 31, 2008 the discount rate was 5.03% for both Financial Guarantee and Insured Derivative installments.
		⁽³⁾		The loss provision is calculated by applying 12% to net unearned premiums and net unearned Insured Derivative revenue on an after-tax basis.
		⁽⁴⁾		A non-GAAP measure.


⁽¹⁾		At June 30, 2009 and December 31, 2008 the discount rate was 5.03%.
⁽²⁾		The amounts consist of Financial Guarantee premiums and Insured Derivative premiums.
⁽³⁾		Net debt service outstanding divided by the capital base.
⁽⁴⁾		Net debt service outstanding divided by the sum of the capital base, unearned premium reserve (after-tax), present value of installment premiums (after-tax) and loss and loss adjustment expense.