Exhibit 99.1

MBIA INSURANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2003 AND DECEMBER 31, 2002

AND FOR THE PERIODS ENDED SEPTEMBER 30, 2003 AND 2002

MBIA INSURANCE CORPORATION

AND SUBSIDIARIES

I N D E X

	PAGE
Consolidated Balance Sheets - September 30, 2003 and December 31, 2002 (Unaudited)	3
Consolidated Statements of Income - Three and nine months ended September 30, 2003 and 2002 (Unaudited)	4
Consolidated Statement of Changes in Shareholder’s Equity - Nine months ended September 30, 2003 (Unaudited)	5
Consolidated Statements of Cash Flows - Nine months ended September 30, 2003 and 2002 (Unaudited)	6
Notes to Consolidated Financial Statements (Unaudited)	7-10

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(dollars in thousands except per share amounts)

	September 30, 2003		December 31, 2002
Assets
Investments:
Fixed-maturity securities held as available-for-sale at fair value (amortized cost $7,363,328 and $6,945,059)	$	7,825,398	$	7,446,035
Fixed-maturity securities pledged as collateral at fair value (amortized cost $345,158 and $485,124)		358,635		512,961
Short-term investments, at amortized cost (which approximates fair value)		1,070,267		628,033
Conduit investments held-to-maturity		1,435,220		—
Other investments		178,498		151,967
Total investments		10,868,018		8,738,996
Cash and cash equivalents		49,285		17,538
Securities purchased under agreements to resell		442,224		492,280
Accrued investment income		115,131		116,354
Deferred acquisition costs		309,483		302,222
Prepaid reinsurance premiums		538,707		521,641
Reinsurance recoverable on unpaid losses		63,495		43,828
Goodwill		76,938		76,938
Property and equipment, at cost (less accumulated depreciation of $71,999 and $63,926)		106,592		109,817
Receivable for investments sold		107,270		39,464
Derivative assets		70,536		96,733
Other assets		42,406		32,185
Total assets	$	12,790,085	$	10,587,996
Liabilities and Shareholder’s Equity
Liabilities:
Deferred premium revenue	$	3,014,781	$	2,755,046
Loss and loss adjustment expense reserves		561,072		573,275
Securities sold under agreements to repurchase		442,224		492,280
Conduit debt obligations		1,434,737		—
Short term debt		39,823		—
Current income taxes		10,581		—
Deferred income taxes		422,341		384,132
Deferred fee revenue		17,455		19,739
Payable for investments purchased		156,619		56,971
Derivative liabilities		63,065		190,881
Other liabilities		213,631		207,047
Total liabilities		6,376,329		4,679,371
Shareholder’s Equity:
Preferred stock, par value $1,000 per share; authorized shares - 4,000.08 and none, issued and outstanding - none		—		—
Common stock, par value $150 per share; authorized, issued and outstanding - 100,000 shares		15,000		15,000
Additional paid-in capital		1,628,384		1,610,574
Capital contribution		46		—
Retained earnings		4,390,069		3,943,341
Accumulated other comprehensive income, net of deferred income tax provision of $192,402 and $185,706		380,257		339,710
Total shareholder’s equity		6,413,756		5,908,625
Total liabilities and shareholder’s equity	$	12,790,085	$	10,587,996

The accompanying notes are an integral part of the consolidated financial statements.

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(dollars in thousands)

	Three months ended September 30						Nine months ended September 30
	2003			2002			2003			2002
Revenues:
Gross premiums written	$	346,766		$	237,753		$	962,211		$	630,337
Ceded premiums		(70,095	)		(57,660	)		(189,785	)		(146,131	)
Net premiums written		276,671			180,093			772,426			484,206
Increase in deferred premium revenue		(81,599	)		(25,492	)		(230,299	)		(52,799	)
Premiums earned (net of ceded premiums of $59,953, $49,117, $178,273 and $137,819)		195,072			154,601			542,127			431,407
Net investment income		104,238			108,726			315,835			322,347
Net realized gains		13,285			6,156			47,145			7,540
Change in fair value of derivative instruments		4,324			(3,825	)		101,618			811
Advisory fees		13,100			18,273			48,241			36,085
Other		87			50			247			384
Total revenues		330,106			283,981			1,055,213			798,574
Expenses:
Losses and loss adjustment		19,052			15,528			54,122			45,416
Amortization of deferred acquisition costs		15,354			12,799			42,755			34,944
Operating		27,447			21,626			85,630			63,090
Total expenses		61,853			49,953			182,507			143,450
Income before income taxes		268,253			234,028			872,706			655,124
Provision for income taxes		78,218			59,559			245,978			168,069
Net income	$	190,035		$	174,469		$	626,728		$	487,055

The accompanying notes are an integral part of the consolidated financial statements.

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDER’S EQUITY (Unaudited)

For the nine months ended September 30, 2003

(Dollars in thousands except per share amounts)

	Common Stock					Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income		Total Shareholder’s Equity
	Shares			Amount
Balance, January 1, 2003		100,000		$	15,000	$	1,610,574		$	3,943,341		$	339,710	$	5,908,625
Comprehensive income:
Net income		—			—		—			626,728			—		626,728
Other comprehensive income:
Change in unrealized appreciation of investments net of change in deferred income taxes of $6,696		—			—		—			—			13,446		13,446
Change in foreign currency translation		—			—		—			—			27,101		27,101
Other comprehensive income															40,547
Comprehensive income															667,275
Dividends declared (per common share $1,800.00)		—			—		—			(180,000	)		—		(180,000	)
Stock-based compensation		—			—		21,312			—			—		21,312
Capital contribution							46								46
Capital issuance costs		—			—		(3,502	)		—			—		(3,502	)
Balance, September 30, 2003		100,000		$	15,000	$	1,628,430		$	4,390,069		$	380,257	$	6,413,756
Disclosure of reclassification amount:
Unrealized appreciation of investments arising during the period, net of taxes	$	(20,631	)
Reclassification adjustment, net of taxes		34,077
Net unrealized appreciation, net of taxes	$	13,446

The accompanying notes are an integral part of the consolidated financial statements.

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Dollars in thousands)

	Nine months ended September 30
	2003			2002
Cash flows from operating activities:
Net income	$	626,728		$	487,055
Adjustments to reconcile net income to net cash provided by operating activities:
Increase (decrease) in accrued investment income		1,223			(6,699	)
Increase in deferred acquisition costs		(7,261	)		(9,708	)
Increase in prepaid reinsurance premiums		(17,066	)		(11,734	)
Increase in deferred premium revenue		247,365			64,533
(Decrease) increase in loss and loss adjustment expense reserves, net		(31,870	)		40,540
Depreciation		8,073			8,069
Amortization of bond discount, net		(4,252	)		(1,760	)
Net realized gains on sale of investments		(47,145	)		(7,540	)
Current income tax provision		10,581			—
Deferred income tax provision		30,664			21,466
Fair value of derivative instruments		(101,618	)		(811	)
Stock option compensation		16,848			15,072
Other, net		29,787			(32,125	)
Total adjustments to net income		135,329			79,303
Net cash provided by operating activities		762,057			566,358
Cash flows from investing activities:
Purchase of fixed-maturity securities, net of payable for investments purchased		(4,219,100	)		(2,206,012	)
Sale of fixed-maturity securities, net of receivable for investments sold		2,380,205			1,665,537
Redemption of fixed-maturity securities, net of receivable for investments redeemed		1,387,689			384,935
Purchase of short-term investments, net		(117,312	)		(230,261	)
Purchase of other investments, net		(15,841	)		(14,686	)
Purchase of investments in conduits		(1,435,220	)		—
Capital expenditures		(5,294	)		(5,871	)
Disposals of capital assets		3			190
Net cash used by investing activities		(2,024,870	)		(406,168	)
Cash flows from financing activities:
Net proceeds from issuance of short-term debt		39,823			—
Net proceeds from issuance of conduit debt obligations		1,434,737			—
Dividends paid		(180,000	)		(172,600	)
Net cash provided (used) by financing activities		1,294,560			(172,600	)
Net increase (decrease) in cash and cash equivalents		31,747			(12,410	)
Cash and cash equivalents - beginning of period		17,538			24,404
Cash and cash equivalents - end of period	$	49,285		$	11,994
Supplemental cash flow disclosures:
Income taxes paid	$	193,219		$	166,291

The accompanying notes are an integral part of the consolidated financial statements.

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying consolidated financial statements are unaudited and include the accounts of MBIA Insurance Corporation and its Subsidiaries (the Company or MBIA Corp.). The statements do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America (GAAP). These statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the year ended December 31, 2002. The accompanying consolidated financial statements have not been audited by independent accountants in accordance with auditing standards generally accepted in the United States of America, but in the opinion of management such financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Company’s financial position and results of operations. The results of operations for the nine months ended September 30, 2003 may not be indicative of the results that may be expected for the year ending December 31, 2003. The December 31, 2002 balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP.

2. Dividends Declared

Dividends declared and paid by the Company during the nine months ended September 30, 2003 were $180.0 million.

3. Employee Stock Option Plans

MBIA Corp. participates in MBIA Inc.’s Stock Option Plan. Prior to 2002, MBIA Inc. elected to follow Accounting Principles Board Opinion No. (APB) 25, “Accounting for Stock Issued to Employees” and related interpretations in accounting for its employee stock options. No stock-based employee compensation cost for stock options was reflected in net income prior to 2002 as all options granted had an exercise price equal to the market value of the underlying common stock on the date of grant. Effective January, 1, 2002 MBIA Inc. adopted the fair value recognition provisions of Statement of Financial Standards No. (SFAS) 123, “Accounting for Stock-Based Compensation.” Under the Modified Prospective Method of adoption selected by the Company under the provisions of SFAS 148, “Accounting for Stock-Based Compensation – Transition and Disclosure,” compensation cost recognized in 2002 is the same as that which would have been recognized had the recognition provisions of SFAS 123 been applied from its original effective date.

Employee stock compensation for the nine months ended September 30, 2003 and September 30, 2002 totaled $17 million and $15 million, respectively.

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

In accordance with SFAS 123 all stock options granted are valued using an option-pricing model. The value is recognized as an expense over the period in which the options vest. The Company believes that recognizing the expense associated with stock option grants is preferable to the prior method of accounting for stock options under APB 25 because it produces a complete picture of compensation expenses within the Company’s statement of income.

4. Recent Litigation

On July 15, 2002 MBIA Corp. and Wells Fargo Bank Minnesota, N.A. (Wells Fargo), in its capacity as trustee, jointly filed suit in Delaware federal district court against Royal Indemnity Company (Royal) to enforce insurance policies that Royal issued (the Royal Policies) to guarantee vocational loans originated by Student Finance Corporation (SFC). MBIA Corp. insured eight securitizations, which had a total gross par outstanding of approximately $363 million as of September 30, 2003, that were collateralized by the vocational student loans originated by SFC and guaranteed by Royal. The Royal Policies guarantee the payment of all the principal plus 90 days interest on all of the vocational loans in the securitizations insured by MBIA Corp. and state that “notwithstanding any other provision of (the) policy to the contrary, the right of the beneficiary to receive payment for loss under (the) policy after payment of the initial premium by the insured shall be absolute, irrevocable and unconditional.”

In their complaints, MBIA Corp. and Wells Fargo allege that Royal has committed anticipatory breaches of the Royal Policies. Previously, in June 2002, Royal brought suit against Well Fargo and other parties, not including MBIA Corp., seeking a declaration that it is not obligated to pay on the Royal Policies, and seeking rescission of the Royal Policies, on the grounds that SFC, its subsidiaries, and other related parties engaged in fraudulent behavior and/or made negligent misrepresentations regarding the collateralized loans.

To date, claims in the amount of approximately $337 million have been made under the Royal Policies with respect to student loans that have defaulted. MBIA Corp. expects that there will be additional claims made under the Royal Policies with respect to student loans that may default in the future. In the event that Royal does not honor claims under the Royal Policies during the litigation process, MBIA Corp. will be required to make payments under its policies in respect of scheduled interest and principal on the notes insured under the MBIA Corp. policies. MBIA Corp. expects ultimately to recover from Royal any payments it makes under its policies. MBIA Corp. believes that it will prevail in the litigation and will have no ultimate loss on these policies, although there can

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

be no assurance that MBIA Corp. will prevail in the litigation. If MBIA Corp. does not prevail in the litigation and Royal does not make payments under the Royal Policies, MBIA Corp. expects to incur losses under its policies. MBIA Corp. does not believe, however, that any such losses will have a material adverse effect on its financial condition.

In October 2003, the Delaware District Court granted MBIA’s motion for summary judgment and ordered Royal Indemnity Company to pay all claims under its policies. MBIA filed a lawsuit in July 2002 to seek enforcement of eight insurance policies issued by Royal that guaranteed vocational loans originated by Student Finance Corporation. While Royal has indicated that they will appeal the order, MBIA expects that the order will be upheld on appeal. As part of the appeals process, which the Company expects to be initiated quickly, Royal is expected to post security to secure the judgment. A copy of the District Court’s order and its opinion in support of the order are available at MBIA’s website, along with all other key documents related to the litigation.

5. Goodwill

Goodwill represents the excess of the cost of acquisitions over the fair value of the net assets acquired. Prior to 2002, goodwill attributed to the acquisition of MBIA Corp. was amortized using the straight-line method over 25 years. Goodwill attributed to the acquisition of MBIA Illinois was amortized according to the recognition of future profits from its deferred premium revenue and installment premiums, except for a minor portion attributed to state licenses, which was amortized using the straight-line method over 25 years.

Effective January 1, 2002 the Company adopted SFAS 141, “Business Combinations” and SFAS 142, “Goodwill and Other Intangible Assets.” SFAS 141, which supercedes APB 16, “Business Combinations,” requires business combinations initiated after June 30, 2001 to be accounted for using the purchase method of accounting and provides specific criteria for initial recognition of intangible assets apart from goodwill. SFAS 142, which supercedes APB 17, “Intangible Assets,” requires that goodwill and intangible assets with indefinite lives are no longer amortized but instead tested for impairment at least annually. The impairment testing is aimed at determining the amount, if any, by which the carry value of a reporting unit exceeds its fair value. Other intangible assets are amortized over their useful lives.

MBIA Corp. completed its transitional impairment testing on its existing goodwill as of January 1, 2002 in accordance with SFAS 142.

As of January 1, 2002, MBIA Corp. goodwill totaled $76.9 million. SFAS 142 requires a two-step approach in determining any impairment in goodwill. Step one entails evaluating whether the fair value of a reporting segment

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

exceeds its carrying value. In performing this evaluation it was determined that the best measure of the fair value of MBIA Corp. was its book value adjusted for the after-tax effects of deferred premium revenue, prepaid reinsurance premiums, deferred acquisition costs and the present value of installment premiums to arrive at adjusted book value. As of January 1, 2002, MBIA Corp.’s adjusted book value significantly exceeded its carry value, and thus there was no impairment of its existing goodwill.

MBIA Corp. performed its annual impairment testing of goodwill as of January 1, 2003. MBIA Corp.’s fair value was determined using the same valuation method applied during the transition testing. Its fair value significantly exceeded its carrying value indicating that goodwill was not impaired.

6. Recent Accounting Pronouncements

In May 2003, the Company sponsored the formation of Toll Road Funding, Plc. (TRF), a public company limited by shares and incorporated in Ireland under the Irish Companies Act. TRF was established to acquire a loan participation related to the financing of an Italian toll road and, at September 30, 2003, had $1.4 billion of debt outstanding. Assets supporting the repayment of the debt were comprised of the loan participation and high-quality, liquid investments. TRF is a variable interest entity, of which the Company is the primary beneficiary. Therefore, while the Company does not have a direct ownership interest in TRF, it is consolidated in the financial statements of the Company in accordance with FIN 46, “Consolidation of Variable Interest Entities.”

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