Exhibit 99.1

MBIA INSURANCE CORPORATION

AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

As of June 30, 2004 and December 31, 2003

and for the periods ended June 30, 2004 and 2003

MBIA INSURANCE CORPORATION

AND SUBSIDIARIES

I N D E X

	PAGE
Consolidated Balance Sheets - June 30, 2004 and December 31, 2003 (Unaudited)	3
Consolidated Statements of Income - Three and six months ended June 30, 2004 and 2003 (Unaudited)	4
Consolidated Statement of Changes in Shareholder’s Equity - Six months ended June 30, 2004 (Unaudited)	5
Consolidated Statements of Cash Flows - Six months ended June 30, 2004 and 2003 (Unaudited)	6
Notes to Consolidated Financial Statements (Unaudited)	7-9

MBIA INSURANCE CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands except per share amounts)

	June 30, 2004		December 31, 2003
Assets
Investments:
Fixed-maturity securities held as available-for-sale at fair value (amortized cost $7,892,613 and $7,615,494)	$	8,192,806	$	8,136,740
Fixed-maturity securities pledged as collateral at fair value (amortized cost $395,600 and $365,205)		397,886		376,211
Short-term investments at amortized cost (which approximates fair value)		987,686		906,883
Investments held-to-maturity at amortized cost		1,218		1,505,906
Other investments		181,865		252,098
Total investments		9,761,461		11,177,838
Cash and cash equivalents		127,543		57,322
Securities purchased under agreements to resell		377,330		383,398
Accrued investment income		120,169		128,803
Deferred acquisition costs		339,921		319,728
Prepaid reinsurance premiums		552,334		535,728
Reinsurance recoverable on unpaid losses		27,302		61,085
Goodwill		76,938		76,938
Property and equipment, at cost (less accumulated depreciation of $78,452 and $72,996)		104,333		106,408
Receivable for investments sold		172,516		2,099
Derivative assets		46,349		55,806
Variable interest entity assets		600,422		600,322
Other assets		46,750		53,165
Total assets	$	12,353,368	$	13,558,640
Liabilities and Shareholder’s Equity
Liabilities:
Deferred premium revenue	$	3,151,450	$	3,079,851
Loss and loss adjustment expense reserves		511,315		559,510
Securities sold under agreements to repurchase		377,330		383,398
Medium-term note obligations		—		1,503,324
Short-term debt		58,745		57,337
Deferred income taxes, net		373,774		468,036
Deferred fee revenue		15,712		16,869
Payable for investments purchased		381,636		—
Derivative liabilities		38,813		49,549
Variable interest entity liabilities		600,422		600,322
Other liabilities		195,772		238,264
Total liabilities		5,704,969		6,956,460
Shareholder’s Equity:
Preferred stock, par value $1,000 per share; authorized shares - 4,000.08, 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		1,647,850		1,636,422
Retained earnings		4,761,040		4,512,765
Accumulated other comprehensive income, net of deferred income tax of $119,975 and $232,445		224,509		437,993
Total shareholder’s equity		6,648,399		6,602,180
Total liabilities and shareholder’s equity	$	12,353,368	$	13,558,640

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 (Unaudited)

(in thousands)

	Three months ended June 30					Six months ended June 30
	2004		2003			2004			2003
Revenues:
Gross premiums written	$382,106		$	327,298		$	596,766		$615,445
Ceded premiums	(52,469	)		(55,571	)		(90,860	)	(119,690	)
Net premiums written	329,637			271,727			505,906		495,755
Increase in deferred premium revenue	(115,318	)		(85,852	)		(85,225	)	(148,700	)
Premiums earned (net of ceded premiums of $56,661, $62,014, $107,054 and $118,320)	214,319			185,875			420,681		347,055
Net investment income	106,793			105,526			218,099		211,597
Net realized gains	16,805			12,379			62,934		33,860
Net gains on derivative instruments	210			38,883			1,280		97,294
Advisory fees	17,340			22,427			24,021		35,141
Other	20			94			20		160
Total revenues	355,487			365,184			727,035		725,107
Expenses:
Losses and loss adjustment	20,399			18,192			39,633		35,070
Amortization of deferred acquisition costs	16,493			14,619			32,079		27,401
Operating	30,386			34,891			59,617		58,183
Total expenses	67,278			67,702			131,329		120,654
Income before income taxes	288,209			297,482			595,706		604,453
Provision for income taxes	79,192			80,508			157,431		167,760
Net income	$209,017		$	216,974		$	438,275		$436,693

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 six months ended June 30, 2004

(In thousands except per share amounts)

	Common Stock					Additional Paid-in Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Shareholder’s Equity
	Shares			Amount
Balance, January 1, 2004		100,000		$	15,000	$	1,636,422		$	4,512,765		$	437,993		$	6,602,180
Comprehensive income:
Net income		—			—		—			438,275			—			438,275
Other comprehensive loss:
Change in unrealized appreciation of investments net of change in deferred income taxes of $(115,126)		—			—		—			—			(217,345	)		(217,345	)
Change in foreign currency translation net of change in deferred income taxes of $2,656		—			—		—			—			3,861			3,861
Other comprehensive loss																(213,484	)
Comprehensive income																224,791
Dividends declared (per common share $1,900.00)		—			—		—			(190,000	)		—			(190,000	)
Stock-based compensation		—			—		12,479			—			—			12,479
Capital issuance costs		—			—		(1,051	)		—			—			(1,051	)
Balance, June 30, 2004		100,000		$	15,000	$	1,647,850		$	4,761,040		$	224,509		$	6,648,399
Disclosure of reclassification amount:
Change in unrealized appreciation of investments arising during the period, net of taxes	$	(158,290	)
Reclassification adjustment, net of taxes		(59,055	)
Change in net unrealized appreciation, net of taxes	$	(217,345	)

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)

(In thousands)

	Six months ended June 30
	2004			2003
Cash flows from operating activities:
Net income	$	438,275		$	436,693
Adjustments to reconcile net income to net cash provided by operating activities:
Decrease (increase) in accrued investment income		8,634			(5,283	)
Increase in deferred acquisition costs		(20,193	)		(8,056	)
Increase in prepaid reinsurance premiums		(16,606	)		(6,372	)
Increase in deferred premium revenue		71,599			155,072
Decrease in loss and loss adjustment expense reserves		(48,195	)		(47,415	)
Decrease in reinsurance recoverable on unpaid losses		33,783			1,798
Depreciation		5,456			5,484
Amortization of bond discount, net		19,584			(946	)
Net realized gains on sale of investments		(62,934	)		(33,860	)
Current income tax provision		—			19,960
Deferred income tax provision		18,143			8,590
Net gains on derivative instruments		(1,280	)		(97,294	)
Stock option compensation		7,705			11,221
Other, net		(38,669	)		(1,327	)
Total adjustments to net income		(22,973	)		1,572
Net cash provided by operating activities		415,302			438,265
Cash flows from investing activities:
Purchase of fixed-maturity securities, net of payable for investments purchased		(1,224,513	)		(3,321,837	)
Sale of fixed-maturity securities, net of receivable for investments sold		557,672			1,860,078
Redemption of fixed-maturity securities, net of receivable for investments redeemed		433,525			1,083,237
Sale of short-term investments, net		24,930			97,693
Sale (purchase) of other investments, net		55,044			(17,086	)
Purchase of investments in conduits		—			(1,417,079	)
Redemptions of held-to-maturity investments		1,504,688			—
Capital expenditures		(3,851	)		(3,227	)
Disposals of capital assets		68			—
Net cash provided (used) by investing activities		1,347,563			(1,718,221	)
Cash flows from financing activities:
Net proceeds from issuance of short-term debt		1,408			13,597
Net proceeds from issuance of conduit debt obligations		—			1,416,398
Net repayment of conduit debt obligations		(1,503,001	)		—
Capital issuance costs		(1,051	)		(2,808	)
Dividends paid		(190,000	)		(120,000	)
Net cash provided (used) by financing activities		(1,692,644	)		1,307,187
Net increase in cash and cash equivalents		70,221			27,231
Cash and cash equivalents - beginning of period		57,322			17,538
Cash and cash equivalents - end of period	$	127,543		$	44,769
Supplemental cash flow disclosures:
Income taxes paid	$	148,771		$	137,859

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, its Subsidiaries and other entities (MBIA Corp.) required by accounting principles generally accepted in the United States of America (GAAP). These statements do not include all of the information and disclosures required by GAAP. These statements should be read in conjunction with MBIA Corp.’s consolidated financial statements and notes thereto for the year ended December 31, 2003. The accompanying consolidated financial statements have not been audited by an independent registered public accounting firm in accordance with standards of the Public Company Accounting Oversight Board (United States), but in the opinion of management such financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of MBIA Corp.'s financial position and results of operations. The results of operations for the six months ended June 30, 2004 may not be indicative of the results that may be expected for the year ending December 31, 2004. The December 31, 2003 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 MBIA Corp. during the six months ended June 30, 2004 were $190.0 million.

3. Variable Interest Entities

MBIA Corp. provides structured funding and credit enhancement services to global finance clients through the use of certain MBIA Corp.-sponsored, bankruptcy-remote special purpose vehicles (SPVs) and through third-party SPVs. Third-party SPVs are used in a variety of structures guaranteed or managed by MBIA Corp., whereby the Company has risks analogous to those of MBIA Corp.-sponsored SPVs. MBIA Corp. has determined that such SPVs fall within the definition of a variable interest entity (VIE) under Financial Accounting Standards Board (FASB) Interpretation No. (FIN) 46, “Consolidation of Variable Interest Entities.” Under the provisions of FIN 46, MBIA Corp. must determine whether it has a variable interest in a VIE and if so, whether that variable interest would cause MBIA Corp. to be the primary beneficiary. The primary beneficiary is the entity that will absorb the majority of the expected losses, receive the majority of

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

the expected residual returns, or both, of the VIE and is required to consolidate the VIE.

In May 2003, MBIA Corp. sponsored the formation of Toll Road Funding, Plc. (TRF). TRF is a conduit established to acquire a loan participation related to the financing of an Italian toll road and, at March 31, 2004 and December 31, 2003, had $1.5 billion of debt outstanding. Assets supporting the repayment of the debt were comprised of the loan participation and high-quality, liquid investments. Assets and liabilities of TRF are included within “Investments held-to-maturity” and “Medium-term note obligations,” respectively, on MBIA Corp.’s balance sheet. TRF is a VIE, of which MBIA Corp. is the primary beneficiary. Therefore, while MBIA does not have a direct ownership interest in TRF, it is consolidated in the financial statements of MBIA Corp. in accordance with FIN 46. In June 2004, the loan in which TRF participated was repaid in full. At that time, TRF repaid all of its outstanding debt obligations.

Third-party VIEs are used in a variety of structures insured by MBIA Corp. Under FIN 46, MBIA Corp.’s guarantee of the assets or liabilities of a VIE constitute a variable interest and require MBIA Corp. to assess whether it is the primary beneficiary. Consolidation of such VIEs does not increase MBIA Corp.’s exposure above that already committed to in its insurance policies. Additionally, VIE assets and liabilities that are consolidated within MBIA Corp.’s financial statements may represent amounts above MBIA Corp.’s guarantee, although such excess amounts would ultimately have no impact on MBIA Corp.’s net income. VIE assets and liabilities consolidated in MBIA Corp.’s financial statements at June 30, 2004 and December 31, 2003 are reported in “Variable interest entity assets” and “Variable interest entity liabilities,” respectively, on the face of MBIA Corp.’s balance sheet and totaled approximately $600 million on both reporting dates.

4. Recent Litigation

In July 2002, MBIA Corp. filed suit against Royal Indemnity Company (Royal), in the United States District Court for the District of Delaware, to enforce insurance policies that Royal issued on certain vocational student loan transactions that MBIA Corp. insured. To date,

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MBIA INSURANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Continued)

claims in the amount of approximately $344 million have been made under the Royal policies with respect to loans that have defaulted. MBIA Corp. expects that there will be additional claims made under the policies with respect to student loans that may default in the future. Royal has filed an action seeking a declaration that it is not obligated to pay on its policies. If Royal does not honor its policies, MBIA Corp. will be required to make payment on the notes it insured, and will incur material losses under its policies. In October 2003, the court granted MBIA Corp.’s motion for summary judgment and ordered Royal to pay all claims under its policies. While Royal has appealed the order, MBIA Corp. expects that the order will be upheld on appeal. As part of the appeals process, which the Company expects to be initiated quickly, Royal has pledged $373 million of investment grade collateral to MBIA Corp. to secure the entire amount of the judgment, with interest, and has agreed to post additional security for future claims and interest. The Federal District Court has ordered Royal to comply with the pledge agreement.

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

The trustee in bankruptcy for Student Finance Corporation (SFC), the entity that originated the vocational student loans, has filed claims against the MBIA Corp. insured trusts formed by SFC affiliates to securitize the student loans asserting that $46.9 million in funds transferred by SFC to the insured trusts were fraudulent transfers that should be returned to SFC's bankruptcy estate. MBIA Corp., along with others, has been named as a party in the lawsuit. In the event that the court orders that these funds are to be paid to SFC’s bankruptcy estate, MBIA Corp. may be required under its financial guarantee policies to make payments to the insured securitization trusts.

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