MBIA manages its activities primarily through three principal business operations: U.S. public finance insurance, structured finance and international insurance, and advisory services. The Company's U.S. public finance insurance business is primarily operated through National, its structured finance and international insurance business is primarily operated through MBIA Corp., and its advisory services business is primarily operated through Cutwater. MBIA also manages certain business activities through its corporate, asset/liability products, and conduit segments. The corporate segment includes revenues and expenses that arise from general corporate activities. Funding programs managed through the asset/liability products and conduit segments are in wind-down.

Following is a description of each of the Company's reportable operating segments:

The Company's U.S. public finance insurance segment is principally conducted through National. The financial guarantees issued by National provide unconditional and irrevocable guarantees of the payment of principal of, and interest or other amounts owing on, U.S. public finance insured obligations when due. The obligations are generally not subject to acceleration, except that National may have the right, at its discretion, to accelerate insured obligations upon default or otherwise. National issues financial guarantees for municipal bonds and bonds backed by publicly or privately funded public-purpose projects.

The Company's structured finance and international insurance segment is principally conducted through MBIA Corp. The financial guarantees issued by MBIA Corp. provide unconditional and irrevocable guarantees of the payment of principal of, and interest or other amounts owing on, global structured finance and non-U.S. public finance insured obligations when due, or in the event MBIA Corp. has the right, at its discretion, to accelerate insured obligations upon default or otherwise, upon MBIA Corp.'s acceleration. Certain guaranteed investment contracts written by MBIA Inc. are insured by MBIA Corp., and if MBIA Inc. were to have insufficient assets to pay amounts due upon maturity or termination, MBIA Corp. would make such payments. MBIA Corp. issues financial guarantees for municipal bonds, ABS and MBS, investor-owned utility bonds, bonds backed by publicly or privately funded public-purpose projects, bonds issued by sovereign and sub-sovereign entities, and bonds backed by other revenue sources such as corporate franchise revenues. Insured ABS include collateral consisting of a variety of consumer loans, corporate loans and bonds, trade and export receivables, aircraft, equipment and real property leases. Insured MBS include collateral consisting of residential and commercial mortgages. In previous years, MBIA Corp. entered into insured CDS on structured pools of corporate obligations, RMBS and CRE-backed securities and loans.

The Company is no longer insuring new credit derivative contracts except for transactions related to the reduction of existing derivative exposure.

The advisory services segment primarily consists of the operations of Cutwater-ISC, Cutwater Asset Management Corp. ("Cutwater-AMC"), and Cutwater Asset Management U.K. Limited ("Cutwater-UK"). Cutwater-ISC and Cutwater-AMC provide fee-based asset management services to non-affiliated institutional clients and to MBIA Inc. and its other subsidiaries, as well as portfolio accounting and reporting services. Cutwater-ISC and Cutwater-AMC are Securities and Exchange Commission ("SEC") registered investment advisers. Cutwater-AMC is also a Financial Industry Regulatory Authority member firm. Cutwater-UK provides fee-based asset management services to the Company's foreign insurance affiliates and EAAL, and to third-party institutional clients and investment structures. Cutwater-UK is registered with the Financial Services Authority in the U.K.

The Company's wind-down operations consist of the asset/liability products and conduit segments.

The asset/liability products segment principally consists of the activities of MBIA Investment Management Corp. ("IMC"), GFL and EAAL. IMC, along with MBIA Inc., provided customized investment agreements, guaranteed by MBIA Corp., for bond proceeds and other public funds for such purposes as construction, loan origination, escrow and debt service or other reserve fund requirements. It has also provided customized products for funds that are invested as part of asset-backed or structured product transactions. GFL raises funds through the issuance of MTNs with varying maturities, which are, in turn, guaranteed by MBIA Corp. GFL lends the proceeds of these MTN issuances to MBIA Inc. ("GFL Loans"). MBIA Inc. invests the proceeds of investment agreements and GFL Loans in eligible investments, which consisted of investment grade securities at the time of purchase with a minimum average double-A credit quality rating. MBIA Inc. primarily purchases domestic securities, which are pledged to MBIA Corp. as security for its guarantees on investment agreements and MTNs. Additionally, MBIA Inc. loans a portion of the proceeds from investment agreements and MTNs to EAAL. EAAL primarily purchases foreign assets as permitted under the Company's investment guidelines.

The Company's conduit segment administers two Conduits through MBIA Asset Finance, LLC. Assets financed by these Conduits are currently funded by MTNs and liquidity loans.

The ratings downgrades of MBIA Corp. have resulted in a substantial reduction of funding activities and the termination and collateralization of certain investment agreements, as well as winding down of existing asset/liability products and conduit obligations.

The Company's corporate segment is a reportable segment and includes revenues and expenses that arise from general corporate activities, such as net investment income, net gains and losses, interest expense on MBIA Inc. debt and general corporate expenses.

The following tables provide the Company's segment results for the three months ended September 30, 2011 and 2010:


	Three Months Ended September 30, 2011
In millions	U.S. Public Finance Insurance		Structured Finance and International Insurance		Advisory Services		Corporate		Wind-down Operations		Eliminations			Consolidated
Revenues⁽¹⁾	$	181	$	72	$	9	$	1	$	21	$	-		$	284
Realized gains and other settlements on insured derivatives		-		(53)		-		-		-		-			(53)
Unrealized gains (losses) on insured derivatives		-		776		-		-		-		-			776
Net gains (losses) on financial instruments at fair value and foreign exchange		6		(12)		-		8		11		-			13
Net investment losses related to other-than-temporary impairments		-		-		-		(10)		(1)		-			(11)
Other net realized gains (losses)		-		1		-		-		-		-			1
Revenues of consolidated VIEs		-		105		-		-		5		-			110
Inter-segment revenues⁽²⁾		21		25		5		22		(4)		(69)			-

Total revenues		208		914		14		21		32		(69)			1,120
Loss and loss adjustment expense		10		180		-		-		-		-			190
Operating expenses		10		38		14		24		2		-			88
Interest expense		-		33		-		14		28		-			75
Expenses of consolidated VIEs		-		17		-		-		5		-			22
Inter-segment expenses⁽²⁾		31		33		1		4		6		(75)			-

Total expenses		51		301		15		42		41		(75)			375

Income (loss) before income taxes	$	157	$	613	$	(1)	$	(21)	$	(9)	$	6		$	745

Identifiable assets	$	8,015	$	21,251	$	53	$	652	$	5,556	$	(6,157)	⁽³⁾	$	29,370

(1)-	Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements, investment management fees and other fees.

(2)-	Represents intercompany premium income and expense, intercompany asset management fees and expenses, and intercompany interest income and expense pertaining to intercompany receivables and payables.

(3)-	Consists of intercompany reinsurance balances, repurchase agreements and loans.


	Three Months Ended September 30, 2010
In millions	U.S. Public Finance Insurance		Structured Finance and International Insurance		Advisory Services		Corporate		Wind-down Operations		Eliminations			Consolidated
Revenues⁽¹⁾	$	143	$	89	$	7	$	1	$	25	$	-		$	265
Realized gains and other settlements on insured derivatives		0		552		-		-		-		-			552
Unrealized gains (losses) on insured derivatives		0		(1,044)		-		-		-		-			(1,044)
Net gains (losses) on financial instruments at fair value and foreign exchange		45		145		1		(62)		(117)		-			12
Net investment losses related to other-than-temporary impairments		-		0		-		-		0		-			0
Net gains (losses) on extinguishment of debt		-		-		-		0		10		-			10
Other net realized gains (losses)		-		(1)		-		-		-		-			(1)
Revenues of consolidated VIEs		-		(19)		-		-		34		-			15
Inter-segment revenues⁽²⁾		18		19		10		24		(5)		(66)			-

Total revenues		206		(259)		18		(37)		(53)		(66)			(191)
Loss and loss adjustment expense		6		(26)		-		-		-		-			(20)
Operating expenses		11		31		17		23		2		-			84
Interest expense		-		34		-		16		31		-			81
Expenses of consolidated VIEs		-		15		-		-		5		-			20
Inter-segment expenses⁽²⁾		22		28		2		4		13		(69)			-

Total expenses		39		82		19		43		51		(69)			165

Income (loss) before income taxes	$	167	$	(341)	$	(1)	$	(80)	$	(104)	$	3		$	(356)

Identifiable assets	$	8,616	$	24,321	$	51	$	1,308	$	7,008	$	(8,032)	⁽³⁾	$	33,272

(1)-	Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements, investment management fees and other fees.

(2)-	Represents intercompany premium income and expense, intercompany asset management fees and expenses, and intercompany interest income and expense pertaining to intercompany receivables and payables.

(3)-	Consists of intercompany reinsurance balances, repurchase agreements and loans.

The following tables provide the Company's segment results for the nine months ended September 30, 2011 and 2010:


	Nine Months Ended September 30, 2011
In millions	U.S. Public Finance Insurance		Structured Finance and International Insurance		Advisory Services		Corporate		Wind-down Operations		Eliminations			Consolidated
Revenues⁽¹⁾	$	455	$	253	$	22	$	2	$	70	$	-		$	802
Realized gains and other settlements on insured derivatives		2		(601)		-		-		-		-			(599)
Unrealized gains (losses) on insured derivatives		-		(531)		-		-		-		-			(531)
Net gains (losses) on financial instruments at fair value and foreign exchange		24		21		-		47		(206)		-			(114)
Net investment losses related to other-than-temporary impairments		-		(4)		-		(10)		(30)		-			(44)
Net gains (losses) on extinguishment of debt		-		-		-		-		24		2			26
Other net realized gains (losses)		-		2		-		-		4		-			6
Revenues of consolidated VIEs		-		39		-		-		25		-			64
Inter-segment revenues⁽²⁾		56		55		24		66		(12)		(189)			-

Total revenues		537		(766)		46		105		(125)		(187)			(390)
Loss and loss adjustment expense		4		200		-		-		-		-			204
Operating expenses		36		124		48		67		2		-			277
Interest expense		-		99		-		44		82		-			225
Expenses of consolidated VIEs		-		54		-		-		15		-			69
Inter-segment expenses⁽²⁾		84		91		4		11		24		(214)			-

Total expenses		124		568		52		122		123		(214)			775

Income (loss) before income taxes	$	413	$	(1,334)	$	(6)	$	(17)	$	(248)	$	27		$	(1,165)

Identifiable assets	$	8,015	$	21,251	$	53	$	652	$	5,556	$	(6,157)	⁽³⁾	$	29,370

(1)-	Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements, investment management fees and other fees.

(2)-	Represents intercompany premium income and expense, intercompany asset management fees and expenses, and intercompany interest income and expense pertaining to intercompany receivables and payables.

(3)-	Consists of intercompany reinsurance balances, repurchase agreements and loans.


	Nine Months Ended September 30, 2010
In millions	U.S. Public Finance Insurance		Structured Finance and International Insurance		Advisory Services		Corporate		Wind-down Operations		Eliminations			Consolidated
Revenues⁽¹⁾	$	459	$	370	$	21	$	3	$	87	$	-		$	940
Realized gains and other settlements on insured derivatives		0		454		-		-		-		-			454
Unrealized gains (losses) on insured derivatives		0		(1,717)		-		-		-		-			(1,717)
Net gains (losses) on financial instruments at fair value and foreign exchange		49		131		2		(80)		(138)		-			(36)
Net investment losses related to other-than-temporary impairments		-		(4)		-		-		(39)		-			(43)
Net gains (losses) on extinguishment of debt		-		-		-		0		28		-			28
Other net realized gains (losses)		0		18		0		0		0		-			18
Revenues of consolidated VIEs		-		310		-		-		76		-			386
Inter-segment revenues⁽²⁾		66		69		29		74		(15)		(223)			-

Total revenues		574		(369)		52		(3)		(1)		(223)			30
Loss and loss adjustment expense		42		80		-		-		-		-			122
Operating expenses		31		102		45		69		4		-			251
Interest expense		-		102		-		49		95		-			246
Expenses of consolidated VIEs		-		46		-		-		12		-			58
Inter-segment expenses⁽²⁾		74		103		5		10		47		(239)			-

Total expenses		147		433		50		128		158		(239)			677

Income (loss) before income taxes	$	427	$	(802)	$	2	$	(131)	$	(159)	$	16		$	(647)

Identifiable assets	$	8,616	$	24,321	$	51	$	1,308	$	7,008	$	(8,032)	⁽³⁾	$	33,272

(1)-	Represents the sum of third-party financial guarantee net premiums earned, net investment income, insurance-related fees and reimbursements, investment management fees and other fees.

(2)-	Represents intercompany premium income and expense, intercompany asset management fees and expenses, and intercompany interest income and expense pertaining to intercompany receivables and payables.

(3)-	Consists of intercompany reinsurance balances, repurchase agreements and loans.

Premiums on financial guarantees and insured derivatives reported within the Company's insurance segments are generated within and outside the U.S. The following table summarizes premiums earned on financial guarantees and insured derivatives by geographic location of risk for the three and nine months ended September 30, 2011 and 2010:

The following tables provide the results of the segments within the wind-down operations for the three months ended September 30, 2011 and 2010:


	Three Months Ended September 30, 2011
In millions	Asset / Liability Products		Conduits		Eliminations		Total Wind- down Operations
Revenues⁽¹⁾	$	23	$	(2)	$	-	$	21
Net gains (losses) on financial instruments at fair value and foreign exchange		11		-		-		11
Net investment losses related to other-than-temporary impairments		(1)		-		-		(1)
Revenues of consolidated VIEs		(2)		7		-		5
Inter-segment revenues⁽²⁾		(3)		(1)		-		(4)

Total revenues		28		4		-		32
Operating expenses		-		2		-		2
Interest expense		27		1		-		28
Expenses of consolidated VIEs		-		5		-		5
Inter-segment expenses⁽²⁾		9		(3)		-		6

Total expenses		36		5		-		41

Income (loss) before income taxes	$	(8)	$	(1)	$	-	$	(9)

Identifiable assets	$	3,982	$	1,574	$	-	$	5,556

(1) - Represents the sum of third-party interest income, investment management services fees and other fees.

(2) - Represents intercompany asset management fees and expenses plus intercompany interest income and expense.


	Three Months Ended September 30, 2010
In millions	Asset / Liability Products		Conduits		Eliminations		Total Wind- down Operations
Revenues⁽¹⁾	$	24	$	1	$	-	$	25
Net gains (losses) on financial instruments at fair value and foreign exchange		(117)		-		-		(117)
Net investment losses related to other-than-temporary impairments		0		-		-		0
Net gains (losses) on extinguishment of debt		10		-		-		10
Revenues of consolidated VIEs		15		19		-		34
Inter-segment revenues⁽²⁾		(4)		(1)		0		(5)

Total revenues		(72)		19		0		(53)
Operating expenses		1		1		-		2
Interest expense		31		-		-		31
Expenses of consolidated VIEs		-		5		-		5
Inter-segment expenses⁽²⁾		14		(1)		0		13

Total expenses		46		5		0		51

Income (loss) before income taxes	$	(118)	$	14	$	-	$	(104)

Identifiable assets	$	5,539	$	1,683	$	(214)	$	7,008

(1) - Represents the sum of third-party interest income, investment management services fees and other fees.

(2) - Represents intercompany asset management fees and expenses plus intercompany interest income and expense.

The following tables summarize the segments within the wind-down operations for the nine months ended September 30, 2011 and 2010:


	Nine Months Ended September 30, 2011
In millions	Asset / Liability Products		Conduits		Eliminations		Total Wind- down Operations
Revenues⁽¹⁾	$	70	$	-	$	-	$	70
Net gains (losses) on financial instruments at fair value and foreign exchange		(206)		-		-		(206)
Net investment losses related to other-than-temporary impairments		(30)		-		-		(30)
Net gains (losses) on extinguishment of debt		24		-		-		24
Other net realized gains (losses)		4		-		-		4
Revenues of consolidated VIEs		10		15		-		25
Inter-segment revenues⁽²⁾		(9)		(3)		-		(12)

Total revenues		(137)		12		-		(125)
Operating expenses		2		-		-		2
Interest expense		82		-		-		82
Expenses of consolidated VIEs		-		15		-		15
Inter-segment expenses⁽²⁾		25		(1)		-		24

Total expenses		109		14		-		123

Income (loss) before income taxes	$	(246)	$	(2)	$	-	$	(248)

Identifiable assets	$	3,982	$	1,574	$	-	$	5,556

(1) - Represents the sum of third-party interest income, investment management services fees and other fees.

(2) - Represents intercompany asset management fees and expenses plus intercompany interest income and expense.


	Nine Months Ended September 30, 2010
In millions	Asset / Liability Products		Conduits		Eliminations		Total Wind- down Operations
Revenues⁽¹⁾	$	84	$	3	$	-	$	87
Net gains (losses) on financial instruments at fair value and foreign exchange		(138)		-		-		(138)
Net investment losses related to other-than-temporary impairments		(39)		-		-		(39)
Net gains (losses) on extinguishment of debt		28		-		-		28
Other net realized gains (losses)		0		-		-		0
Revenues of consolidated VIEs		36		40		-		76
Inter-segment revenues⁽²⁾		(11)		(3)		(1)		(15)

Total revenues		(40)		40		(1)		(1)
Operating expenses		3		1		-		4
Interest expense		95		-		-		95
Expenses of consolidated VIEs		-		12		-		12
Inter-segment expenses⁽²⁾		46		2		(1)		47

Total expenses		144		15		(1)		158

Income (loss) before income taxes	$	(184)	$	25	$	-	$	(159)

Identifiable assets	$	5,539	$	1,683	$	(214)	$	7,008

(1) - Represents the sum of third-party interest income, investment management services fees and other fees.

(2) - Represents intercompany asset management fees and expenses plus intercompany interest income and expense.