Business Segments (Tables)

6 Months Ended

Jun. 30, 2012


	Three Months Ended June 30, 2012
In millions	U.S. Public Finance Insurance		Structured Finance and International Insurance		Advisory Services		Corporate		Wind-down Operations		Eliminations			Consolidated
Revenues⁽¹⁾	$	145	$	80	$	5	$	5	$	16	$	-		$	251
Realized gains and other settlements on insured derivatives		-		(428)		-		-		-		-			(428)
Unrealized gains (losses) on insured derivatives		-		1,203		-		-		-		-			1,203
Net gains (losses) on financial instruments at fair value and foreign exchange		11		20		-		3		(40)		-			(6)
Net investment losses related to other-than-temporary impairments		-		(1)		-		-		(2)		-			(3)
Other net realized gains (losses)		-		-		-		6		-		-			6
Revenues of consolidated VIEs		-		(20)		-		-		36		-			16
Inter-segment revenues⁽²⁾		43		(11)		11		56		(21)		(78)			-

Total revenues		199		843		16		70		(11)		(78)			1,039
Loss and loss adjustment expense		(3)		65		-		-		-		-			62
Operating expenses		23		32		11		24		3		-			93
Interest expense		-		33		-		15		23		-			71
Expenses of consolidated VIEs		-		14		-		-		4		-			18
Inter-segment expenses⁽²⁾		31		54		5		3		40		(133)			-

Total expenses		51		198		16		42		70		(133)			244

Income (loss) before income taxes	$	148	$	645	$	-	$	28	$	(81)	$	55		$	795

Identifiable assets	$	7,120	$	17,395	$	46	$	759	$	3,205	$	(6,230)	⁽³⁾	$	22,295

(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 June 30, 2011
In millions	U.S. Public Finance Insurance		Structured Finance and International Insurance		Advisory Services		Corporate		Wind-down Operations		Eliminations			Consolidated
Revenues⁽¹⁾	$	143	$	81	$	7	$	-	$	24	$	-		$	255
Realized gains and other settlements on insured derivatives		1		(192)		-		-		-		-			(191)
Unrealized gains (losses) on insured derivatives		-		116		-		-		-		-			116
Net gains (losses) on financial instruments at fair value and foreign exchange		14		-		-		16		(133)		-			(103)
Net investment losses related to other-than-temporary impairments		-		(2)		-		-		(18)		-			(20)
Revenues of consolidated VIEs		-		37		-		-		4		-			41
Inter-segment revenues⁽²⁾		19		19		10		22		(3)		(67)			-

Total revenues		177		59		17		38		(126)		(67)			98
Loss and loss adjustment expense		(9)		59		-		-		-		-			50
Operating expenses		14		45		18		21		-		-			98
Interest expense		-		33		-		14		28		-			75
Expenses of consolidated VIEs		-		17		-		-		5		-			22
Inter-segment expenses⁽²⁾		28		30		2		4		8		(72)			-

Total expenses		33		184		20		39		41		(72)			245

Income (loss) before income taxes	$	144	$	(125)	$	(3)	$	(1)	$	(167)	$	5		$	(147)

Identifiable assets	$	8,083	$	23,592	$	52	$	671	$	5,640	$	(6,370)	⁽³⁾	$	31,668

(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 six months ended June 30, 2012 and 2011:


	Six Months Ended June 30, 2012
In millions	U.S. Public Finance Insurance		Structured Finance and International Insurance		Advisory Services		Corporate		Wind-down Operations		Eliminations			Consolidated
Revenues⁽¹⁾	$	270	$	135	$	11	$	7	$	35	$	-		$	458
Realized gains and other settlements on insured derivatives		-		(432)		-		-		-		-			(432)
Unrealized gains (losses) on insured derivatives		-		1,506		-		-		-		-			1,506
Net gains (losses) on financial instruments at fair value and foreign exchange		21		66		-		8		(120)		-			(25)
Net investment losses related to other-than-temporary impairments		-		(41)		-		-		(56)		-			(97)
Other net realized gains (losses)		-		1		-		5		-		-			6
Revenues of consolidated VIEs		-		(34)		-		-		40		-			6
Inter-segment revenues⁽²⁾		79		(19)		18		79		(19)		(138)			-

Total revenues		370		1,182		29		99		(120)		(138)			1,422
Loss and loss adjustment expense		11		148		-		-		-		-			159
Operating expenses		98		91		26		45		3		-			263
Interest expense		-		66		-		29		50		-			145
Expenses of consolidated VIEs		-		31		-		-		8		-			39
Inter-segment expenses⁽²⁾		59		100		7		7		47		(220)			-

Total expenses		168		436		33		81		108		(220)			606

Income (loss) before income taxes	$	202	$	746	$	(4)	$	18	$	(228)	$	82		$	816

Identifiable assets	$	7,120	$	17,395	$	46	$	759	$	3,205	$	(6,230)	⁽³⁾	$	22,295

(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.


	Six Months Ended June 30, 2011
In millions	U.S. Public Finance Insurance		Structured Finance and International Insurance		Advisory Services		Corporate		Wind-down Operations		Eliminations			Consolidated
Revenues⁽¹⁾	$	274	$	183	$	13	$	1	$	49	$	-		$	520
Realized gains and other settlements on insured derivatives		1		(547)		-		-		-		-			(546)
Unrealized gains (losses) on insured derivatives		-		(1,307)		-		-		-		-			(1,307)
Net gains (losses) on financial instruments at fair value and foreign exchange		17		33		-		39		(216)		-			(127)
Net investment losses related to other-than-temporary impairments		-		(4)		-		-		(29)		-			(33)
Net gains (losses) on extinguishment of debt		-		-		-		-		24		2			26
Other net realized gains (losses)		-		1		-		-		4		-			5
Revenues of consolidated VIEs		-		(67)		-		-		19		-			(48)
Inter-segment revenues⁽²⁾		37		29		19		44		(8)		(121)			-

Total revenues		329		(1,679)		32		84		(157)		(119)			(1,510)
Loss and loss adjustment expense		(5)		19		-		-		-		-			14
Operating expenses		26		86		33		43		1		-			189
Interest expense		-		66		-		30		54		-			150
Expenses of consolidated VIEs		-		37		-		-		10		-			47
Inter-segment expenses⁽²⁾		53		59		3		7		18		(140)			-

Total expenses		74		267		36		80		83		(140)			400

Income (loss) before income taxes	$	255	$	(1,946)	$	(4)	$	4	$	(240)	$	21		$	(1,910)

Identifiable assets	$	8,083	$	23,592	$	52	$	671	$	5,640	$	(6,370)	⁽³⁾	$	31,668

(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.

Summary Of Premiums Earned On Financial Guarantees And Insured Derivatives By Geographic Location Of Risk


	Three Months Ended June 30,				Six Months Ended June 30,
In millions	2012		2011		2012		2011
Total premiums earned:
United States	$	142	$	130	$	261	$	252
United Kingdom		10		10		18		17
Europe (excluding United Kingdom)		4		9		9		21
Internationally diversified		5		9		10		18
Central and South America		21		10		32		19
Asia		1		5		2		12
Other		3		3		6		6

Total	$	186	$	176	$	338	$	345

Summary Of Segments Within Wind-Down Operations


	Three Months Ended June 30, 2012
In millions	Asset / Liability Products		Conduits		Eliminations		Total Wind- down Operations
Revenues⁽¹⁾	$	16	$	-	$	-	$	16
Net gains (losses) on financial instruments at fair value and foreign exchange		(40)		-		-		(40)
Net investment losses related to other-than-temporary impairments		(2)		-		-		(2)
Revenues of consolidated VIEs		-		36		-		36
Inter-segment revenues⁽²⁾		(18)		(1)		(2)		(21)

Total revenues		(44)		35		(2)		(11)
Operating expenses		3		-		-		3
Interest expense		23		-		-		23
Expenses of consolidated VIEs		-		4		-		4
Inter-segment expenses⁽²⁾		6		34		-		40

Total expenses		32		38		-		70

Income (loss) before income taxes	$	(76)	$	(3)	$	(2)	$	(81)

Identifiable assets	$	2,439	$	819	$	(53)	$	3,205

(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 pertaining to intercompany debt.


	Three Months Ended June 30, 2011
In millions	Asset / Liability Products		Conduits		Eliminations		Total Wind- down Operations
Revenues⁽¹⁾	$	23	$	1	$	-	$	24
Net gains (losses) on financial instruments at fair value and foreign exchange		(133)		-		-		(133)
Net investment losses related to other-than-temporary impairments		(18)		-		-		(18)
Revenues of consolidated VIEs		1		3		-		4
Inter-segment revenues⁽²⁾		(2)		(1)		-		(3)

Total revenues		(129)		3		-		(126)
Operating expenses		1		(1)		-		-
Interest expense		28		-		-		28
Expenses of consolidated VIEs		-		5		-		5
Inter-segment expenses⁽²⁾		8		-		-		8

Total expenses		37		4		-		41

Income (loss) before income taxes	$	(166)	$	(1)	$	-	$	(167)

Identifiable assets	$	4,481	$	1,564	$	(405)	$	5,640

(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 pertaining to intercompany debt.

The following tables provide the results of the segments within the wind-down operations for the six months ended June 30, 2012 and 2011:


	Six Months Ended June 30, 2012
In millions	Asset / Liability Products		Conduits		Eliminations		Total Wind- down Operations
Revenues⁽¹⁾	$	35	$	-	$	-	$	35
Net gains (losses) on financial instruments at fair value and foreign exchange		(120)		-		-		(120)
Net investment losses related to other-than-temporary impairments		(56)		-		-		(56)
Revenues of consolidated VIEs		-		40		-		40
Inter-segment revenues⁽²⁾		(15)		(2)		(2)		(19)

Total revenues		(156)		38		(2)		(120)
Operating expenses		3		-		-		3
Interest expense		50		-		-		50
Expenses of consolidated VIEs		-		8		-		8
Inter-segment expenses⁽²⁾		12		35		-		47

Total expenses		65		43		-		108

Income (loss) before income taxes	$	(221)	$	(5)	$	(2)	$	(228)

Identifiable assets	$	2,439	$	819	$	(53)	$	3,205

(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 pertaining to intercompany debt.


	Six Months Ended June 30, 2011
In millions	Asset / Liability Products		Conduits		Eliminations		Total Wind- down Operations
Revenues⁽¹⁾	$	47	$	2	$	-	$	49
Net gains (losses) on financial instruments at fair value and foreign exchange		(216)		-		-		(216)
Net investment losses related to other-than-temporary impairments		(29)		-		-		(29)
Net gains (losses) on extinguishment of debt		24		-		-		24
Other net realized gains (losses)		4		-		-		4
Revenues of consolidated VIEs		11		8		-		19
Inter-segment revenues⁽²⁾		(6)		(2)		-		(8)

Total revenues		(165)		8		-		(157)
Operating expenses		2		(1)		-		1
Interest expense		54		-		-		54
Expenses of consolidated VIEs		-		10		-		10
Inter-segment expenses⁽²⁾		17		1		-		18

Total expenses		73		10		-		83

Income (loss) before income taxes	$	(238)	$	(2)	$	-	$	(240)

Identifiable assets	$	4,481	$	1,564	$	(405)	$	5,640

(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 pertaining to intercompany debt.

- Definition

Tabular disclosure of all significant reconciling items in the reconciliation of total profit or loss from reportable segments, to the entity's consolidated income before income taxes, extraordinary items, and discontinued operations.

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