Schedule II- Parent Company Financials

12 Months Ended

Dec. 31, 2015

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure

SCHEDULE II
MBIA INC. (PARENT COMPANY)
CONDENSED BALANCE SHEETS
(In millions except share and per share amounts)
			December 31, 2015		December 31, 2014
Assets
Investments:
	Fixed-maturity securities held as available-for-sale, at fair value (amortized cost $739 and $671)		$	792	$	751
	Investments carried at fair value			7		33
	Investments pledged as collateral, at fair value (amortized cost $329 and $445)			291		408
	Short-term investments held as available-for-sale, at fair value (amortized cost $254 and $327)			254		327
	Other investments			4		4
		Total investments		1,348		1,523
Cash and cash equivalents				35		100
Investment in wholly-owned subsidiaries				4,085		3,953
Deferred income taxes, net				991		965
Other assets				110		143
		Total assets	$	6,569	$	6,684
Liabilities and Shareholders' Equity
Liabilities:
	Investment agreements			423		505
	Long-term debt			582		592
	Affiliate loans payable			1,022		1,207
	Other liabilities			813		451
		Total liabilities		2,840		2,755
Shareholders' Equity:
	Preferred stock, par value $1 per share; authorized shares--10,000,000; issued and outstanding--none			-		-
	Common stock, par value $1 per share; authorized shares--400,000,000; issued shares--281,833,618
		and 281,352,782		282		281
	Additional paid-in capital			3,138		3,128
	Retained earnings			3,038		2,858
	Accumulated other comprehensive income (loss), net of tax of $3 and $6			(61)		21
	Treasury stock, at cost--130,303,241 and 89,409,887 shares			(2,668)		(2,359)
		Total shareholders' equity of MBIA Inc.		3,729		3,929
		Total liabilities and shareholders' equity	$	6,569	$	6,684
The condensed financial statements should be read in conjunction with the
consolidated financial statements and notes thereto and the accompanying notes.

SCHEDULE II
MBIA INC. (PARENT COMPANY)
CONDENSED STATEMENTS OF OPERATIONS
(In millions)
				Years ended December 31,
				2015		2014		2013
Revenues:
	Net investment income			$	35	$	44	$	50
	Net gains (losses) on financial instruments at fair value and foreign exchange				59		24		11
	Investment losses related to other-than-temporary impairments:
		Investment losses related to other-than-temporary impairments			(3)		-		-
		Other-than-temporary impairments recognized in accumulated other
			comprehensive income (loss)		(1)		-		-
			Net investment losses related to other-than-temporary impairments		(4)		-		-
	Net gains (losses) on extinguishment of debt				-		1		43
	Other net realized gains (losses)				21		1		-
			Total revenues		111		70		104
Expenses:
	Operating				24		25		69
	Interest				95		104		105
			Total expenses		119		129		174
	Gain (loss) before income taxes and equity in earnings of subsidiaries				(8)		(59)		(70)
Provision (benefit) for income taxes					1		(165)		(202)
	Gain (loss) before equity in earnings of subsidiaries				(9)		106		132
Equity in net income (loss) of subsidiaries					189		463		118
			Net income (loss)	$	180	$	569	$	250
The condensed financial statements should be read in conjunction with the
consolidated financial statements and notes thereto and the accompanying notes.

SCHEDULE II
MBIA INC. (PARENT COMPANY)
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
			Years ended December 31,
			2015		2014		2013
Net income (loss)			$	180	$	569	$	250
Other comprehensive income (loss):
Unrealized gains (losses) on available-for-sale securities:
	Unrealized gains (losses) arising during the period			(66)		126		(179)
	Provision (benefit) for income taxes			(7)		14		(17)
	Total			(59)		112		(162)
	Reclassification adjustments for (gains) losses included in net income (loss)			4		23		23
	Provision (benefit) for income taxes			1		8		8
	Total			3		15		15
Available-for-sale securities with other-than-temporary impairments:
	Other-than-temporary impairments and unrealized gains (losses)
		arising during the period		-		-		12
	Provision (benefit) for income taxes			-		-		4
	Total			-		-		8
	Reclassification adjustments for (gains) losses included in net income (loss)			-		4		-
	Provision (benefit) for income taxes			-		1		-
	Total			-		3		-
Foreign currency translation:
	Foreign currency translation gains (losses)			(26)		(23)		(3)
Total other comprehensive income (loss)				(82)		107		(142)
Comprehensive income (loss)			$	98	$	676	$	108
The condensed financial statements should be read in conjunction with the
consolidated financial statements and notes thereto and the accompanying notes.

SCHEDULE II
MBIA INC. (PARENT COMPANY)
CONDENSED STATEMENTS OF CASH FLOWS
(In millions)
				Years ended December 31,
				2015		2014		2013
Cash flows from operating activities:
	Fees and reimbursements received			$	-	$	1	$	-
	Investment income received				142		256		250
	Operating expenses paid				(25)		(35)		(35)
	Interest paid, net of interest converted to principal				(88)		(93)		(93)
	Income taxes (paid) received				108		59		111
			Net cash provided (used) by operating activities		137		188		233
Cash flows from investing activities:
	Purchases of available-for-sale investments				(606)		(125)		(287)
	Sales of available-for-sale investments				325		268		147
	Paydowns and maturities of available-for-sale investments				186		98		252
	Purchases of investments at fair value				(144)		(266)		(144)
	Sales, paydowns and maturities of investments at fair value				171		280		126
	Sales, paydowns and maturities (purchases) of short-term investments, net				232		(242)		94
	(Payments) proceeds for derivative settlements				43		(26)		(32)
	Collateral (to) from swap counterparty				(31)		144		122
	Contributions to subsidiaries, net				16		(20)		2
	Advances to subsidiaries, net				-		(12)		-
	Other investing				24		-		-
			Net cash provided (used) by investing activities		216		99		280
Cash flows from financing activities:
	Proceeds from investment agreements				21		23		25
	Principal paydowns of investment agreements				(111)		(181)		(274)
	Payments for securities sold under agreements to repurchase				-		-		(32)
	Principal paydowns of long-term debt				(11)		-		(3)
	Payments for affiliate loans				(103)		(153)		(194)
	Purchases of treasury stock				(233)		(32)		-
	Restricted stock awards settlements				19		16		13
			Net cash provided (used) by financing activities		(418)		(327)		(465)
Net increase (decrease) in cash and cash equivalents					(65)		(40)		48
Cash and cash equivalents - beginning of year					100		140		92
Cash and cash equivalents - end of year				$	35	$	100	$	140
Reconciliation of net income (loss) to net cash provided (used) by operating activities:
	Net income (loss)			$	180	$	569	$	250
	Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities:
		Change in:
			Intercompany accounts receivable		(21)		(24)		(14)
			Current income taxes		109		70		116
		Equity in earnings of subsidiaries			(189)		(463)		(118)
		Dividends from subsidiaries			116		225		219
		Net investment losses related to other-than-temporary impairments			4		-		-
		Net (gains) losses on financial instruments at fair value and foreign exchange			(59)		(24)		(11)
		Other net realized (gains) losses			(21)		(1)		-
		Deferred income tax benefit			-		(176)		(207)
		(Gains) losses on extinguishment of debt			-		(1)		(43)
		Other operating			18		13		41
		Total adjustments to net income (loss)			(43)		(381)		(17)
			Net cash provided (used) by operating activities	$	137	$	188	$	233
The condensed financial statements should be read in conjunction with the
consolidated financial statements and notes thereto and the accompanying notes.

SCHEDULE II

MBIA INC. (PARENT COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

1. Condensed Financial Statements

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the Company’s consolidated financial statements and the notes thereto.

The activities of MBIA Inc. consist of general corporate activities and funding activities, which principally include holding and managing investments, servicing outstanding corporate debt, investment agreements issued by MBIA Inc. and its subsidiaries, and posting collateral under investment agreement and derivative contracts.

MBIA Inc. is subject to the same liquidity risks and uncertainties as described in footnote 1 to the Company’s consolidated financial statements. As of December 31,2015, MBIA Inc. had $416 million of cash and highly liquid assets available for general corporate liquidity purposes.

2. Significant Accounting Policies

MBIA Inc. (the “Parent Company”) carries its investments in subsidiaries under the equity method.

Certain amounts have been reclassified in prior years’ financial statements to conform to the current presentation. These reclassifications had no impact on total revenues, expenses, assets, liabilities, or shareholders’ equity for all periods presented.

3. Dividends from Subsidiaries

During 2015, National Public Finance Guarantee Holdings, Inc. declared and paid a dividend of $114 million to MBIA Inc., Trifinium Holdings Limited declared and paid dividends of $1 million to MBIA Inc. and MBIA Services Corp. declared and paid a dividend of $1 million to MBIA Inc.

During 2014, National Public Finance Guarantee Holdings, Inc. declared and paid a dividend of $220 million to MBIA Inc.and Trifinium Holdings Limited declared and paid dividends of $5 million to MBIA Inc.

During2013, National Public Finance Guarantee Holdings, Inc. declared and paid a dividend of $214 million to MBIA Inc., MBIA Services Corporation declared and paid dividends of $2 million to MBIA Inc. and CapMAC Holdings Inc. declared and paid dividends of $3 million to MBIA Inc.

4. Obligations under Investment Agreements

The investment agreement business, as described in footnotes 2 and 10 to the Company’s consolidated financial statements, is conducted by both MBIA Inc. and its wholly-owned subsidiary, MBIA Investment Management Corp.

5. Pledged Collateral

Substantially all of the obligations under investment agreements require MBIA Inc. to pledge securities as collateral. As of December 31,2015 and 2014, the fair value of securities pledged as collateral with respect to these investment agreements approximated $402million and $273 million, respectively. The Parent Company’s collateral as of December 31,2015, consisted principally of U.S. Treasury and government agency and state and municipal bonds, and was primarily held with major U.S. banks. Additionally, the Parent Company pledged cash and money market securities as collateral under investment agreements in the amount of $12 million and $26 million as of December 31,2015 and 2014, respectively.

Under derivative contracts entered into by MBIA Inc., collateral postings are required by either MBIA Inc. or the counterparty when the aggregate market value of derivative contracts entered into with the same counterparty exceeds a predefined threshold. As of December 31,2015,MBIA Inc. pledged securities with a fair value of $259 million to derivative counterparties. As of December 31,2014, MBIA Inc. pledged securities with a fair value of $199 million to derivative counterparties.

6. Affiliate Loans Payable

Affiliate loans payable consists of loans payable to MBIA Global Funding, LLC (“GFL”). GFL raised funds through the issuance of medium-term notes with varying maturities, which were, in turn, guaranteed by MBIA Corp. GFL lent the proceeds of these medium-term note issuances to MBIA Inc.