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Business Segments | 9 Months Ended
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Sep. 30, 2013
Text Block [Abstract] |
Business Segments | Note 11: Business Segments MBIA manages its activities 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 operated through National, its structured finance and international insurance business is operated through MBIA Corp., and its advisory services business is primarily operated through Cutwater. MBIA Inc. and certain of its subsidiaries also manage certain other business activities, the results of which are reported in its corporate, asset/liability products, and conduit segments. The corporate segment includes revenues and expenses that arise from general corporate activities. While the asset/liability products and conduit businesses represent separate business segments, they may be referred to collectively as “wind-down operations” as the funding programs managed through those businesses are in wind-down. As defined by segment reporting, an operating segment is a component of a company (i) that engages in business activities from which it earns revenue and incurs expenses, (ii) whose operating results are regularly reviewed by the Chief Operating Decision Maker to assess the performance of the segment and to make decisions about the allocation of resources to the segment and, (iii) for which discrete financial information is available. The following sections provide a description of each of the Company's reportable operating segments. U.S. Public Finance Insurance 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, including tax-exempt and taxable indebtedness of U.S. political subdivisions, as well as utility districts, airports, health care institutions, higher educational facilities, student loan issuers, housing authorities and other similar agencies and obligations issued by private entities that finance projects that serve a substantial public purpose. Municipal bonds and privately issued bonds used for the financing of public purpose projects are generally supported by taxes, assessments, fees or tariffs related to the use of these projects, lease payments or other similar types of revenue streams. National has not written any meaningful amount of business since its formation in 2009. Structured Finance and International Insurance The Company's structured finance and international insurance segment is principally conducted through MBIA Corp. The financial guarantees issued by MBIA Corp. generally 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. also insures debt obligations of the following affiliates: MBIA Inc.; GFL; Meridian Funding Company, LLC; LaCrosse Financial Products, LLC, a wholly-owned affiliate, in which MBIA Corp. has written insurance policies guaranteeing the obligations under CDS, including termination payments that may become due upon certain events including the insolvency or payment default of the financial guarantor or the CDS issuer. MBIA Corp.'s guarantees insure structured finance and asset-backed obligations, privately issued bonds used for the financing of public purpose projects, which are primarily located outside of the U.S. and that include toll roads, bridges, airports, public transportation facilities, utilities and other types of infrastructure projects serving a substantial public purpose, and obligations of sovereign-related and sub-sovereign issuers. Structured finance and ABS typically are securities repayable from expected cash flows generated by a specified pool of assets, such as residential and commercial mortgages, insurance policies, consumer loans, corporate loans and bonds, trade and export receivables, and leases for equipment, aircraft and real estate property. The Company is no longer insuring new credit derivative contracts except for transactions related to the reduction of existing derivative exposure. MBIA Corp. has not written any meaningful amount of business since 2008. Advisory Services The advisory services segment primarily consists of the operations of Cutwater Investor Services Corp. (“Cutwater-ISC”), Cutwater Asset Management Corp. (“Cutwater-AMC”), and Trifinium. Cutwater-ISC and Cutwater-AMC provide advisory services, including cash management, discretionary asset management and structured products on a fee-for-service basis. Cutwater offers these services to public, not-for-profit, corporate and financial services clients, including MBIA Inc. and its subsidiaries, as well as portfolio accounting and reporting services. Cutwater-ISC and Cutwater-AMC are Securities and Exchange Commission registered investment advisers. Cutwater-AMC is also a Financial Industry Regulatory Authority member firm. Trifinium provides certain ad visory services primarily in the European Union and is reg ulated by the Financial Conduct Authority in the U.K. Corporate The Company's corporate segment is principally conducted through Optinuity Alliance Resources Corporation (“Optinuity”), which provides general support services to the corporate segment and other operating businesses. Optinuity is a reportable segment that includes revenues and expenses that arise from general corporate activities, such as fees, net investment income, net gains and losses, interest expense on MBIA Inc. debt and general corporate expenses. Employees of the service company provide various support services including management, legal, accounting, treasury, information technology, and insurance portfolio surveillance, among others, on a fee-for-service basis. The service company's revenues and expenses are included in the results of the corporate segment. Wind-down Operations 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 Inc., MBIA Investment Management Corp. (“IMC”) and GFL. 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 also provided customized products for funds that are invested as part of asset-backed or structured product transactions. GFL raise d funds through the issuance of MTNs with varying maturities, which were, in turn, guaranteed by MBIA Corp. GFL len t the proceeds of these MTN issuances to MBIA Inc. (“GFL Loans”). MBIA Inc. invest ed the proceeds of investment agreements and GFL Loans in eligible investments, which consist ed of investment grade securities rated investment grade at the time of purchase and maintained a minimum average double-A credit quality rating at the time of purchase. MBIA Inc. primarily purchases domestic securities, which are pledged to MBIA Corp. as security for its guarantees on investment agreements and MTNs. The Company's conduit segment administers one conduit through MBIA Asset Finance, LLC. Assets financed by this conduit are currently funded by MTNs. 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. Segments Results The following tables provide the Company's segment results for the three months ended September 30, 2013 and 2012:
|  |  |  | Three Months Ended September 30, 2013
|  |  |  | U.S. |  | Structured |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Public |  | Finance and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Finance |  | International |  | Advisory |  |  |  |  | Wind-down |  |  |  |  |  |  |
In millions |  | Insurance |  | Insurance |  | Services |  | Corporate |  | Operations |  | Eliminations |  |  | Consolidated
Revenues(1) |  | $ | 93 |  | $ | 39 |  | $ | 3 |  | $ | 10 |  | $ | 6 |  | $ | - |  |  | $ | 151
Realized gains (losses) and other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| settlements on insured |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net change in fair value of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| insured derivatives |  |  | - |  |  | 257 |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | 257
Net gains (losses) on financial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| instruments at fair value |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| and foreign exchange |  |  | - |  |  | (3) |  |  | - |  |  | 37 |  |  | (29) |  |  | - |  |  |  | 5
Net investment losses related |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| to other-than-temporary |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net gains (losses) on |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| extinguishment of debt |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 7 |  |  | (1) |  |  |  | 6
Other net realized gains (losses) |  |  | (29) |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | (29)
Revenues of consolidated VIEs |  |  | - |  |  | 30 |  |  | - |  |  | (1) |  |  | 1 |  |  | - |  |  |  | 30
Inter-segment revenues(2) |  |  | 10 |  |  | 20 |  |  | 8 |  |  | 35 |  |  | (3) |  |  | (70) |  |  |  | -
|  | Total revenues |  |  | 74 |  |  | 343 |  |  | 11 |  |  | 81 |  |  | (18) |  |  | (71) |  |  |  | 420
Losses and loss adjustment |  |  | 35 |  |  | 63 |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | 98
Operating |  |  | 13 |  |  | 22 |  |  | 16 |  |  | 29 |  |  | - |  |  | - |  |  |  | 80
Interest |  |  | - |  |  | 27 |  |  | - |  |  | 13 |  |  | 19 |  |  | - |  |  |  | 59
Expenses of consolidated VIEs |  |  | - |  |  | 12 |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | 12
Inter-segment expenses(2) |  |  | 20 |  |  | 23 |  |  | 3 |  |  | 3 |  |  | 17 |  |  | (66) |  |  |  | -
|  | Total expenses |  |  | 68 |  |  | 147 |  |  | 19 |  |  | 45 |  |  | 36 |  |  | (66) |  |  |  | 249
Income (loss) before income taxes |  | $ | 6 |  | $ | 196 |  | $ | (8) |  | $ | 36 |  | $ | (54) |  | $ | (5) |  |  | $ | 171
Identifiable assets |  | $ | 6,509 |  | $ | 12,096 |  | $ | 47 |  | $ | 910 |  | $ | 1,785 |  | $ | (3,714) | (3) |  | $ | 17,633
________________ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(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 deferred income taxes.
|  |  |  | Three Months Ended September 30, 2012
|  |  |  | U.S. |  | Structured |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Public |  | Finance and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Finance |  | International |  | Advisory |  |  |  |  | Wind-down |  |  |  |  |  |  |
In millions |  | Insurance |  | Insurance |  | Services |  | Corporate |  | Operations |  | Eliminations |  |  | Consolidated
Revenues(1) |  | $ | 149 |  | $ | 59 |  | $ | 5 |  | $ | 3 |  | $ | 9 |  | $ | - |  |  | $ | 225
Realized gains (losses) and other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| derivatives |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net change in fair value of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| insured derivatives |  |  | - |  |  | (21) |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | (21)
Net gains (losses) on financial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| instruments at fair value and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| foreign exchange |  |  | 22 |  |  | 14 |  |  | - |  |  | 11 |  |  | (40) |  |  | - |  |  |  | 7
Net investment losses related |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| to other-than-temporary |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| impairments |  |  | - |  |  | (4) |  |  | - |  |  | (4) |  |  | - |  |  | - |  |  |  | (8)
Net gains (losses) on |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other net realized gains (losses) |  |  | - |  |  | - |  |  | - |  |  | 1 |  |  | - |  |  | - |  |  |  | 1
Revenues of consolidated VIEs |  |  | - |  |  | 57 |  |  | - |  |  | - |  |  | 20 |  |  | - |  |  |  | 77
Inter-segment revenues(2) |  |  | 43 |  |  | 29 |  |  | 8 |  |  | 53 |  |  | (1) |  |  | (132) |  |  |  | -
|  | Total revenues |  |  | 214 |  |  | 134 |  |  | 13 |  |  | 64 |  |  | (12) |  |  | (132) |  |  |  | 281
Losses and loss adjustment |  |  | 4 |  |  | 167 |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | 171
Operating |  |  | 14 |  |  | 29 |  |  | 12 |  |  | 24 |  |  | 1 |  |  | - |  |  |  | 80
Interest |  |  | - |  |  | 33 |  |  | - |  |  | 14 |  |  | 22 |  |  | - |  |  |  | 69
Expenses of consolidated VIEs |  |  | - |  |  | 15 |  |  | - |  |  | - |  |  | 3 |  |  | - |  |  |  | 18
Inter-segment expenses(2) |  |  | 32 |  |  | 54 |  |  | 3 |  |  | 4 |  |  | 39 |  |  | (132) |  |  |  | -
|  | Total expenses |  |  | 50 |  |  | 298 |  |  | 15 |  |  | 42 |  |  | 65 |  |  | (132) |  |  |  | 338
Income (loss) before income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| taxes |  | $ | 164 |  | $ | (164) |  | $ | (2) |  | $ | 22 |  | $ | (77) |  | $ | - |  |  | $ | (57)
Identifiable assets |  | $ | 7,134 |  | $ | 17,399 |  | $ | 53 |  | $ | 843 |  | $ | 2,861 |  | $ | (6,158) | (3) |  | $ | 22,132
________________ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(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.
T h e f ol l owin g t able s p r o v id e t h e Company's segment r e s u l t s f o r t h e nine months ended September 30, 2013 an d 2012:
|  |  |  | Nine Months Ended September 30, 2013
|  |  |  | U.S. |  | Structured |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Public |  | Finance and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Finance |  | International |  | Advisory |  |  |  |  | Wind-down |  |  |  |  |  |  |
In millions |  | Insurance |  | Insurance |  | Services |  | Corporate |  | Operations |  | Eliminations |  |  | Consolidated
Revenues(1) |  | $ | 314 |  | $ | 120 |  | $ | 13 |  | $ | 15 |  | $ | 21 |  | $ | - |  |  | $ | 483
Realized gains (losses) and other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| settlements on insured |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net change in fair value of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| insured derivatives |  |  | - |  |  | 14 |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | 14
Net gains (losses) on financial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| instruments at fair value and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| foreign exchange |  |  | 30 |  |  | 31 |  |  | - |  |  | 39 |  |  | (38) |  |  | - |  |  |  | 62
Net investment losses related |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| to other-than-temporary |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net gains (losses) on |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| extinguishment of debt |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 11 |  |  | 38 | (3) |  |  | 49
Other net realized gains (losses) |  |  | (29) |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | (29)
Revenues of consolidated VIEs |  |  | - |  |  | 174 |  |  | - |  |  | (10) |  |  | 8 |  |  | - |  |  |  | 172
Inter-segment revenues(2) |  |  | 81 |  |  | 52 |  |  | 20 |  |  | 56 |  |  | (5) |  |  | (204) |  |  |  | -
|  | Total revenues |  |  | 396 |  |  | 391 |  |  | 33 |  |  | 100 |  |  | (3) |  |  | (166) |  |  |  | 751
Losses and loss adjustment |  |  | 105 |  |  | (13) |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | 92
Operating |  |  | 57 |  |  | 91 |  |  | 42 |  |  | 125 |  |  | 1 |  |  | - |  |  |  | 316
Interest |  |  | - |  |  | 84 |  |  | - |  |  | 36 |  |  | 59 |  |  | - |  |  |  | 179
Expenses of consolidated VIEs |  |  | - |  |  | 38 |  |  | - |  |  | - |  |  | 4 |  |  | - |  |  |  | 42
Inter-segment expenses(2) |  |  | 72 |  |  | 115 |  |  | 6 |  |  | 8 |  |  | 32 |  |  | (233) |  |  |  | -
|  | Total expenses |  |  | 234 |  |  | 315 |  |  | 48 |  |  | 169 |  |  | 96 |  |  | (233) |  |  |  | 629
Income (loss) before income taxes |  | $ | 162 |  | $ | 76 |  | $ | (15) |  | $ | (69) |  | $ | (99) |  | $ | 67 |  |  | $ | 122
Identifiable assets |  | $ | 6,509 |  | $ | 12,096 |  | $ | 47 |  | $ | 910 |  | $ | 1,785 |  | $ | (3,714) | (4) |  | $ | 17,633
________________ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(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, intercompany interest income, expenses pertaining to
intercompany receivables and payables and intercompany loans.
(3) - Represents the gain on the debt received as consideration in connection with the BofA Settlement Agreement.
(4) - Consists of intercompany reinsurance balances, repurchase agreements and deferred income taxes.
|  |  |  | Nine Months Ended September 30, 2012
|  |  |  | U.S. |  | Structured |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Public |  | Finance and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  | Finance |  | International |  | Advisory |  |  |  |  | Wind-down |  |  |  |  |  |  |
In millions |  | Insurance |  | Insurance |  | Services |  | Corporate |  | Operations |  | Eliminations |  |  | Consolidated
Revenues(1) |  | $ | 419 |  | $ | 194 |  | $ | 16 |  | $ | 10 |  | $ | 44 |  | $ | - |  |  | $ | 683
Realized gains (losses) and other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| settlements on insured |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net change in fair value of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| insured derivatives |  |  | - |  |  | 1,053 |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | 1,053
Net gains (losses) on financial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| instruments at fair value and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| foreign exchange |  |  | 43 |  |  | 80 |  |  | - |  |  | 19 |  |  | (160) |  |  | - |  |  |  | (18)
Net investment losses related |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| to other-than-temporary |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| impairments |  |  | - |  |  | (45) |  |  | - |  |  | (4) |  |  | (56) |  |  | - |  |  |  | (105)
Net gains (losses) on |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other net realized gains (losses) |  |  | - |  |  | 1 |  |  | - |  |  | 6 |  |  | - |  |  | - |  |  |  | 7
Revenues of consolidated VIEs |  |  | - |  |  | 23 |  |  | - |  |  | - |  |  | 60 |  |  | - |  |  |  | 83
Inter-segment revenues(2) |  |  | 123 |  |  | 10 |  |  | 26 |  |  | 132 |  |  | (19) |  |  | (272) |  |  |  | -
|  | Total revenues |  |  | 585 |  |  | 1,316 |  |  | 42 |  |  | 163 |  |  | (131) |  |  | (272) |  |  |  | 1,703
Losses and loss adjustment |  |  | 15 |  |  | 315 |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  | 330
Operating |  |  | 112 |  |  | 120 |  |  | 38 |  |  | 69 |  |  | 4 |  |  | - |  |  |  | 343
Interest |  |  | - |  |  | 99 |  |  | - |  |  | 43 |  |  | 72 |  |  | - |  |  |  | 214
Expenses of consolidated VIEs |  |  | - |  |  | 46 |  |  | - |  |  | - |  |  | 11 |  |  | - |  |  |  | 57
Inter-segment expenses(2) |  |  | 91 |  |  | 154 |  |  | 10 |  |  | 10 |  |  | 87 |  |  | (352) |  |  |  | -
|  | Total expenses |  |  | 218 |  |  | 734 |  |  | 48 |  |  | 122 |  |  | 174 |  |  | (352) |  |  |  | 944
Income (loss) before income taxes |  | $ | 367 |  | $ | 582 |  | $ | (6) |  | $ | 41 |  | $ | (305) |  | $ | 80 |  |  | $ | 759
Identifiable assets |  | $ | 7,134 |  | $ | 17,399 |  | $ | 53 |  | $ | 843 |  | $ | 2,861 |  | $ | (6,158) | (3) |  | $ | 22,132
________________ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(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.
Pr e m iu ms o n f inan c ia l g u a r an t ee s a n d i n s u r e d de r i v a t i v e s r ep o r t e d wi t hi n t h e C o m p an y's i n s u r an ce s e g m e n t s a re gen e r a t e d wi t hi n a n d o u t s id e t h e U.S. T h e f o l lowin g t abl e s u m m a r i z e s p r e m iu ms ea r ne d o n f i nan c ia l gu a r a n t e e s and in s u r e d d e r i v a t i v e s b y g eog r aph i c l o c a t i o n o f r i sk f o r t h e three and nine months ended September 30, 2013 and 2012:
|  |  |  | Three Months Ended September 30, |  | Nine Months Ended September 30, |
| In millions |  |  | 2013 |  |  | 2012 |  |  | 2013 |  |  | 2012 |
| Total premiums earned: |  |  |  |  |  |  |  |  |  |  |  |  |
|  | United States |  | $ | 82 |  | $ | 141 |  | $ | 297 |  | $ | 402 |
|  | United Kingdom |  |  | 9 |  |  | 9 |  |  | 26 |  |  | 27 |
|  | Europe (excluding United Kingdom) |  |  | 3 |  |  | 3 |  |  | 9 |  |  | 12 |
|  | Internationally diversified |  |  | 2 |  |  | 3 |  |  | 8 |  |  | 13 |
|  | Central and South America |  |  | 13 |  |  | 8 |  |  | 28 |  |  | 40 |
|  | Asia |  |  | 1 |  |  | 2 |  |  | 3 |  |  | 4 |
|  | Other |  |  | 2 |  |  | 2 |  |  | 6 |  |  | 8 |
| Total |  | $ | 112 |  | $ | 168 |  | $ | 377 |  | $ | 506 |
T h e f ol l owin g t able s p r o v id e t h e r e s u l t s o f t h e s e g m e n t s wi t h i n t h e wi n d-dow n ope r a t ion s f o r t h e three months ended September 30, 2013 an d 2012:
|  |  |  | Three Months Ended September 30, 2013
|  |  |  | Asset / |  |  |  |  |  |  |  | Total Wind-
|  |  |  | Liability |  |  |  |  |  |  |  | down
In millions |  | Products |  | Conduits |  | Eliminations |  | Operations
Revenues(1) |  | $ | 6 |  | $ | - |  | $ | - |  | $ | 6
Net gains (losses) on financial |  |  |  |  |  |  |  |  |  |  |  |
| instruments at fair value and foreign |  |  |  |  |  |  |  |  |  |  |  |
| exchange |  |  | (29) |  |  | - |  |  | - |  |  | (29)
Net investment losses related to other- |  |  |  |  |  |  |  |  |  |  |  |
Net gains (losses) on extinguishment |  |  |  |  |  |  |  |  |  |  |  |
| of debt |  |  | 7 |  |  | - |  |  | - |  |  | 7
Revenues of consolidated VIEs |  |  | - |  |  | 1 |  |  | - |  |  | 1
Inter-segment revenues(2) |  |  | (1) |  |  | (2) |  |  | - |  |  | (3)
|  | Total revenues |  |  | (17) |  |  | (1) |  |  | - |  |  | (18)
Interest |  |  | 19 |  |  | - |  |  | - |  |  | 19
Inter-segment expenses(2) |  |  | 2 |  |  | 15 |  |  | - |  |  | 17
|  | Total expenses |  |  | 21 |  |  | 15 |  |  | - |  |  | 36
Income (loss) before income taxes |  | $ | (38) |  | $ | (16) |  | $ | - |  | $ | (54)
Identifiable assets |  | $ | 1,586 |  | $ | 198 |  | $ | 1 |  | $ | 1,785
_______________ |  |  |  |  |  |  |  |  |  |  |  |
(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 September 30, 2012
|  |  |  | Asset / |  |  |  |  |  |  |  | Total Wind-
|  |  |  | Liability |  |  |  |  |  |  |  | down
In millions |  | Products |  | Conduits |  | Eliminations |  | Operations
Revenues(1) |  | $ | 9 |  | $ | - |  | $ | - |  | $ | 9
Net gains (losses) on financial |  |  |  |  |  |  |  |  |  |  |  |
| instruments at fair value and foreign |  |  |  |  |  |  |  |  |  |  |  |
| exchange |  |  | (40) |  |  | - |  |  | - |  |  | (40)
Net investment losses related to other- |  |  |  |  |  |  |  |  |  |  |  |
Net gains (losses) on extinguishment |  |  |  |  |  |  |  |  |  |  |  |
Revenues of consolidated VIEs |  |  | - |  |  | 20 |  |  | - |  |  | 20
Inter-segment revenues(2) |  |  | (1) |  |  | - |  |  | - |  |  | (1)
|  | Total revenues |  |  | (32) |  |  | 20 |  |  | - |  |  | (12)
Operating |  |  | 1 |  |  | - |  |  | - |  |  | 1
Interest |  |  | 22 |  |  | - |  |  | - |  |  | 22
Expenses of consolidated VIEs |  |  | - |  |  | 3 |  |  | - |  |  | 3
Inter-segment expenses(2) |  |  | 3 |  |  | 36 |  |  | - |  |  | 39
|  | Total expenses |  |  | 26 |  |  | 39 |  |  | - |  |  | 65
Income (loss) before income taxes |  | $ | (58) |  | $ | (19) |  | $ | - |  | $ | (77)
Identifiable assets |  | $ | 2,219 |  | $ | 693 |  | $ | (51) |  | $ | 2,861
_______________ |  |  |  |  |  |  |  |  |  |  |  |
(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.
T h e f ol l owin g t able s p r o v id e t h e r e s u l t s o f t h e s e g m e n t s wi t h i n t h e wi n d-dow n ope r a t ion s f o r t h e nine months ended September 30, 2013 and 2012:
|  |  |  | Nine Months Ended September 30, 2013
|  |  |  | Asset / |  |  |  |  |  |  |  | Total Wind-
|  |  |  | Liability |  |  |  |  |  |  |  | down
In millions |  | Products |  | Conduits |  | Eliminations |  | Operations
Revenues(1) |  | $ | 21 |  | $ | - |  | $ | - |  | $ | 21
Net gains (losses) on financial |  |  |  |  |  |  |  |  |  |  |  |
| instruments at fair value and foreign |  |  |  |  |  |  |  |  |  |  |  |
| exchange |  |  | (38) |  |  | - |  |  | - |  |  | (38)
Net investment losses related to other- |  |  |  |  |  |  |  |  |  |  |  |
Net gains (losses) on extinguishment |  |  |  |  |  |  |  |  |  |  |  |
| of debt |  |  | 11 |  |  | - |  |  | - |  |  | 11
Revenues of consolidated VIEs |  |  | - |  |  | 8 |  |  | - |  |  | 8
Inter-segment revenues(2) |  |  | (3) |  |  | (8) |  |  | 6 |  |  | (5)
|  | Total revenues |  |  | (9) |  |  | - |  |  | 6 |  |  | (3)
Operating |  |  | 1 |  |  | - |  |  | - |  |  | 1
Interest |  |  | 59 |  |  | - |  |  | - |  |  | 59
Expenses of consolidated VIEs |  |  | - |  |  | 4 |  |  | - |  |  | 4
Inter-segment expenses(2) |  |  | 6 |  |  | 26 |  |  | - |  |  | 32
|  | Total expenses |  |  | 66 |  |  | 30 |  |  | - |  |  | 96
Income (loss) before income taxes |  | $ | (75) |  | $ | (30) |  | $ | 6 |  | $ | (99)
Identifiable assets |  | $ | 1,586 |  | $ | 198 |  | $ | 1 |  | $ | 1,785
_______________ |  |  |  |  |  |  |  |  |  |  |  |
(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.
|  |  |  | Nine Months Ended September 30, 2012
|  |  |  | Asset / |  |  |  |  |  |  |  | Total Wind-
|  |  |  | Liability |  |  |  |  |  |  |  | down
In millions |  | Products |  | Conduits |  | Eliminations |  | Operations
Revenues(1) |  | $ | 44 |  | $ | - |  | $ | - |  | $ | 44
Net gains (losses) on financial |  |  |  |  |  |  |  |  |  |  |  |
| instruments at fair value and foreign |  |  |  |  |  |  |  |  |  |  |  |
| exchange |  |  | (160) |  |  | - |  |  | - |  |  | (160)
Net investment losses related to other- |  |  |  |  |  |  |  |  |  |  |  |
| than-temporary impairments |  |  | (56) |  |  | - |  |  | - |  |  | (56)
Net gains (losses) on extinguishment |  |  |  |  |  |  |  |  |  |  |  |
Revenues of consolidated VIEs |  |  | - |  |  | 60 |  |  | - |  |  | 60
Inter-segment revenues(2) |  |  | (15) |  |  | (2) |  |  | (2) |  |  | (19)
|  | Total revenues |  |  | (187) |  |  | 58 |  |  | (2) |  |  | (131)
Operating |  |  | 4 |  |  | - |  |  | - |  |  | 4
Interest |  |  | 72 |  |  | - |  |  | - |  |  | 72
Expenses of consolidated VIEs |  |  | - |  |  | 11 |  |  | - |  |  | 11
Inter-segment expenses(2) |  |  | 16 |  |  | 71 |  |  | - |  |  | 87
|  | Total expenses |  |  | 92 |  |  | 82 |  |  | - |  |  | 174
Income (loss) before income taxes |  | $ | (279) |  | $ | (24) |  | $ | (2) |  | $ | (305)
Identifiable assets |  | $ | 2,219 |  | $ | 693 |  | $ | (51) |  | $ | 2,861
_______________ |  |  |  |  |  |  |  |  |  |  |  |
(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.

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