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Schedule II- Parent Company Financials | 12 Months Ended
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Dec. 31, 2016
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, 2016 |  | December 31, 2015
Assets |  |  |  |  |  |
Investments: |  |  |  |  |  |
| Fixed-maturity securities held as available-for-sale, at fair value (amortized cost $687 and $749) |  | $ | 725 |  | $ | 801
| Investments carried at fair value |  |  | 6 |  |  | 7
| Investments pledged as collateral, at fair value (amortized cost $242 and $329) |  |  | 233 |  |  | 291
| Short-term investments held as available-for-sale, at fair value (amortized cost $278 and $245) |  |  | 278 |  |  | 245
| Other investments |  |  | 2 |  |  | 4
|  | Total investments |  |  | 1,244 |  |  | 1,348
Cash and cash equivalents |  |  | 13 |  |  | 35
Investment in wholly-owned subsidiaries |  |  | 3,673 |  |  | 4,085
Deferred income taxes, net |  |  | 1,003 |  |  | 991
Other assets |  |  | 107 |  |  | 103
|  | Total assets |  | $ | 6,040 |  | $ | 6,562
Liabilities and Shareholders' Equity |  |  |  |  |  |
Liabilities: |  |  |  |  |  |
| Investment agreements |  | $ | 361 |  | $ | 423
| Long-term debt |  |  | 576 |  |  | 575
| Affiliate loans payable |  |  | 901 |  |  | 1,022
| Income taxes payable |  |  | 696 |  |  | 573
| Other liabilities |  |  | 279 |  |  | 240
|  | Total liabilities |  |  | 2,813 |  |  | 2,833
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--283,989,999 |  |  |  |  |  |
|  | and 281,833,618 |  |  | 284 |  |  | 282
| Additional paid-in capital |  |  | 3,160 |  |  | 3,138
| Retained earnings |  |  | 2,700 |  |  | 3,038
| Accumulated other comprehensive income (loss), net of tax |  |  | (128) |  |  | (61)
| Treasury stock, at cost--148,789,168 and 130,303,241 shares |  |  | (2,789) |  |  | (2,668)
|  | Total shareholders' equity of MBIA Inc. |  |  | 3,227 |  |  | 3,729
|  | Total liabilities and shareholders' equity |  | $ | 6,040 |  | $ | 6,562
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,
|  |  |  |  | 2016 |  | 2015 |  | 2014
Revenues: |  |  |  |  |  |  |  |  |
| Net investment income |  | $ | 29 |  | $ | 35 |  | $ | 44
| Net gains (losses) on financial instruments at fair value and foreign exchange |  |  | (13) |  |  | 59 |  |  | 24
| Investment losses related to other-than-temporary impairments: |  |  |  |  |  |  |  |  |
|  | Investment losses related to other-than-temporary impairments |  |  | (1) |  |  | (3) |  |  | -
|  | Other-than-temporary impairments recognized in accumulated other |  |  |  |  |  |  |  |  |
|  |  | comprehensive income (loss) |  |  | - |  |  | (1) |  |  | -
|  |  | Net investment losses related to other-than-temporary impairments |  |  | (1) |  |  | (4) |  |  | -
| Net gains (losses) on extinguishment of debt |  |  | 5 |  |  | - |  |  | 1
| Other net realized gains (losses) |  |  | (5) |  |  | 21 |  |  | 1
|  |  | Total revenues |  |  | 15 |  |  | 111 |  |  | 70
Expenses: |  |  |  |  |  |  |  |  |
| Operating |  |  | 16 |  |  | 24 |  |  | 25
| Interest |  |  | 90 |  |  | 95 |  |  | 104
|  |  | Total expenses |  |  | 106 |  |  | 119 |  |  | 129
| Gain (loss) before income taxes and equity in earnings of subsidiaries |  |  | (91) |  |  | (8) |  |  | (59)
Provision (benefit) for income taxes |  |  | (15) |  |  | 1 |  |  | (165)
| Gain (loss) before equity in earnings of subsidiaries |  |  | (76) |  |  | (9) |  |  | 106
Equity in net income (loss) of subsidiaries |  |  | (262) |  |  | 189 |  |  | 463
|  |  | Net income (loss) |  | $ | (338) |  | $ | 180 |  | $ | 569
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,
|  |  |  | 2016 |  | 2015 |  | 2014
Net income (loss) |  | $ | (338) |  | $ | 180 |  | $ | 569
Other comprehensive income (loss): |  |  |  |  |  |  |  |  |
Unrealized gains (losses) on available-for-sale securities: |  |  |  |  |  |  |  |  |
| Unrealized gains (losses) arising during the period |  |  | 21 |  |  | (66) |  |  | 126
| Provision (benefit) for income taxes |  |  | 2 |  |  | (7) |  |  | 14
| Total |  |  | 19 |  |  | (59) |  |  | 112
| Reclassification adjustments for (gains) losses included in net income (loss) |  |  | 12 |  |  | 4 |  |  | 23
| Provision (benefit) for income taxes |  |  | 4 |  |  | 1 |  |  | 8
| Total |  |  | 8 |  |  | 3 |  |  | 15
Available-for-sale securities with other-than-temporary impairments: |  |  |  |  |  |  |  |  |
| Other-than-temporary impairments and unrealized gains (losses) |  |  |  |  |  |  |  |  |
|  | arising during the period |  |  | 2 |  |  | - |  |  | -
| Provision (benefit) for income taxes |  |  | 1 |  |  | - |  |  | -
| Total |  |  | 1 |  |  | - |  |  | -
| 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) |  |  | (95) |  |  | (26) |  |  | (23)
Total other comprehensive income (loss) |  |  | (67) |  |  | (82) |  |  | 107
Comprehensive income (loss) |  | $ | (405) |  | $ | 98 |  | $ | 676
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,
|  |  |  |  | 2016 |  | 2015 |  | 2014
Cash flows from operating activities: |  |  |  |  |  |  |  |  |
| Fees and reimbursements received |  | $ | 4 |  | $ | - |  | $ | 1
| Investment income received |  |  | 144 |  |  | 142 |  |  | 256
| Operating expenses paid |  |  | (19) |  |  | (25) |  |  | (35)
| Interest paid, net of interest converted to principal |  |  | (84) |  |  | (88) |  |  | (93)
| Income taxes (paid) received |  |  | 73 |  |  | 108 |  |  | 59
|  |  | Net cash provided (used) by operating activities |  |  | 118 |  |  | 137 |  |  | 188
Cash flows from investing activities: |  |  |  |  |  |  |  |  |
| Purchases of available-for-sale investments |  |  | (129) |  |  | (606) |  |  | (125)
| Sales of available-for-sale investments |  |  | 165 |  |  | 325 |  |  | 268
| Paydowns and maturities of available-for-sale investments |  |  | 90 |  |  | 186 |  |  | 98
| Purchases of investments at fair value |  |  | (57) |  |  | (144) |  |  | (266)
| Sales, paydowns and maturities of investments at fair value |  |  | 58 |  |  | 171 |  |  | 280
| Sales, paydowns and maturities (purchases) of short-term investments, net |  |  | 1 |  |  | 232 |  |  | (242)
| (Payments) proceeds for derivative settlements |  |  | (37) |  |  | 43 |  |  | (26)
| Collateral (to) from swap counterparty |  |  | 52 |  |  | (31) |  |  | 144
| Contributions to subsidiaries, net |  |  | (10) |  |  | 16 |  |  | (20)
| Advances to subsidiaries, net |  |  | - |  |  | - |  |  | (12)
| Other investing |  |  | - |  |  | 24 |  |  | -
|  |  | Net cash provided (used) by investing activities |  |  | 133 |  |  | 216 |  |  | 99
Cash flows from financing activities: |  |  |  |  |  |  |  |  |
| Proceeds from investment agreements |  |  | 16 |  |  | 21 |  |  | 23
| Principal paydowns of investment agreements |  |  | (80) |  |  | (111) |  |  | (181)
| Principal paydowns of long-term debt |  |  | - |  |  | (11) |  |  | -
| Payments for affiliate loans |  |  | (111) |  |  | (103) |  |  | (153)
| Purchases of treasury stock |  |  | (106) |  |  | (233) |  |  | (32)
| Restricted stock awards settlements |  |  | 8 |  |  | 19 |  |  | 16
|  |  | Net cash provided (used) by financing activities |  |  | (273) |  |  | (418) |  |  | (327)
Net increase (decrease) in cash and cash equivalents |  |  | (22) |  |  | (65) |  |  | (40)
Cash and cash equivalents - beginning of year |  |  | 35 |  |  | 100 |  |  | 140
Cash and cash equivalents - end of year |  | $ | 13 |  | $ | 35 |  | $ | 100
Reconciliation of net income (loss) to net cash provided (used) by operating activities: |  |  |  |  |  |  |  |  |
| Net income (loss) |  | $ | (338) |  | $ | 180 |  | $ | 569
| Adjustments to reconcile net income (loss) to net cash provided (used) by operating activities: |  |  |  |  |  |  |  |  |
|  | Change in: |  |  |  |  |  |  |  |  |
|  |  | Intercompany accounts receivable |  |  | (10) |  |  | (21) |  |  | (24)
|  |  | Current income taxes |  |  | 78 |  |  | 109 |  |  | 70
|  | Equity in earnings of subsidiaries |  | 262 |  |  | (189) |  |  | (463)
|  | Dividends from subsidiaries |  | 118 |  |  | 116 |  |  | 225
|  | Net investment losses related to other-than-temporary impairments |  | 1 |  |  | 4 |  |  | -
|  | Net (gains) losses on financial instruments at fair value and foreign exchange |  | 13 |  |  | (59) |  |  | (24)
|  | Other net realized (gains) losses |  | 5 |  |  | (21) |  |  | (1)
|  | Deferred income tax benefit |  | (20) |  |  | - |  |  | (176)
|  | (Gains) losses on extinguishment of debt |  | (5) |  |  | - |  |  | (1)
|  | Other operating |  | 14 |  |  | 18 |  |  | 13
|  | Total adjustments to net income (loss) |  | 456 |  |  | (43) |  |  | (381)
|  |  | Net cash provided (used) by operating activities |  | $ | 118 |  | $ | 137 |  | $ | 188
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 o f 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 collat eral 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, 2016, MBIA Inc. had $403 million of cash and highly liquid assets available for general corporate liquidity purpose s. 2. Accounting Policies MBIA Inc. (the “Parent Company”) carries its investments in subsidiaries under the equity method. Certain amounts have been reclassif ied in prior years’ financial statements to conform to the current presentation. This includes a change in the presentation of short-term investments held as available-for-sale (“AFS”) to classify only fixed-maturity securities with a remaining maturity of less than one year at the date of purchase in “Short-term investments held as available-for-sale, at fair value” on the Parent Company’s condensed balance sheet. In prior periods, short-term investments held as AFS previously included all fixed-maturity s ecurities with a remaining effective term to maturity of less than one year. The change in presentation effected “Short-term investments held as available-for-sale, at fair value” and “Fixed maturities held as available-for-sale, at fair value” on the Parent Company’s condensed balance sheet in prior periods. The reclassifications had no impact on total revenues, expenses, assets, liabilities, shareholders’ equity, operating cash flows, investing cash flows, or financing cash flows for all periods prese nted. Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03) In April of 2015, the Financial Accounting Standards Board issued ASU 2015-03, “Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.” ASU 2015-03 requires debt issuance costs related to a debt liability measured at amortized cost to be reported in the balance sheet as a direct deduction from the face amount of the debt liability. ASU 2015-03 was effective for interim and annual periods b eginning January 1, 2016. The adoption of ASU 2015-03 was applied retrospectively and all previously reported amounts have been conformed to the current presentation. The adoption of ASU 2015-03 did not materially impact the Parent Company’s condensed financial statements. For a further discussion of significant accounting policies and recent accounting pronouncements, refer to footnotes 2 and 3 to the Company’s consolidated financial statements. 3. Divide nds from Subsidiaries During 2016, National Public Finance Guarantee Holdings, Inc. declared and paid a dividend of $118 million to MBIA Inc. During 2015, National Public Finance Guarantee Holdings, Inc. declared and paid a dividend of $114 millio n to MBIA Inc., Trifinium Holdings Limited d ecl ared 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 d ecl ared and paid dividends of $5 million to MBIA Inc. 4. Obligations under Investment Agreements I nvestment agreement s, as described in footnote 10 to the Company’s consolidated financial statements, are 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 securiti es as collateral. As of December 31, 2016 and 2015, the fair value of securities pledged as collateral with respect to these investment agreements approximated $394 million and $402 million, respectively. The Parent Company’s collateral as of December 31, 2016, 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 investmen t agreements in the amount of $6 million and $12 million as of December 31, 2016 and 2015, 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, 2016, MBIA Inc. pledged securities with a fair value of $276 million to derivative counterparties. As of December 31, 2015, MBIA Inc. pledged securities with a fair value of $259 million to derivative counterparties. 6. Affiliate Loans Payable Affiliate loans payable consists of loans payable to MBIA Global Funding, LLC (“GFL”). GFL raise d funds through the issuance of mediu m-term notes with varying maturities, which were, in turn, guaranteed by MBIA Corp. GFL len t the proceeds of these medium-term note issuances to MBIA Inc.

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- Definition The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=51664549&loc=d3e5283-111683 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 3 -Subparagraph (SX 210.12-04) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e24072-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Paragraph c -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 06 -Article 9 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 05 -Paragraph c -Article 7 + Details
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