MBIA Inc. Reports 11 Percent Decrease in 2005 Earnings Per Share; Operating Earnings Per Share up 4 Percent in 2005

MBIA Inc. (NYSE: MBI), the holding company for MBIAInsurance Corporation, reported today that 2005 diluted earnings pershare declined 11 percent to $5.18 per share compared with $5.82 in2004. Net income for 2005 was $711.0 million compared with $843.0million for 2004, a 16 percent decrease. The decrease was due to theeffect of net realized losses of $0.04 per share in 2005, comparedwith net realized gains of $0.47 per share recorded in 2004, as wellas a charge of $0.52 per share related to a $75 million accrual thatthe Company made in the third quarter of 2005 for estimated penaltiesand disgorgement related to any settlements of regulatoryinvestigations.

Operating income per share, which excludes the effects of netrealized gains and losses, net unrealized gains and losses onderivative instruments and foreign exchange, income from discontinuedoperations, and the accrual for estimated penalties and disgorgement,rose 4 percent to $5.57 per share in 2005 compared to $5.35 per sharein 2004.

Fourth quarter diluted earnings per share in 2005 declined 16percent to $1.34 from $1.60 in 2004. Net income for the fourth quarterdecreased 19 percent to $182.7 million from $226.7 million in lastyear's fourth quarter. The decrease was the result of $0.01 per shareof net realized losses in the fourth quarter of 2005, compared withnet realized gains of $0.20 per share recorded during the same periodof 2004.

For the fourth quarter of 2005, operating income per shareincreased 1 percent to $1.38 compared with $1.36 in the fourth quarterof 2004. Excluding refundings, fourth quarter operating income pershare declined 2 percent to $1.20 in 2005 from $1.23 in the sameperiod of 2004.
Diluted earnings per share information
--------------------------------------
Three Months Year
Ended Ended
December 31 December 31
----------- -----------

(Restated) (Restated)
-------- --------
2005 2004 2005 2004
---- ---- ---- ----
Net income $1.34 $1.60 $ 5.18 $ 5.82
Income (loss) from discontinued
operations - - 0.00 (0.01) 0.02
---- ---- ------ ----
Net income from continuing operations 1.34 1.60 5.19 5.80
Accrual for penalties and
disgorgement - - - - (0.52) - -
Net realized gains (losses) (0.01) 0.20 (0.04) 0.47
Net gains (losses) on derivative
instruments and foreign exchange (0.02) 0.04 0.18 (0.01)
------ ---- ---- ------
Operating income (1) $1.38 $1.36 $ 5.57 $ 5.35

(1) Presented on the same basis as analysts' estimates

Net income for 2005 includes the effects of a $75 million accrualin the third quarter for the total amount that the Company estimatesit will have to pay in connection with any settlements ofinvestigations by the SEC, the New York Attorney General's Office andthe New York State Insurance Department regarding agreements MBIAInsurance Corporation entered into in 1998 with AXA Re Finance S.A.(AXA Re), Muenchener Rueckversicherungs-Gesellshaft (Munich Re) andConverium Re (previously known as Zurich Reinsurance North America).

Gary Dunton, MBIA Chief Executive Officer, said, "We achievedacceptable operating financial results in a challenging marketplace,one in which we saw intense competition, tight credit spreads andinvestors awash in capital. Despite fewer opportunities ininternational public finance, business production in our other sectorswas good, and very strong in the case of international structuredfinance.

"Looking ahead, given our expectation that current marketconditions will persist, it is unlikely that we will achieve ourhistorical growth rates in 2006. Our underwriting standards andpricing discipline are designed for long-term profitability, and wesimply won't compromise them for short-term gain. Our franchiseremains solid, and our commitment to building long-term shareholdervalue is steadfast."

Insurance Operations

Adjusted direct premium (ADP), a non-GAAP measure, which includesboth upfront premiums written and the present value of estimatedinstallment premiums for new business written in the period andexcludes premiums assumed or ceded, declined 4 percent to $1.10billion in 2005 from $1.15 billion in 2004. The decline is primarilydue to tighter credit spreads, increased competition from theuninsured market and other monolines, and weak new business productionin the Company's international public finance operations. In thefourth quarter of 2005, ADP declined 42 percent to $221.4 million from$383.9 million in the fourth quarter of last year. The decrease wasthe result of the factors cited above.
Adjusted Direct Premium
-----------------------
(dollars in millions)

Three Months Year
Ended Ended
December 31 December 31
----------- -----------
% %
2005 2004 Change 2005 2004 Change
---- ---- ------ ---- ---- ------
Public Finance
United States $105.9 $106.8 (1%) $ 487.6 $ 457.4 7%
Non-United States 24.2 119.8 (80%) 92.8 261.6 (65%)
---- ----- ----- ---- ----- -----
Total 130.1 226.6 (43%) 580.4 719.0 (19%)

Structured Finance
United States 78.9 126.0 (37%) 310.2 284.5 9%
Non-United States 12.4 31.3 (61%) 210.6 142.6 48%
---- ---- ----- ----- ----- ---
Total 91.3 157.3 (42%) 520.8 427.1 22%

Total $221.4 $383.9 (42%) $1,101.2 $1,146.1 (4%)

Global public finance ADP declined 19 percent in 2005 comparedwith 2004. U.S. public finance production increased 7 percent in 2005,reflecting solid business in the transportation and military housingsectors. As fewer large infrastructure transactions in Europe came tomarket this year, non-U.S. production declined 65 percent, despitegrowth in the Latin American and Australian markets. Credit qualityfor global public finance transactions remained very high, with 91percent of insured business written rated Single-A or higher in 2005.

Despite continued tight spreads and investor demand for uninsuredtransactions, global structured finance ADP in 2005 increased 22percent over 2004, characterized by strong business from repeatissuers across all sectors. The consumer asset-backed and CDObusinesses had impressive production, while international structuredADP increased 48 percent, driven by solid future flow and wholecompany securitization activity. In 2005, 69 percent of businesswritten in global structured finance was rated Single-A or higher.

Premiums earned in 2005 declined 1 percent to $842.7 million from$849.7 million in 2004, due in part to some early policy terminationsin the structured finance book of business as well as the effect ofrefunding activity in prior years, which results in any unearnedpremiums that would have been earned over time to be earnedimmediately, and reduces the growth rate of scheduled earned premiums.Earned premiums from refundings remained strong given the continuedlow interest rate environment, declining a marginal 2 percent to$140.5 million in 2005.

Pre-tax net investment income in 2005, excluding net realizedgains, was $491.9 million, a 4 percent increase from $474.4 million in2004, driven by a 3 percent increase in average invested assets.

MBIA's advisory fees in 2005 were down 32 percent to $28.2 millionfrom $41.5 million during 2004, primarily reflecting a decline inbusiness that generates advisory services.

Insurance expenses, consisting of the amortization of deferredacquisition costs and operating expenses, were up 11 percent for 2005to $210.0 million from $188.7 million in 2004, due to a 17 percentincrease in operating expenses over the same period last year. Theincrease in operating expenses partially relates to a reduction in thepercentage of expenses recorded and deferred as policy acquisitioncosts, which became effective in the third quarter of 2005. Otherfactors contributing to the increase in operating expenses were anincrease in loss prevention expenses and the cost of a soft capitalfacility.

MBIA's pre-tax operating income from insurance operations, whichexcludes the effects of net realized gains and losses and netunrealized gains and losses on derivative instruments and foreignexchange, declined 2 percent to $1.07 billion in 2005 from $1.09billion in 2004.

Risk Management and Loss Reserves

The Company incurred $84.3 million in loss and loss adjustmentexpenses in 2005, a 1 percent decrease compared to $84.8 million in2004. Total case-incurred activity was $188.6 million in 2005,primarily related to transactions in the Enhanced Equipment TrustCertificate (EETC), CDO, tax lien, mortgage-backed, and manufacturedhousing sectors, as well as accretion on reserves previouslyestablished for the Company's AHERF exposure. The unallocated lossreserve as of December 31, 2005 stands at $208.6 million.

MBIA established a case loss reserve of $76.3 million in thefourth quarter in connection with its $685.4 million in net parexposure under four insured EETCs secured by 64 aircraft financed byNorthwest Airlines. Northwest filed for bankruptcy protection inSeptember 2005 and, subsequently, did not make scheduled payments onleases supporting outstanding senior debt for 31 aircraft in three ofthe four MBIA-insured EETCs. MBIA established the case loss reservebased on projected lower lease income related to these leases, theprojected revenue from the potential redeployment of certain aircraftand estimated valuations for the aircraft subject to the defaultedleases. Currently, the leases related to the remaining 33 aircraft areperforming according to the original contract terms. Temporaryextensions are in place to allow Northwest to continue flying theaircraft subject to the defaulted leases, and negotiations with theairline about resolving the lease non-compliance issues arecontinuing.

Overall credit quality in the insured portfolio improved thisyear, with 81 percent of the total book of business rated A or better,up from 80 percent at the end of 2004. The percentage of the portfoliorated non-investment grade increased somewhat to 2.1 percent, up from1.9 percent in 2004, driven by the addition of two consumerasset-backed financings.

Investment Management Services

The market value of annual average fixed-income assets undermanagement was $43.5 billion in 2005, up 16 percent from $37.4 billionin 2004. Pre-tax operating income from MBIA's investment managementbusinesses, which excludes the effects of net realized gains andlosses, and net gains and losses on derivative instruments and foreignexchange, increased 41 percent in 2005 to $86.6 million from $61.4million in 2004. Solid demand for investment agreements drove growthin the asset/liability products segment.

Corporate

The corporate segment includes net investment income, interestexpense and corporate expenses. In 2005, net corporate segmentexpenses increased to $171.8 million from $83.8 million. The increasereflects the $75 million accrual for estimated penalties anddisgorgement, incremental legal and consulting expenses related to theregulatory investigations, and increased interest expenses due tohigher average debt outstanding. Excluding the accrual for estimatedpenalties and disgorgement, and legal and consulting expensesassociated with the investigations, net corporate expenses decreased 1percent.

Gains and Losses

In 2005, MBIA recorded net realized losses of $7.9 million for allbusiness operations, compared to net realized gains of $104.2 millionin 2004. In 2005, net realized losses were impacted by a $19 millionwrite-down of receivable balances that the Company obtained undersalvage and subrogation rights. In 2004, net realized gains wereprimarily the result of the sale of a common stock investment that theCompany purchased in 2002 and gains resulting from the reassumption ofportfolios from AXA Re and Converium, which were accounted for asdeposits as a result of the restatements.

The Company recorded pre-tax mark-to-market net unrealized gainsof $38.4 million in 2005 on its derivative exposure and foreignexchange, compared with net unrealized loss of $3.3 million in 2004.

Book Value and Adjusted Book Value

MBIA's book value per share at December 31, 2005 was $49.17, up 5percent from $47.05 at December 31, 2004. The increase was principallydriven by net income from operations offset by an increase in treasurystock resulting from share repurchases. Adjusted book value (ABV) pershare, a non-GAAP measure, at December 31, 2005 rose 6 percent to$70.62 from $66.34 at December 31, 2004. ABV includes the after-taxeffects of deferred premium revenue less prepaid reinsurance premiumsand deferred acquisition costs, the present value of installmentpremiums, the present value of the net spread of asset/liabilityproducts, and a provision for loss and loss adjustment expenses.

Share Repurchase

During 2005, the Company repurchased approximately 5.9 millionshares at an average cost of $57.77 per share. At December 31, 2005,approximately 5 million shares remained in the Company's share buybackprogram, which was authorized in August 2004. The Company did notrepurchase any shares in the second half of 2005.

Operating ROE

For 2005, MBIA's operating return on equity, a non-GAAP measure,was 12.5 percent compared to 13.5 percent for 2004.

Conference Call

MBIA will host a conference call for investors today at 11 a.m.EST. The conference call will consist of brief comments by Mr. Duntonand Nicholas Ferreri, MBIA Chief Financial Officer, followed by aquestion and answer session with Mr. Dunton, Mr. Ferreri and MitchellSonkin, head of Insured Portfolio Management. The conference call willbe Web cast live on MBIA's Web site at http://investor.mbia.com (thenselect "Conference Call"). Those who are unable to participate in theconference call may listen to a replay by dialing 1-866-356-4366 inthe United States and 1-203- 369-0107 for outside the United States,which will be available on MBIA's Web site approximately two hoursafter the end of the conference call.

MBIA Inc., through its subsidiaries, is a leading financialguarantor and provider of specialized financial services. MBIA'sinnovative and cost-effective products and services meet the creditenhancement, financial and investment needs of its public and privatesector clients, domestically and internationally. MBIA Inc.'sprincipal operating subsidiary, MBIA Insurance Corporation, has afinancial strength rating of Triple-A from Moody's Investors Service,Standard & Poor's Ratings Services, Fitch Ratings, and Rating andInvestment Information, Inc. Please visit MBIA's Web site athttp://www.mbia.com.

This news release contains forward-looking statements. Importantfactors such as general market conditions and the competitiveenvironment could cause actual results to differ materially from thoseprojected in these forward-looking statements. The Company undertakesno obligation to revise or update any forward-looking statements toreflect changes in events or expectations.

Explanation of Non-GAAP Financial Measures

The following are explanations of why MBIA believes that thenon-GAAP financial measures used in this press release, which serve tosupplement GAAP information, are meaningful to investors.

Operating Income: The Company believes operating income is auseful measurement of performance because it measures income fromoperations, unaffected by investment portfolio realized gains andlosses, gains and losses on derivative instruments and foreignexchange and non-recurring items. Operating income is also provided toassist research analysts and investors who use this information intheir analysis of the Company.

Operating Return on Equity (ROE): The Company believes operatingreturn on equity is a useful measurement of performance because itmeasures return on equity based upon income from operations,unaffected by investment portfolio realized gains and losses, gainsand losses on derivative instruments and foreign exchange andnon-recurring items. Operating return on equity is also provided toassist research analysts and investors who use this information intheir analysis of the Company.

Adjusted Direct Premiums: The Company believes adjusted directpremiums are a meaningful measure of the total value of the insurancebusiness written during a reporting period since they represent thepresent value of all premiums collected and expected to be collectedon policies closed during the period. As such, it gives investors anopportunity to measure the value of new business activities in a givenperiod and compare it to new business activities in other periods.Other measures, such as premiums written and premiums earned, includethe value of premiums resulting from business closed in prior periodsand do not provide the same information to investors.

Adjusted Book Value (ABV): The Company believes the presentationof adjusted book value, which includes items that are expected to berealized in future periods, provides additional information that givesa comprehensive measure of the value of the Company. Since the Companyexpects these items to affect future results and, in general, they donot require any additional future performance obligation on theCompany's part, ABV provides an indication of the Company's value inthe absence of any new business activity. ABV is not a substitute forGAAP book value but does provide investors with additional informationwhen viewed in conjunction with GAAP book value.
MBIA INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------

(dollars in thousands)

December December
31, 2005 31, 2004
----------- ------------
Assets
------
Investments:
Fixed-maturity securities held as available-
for-sale, at fair value (amortized cost
$23,189,684 and $18,802,894) $23,747,204 $19,679,905
Investments held-to-maturity, at amortized
cost (fair value $5,255,724 and $7,535,787) 5,286,571 7,540,218
Investment agreement portfolio pledged as
collateral, at fair value (amortized cost
$712,054 and $713,704) 729,072 730,870
Short-term investments, at amortized cost
(which approximates fair value) 1,678,281 2,405,192
Other investments 234,927 261,865
----------- -----------
Total investments 31,676,055 30,618,050

Cash and cash equivalents 233,046 366,236
Accrued investment income 396,048 312,208
Deferred acquisition costs 427,111 406,035
Prepaid reinsurance premiums 407,614 434,968
Reinsurance recoverable on unpaid losses 58,965 34,610
Goodwill 79,406 79,406
Property and equipment (net of accumulated
depreciation) 109,275 114,692
Receivable for investments sold 74,787 67,205
Derivative assets 326,867 288,564
Other assets 293,609 314,321
----------- -----------
Total assets $34,082,783 $33,036,295
=========== ===========

Liabilities and Shareholders' Equity
------------------------------------
Liabilities:
Deferred premium revenue $ 3,185,200 $ 3,211,181
Loss and loss adjustment expense reserves 721,502 748,869
Investment agreements 10,806,277 8,678,768
Commercial paper 859,997 2,598,655
Medium-term notes 7,542,416 6,943,840
Variable interest entity floating rate notes 801,549 600,505
Securities sold under agreements to
repurchase 646,343 647,104
Short-term debt 58,745 58,745
Long-term debt 1,210,405 1,332,540
Deferred income taxes, net 569,536 599,627
Deferred fee revenue 20,379 26,780
Payable for investments purchased 83,369 94,609
Derivative liabilities 384,611 527,455
Other liabilities 600,810 408,820
----------- -----------
Total liabilities 27,491,139 26,477,498

Shareholders' Equity:
Common stock 156,602 155,608
Additional paid-in capital 1,479,447 1,410,799
Retained earnings 5,747,171 5,187,484
Accumulated other comprehensive income 399,381 618,606
Unearned compensation - restricted stock (43,857) (34,686)
Treasury stock (1,147,100) (779,014)
----------- -----------
Total shareholders' equity 6,591,644 6,558,797

Total liabilities and shareholders' equity $34,082,783 $33,036,295
=========== ===========

MBIA INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------

(dollars in thousands except per share amounts)

Three Months Ended Years Ended
December 31 December 31
---------------------- -----------------------
2005 2004 2005 2004
---- ---- ---- ----
Insurance operations
Revenues:
Gross premiums
written $ 232,354 $ 283,704 $ 984,908 $1,116,915
Ceded premiums (28,751) (51,491) (127,107) (158,831)
----------- ----------- ----------- -----------
Net premiums written 203,603 232,213 857,801 958,084

Scheduled premiums
earned 174,320 180,529 702,284 706,286
Refunding premiums
earned 40,120 29,899 140,458 143,384
----------- ----------- ----------- -----------
Premiums earned 214,440 210,428 842,742 849,670

Net investment income 129,274 120,355 491,857 474,415
Advisory fees 8,067 12,328 28,235 41,539
Net realized gains
(losses) (1,756) 46,062 (8,075) 108,874
Net gains (losses) on
derivative instruments
and foreign exchange (4,851) 3,460 (4,436) 6,627
----------- ----------- ----------- -----------
Total insurance
revenues 345,174 392,633 1,350,323 1,481,125

Expenses:
Losses and loss
adjustment 20,919 21,663 84,274 84,753
Amortization of
deferred acquisition
costs 16,941 16,917 66,577 66,412
Operating 39,962 34,275 143,378 122,309
----------- ----------- ----------- -----------
Total insurance
expenses 77,822 72,855 294,229 273,474

Insurance income 267,352 319,778 1,056,094 1,207,651
----------- ----------- ----------- -----------

Investment management
services

Revenues 247,705 161,887 866,154 551,926
Net realized gains
(losses) (1,616) (1,555) 1,384 (4,120)
Net gains (losses) on
derivative instruments
and foreign exchange 925 4,703 42,558 (9,670)
----------- ----------- ----------- -----------
Total investment
management services
revenues 247,014 165,035 910,096 538,136

Interest expense 204,361 123,711 705,340 413,615
Expenses 22,386 19,948 74,194 76,912
----------- ----------- ----------- -----------
Total investment
management services
expenses 226,747 143,659 779,534 490,527
----------- ----------- ----------- -----------
Investment management
services income 20,267 21,376 130,562 47,609
----------- ----------- ----------- -----------

Municipal services
Revenues 7,843 7,637 24,388 27,593
Net realized gains
(losses) (51) 9 (187) (81)
Net gains (losses)
on derivative
instruments and
foreign exchange 30 (279) 230 (279)
----------- ----------- ----------- -----------
Total municipal
services revenues 7,822 7,367 24,431 27,233
Expenses 6,482 6,636 22,316 25,649
----------- ----------- ----------- -----------
Municipal services
income 1,340 731 2,115 1,584
----------- ----------- ----------- -----------

Corporate
Net investment income (468) 1,935 16,646 8,446
Net realized gains
(losses) 312 (281) (989) (467)
Interest expense 24,858 21,308 90,999 74,651
Corporate expenses 5,011 3,445 97,481 17,579
----------- ----------- ----------- -----------
Corporate loss (30,025) (23,099) (172,823) (84,251)
----------- ----------- ----------- -----------

Income from continuing
operations before
income taxes 258,934 318,786 1,015,948 1,172,593

Provision for income
taxes 76,213 91,917 303,869 332,123
----------- ----------- ----------- -----------

Income from continuing
operations 182,721 226,869 712,079 840,470

Income (loss) from
discontinued
operations, net of tax -- (121) (1,093) (602)
Gain on sale of
discontinued
operations, net of tax -- -- -- 3,178
----------- ----------- ----------- -----------
Income (loss) from
discontinued
operations -- (121) (1,093) 2,576

Net income $ 182,721 $ 226,748 $ 710,986 $ 843,046
=========== =========== =========== ===========

Net income per common
share:
Basic $ 1.38 $ 1.63 $ 5.30 $ 5.94
Diluted $ 1.34 $ 1.60 $ 5.18 $ 5.82

Weighted-average common
shares outstanding:
Basic 132,640,767 139,007,629 134,098,392 141,861,225
Diluted 135,871,235 141,926,243 137,220,731 144,799,513


MBIA INC. AND SUBSIDIARIES

Reconciliation of Adjusted Direct Premiums to Gross Premiums Written
--------------------------------------------------------------------

(dollars in millions)

Three Months Ended Years Ended
December 31 December 31
------------------ ---------------
2005 2004 2005 2004
---- ---- ---- ----

Adjusted direct premiums (1) $ 221.4 $ 383.9 $1,101.2 $1,146.1

Adjusted premiums assumed 5.0 --- 6.7 (2.9)

------- ------- -------- ---------
Adjusted gross premiums 226.4 383.9 1,107.9 1,143.2

Present value of estimated future
installment premiums (2) (108.5) (238.2) (633.4) (632.2)
------- ------- -------- ---------
Gross upfront premiums written 117.9 145.7 474.5 511.0

Gross installment premiums
received 114.5 138.0 510.4 605.9
------- ------- -------- ---------
Gross premiums written $ 232.4 $ 283.7 $ 984.9 $1,116.9
======= ======= ======== ========

(1) A non-GAAP measure.
(2) At December 31, 2005 and December 31, 2004 the discount rate was
5.0% and 4.8%, respectively.


Components of Net Income per Share (1)
--------------------------------------

Three Months Ended Years Ended
December 31 December 31
------------------- -------------
2005 2004 2005 2004
---- ---- ---- ----

Net income $ 1.34 $ 1.60 $ 5.18 $ 5.82

Income (loss) from discontinued
operations --- 0.00 (0.01) 0.02
------- ------- ------- -------
Net income from continuing
operations 1.34 1.60 5.19 5.80

Penalties and disgorgement --- --- (0.52) ---

Net realized gains (losses) (0.01) 0.20 (0.04) 0.47

Net gains (losses) on derivative
instrument and foreign exchange (0.02) 0.04 0.18 (0.01)
------- ------- ------- -------

Operating income (2) $ 1.38 $ 1.36 $ 5.57 $ 5.35
======= ======= ======= =======

(1) May not add due to rounding.
(2) A non-GAAP measure.

MBIA INC. AND SUBSIDIARIES

Components of Adjusted Book Value per Share
-------------------------------------------

December 31, December 31,
2005 2004
---------------- ----------------
Book value $ 49.17 $ 47.05
After-tax value of:
Deferred premium revenue 15.45 14.97
Prepaid reinsurance premiums (1.98) (2.03)
Deferred acquisition costs (2.07) (1.89)
------ ------
Net deferred premium revenue 11.40 11.05
Present value of installment
premiums (1) 10.53 10.12
Asset/liability products adjustment 2.40 0.88
Loss provision (2) (2.88) (2.76)
-------- ---------
Adjusted book value (3) $ 70.62 $ 66.34
======== ========

(1) At December 31, 2005 and December 31, 2004 the discount rate was
5.0% and 4.8%, respectively.
(2) The loss provision is calculated by applying 12% to the following
items on an after-tax basis: (a) deferred premium revenue; (b)
prepaid reinsurance premiums; and, (c) the present value of
installment premiums.
(3) A non-GAAP measure.

CONSOLIDATED INSURANCE OPERATIONS

Selected Financial Data Computed on a Statutory Basis
-----------------------------------------------------
(dollars in millions)

December December
31, 2005 31, 2004
----------- -----------

Capital and surplus $ 3,800.4 $ 3,280.3
Contingency reserve 2,769.0 2,705.1
---------- ----------

Capital base 6,569.4 5,985.4

Unearned premium reserve 3,508.1 3,390.9
Present value of installment premiums (1) 2,171.1 2,170.2
---------- ----------

Premium resources 5,679.2 5,561.1

Loss and loss adjustment expense reserves 317.8 271.6
Soft capital credit facilities 850.0 1,100.0
---------- ----------

Total claims-paying resources $ 13,416.4 $ 12,918.1
========== ==========


Net debt service outstanding $889,018.9 $890,222.1

Capital ratio (2) 135:1 149:1

Claims-paying ratio (3) 78:1 81:1

(1) At December 31, 2005 and December 31, 2 004 the discount rate was
5.0% and 4.8%, respectively.
(2) Net debt service outstanding divided by the capital base.
(3) Net debt service outstanding divided by the sum of the capital
base, unearned premium reserve (after-tax), present value of
installment premiums (after-tax), loss and loss adjustment expense
reserves and soft capital credit facilities.