Welcome to the MBIA Incorporated First Quarter 2014 Financial Results Conference Call. (Operator Instructions) Thank you. It’s now my pleasure to turn the call over to Greg Diamond, Managing Director of Investor Relations at MBIA. Please go ahead.

Thank you, Maria. Welcome to MBIA's conference call for our first quarter 2014 financial results. After the market closed yesterday, we posted several items on our website, including our financial results press release, Form 10-Q and the quarterly operating supplement for the first quarter of this year. We also posted the statutory financial statements for MBIA Insurance Corporation and National Public Finance Guarantee Corporation as well as updates to our frequently asked questions and insured portfolio listings. Yesterday’s financial results press release includes the information for accessing the recorded replay of today's call, which would become available approximately one hour after the end of the call. Please note that anything said on today's call is qualified by the information provided in the company's 10-Q, 10-K and other SEC filings, as our company's definitive disclosures are incorporated in these filings. Please read our 2013 10-K and our first quarter 2000 (sic) 10-Q as they contain our most current disclosures about the company and its financial and operating results. The 10-K and 10-Q also contain information that may not be addressed on today's call. The definitions and reconciliations of the non-GAAP terms that will be included in our remarks today may be found in the financial results press release that we issued yesterday afternoon. And now here is our Safe Harbor disclosure statement. Our remarks on this conference call may contain forward-looking statements. Important factors such as general market conditions and the competitive environment could cause actual results to differ materially from those projected in our forward-looking statements. Risk factors are detailed in our 10-K, which is available on our website at mbia.com. The company cautions not to place undue reliance on any such forward-looking statements. The company also undertakes no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such statement is no longer accurate. For our call today, Jay Brown, Bill Fallon and Chuck Chaplin will provide some brief introductory comments. Then Anthony McKiernan will join Jay, Bill and Chuck for the question-and-answer session that will follow. Without further ado, here's Jay.

Thanks, Greg and good morning everyone. Only 70 days have passed since we last spoke in March. But in that time we’ve made significant progress in our efforts to re-enter the domestic public finance market as the largest U.S. muni only bond insurer and in further reducing the potential volatility of our structured finance and international insurance business. The biggest news of the quarter was that National achieved a AA- rating from S&P in March, and then just yesterday, a AA+ rating from Kroll Ratings. As a result, National is now in a strong position to write new policies. However it will be a slow ramp up and I don't expect a material amount of new business for at least two or three quarters. Bill will talk more about what's going on at National in a few minutes. At MBIA Corp. we commuted over $3 billion of CMBS exposure in the first quarter, dramatically reducing the potential volatility of that book of business and saw terminations of note -- of nearly another $3 billion corporate CDOs. That's not new news though as we discussed in the conference call in early March. But we also achieved commutation and terminations later in March that together with contract maturities reduced MBIA Corp.’s insured par outstanding by a total of $10 billion in the first quarter, to about $70 billion as of March 31. Incurred losses as well as paid losses in the quarter reflect the ongoing trend towards greater stability in the MBIA Corp. The keys to MBIA Corp.’s ongoing balance sheet stability and liquidity adequacy will be the collection of recoveries from excess spread and insured mortgage securitizations and the collection of putback recoverables from Credit Suisse for its representation and warranty violations. With the addition of installment premiums, the total from…

Thanks, Jay. As Jay mentioned, National was upgraded to AA minus by S&P in mid-March, which was an extremely important event for us as it opened the door for our reentry into the municipal finance market in a meaningful way. An S&P rating in a AA range is what the market is looking for in order to be considered a serious industry participant on the new business side. As for other agencies, Kroll Ratings initiated ratings coverage of National yesterday with a AA plus stable rating, which is the highest rating currently achievable from them for financial guarantor. The rating underscores the strength of National’s balance sheet and business plan. We’ve been active in marketing National over the past five years, meeting with issuers and fixed income investors, not only to keep them up-to-date but also to keep on top of investor concerns and developments in the marketplace. These efforts have increased in recent months as we readied the company to write new business. We expect to further enhance our marketing and business origination capabilities through select additions to staff in the coming months. We’ve been actively pricing and bidding on transactions since shortly after the S&P upgrade but as of this date, have not issued a new policy. We’re incredibly focused on maintaining the discipline of our underwriting and pricing processes and we will only wrap business that meets our underwriting criteria and has an acceptable expected return on shareholder capital. However I am confident that as the market recognizes the value that National’s wrap adds for issuers and investors, we will start to add new business to our portfolio that will be accretive to our shareholders. That’s supported by our view of the overall market where we’re starting to see signs of greater demand for bond insurance. Although…

Thanks, Bill and good morning everyone. I will make some comments now about our consolidated results and the segments and then provide some information on balance sheet and liquidity positions in our major legal entities. Net income in the first quarter of 2014 was $256 million compared to $164 million in the first quarter of 2013. In last year's first quarter, we had a $61 million loss on insured credit derivatives driven by improving spreads on MBIA Corp. credit default swaps. This year we saw a $469 million net gain in this line, driven by the commutation of the $3 billion of CMBS contract that Jay referred to earlier. The potential for this kind of volatility should be much lower in the future as the remaining portfolio of insured CDS has shrunk significantly. The balance sheet mark-to-market with respect to insured credit default swaps as of March 31, 2014 was $309 million, down from $7.2 billion at its peak in 2008. Another thing to note in our GAAP results is that the observed tax rate is about 37% compared to 24% in last year's first quarter. Last year's first quarter included a reduction in the valuation allowance that we've taken on the tax impact of realized losses and reflected a lower tax liability for our foreign earnings. In this year's first quarter, the rate is slightly above 35% because the expense associated with outstanding warrants is not tax-deductible. We also report a non-GAAP measure adjusted pretax income that treats all of our insurance policies using an insurance accounting model. It avoids the mark-to-market treatment that GAAP requires on insured credit derivatives and unwind the consolidation of certain securitizations which we consolidate as variable interest entities under GAAP. It provides a useful alternative view of our financial results. We had an…

(Operator Instructions) Our first question comes from the line of Brian Charles of RW Research.

I just have a couple questions about your expected losses. I think that you reflect on your supplemental package on page 25. It looks like you broke it out for the first time, there is a table in the middle there that breaks out CDO and other in the two categories for the first time. And between the two, I count 574 million of expected losses, I guess, at the present value, that's down from $924 million. Is that essentially reflecting the commutation activity and CDO terminations that occurred during the first quarter?

Yes.

Yes.

Okay, good enough. And within that, do you have any color on your remaining triple B CMBS exposure? I know you talked about increasing loss estimates by $20 million. But has that $391 million of exposure that you expect to realize some sort of loss on – has that changed from year end?

The 390 at this point is down to approximately 375 as of first quarter.

Okay. Is that a result of loss payments made during the quarter just to get rid of exposure that was expected to lose?

Essentially yes. Yes, claims were presented in the quarter that we paid.

And then finally, you did talk about cash flows at MBIA Corp. between installment premiums, excess spread and putback recoveries totaling about $2.4 billion. I just want to make sure that includes installment premiums coming at the subsidiary level, is that right?

Yes.

Coming in at MBIA Corp. Okay, good. Okay. That's all I have for now. Thank you.

Our next question comes from the line of Brian Cindley from BAM [ph].

Appreciate the additional disclosures this quarter. Question for you, though, I was a little bit confusing on the commutations because obviously on your year-end call you disclosed that the commutations that had occurred after the end of the quarter, I think the math that we’re coming up with, because at that time you said you had commuted just below 6 billion of risk and I believe now you're saying during the quarter you commuted roughly 6.7 billion total. So that would be -- I guess the quick math would be, that’d be an additional 700 million of commutations after the announcement at the end of the year, or for the end of your call, is that accurate?

Yes, basically we had an additional commutation in the month of March but after the year-end call. It was in that order of magnitude.

And was that effectively CMBS?

It was a commutation of a secondary program that contains a variety of asset types.

So there's a disclosure I guess on page 82 where you say you now are -- really have two pools of CMBS that are being monitored -- one that the gentleman before me asked about, where you’re paying out claims on?

Yes.

And I believe that that was four pools as of the 12/31 period, so the reduction of two pools, that relates to those prior commutations or this additional 700 million?

Perfect, that's correct.

Meaning it relates to the prior 6 billion?

Right, we’ve commuted 3 billion in the first quarter that we reported on at year-end which brings – sorry –

I think what you are asking is how many of the pools we were monitoring disappeared after the conference call, and I believe there were two transactions included in that that were part of the 700 million that was commuted.

So it was related to the 700 million?

That’s correct.

And then just trying to connect some dots on Corp., given the existence of the line item that you are carrying for the potential CSFB recovery, if that were to go away for some reason, is that were go to zero, that would be a direct hit to stat capital and further sort of influence some of the dynamics that you describe on page 90 with respect to the surplus notes, is that fair?

It certainly would be a direct hit to statutory surplus.

It would affect obviously [multiple speakers] -- affect any calculation association with surplus notes.

(Operator Instructions) I am showing there are no further questions at this time. I would like to turn the floor back over to Mr. Greg Diamond for any concluding remarks.

Thanks, Maria, and thanks to all of you who have joined us for today's call. Please contact me directly at 914-765-3190 if you have any additional questions. We also recommend that you visit our website at www.mbia.com for additional information on our company. Thank you for your interest in MBIA. Good day and goodbye.

Thank you. This concludes today's MBIA’s first quarter 2014 earnings conference call. You may now disconnect and have a wonderful day.