MBIA : Q1 2024 Operating Supplement

MBIA Inc. and Subsidiaries

Quarterly Operating Supplement

March 31, 2024

First Quarter 2024

MBIA Inc. and Subsidiaries
Quarterly Operating Supplement(1)
Safe Harbor Disclosure	1
MBIA Inc. (Consolidated)
Consolidated Balance Sheets	3
Consolidated Statements of Operations	4
Adjusted Net Income (Loss) Reconciliation	5
Book Value Adjustments Per Share	5
National Public Finance Guarantee Corporation
GAAP Balance Sheets	7
GAAP Statements of Operations	8
GAAP Amortization of Gross Par, Gross Debt Service, Gross Unearned Premium and Net Cash Premiums Collected and Expected	9
Statutory Balance Sheets Summary	9
Claims-Paying Resources	9
Investment Portfolio Including Cash and Cash Equivalents	10
Insured Portfolio Profile by Geography and by Bond Type	11
Insured Portfolio - 25 Largest Credits	12
Credit Quality Distribution, Top 10 Below Investment Grade (BIG) Credits	13
MBIA Insurance Corporation
Statutory Balance Sheets	15
Statutory Statements of Income	16
Statutory Amortization of Gross Par, Gross Debt Service, Net Unearned Premium and Future Premiums	17
Claims-Paying Resources	17
Investment Portfolio Including Cash and Cash Equivalents	18
Insured Portfolio Profile Par Value by Bond Type, Par Value by Geography	19
Top 10 Below Investment Grade (BIG) Credits	20
MBIA Inc. (Parent Company)
Corporate Segment Balance Sheets	22
Glossary	23

(1) This report is unaudited.

Safe Harbor Disclosure

This Operating Supplement of MBIA Inc., together with its consolidated subsidiaries, (collectively, "MBIA", the "Company", "we", "us" or "our") includes statements that are not historical or current facts and are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The words "believe", "anticipate", "project", "plan", "expect", "estimate", "intend", "will likely result", "looking forward", or "will continue" and similar expressions identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. MBIA cautions readers not to place undue reliance on any such forward-looking statements, which speak only to their respective dates. We undertake no obligation to publicly correct or update any forward-looking statement if the Company later becomes aware that such result is not likely to be achieved.

The following are some of the general factors that could affect financial performance or could cause actual results to differ materially from estimates contained in or underlying the Company's forward-looking statements:

• increased credit losses or impairments on public finance obligations that National Public Finance Guarantee Corporation ("National") insures issued by state, local and territorial governments and finance authorities and other providers of public services, located in the U.S. or abroad, that are experiencing fiscal stress;
• the possibility that loss reserve estimates are not adequate to cover potential claims;
• a disruption in the cash flow from National or an inability to access the capital markets and our exposure to significant fluctuations in liquidity and asset values in the global credit markets as a result of collateral posting requirements;
• our ability to fully implement our strategic plan;
• the possibility that MBIA Insurance Corporation will have inadequate liquidity or resources to timely pay claims as a result of higher than expected losses on certain insured transactions or as a result of a delay or failure in collecting expected recoveries, which could lead the New York State Department of Financial Services ("NYSDFS") to put MBIA Insurance Corporation into a rehabilitation or liquidation proceeding under Article 74 of the New York Insurance Law and/or take such other actions as the NYSDFS may deem necessary to protect the interests of MBIA Insurance Corporation's policyholders;
• deterioration in the economic environment and financial markets in the United States or abroad, real estate market performance, credit spreads, interest rates and foreign currency levels; and
• the effects of changes to governmental regulation, including insurance laws, securities laws, tax laws, legal precedents and accounting rules.

The above factors provide a summary of and are qualified in their entirety by the risk factors discussed under "Risk Factors" in Part II, Other Information, Item 1A included in Quarterly Report on Form 10-Q. The Company encourages readers to review these risk factors in their entirety.

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MBIA Inc. (Consolidated)

MBIA Inc. and Subsidiaries

Consolidated Balance Sheets

(in millions except share and per share amounts)

		March 31, 2024			December 31, 2023
Assets
Investments:
Fixed-maturity securities held as available-for-sale, at fair value (amortized cost $1,186 and $1,175)	$	1,040	$	1,043
Investments carried at fair value		321			337
Short-term investments, at fair value (amortized cost $442 and $548)		442			548
Other investments at amortized cost		3			3
Total investments		1,806			1,931
Cash and cash equivalents		131			104
Premiums receivable (net of allowance for credit losses of $- and $- )		145			146
Deferred acquisition costs		30			31
Insurance loss recoverable		179			183
Assets held for sale		74			73
Other assets		57			76
Assets of consolidated variable interest entities:
Cash		6			3
Investments carried at fair value		22			22
Loans receivable at fair value		36			35
Other assets		2			2
Total assets	$	2,488	$	2,606
Liabilities and Equity
Liabilities:
Unearned premium revenue	$	224	$	232
Loss and loss adjustment expense reserves		470			473
Long-term debt		2,625			2,585
Medium-term notes (includes financial instruments carried at fair value of $36 and $40)		457			497
Investment agreements		220			221
Liabilities held for sale		64			64
Other liabilities		85			86
Liabilities of consolidated variable interest entities:
Variable interest entity debt (includes financial instruments carried at fair value of $46 and $78)		51			81
Derivative liabilities		15			14
Total liabilities		4,211			4,253
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--283,186,115 and
283,186,115		283			283
Additional paid-in capital		2,486			2,515
Retained earnings (deficit)		(1,230)			(1,144)
Accumulated other comprehensive income (loss), net of tax of $7 and $7		(131)			(139)
Treasury stock, at cost--231,910,363 and 232,323,184 shares		(3,141)			(3,172)
Total shareholders' equity of MBIA Inc.		(1,733)			(1,657)
Preferred stock of subsidiary and noncontrolling interest held for sale		10			10
Total equity		(1,723)			(1,647)
Total liabilities and equity	$	2,488	$	2,606

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MBIA Inc. and Subsidiaries

Consolidated Statements of Operations

(in millions except share and per share amounts)

		Three Months Ended March 31,
		2024			2023
Revenues:
Total premiums earned (net of ceded premiums of $- and $-)	$	9	$	10
Net investment income		23			26
Net realized investment gains (losses)		(1)			(3)
Net gains (losses) on financial instruments at fair value and
foreign exchange		4			(13)
Net gains (losses) on extinguishment of debt		1			-
Other net realized gains (losses)		2			-
Revenues of consolidated variable interest entities:
Net gains (losses) on financial instruments at fair value and
foreign exchange		(25)			(3)
Other net realized gains (losses)		-			(15)
Total revenues		13			2
Expenses:
Losses and loss adjustment		18			6
Amortization of deferred acquisition costs		1			2
Operating		25			22
Interest		52			51
Expenses of consolidated variable interest entities:
Operating		4			4
Total expenses		100			85
Income (loss) from continuing operations before income taxes		(87)			(83)
Provision (benefit) for income taxes		-			-
Income (loss) from continuing operations		(87)			(83)
Income (loss) from discontinued operations, net of income taxes		1			(3)
Net income (loss)		(86)			(86)
Less: Net income (loss) from discontinued operations attributable to
noncontrolling interest		-			7
Net income (loss) attributable to MBIA Inc.	$	(86)	$	(93)
Net income (loss) per common share attributable to MBIA Inc. - basic and
diluted:
Continuing operations	$	(1.88)	$	(1.67)
Discontinued operations		0.04			(0.19)
Net income (loss) per common share attributable to MBIA Inc. - basic and
diluted	$	(1.84)	$	(1.86)
Weighted average number of common shares outstanding:
Basic		46,820,922			49,945,917
Diluted		46,820,922			49,945,917

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MBIA Inc. and Subsidiaries

Adjusted Net Income (Loss) Reconciliation (Non-GAAP Basis) (1) (2)

(in millions except per share amounts)

		Three Months Ended
			March 31,
	2024				2023
Net income (loss)
$		(86)	$		(93)
Less: Adjusted Net Income (Loss) Adjustments
Net Income (loss) from discontinued operations, net of
noncontrolling interest			1			(10)
Income (loss) before income taxes of our international and
structured finance insurance segment and eliminations			(69)			(69)
Adjustments before income taxes (3):
Mark-to-market gains (losses) on financial instruments (4)			3			(7)
Foreign exchange gains (losses) (4)			3			(3)
Net realized investment gains (losses)			(1)			(3)
Net gains (losses) on extinguishment of debt			1			-
Adjusted net income adjustment for income taxes			-			-
Adjusted Net Income (loss)	$		(24)	$		(1)
Adjusted Net Income (loss) per diluted common share	$		(0.52)	$		(0.03)
Diluted Weighted Average Shares Outstanding			46.8			49.9

1. A non-GAAP measure. Please see glossary for an explanation of Adjusted Net Income (Loss).
2. Totals may not add due to rounding.
3. Adjustments exclude the International and Structured Finance Insurance segment and eliminations.
4. Reported within "Net gains (losses) on financial instruments at fair value and foreign exchange" on the Company's consolidated statements of operations.

MBIA Inc.

Book Value Adjustments Per Share (1)

		3/31/2024		12/31/2023
Book Value Per Share	$	(33.80)	$	(32.56)
Management's book value per share adjustments:
Remove negative book value of MBIA Corp. (2)		(45.44)		(44.91)
Remove net unrealized gains (losses) on available-for-sale securities included in other
comprehensive income (loss)		(2.71)		(2.40)
Include net unearned premium revenue in excess of expected losses (3) (4)		2.74		2.91
Shares outstanding in millions		51.3		50.9

1. Please see glossary for an explanation of book value adjustments.
2. The book value of MBIA Corp. does not provide significant economic or shareholder value to MBIA Inc.
3. The discount rate on financial guarantee installment premiums was the risk-free rate as defined by GAAP for financial guarantee insurance contracts.
4. The amounts consist of financial guarantee premiums in excess of expected losses, net of the related deferred acquisition costs.

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National Public Finance Guarantee Corporation

National Public Finance Guarantee Corporation

GAAP Balance Sheets

(in millions except share and per share amounts)

		March 31, 2024		December 31, 2023
Assets
Investments:
Fixed-maturity securities held as available-for-sale, at fair value (amortized cost $1,207 and $1,191)	$	1,072	$	1,069
Investments carried at fair value		161			164
Investments pledged as collateral, at fair value (amortized cost $38 and $38)		32			32
Short-term investments at fair value (amortized cost $32 and $34)		32			34
Total investments		1,297			1,299
Cash and cash equivalents		20			39
Securities purchased under agreements to resell		32			32
Premiums receivable		116			116
Deferred acquisition costs		57			59
Insurance loss recoverable		150			152
Other assets		48			45
Total assets	$	1,720		$	1,742
Liabilities and Equity
Liabilities:
Unearned premium revenue	$	205	$	211
Loss and loss adjustment expense reserves		234			230
Securities sold under agreements to repurchase		32			32
Payable for investments purchased		4			-
Other liabilities		22			23
Total liabilities		497			496
Equity:
Common stock, par value $30 per share; authorized, issued and outstanding shares - 500,000		15			15
Additional paid-in capital		1,641			1,641
Retained earnings		(304)			(295)
Accumulated other comprehensive income (loss), net of tax of $12 and $12		(129)			(115)
Total equity		1,223			1,246
Total liabilities and equity	$	1,720		$	1,742

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National Public Finance Guarantee Corporation

GAAP Statements of Operations

(in millions)

	Three Months Ended March 31,
Revenues:	2024		2023
Total premiums earned	$	7	$	7
Net investment income		18			23
Net realized investment gains (losses)		(1)			(2)
Net gains (losses) on financial instruments at fair value and
foreign exchange		1			2
Fees and reimbursements		1			1
Total revenues		26			31
Expenses:
Losses and loss adjustment		22			-
Amortization of deferred acquisition costs		2			2
Operating		11			12
Total expenses		35			14
Income (loss) before income taxes		(9)			17
Provision (benefit) for income taxes		-			-
Net income (loss)	$	(9)	$	17

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