MBIA Inc. (NYSE:MBI) Q4 2023 Earnings Conference Call February 29, 2024 8:00 AM ET Company Participants Greg Diamond - Managing Director, Investor and Media Relations William Fallon - CEO Anthony McKiernan - CFO Conference Call Participants Thomas McJoynt - KBW John Stanley - Stanley Capital Advisors Paul Saunders - Hutch Capital Operator Welcome to the MBIA Inc. Fourth Quarter and Full Year 2023 Financial Results Conference Call. I would now like to turn the call over to Greg Diamond, Managing Director of ...

MBIA (MBI) came out with a quarterly loss of $0.16 per share versus the Zacks Consensus Estimate of $0.04. This compares to earnings of $0.30 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -500%. A quarter ago, it was expected that this insurance and reinsurance company would post a loss of $0.05 per share when it actually produced a loss of $2.92, delivering a surprise of -5,740%.Over the last four quarters, the company has ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 28, 2024 MBIA Inc. (Exact name of Registrant as Specified in Its Charter) Connecticut 001-09583 06-1185706 (State or Other Jurisdiction (Commission File Number) (IRS Employer of Incorporation) Identification No .) 1 Manhattanville Road Suite 301 Purchase, New York 10577 (Address of Pri ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-09583 MBIA INC. (Exact name of registrant as specified in its charter) Connecticut 06-1185706 (State of incorporation) (I.R.S. Employer Identifi ...

PURCHASE, N.Y.--(BUSINESS WIRE)--MBIA Inc. (NYSE:MBI) will host a webcast and conference call for investors on Thursday, February 29 at 8:00 a.m. (ET) to discuss its fourth quarter and full year 2023 financial results and other issues related to the Company. The dial-in number for the call is 800-245-3047 in the U.S. and 203-518-9765 from outside the U.S. The conference call code is MBIAQ423. A live webcast of the conference call will also be accessible on www.mbia.com. The conference call will consist of ...

MBIA Inc. (NYSE:MBI) Q3 2023 Earnings Conference Call November 3, 2023 8:00 AM ET Company Participants Greg Diamond - Managing Director, Investor and Media Relations Bill Fallon - CEO Anthony McKiernan - CFO Conference Call Participants Tommy McJoynt - KBW John Staley - Staley Capital Advisers Giuliano Bologna - Compass Point Geoffrey Dunn - Dowling & Partners Operator Welcome to the MBIA Inc. Third Quarter 2023 Financial Results Conference Call. I would now like to turn the call over to Greg Diamond, Manag ...

Table of Contents United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-9583 MBIA INC. (Exact name of registrant as specified in its charter) Connecticut (State or other jurisdiction of inco ...

Financial Data and Key Metrics Changes - The company reported a consolidated GAAP net loss of $74 million or a negative $1.46 per share for Q2 2023, compared to a net loss of $36 million or negative $0.72 per share for Q2 2022, indicating a significant increase in losses [8][11] - The adjusted net loss, a non-GAAP measure, was $22 million or a negative $0.45 per diluted share for Q2 2023, compared to an adjusted net loss of $47 million or a negative $0.93 per diluted share for Q2 2022, showing improvement [9][10] - Book value per share decreased to a negative $19.21 as of June 30, 2023, from a negative $16.07 as of December 31, 2022, primarily due to net losses and share repurchases [11] Business Line Data and Key Metrics Changes - National reported a statutory net loss of $11 million for Q2 2023, an improvement from a statutory net loss of $44 million for Q2 2022, attributed to lower loss in LAE and higher investment income [12][13] - The gross par outstanding for MBIA Corp. reduced by approximately $130 million during the quarter, totaling $3.2 billion as of June 30, 2023 [14] Market Data and Key Metrics Changes - National's outstanding gross par declined by approximately $1.2 billion from year-end 2022 to $30.5 billion as of June 30, 2023, indicating a continued run-off of its insured portfolio [6] Company Strategy and Development Direction - The company is focused on resolving its last material exposure to the Commonwealth of Puerto Rico, specifically the Puerto Rico Electric Power Authority (PREPA), while also reducing expenses and repurchasing shares [5][6] - A $100 million share repurchase authorization was approved, with 3 million shares repurchased at an average price of $8.08 per share, reducing the outstanding share count to 51.9 million [5] Management's Comments on Operating Environment and Future Outlook - Management expressed hope for a timely resolution regarding PREPA, with ongoing efforts to monitor the run-off of insurance portfolios and deliver shareholder value [5][6] - The company remains cautious about the operating environment, emphasizing the importance of maintaining liquidity and managing capital effectively [30] Other Important Information - National's leverage ratio of gross par to statutory capital remained unchanged at 16:1 as of June 30, 2023, with total claims paying resources of $2.4 billion and statutory capital in surplus of $1.9 billion [7] Q&A Session Summary Question: What is National's statutory capacity for buybacks as of June 30? - National had about $50 million of capacity left to purchase shares [15] Question: What happens to the shares that National has repurchased if it is sold? - Most likely, those shares would be retired and sent to the holding company [18] Question: Was National's provision attributed to PREPA driven by time value of money or lower expected recoveries? - It was a combination of both factors, including delays and potential risks [20] Question: Can you provide an update on the state of play for National regarding PREPA? - The current deadline for filing a plan is tomorrow, with ongoing focus on the existing PSA [22] Question: How do you view the better use of capital in terms of stock versus bonds? - The company is focused on near-term liquidity and obligations, prioritizing bond repurchases that align with their liquidity profile [34]

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section provides the company's consolidated financial statements, management's discussion and analysis, and disclosures on market risks and internal controls [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents MBIA Inc.'s unaudited consolidated financial statements, including balance sheets, statements of operations, and cash flows, with detailed notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet shows a decrease in total assets from $3.375 billion at year-end 2022 to $3.257 billion as of June 30, 2023, with total liabilities stable and shareholders' equity becoming more negative Consolidated Balance Sheet Summary (in millions) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$3,257** | **$3,375** | | Total Investments | $2,445 | $2,676 | | Cash and cash equivalents | $208 | $50 | | **Total Liabilities** | **$4,245** | **$4,251** | | Long-term debt | $2,505 | $2,428 | | Loss and loss adjustment expense reserves | $361 | $439 | | **Total Shareholders' Equity** | **($1,000)** | **($882)** | [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported an increased net loss attributable to MBIA Inc. for Q2 and H1 2023 compared to the prior year, driven by lower revenues and higher expenses Consolidated Statement of Operations Summary (in millions, except per share data) | Metric | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $28 | $40 | $30 | $80 | | Total Expenses | $106 | $76 | $191 | $189 | | Net Income (Loss) Attributable to MBIA Inc. | ($74) | ($36) | ($167) | ($109) | | Net Income (Loss) per Share (Basic & Diluted) | ($1.46) | ($0.72) | ($3.51) | ($2.20) | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash used by operating activities significantly shifted to ($78) million for the six months ended June 30, 2023, from $232 million provided in the prior year, primarily due to lower recoveries and reinsurance Consolidated Cash Flow Summary (in millions) | Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net Cash (Used) Provided by Operating Activities | ($78) | $232 | | Net Cash Provided (Used) by Investing Activities | $314 | ($12) | | Net Cash Provided (Used) by Financing Activities | ($88) | ($172) | | **Net Increase (Decrease) in Cash** | **$148** | **$47** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial results, covering business developments, loss reserves, fair value measurements, segment performance, and litigation - The company operates in **three segments**: U.S. public finance insurance (through National), corporate, and international and structured finance insurance (through MBIA Corp)[28](index=28&type=chunk) - On January 1, 2023, the Puerto Rico Electric Power Authority (PREPA) defaulted on National insured bonds, leading to a gross claim payment of **$18 million**, with a further **$119 million** claim payment on July 1, 2023[29](index=29&type=chunk) - National entered into a PREPA Plan Support Agreement (PSA) with the Oversight Board in January 2023 to resolve claims related to PREPA revenue bonds, subject to court approval and other conditions[30](index=30&type=chunk) - The company has a full valuation allowance of **$1.2 billion** against its net deferred tax asset as of June 30, 2023, resulting in a **0.0%** effective tax rate for the period[199](index=199&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=47&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, liquidity, and capital resources, covering consolidated and segment results [Overview](index=47&type=section&id=MD%26A%20Overview) The company manages three segments, suspended strategic alternative exploration in May 2023, and initiated a new $100 million share repurchase program amid PREPA defaults - The company suspended its process of exploring strategic alternatives in **May 2023** due to market conditions[240](index=240&type=chunk) - The Board of Directors approved a new **$100 million** share repurchase program on **May 3, 2023**, with National purchasing **2.9 million** shares for an average price of **$8.06** per share during the first six months of 2023[246](index=246&type=chunk) [Results of Operations](index=49&type=section&id=MD%26A%20Results%20of%20Operations) Consolidated net loss increased in Q2 and H1 2023 due to lower revenues and higher expenses, with varying segment performance and the presentation of non-GAAP measures Reconciliation of GAAP Net Income (Loss) to Non-GAAP Adjusted Net Income (Loss) (in millions) | Description | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net Income (Loss) (GAAP)** | **($74)** | **($36)** | **($167)** | **($109)** | | Less: Adjustments | (52) | (11) | (144) | (34) | | **Adjusted Net Income (Loss) (Non-GAAP)** | **($22)** | **($47)** | **($23)** | **($143)** | Book Value Per Share Adjustments (in dollars) | Description | As of June 30, 2023 | As of Dec 31, 2022 | | :--- | :--- | :--- | | **GAAP Book Value Per Share** | **($19.21)** | **($16.07)** | | Remove negative book value per share of MBIA Corp. | ($41.88) | ($37.76) | | Remove net unrealized gains (losses) on AFS securities | ($3.43) | ($3.96) | | Include net unearned premium revenue in excess of expected losses | $3.06 | $3.08 | [Liquidity and Capital Resources](index=63&type=section&id=MD%26A%20Liquidity%20and%20Capital%20Resources) The company manages liquidity on a legal-entity basis, with capital resources including equity and debt, and statutory capital details for segments - As of June 30, 2023, MBIA Inc. had a liquidity position of **$197 million**, down from **$230 million** at year-end 2022[365](index=365&type=chunk) - National's Claims-Paying Resources (CPR) on a statutory basis were **$2.39 billion** as of June 30, 2023, down from **$2.44 billion** at year-end 2022[387](index=387&type=chunk) - MBIA Corp.'s Claims-Paying Resources (CPR) on a statutory basis were **$561 million** as of June 30, 2023, down from **$669 million** at year-end 2022[398](index=398&type=chunk)[395](index=395&type=chunk) - The NYSDFS has not approved interest payments on MBIA Corp.'s Surplus Notes since **January 2013**, with unpaid interest totaling **$1.3 billion** as of July 15, 2023[391](index=391&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=70&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposures are interest rate, foreign exchange, and credit spread risks, with no material changes since December 31, 2022 - The company's main market risks are interest rate, foreign exchange, and credit spread risk, which affect the value of its investment portfolio and other financial instruments[399](index=399&type=chunk) - There were no material changes in market risk exposures since **December 31, 2022**[399](index=399&type=chunk) [Item 4. Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) The company concluded that its disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[400](index=400&type=chunk) [PART II OTHER INFORMATION](index=71&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides disclosures on legal proceedings, updated risk factors, details on equity security sales, and a list of exhibits filed with the report [Item 1. Legal Proceedings](index=71&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending against an adversary complaint filed by the Puerto Rico Oversight Board challenging the liens securing PREPA bonds, with the outcome uncertain - The company is involved in an adversary complaint filed by the Puerto Rico Oversight Board challenging the validity of liens securing PREPA bonds, defending against the action but unable to estimate any potential loss[233](index=233&type=chunk)[235](index=235&type=chunk) [Item 1A. Risk Factors](index=71&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors occurred since the 2022 Annual Report, except for updated details on the fiscal stress of public finance issuers, particularly the ongoing PREPA bankruptcy proceeding - A key risk factor is the fiscal stress of state, local, and territorial governments that have issued public finance obligations insured by the company[404](index=404&type=chunk) - The PREPA bankruptcy proceeding remains a significant risk, with National paying **$18 million** in claims in **January 2023** and **$119 million** in **July 2023** due to PREPA defaults, and the confirmation of a plan of adjustment not assured[407](index=407&type=chunk)[408](index=408&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2023, the company and its subsidiary repurchased 2,986,663 shares at an average price of $8.12, primarily under a new $100 million share repurchase program Share Repurchases - Q2 2023 | Month | Total Shares Purchased | Average Price Paid Per Share (in dollars) | | :--- | :--- | :--- | | April | 79,619 | $10.23 | | May | 1,871,055 | $7.91 | | June | 1,035,989 | $8.33 | | **Total** | **2,986,663** | **$8.12** | - A new share repurchase program was approved on **May 3, 2023**, authorizing up to **$100 million** in purchases, with **$77 million** remaining available as of the end of Q2 2023[410](index=410&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - Exhibits filed include CEO and CFO certifications under Sarbanes-Oxley Sections **302** and **906**[411](index=411&type=chunk) - Interactive Data Files (XBRL) are included as part of the filing[411](index=411&type=chunk)

Financial Data and Key Metrics Changes - The company reported a consolidated GAAP net loss of $93 million or negative $1.86 per share for Q1 2023, compared to a net loss of $73 million or negative $1.48 per share for Q1 2022, indicating a deterioration in financial performance [8] - The adjusted net loss was $1 million or negative $0.03 per diluted share for Q1 2023, an improvement from an adjusted net loss of $96 million or negative $1.94 per diluted share for Q1 2022, primarily due to lower loss in loss adjustment expenses (LAE) at National [9][10] - Book value per share decreased to negative $16.57 as of March 31, 2023, from negative $16.07 as of December 31, 2022, mainly due to the net loss for the year [10] Business Line Data and Key Metrics Changes - National reported statutory net income of $11 million for Q1 2023, down from $104 million in Q1 2022, primarily due to a large loss in LAE benefit in Q1 2022 compared to a modest loss in Q1 2023 [11] - MBIA Insurance Corp. had a statutory net loss of $20 million for Q1 2023, compared to a loss of $14 million in Q1 2022, driven by increased LAE expense [13] Market Data and Key Metrics Changes - National's remaining exposure to Puerto Rico's PREPA is $710 million of gross par insured as of March 31, 2023, with the insured portfolio running off as gross par declined by $600 million from year-end 2022 to $31 billion [6][7] - Total claims paying resources for National were $2.4 billion, with statutory capital and surplus at $1.9 billion as of March 31, 2023 [12] Company Strategy and Development Direction - The company has suspended the exploration of strategic alternatives due to volatile market conditions and feedback from potential suitors, focusing instead on finalizing PREPA remediation and seeking cost reductions [5] - A new $100 million share repurchase authorization has been approved, which can be utilized by MBIA Inc. and/or National [5] Management Comments on Operating Environment and Future Outlook - Management indicated that the macroeconomic environment, including tighter credit conditions, influenced the decision to suspend strategic alternatives, but they remain optimistic about restarting the process in the near future [16][23] - The finalization of PREPA is seen as a critical step that could eliminate uncertainty and potentially attract interest from prospective buyers [23][25] Other Important Information - The company noted that Charlie Rinehart, the Board Chairman, resigned after 15 years of service, highlighting his contributions to MBIA [7] Q&A Session Summary Question: Reasons for suspending strategic alternatives - Management indicated that the primary reason was the overall market conditions rather than stale interest from potential suitors [16] Question: Statutory capacity for National to buy back stock - The capacity for National to buy shares is based on a calculation related to its surplus, approximately 50% of surplus minus common and preferred shares [18] Question: Future strategic plans and potential for reinsurance deals - Management stated they will continue to look for opportunities to enhance shareholder value, including potential reinsurance deals [31] Question: Market conditions affecting prospective buyers - Management acknowledged that both risk aversion and wider spreads are impacting the market, making it difficult to attribute the effects to one factor [28] Question: Capacity for National to conduct buybacks - Management confirmed that National currently has about $50 million of capacity for buybacks, which has increased as share prices have declined [20] Question: True economic book value for buybacks - Management refrained from providing specific numbers on the true economic book value but emphasized diligence in purchasing shares at discounted prices [36][38]