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, 2019 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 06-1185706 (State or other jurisdict ...

MBIA, Inc. (NYSE:MBI) Q2 2019 Earnings Conference Call August 7, 2019 8:00 AM ET Company Participants Greg Diamond - Managing Director of Investor and Media Relations Bill Fallon - Chief Executive Officer Anthony McKiernan - Chief Financial Officer Conference Call Participants Bose George - KBW Geoff Dunn - Dowling & Partners Giuliano Bologna - BTIG Operator Welcome to the MBIA Inc. Second Quarter 2019 Financial Results Conference call. I would now like to turn the call over to Greg Diamond, Managing Direct ...

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents the company's consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The unaudited consolidated financial statements report a net loss of $170 million for Q2 2019, with total assets increasing to $8.65 billion and shareholders' equity decreasing to $1.04 billion [Note 1: Business Developments and Risks and Uncertainties](index=9&type=section&id=Note%201%3A%20Business%20Developments%20and%20Risks%20and%20Uncertainties) This note details business segments, key developments like Puerto Rico defaults and COFINA Plan, and risks including liquidity and Zohar CDO recoveries - On January 1 and July 1, 2019, Puerto Rico defaulted on scheduled debt service for National insured bonds, resulting in National paying aggregate gross claims of **$393 million**[21](index=21&type=chunk) - In February 2019, the COFINA Plan of Adjustment was confirmed, leading to the creation of National Custodial Trusts which were consolidated as VIEs in Q1 2019[22](index=22&type=chunk) - MBIA Corp.'s ability to meet its obligations is limited by available liquidity. There is a risk that the NYSDFS could place MBIA Insurance Corporation into a rehabilitation or liquidation proceeding if it concludes the company cannot pay its policyholder claims[28](index=28&type=chunk)[32](index=32&type=chunk) - The company faces uncertainty in recovering payments made on Zohar I and Zohar II notes, with primary recovery expected from the monetization of Zohar Assets through a bankruptcy settlement process[29](index=29&type=chunk) [Note 4: Variable Interest Entities](index=13&type=section&id=Note%204%3A%20Variable%20Interest%20Entities) The company consolidates VIEs where it is the primary beneficiary, with $2.3 billion in consolidated VIE assets and liabilities and $6.2 billion maximum exposure for nonconsolidated VIEs - In Q1 2019, the company consolidated seven VIEs related to the COFINA Custodial Trusts, recording a loss of **$42 million** on initial consolidation[52](index=52&type=chunk) Consolidated VIE Assets and Liabilities (in billions) | Date | Carrying Amount of Assets & Liabilities (in billions) | | :--- | :--- | | June 30, 2019 | $2.3 | | December 31, 2018 | $1.7 | Maximum Exposure to Loss for Nonconsolidated VIEs (in millions) | Date | Maximum Exposure to Loss (Insurance in Force, in millions) | | :--- | :--- | | June 30, 2019 | $6,189 | | December 31, 2018 | $7,284 | [Note 5: Loss and Loss Adjustment Expense Reserves](index=16&type=section&id=Note%205%3A%20Loss%20and%20Loss%20Adjustment%20Expense%20Reserves) Loss and LAE reserves increased to $998 million, driven by Puerto Rico and RMBS exposures, with insurance loss recoverable at $1.62 billion Summary of Loss Reserves and Recoveries (in millions) | Category | June 30, 2019 (in millions) | December 31, 2018 (in millions) | | :--- | :--- | :--- | | **Insurance loss recoverable** | **$1,623** | **$1,595** | | U.S. Public Finance | $659 | $571 | | International & Structured Finance | $964 | $1,024 | | **Loss and LAE reserves** | **$998** | **$965** | | U.S. Public Finance | $528 | $551 | | International & Structured Finance | $470 | $414 | - For the six months ended June 30, 2019, loss and LAE reserves increased by a net **$33 million**, driven by a **$135 million** increase from changes in assumptions, partially offset by **$92 million** in loss payments[75](index=75&type=chunk) - Insurance loss recoverable increased by a net **$28 million** in the first six months of 2019, primarily due to anticipated recoveries on claims paid for certain Puerto Rico credits and additional recoveries on insured RMBS transactions[78](index=78&type=chunk) [Note 11: Business Segments](index=50&type=section&id=Note%2011%3A%20Business%20Segments) The company operates in U.S. Public Finance, Corporate, and International/Structured Finance segments, reporting a consolidated pre-tax loss of $207 million for Q2 2019 - The U.S. Public Finance Insurance segment is operated through National Public Finance Guarantee Corporation[202](index=202&type=chunk) - The International and Structured Finance Insurance segment is operated through MBIA Insurance Corporation and has not written any meaningful new business since 2008[206](index=206&type=chunk)[207](index=207&type=chunk) Segment Income (Loss) Before Income Taxes (in millions) | Segment | Three Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2019 (in millions) | | :--- | :--- | :--- | | U.S. Public Finance Insurance | $(46) | $31 | | Corporate | $(52) | $(92) | | International and Structured Finance Insurance | $(109) | $(165) | | **Consolidated Total** | **$(207)** | **$(226)** | Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2019 (in millions) | December 31, 2018 (in millions) | | :--- | :--- | :--- | | **Total Assets** | **$8,647** | **$8,107** | | Total Investments | $3,825 | $4,072 | | Assets of consolidated VIEs | $2,292 | $1,627 | | **Total Liabilities** | **$7,594** | **$6,975** | | Long-term debt | $2,315 | $2,249 | | Liabilities of consolidated VIEs | $2,340 | $1,744 | | **Total Shareholders' Equity** | **$1,040** | **$1,119** | Consolidated Statement of Operations Highlights (in millions, except per share data) | Metric | Three Months Ended June 30, 2019 (in millions) | Three Months Ended June 30, 2018 (in millions) | Six Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2018 (in millions) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | $30 | $12 | $80 | $85 | | **Total Expenses** | $237 | $158 | $306 | $327 | | Losses and loss adjustment | $140 | $59 | $102 | $131 | | **Net Income (Loss)** | **$(170)** | **$(146)** | **$(187)** | **$(244)** | | **Diluted EPS** | **$(2.02)** | **$(1.64)** | **$(2.20)** | **$(2.75)** | Consolidated Statement of Cash Flows Highlights (in millions) | Cash Flow Activity | Six Months Ended June 30, 2019 (in millions) | Six Months Ended June 30, 2018 (in millions) | | :--- | :--- | :--- | | Net cash provided (used) by operating activities | $(57) | $(126) | | Net cash provided (used) by investing activities | $683 | $351 | | Net cash provided (used) by financing activities | $(428) | $(174) | | **Net increase (decrease) in cash** | **$198** | **$51** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=59&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a Q2 2019 consolidated net loss of $170 million, driven by higher insurance losses, particularly from Puerto Rico and RMBS exposures Financial Highlights (in millions, except per share data) | Metric | Three Months Ended June 30, 2019 (in millions) | Three Months Ended June 30, 2018 (in millions) | | :--- | :--- | :--- | | **Net income (loss)** | **$(170)** | **$(146)** | | **Net income (loss) per diluted share** | **$(2.02)** | **$(1.64)** | | **Adjusted net income (loss) (Non-GAAP)** | **$(76)** | **$(51)** | | **Adjusted net income (loss) per diluted share (Non-GAAP)** | **$(0.90)** | **$(0.58)** | - In H1 2019, National paid gross claims of **$393 million** due to defaults by Puerto Rico and its instrumentalities[244](index=244&type=chunk) - The company's GAAP book value per share was **$12.26** as of June 30, 2019, down from **$12.46** at year-end 2018[267](index=267&type=chunk) [U.S. Public Finance Insurance](index=64&type=section&id=U.S.%20Public%20Finance%20Insurance) The U.S. Public Finance segment reported a $46 million pre-tax loss in Q2 2019, driven by increased Puerto Rico-related loss expenses, with $3.0 billion gross par exposure - Loss and loss adjustment expenses increased to **$106 million** in Q2 2019 from **$59 million** in Q2 2018, mainly due to certain Puerto Rico credits[272](index=272&type=chunk)[278](index=278&type=chunk) - As of June 30, 2019, National had **$3.0 billion** of gross insured par outstanding related to Puerto Rico[291](index=291&type=chunk)[440](index=440&type=chunk) - Through June 30, 2019, National has paid aggregate gross claims of **$756 million** related to Puerto Rico defaults. An additional **$328 million** was paid on July 1, 2019[296](index=296&type=chunk) [International and Structured Finance Insurance](index=73&type=section&id=International%20and%20Structured%20Finance%20Insurance) The International and Structured Finance segment reported a $109 million pre-tax loss in Q2 2019, primarily due to RMBS loss expenses and reduced net premiums earned - Loss and loss adjustment expenses were **$34 million** in Q2 2019, primarily from increases in losses on insured first-lien RMBS transactions[335](index=335&type=chunk)[346](index=346&type=chunk) - Net premiums earned decreased **71%** to **$6 million** in Q2 2019 from **$21 million** in Q2 2018, mainly due to the acceleration of premium earnings in 2018 from a policy termination[335](index=335&type=chunk)[338](index=338&type=chunk) Direct RMBS Insured Exposure (Gross Par Outstanding, in millions) | Collateral Type | June 30, 2019 (in millions) | December 31, 2018 (in millions) | | :--- | :--- | :--- | | HELOC Second-lien | $441 | $511 | | CES Second-lien | $153 | $591 | | Alt-A First-lien | $941 | $983 | | Subprime First-lien | $390 | $439 | | **Total** | **$1,938** | **$2,539** | [Capital Resources](index=78&type=section&id=CAPITAL%20RESOURCES) Total capital resources were $2.9 billion, with National's statutory capital at $2.4 billion and MBIA Corp.'s at $499 million, alongside share repurchases and unpaid surplus note interest - During the first six months of 2019, the company repurchased **5.9 million** common shares at an average price of **$9.10** per share[371](index=371&type=chunk)[442](index=442&type=chunk) Statutory Capital and Claims-Paying Resources (CPR) as of June 30, 2019 (in millions) | Entity | Statutory Capital (in millions) | Total CPR (in millions) | | :--- | :--- | :--- | | National | $2,445 | $3,847 | | MBIA Insurance Corp. | $499 | $1,323 | - As of July 15, 2019, there was **$824 million** of unpaid interest on MBIA Insurance Corporation's surplus notes due to non-approval from the NYSDFS[386](index=386&type=chunk) [Liquidity](index=82&type=section&id=LIQUIDITY) MBIA Inc. had $407 million in liquidity, with National holding $3.3 billion in cash and investments, and a net cash increase of $198 million in H1 2019 Liquidity Positions as of June 30, 2019 (in millions) | Entity | Cash and Investments (in millions) | | :--- | :--- | | MBIA Inc. (Corporate) | $407 | | National | $3,300 | | MBIA Corp. | $239 | - In July 2019, MBIA Corp. consummated a refinanced facility, with new senior notes of **$278 million** and amended subordinated notes of **$54 million**, maturing in January 2022[406](index=406&type=chunk) Consolidated Cash Flow Summary - H1 2019 (in millions) | Category | Cash Flow (in millions) | | :--- | :--- | | Operating Activities | $(57) | | Investing Activities | $683 | | Financing Activities | $(428) | | **Net Increase in Cash** | **$198** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=88&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rates and credit spreads, with a 100 bps interest rate increase estimated to cause a $33 million pre-tax fair value loss Interest Rate Sensitivity Analysis (Pre-tax change in fair value, in millions) | Rate Shift | Estimated Change in Fair Value (in millions) | | :--- | :--- | | +300 bps | $(75) | | +200 bps | $(57) | | +100 bps | $(33) | | -100 bps | $44 | | -200 bps | $104 | | -300 bps | $186 | Credit Spread Sensitivity Analysis (Pre-tax change in fair value, in millions) | Spread Shift | Estimated Change in Fair Value (in millions) | | :--- | :--- | | +200 bps | $(59) | | +50 bps | $(15) | | -50 bps | $14 | [Item 4. Controls and Procedures](index=88&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective due to a material weakness in RMBS loss reserve estimation, with remediation efforts underway and expected completion by year-end 2019 - Disclosure controls and procedures were concluded to be not effective due to a material weakness in internal control over financial reporting[430](index=430&type=chunk) - The material weakness relates to the process for estimating loss reserves and recoveries for RMBS insured by MBIA Insurance Corporation[430](index=430&type=chunk) - A remediation plan is underway, with new and modified controls implemented in Q2 2019. Management expects the weakness to be remediated by year-end 2019[431](index=431&type=chunk) [PART II - OTHER INFORMATION](index=89&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, other information, and a list of exhibits [Item 1. Legal Proceedings](index=89&type=section&id=Item%201.%20Legal%20Proceedings) This section directs readers to Note 14 for detailed litigation information, with selected documents available on the company's website - For a detailed discussion of the Company's litigation, readers are directed to Note 14 in the Notes to Consolidated Financial Statements[433](index=433&type=chunk) [Item 1A. Risk Factors](index=89&type=section&id=Item%201A.%20Risk%20Factors) Primary risk factors include fiscal stress of public finance issuers, particularly Puerto Rico's crisis and PROMESA proceedings, posing significant credit loss potential for National's $3.0 billion exposure - A primary risk is the fiscal stress of public finance issuers, which could lead to increased credit losses or impairments on insured obligations[435](index=435&type=chunk) - The Commonwealth of Puerto Rico's fiscal crisis and its Title III proceedings under PROMESA pose a significant risk, with National having **$3.0 billion** of gross insured par outstanding as of June 30, 2019[436](index=436&type=chunk)[440](index=440&type=chunk) - Heightened political risk related to federal aid and the Oversight Board's actions in Puerto Rico could lead to greater concessions from creditors, potentially increasing National's losses[439](index=439&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=90&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 5.9 million common shares for $54 million in H1 2019, with $148 million remaining under the authorization Share Repurchases in Q2 2019 | Month | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April | 117 | $9.50 | | May | 2,317,283 | $9.04 | | June | 3,128,015 | $9.17 | | **Total Q2** | **5,445,415** | **$9.12** | - As of June 30, 2019, **$148 million** remained authorized for future share repurchases[444](index=444&type=chunk) [Item 5. Other Information](index=90&type=section&id=Item%205.%20Other%20Information) Francis Y. Chin resigned from the Board of Directors on July 31, 2019, reducing the board size from seven to six members - Francis Y. Chin resigned from the Board of Directors effective July 31, 2019, reducing the board size to six members[443](index=443&type=chunk) [Item 6. Exhibits](index=91&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including financing agreements, CEO/CFO certifications, and interactive data files - Lists various legal and financial documents filed with the report, including agreements for MZ Funding, CEO/CFO certifications, and interactive data files[445](index=445&type=chunk)

MBIA Inc. (NYSE:MBI) Q1 2019 Results Earnings Conference Call May 9, 2019 8:00 AM ET Company Participants Greg Diamond - MD of Investor and Media Relations Bill Fallon - Chief Executive Officer Anthony McKiernan - Executive Vice President and Chief Financial Officer Conference Call Participants Bose George - KBW Geoff Dunn - Dowling & Partners Andrew Gadlin - Odeon Capital Group Operator Welcome to the MBIA Inc. First Quarter 2019 Financial Results Conference Call. I would now like to turn the call over to ...

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 March 31, 2019 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 06-1185706 (State of incorporation) (I.R. ...

MBIA, Inc. (NYSE:MBI) Q8 2018 Earnings Conference Call March 1, 2019 8:00 AM ET Company Participants Greg Diamond - MD of Investor and Media Relations Bill Fallon - Chief Executive Officer Anthony McKiernan - Executive Vice President and Chief Financial Officer Conference Call Participants Andrew Gadlin - Odeon Capital Group LLC Tommy McJoynt - Keefe, Bruyette, & Woods, Inc. Jack Barnes - Samlyn Capital Operator Welcome to MBIA Inc. Fourth Quarter and Full Year 2018 Financial Results Conference Call. I woul ...

Table of Contents 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, 2018 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 06-1185706 (State of incorporation) (I.R.S. Em ...