Financial Data and Key Metrics Changes - The company reported a consolidated GAAP net loss of $177 million for full year 2025, an improvement from a net loss of $447 million in 2024, indicating a significant reduction in losses [15] - For the fourth quarter of 2025, the consolidated GAAP net loss was $51 million, consistent with the loss reported in the fourth quarter of 2024, but the adjusted net loss improved to $12 million from $22 million year-over-year [13][14] - The adjusted net income for full year 2025 was $23 million, a turnaround from an adjusted net loss of $184 million in 2024 [16] Business Line Data and Key Metrics Changes - National's gross par amount outstanding declined by approximately $3 billion from year-end 2024 to about $22 billion at the end of 2025, with a leverage ratio of 24 to 1, down from 28 to 1 [11] - National reported statutory net income of $88 million for full year 2025, compared to a statutory net loss of $133 million in 2024, driven by a loss in LAE benefit of $35 million in 2025 [19] - MBIA Insurance Corp. reported a statutory net loss of $26 million for full year 2025, an improvement from a net loss of $64 million in 2024, primarily due to lower losses in LAE [21][22] Market Data and Key Metrics Changes - As of December 31, 2025, National had total claims-paying resources of $1.4 billion and statutory capital surplus in excess of $900 million [12] - MBIA Insurance Corp.'s insured gross par outstanding was approximately $2 billion as of December 31, 2025, down about 13% from year-end 2024 [22] Company Strategy and Development Direction - The company continues to prioritize resolving National's PREPA exposure, with ongoing discussions regarding potential special dividends as the portfolio runs off [10][25] - Management indicated that all options are on the table regarding potential sales, whether of the entire company or just National, depending on what is best for shareholders [28][29] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about potential developments in the PREPA restructuring, although no substantive progress has been made recently due to ongoing legal issues [11][49] - The company is comfortable with its portfolio and has not identified any specific credits that would necessitate additional reserves, despite political pressures in various states [41] Other Important Information - The corporate segment had total assets of approximately $653 million as of December 31, 2025, with unencumbered cash and liquid assets totaling $357 million [18] - The company has received approval for a special dividend and has distributed it to the holding company, indicating improved circumstances for potential future dividends [26] Q&A Session Summary Question: Did the company explore the potential for a special dividend in the fourth quarter? - Management stated that while there is nothing specific for the fourth quarter, they are continuously evaluating the possibility of a special dividend as the portfolio runs off and PREPA exposure decreases [25][26] Question: What is the latest update on the strategic process regarding a potential sale of the company? - Management indicated that all options are on the table, and they are focused on what would be best for shareholders, whether that involves selling the entire company or just National [27][28][29] Question: Is there a bid to sell the rest of the PREPA exposure? - Management clarified that there is limited exposure left and that the remaining $425 million is not something that can be sold like previous custodial receipts [32][36] Question: Are there pressures from auditors regarding higher valuation reserves related to non-Puerto Rican credits? - Management confirmed that they are comfortable with the current portfolio and have not identified any specific credits that would require additional reserves [41] Question: What needs to happen for MBIA Insurance to wrap up its operations? - Management noted that the runoff is occurring as expected, and once the major restructuring related to Zohar is resolved, there may be ways to accelerate the runoff of MBIA Insurance Corp [43][46]

Financial Data and Key Metrics Changes - The company reported a consolidated GAAP net loss of $51 million or a negative $1.01 per share for Q4 2025, compared to a consolidated GAAP net loss of $51 million or a negative $1.07 per share for Q4 2024 [13] - For the full year 2025, the consolidated GAAP net loss was $177 million or a negative $3.58 per share, an improvement from a consolidated net loss of $447 million or a negative $9.43 per share for 2024 [15] - The adjusted net income for full year 2025 was $23 million or $0.46 per share, compared to an adjusted net loss of $184 million or a negative $3.90 per share for 2024 [17] Business Line Data and Key Metrics Changes - National reported a statutory net income of $5 million for Q4 2025, compared to a statutory net loss of $10 million for Q4 2024 [20] - For the full year 2025, National reported a statutory net income of $88 million, compared to a statutory net loss of $133 million for 2024 [20] - MBIA Insurance Corp. reported a statutory net loss of $7 million for Q4 2025, compared to statutory net income of $4 million for Q4 2024 [22] Market Data and Key Metrics Changes - The gross par amount outstanding for National's insured portfolio declined by approximately $3 billion from year-end 2024 to about $22 billion at the end of 2025 [11] - MBIA Insurance Corp.'s insured gross par outstanding was approximately $2 billion as of December 31, 2025, down about 13% from year-end 2024 [23] Company Strategy and Development Direction - The company continues to prioritize resolving National's PREPA exposure, with a focus on reducing legal issues related to the Financial Oversight and Management Board [10] - The management is exploring options for a potential sale of the company or its components, emphasizing that all options are on the table for maximizing shareholder value [29][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about potential developments in the PREPA restructuring process, although no substantive progress has been made recently [10] - The company is in regular discussions with regulators regarding special dividends and is assessing the timing based on portfolio runoff and PREPA exposure reduction [61] Other Important Information - As of December 31, 2025, National had total claims-paying resources of $1.4 billion and statutory capital surplus in excess of $900 million [12] - MBIA Inc.'s book value per share decreased to a negative $44.27 as of December 31, 2025, primarily due to the consolidated net loss for the year [18] Q&A Session Summary Question: Did the company explore the potential for a special dividend in Q4 2025? - Management indicated that while there is no specific information at this time, they are continuously evaluating the possibility of a special dividend as circumstances improve [26][27] Question: What is the latest update on the strategic process regarding a potential sale of the company? - Management stated that all options are being considered, including selling the entire company or just National, depending on what is best for shareholders [28][30] Question: Is there a bid to sell the rest of the PREPA exposure? - Management clarified that there is limited exposure left and that the remaining $425 million cannot be sold in the same manner as previous transactions [33][36] Question: Are there pressures from auditors regarding higher valuation reserves related to non-Puerto Rican credits? - Management confirmed that they are comfortable with the current portfolio and have not identified any specific credits requiring additional reserves [41] Question: What needs to happen for MBIA Insurance to wrap up its operations? - Management noted that the runoff is proceeding as expected, and once the major restructuring related to Zohar is resolved, there may be opportunities to accelerate the runoff of MBIA Insurance Corp. [45][47]