MBI 10-K & 10-Q changes, risk factors and insider trading

References in the risk factors to the “Company” are to MBIA Inc., together with its domestic and international subsidiaries. References to “we,” “our” and “us” are to MBIA Inc. or the Company, as the context requires. Our risk factors are grouped into categories and are presented in the following order: “Insured Portfolio Loss Related Risk Factors”, “Legal, Regulatory and Other Risk Factors”, “Capital, Liquidity and Market Related Risk Factors”, “MBIA Corp. Risk Factors”, and “General Risk Factors”. Risk Factors are generally listed in order of significance within each category.

On January 29, 2024, the First Circuit Court of Appeals heard argumentarguments on the appeal of Judge Swain's ruling on the scope of the bondholder liens and the allowed amount of the under-secured portion of the bondholders' unsecured claim. On June 12, 2024, the First Circuit Court of Appeals reversed Judge Swain's prior rulings and supported bondholder liens and claim amounts (the "Appeal Decision"). On June 26, 2024, the Oversight Board filed a petition for a First Circuit panel rehearing, and the Unsecured Creditors Committee ("UCC") filed an en banc appeal. On November 13, 2024, the First Circuit affirmed the Appeal Decision. On November 27, 2024, the Oversight Board filed a petition for further rehearing, and on December 31, 2024, the First Circuit denied the rehearing request. Following a status conference held on July 10, 2024, the Court imposed a 60-day stay of all litigation and other filings related to the amended Plan, which stay was subsequently extended until March 24, 2025, and ordered the parties into mediation. Following the Appeal Decision, the Oversight Board informed the Court, National and other parties that it intended to modify National’s settlement in a forthcoming amended Plan. Thereafter, National provided notice to the Oversight Board that National did not support theOversight board'sBoard's actions and that such actions constituted a breach and termination of the PREPA RSA, as amended. On January 29, 2025, the Court extended its litigation stay through March 24, 2025, and on March 3, 2025, entered an order identifying key legal issues and requiring a joint proposed litigation schedule. On March 20, 2025, the Court set a briefing schedule addressing the key issues and requested the parties provide a joint status report by May 30, 2025 proposing a plan for limited discovery necessary to resolve the issues. On June 11, 2025, the Court set June 30, 2025, as the deadline for discovery, and July 23, 2025, for oral arguments in the administrative expense claim motion. Following the hearing, the Court reserved its decision on the legal issues and permitted the parties to continue resolution of discovery disputes. On August 8, 2025, the Court entered an order suspending deadlines for the Administrative Expense Claim until further order of the Court. On October 22, 2025, the Court ordered the parties to meet and confer on scheduling issues in the Administrative Expense Claim litigation and required they filed a Joint Status Report by November 24, 2025. Following the filing of the Joint Status Report, the Court entered an order dated December 9, 2025, lifting the litigation stay to permit the parties to litigate motions to compel solely in connection with the Administrative Expense Motion. Bondholders filed their Motion to Compel on January 9, 2026, and the Oversight Board on January 23, 2026 filed its opposition. Bondholders filed their reply brief on February 6, 2026. There is no assurance that a plan that is substantially similar in the treatment of National's claims and rights will ultimately be confirmed and become effective.

Consequently, National's inabilitiesinability to pay dividends or our inability to access capital from external sources on favorable terms could have an adverse impact on our ability to pay losses and debt obligations, to pay dividends on our capital stock, to pay principal and interest on our indebtedness, to pay our operating expenses and to make capital investments in our subsidiaries. In addition, future capital raises for equity or equity-linked securities could result in dilution to the Company's shareholders. Also, some securities that the Company could issue, such as preferred stock or securities issued by the Company's operating subsidiaries may have rights, preferences and privileges that are senior to those of its common shares.

In addition, the Company is exposed to foreign currency exchange rate fluctuation risk in respect of assets and liabilities denominated in currencies other than U.S. dollars. In addition to insured liabilities denominated in foreign currencies, some of the remaining liabilities in our corporate segment are denominated in currencies other than U.S. dollars and the assets of our corporate segment are predominantly denominated in U.S. dollars. Accordingly, the weakening of the U.S. dollar versus foreign currencies could substantially increase our potential obligations and statutory capital exposure. Conversely, the Company makes investments denominated in a foreign currency and the weakening of the foreign currency versus the U.S. dollar will diminish the value of such non-U.S. dollar denominated asset. Exchange rates have fluctuated significantly in recent periods and may continue to do so in the future, which could adversely impact the Company’s financial position, results of operations and cash flows.

MBIA Insurance Corporation is particularly sensitive to the risk that it will not have sufficient capital or liquid resources to meet contractual payment obligations when due or to make settlement payments in order to terminate insured exposures to avoid losses. While management’s expected liquidity and capital forecasts for MBIA Insurance Corporation reflect adequate resources to pay expected claims, there are risks to the capital and liquidity forecasts as MBIA Insurance Corporation’s remaining insured exposures and its expected salvage recoveries are potentially volatile. Such volatility exists in salvage that MBIA Insurance Corporation may collect, including in particular recoveries on loans and equity interests related to the claims it paid in respect of the insured notes issued by Zohar collateralized debt obligation (“CDO”) 2003-1, Limited and Zohar II 2005-1 CDO (collectively, the “Zohar Recoveries”), and the exposure in its remaining insured portfolio, which could deteriorate and result in significant additional loss reserves and claim payments, including claims on insured exposures that in some cases may require large bullet payments. In addition, if we fail to maintain effective internal controls over entities (including any entities the Company controls, is affiliated with or exercises significant influence over as a result of the Zohar Recoveries or otherwise), this could result in failure to ensure that such entities comply with applicable laws.

The rehabilitator or liquidator wouldcould replace the Board of Directors of MBIA Insurance Corporation and take control of the operations and assets of MBIA Insurance Corporation, which would result in the Company losing control of MBIA Insurance Corporation and possible changes to MBIA Insurance Corporation’s strategies and management; and

Available indicators suggest that U.S. economic activity indicatorshas havebeen continued to expandexpanding at a solid pacepace. with theThe unemployment rate stabilizinghas atshown asigns lowof levelstabilization and laborjob marketgains conditionshave remainingremained solid.low. Inflation remains elevated. With theThe Federal Open Market Committee (“FOMC”) seekingseeks to achieve maximum employment and 2% inflation over the longer run, atand has noted that uncertainty around the economic outlook remains elevated. At its most recent meeting, the FOMC maintained its federal funds rate target range at 4.25%3.50% to 4.50%.3.75%. Economic and financial market trends could impact the Company’s financial results. Economic improvement at the state and local level strengthens the credit quality of the issuers of our insured municipal bonds, improves the performance of our insured U.S. public finance portfolio and could reduce the amount of National’s potential incurred losses. HigherLower interest rates could adversely affect investment portfolio yields and income, but increase the values of our Company’s investment portfolio,portfolio. butLower increaseinterest investmentrates portfoliocould yieldalso andadversely income, and decreaseaffect the present value of loss reserves.

On January 31, 2023, National entered into a restructuring support agreement (“PREPA RSA”) with the Financial Oversight and Management Board for Puerto Rico (the “Oversight Board”), on behalf of itself and as the sole Title III representative of PREPA. A plan of adjustment for PREPA (the "Plan") and related disclosure statement was filed on February 9, 2023. Subsequently, both the Plan and PREPA RSA were amended. The Title III Court conducted confirmation hearings in March 2024. On June 12, 2024, the First Circuit Court of Appeals reversed Judge Swain's prior rulings and supported bondholder liens and claim amounts (the "Appeal Decision"). On June 26, 2024, the Oversight Board filed a petition for a First Circuit panel rehearing, and the Unsecured Creditors Committee ("UCC") filed an en banc appeal. On November 13, 2024, the First Circuit affirmed the Appeal Decision. On November 27, 2024, the Oversight Board filed a petition for further rehearing, and on December 31, 2024, the First Circuit denied the rehearing request. Following a status conference held on July 10, 2024, the Court imposed a 60-day stay of all litigation and other filings related to the amended Plan, which stay was subsequently extended until March 24, 2025, and ordered the parties into mediation. Following the Appeal Decision, the Oversight Board informed the Court, National and other parties that it intended to modify National’s settlement in a forthcoming amended Plan. Thereafter, National provided notice to the Oversight Board that National did not support the board's actions and that such actions constituted a breach and termination of the PREPA RSA, as amended. On January 29, 2025, the Court extended its litigation stay through March 24, 2025, and on March 3, 2025, the Court entered an order identifying key legal issues and requiring a joint proposed litigation schedule. On March 20, 2025, the Court set a briefing schedule on a motion for allowance of an administrative expense. On June 11, 2025, the Court set June 30, 2025, as the deadline for discovery, and July 23, 2025, for oral arguments in the administrative expense claim motion. Following the hearing, the Court reserved its decision on the legal issues and permitted the parties to continue resolution of discovery disputes. On August 8, 2025, the Court entered an order suspending deadlines for the Administrative Expense Claim until further order of the Court. On October 22, 2025, the Court ordered the parties to meet and confer on scheduling issues in the Administrative Expense Claim litigation and required they filed a Joint Status Report by November 24, 2025. Following the filing of the Joint Status Report, the Court entered an order dated December 9, 2025, lifting the litigation stay to permit the parties to litigate motions to compel solely in connection with the Administrative Expense Motion. Bondholders filed their Motion to Compel on January 9, 2026, and the Oversight Board on January 23, 2026 filed its opposition. Bondholders filed their reply brief on February 6, 2026. There is no assurance that a plan that is substantially similar in the treatment of National's claims and rights will ultimately be confirmed and become effective. In the event of a substantially different confirmed plan, National’s PREPA loss reserves and recoveries could be materially adversely affected.

Income (loss) from Continuing Operations Before Income Taxes The increase in consolidated total revenues for 20242025 compared with 20232024 was principally due to favorable changes from net realized investment losses from sales of investments andin revenues from consolidated VIEs.variable interest entities ("VIEs") and fair valuing investments. These favorable changesincreases were partially offset by anunfavorable increasechanges in lossesforeign fromcurrency fair valuing investmentsgains and alosses decrease inand net investment income. NetConsolidated realizedVIE investmentrevenue lossesfor from2025 saleswas a gain of investments for 2024 were $3$10 million compared with $76a loss of $37 million for 2023.2024. InConsolidated addition,VIE 2024revenue andfor 20232025 includedprimarily $37related millionto anda $70gain million,from respectively,a oflitigation trust we consolidate as a VIE. The consolidated VIE lossesloss for 2024 was primarily from the reclassification of credit risk losses from accumulated other comprehensive income ("AOCI") to net income (loss) due to early redemptions of VIE liabilities and losses from the deconsolidation of VIEs.a 2024VIE. In addition, 2025 included $49$13 million of losses from fair valuing investments compared with $6$49 million of gainslosses for 2023.2024. NetUnfavorable changes in 2025 included foreign currency losses of $13 million on euro-denominated liabilities due to the weakening of the U.S. dollar against the euro and foreign currency translation losses of $5 million reclassified from AOCI to net income (loss) due to the liquidation of MBIA Mexico, compared with $8 million of foreign currency gains on euro-denominated liabilities in 2024 due to the strengthening of the U.S. dollar against the euro. In addition, net investment income decreased $32$11 million for 20242025 compared with 20232024 primarily due to a lower average asset base asand aan resultoverall oflower theinvestment extraordinaryportfolio cash dividend payment on MBIA Inc.'s stock in December of 2023.yield.

As of December 31, 20242025 and 2023,2024, the Company’s valuation allowance against its net deferred tax asset was $1.4 billion and $1.2 billion, respectively.billion. Notwithstanding the full valuation allowance on its net deferred tax asset, the Company believes that it may be able to use some of its net deferred tax asset before the expirations associated with that asset based upon expected earnings at National. Accordingly, the Company will continue to re-evaluate its net deferred tax asset on a quarterly basis. There is no assurance that the Company will reverse any of its valuation allowance on its net deferred tax asset in the future. Refer to “Note 10: Income Taxes” in the Notes to Consolidated Financial Statements in Part II, Item 8 of this Form 10-K for a further discussion of income taxes, including the valuation allowance against the Company’s net deferred tax asset and its accounting for tax uncertainties.

Adjusted net income (loss) and adjusted net income (loss) per diluted common share include the after-tax results of the Company and remove the after-tax results of our international and structured finance insurance segment, comprising the results of MBIA Corp. and its discontinued operations net ofand noncontrolling interest and income taxes,taxes. which givenGiven MBIA Corp.’s capital structure and business prospects, we do not expect its financial performance to have a material economic impact on MBIA Inc.,Inc. asWe wellalso as adjustingadjust the following:

National continues to monitor and remediate its existing insured portfolio and has pursued and may continue to pursue other transactions that could enhance shareholder value, including receiving NYSDFS approval of a $550 million special dividend that was paid to its ultimate parent, MBIA Inc., in 2023.value. Regarding its insured portfolio, Puerto Rico has been experiencing significant fiscal stress and constrained liquidity. Refer to the “U.S. Public Finance Insurance Puerto Rico Exposures” section for additional information on our PREPA exposure. In addition to Puerto Rico, some state and local governments and territory obligors that National insures are experiencing financial and budgetary stress which could lead to an increase in defaults by such entities on the payment of their obligations and, while such stress has not yet occurred materially, losses or impairments on a greater number of the Company’s insured transactions. In particular, PREPA had been experiencing significant fiscal stress and constrained liquidity. Refer to the “U.S. Public Finance Insurance Puerto Rico Exposures” section for additional information on our PREPA exposures. We continue to monitor and analyze these situations and other stressed credits closely, and the overall extent and duration of stress affecting our insured credits remains uncertain.

NET INVESTMENT INCOME The decrease in net investment income for 20242025 compared with 20232024 was primarily due to a lower average invested asset base asand alower resultyielding assets. The lower average invested asset base primarily resulted from claims payments, net of thesalvage dividendreceived, paymentsdividends paid to National's ultimate parent, MBIA Inc., inand 2023.the Thispayment decreaseof wasoperating partially offset by higher yields on investments.expenses.

AMORTIZATION OF DEFERRED ACQUISITION COSTS Acquisition costs are recognized as expense when the associated premium is earned. When an insured obligation refunds, we accelerate to expense any remaining deferred acquisition costs associated with the policy covering the refunded insured obligation. We did not defer a material amount of policy acquisition costs during 20242025 or 20232024 as we did not write any new insurance business in those years.

On June 23, 2023, the Oversight Board filed a fiscal plan for PREPA for fiscal year 2023, which provided for approximately $2.4 billion of distributions to PREPA bondholders. The University of Puerto Rico (the "University") is not a debtor in Title III and continues to be current on its debt service payment.payments. However, the University is subject to aA standstill agreement with itscertain seniorbondholders bondholders,was whichreplaced hasby beenan extendedAmended toand MayRestated 31,Trust 2025.Agreement during 2025 that cured the remaining technical defaults and implemented monthly sinking-fund payments. National is not a party to the standstillAmended agreement.and Restated Trust Agreement. As of December 31, 2024,2025, National had $62$46 million of insured debt service outstanding related to the University.

On June 22, 2020, the Oversight Board and the Puerto Rico P3 Authority announced an agreement and contract with LUMA Energy, LLC (“LUMA”) which calls for LUMA to take full responsibility for the operation and maintenance of PREPA’s transmission and distribution system; the contract runs for 15-years following a transition period.period expected to take 12 months. PREPA retains ownership of the system as well as responsibility for the power generation system. LUMA assumed responsibility for operations on June 1, 2021.

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE Net gains (losses) on financial instruments at fair value and foreign exchange were primarily driven by changes in market values on interest rate swaps, changes in the revaluation of euro-denominated liabilitiesliabilities. For 2025, foreign currency losses were $13 million and changes in fair value on investments for which the fair value option was elected. 2023 included fair value net gains of $14 million on interest rate swaps with no comparable amounts for 2024. The 2023 gains were duerelated to aneuro-denominated increaseliabilities incompared interest rates on swaps for which we received floating rates. Substantially all of the interest rates swaps were terminated in the second half of 2023. In addition, 2024 includedwith foreign currency gains of $8 million on euro-denominated liabilities compared with foreign currency losses of $6 million on these liabilities for 2023.2024. This change was due to the U.S. dollar strengtheningweakening against the euro in 20242025 compared with the U.S. dollar weakeningstrengthening against the euro in 2023.2024. Also,In 2024addition, 2025 included $6 million of fair value gains on investmentsfinancial forinstruments whichof the$10 fair value option was electedmillion compared with $4$7 million ofon fairthese valueinstruments gainsfor in 2023.2024.

MBIA Corp. insures sovereign-related and sub-sovereignsub- sovereign bonds, utilities, privately issued bonds used for the financing of projects that include toll roads, bridges, public transportation facilities, and other types of infrastructure projects serving a substantial public purpose. MBIA Corp. also insures structured finance and asset-backed obligations repayable from expected cash flows generated by a specified pool of assets, such as residential and commercial mortgages, consumer loans and structured settlements. MBIA Insurance Corporation insures the investment agreements written by MBIA Inc., and if MBIA Inc. were to have insufficient assets to pay amounts due upon maturity or termination, MBIA Insurance Corporation would be required to make such payments under its insurance policies. MBIA Insurance Corporation also insures debt obligations of GFL and obligations under certain types of derivative contracts. As of December 31, 2024,2025, MBIA Corp.’s total insured gross par outstanding was $2.3$2.1 billion. In addition, MBIA Corp. consolidates insured transactions as VIEs if it determines it is the primary beneficiary, and deconsolidates such VIEs when it is no longer the primary beneficiary.

NET PREMIUMS EARNED Our international and structured finance insurance segment generates net premiums from insurance policies accounted for as financial guarantee contracts. Net premiums earned represent gross premiums earned net of premiums ceded to reinsurers,reinsurers and include scheduled premium earnings and premium earnings from refunded issues. Certain premiums may be eliminated in our consolidated financial statements as a result of the Company consolidating VIEs. Net premiums earned were primarily related to non-U.S. exposures.

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE The net losses for 2025 and 2024 were primarily due to fair value losses of $20 million and $56 million, respectively, on investments for which the fair value option was elected. TheIn addition, the net lossesloss for 20232025 wereincluded primarilythe drivenreclassification byof foreign exchangecurrency translation losses onfrom non-U.S.AOCI dollarto insurancenet balancesincome and(loss) fairdue value losses on investments for whichto the fairliquidation valueof optionMBIA was elected.Mexico.

REVENUES OF CONSOLIDATED VIEs The net losses of consolidatedConsolidated VIE revenuesgains for 2025 primarily related to a gain from a litigation trust we consolidate as a VIE. Consolidated VIE losses for 2024 and 2023 were primarily drivendue by recognizing credit risk losses fromto the early redemptions of VIE liabilities and losses from the deconsolidation of VIEs.a For 2024VIE, and 2023, net losses of consolidated VIE revenues included the reclassification of $28 million and $45 million, respectively, of credit risk losses from AOCI to net income (loss). In addition, 2023 included a loss of $7 million from the deconsolidation of a VIE.

LOSSES AND LOSS ADJUSTMENT EXPENSES For 2024, the2025, losses and LAE incurred benefitwere primarily relateddue to anthe increaseimpact inof lower risk-free rates inand 2024,accretion of our insured first-lien residential mortgage-backed securities ("RMBS") loss reserves, both of which causedincreased the present value of the loss reserves, net of recoveries, to decline on our insured RMBS loss reserves.recoveries. This increase was partially offset by accretioncredit and an increase in the secured overnight financing rate ("SOFR"), which increased loss reservesimprovements on insuredcertain RMBS floating rate liabilities.transactions.

As a result of the consolidation of VIEs, losslosses and LAE excludes lossesa benefit of $3 million and LAEan expense of $21 million andfor a losses2025 and LAE benefit of $30 million for 2024 and 2023,2024, respectively, as VIE losses and LAE activity is eliminated in consolidation.

The following table presents informationMBIA about ourCorp.'s insurance loss recoverable and loss and LAE reserves as of December 31, 20242025 and 2023.2024.

The insurance loss recoverable primarily relates to reimbursement rights arising from the payment of claims on MBIA Corp.’s policies insuring certain RMBS transactions. Such payments also entitle MBIA Corp. to exercise certain rights and remedies to seek recovery of its reimbursement entitlements. The decreaseincrease in MBIA Corp.’s lossLoss and LAE reserves from 2023December was31, 2024 primarily duerelated to claimthe paymentsimpact andof ana increasedecrease in risk-free rates inand 2024, which caused the present valueaccretion of reserves,loss netreserves of recoveries,related to decline.our Thisinsured decreaseRMBS wastransactions, partially offset by anclaim increase in SOFR, which increased reserves on floating rate liabilities, and accretion, primarily on our insured RMBS transactions.payments.

Based on the Company's filer status determination pursuant to Rule 12b-2 of the Exchange Act as of June 30, 2025, using the Company's public float as of that date and total revenues for the year ended December 31, 2024, the Company determined that it qualifies as a smaller reporting company and a non-accelerated filer. As a result, the Company will be subject to the applicable reporting requirements for these classifications, including eligibility for scaled disclosure requirements, an exemption from the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, and an extended filing timeline for certain reports. This change in filer status iswas effective beginning with thisour Form 10-Q for the quarterly period ended March 31, 2026. The Company is currently evaluating the extent to which it will utilize the scaled disclosure accommodations available to it as a smaller reporting company and non-accelerated filer in its future filings.

Recent indicators suggest that U.S. economic activity has been expanding at a solid pace.pace despite elevated uncertainty, in part, due to the conflict in the Middle East. The unemployment rate has been little changed in recent months and job gains have remainedkept low.pace with the workforce. Inflation remains elevated. The Federal Open Market Committee (“FOMC”) seeks to achieve maximum employment and 2% inflation over the longer run,run and has noted that uncertainty around the U.S. economic outlook remains elevated and developments in the Middle East are contributing to this uncertainty. Atat its most recent meeting, the FOMC maintained its federal funds rate target range at 3.50% to 3.75%. Economic and financial market trends could impact the Company’s financial results. Economic improvement at the state and local level strengthens the credit quality of the issuers of our insured municipal bonds, improves the performance of our insured U.S. public finance portfolio and could reduce the amount of National’s potential incurred losses. Higher interest rates could adversely affect the values of our investment portfolio, but increase investment portfolio yield and income, and decrease the present value of loss reserves. Lower interest rates could adversely affect investment portfolio yields and income, but increase the values of our Company’s investment portfolio. Lower interest rates could also adversely affect the present value of loss reserves.

On January 1, 2026, the Puerto Rico Electric Power Authority (“PREPA”) defaulted on scheduled debt service for National insured bonds and National paid gross claims in the aggregate of $11 million. As of MarchJune 31,30, 2026, National had $554 million of insured debt service outstanding related to PREPA. In addition, on July 1, 2026, PREPA defaulted on scheduled debt service for National insured bonds and National paid gross claims in the aggregate of $46 million.

On January 31, 2023, National entered into a restructuring support agreement (“PREPA RSA”) with the Financial Oversight and Management Board for Puerto Rico (the “Oversight Board”), on behalf of itself and as the sole Title III representative of PREPA. A plan of adjustment for PREPA (the "Plan") and related disclosure statement was filed on February 9, 2023. Subsequently, both the Plan and PREPA RSA were amended. The Title III Court conducted confirmation hearings in March 2024. On June 12, 2024, the First Circuit Court of Appeals reversed Judge Swain's prior rulings and supported bondholder liens and claim amounts (the "Appeal Decision"). On June 26, 2024, the Oversight Board filed a petition for a First Circuit panel rehearing, and the Unsecured Creditors Committee ("UCC") filed an en banc appeal. On November 13, 2024, the First Circuit affirmed the Appeal Decision. On November 27, 2024, the Oversight Board filed a petition for further rehearing, and on December 31, 2024, the First Circuit denied the rehearing request. Following the Appeal Decision, the Oversight Board informed the Court, National and other parties that it intended to modify National’s settlement in a forthcoming amended Plan. Thereafter, National provided notice to the Oversight Board that National did not support the board's actions and that such actions constituted a breach and termination of the PREPA RSA, as amended. On January 29, 2025, the Court extended its litigation stay through March 24, 2025, and on March 3, 2025, the Court entered an order identifying key legal issues and requiring a joint proposed litigation schedule. On March 20, 2025, the Court set a briefing schedule on a Motion for Allowance of an Administrative Expense Claim (the "Administrative Claim Motion"). On June 11, 2025, the Court set June 30, 2025, as the deadline for discovery, and July 23, 2025, for oral arguments in the Administrative Claim Motion. Following the hearing, the Court reserved its decision on the legal issues and permitted the parties to continue resolution of discovery disputes. On August 8, 2025, the Court entered an order suspending deadlines for the Administrative Claim Motion until further order of the Court. On October 22, 2025, the Court ordered the parties to meet and confer on scheduling issues in the Administrative Claim Motion litigation and required they file a Joint Status Report by November 24, 2025. Following the filing of the Joint Status Report, the Court entered an order dated December 9, 2025, lifting the litigation stay to permit the parties to litigate motions to compel solely in connection with the Administrative Claim Motion. Bondholders filed their Motion to Compel on January 9, 2026 and the Oversight Board on January 23, 2026 filed its opposition. Bondholders filed their reply brief on February 6, 2026. On March 16, 2026, the Court denied the Bondholders' Administrative Claim Motion. Bondholders filed a notice of appeal on March 27, 2026 to the First Circuit Court of Appeals. On May 14, 2026, the Bondholders filed their appellate briefs. On May 21, 2026, thirteen U.S. States filed a combined Amici Curiae brief in support of the Bondholders' appeal. On July 10, 2026, the Oversight Board filed its appellate brief. Reply briefs were filed on July 31, 2026. On April 13, 2026, the Court entered an order lifting the litigation stay solely to permit Bondholders to prosecute their accounting counterclaim motion. On April 17, 2026, the Bondholders filed their revised motion and on April 28, 2026, the Oversight Board filed its answer. The parties are currently in the process of discovery on the accounting counterclaim. On June 30, 2026, the Oversight Board issued a media release outlining a settlement proposed to Bondholders offering $3 billion to current non-settling Bondholders, comprised of cash or issuance of new bonds, or a combination, or approximately 35% on Bondholders’ claims. In addition, the Oversight Board offered to negotiate a contingent value instrument based on actual increases of PREPA’s net cash flow from volumes of power sold above the projections of the 2025 PREPA Fiscal Plan. The Coop Group of Bondholders subsequently rejected the proposal. There is no assurance that a plan that is substantially similar in the treatment of National's claims and rights will ultimately be confirmed and become effective. In the event of a substantially different confirmed plan, National’s PREPA loss reserves and recoveries could be materially adversely affected. There is no assurance that a plan that is substantially similar in the treatment of National's claims and rights will ultimately be confirmed and become effective. In the event of a substantially different confirmed plan, National’s PREPA loss reserves and recoveries could be materially adversely affected.

Between August 1 and August 8, 2025, President Trump notified six Oversight Board members that their membership on the Oversight Board was terminated effective immediately. On September 18, 2025, three of the terminated Oversight Board members, Arthur Gonzalez, Andrew Biggs and Betty Rosa (the "Plaintiffs") sought reinstatement on the Oversight Board by filing injunctive, declaratory and legal relief (the "Termination Case"). On September 22, 2025, Plaintiffs also filed a Motion for Preliminary Injunction seeking restrictions on replacing them on the Oversight Board until the Court hears the underlying merits of their claims. On October 3, 2025, the District Court for the District of Puerto Rico granted Plaintiffs' Motion for Preliminary Injunction permitting the Plaintiffs to remain on the Oversight Board until a final hearing on the adequacy of the termination notice as well as the scope of executive authority. On December 30, 2025, the Court of Appeals for the First Circuit entered an order holding the Termination Case in abeyance until the court is notified that the Supreme Court has issued a decision in the Trump v. Cook case, heard by the Supreme Court on January 21, 2026. Following the issuance of the Cook and Slaughter decisions on June 29, 2026, the First Circuit requested the parties file motions in respect of further proceedings in the case by July 31, 2026. Motions were filed on July 31, 2026.

The following table presents a summary of our consolidated financial results for the three and six months ended MarchJune 31,30, 2026 and 2025:

Income (loss) from Continuing Operations Before Income Taxes The increase in consolidated total revenues for the three months ended MarchJune 31,30, 2026 compared with the same period of 2025 was principally due to favorable changes in foreign currency and net realized investment losses from sales of investments,currency, partially offset by unfavorable changes in revenues from consolidatedfair variablevaluing interest entities ("VIEs").investments. The three months ended MarchJune 31,30, 2026 included foreign currency gains of $2$1 million related to gains on euro-denominated liabilities due to the strengthening of the U.S. dollar against the euro in 2026. The three months ended MarchJune 31,30, 2025 included net foreign currency losses of $12$9 million primarily related to the reclassification of foreign currency translation losses from accumulated other comprehensive income ("AOCI") to net income (loss) due to the liquidation of a foreign subsidiary and losses on euro-denominated liabilities due to the weakening of the U.S. dollar against the euro in 2025. The three months ended MarchJune 31,30, 2025 also2026 included $2 million of gains from fair valuing investments compared with $5 million of net realized investment losses from the sales of investments with no comparable amountgains for the same period of 2026. Consolidated VIE revenue for the three months ended March 31, 2025 was a gain of $7 million with no comparable amount for the same period of 2026. Consolidated VIE revenue for the three months ended March 31, 2025 primarily related to a gain from a litigation trust we consolidated as a VIE.2025.

Consolidated total expenses for the three months ended MarchJune 31,30, 2026 included a losses and loss adjustment expense (“LAE”) benefitexpense of $3$9 million compared with losses and LAE expense of $8 million for the same period of 2025. The favorable change in losses and LAE was primarily due to a decrease in losses on our insured first-lien residential mortgage-backed securities ("RMBS") exposure primarily related to the impact of changes in risk-free interest rates used to present value loss reserves. This was partially offset by an increase in losses and LAE on our PREPA exposure. Refer to the following “Losses and Loss Adjustment Expenses” sections of the U.S. Public Finance Insurance and International and Structured Finance Insurance segments for additional information on our losses and LAE. In addition, expenses of our consolidated VIEs decreased for the three months ended June 30, 2026 compared with the same period of 2025 primarily due to an $8 million reversal of previously recognized legal expenses.

For the three and six months ended MarchJune 31,30, 2026 and 2025, our effective tax rate applied to our loss before income taxes was below the U.S. statutory tax rate of 21% due to the full valuation allowance on the changes in our net deferred tax asset, which included our net operating loss (“NOL”).

The following table presents our adjusted net income (loss) and adjusted net income (loss) per diluted common share and provides a reconciliation of GAAP net income (loss) to adjusted net income (loss) for the three and six months ended MarchJune 31,30, 2026 and 2025:

Our U.S. public finance insurance portfolio is managed through National. The financial guarantees issued by National provide unconditional and irrevocable guarantees of the payment of the principal of, and interest or other amounts owing on, insured obligations when due or, in the event National has exercised, at its discretion, the right to accelerate the payment under its policies upon the acceleration of the underlying insured obligations due to default or otherwise. National’s guarantees insure municipal bonds, including tax-exempt and taxable indebtedness of U.S. political subdivisions, as well as utility districts, airports, healthcare institutions, higher educational facilities, housing authorities and other similar agencies and obligations issued by private entities that finance projects that serve a substantial public purpose. Municipal bonds and privately issued bonds used for the financing of public purpose projects are generally supported by taxes, assessments, user fees or tariffs related to the use of these projects, lease payments or other similar types of revenue streams. As of MarchJune 31,30, 2026, National had total insured gross par outstanding of $21.5$20.8 billion.

The following table presents our U.S. public finance insurance segment results for the three and six months ended MarchJune 31,30, 2026 and 2025:

NET PREMIUMS EARNED Net premiums earned on financial guarantees represent gross premiums earned net of premiums ceded to reinsurers, and include scheduled premium earnings and premium earnings from refunded issues. Refunding activity over the past several years has accelerated premium earnings in prior years and reduced the amount of scheduled premiums that would have been earned in the current year. Refunding activity can vary significantly from period to period based on issuer refinancing behavior. ForIncluded in net premiums earned for the three months ended MarchJune 31,30, 2026 and 2025, were scheduled premiums earned wasof $6$5 million and refunded$6 million, respectively. Included in net premiums earned for the six months ended June 30, 2026 and 2025, were notscheduled material.premiums earned of $11 million and $12 million, respectively.

NET REALIZED INVESTMENT GAINS (LOSSES) Net realized investment losses for the threesix months ended MarchJune 31,30, 2025 primarily related to sales of securities from the ongoing management of our U.S. public finance investment portfolio, including to generate liquidity to pay claims.

LOSSES AND LOSS ADJUSTMENT EXPENSES For the three and six months ended MarchJune 31,30, 2026, losslosses and LAE activityincurred was primarily related to our PREPA exposure, which was driven by LAE and the accretion of net reserves and LAE,reserves, partially offset by an increase in risk-free discount rates, which caused loss reserves, net of recoveries, to decline. For the three and six months ended June 30, 2025, losses and LAE incurred was primarily due to extending the timing of a settlement on our PREPA exposure. Refer to the following “U.S. Public Finance Insurance Puerto Rico Exposures” section for additional information on our PREPA exposures.

The following table presents information about our U.S. public finance insurance loss recoverable asset and loss and LAE reserves liabilities as of MarchJune 31,30, 2026 and December 31, 2025:

The insuranceInsurance loss recoverable as of June 30, 2026 increased compared with December 31, 2025 primarily asdue a result ofto reclassifying recoveries from loss and LAE reserve as a result of claims paid on a lease-backed transaction, partially offset by recovery collections. The lossLoss and LAE reserves as of MarchJune 31,30, 2026 decreased compared with December 31, 2025 primarily due to January 2026 PREPA claim payments and an increase in risk-free rates, partially offset by accretion related to PREPA. Refer to “Note 5: Loss and Loss Adjustment Expense Reserves” in the Notes to Consolidated Financial Statements for additional information related to the Company’s insurance loss reserves and recoverables and loss reserving process.

OPERATING EXPENSES Our U.S. public finance insurance segment's operating expenses primarily consist of inter-segment service charge from the corporate segment for support services. For the three months ended MarchJune 31,30, 2026 and 2025, the inter-segment service charge was $9$7 million. For the six months ended June 30, 2026 and 2025, the inter-segment service charge was $16 million and $10$17 million, respectively.

The following table presents the credit quality distribution of National’s U.S. public finance outstanding gross par insured as of MarchJune 31,30, 2026 and December 31, 2025. Capital appreciation bonds are reported at the par amount at the time of issuance of the insurance policy. All ratings are as of the period presented and represent S&P underlying ratings, where available. If transactions are not rated by S&P, a Moody’s equivalent rating is used. If transactions are not rated by either S&P or Moody’s, an internal equivalent rating is used.

As a result of prior defaults, various stays and the Title III cases, Puerto Rico failed to make certain scheduled debt service payments for National insured bonds. As a consequence, National has paid gross claims in the aggregate amount of $3.2 billion relating to GO, PBA, PREPA and HTA bonds through MarchJune 31,30, 2026, inclusive of the commutation payment and the additional payment in the amount of $66 million in 2019 related to COFINA and the GO and HTA acceleration and commutation payments of $277 million and $556 million, respectively, in 2022.

On June 23, 2023, the Oversight Board filed a fiscal plan for PREPA for fiscal year 2023, which provided for approximately $2.4 billion of distributions to PREPA bondholders. The University of Puerto Rico (the "University") is not a debtor in Title III and continues to be current on its debt service payments. A standstill agreement with certain bondholders was replaced by an Amended and Restated Trust Agreement during 2025 that cured the remaining technical defaults and implemented monthly sinking-fund payments. National is not a party to the Amended and Restated Trust Agreement. As of MarchJune 31,30, 2026, National had $45 million of insured debt service outstanding related to the University.

On January 31, 2023, National entered into the PREPA RSA with the Oversight Board, on behalf of itself and as the sole Title III representative of PREPA. The Plan and related disclosure statement was filed on February 9, 2023. Subsequently, both the Plan and PREPA RSA were amended. The Title III Court conducted confirmation hearings in March 2024. On June 12, 2024, following the Appeal Decision affirming the Bondholder liens, the Oversight Board informed the Court that it intended to file an amendment to the Plan it believed would account for the changes required by the First Circuit opinion. Thereafter, National provided notice to the Oversight Board that National did not support the board's actions and that such actions constituted a breach and termination of the PREPA RSA, as amended. On June 26, 2024, the Oversight Board filed a petition for a First Circuit panel rehearing, and the UCC filed an en banc appeal. On November 13, 2024, the First Circuit affirmed its decision. On November 27, 2024, the Oversight Board filed a petition for further rehearing, and on December 31, 2024, the First Circuit denied the rehearing request. On January 29, 2025, the Court extended its litigation stay through March 24, 2025, and on March 3, 2025, entered an order identifying key legal issues and requiring a joint proposed litigation schedule. On March 20, 2025, the Court set a briefing schedule on a Motion for Allowance of an Administrative Expense Claim (the "Administrative Claim Motion"). On June 11, 2025, the Court set June 30, 2025, as the deadline for discovery, and July 23, 2025, for oral arguments in the Administrative Claim Motion. Following the hearing, the Court reserved its decision on the legal issues and permitted the parties to continue resolution of discovery disputes. On August 8, 2025, the Court entered an order suspending deadlines for the Administrative Claim Motion until further order of the Court. On October 22, 2025, the Court ordered the parties to meet and confer on scheduling issues in the Administrative Claim Motion litigation and required they file a Joint Status Report by November 24, 2025. Following the filing of the Joint Status Report, the Court entered an order dated December 9, 2025, lifting the litigation stay to permit the parties to litigate motions to compel solely in connection with the Administrative Claim Motion. Bondholders filed their Motion to Compel on January 9, 2026 and the Oversight Board on January 23, 2026, filed its opposition. Bondholders filed their reply brief on February 6, 2026. On March 16, 2026, the Court denied Bondholders' Motion for Allowance of an Administrative Expense Claim. Bondholders filed a notice of appeal on March 27, 2026 to the First Circuit Court of Appeals. On May 14, 2026, the Bondholders filed their appellate briefs. On May 21, 2026, thirteen U.S. States filed a combined Amici Curiae brief in support of the Bondholders' appeal. On July 10, 2026, the Oversight Board filed its appellate brief. Reply briefs were filed on July 31, 2026. On April 13, 2026, the Court entered an order lifting the litigation stay solely to permit Bondholders to prosecute their accounting counterclaim motion. On April 17, 2026, the Bondholders filed their revised motion and on April 28, 2026, the Oversight Board filed its answer. The parties are currently in the process of discovery on the accounting counterclaim. On June 30, 2026, the Oversight Board issued a media release outlining a settlement proposed to Bondholders offering $3 billion to current non-settling Bondholders, comprised of cash or issuance of new bonds, or a combination, or approximately 35% on Bondholders’ claims. In addition, the Oversight Board offered to negotiate a contingent value instrument based on actual increases of PREPA’s net cash flow from volumes of power sold above the projections of the 2025 PREPA Fiscal Plan. The Coop Group of Bondholders subsequently rejected the proposal.

Between August 1 and August 8, 2025, President Trump notified six Oversight Board members that their membership on the Oversight Board was terminated effective immediately. On September 18, 2025, the Plaintiffs sought reinstatement on the Oversight Board by filing injunctive, declaratory and legal relief. On September 22, 2025, Plaintiffs also filed a Motion for Preliminary Injunction seeking restrictions on replacing them on the Oversight Board until the Court hears the underlying merits of their claims. On October 3, 2025, the District Court for the District of Puerto Rico granted Plaintiffs' Motion for Preliminary Injunction permitting the Plaintiffs to remain on the Oversight Board until a final hearing on the adequacy of the termination notice as well as the scope of executive authority. On December 30, 2025, the Court of Appeals for the First Circuit entered an order holding the Termination Case in abeyance until the court is notified that the Supreme Court has issued a decision in the Trump v. Cook case, heard by the Supreme Court on January 21, 2026. Following the issuance of the Cook and Slaughter decisions on June 29, 2026, the First Circuit requested the parties file motions in respect of further proceedings in the case no later than July 31, 2026. Motions were filed on July 31, 2026.

The following table presents our scheduled gross debt service due on our PREPA insured exposures as of MarchJune 31,30, 2026, for the ninesix months ending December 31, 2026, for each of the subsequent four years ending December 31, and thereafter:

The following table summarizes the consolidated results of our corporate segment for the three and six months ended MarchJune 31,30, 2026 and 2025:

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE NetThe three and six months ended June 30, 2026 included foreign currency revaluation gains (losses)of on$1 financial instruments at fair valuemillion and foreign$3 exchangemillion, wererespectively, primarily driven by changes in the revaluation ofon euro-denominated MTN liabilities. For the three months ended March 31, 2026, foreign currency gains related to these liabilities were $2 million compared with foreign currency losses of $4$9 million and $13 million, respectively, on these liabilities for the same periodperiods of 2025. ThisThese changechanges waswere due to the U.S. dollar strengthening against the euro in 2026 compared with the U.S. dollar weakening against the euro in 2025.

FEES Corporate segment fees consist entirely of fees paid by our other segments for services provided. The decrease in fees for the threesix months ended MarchJune 31,30, 2026 compared with the same period of 2025 was due to lower inter-segment service charges to the other segments.

MBIA Corp. insures sovereign-related and sub- sovereign bonds, utilities, privately issued bonds used for the financing of projects that include toll roads, bridges, public transportation facilities, and other types of infrastructure projects serving a substantial public purpose. MBIA Corp. also insures structured finance and asset-backed obligations repayable from expected cash flows generated by a specified pool of assets, such as residential and commercial mortgages, consumer loans and structured settlements. MBIA Insurance Corporation insures the investment agreements written by MBIA Inc., and if MBIA Inc. were to have insufficient assets to pay amounts due upon maturity or termination, MBIA Insurance Corporation would be required to make such payments under its insurance policies. MBIA Insurance Corporation also insures debt obligations of GFL and obligations under certain types of derivative contracts. As of MarchJune 31,30, 2026, MBIA Corp.’s total insured gross par outstanding was $1.9$1.8 billion. In addition, MBIA Corp. consolidates insured transactions as VIEs if it determines it is the primary beneficiary, and deconsolidates such VIEs when it is no longer the primary beneficiary.

The following table presents our international and structured finance insurance segment results for the three and six months ended MarchJune 31,30, 2026 and 2025:

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE The net losses for the three and six months ended MarchJune 31,30, 2026 were primarily due to fair value losses on investments for which the fair value option was elected. The net losses for the six months ended June 30, 2025 werewas primarily due to the reclassification of foreign currency translation losses from AOCI to net income (loss) due to the liquidation of a foreign subsidiary.

REVENUES OF CONSOLIDATED VIEs Consolidated VIE revenue for the threesix months ended MarchJune 31,30, 2025 related to a gain from a litigation trust we consolidated as a VIE.

LOSSES AND LOSS ADJUSTMENT EXPENSES For the three months ended MarchJune 31,30, 2025,2026, the losses and LAE incurred was principally driven by accretion on our insured RMBS transactions. For the six months ended June 30, 2026, the losses and LAE benefit primarily related to aan declineincrease in risk-free rates used to discount ratesloss reserves, which causedreduced the present value of loss reserves, net of recoveries, topartially increaseoffset andby accretion of loss reserves on our insured RMBS transactions.

AsDue a result ofto the consolidation of VIEs, the losses and LAE benefit and expense exclude a$1 million of VIE-related losses and LAE expense of $1 million for the threesix months ended MarchJune 31, 2026 and30, 2025, respectively, as VIEthese losses and LAEamounts are eliminated inupon consolidation.

The following table presents information about our insurance loss recoverable and loss and LAE reserves as of MarchJune 31,30, 2026 and December 31, 2025:

The insurance loss recoverable primarily relates to reimbursement rights arising from the payment of claims on MBIA Corp.’s policies insuring certain RMBS transactions. Such payments also entitle MBIA Corp. to exercise certain rights and remedies to seek recovery of its reimbursement entitlements. The decrease in lossLoss and LAE reserves fromas of June 30, 2026 decreased compared with December 31, 2025 primarily relateddue to an increase in risk-free rates used to discount loss reserves, which reduced the present value of loss reserves, net of recoveries, and payments on our insured RMBS reserves. These decreases were partially offset by accretion of loss reserves on our insured RMBS transactions.

OPERATING EXPENSES Our international and structured finance insurance segment's operating expenses primarily consist of inter-segment service charge from the corporate segment for support services. For the three months ended MarchJune 31,30, 2026 and 2025, the inter-segment service charges were $3 million. For the six months ended June 30, 2026 and 2025, the inter-segment service charge was $3$6 million and $4$7 million, respectively.

INTEREST EXPENSE Interest expense relates to MBIA Corp.’s surplus notes. The interest rate on the surplus notes is 11.26% plus 3-month Secured Overnight Financing Rate ("SOFR") plus 0.26161%. The decrease in interest expense for the three months ended March 31, 2026 compared with the same period of 2025 was due to a decrease in SOFR. Refer to the following “Liquidity and Capital Resources” section for more information about MBIA Corp.’s surplus notes.

The credit quality of our international and structured finance insured portfolio is assessed in the same manner as our U.S. public finance insured portfolio. As of MarchJune 31,30, 2026 and December 31, 2025, 26%27% and 25%, respectively, of our international and structured finance insured portfolio was rated below investment grade, before giving effect to MBIA’s guarantees, based on MBIA’s internal ratings, which are generally more current than the underlying ratings provided by S&P and Moody’s for this subset of our insured portfolio. As of MarchJune 31,30, 2026, below investment grade insurance policies primarily represent our first-lien RMBS exposures.

MBIA Corp. insures RMBS backed by residential mortgage loans, including first-lien alternative A-paper and subprime mortgage loans directly through RMBS securitizations. As of MarchJune 31,30, 2026 and December 31, 2025, MBIA Corp. had $494$485 million and $504 million, respectively, of first-lien RMBS gross par outstanding. These amounts include the gross par outstanding related to transactions that the Company consolidates under accounting guidance for VIEs and includes international exposure of $27$26 million and $28 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

Effective in the first quarter of 2022, MBIA Corp. was granted a permitted practice by the New York State Department of Financial Services (“NYSDFS”) related to the purchase of certain MBIA Corp.-insured securities with gross case base loss reserves (“Remediation Securities”). The Remediation Securities are acquired with the intent to terminate or commute the related insurance policies. MBIA Corp. may elect to sell the Remediation Securities to facilitate a termination or commutation. As of MarchJune 31,30, 2026 and December 31, 2025, MBIA Corp. did not hold any securities under this permitted practice.

As of MarchJune 31,30, 2026, the aggregate amount of insured par outstanding ceded by MBIA to reinsurers under reinsurance agreements was $481$447 million compared with $504 million as of December 31, 2025. Under National’s reinsurance agreement with MBIA Corp., if a reinsurer of MBIA Corp. is unable to pay claims ceded by MBIA Corp. on U.S. public finance exposure, National will assume liability for such ceded claim payments. For a further discussion of the Company’s reinsurance, refer to “Note 12: Insurance in Force” in the Notes to Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Information about our consolidated cash flows by category is presented on our consolidated statements of cash flows. The following table summarizes our consolidated cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025:

Net cash used by operating activities decreased for the threesix months ended MarchJune 31,30, 2026 compared with the same period of 2025 principally due to a decrease in payments to participants of our non-qualified deferred compensation plan in 2026.2026, partially offset by lower proceeds from loss recoveries.