MBIA INC

NOTES TO CONDENSED FINANCIAL STATEMENTS

1. Condensed Financial Statements

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. This includes the statements of comprehensive income (loss) which is exactly the same as the Company’s consolidated statements of comprehensive income (loss). It is suggested that these condensed financial statements be read in conjunction with the Company’s consolidated financial statements and the notes thereto.

The activities of MBIA Inc. (the “Parent Company”) consist of general corporate activities and funding activities, which principally include holding and managing investments, servicing outstanding corporate debt, investment agreements issued by the Parent Company and its subsidiaries, and posting collateral under investment agreement and derivative contracts.

The Parent Company is subject to the same liquidity risks and uncertainties as described in footnote 1 to the Company’s consolidated financial statements. As of December 31, 2024, the liquidity position of the Parent Company, which included cash and cash equivalents or short-term investments comprised of highly rated commercial paper, money market funds and municipal, U.S. agency and corporate bonds for general corporate purposes, excluding the amount held in escrow under its tax sharing agreement, was $380 million.

During 2024, the Parent Company repurchased $10 million and $1 million principal amounts of the Parent Company 7.000% Debentures due 2025 from National and MBIA Corp., respectively, and $5 million principal amount of the Parent Company 7.150% Debentures due 2027 from MBIA Corp. As of December 31, 2024, National owned $308 million principal amount of the Parent Company 5.700% Senior Notes due 2034 and MBIA Corp. owned $29 million principal amount of the Parent Company 6.625% Debentures due 2028; and the Parent Company owned $13 million of MBIA Corp. surplus notes.

2. Accounting Policies

The Parent Company carries its investments in subsidiaries under the equity method.

For a further discussion of significant accounting policies and recent accounting pronouncements, refer to footnotes 2 and 3 to the Company’s consolidated financial statements.

3. Dividends from Subsidiaries

During 2024, National declared and paid dividends of $69 million to its ultimate parent, MBIA Inc. The Parent Company accounted for the dividend as a return of investment.

During 2023, National declared and paid a special dividend of $550 million and an as-of-right dividend of $97 million to its ultimate parent, MBIA Inc.

During 2022, National declared and paid dividends of $72 million to its ultimate parent, MBIA Inc.

4. Deferred Tax Asset, Net of Valuation Allowance

The Parent Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on tax assets and liabilities is recognized in income in the period that includes the enactment date. Valuation allowances are established to reduce deferred tax assets to the amount that more likely than not will be realized. For a further discussion of the net deferred tax asset, refer to footnote 10 to the Company’s consolidated financial statements.

NOTES TO CONDENSED FINANCIAL STATEMENTS (continued)

5. Obligations under Investment Agreements

Refer to footnote 9 to the Company’s consolidated financial statements for information of investment agreements.

6. Pledged Collateral

Substantially all of the obligations under investment agreements require the Parent Company and its subsidiaries to pledge securities as collateral. As of December 31, 2024 and 2023, the fair value of securities pledged as collateral with respect to these investment agreements approximated $213 million and $241 million, respectively. The Parent Company’s collateral as of December 31,2024, consisted principally of U.S. Treasury and government agency and state and municipal bonds, and was primarily held with major U.S. banks.

7. Affiliate Loans Payable

Affiliate loans payable consists of loans payable to MBIA Global Funding, LLC (“GFL”). GFL raised funds through the issuance of medium-term notes with varying maturities, which were, in turn, guaranteed by MBIA Corp. GFL lent the proceeds of these medium-term note issuances to the Parent Company.

8. Extraordinary Cash Dividend

On December 7, 2023, the Company's Board of Directors declared an extraordinary cash dividend on MBIA’s common stock of $8.00 per share. The dividend was paid on December 22, 2023 to shareholders of record as of the close of business on December 18, 2023.