MBIA INC

Previous wording

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 is effective beginning with this 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.

Current wording

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 was effective beginning with our 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.

Previous wording

Recent indicators suggest that U.S. economic activity has been expanding at a solid pace. The unemployment rate has been little changed in recent months and job gains have remained low. Inflation remains elevated. The Federal Open Market Committee (“FOMC”) seeks to achieve maximum employment and 2% inflation over the longer 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. At 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. 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.

Current wording

Recent indicators suggest that U.S. economic activity has been expanding at a solid 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 kept 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 and at 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 investment portfolio. Lower interest rates could also adversely affect the present value of loss reserves.

Previous wording

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 March 31, 2026, National had $554 million of insured debt service outstanding related to PREPA.

Current wording

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 June 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.

Previous wording

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 C…

Excerpt shortened here; the source contains the full paragraph.

Current wording

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 C…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

The increase in consolidated total revenues for the three months ended March 31, 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, partially offset by unfavorable changes in revenues from consolidated variable interest entities ("VIEs"). The three months ended March 31, 2026 included foreign currency gains of $2 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 March 31, 2025 included net foreign currency losses of $12 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 March 31, 2025 also included $5 million of net realized investment losses from the sales of investments with no comparable amount 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.

Current wording

The increase in consolidated total revenues for the six months ended June 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, partially offset by unfavorable changes in revenues from consolidated variable interest entities ("VIEs"). The six months ended June 30, 2026 included foreign currency gains of $3 million on euro-denominated liabilities due to the strengthening of the U.S. dollar against the euro in 2026. The six months ended June 30, 2025 included net foreign currency losses of $13 million on euro-denominated liabilities due to the weakening of the U.S. dollar against the euro in 2025 and foreign currency translation losses of $5 million reclassified from accumulated other comprehensive income ("AOCI") to net income (loss) due to the liquidation of a foreign subsidiary. The six months ended June 30, 2025 also included $6 million of net realized investment losses from the sales of investments with no comparable amount for the same period of 2026. Consolidated VIE revenue for the six months ended June 30, 2025 was a gain of $7 million with no comparable amount for the same period of 2026. Consolidated VIE revenue for the six months ended June 30, 2025 primarily related to a gain from a litigation trust we consolidated as a VIE.

Previous wording

Consolidated total expenses for the three months ended March 31, 2026 included a losses and loss adjustment expense (“LAE”) benefit of $3 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.

Current wording

Consolidated total expenses for the six months ended June 30, 2026 included $6 million of losses and LAE compared with $16 million for the same period of 2025. This decrease in losses and LAE was primarily due to favorable changes 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. 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 six months ended June 30, 2026 compared with the same period of 2025 primarily due to an $8 million reversal of previously recognized legal expenses.

Previous wording

For the three months ended March 31, 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”).

Current wording

For the three and six months ended June 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”).

Previous wording

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 months ended March 31, 2026 and 2025:

Current wording

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 June 30, 2026 and 2025:

Previous wording

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 March 31, 2026, National had total insured gross par outstanding of $21.5 billion.

Current wording

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 June 30, 2026, National had total insured gross par outstanding of $20.8 billion.

Previous wording

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

Current wording

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

Previous wording

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. For the three months ended March 31, 2026 and 2025, scheduled premiums earned was $6 million and refunded premiums earned were not material.

Current wording

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. Included in net premiums earned for the three months ended June 30, 2026 and 2025, were scheduled premiums earned of $5 million and $6 million, respectively. Included in net premiums earned for the six months ended June 30, 2026 and 2025, were scheduled premiums earned of $11 million and $12 million, respectively.

Previous wording

NET REALIZED INVESTMENT GAINS (LOSSES) Net realized investment losses for the three months ended March 31, 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.

Current wording

NET REALIZED INVESTMENT GAINS (LOSSES) Net realized investment losses for the six months ended June 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.

Previous wording

LOSSES AND LOSS ADJUSTMENT EXPENSES For the three months ended March 31, 2026, loss and LAE activity was primarily related to our PREPA exposure, which was driven by the accretion of net reserves and LAE, partially offset by an increase in risk-free discount rates, which caused loss reserves, net of recoveries, to decline. Refer to the following “U.S. Public Finance Insurance Puerto Rico Exposures” section for additional information on our PREPA exposures.

Current wording

LOSSES AND LOSS ADJUSTMENT EXPENSES For the three and six months ended June 30, 2026, losses and LAE incurred was primarily related to our PREPA exposure, which was driven by LAE and the accretion of net 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.

Previous wording

The insurance loss recoverable increased compared with December 31, 2025 primarily as a result of reclassifying recoveries from loss and LAE reserve as a result of claims paid on a lease-backed transaction, partially offset by recovery collections. The loss and LAE reserves as of March 31, 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.

Current wording

Insurance loss recoverable as of June 30, 2026 increased compared with December 31, 2025 primarily due to reclassifying recoveries from loss and LAE reserve as a result of claims paid on a lease-backed transaction, partially offset by recovery collections. Loss and LAE reserves as of June 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.

Previous wording

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 March 31, 2026 and 2025, the inter-segment service charge was $9 million and $10 million, respectively.

Current wording

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 June 30, 2026 and 2025, the inter-segment service charge was $7 million. For the six months ended June 30, 2026 and 2025, the inter-segment service charge was $16 million and $17 million, respectively.

Previous wording

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.

Current wording

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 b…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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 the revaluation of 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 million on these liabilities for the same period of 2025. This change was due to the U.S. dollar strengthening against the euro in 2026 compared with the U.S. dollar weakening against the euro in 2025.

Current wording

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE The three and six months ended June 30, 2026 included foreign currency revaluation gains of $1 million and $3 million, respectively, on euro-denominated MTN liabilities compared with foreign currency losses of $9 million and $13 million, respectively, on these liabilities for the same periods of 2025. These changes were due to the U.S. dollar strengthening against the euro in 2026 compared with the U.S. dollar weakening against the euro in 2025.

Previous wording

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

Current wording

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

Previous wording

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 March 31, 2026, MBIA Corp.’s total insured gross par outstanding was $1.9 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.

Current wording

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 June 30, 2026, MBIA Corp.’s total insured gross par outstanding was $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.

Previous wording

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

Current wording

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

Previous wording

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE The net losses for the three months ended March 31, 2025 were primarily due to the reclassification of foreign currency translation losses from AOCI to net income (loss) due to the liquidation of a foreign subsidiary.

Current wording

NET GAINS (LOSSES) ON FINANCIAL INSTRUMENTS AT FAIR VALUE AND FOREIGN EXCHANGE The net losses for the three and six months ended June 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 was primarily due to the reclassification of foreign currency translation losses from AOCI to net income (loss) due to the liquidation of a foreign subsidiary.

Previous wording

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

Current wording

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

Previous wording

LOSSES AND LOSS ADJUSTMENT EXPENSES For the three months ended March 31, 2026, the losses and LAE benefit primarily related to our insured RMBS transactions, driven by an increase in risk-free discount rates which caused loss reserves, net of recoveries, to decline.

Current wording

LOSSES AND LOSS ADJUSTMENT EXPENSES For the three months ended June 30, 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 an increase in risk-free rates used to discount loss reserves, which reduced the present value of loss reserves, net of recoveries, partially offset by accretion of loss reserves on our insured RMBS transactions.

Previous wording

For the three months ended March 31, 2025, losses incurred primarily related to a decline in risk-free discount rates which caused loss reserves, net of recoveries, to increase and accretion of loss reserves on our insured RMBS transactions.

Current wording

For the three and six months ended June 30, 2025, losses and LAE incurred primarily related to a decrease in risk-free rates used to discount loss reserves, which caused the present value of loss reserves, net of recoveries to increase and accretion of loss reserves on our insured RMBS transactions.

Previous wording

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 loss and LAE reserves from December 31, 2025 primarily related to an increase in risk-free rates used to discount our insured RMBS reserves.

Current wording

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. Loss and LAE reserves as of June 30, 2026 decreased compared with December 31, 2025 primarily due 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.

Previous wording

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 March 31, 2026 and 2025, the inter-segment service charge was $3 million and $4 million, respectively.

Current wording

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 June 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 $6 million and $7 million, respectively.

Previous wording

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.

Current wording

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 plus 0.26161%. Refer to the following “Liquidity and Capital Resources” section for more information about MBIA Corp.’s surplus notes.

Previous wording

EXPENSES OF CONSOLIDATED VIEs The increase in expenses of consolidated VIEs for the three months ended March 31, 2026 compared with the same period of 2025 was primarily due to an increase in legal expenses related to a consolidated VIE.

Current wording

EXPENSES OF CONSOLIDATED VIEs During the second quarter of 2026, we recorded an $8 million reversal of previously recognized legal expenses related to a consolidated VIE. Refer to “Note 12: Commitments and Contingencies” in the Notes to Consolidated Financial Statements for additional information.

Previous wording

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 March 31, 2026 and December 31, 2025, 26% 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 March 31, 2026, below investment grade insurance policies primarily represent our first-lien RMBS exposures.

Current wording

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 June 30, 2026 and December 31, 2025, 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 June 30, 2026, below investment grade insurance policies primarily represent our first-lien RMBS exposures.

Previous wording

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 March 31, 2026 and December 31, 2025, MBIA Corp. had $494 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 million and $28 million as of March 31, 2026 and December 31, 2025, respectively.

Current wording

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 June 30, 2026 and December 31, 2025, MBIA Corp. had $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 $26 million and $28 million as of June 30, 2026 and December 31, 2025, respectively.

Previous wording

As of March 31, 2026, the aggregate amount of insured par outstanding ceded by MBIA to reinsurers under reinsurance agreements was $481 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.

Current wording

As of June 30, 2026, the aggregate amount of insured par outstanding ceded by MBIA to reinsurers under reinsurance agreements was $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.

Previous wording

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 three months ended March 31, 2026 and 2025:

Current wording

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 six months ended June 30, 2026 and 2025:

Previous wording

Net cash used by operating activities decreased for the three months ended March 31, 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.

Current wording

Net cash used by operating activities decreased for the six months ended June 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, partially offset by lower proceeds from loss recoveries.

Previous wording

Net cash provided by investing activities increased for the three months ended March 31, 2026 compared with the same period of 2025 primarily due to a higher return of principal from investments, net of purchases in 2026.

Current wording

Net cash provided by investing activities decreased for the six months ended June 30, 2026 compared with the same period of 2025 primarily due to higher proceeds from sales of investments in 2025, partially offset by higher scheduled principal payments in 2026.

Previous wording

Net cash used by financing activities decreased for the three months ended March 31, 2026 compared with the same period of 2025 primarily due to decreases in stock repurchases related to employee stock award vesting and paydowns of VIE debt in 2026.

Current wording

Net cash used by financing activities decreased for the six months ended June 30, 2026 compared with the same period of 2025 primarily due to decreases in stock repurchases related to employee stock award vesting and paydowns of VIE debt in 2026.