Executive Summary

Q1 2024 GAAP net loss was $86 million (−$1.84 EPS) vs. $93 million (−$1.86 EPS) a year ago; Adjusted net loss widened to $24 million (−$0.52/share) from $1 million (−$0.03/share), driven primarily by higher losses and LAE at National related to PREPA timing effects .
Liquidity at the holding company was $376 million; management retired ~$36 million of euro MTNs in Q1 and a further ~$26 million post-quarter, describing the transactions as accretive to equity and reducing FX volatility .
National remained well-capitalized with statutory capital ~$1.1B and claims-paying resources ~$1.7B; insured gross par fell to $27.8B (−$0.6B q/q), leverage ratio steady at 25:1 .
PREPA exposure remains the critical catalyst: $610 million gross par insured outstanding; confirmation hearing concluded Mar 18, 2024 and rulings are pending (First Circuit appeals and Judge Swain), which will influence reserve outcomes and the timing to restart a sale process .

What Went Well and What Went Wrong

What Went Well
- Opportunistic liability management: Retired GFL euro MTNs at discounts (Q1: ~$36M; post-quarter: ~$26M), improving equity accretion and reducing FX volatility; holdco liquidity described as the strongest in a while (“purchases were executed at prices accretive to equity… reduce euro exchange rate volatility”) (“we do have opportunities… value adding to our shareholders”).
- Corporate FV/FX tailwinds vs. prior year and swap terminations: Q1 saw favorable changes in interest rate swaps and FX (euro liabilities), supporting total revenues vs. prior year (“favorable changes on our interest rate swaps and foreign exchange rates… fair value net gains… foreign currency gains”).
- Insurance portfolio de-risking trend intact: National’s insured portfolio runoff continued (−$0.6B q/q to $27.8B), leverage steady (25:1), with CPR ~$1.7B and statutory capital ~$1.1B .
What Went Wrong
- PREPA delays pressured results: Higher losses and LAE at National tied to extending the expected effective date of the settlement; Q1 losses and LAE were $18M vs. $6M prior year .
- Book value per share declined further to −$33.80 (from −$32.56), reflecting the quarter’s net loss and MBIA Corp’s negative book value drag .
- PREPA legal overhang persists: Management highlighted the uncertainty and timing of the First Circuit and confirmation decisions, leaving capital return/sale optionality gated by resolution (“very difficult to predict when these opinions will be issued”) .

Financial Results

Revenue, EPS, YoY comparison (GAAP)

Metric	Q1 2023	Q1 2024
Total Revenues ($MM)	$2	$13
Net Income (Loss) Attributable to MBIA ($MM)	$(93)	$(86)
Net Income (Loss) per Share ($)	$(1.86)	$(1.84)
Adjusted Net Income (Loss) ($MM, non-GAAP)	$(1)	$(24)
Adjusted EPS ($, non-GAAP)	$(0.03)	$(0.52)

Sequential EPS and Net Income

Metric	Q4 2023	Q1 2024
Net Income (Loss) ($MM)	$(138)	$(86)
EPS ($)	$(2.94)	$(1.84)

Segment snapshot (GAAP)

Segment (3 mos)	Revenues ($MM)	Losses & LAE ($MM)	Interest ($MM)	Pre-Tax Income (Loss) ($MM)
U.S. Public Finance (Q1’23)	31	0	0	17
U.S. Public Finance (Q1’24)	26	22	0	(9)
Corporate (Q1’23)	7	0	14	(31)
Corporate (Q1’24)	31	0	13	(9)
Int’l & Structured Finance (Q1’23)	(13)	6	37	(69)
Int’l & Structured Finance (Q1’24)	(22)	(4)	39	(69)

Key KPIs and balance metrics

KPI	Q3 2023	Q4 2023	Q1 2024
National Statutory Capital ($B)	1.8	1.1	1.1
National CPR ($B)	2.3	1.7	1.7
National Gross Par Outstanding ($B)	29.1	28.4	27.8
National Leverage (Gross Par / Stat Cap)	16:1	25:1	25:1
Holdco Liquidity ($MM)	194	411	376
Book Value / Share ($)	(24.22)	(32.56)	(33.80)
PREPA Gross Par Insured ($MM)	610	610	610

PREPA scheduled insured debt service outstanding (National)

Period	Amount ($MM)
9 months ending Dec 31, 2024	121
2025	105
2026	57
2027	20
2028	20
Thereafter	469
Total	792

Drivers and non-GAAP notes

Higher losses and LAE in Q1’24 stemmed from extending the timing to the effective date of a PREPA settlement, partially offset by rate-driven reserve benefits on RMBS; total losses and LAE were $18MM vs. $6MM a year ago .
Adjusted loss widened due to National’s PREPA-related losses and LAE; reconciling items included FV/FX, realized gains/losses, and the exclusion of MBIA Corp. and discontinued ops per policy .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance (Revenue/EPS/Margins)	FY/Qtr	None provided	None provided	n/a
Strategic priorities	Ongoing	Resolve Puerto Rico exposures; return capital; evaluate sale	Resolve PREPA; then restart sale process	Maintained
Share repurchase authorization	Ongoing	$71MM remaining (shared across entities)	$71MM remaining; current buyback capacity at holdco (National constrained)	Maintained; locus at holdco
Balance sheet actions	Near term	Opportunistic debt repurchases	Continued opportunistic MTN/debt repurchases when accretive	Reiterated

No quantitative guidance was issued; management focused on PREPA resolution as gating item for strategic alternatives and further capital actions .

Earnings Call Themes & Trends

Topic	Q3 2023 (Prev-2)	Q4 2023 (Prev-1)	Q1 2024 (Current)	Trend
PREPA resolution	Amended PSA lowered recoveries; large reserve build at National; hearing set Mar 2024	PREPA exposure $610MM; confirmation hearing Mar 4 start; pending appeals	Hearing concluded Mar 18; awaiting rulings from First Circuit and Judge Swain	Approaching decision; timing uncertain
Capital return/liability mgmt	Inc buybacks in Q3; as-of-right dividend expected; National repurchase capacity noted	$8/share extraordinary dividend paid; $235MM retained at holdco; flexibility to repurchase debt	$36MM MTNs repurchased; $26MM more post-Q1; accretive; holdco liquidity $376MM	Ongoing, accretive liability reduction
National capital & CPR	Stat cap $1.8B; CPR $2.3B	Stat cap $1.1B; CPR $1.7B post-dividend	Stat cap $1.1B; CPR $1.7B; leverage 25:1	Stable after Q4 dividend
Strategic alternatives	Sale process paused pending PR resolution	Intend to resume sale post-PREPA	Strategy reiterated: resolve PREPA then restart sale	Unchanged
Liquidity & debt runway	Holdco liquidity ~$194MM; swap/GIC management	Holdco liquidity ~$411MM; swaps terminated	Holdco liquidity $376MM; additional MTN retirements; runway discussed through ~2030	Adequate runway improving profile

Management Commentary

Strategy and priorities: “Our primary objectives continue to be focused on the resolution of our remaining Puerto Rico exposure and then restarting the process to sell the company.”
PREPA timing: “There is a view that Judge Swain is waiting for the First Circuit to issue their opinion before she issues the confirmation… very difficult to predict when these opinions will be issued.”
Liability management and liquidity: “Unencumbered cash and liquid assets held by MBIA Inc. totaled $376 million… spending approximately $36 million on retiring… euro medium-term note liabilities… subsequent to March 31, we spent an additional $26 million…”
National portfolio metrics: “National… gross par… declined by approximately $600 million… to $27.8 billion… leverage ratio… 25:1… claims paying resources of $1.7 billion and statutory capital… $1.1 billion.”

Q&A Highlights

Holdco liquidity and liability repurchases: Management plans to remain opportunistic in repurchasing MTNs and holding company debt when accretive; investment agreements are held to maturity .
Share repurchases: $71MM authorization in place; National currently lacks capacity, so any near-term buybacks would be at the holding company level, subject to best use of capital .
PREPA timing and impact: Management acknowledged uncertainty on timing of First Circuit and confirmation rulings; reserves reflect scenario analysis with potential upside if the plan proceeds as projected .
Debt service runway and options: With holdco liquidity and as-of-right dividends, runway extends toward ~2030 without a sale; other levers include refinancing, and National’s holdings of 2034 Inc. debt aiding flexibility .

Estimates Context

Wall Street consensus (S&P Global) for Q1 2024 EPS and revenue was not available due to access constraints at the time of analysis; therefore, no beat/miss vs. consensus is presented. We benchmark results vs. prior year and prior quarter based on company filings and the earnings call.

Key Takeaways for Investors

PREPA is the dominant catalyst: Court rulings (First Circuit and confirmation) are pending; outcomes will drive reserve releases/charges, capital return capacity, and timing to restart a sale process .
Liability management remains value accretive: Continued repurchases of euro MTNs at discounts and reduced FX volatility are supportive of equity value and lower risk profile .
National’s financial strength stabilized post-dividend: Stat capital ~$1.1B, CPR ~$1.7B, leverage 25:1; insured portfolio runoff continues as expected .
Earnings volatility persists until Puerto Rico is resolved: Q1 Adjusted loss widened on PREPA timing, partly offset by favorable rate impacts and Corporate FV/FX .
Capital allocation optionality exists at the holdco: $376MM liquidity, $71MM buyback authorization, and the ability to repurchase debt opportunistically provide levers pending PREPA clarity .
Book value remains negative due to MBIA Corp. drag: GAAP BV/share −$33.80; management also tracks adjusted measures excluding MBIA Corp./AOCI .
Near-term trading setup: Stock likely sensitive to PREPA decision headlines and further liability management announcements; positive rulings could be a catalyst to re-engage the sale process and potential capital actions .

MBIA INC (MBI)·Q1 2024 Earnings Summary