v3.25.2
Business Segments
 6 Months Ended
Jun. 30, 2025
Text Block [Abstract]  
Business Segments

Note 9: Business Segments

As defined by segment reporting, an operating segment is a component of a company (i) that engages in business activities from which it earns revenue and incurs expenses, (ii) whose operating results are regularly reviewed by the Chief Operating Decision Maker ("CODM") to assess the performance of the segment and to make decisions about the allocation of resources to the segment and, (iii) for which discrete financial information is available. The Company manages its businesses across three operating segments: 1) U.S. public finance insurance; 2) corporate; and 3) international and structured finance insurance. The Company's CODM is the Chief Executive Officer. The Company evaluates the performance of all of its reportable segments based on each segment's income (loss) from continuing operations before income taxes. The CODM uses each segment's income (loss) from continuing operations before income taxes to allocate resources, including employees and financial or capital resources. Operating decisions are made during the Company's annual planning and quarterly forecasting processes, and after considering budget-to-actual variances on a quarterly basis using the income (loss) from continuing operations before income taxes. The following sections provide a description of each of the Company’s reportable operating segments.

U.S. Public Finance Insurance

The Company’s 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, U.S. public finance insured obligations when due. The obligations are not subject to acceleration, except that National may have the right, at its discretion, to accelerate insured obligations upon default or otherwise. National’s guarantees insure municipal bonds, including tax-exempt and taxable indebtedness of U.S. political subdivisions, as well as utilities, airports, health care 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, fees or tariffs related to the use of these projects, lease payments or other similar types of revenue streams.

Corporate

The Company’s corporate segment consists of general corporate activities, including providing support services to MBIA Inc.’s subsidiaries as well as asset and capital management. Support services are provided by the Company’s service company, MBIA Services, and include, among others, management, legal, accounting, treasury, information technology, and insurance portfolio surveillance, on a fee-for-service basis. MBIA Services is compensated for services at cost and its net revenues and expenses are generally managed to break-even. Capital management includes activities related to servicing obligations issued by MBIA Inc. and its subsidiary, MBIA Global Funding, LLC (“GFL”). MBIA Inc. issued debt to finance the operations of the MBIA group. GFL raised funds through the issuance of MTNs with varying maturities, which were in turn guaranteed by MBIA Corp. GFL lent the proceeds of these MTN issuances to MBIA Inc. MBIA Inc. also provided customized investment agreements, guaranteed by MBIA Corp., for bond proceeds and other public funds for such purposes as construction, loan origination, escrow and debt service or other reserve fund requirements. The Company has ceased issuing new MTNs and investment agreements and the outstanding liability balances and corresponding asset balances have declined over time as liabilities matured, terminated or were called or repurchased. All of the debt within the corporate segment is managed collectively and is serviced by available liquidity.

International and Structured Finance Insurance

The Company’s international and structured finance insurance segment is managed through MBIA Corp. The financial guarantees issued by MBIA Corp. generally provide unconditional and irrevocable guarantees of the payment of principal of, and interest or other amounts owing on, non-U.S. public finance and global structured finance insured obligations when due, or in the event MBIA Corp. has the right, at its discretion, to accelerate insured obligations upon default or otherwise. MBIA Corp. insures non-U.S. public finance and global structured finance obligations, including asset-backed obligations. MBIA Corp. has insured 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 Corp. insures the investment contracts written by MBIA Inc., and if MBIA Inc. were to have insufficient assets to pay amounts due upon maturity or termination, MBIA Corp. would make such payments. MBIA Insurance Corporation also insures debt obligations of GFL. MBIA Corp. has also written policies guaranteeing obligations under certain derivative contracts, including termination payments that may become due upon certain insolvency or payment defaults of the financial guarantor or the issuer. MBIA Corp. has not written any meaningful amount of business since 2008.

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

 

Note 9: Business Segments (continued)

Segments Results

The following tables provide the Company’s segment results for the three months ended June 30, 2025 and 2024:

 

 

 

 

 

Three Months Ended June 30, 2025

 

 

 

 

 

U.S.

 

 

 

 

 

International

 

 

 

 

 

 

 

 

 

 

 

Public

 

 

 

 

 

and Structured

 

 

 

 

 

 

 

 

 

 

 

Finance

 

 

 

 

 

Finance

 

 

 

 

 

 

 

In millions

 

Insurance

 

 

Corporate

 

 

Insurance

 

 

Eliminations

 

 

Consolidated

 

Revenues (1)

 

$

15

 

 

$

5

 

 

$

5

 

 

$

-

 

 

$

25

 

Net gains (losses) on financial instruments at fair value and foreign exchange

 

 

1

 

 

 

(3

)

 

 

-

 

 

 

-

 

 

 

(2

)

Inter-segment revenues (2)

 

 

7

 

 

 

12

 

 

 

1

 

 

 

(20

)

 

 

-

 

 

 

Total revenues (3)

 

 

23

 

 

 

14

 

 

 

6

 

 

 

(20

)

 

 

23

 

Losses and loss adjustment

 

 

6

 

 

 

-

 

 

 

2

 

 

 

-

 

 

 

8

 

Compensation and benefits

 

 

-

 

 

 

12

 

 

 

-

 

 

 

-

 

 

 

12

 

Interest

 

 

-

 

 

 

18

 

 

 

36

 

 

 

(6

)

 

 

48

 

Inter-segment service charge

 

 

7

 

 

 

-

 

 

 

3

 

 

 

(10

)

 

 

-

 

Other segment items (4)

 

 

3

 

 

 

4

 

 

 

7

 

 

 

(3

)

 

 

11

 

 

 

Total expenses

 

 

16

 

 

 

34

 

 

 

48

 

 

 

(19

)

 

 

79

 

Income (loss) from continuing operations before income taxes

 

$

7

 

 

$

(20

)

 

$

(42

)

 

$

(1

)

 

$

(56

)

Total assets per reportable segment

 

$

1,544

 

 

$

677

 

 

$

805

 

 

$

(903

)

 (5)

$

2,123

 

Assets held for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11

 

Total assets

 

 

 

 

 

 

 

 

 

 

 

 

 

$

2,134

 

 

 

(1) - Consists primarily of net premiums earned, net investment income, net realized investment gains (losses), fees and reimbursements and other net realized gains (losses).

(2) - Primarily represents intercompany service charges and intercompany net investment income.

(3) - Includes net investment income of $15 million, $6 million, $3 million, and ($5) million for the U.S. Public Finance, Corporate, International and Structured Finance, and Eliminations segments, respectively.

(4) - Other segment items for each reportable segment include:

a. U.S. Public Finance Insurance - amortization of DAC, professional service fees, occupancy costs and other operating expenses;

b. Corporate - professional service fees, occupancy costs and other operating expenses;

c. International and Structured Finance Insurance - expenses of consolidated VIEs, amortization of DAC, professional service fees and other operating expenses, and

d. Elimination - inter-segment amortization of DAC and inter-segment occupancy costs.

(5) - Consists principally of intercompany reinsurance balances.

 

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

 

Note 9: Business Segments (continued)

 

 

 

 

 

Three Months Ended June 30, 2024

 

 

 

 

 

U.S.

 

 

 

 

 

International

 

 

 

 

 

 

 

 

 

 

 

Public

 

 

 

 

 

and Structured

 

 

 

 

 

 

 

 

 

 

 

Finance

 

 

 

 

 

Finance

 

 

 

 

 

 

 

In millions

 

Insurance

 

 

Corporate

 

 

Insurance

 

 

Eliminations

 

 

Consolidated

 

Revenues (1)

 

$

16

 

 

$

8

 

 

$

8

 

 

$

(1

)

 

$

31

 

Net gains (losses) on financial instruments at fair value and foreign exchange

 

 

-

 

 

 

4

 

 

 

(59

)

 

 

-

 

 

 

(55

)

Revenues of consolidated VIEs

 

 

-

 

 

 

-

 

 

 

(13

)

 

 

-

 

 

 

(13

)

Inter-segment revenues (2)

 

 

7

 

 

 

15

 

 

 

1

 

 

 

(23

)

 

 

-

 

 

 

Total revenues (3)

 

 

23

 

 

 

27

 

 

 

(63

)

 

 

(24

)

 

 

(37

)

Losses and loss adjustment

 

 

141

 

 

 

-

 

 

 

1

 

 

 

-

 

 

 

142

 

Compensation and benefits

 

 

-

 

 

 

9

 

 

 

-

 

 

 

-

 

 

 

9

 

Interest

 

 

-

 

 

 

18

 

 

 

41

 

 

 

(6

)

 

 

53

 

Inter-segment service charge

 

 

9

 

 

 

-

 

 

 

6

 

 

 

(15

)

 

 

-

 

Other segment items (4)

 

 

3

 

 

 

4

 

 

 

8

 

 

 

(3

)

 

 

12

 

 

 

Total expenses

 

 

153

 

 

 

31

 

 

 

56

 

 

 

(24

)

 

 

216

 

Income (loss) from continuing operations before income taxes

 

$

(130

)

 

$

(4

)

 

$

(119

)

 

$

-

 

 

$

(253

)

Total assets per reportable segment

 

$

1,671

 

 

$

657

 

 

$

846

 

 

$

(941

)

(5)

$

2,233

 

Assets held for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

71

 

Total assets

 

 

 

 

 

 

 

 

 

 

 

 

 

$

2,304

 

________________

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) - Consists primarily of net premiums earned, net investment income, net realized investment gains (losses), fees and reimbursements and other net realized gains (losses).

(2) - Primarily represents intercompany service charges and intercompany net investment income.

(3) - Includes net investment income of $17 million, $8 million, $2 million, and ($5) million for the U.S. Public Finance, Corporate, International and Structured Finance, and Eliminations segments, respectively.

(4) - Other segment items for each reportable segment include:

a. U.S. Public Finance Insurance - amortization of DAC, professional service fees, occupancy costs and other operating expenses;

b. Corporate - professional service fees, occupancy costs and other operating expenses;

c. International and Structured Finance Insurance - expenses of consolidated VIEs, amortization of DAC, professional service fees and other operating expenses, and

d. Elimination - inter-segment amortization of DAC and inter-segment occupancy costs.

(5) - Consists principally of intercompany reinsurance balances.

 

 

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

 

Note 9: Business Segments (continued)

The following tables provide the Company’s segment results for the six months ended June 30, 2025 and 2024:

 

 

 

 

 

Six Months Ended June 30, 2025

 

 

 

 

 

U.S.

 

 

 

 

 

International

 

 

 

 

 

 

 

 

 

 

 

Public

 

 

 

 

 

and Structured

 

 

 

 

 

 

 

 

 

 

 

Finance

 

 

 

 

 

Finance

 

 

 

 

 

 

 

In millions

 

Insurance

 

 

Corporate

 

 

Insurance

 

 

Eliminations

 

 

Consolidated

 

Revenues (1)

 

$

26

 

 

$

11

 

 

$

10

 

 

$

-

 

 

$

47

 

Net gains (losses) on financial instruments at fair value and foreign exchange

 

 

1

 

 

 

(8

)

 

 

(10

)

 

 

-

 

 

 

(17

)

Revenues of consolidated VIEs

 

 

-

 

 

 

-

 

 

 

7

 

 

 

-

 

 

 

7

 

Inter-segment revenues (2)

 

 

13

 

 

 

27

 

 

 

3

 

 

 

(43

)

 

 

-

 

 

 

Total revenues (3)

 

 

40

 

 

 

30

 

 

 

10

 

 

 

(43

)

 

 

37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Losses and loss adjustment

 

 

9

 

 

 

-

 

 

 

7

 

 

 

-

 

 

 

16

 

Compensation and benefits

 

 

-

 

 

 

21

 

 

 

-

 

 

 

-

 

 

 

21

 

Interest

 

 

-

 

 

 

36

 

 

 

74

 

 

 

(12

)

 

 

98

 

Inter-segment service charge

 

 

17

 

 

 

-

 

 

 

7

 

 

 

(24

)

 

 

-

 

Other segment items (4)

 

 

7

 

 

 

8

 

 

 

11

 

 

 

(6

)

 

 

20

 

 

 

Total expenses

 

 

33

 

 

 

65

 

 

 

99

 

 

 

(42

)

 

 

155

 

Income (loss) from continuing operations before income taxes

 

$

7

 

 

$

(35

)

 

$

(89

)

 

$

(1

)

 

$

(118

)

Total assets per reportable segment

 

$

1,544

 

 

$

677

 

 

$

805

 

 

$

(903

)

 (5)

$

2,123

 

Assets held for sale

 

 

 

 

 

 

 

 

11

 

Total assets

 

 

 

 

 

 

 

$

2,134

 

 

(1) - Consists primarily of net premiums earned, net investment income, net realized investment gains (losses), fees and reimbursements and other net realized gains (losses).

(2) - Primarily represents intercompany service charges and intercompany net investment income.

(3) - Includes net investment income of $30 million, $13 million, $6 million, and ($12) million for the U.S. Public Finance, Corporate, International and Structured Finance, and Eliminations segments, respectively.

(4) - Other segment items for each reportable segment include:

a. U.S. Public Finance Insurance - amortization of DAC, professional service fees, occupancy costs and other operating expenses;

b. Corporate - professional service fees, occupancy costs and other operating expenses;

c. International and Structured Finance Insurance - expenses of consolidated VIEs, amortization of DAC, professional service fees and other operating expenses, and

d. Elimination - inter-segment amortization of DAC and inter-segment occupancy costs.

(5) - Consists principally of intercompany reinsurance balances.

 

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

 

Note 9: Business Segments (continued)

 

 

 

 

 

Six Months Ended June 30, 2024

 

In millions

 

U.S. Public Finance Insurance

 

 

Corporate

 

 

International and Structured Finance Insurance

 

 

Eliminations

 

 

Consolidated

 

Revenues (1)

 

$

35

 

 

$

16

 

 

$

15

 

 

$

(1

)

 

$

65

 

Net gains (losses) on financial instruments at fair value and foreign exchange

 

 

1

 

 

 

12

 

 

 

(64

)

 

 

-

 

 

 

(51

)

Revenues of consolidated VIEs

 

 

-

 

 

 

-

 

 

 

(38

)

 

 

-

 

 

 

(38

)

Inter-segment revenues (2)

 

 

13

 

 

 

30

 

 

 

2

 

 

 

(45

)

 

 

-

 

 

 

Total revenues (3)

 

 

49

 

 

 

58

 

 

 

(85

)

 

 

(46

)

 

 

(24

)

Losses and loss adjustment

 

 

163

 

 

 

-

 

 

 

(3

)

 

 

-

 

 

 

160

 

Compensation and benefits

 

 

-

 

 

 

28

 

 

 

-

 

 

 

-

 

 

 

28

 

Interest

 

 

-

 

 

 

36

 

 

 

81

 

 

 

(12

)

 

 

105

 

Inter-segment service charge

 

 

19

 

 

 

-

 

 

 

10

 

 

 

(29

)

 

 

-

 

Other segment items (4)

 

 

6

 

 

 

7

 

 

 

15

 

 

 

(5

)

 

 

23

 

 

 

Total expenses

 

 

188

 

 

 

71

 

 

 

103

 

 

 

(46

)

 

 

316

 

Income (loss) from continuing operations before income taxes

 

$

(139

)

 

$

(13

)

 

$

(188

)

 

$

-

 

 

$

(340

)

Total assets per reportable segment

 

$

1,671

 

 

$

657

 

 

$

846

 

 

$

(941

)

(5)

$

2,233

 

Assets held for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

71

 

Total assets

 

 

 

 

 

 

 

 

 

 

 

 

 

$

2,304

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) - Consists primarily of net premiums earned, net investment income, net realized investment gains (losses) and other net realized gains (losses).

(2) - Primarily represents intercompany service charges and intercompany net investment income.

(3) - Includes net investment income of $35 million, $16 million, $5 million, and ($11) million for the U.S. Public Finance, Corporate, International and Structured Finance, and Eliminations segments, respectively.

(4) - Other segment items for each reportable segment include:

a. U.S. Public Finance Insurance - amortization of DAC, professional service fees, occupancy costs and other operating expenses;

b. Corporate - professional service fees, occupancy costs and other operating expenses;

c. International and Structured Finance Insurance - expenses of consolidated VIEs, amortization of DAC, professional service fees and other operating expenses, and

d. Elimination - inter-segment amortization of DAC and inter-segment occupancy costs.

(5) - Consists principally of intercompany reinsurance balances.