Earnings Per Share

9 Months Ended

Sep. 30, 2023

Note 11: Earnings Per Share

Earnings per share is calculated using the two-class method in which earnings are allocated to common stock and participating securities based on their rights to receive nonforfeitable dividends or dividend equivalents. The Company grants restricted stock to certain employees and non-employee directors in accordance with the Company’s long-term incentive programs, which entitle the participants to receive nonforfeitable dividends or dividend equivalents during the vesting period on the same basis as those dividends are paid to common shareholders. These unvested stock awards represent participating securities. During periods of net income, the calculation of earnings per share exclude the income attributable to participating securities in the numerator and the dilutive impact of these securities from the denominator. During periods of net loss, no effect is given to participating securities in the numerator and the denominator excludes the dilutive impact of these securities since they do not share in the losses of the Company.

Basic earnings per share excludes dilution and is reported separately for continuing operations and discontinued operations. Basic earnings per share for continuing operations and discontinued operations is computed by dividing net income from continuing operations and discontinued operations available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflects the dilutive effect of all unvested restricted stock outstanding during the period that could potentially result in the issuance of common stock. The dilution from unvested restricted stock is calculated by applying the two-class method and using the treasury stock method. The treasury stock method assumes the proceeds from the unrecognized compensation expense from unvested restricted stock will be used to purchase shares of the Company’s common stock at the average market price during the period. If the potentially dilutive securities disclosed in the table below become vested, the transaction would be net share settled resulting in a significantly lower impact to the outstanding share balance in comparison to the total amount of the potentially dilutive securities. During periods of net loss, unvested restricted stock is excluded from the calculation because it would have an antidilutive effect. Therefore, in periods of net loss, the calculation of basic and diluted earnings per share would result in the same value.

MBIA Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

Note 11: Earnings Per Share (continued)

The following table presents the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2023 and 2022:



	Three Months Ended September 30,						Nine Months Ended September 30,
In millions except per share amounts	2023			2022			2023			2022
Basic and diluted earnings per share:
Net income (loss) from continuing operations available to common shareholders	$	(185	)	$	(35	)	$	(346	)	$	(144	)
Income (loss) from discontinued operations, net of income taxes		(1	)		1			(2	)		1
Less: Net income (loss) from discontinued operations attributable to noncontrolling interests		(1	)		-			5			-
Net income (loss) from discontinued operations attributable to MBIA Inc.		-			1			(7	)		1
Net income (loss) attributable to MBIA Inc.	$	(185	)	$	(34	)	$	(353	)	$	(143	)
Basic and diluted weighted average shares(1)		47.0			49.9			48.7			49.8
Net income (loss) per common share attributable to MBIA Inc. - basic and diluted:
Continuing operations	$	(3.93	)	$	(0.68	)	$	(7.10	)	$	(2.88	)
Discontinued operations		(0.01	)		0.01			(0.15	)		0.01
Net income (loss) per share attributable to MBIA Inc. - basic and diluted	$	(3.94	)	$	(0.67	)	$	(7.25	)	$	(2.87	)
Potentially dilutive securities excluded from the calculation of diluted EPS because of antidilutive affect		4.3			5.0			4.3			5.0

(1) - Includes approximately 1 million of participating securities that met the service condition and were eligible to receive nonforfeitable dividends or dividend equivalents for the three and nine months ended September 30, 2023 and 2022.