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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2025

Text Block [Abstract]

Quantitative Information Regarding The Significant Unobservable Inputs For Certain Assets And Liabilities Measured At Fair Value On A Recurring Basis

The following tables provide quantitative information regarding the significant unobservable inputs used by the Company for assets measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024:


			Fair Value as of								Range
			September 30,								(Weighted
In millions			2025				Valuation Techniques		Unobservable Input		Average)
Assets:
	Equity Investments		$	33			Discounted cash flow		Discount rate (1)
									EBITDA multiple (1)
							Type certificate		Discount rate (1)
									EBITDA royalty share (1)
	Loans carried at fair value			16			Discounted cash flow		Discount rate (1)
Assets of consolidated VIEs:
	Loans receivable at fair value			33			Market prices of similar liabilities adjusted for financial guarantees provided to VIE obligations		Impact of financial guarantee		-3% to -3% (-3%) (2)

(1) - Ranges for discount rate, EBITDA multiple and EBITDA royalty share are not meaningful.

(2) - Weighted average represents the total MBIA guarantees as a percentage of total instrument fair value. The percentage is negative when the guarantees are in a net receivable position and positive when they are in a net payable position.


			Fair Value as of								Range
			December 31,								(Weighted
In millions			2024				Valuation Techniques		Unobservable Input		Average)
Assets:
	Equity Investments		$	52			Discounted cash flow		Discount rate (1)
									EBITDA multiple (1)
							Type certificate		Discount rate (1)
									EBITDA royalty share (1)
	Loans carried at fair value			15			Discounted cash flow		Discount rate (1)
Assets of consolidated VIEs:
	Loans receivable at fair value			28			Market prices of similar liabilities adjusted for financial guarantees provided to VIE obligations		Impact of financial guarantee		27% to 27% (27%) (2)

(1) - Ranges for discount rate, EBITDA multiples, EBITDA royalty share are not meaningful.

(2) - Weighted average represents the total MBIA guarantees as a percentage of total instrument fair value. The percentage is negative when the guarantees are in a net receivable position and positive when they are in a net payable position.

Company's Assets And Liabilities Measured At Fair Value On Recurring Basis

The following tables present the fair value of the Company’s assets (including short-term investments) and liabilities measured and reported at fair value on a recurring basis as of September 30, 2025 and December 31, 2024:


						Fair Value Measurements at Reporting Date Using
						Quoted Prices in				Significant
						Active Markets				Other				Significant
						for Identical				Observable				Unobservable				Balance as of
						Assets				Inputs				Inputs				September 30,
In millions						(Level 1)				(Level 2)				(Level 3)				2025
Assets:
Fixed-maturity investments:
	U.S. Treasury and government agency					$	562			$	-			$	-			$	562
	State and municipal bonds						-				96				-				96
	Foreign governments						-				5				-				5
	Corporate obligations						-				400				17		(1)		417
	Mortgage-backed securities:
		Residential mortgage-backed agency					-				112				-				112
		Residential mortgage-backed non-agency					-				17				-				17
		Commercial mortgage-backed					-				18				-				18
	Asset-backed securities:
		Collateralized debt obligations					-				46				-				46
		Other asset-backed					-				254				-				254
			Total fixed-maturity investments				562				948				17				1,527
Money market securities							105				-				-				105
Equity investments							45				6				33				94		(2)
Cash and cash equivalents							64				-				-				64
Assets of consolidated VIEs:
	Cash						5				-				-				5
	Loans receivable at fair value:
		Residential loans receivable					-				-				33				33
Total assets						$	781			$	954			$	83			$	1,828
Liabilities:
Medium-term notes						$	-			$	-			$	42			$	42
Other liabilities:
Liabilities of consolidated VIEs:
	Variable interest entity notes						-				-				26				26
	Currency derivatives						-				-				11				11
Total liabilities						$	-			$	-			$	79			$	79

(1) - Includes loans carried at fair value of $16 million.

(2) - Includes $10 million of an exchange-traded bond fund that seeks to track the investment results of an index composed of U.S. dollar-denominated, high yield corporate bonds. The fund is measured at fair value by applying the net asset value per share practical expedient, and is not required to be classified in the fair value hierarchy.


						Fair Value Measurements at Reporting Date Using
						Quoted Prices in				Significant
						Active Markets				Other				Significant
						for Identical				Observable				Unobservable				Balance as of
						Assets				Inputs				Inputs				December 31,
In millions						(Level 1)				(Level 2)				(Level 3)				2024
Assets:
Fixed-maturity investments:
	U.S. Treasury and government agency					$	481			$	-			$	-			$	481
	State and municipal bonds						-				102				-				102
	Foreign governments						-				10				-				10
	Corporate obligations						-				435				16		(1)		451
	Mortgage-backed securities:
		Residential mortgage-backed agency					-				111				-				111
		Residential mortgage-backed non-agency					-				41				-				41
		Commercial mortgage-backed					-				7				-				7
	Asset-backed securities:
		Collateralized debt obligations					-				101				-				101
		Other asset-backed					-				52				-				52
			Total fixed-maturity investments				481				859				16				1,356
Money market securities							181				-				-				181
Equity investments							48				7				52				117		(2)
Cash and cash equivalents							84				-				-				84
Assets of consolidated VIEs:
	Cash						3				-				-				3
	Loans receivable at fair value:
		Residential loans receivable					-				-				28				28
Total assets						$	797			$	866			$	96			$	1,769
Liabilities:
Medium-term notes						$	-			$	-			$	35			$	35
Other liabilities:
	Insured credit derivatives						-				1				-				1
Liabilities of consolidated VIEs:
	Variable interest entity notes						-				-				31				31
	Currency derivatives						-				-				6				6
Total liabilities						$	-			$	1			$	72			$	73

(1) - Includes loans carried at fair value of $15 million.

(2) - Includes $10 million of an exchange-traded bond fund that seeks to track the investment results of an index composed of U.S. dollar-denominated, high yield corporate bonds. The fund is measured at fair value by applying the net asset value per share practical expedient, and is not required to be classified in the fair value hierarchy.

Fair Value Hierarchy Table Presents The Company's Assets And Liabilities Not Recorded At Fair Value On The Company's Consolidated Balance Sheet


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant				Significant				Fair Value				Carry Value
			Active Markets for				Other Observable				Unobservable				Balance as of				Balance as of
			Identical Assets				Inputs				Inputs				September 30,				September 30,
In millions			(Level 1)				(Level 2)				(Level 3)				2025				2025
Assets:
	Other investments		$	-			$	-			$	1			$	1			$	1
Total assets			$	-			$	-			$	1			$	1			$	1
Liabilities:
	Long-term debt		$	-			$	289			$	-			$	289			$	2,853
	Medium-term notes			-				-				260				260				419		(1)
	Investment agreements			-				-				185				185				173
Liabilities of consolidated VIEs:
	Variable interest entity loans payable			-				-				6				6				6
Total liabilities			$	-			$	289			$	451			$	740			$	3,451
Financial Guarantees:
	Gross liability (recoverable)		$	-			$	-			$	800			$	800			$	582
	Ceded recoverable (liability)			-				-				19				19				16

(1) - The carry value includes the complex interest calculations embedded in an MTN elected to be accounted for as a separate derivative that is reported together with the host contract. As of September 30, 2025, the Company's embedded derivative liability was not material.


			Fair Value Measurements at Reporting Date Using
			Quoted Prices in				Significant				Significant				Fair Value				Carry Value
			Active Markets for				Other Observable				Unobservable				Balance as of				Balance as of
			Identical Assets				Inputs				Inputs				December 31,				December 31,
In millions			(Level 1)				(Level 2)				(Level 3)				2024				2024
Assets:
	Other investments		$	-			$	-			$	1			$	1			$	1
Total assets			$	-			$	-			$	1			$	1			$	1
Liabilities:
	Long-term debt		$	-			$	305			$	-			$	305			$	2,741
	Medium-term notes			-				-				217				217				403		(1)
	Investment agreements			-				-				217				217				204
Liabilities of consolidated VIEs:
	Variable interest entity loans payable			-				-				12				12				12
Total liabilities			$	-			$	305			$	446			$	751			$	3,360
Financial Guarantees:
	Gross liability (recoverable)		$	-			$	-			$	764			$	764			$	540
	Ceded recoverable (liability)			-				-				19				19				18

(1) - The carry value includes the complex interest calculations embedded in an MTN elected to be accounted for as a separate derivative that is reported together with the host contract. As of December 31, 2024, the Company had an embedded derivative liability of $2 million.

Changes In Level 3 Assets Measured At Fair Value On A Recurring Basis

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2025


																																										Change in				Change in
																																										Unrealized				Unrealized
																																										Gains				Gains
																																										(Losses) for				(Losses) for
																																										the Period				the Period
																																										Included in				Included in
						Total																																				Earnings for				OCI for
						Gains /				Unrealized																																Assets				Assets
						(Losses)				Gains /																																still held				still held
		Balance				Included				(Losses)																				Transfers				Transfers								as of				as of
		Beginning				in				Included																				into				out of				Ending				September 30,				September 30,
In millions		of Year				Earnings				in OCI(1)				Purchases				Issuances				Settlements				Sales				Level 3				Level 3				Balance				2025				2025(1)
Assets:
Corporate obligations		$	16			$	(1	)		$	-			$	2			$	-			$	-			$	-			$	-			$	-			$	17		(3)	$	(1	)		$	-
Equity investments			52				(19	)			-				-				-				-				-				-				-				33				(19	)			-
Assets of consolidated VIEs:
Loans receivable - residential			28				7				-				-				-				(2	)			-				-				-				33				6				-
Total assets		$	96			$	(13	)		$	-			$	2			$	-			$	(2	)		$	-			$	-			$	-			$	83			$	(14	)		$	-

Changes in Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis for the Nine Months Ended September 30, 2024


																																										Change in				Change in
																																										Unrealized				Unrealized
																																										Gains				Gains
																																										(Losses) for				(Losses) for
																																										the Period				the Period
																																										Included in				Included in
						Total																																				Earnings for				OCI for
						Gains /				Unrealized																																Assets				Assets
						(Losses)				Gains /																																still held				still held
		Balance,				Included				(Losses)																				Transfers				Transfers								as of				as of
		Beginning				in				Included																				into				out of				Ending				September 30,				September 30,
In millions		of Year				Earnings				in OCI(1)				Purchases				Issuances				Settlements				Sales				Level 3				Level 3				Balance				2024				2024(1)
Assets:
Corporate obligations		$	1			$	(2	)		$	-			$	15			$	-			$	-			$	-			$	-			$	-			$	14		(3)	$	-			$	-
Equity investments			108				(63	)			-				-				-				-				-				-				-				45				(63	)			-
Assets of consolidated VIEs:
Loans receivable - residential			35				(2	)			-				-				-				(3	)			-				-				-				30				(4	)			-
Other			2				-				-				-				-				-				(2	)			-				-				-				-				-
Total assets		$	146			$	(67	)		$	-			$	15			$	-			$	(3	)		$	(2	)		$	-			$	-			$	89			$	(67	)		$	-

Changes In Level 3 Liabilities Measured At Fair Value On A Recurring Basis


																																										Change in				Change in
																																										Unrealized				Unrealized
																																										(Gains)				(Gains)
																																										Losses for				Losses for
																																										the Period				the Period
																																										Included in				Included in
						Total				Unrealized																																Earnings for				OCI for
						(Gains) /				(Gains) /																																Liabilities				Liabilities
						Losses				Losses																																still held				still held
		Balance,				Included				Included in																				Transfers				Transfers								as of				as of
		Beginning				in				Credit Risk																				into				out of				Ending				September 30,				September 30,
In millions		of Year				Earnings				in OCI(2)				Purchases				Issuances				Settlements				Sales				Level 3				Level 3				Balance				2025				2025(2)
Liabilities:
Medium-term notes		$	35			$	5			$	2			$	-			$	-			$	-			$	-			$	-			$	-			$	42			$	5			$	2
Liabilities of consolidated VIEs:
VIE notes			31				3				-				-				-				(8	)			-				-				-				26				1				-
Currency derivatives			6				5				-				-				-				-				-				-				-				11				5				-
Total liabilities		$	72			$	13			$	2			$	-			$	-			$	(8	)		$	-			$	-			$	-			$	79			$	11			$	2

(1) - Reported within the "Unrealized gains (losses) on available-for-sale securities" on the Company's consolidated statements of comprehensive income (loss).

(2) - Reported within the "Instrument-specific credit risk of liabilities measured at fair value" on the Company's consolidated statements of comprehensive income (loss).

(3) - Includes loans carried at fair value of $16 million.


																																										Change in				Change in
																																										Unrealized				Unrealized
																																										(Gains)				(Gains)
																																										Losses for				Losses for
																																										the Period				the Period
																																										Included in				Included in
						Total																																				Earnings for				OCI for
						(Gains) /				Unrealized																																Liabilities				Liabilities
						Losses				(Gains) /																																still held				still held
		Balance,				Included				Losses																				Transfers				Transfers								as of				as of
		Beginning				in				Included																				into				out of				Ending				September 30,				September 30,
In millions		of Year				Earnings				in OCI(2)				Purchases				Issuances				Settlements				Sales				Level 3				Level 3				Balance				2024				2024(2)
Liabilities:
Medium-term notes		$	40			$	-			$	(4	)		$	-			$	-			$	-			$	-			$	-			$	-			$	36			$	-			$	(4	)
Liabilities of consolidated VIEs:
VIE notes			78				40				(27	)			-				-				(39	)			(20	)			-				-				32				1				1
Currency derivatives			14				(6	)			-				-				-				-				-				-				-				8				(6	)			-
Total liabilities		$	132			$	34			$	(31	)		$	-			$	-			$	(39	)		$	(20	)		$	-			$	-			$	76			$	(5	)		$	(3	)

(1) - Reported within the "Unrealized gains (losses) on available-for-sale securities" on the Company's consolidated statements of comprehensive income (loss).

(2) - Reported within the "Instrument-specific credit risk of liabilities measured at fair value" on the Company's consolidated statements of comprehensive income (loss).

(3) - Includes loans carried at fair value of $13 million.

Gains And Losses (Realized And Unrealized) Included In Earnings Pertaining To Level 3 Assets And Liabilities

Gains and losses (realized and unrealized) included in earnings related to Level 3 assets and liabilities for the three and nine months ended September 30, 2025 and 2024 are reported on the Company’s consolidated statements of operations as follows:


			Three Months Ended September 30, 2025								Three Months Ended September 30, 2024
							Change in								Change in
							Unrealized								Unrealized
							Gains (Losses)								Gains (Losses)
							for the								for the
							Period Included								Period Included
							in Earnings								in Earnings
							for Assets								for Assets
							and								and
			Total Gains				Liabilities still				Total Gains				Liabilities still
			(Losses)				held as of				(Losses)				held as of
			Included				September 30,				Included				September 30,
In millions			in Earnings				2025				in Earnings				2024
Revenues:
	Net gains (losses) on financial instruments at fair value and foreign exchange		$	(19	)		$	(19	)		$	(6	)		$	(5	)
	Revenues of consolidated VIEs (1)			(1	)			-				-				-
Total			$	(20	)		$	(19	)		$	(6	)		$	(5	)

(1) - Reported within "Net gains (losses) on financial instruments at fair value and foreign exchange-VIE" and "Other net realized gains (losses)-VIE" on the Company's consolidated statements of operations.

Effects Of Derivative Instruments On Consolidated Statements Of Operations

The following tables present the effects of derivative instruments on the Company's consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024:


In millions
Derivatives Not Designated				Three Months Ended September 30,
as Hedging Instruments		Location of Gain (Loss) Recognized in Income on Derivative		2025				2024
Interest rate swaps		Net gains (losses) on financial instruments at fair value and foreign exchange		$	1			$	(1	)
Currency swaps-VIE		Net gains (losses) on financial instruments at fair value and foreign exchange-VIE			(1	)			1
Total				$	-			$	-


In millions
Derivatives Not Designated				Nine Months Ended September 30,
as Hedging Instruments		Location of Gain (Loss) Recognized in Income on Derivative		2025					2024
Interest rate swaps		Net gains (losses) on financial instruments at fair value and foreign exchange			$	2				$	(1	)
Currency swaps-VIE		Net gains (losses) on financial instruments at fair value and foreign exchange-VIE				(5	)				6
Total					$	(3	)			$	5

Changes In Fair Value Included In The Company's Consolidated Statements Of Operations

The following table presents the gains and (losses) included in the Company's consolidated statements of operations for the three and nine months ended September 30, 2025 and 2024 for financial instruments for which the fair value option was elected:


			Three Months Ended September 30,								Nine Months Ended September 30,
In millions			2025				2024				2025				2024
Investments carried at fair value (1)			$	(18	)		$	2			$	(19	)		$	(61	)
Fixed-maturity securities held at fair value-VIE (2)				-				-				-				(1	)
Loans receivable at fair value:
	Residential mortgage loans (2)			1				-				7				(2	)
Medium-term notes (1)				-				(6	)			(5	)			-
Variable interest entity notes (2)				(1	)			(1	)			(3	)			(40	)

(1) - Reported within "Net gains (losses) on financial instruments at fair value and foreign exchange" on the Company's consolidated statements of operations.

(2) - Reported within "Net gains (losses) on financial instruments at fair value and foreign exchange-VIE" and/or "Other net realized gains (losses)-VIE" on the Company's consolidated statements of operations.

Difference Between Aggregate Fair Value And The Aggregate Remaining Contractual Principal Balance Outstanding

The following table reflects the difference between the aggregate fair value and the aggregate remaining contractual principal balance outstanding as of September 30, 2025 and December 31, 2024 for loans and notes for which the fair value option was elected:


			As of September 30, 2025												As of December 31, 2024
			Contractual												Contractual
			Outstanding				Fair								Outstanding				Fair
In millions			Principal				Value				Difference				Principal				Value				Difference
Loans receivable at fair value:
	Residential mortgage loans - current		$	12			$	12			$	-			$	12			$	12			$	-
	Residential mortgage loans (90 days or more past due)			54				21				33				48				16				32
	Corporate loans - current			18				16				2				16				15				1
Total loans receivable at fair value			$	84			$	49			$	35			$	76			$	43			$	33
Variable interest entity notes			$	39			$	26			$	13			$	45			$	31			$	14
Medium-term notes			$	59			$	42			$	17			$	52			$	35			$	17