Subsidiary Information (Tables)

12 Months Ended

Dec. 31, 2011

Subsidiary Information

Condensed Consolidating Balance Sheet

CONDENSED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2011
(in millions)

	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries		Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
ASSETS
Total investment portfolio and cash	$	32.9	$	99.5		$	61.4		$	11,119.5	$	—		$	11,313.3
Investment in subsidiaries		4,673.5		3,790.5			2,814.1			3,318.6		(14,596.7	)		—
Premiums receivable, net of ceding commissions payable		—		—			—			1,149.6		(146.7	)		1,002.9
Ceded unearned premium reserve		—		—			—			1,739.1		(1,030.2	)		708.9
Deferred acquisition costs		—		—			—			322.8		(90.9	)		231.9
Reinsurance recoverable on unpaid losses		—		—			—			211.8		(142.5	)		69.3
Credit derivative assets		—		—			—			503.4		(34.5	)		468.9
Deferred tax asset, net		—		22.5			(76.9	)		834.6		(9.3	)		770.9
Intercompany receivable		—		—			—			300.0		(300.0	)		—
Financial guaranty variable interest entities' assets, at fair value		—		—			—			2,819.1		—			2,819.1
Other assets(1)		23.1		(71.3	)		26.9			836.4		(108.8	)		706.3
TOTAL ASSETS	$	4,729.5	$	3,841.2		$	2,825.5		$	23,154.9	$	(16,459.6	)	$	18,091.5
LIABILITIES AND SHAREHOLDERS' EQUITY
Unearned premium reserves	$	—	$	—		$	—		$	6,949.4	$	(986.6	)	$	5,962.8
Loss and LAE reserve		—		—			—			834.2		(155.2	)		679.0
Long-term debt		—		519.5			415.1			103.7		—			1,038.3
Intercompany payable		—		—			—			300.0		(300.0	)		—
Credit derivative liabilities		—		0.2			—			1,807.1		(34.5	)		1,772.8
Financial guaranty variable interest entities' liabilities, at fair value		—		—			—			3,458.4		—			3,458.4
Other liabilities(2)		11.1		2.9			15.7			674.7		(242.6	)		461.8
TOTAL LIABILITIES		11.1		522.6			430.8			14,127.5		(1,718.9	)		13,373.1
TOTAL SHAREHOLDERS' EQUITY		4,718.4		3,318.6			2,394.7			9,027.4		(14,740.7	)		4,718.4
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	4,729.5	$	3,841.2		$	2,825.5		$	23,154.9	$	(16,459.6	)	$	18,091.5

(1)

Includes salvage and subrogation recoverable and other assets.

(2)

Includes reinsurance balances payable, net, current income tax payable and other liabilities.

CONDENSED CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 2010
(in millions)

	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries		Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
ASSETS
Total investment portfolio and cash	$	22.5	$	15.7		$	45.7		$	10,765.4	$	—		$	10,849.3
Investment in subsidiaries		3,703.6		2,965.4			2,316.9			2,489.8		(11,475.7	)		—
Premiums receivable, net of ceding commissions payable		—		—			—			1,346.8		(179.2	)		1,167.6
Ceded unearned premium reserve		—		—			—			1,883.4		(1,061.6	)		821.8
Deferred acquisition costs		—		—			—			350.4		(110.6	)		239.8
Reinsurance recoverable on unpaid losses		—		—			—			93.1		(70.8	)		22.3
Credit derivative assets		—		—			—			672.7		(79.8	)		592.9
Deferred tax asset, net		—		(0.8	)		(95.8	)		1,355.3		0.4			1,259.1
Intercompany receivable		—		—			—			300.0		(300.0	)		—
Financial guaranty variable interest entities' assets, at fair value		—		—			—			3,657.5		—			3,657.5
Other assets(1)		19.2		3.8			15.2			1,354.5		(161.1	)		1,231.6
TOTAL ASSETS	$	3,745.3	$	2,984.1		$	2,282.0		$	24,268.9	$	(13,438.4	)	$	19,841.9
LIABILITIES AND SHAREHOLDERS' EQUITY
Unearned premium reserves	$	—	$	—		$	—		$	7,976.5	$	(1,003.6	)	$	6,972.9
Loss and LAE reserve		—		—			—			663.9		(89.5	)		574.4
Long-term debt		—		518.4			407.5			127.0		—			1,052.9
Intercompany payable		—		—			—			300.0		(300.0	)		—
Credit derivative liabilities		—		0.2			—			2,542.5		(79.9	)		2,462.8
Financial guaranty variable interest entities' liabilities, at fair value		—		—			—			4,368.1		—			4,368.1
Other liabilities(2)		11.8		(24.3	)		(6.9	)		1,023.7		(327.0	)		677.3
TOTAL LIABILITIES		11.8		494.3			400.6			17,001.7		(1,800.0	)		16,108.4
TOTAL SHAREHOLDERS' EQUITY		3,733.5		2,489.8			1,881.4			7,267.2		(11,638.4	)		3,733.5
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	3,745.3	$	2,984.1		$	2,282.0		$	24,268.9	$	(13,438.4	)	$	19,841.9

(1)

Includes salvage and subrogation recoverable and other assets.

(2)

Includes reinsurance balances payable, net, current income tax payable and other liabilities.

Condensed Consolidating Statement of Operations

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2011
(in millions)

	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—	$	—		$	—		$	904.1		$	16.0		$	920.1
Net investment income		—		—			0.7			405.3			(15.0	)		391.0
Net realized investment gains (losses)		—		—			—			(18.0	)		—			(18.0	)
Net change in fair value of credit derivatives:
Realized gains and other settlements		—		—			—			6.0			—			6.0
Net unrealized gains (losses)		—		—			—			553.7			—			553.7
Net change in fair value of credit derivatives		—		—			—			559.7			—			559.7
Equity in earnings of subsidiaries		800.3		644.0			404.6			617.9			(2,466.8	)		—
Other income(1)		—		—			—			(28.9	)		(4.6	)		(33.5	)
TOTAL REVENUES		800.3		644.0			405.3			2,440.1			(2,470.4	)		1,819.3
EXPENSES
Loss and LAE		—		—			—			453.7			8.2			461.9
Amortization of deferred acquisition costs		—		—			—			50.6			(19.7	)		30.9
Interest expense		—		39.4			53.6			21.1			(15.0	)		99.1
Other operating expenses		24.7		0.7			1.1			175.0			(8.5	)		193.0
TOTAL EXPENSES		24.7		40.1			54.7			700.4			(35.0	)		784.9
INCOME (LOSS) BEFORE INCOME TAXES		775.6		603.9			350.6			1,739.7			(2,435.4	)		1,034.4
Total provision (benefit) for income taxes		—		(14.0	)		(18.9	)		279.0			12.7			258.8
NET INCOME (LOSS)	$	775.6	$	617.9		$	369.5		$	1,460.7		$	(2,448.1	)	$	775.6

(1)

Includes fair value gain (loss) on CCS, net change in fair value of FG VIEs and other income.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2010
(in millions)

	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—	$	—		$	—		$	1,168.2		$	18.5		$	1,186.7
Net investment income		—		—			0.5			369.2			(15.0	)		354.7
Net realized investment gains (losses)		—		—			0.1			(6.1	)		4.0			(2.0	)
Net change in fair value of credit derivatives:
Realized gains and other settlements		—		—			—			153.5			—			153.5
Net unrealized gains (losses)		—		—			—			(155.1	)		—			(155.1	)
Net change in fair value of credit derivatives		—		—			—			(1.6	)		—			(1.6	)
Equity in earnings of subsidiaries		518.1		454.3			530.6			426.6			(1,929.6	)		—
Other income(1)		—		—			—			(223.2	)		(1.1	)		(224.3	)
TOTAL REVENUES		518.1		454.3			531.2			1,733.1			(1,923.2	)		1,313.5
EXPENSES
Loss and LAE		—		—			—			406.4			5.8			412.2
Amortization of deferred acquisition costs		—		—			—			41.7			(7.6	)		34.1
Interest expense		—		39.3			53.6			21.7			(15.0	)		99.6
Other operating expenses(2)		24.4		3.3			2.8			190.0			(2.2	)		218.3
TOTAL EXPENSES		24.4		42.6			56.4			659.8			(19.0	)		764.2
INCOME (LOSS) BEFORE INCOME TAXES		493.7		411.7			474.8			1,073.3			(1,904.2	)		549.3
Total provision (benefit) for income taxes		—		(14.9	)		(21.1	)		79.6			12.0			55.6
NET INCOME (LOSS)	$	493.7	$	426.6		$	495.9		$	993.7		$	(1,916.2	)	$	493.7

(1)

Includes fair value gain (loss) on CCS, net change in fair value of FG VIEs and other income.

(2)

Includes AGMH acquisition-related expenses and other operating expenses.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2009
(in millions)

	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—	$	—		$	—		$	895.2		$	35.2		$	930.4
Net investment income		0.1		0.5			0.3			259.4			(1.1	)		259.2
Net realized investment gains (losses)		—		—			—			(32.9	)		0.2			(32.7	)
Net change in fair value of credit derivatives:
Realized gains and other settlements		—		—			—			163.6			—			163.6
Net unrealized gains (losses)		—		—			—			(337.8	)		—			(337.8	)
Net change in fair value of credit derivatives		—		—			—			(174.2	)		—			(174.2	)
Equity in earnings of subsidiaries		113.3		310.0			736.0			275.9			(1,435.2	)		—
Other income(1)		—		—			—			(52.9	)		(12.7	)		(65.6	)
TOTAL REVENUES		113.4		310.5			736.3			1,170.5			(1,413.6	)		917.1
EXPENSES
Loss and LAE		—		—			—			395.1			(1.3	)		393.8
Amortization of deferred acquisition costs		—		—			—			18.1			35.8			53.9
Interest expense		—		31.6			26.8			4.9			(0.5	)		62.8
Goodwill and settlement of pre-existing relationship		—		—			—			(147.1	)		170.4			23.3
Other operating expenses(2)		27.4		18.8			2.5			255.3			(37.6	)		266.4
TOTAL EXPENSES		27.4		50.4			29.3			526.3			166.8			800.2
INCOME (LOSS) BEFORE INCOME TAXES		86.0		260.1			707.0			644.2			(1,580.4	)		116.9
Total provision (benefit) for income taxes		—		(15.8	)		(10.1	)		51.4			6.6			32.1
NET INCOME (LOSS)		86.0		275.9			717.1			592.8			(1,587.0	)		84.8
Less: noncontrolling interest of variable interest entities		—		—			—			(1.2	)		—			(1.2	)
NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD.	$	86.0	$	275.9		$	717.1		$	594.0		$	(1,587.0	)	$	86.0

(1)

Includes fair value gain (loss) on CCS and other income.

(2)

Includes AGMH acquisition-related expenses and other operating expenses.

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2011
(in millions)

	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
Net cash flows provided by (used in) operating activities	$	67.9		$	83.8		$	(36.0	)	$	675.9		$	(116.0	)	$	675.6
Cash flows from investing activities
Fixed maturity securities:
Purchases		—			—			(14.2	)		(2,293.9	)		—			(2,308.1	)
Sales		—			—			—			1,107.5			—			1,107.5
Maturities		—			—			0.8			662.1			—			662.9
Sales (purchases) of short-term investments, net		(10.4	)		(25.1	)		(0.6	)		356.1			—			320.0
Net proceeds from financial guaranty variable entities' assets		—			—			—			760.4			—			760.4
Investment in subsidiary		—			—			50.0			—			(50.0	)		—
Other		—			—			—			18.6			—			18.6
Net cash flows used in investing activities		(10.4	)		(25.1	)		36.0			610.8			(50.0	)		561.3
Cash flows from financing activities
Return of capital		—			—			—			(50.0	)		50.0			—
Dividends paid		(33.0	)		—			—			(116.0	)		116.0			(33.0	)
Repurchases of common stock		(23.3	)		—			—			—			—			(23.3	)
Share activity under option and incentive plans		(1.2	)		—			—			—			—			(1.2	)
Net paydowns of financial guaranty variable entities' liabilities		—			—			—			(1,053.3	)		—			(1,053.3	)
Payment of long-term debt		—			—			—			(22.1	)		—			(22.1	)
Net cash flows provided by (used in) financing activities		(57.5	)		—			—			(1,241.4	)		166.0			(1,132.9	)
Effect of exchange rate changes		—			—			—			2.1			—			2.1
Increase (decrease) in cash		—			58.7			—			47.4			—			106.1
Cash at beginning of period		—			13.0			—			95.4			—			108.4
Cash at end of period	$	—		$	71.7		$	—		$	142.8		$	—		$	214.5

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2010
(in millions)

	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)		AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
Net cash flows provided by (used in) operating activities	$	15.7		$	11.8	$	(49.0	)	$	224.7		$	(74.0	)	$	129.2
Cash flows from investing activities
Fixed maturity securities:
Purchases		—			—		(15.0	)		(2,446.7	)		—			(2,461.7	)
Sales		—			—		4.5			1,059.1			—			1,063.6
Maturities		—			—		6.4			988.0			—			994.4
Sales (purchases) of short-term investments, net		30.0			1.1		3.1			579.1			—			613.3
Net proceeds from financial guaranty variable entities' assets		—			—		—			424.0			—			424.0
Investment in subsidiary		—			—		50.0			—			(50.0	)		—
Other		—			—		—			19.7			—			19.7
Net cash flows used in investing activities		30.0			1.1		49.0			623.2			(50.0	)		653.3
Cash flows from financing activities
Return of capital		—			—		—			(50.0	)		50.0			—
Dividends paid		(33.2	)		—		—			(74.0	)		74.0			(33.2	)
Repurchases of common stock		(10.5	)		—		—			—			—			(10.5	)
Share activity under option and incentive plans		(2.0	)		—		—			—			—			(2.0	)
Net paydowns of financial guaranty variable entities' liabilities		—			—		—			(650.8	)		—			(650.8	)
Payment of long-term debt		—			—		—			(20.9	)		—			(20.9	)
Net cash flows provided by (used in) financing activities		(45.7	)		—		—			(795.7	)		124.0			(717.4	)
Effect of exchange rate changes		—			—		—			(0.8	)		—			(0.8	)
Increase (decrease) in cash		—			12.9		—			51.4			—			64.3
Cash at beginning of period		—			0.1		—			44.0			—			44.1
Cash at end of period	$	—		$	13.0	$	—		$	95.4		$	—		$	108.4

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2009
(in millions)

	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
Net cash flows provided by (used in) operating activities	$	19.6		$	(23.9	)	$	(24.7	)	$	355.8		$	(47.6	)	$	279.2
Cash flows from investing activities
Fixed maturity securities:
Purchases		—			—			(1.7	)		(2,286.0	)		—			(2,287.7	)
Sales		—			—			—			1,519.3			—			1,519.3
Maturities		—			—			1.6			216.3			—			217.9
Sales (purchases) of short-term investments, net		(52.3	)		(3.5	)		(0.3	)		(341.0	)		—			(397.1	)
Capital contribution to subsidiary		(962.9	)		(556.7	)		—			(512.0	)		2,031.6			—
Acquisition of AGMH		—			(546.0	)		—			87.0			—			(459.0	)
Investment in subsidiary		—			—			25.0			—			(25.0	)		—
Other		—			—			—			9.4			—			9.4
Net cash flows used in investing activities		(1,015.2	)		(1,106.2	)		24.6			(1,307.0	)		2,006.6			(1,397.2	)
Cash flows from financing activities
Net proceeds from issuance of common stock and equity units		1,022.8			167.3			—			—			—			1,190.1
Capital contribution from parent		—			962.9			—			1,068.7			(2,031.6	)		—
Return of capital		—			—			—			(25.0	)		25.0			—
Dividends paid		(22.8	)		—			—			(47.1	)		47.6			(22.3	)
Repurchases of common stock		(3.7	)		—			—			—			—			(3.7	)
Share activity under option and incentive plans		(0.7	)		—			—			—			—			(0.7	)
Payment of long-term debt		—			—			—			(14.8	)		—			(14.8	)
Net cash flows provided by (used in) financing activities		995.6			1,130.2			—			981.8			(1,959.0	)		1,148.6
Effect of exchange rate changes		—			—			—			1.2			—			1.2
Increase (decrease) in cash		—			0.1			(0.1	)		31.8			—			31.8
Cash at beginning of period		—			—			0.1			12.2			—			12.3
Cash at end of period	$	—		$	0.1		$	—		$	44.0		$	—		$	44.1