8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant To Section 13 or 15 (d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) —August 5, 2005

ASSURED GUARANTY LTD.

(Exact name of registrant as specified in its charter)

Bermuda	001-32141	98-0429991
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

Assured Guaranty Ltd.
30 Woodbourne Avenue
Hamilton HM 08 Bermuda
(Address of principal executive offices)

Registrant’s telephone number, including area code: (441) 296-4004

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

(Former name or former address, if changed since last report)

Item 2.02Results of Operations and Financial Condition

On August 5, 2005, Assured Guaranty Ltd. issued a press release reporting its second quarter 2005 results and the availability of its second quarter financial supplement. The press release and the financial supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are hereby incorporated herein by reference.

Item 9.01Financial Statements, Pro Forma Financial Information and Exhibits.

(c)Exhibits

Exhibit Number	Description
99.1	Press release, dated August 5, 2005, reporting second quarter results
99.2	Second quarter 2005 Financial Supplement

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Assured Guaranty Ltd.
	By:	/S/Robert B. Mills
		Robert B. Mills Chief Financial Officer
DATE:  August 5, 2005

3

EX-99.1

Exhibit 99.1

Assured Guaranty Ltd.
30 Woodbourne Avenue – 5^th Floor
Hamilton HM 08 Bermuda
441-299-9375
www.assuredguaranty.com

Press Release

Assured Guaranty Ltd. Reports Second Quarter 2005 Net Income of $66.8 Million

Hamilton, Bermuda, August 4, 2005 –Assured Guaranty Ltd. (NYSE: AGO) reported net income of $66.8 million, or $0.90 per diluted share, for the second quarter ended June 30, 2005, an increase of 55% compared with net income of $43.1 million, or $0.57 per diluted share, earned in the second quarter of 2004.

Dominic Frederico, President and Chief Executive Officer of Assured Guaranty Ltd., commented, “During the quarter, our insurer financial strength ratings, a key element of our strategic objectives, were significantly enhanced.  Standard and Poor’s announced a Stable outlook on their AAA rating and Fitch Ratings announced a new AAA rating with a Stable outlook for Assured Guaranty Corp., our U.S. direct financial guaranty insurer.  We continue to expand our financial guaranty direct platform, as well as receive a strong flow of facultative submissions in our Bermuda-based reinsurance company.”

Analysis of Net Income

($ in millions)

	2Q-05			2Q-04		% Change
Net income	$	66.8		$	43.1	55	%
Less: After-tax realized gains on investments	1.2			6.3		(81	)%
Less: After-tax unrealized (losses) gains on derivatives	(9.7		)	9.0		NMF
Operating income	$	75.2		$	27.9	170	%
Weighted average shares outstanding (in millions):
Basic	73.8			75.0		(2	)%
Diluted	74.1			75.0		(1	)%

Per Diluted Share

	2Q-05			2Q-04		%Change
Net income	$	0.90		$	0.57	58	%
Less: After-tax realized gains on investments	0.02			0.08		(75	)%
Less: After-tax unrealized (losses) gains on derivatives	(0.13		)	0.12		NMF
Operating income	$	1.02		$	0.37	176	%

To assist analysts and investors in evaluating the Company’s financial results, this press release references several non-GAAP financial measures.  These non-GAAP financial measures are defined in the “Explanation of Non-GAAP Financial Measures” section of this press release. In each case, the most directly comparable GAAP financial measure is presented and a reconciliation of the non-GAAP financial measure and GAAP measure is provided. This presentation is consistent with the way that Company management, analysts and investors evaluate the Company’s financial results and is comparable to the earnings per share estimates published by analysts in their research reports on the Company.  The non-GAAP financial measures included in this press release are: operating income, present value of financial guaranty and mortgage guaranty gross written premiums (“PVP”), net present value of estimated future installment premiums in force and adjusted book value.

Operating income, a non-GAAP financial measure, was $75.2 million, or $1.02 per diluted share, in the second quarter of 2005, an increase of 170% from $27.9 million, or $0.37 per diluted share, in the second quarter of 2004.  Assured Guaranty’s second quarter 2005 operating income included net after-tax income of $41.4 million, or $0.56 per diluted share, related to the CFS Related Securities Fraud Litigation Settlement (“CFS Settlement”), net after-tax income of $1.9 million, or $0.03 per diluted share, related to the novation of Financial Security Assurance Inc.’s reinsurance book from Assured Guaranty Corp. (“AGC”) to Assured Guaranty Re Ltd. (“FSA Transaction”), and net after-tax expenses of $1.3 million, or $0.02 per diluted share, related to AGC’s $200 million contingent capital facility (“AGC Contingent Capital Facility”).  Assured Guaranty’s second quarter 2004 operating income included net after-tax expenses of $9.6 million, or $0.13 per diluted share, for IPO-related accelerated vesting and replacement of stock rewards, and a net after-tax operating loss of $5.9 million, or $0.08 per diluted share, from our other segment, which consists of transactions and lines of business that we exited as part of our IPO in April 2004 (together, the “IPO-related translations”), and after-tax operating income of $3.6 million, or $0.05 per diluted share for the Mortgage Guaranty Commutation.

Income Statement Highlights:

Net Written Premiums by Segment

($ in millions)

	2Q-05		2Q-04			% Change
Financial guaranty direct	$	20.4	$	17.3		18	%
Mortgage guaranty	1.9		0.9			111	%
Financial guaranty reinsurance	8.0		35.8			(78	)%
Total financial guaranty	30.2		54.0			(44	)%
Other	—		(84.0		)	NMF
Total	$	30.2	$	(29.9	)	NMF

Net written premiums include the effect of the FSA Transaction in the second quarter of 2005 and IPO-related transactions in the second quarter of 2004. On a segment basis, net written premiums in the financial guaranty direct segment were $20.4 million, up 18% over the prior year period, principally due to the Company’s U.S. public finance business.  Mortgage guaranty net written premiums were $1.9 million versus $0.9 million in the prior year period.  Net written premiums in the financial guaranty reinsurance segment were $8.0 million, a decline of 78% over the prior year period, as net written premiums in the 2005 reporting period were reduced by net premium cessions of $18.4 million related to the FSA Transaction, as well as lower upfront premium volume compared to the prior year quarter.

The other segment, which includes businesses sold or discontinued as part of our IPO, has not generated net written or earned premiums since the second quarter of 2004.  The $(84.0) million of net written premiums in the second quarter of 2004 reflects the impact of IPO-related transactions.

2

Net Earned Premiums by Segment

($ in millions)

	2Q-05		2Q-04			% Change
Financial guaranty direct	$	16.0	$	16.1		(1	)%
Mortgage guaranty	5.1		15.0			(66	)%
Financial guaranty reinsurance	27.2		25.6			6	%
Total financial guaranty	48.3		56.7			(15	)%
Other	—		(66.0		)	NMF
Total	$	48.3	$	(9.3	)	NMF

Consolidated net earned premium comparisons with the prior year period are materially affected by the IPO-related transactions in the other segment in the second quarter of 2004.  On a segment basis, financial guaranty direct net earned premiums were $16.0 million in the second quarter of 2005 compared with $16.1 million in the second quarter of 2004, which included $1.9 million of net earned premiums from the Company’s single name credit default swap business that was sold in the first quarter of 2005. Mortgage guaranty net earned premiums declined to $5.1 million in the second quarter of 2005 from $15.0 million in the second quarter of 2004 due to the run-off of the Company’s quota share mortgage guaranty reinsurance treaties and $8.8 million of net earned premium in the second quarter of 2004 due to the Mortgage Guaranty Commutation. Financial guaranty reinsurance net earned premiums including municipal bond refundings were $27.2 million, up 6% over the second quarter of 2004.  Municipal bond refunding net earned premiums, which are included in the financial guaranty reinsurance segment, were $3.6 million ($0.02 per diluted share) in the current period compared with $4.4 million ($0.02 per diluted share) in the second quarter of 2004.

Underwriting Results by Segment

($ in millions)

	2Q-05		2Q-04			% Change
Underwriting gain (loss):
Financial guaranty direct	$	1.1	$	5.3		(79	)%
Mortgage guaranty	3.1		11.2			(72	)%
Financial guaranty reinsurance	73.8		14.6			405	%
Total financial guaranty	77.9		31.0			151	%
Other	—		(8.8		)	NMF
Total	$	77.9	$	22.3		249	%

Consolidated underwriting results were affected by the CFS Settlement in the second quarter of 2005 and by the impact of IPO-related transactions in the other segment in the second quarter of 2004.  Assured Guaranty reported a consolidated underwriting gain of $77.9 million in the second quarter of 2005, including the $63.7 million recovery from the CFS Settlement, compared to an underwriting gain of $22.3 million in the second quarter of 2004.

On a segment basis, the underwriting gain for the financial guaranty direct segment was $1.1 million in the second quarter of 2005, down from $5.3 million in the second quarter of 2004, due to a $4.5 million case loss reserve established on a sub-prime mortgage transaction in the second quarter of 2005.  The mortgage guaranty segment’s underwriting results declined 72% in the second quarter of 2005 to $3.1 million from $11.2 million in the second quarter of 2004, which included a $5.5 million underwriting gain on the Mortgage Guaranty Commutation.

The underwriting gain for the financial guaranty reinsurance segment in the second quarter of 2005 rose 405% to $73.8 million, including the $63.7 million loss recovery from the CFS Settlement.  The segment’s underwriting results in the second quarter of 2005 also included a $1.2 million case loss reserve on a manufactured housing transaction and a $2.8 million underwriting loss on the FSA transaction.

3

Shareholders’ Equity Highlights:

(amounts in millions except per share data)

	As of
	June 30,		December 31,
	2005		2004
Book value	$	1,619.5	$	1,527.6
Net UPR less DAC - after-tax(1)	304.2		268.6
Net present value of estimated installment premiums in-force - after-tax(2)	300.6		297.1
Adjusted book value	$	2,224.3	$	2,093.3
Shares outstanding at the end of period (in millions)	74.9		75.7
Book value per share outstanding:
Book value	$	21.63	$	20.19
Net UPR less DAC - after-tax(1)	4.06		3.55
Net present value of estimated installment premiums in-force - after-tax(2)	4.01		3.93
Adjusted book value	$	29.71	$	27.67

(1)Unearned premium reserve (UPR) less pre-paid reinsurance premiums and deferred acquisition costs (DAC), all after-tax.

(2)Due to reporting lag by our ceding companies, the present value of estimated installment premiums in force in our reinsurance segment is reported on a one-quarter lag.

At June 30, 2005, the Company’s book value per share was $21.63, an increase of 7% over the book value of $20.19 reported at December 31, 2004 due to the increase in retained earnings since year end.  Adjusted book value per share, a non-GAAP financial measure, was $29.71 at June 30, 2005, up 7% from December 31, 2004, reflecting the growth in net unearned premium reserves and net after-tax present value of estimated installment premiums in force, a non-GAAP financial measure.

4

New Business Production:

Analysis of Present Value of Gross Written Premiums (“PVP”)

($ in millions)

	Three Months Ended
	June 30,
	2005			2004
Premium analysis:
Gross written premiums (GWP) analysis:
Present value of financial guaranty & mortgage guaranty GWP (PVP) (1)
Financial guaranty direct	$	22.7		$	14.4
Mortgage guaranty	—			—
Financial guaranty reinsurance	35.2			40.1
Total PVP	57.9			54.4
Less: Installment premium PVP	38.3			31.6
Upfront financial guaranty & mortgage guaranty GWP	19.6			22.9
Less: Upfront premium due to healthcare reassumption	(18.4		)	—
Plus: Installment GWP	29.8			31.5
Financial guaranty & mortgage guaranty GWP	31.0			54.4
Other segment GWP	9.5			10.0
Total gross written premiums	$	40.5		$	64.4

(1) Due to reporting lags by our ceding companies, PVP for installment premiums from our financial guaranty reinsurance segment is reported on a one-quarter lag.

New business production, as measured by PVP, a non-GAAP financial measure, rose to $57.9 million in the second quarter of 2005, up 6% from the $54.4 million written in the second quarter of 2004.  The financial guaranty direct segment generated $22.7 million of PVP, a 58% increase over second quarter 2004 PVP of $14.4 million, and reflects the expansion of the Company’s direct financial guaranty business.  The number of transactions in the second quarter of 2005 increased materially compared to the first quarter of 2005, and the second quarter of 2004, but did not include any deals with PVP in excess of $5 million.  The Company closed two deals in the first quarter of 2005 and one deal in the fourth quarter of 2004 that had PVP in excess of $5.0 million.

The financial guaranty reinsurance segment’s second quarter 2005 PVP was $35.2 million, a decrease of 12% from the segment’s second quarter 2004 PVP of $40.1 million.  The second quarter of 2004 included $12.0 million in PVP on two reinsurance contracts that are no longer in force.

Investor Conference Call:  The Company will host a conference call for investors at 8:30 a.m. Eastern Daylight Time (9:30 a.m. Atlantic Daylight Time) on Friday, August 5, 2005.  The earnings conference call will be available via live and archived webcast in the Investor Information section of the Company’s website at http://www.assuredguaranty.com or by dialing 1-800-901-5247 (in the U.S.) or 1-617-786-4501 (International), passcode 59514532.  A replay of the call will be available through September 5, 2005.  To listen to the replay dial: 1-888-286-8010 (in the U.S.) or 1-617-801-6888 (International), passcode 20152572.

Please refer to the Assured Guaranty Financial Supplement – June 30, 2005, which is posted on the Company’s website at http://www.assuredguaranty.com/investor/supplement.html for more detailed information on individual segment performance, together with additional disclosure on our financial guaranty portfolio and investment portfolio.

5

Assured Guaranty Ltd. is a Bermuda-based holding company. Its operating subsidiaries provide credit enhancement products to the U.S. and international public finance, structured finance and mortgage markets.  More information can be found at www.assuredguaranty.com.

Explanation of Non-GAAP Financial Measures:

The following section describes why the non-GAAP financial measures presented in this press release are useful for investors.

Operating income, which is a non-GAAP financial measure, is defined as net income excluding after-tax realized gains (losses) on investments and after-tax unrealized gains (losses) on derivative financial instruments.  We believe the presentation of operating income enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.  We exclude net realized gains (losses) on investments and net unrealized gains (losses) on derivative financial instruments because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, the market interest rates, credit spreads and other factors that management cannot control or predict.  This measure should not be viewed as a substitute for net income determined in accordance with GAAP.

Adjusted book value, which is a non-GAAP financial measure, is derived by beginning with shareholder’s equity (book value) and adding or subtracting the after-tax value of: the financial guaranty and mortgage guaranty unearned premium reserve net of prepaid reinsurance premiums and deferred acquisition costs and the present value of estimated future installment premiums (discounted at 6%) net of reinsurance.  The adjustments described above will not be realized until future periods and may differ materially from the amounts used in determining adjusted book value.  Management, investors and analysts use the calculation of adjusted book value to evaluate the net present value of the Company’s in-force premium and capital base.

Present value of estimated installment premiums in-force, which is a non-GAAP financial measure, represents our estimated future premiums on our in-force book of installment premium business in our financial guaranty direct and financial guaranty reinsurance segments.  Estimated future premiums may change from period to period due to changes in insured par outstanding due to actual prepayments or amortizations differing from previous estimates or due to a change in future estimates due to market conditions, interest rates or other factors.  It is calculated net of reinsurance ceded and using a discount rate of 6%.  We believe present value of estimated installment premiums is a useful measure for management, equity analysts and investors, because it permits the evaluation of future estimated installment premiums, similar to the GAAP financial measure of unearned premium reserve.

PVP, which is a non-GAAP financial measure, represents gross premiums and fees related to financial guaranty and mortgage guaranty contracts written in the current period, including upfront and installment premiums received on contracts written in the current period and the present value of estimated future installment premiums, discounted at 6% per year.   We use 6% as the present value discount because it is the approximate taxable equivalent yield on our investment portfolio for the periods presented. We believe PVP is a useful measure for management, equity analysts and investors because it permits the evaluation of the value of new business production for Assured Guaranty by taking into account the value of installment premiums on new contracts underwritten in a reporting period, which the GAAP gross premiums written does not adequately measure.

6

Assured Guaranty Ltd.

Consolidated Income Statements

	Three Months Ended
	June 30,
	2005			2004
	(dollars in millions)
Revenues
Gross written premiums	$	40.5		$	64.4
Net written premiums	30.2			(29.9		)
Net earned premiums	48.3			(9.3		)
Net investment income	23.7			23.5
Other income	(0.2		)	—
Total revenues	$	71.8		$	14.2
Expenses
Loss and loss adjustment expenses	(59.1		)	(60.0		)
Profit commission expense	3.3			4.8
Acquisition costs	11.7			8.4
Other operating expenses	14.5			26.6
Other expenses	5.9			2.5
Total expenses	$	(23.7	)	$	(17.6	)
Income before provision for income taxes	95.5			31.8
Total provision for income taxes	20.3			3.9
Operating income	$	75.2		$	27.9
After-tax net realized investment gains	1.2			6.3
After-tax unrealized (losses) gains on derivative financial instruments	(9.7		)	9.0
Net income	$	66.8		$	43.1

7

Assured Guaranty Ltd.

Consolidated Balance Sheets

	As of:
	June 30,			December 31,
	2005			2004
	(dollars in millions)
Assets
Fixed maturity securities, at fair value	$	2,076.8		$	1,965.1
Short-term investments, at cost which approximates fair value	121.1			175.8
Total investments	2,197.9			2,140.9
Cash and cash equivalents	4.7			17.0
Accrued investment income	21.4			21.9
Deferred acquisition costs	188.2			186.4
Prepaid reinsurance premiums	13.8			15.2
Reinsurance recoverable on ceded losses	112.4			120.2
Loss recovery receivable	63.7			—
Premiums receivable	28.5			40.8
Goodwill	85.4			85.4
Unrealized gains on derivative financial instruments	34.5			43.9
Other assets	21.0			22.3
Total assets	$	2,771.6		$	2,694.0
Liabilities and shareholders’ equity
Liabilities
Unearned premium reserves	$	530.2		$	521.3
Reserves for losses and loss adjustment expenses	206.4			226.5
Profit commissions payable	45.4			61.7
Reinsurance balances payable	21.9			25.1
Current income taxes	28.4			—
Deferred income taxes	18.2			40.1
Funds held by Company under reinsurance contracts	53.8			50.8
Long-term debt	197.3			197.4
Other liabilities	50.5			43.7
Total liabilities	1,152.1			1,166.4
Shareholders’ equity
Common stock	0.7			0.8
Treasury stock	(7.9		)	(7.9		)
Additional paid-in capital	884.4			894.2
Unearned stock grant compensation	(10.1		)	(6.7		)
Retained earnings	674.8			568.3
Accumulated other comprehensive income	77.5			79.0
Total shareholders’ equity	1,619.5			1,527.6
Total liabilities and shareholders’ equity	$	2,771.6		$	2,694.0

8

Cautionary Statement Regarding Forward-Looking Statements:

Any forward-looking statements made in this press release reflect the Company’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements.  For example, the Company’s forward-looking statements, including its statements regarding PVP and present value of estimated installment premiums in force, could be affected by a significant reduction in the amount of reinsurance ceded by one or more of our principal ceding companies, rating agency action such as a ratings downgrade, difficulties with the execution of the Company’s business strategy, contract cancellations, developments in the world’s financial and capital markets, more severe or frequent losses associated with products affecting the adequacy of the Company’s loss reserve, changes in regulation or tax laws, the Company’s dependence on customers, decreased demand or increased competition, loss of key personnel, the effects of mergers, acquisitions and divestitures, changes in accounting policies or practices, and changes in general economic conditions, as well as management’s response to these factors, and other risk factors identified in the Company’s filings with the Securities and Exchange Commission.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information:

Equity Investors and Media

Sabra Purtill

Managing Director, Investor Relations

212-408-6044

441-278-6665

spurtill@assuredguaranty.com

Christopher McNamee

Assistant Vice President, Investor Relations

212-261-5509

cmcnamee@assuredguaranty.com

9

EX-99.2

Exhibit 99.2

Assured Guaranty Ltd.

Financial Supplement

Second Quarter 2005

June 30, 2005

Table of Contents
Assured Guaranty Ltd.
	Selected Financial Highlights
	Consolidated GAAP Income Statements
	Consolidated GAAP Balance Sheets
	Segment Consolidation
	Financial Guaranty Direct Segment
	Financial Guaranty Reinsurance Segment
	Mortgage Guaranty Segment
	Other Segment
	Loss and LAE Reserves
	Investment Portfolio
	Financial Guaranty Profile
	Non-Investment Grade Exposures
	Closely Monitored Credits
	Largest Exposures by Sector
	Consolidated Capital and Claims Paying Resources
	Summary Financial and Statistical Data

This supplement should be read in conjunction with documents filed by Assured Guaranty Ltd. (the “Company”) with the Securities and Exchange Commission, including our IPO prospectus dated April 22, 2004, our 10-Q’s dated March 31, 2004, June 30, 2004, September 30, 2004 and March 31, 2005 and our 10-K for the year ended December 31, 2004.

Cautionary Statement Regarding Forward-Looking Statements:

Any forward-looking statements made in this supplement reflect the Company’s current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements.  For example, the Company’s forward-looking statements, such as its statements regarding PVP and present value of estimated installment premiums in force, could be affected by a significant reduction in the amount of reinsurance ceded by one or more of our principal ceding companies, rating agency action such as a ratings downgrade, difficulties with the execution of the Company’s business strategy, contract cancellations, developments in the world’s financial and capital markets, more severe losses or more frequent losses associated with products affecting the adequacy of the Company’s loss reserve, changes in regulation or tax laws, the Company’s dependence on customers, decreased demand or increased competition, loss of key personnel, the effects of mergers, acquisitions and divestitures, changes in accounting policies or practices, and changes in general economic conditions, as well as management’s response to these factors, and other risk factors identified in the Company’s filings with the Securities and Exchange Commission.

1

Assured Guaranty Ltd.

Selected Financial Highlights

(dollars and shares in millions except per share amounts)

	Quarter Ended June 30,						% Change versus		Six Months Ended June 30,						% Change versus
	2005			2004			2Q-04		2005			2004			YTD 2004
Gross written premiums (GWP) analysis:
Present value of financial guaranty & mortgage guaranty GWP (PVP) (a)	$	57.9		$	54.4		6	%	$	146.2		$	159.5		-8	%
Less: Installment premium PVP	38.3			31.6			21	%	91.8			88.3			4	%
Upfront financial guaranty & mortgage guaranty GWP	19.6			22.9			-14	%	54.4			71.3			-24	%
Plus: Upfront premium due to novations	(18.4		)	—			NMF		(18.4		)	—			NMF
Plus: Installment GWP	29.8			31.5			-6	%	72.2			75.1			-4	%
Financial guaranty & mortgage guaranty GWP	31.0			54.4			-43	%	108.2			146.4			-26	%
Plus: Other segment GWP	9.5			10.0			-5	%	10.4			(83.6		)	NMF
Total GWP	$	40.5		$	64.4		-37	%	$	118.6		$	62.8		89	%
Net income	$	66.8		$	43.1		55	%	$	111.1		$	90.0		23	%
Less: After-tax realized gains on investments	1.2			6.3			-81	%	2.7			6.3			-57	%
Less: After-tax unrealized (losses) gains on derivatives	(9.7		)	9.0			NMF		(8.1		)	12.1			NMF
Operating income (b)	$	75.2		$	27.9		170	%	$	116.6		$	71.6		63	%
Book value	$	1,619.5		$	1,421.9		14	%	$	1,619.5		$	1,421.9		14	%
Plus: Net unearned premium reserve less DAC, after-tax (1)	304.2			245.1			24	%	304.2			245.1			24	%
Plus: Net present value of installment premiums in-force, after-tax	300.6			261.8			15	%	300.6			261.8			15	%
Adjusted book value (c)	$	2,224.3		$	1,928.8		15	%	$	2,224.3		$	1,928.8		15	%
ROE, excluding AOCI	17.7		%	12.4		%			14.9		%	13.2		%
Less: After-tax realized gains on investments	0.3		%	1.8		%			0.4		%	0.9		%
Less: After-tax unrealized (losses) gains on derivatives	-2.6		%	2.6		%			-1.1		%	1.8		%
Operating ROE, excluding AOCI (b)	19.9		%	8.0		%			15.6		%	10.5		%
Per diluted share:
Net income	$	0.90		$	0.57		58	%	$	1.49		$	1.20		24	%
Less: After-tax realized gains on investments	0.02			0.08			-75	%	0.04			0.08			-50	%
Less: After-tax unrealized gains on derivatives	(0.13		)	0.12			NMF		(0.11		)	0.16			NMF
Operating income (b)	$	1.02		$	0.37		176	%	$	1.56		$	0.95		64	%
Book value	$	21.63		$	18.73		15	%	$	21.63		$	18.73		15	%
Plus: Net unearned premium reserve less DAC, after-tax (1)	4.06			3.23			26	%	4.06			3.23			26	%
Plus: Net present value of installment premiums in-force, after-tax	4.01			3.45			16	%	4.01			3.45			16	%
Adjusted book value (c)	$	29.71		$	25.40		17	%	$	29.71		$	25.40		17	%
Additional information:
Shares outstanding at the end of period	74.9			75.9			—		74.9			75.9			—
Weighted average basic shares outstanding	73.8			75.0			-2	%	74.1			75.0			-1	%
Weighted average diluted shares outstanding	74.1			75.0			-1	%	74.5			75.0			-1	%
Consolidated net debt service outstanding	$	137,104		$	132,527		3	%	$	137,104		$	132,527		3	%
Consolidated net par outstanding	94,867			91,350			4	%	94,867			91,350			4	%
Consolidated claims-paying resources	3,028			2,745			10	%	3,028			2,745			10	%

(1)  Unearned premium reserve (UPR) less pre-paid reinsurance premiums and deferred acquisition costs (DAC), all after-tax

Note: Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and adjusted book value (c)].

2

Assured Guaranty Ltd.

Consolidated GAAP Income Statements

(in millions, except per share amounts)

	Quarter Ended June 30,						% Change versus		Six Months Ended June 30,						% Change versus
	2005			2004			2Q-04		2005			2004			YTD 2004
Revenues
Gross written premiums	$	40.5		$	64.4		-37	%	$	118.6		$	62.8		89	%
Net written premiums	30.2			(29.9		)	NMF		106.6			(36.8		)	NMF
Net earned premiums	48.3			(9.3		)	NMF		96.4			77.3			25	%
Net investment income	23.7			23.5			1	%	46.8			47.8			-2	%
Other income	(0.2		)	—			NMF		0.1			0.5			-80	%
Total revenues	$	71.8		$	14.2		406	%	$	143.3		$	125.6		14	%
Expenses
Loss and loss adjustment expenses	(59.1		)	(60.0		)	-2	%	(68.5		)	(36.3		)	89	%
Profit commission expense	3.3			4.8			-31	%	4.3			10.3			-58	%
Acquisition costs	11.7			8.4			39	%	21.9			21.5			2	%
Other operating expenses	14.5			26.6			-45	%	29.0			39.2			-26	%
Other expenses	5.9			2.5			136	%	9.2			5.6			64	%
Total expenses	$	(23.7	)	$	(17.6	)	35	%	$	(4.1	)	$	40.4		NMF
Income before provision for income taxes	95.5			31.8			200	%	147.4			85.3			73	%
Total provision for income taxes	20.3			3.9			425	%	30.8			13.8			124	%
Operating income (b)	$	75.2		$	27.9		170	%	$	116.6		$	71.6		63	%
After-tax net realized gains on investments	1.2			6.3			-81	%	2.7			6.3			-57	%
After-tax unrealized (losses) gains on derivative instruments	(9.7		)	9.0			NMF		(8.1		)	12.1			NMF
Net income	$	66.8		$	43.1		55	%	$	111.1		$	90.0		23	%
Per diluted share
Operating income (b)	$	1.02		$	0.37		176	%	$	1.56		$	0.95		64	%
After-tax net realized gains on investments	0.02			0.08			-75	%	0.04			0.08			-50	%
After-tax unrealized (losses) gains on derivative instruments	(0.13		)	0.12			NMF		(0.11		)	0.16			NMF
Net income	$	0.90		$	0.57		58	%	$	1.49		$	1.20		24	%
Weighted average shares outstanding (in millions)
Basic shares outstanding	73.8			75.0			-2	%	74.1			75.0			-1	%
Plus: effect of options	0.2			—			NMF		0.1			—			NMF
Plus: effect of restricted stock	0.1			—			NMF		0.2			—			NMF
Diluted shares outstanding	74.1			75.0			-1	%	74.5			75.0			-1	%

Note: Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and adjusted book value (c)].

3

Assured Guaranty Ltd.

Consolidated GAAP Balance Sheets

(dollars in millions)

	As of :
	June 30, 2005			December 31, 2004
Assets
Fixed maturity securities, at fair value	$	2,076.8		$	1,965.1
Short-term investments, at cost which approximates fair value	121.1			175.8
Total investments	2,197.9			2,140.9
Cash and cash equivalents	4.7			17.0
Accrued investment income	21.4			21.9
Deferred acquisition costs	188.2			186.4
Prepaid reinsurance premiums	13.8			15.2
Reinsurance recoverable on ceded losses	112.4			120.2
Loss recovery receivable	63.7			—
Premiums receivable	28.5			40.8
Goodwill	85.4			85.4
Unrealized gains on derivative financial instruments	34.5			43.9
Other assets	21.0			22.3
Total assets	$	2,771.6		$	2,694.0
Liabilities and shareholders’ equity
Liabilities
Unearned premium reserves	$	530.2		$	521.3
Reserves for losses and loss adjustment expenses	206.4			226.5
Profit commissions payable	45.4			61.7
Reinsurance balances payable	21.9			25.1
Current income taxes	28.4			—
Deferred income taxes	18.2			40.1
Funds held by Company under reinsurance contracts	53.8			50.8
Long-term debt	197.3			197.4
Other liabilities	50.5			43.7
Total liabilities	1,152.1			1,166.4
Shareholders’ equity
Common stock	0.7			0.8
Treasury stock	(7.9		)	(7.9		)
Additional paid-in capital	884.4			894.2
Unearned stock grant compensation	(10.1		)	(6.7		)
Retained earnings	674.8			568.3
Accumulated other comprehensive income	77.5			79.0
Total shareholders’ equity	1,619.5			1,527.6
Total liabilities and shareholders’ equity	$	2,771.6		$	2,694.0

4

Assured Guaranty Ltd.

Segment Consolidation (1 of 2)

(dollars in millions)

	Quarter Ended June 30, 2005
	Financial Guaranty Direct			Financial Guaranty Reinsurance(1)			Mortgage Guaranty			Total Financial Guaranty			Other		Total
Present value of financial guaranty gross written premiums (PVP): (a)
Public finance	$	6.3		$	15.8		$	—		$	22.1				$	22.1
Structured finance	16.4			19.4			—			35.8					35.8
Total PVP	$	22.7		$	35.2		$	—		$	57.9				$	57.9
Income statement:
Gross written premiums	$	20.9		$	8.2		$	1.9		$	31.0		$	9.5	$	40.5
Net written premiums	20.4			8.0			1.9			30.2			—		30.2
Net earned premiums	16.0			27.2			5.1			48.3			—		48.3
Loss and loss adjustment expenses	5.0			(64.1		)	—			(59.1		)	—		(59.1		)
Profit commission expense	—			2.3			1.0			3.3			—		3.3
Acquisition costs	1.6			9.5			0.6			11.7			—		11.7
Operating expenses	8.4			5.7			0.4			14.5			—		14.5
Total underwriting expenses	$	15.0		$	(46.6	)	$	2.0		$	(29.6	)	$	—	$	(29.6	)
Underwriting gain	$	1.1		$	73.8		$	3.1		$	77.9		$	—	$	77.9
Loss and loss adjustment expense ratio	31.3		%	-235.7		%	—			-122.4		%			-122.4		%
Expense ratio	62.2		%	64.3		%	39.6		%	61.0		%			61.0		%
Combined ratio	93.5		%	-171.4		%	39.6		%	-61.4		%			-61.4		%

	Quarter Ended June 30, 2004
	Financial Guaranty Direct			Financial Guaranty Reinsurance(1)			Mortgage Guaranty			Total Financial Guaranty			Other			Total
PVP:
Public finance	$	2.9		$	31.2		$	—		$	34.1					$	34.1
Structured finance	11.4			8.9			—			20.3						20.3
Total PVP	$	14.4		$	40.1		$	—		$	54.4					$	54.4
Income statement:
Gross written premiums	$	17.7		$	35.8		$	0.9		$	54.4		$	10.0		$	64.4
Net written premiums	17.3			35.8			0.9			54.0			(84.0		)	(29.9		)
Net earned premiums	16.1			25.6			15.0			56.7			(66.0		)	(9.3		)
Loss and loss adjustment expenses	1.6			(0.9		)	(3.3		)	(2.6		)	(57.4		)	(60.0		)
Profit commission expense	—			0.3			4.3			4.6			0.2			4.8
Acquisition costs	0.1			6.6			1.7			8.4			—			8.4
Operating expenses (2)	9.1			5.0			1.1			15.3			—			15.3
Total underwriting expenses	$	10.8		$	11.0		$	3.8		$	25.7		$	(57.2	)	$	(31.5	)
Underwriting gain (loss)	$	5.3		$	14.6		$	11.2		$	31.0		$	(8.8	)	$	22.3
Loss and loss adjustment expense ratio	9.9		%	-3.5		%	-22.0		%	-4.6		%	87.0		%	645.2		%
Expense ratio	57.1		%	46.5		%	47.5		%	50.0		%	-0.3		%	-306.8		%
Combined ratio	67.0		%	43.0		%	25.5		%	45.4		%	86.7		%	338.4		%

(1) Due to the timing of receipts of reports prepared by our ceding companies, present value of financial guaranty gross written premiums (PVP) for installment premiums, par written and par outstanding in our Financial Guaranty Reinsurance segment are reported on a one-quarter lag.

(2) Excludes $11.3 million of operating expenses, related to accelerated vesting of stock awards at the IPO date.

Note: Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and adjusted book value (c)].

5

Assured Guaranty Ltd.

Segment Consolidation (2 of 2)

(dollars in millions)

	Six Months Ended June 30, 2005
	Financial Guaranty Direct			Financial Guaranty Reinsurance(1)			Mortgage Guaranty			Total Financial Guaranty			Other			Total
Present value of financial guaranty gross written premiums (PVP): (a)
Public finance	$	7.9		$	50.5		$	—		$	58.4					$	58.4
Structured finance	52.2			22.5			13.1			87.8						87.8
Total PVP	$	60.1		$	73.0		$	13.1		$	146.2					$	146.2
Income statement:
Gross written premiums	$	44.7		$	42.2		$	21.3		$	108.2		$	10.4		$	118.6
Net written premiums	43.5			42.0			21.3			106.6			—			106.6
Net earned premiums	36.4			50.2			9.7			96.4			—			96.4
Loss and loss adjustment expenses	3.5			(71.2		)	0.2			(67.5		)	(1.1		)	(68.5		)
Profit commission expense	—			2.3			2.0			4.3			—			4.3
Acquisition costs	3.1			17.6			1.1			21.9			—			21.9
Operating expenses	17.8			10.1			1.1			29.0			—			29.0
Total underwriting expenses	$	24.3		$	(41.2	)	$	4.4		$	(12.4	)	$	(1.1	)	$	(13.4	)
Underwriting gain	$	12.1		$	91.4		$	5.3		$	108.8		$	1.1		$	109.9
Loss and loss adjustment expense ratio	9.7		%	-141.8		%	2.1		%	-70.0		%				-71.1		%
Expense ratio	57.1		%	59.8		%	43.3		%	57.2		%				57.2		%
Combined ratio	66.8		%	-82.0		%	45.4		%	-12.8		%				-13.9		%

	Six Months Ended June 30, 2004
	Financial Guaranty Direct			Financial Guaranty Reinsurance(1)			Mortgage Guaranty			Total Financial Guaranty			Other			Total
PVP:
Public finance	$	2.9		$	77.0		$	—		$	79.9					$	79.9
Structured finance	19.3			41.2			19.2			79.6						79.6
Total PVP	$	22.2		$	118.2		$	19.2		$	159.5					$	159.5
Income statement:
Gross written premiums	$	43.3		$	88.2		$	14.9		$	146.4		$	(83.6	)	$	62.8
Net written premiums	42.6			88.2			14.9			145.7			(182.5		)	(36.8		)
Net earned premiums	56.8			46.0			23.4			126.2			(48.9		)	77.3
Loss and loss adjustment expenses	15.0			3.0			(4.5		)	13.5			(49.9		)	(36.3		)
Profit commission expense	—			0.4			9.3			9.7			0.6			10.3
Acquisition costs	1.5			13.7			2.6			17.8			3.7			21.5
Operating expenses (2)	14.6			8.0			1.8			24.4			3.5			27.9
Total underwriting expenses	$	31.1		$	25.1		$	9.2		$	65.4		$	(42.0	)	$	23.4
Underwriting gain (loss)	$	25.7		$	20.9		$	14.3		$	60.9		$	(7.1	)	$	53.8
Loss and loss adjustment expense ratio	26.4		%	6.5		%	-19.2		%	10.7		%	102.0		%	-47.0		%
Expense ratio	28.3		%	48.0		%	58.3		%	41.1		%	-16.1		%	77.2		%
Combined ratio	54.7		%	54.5		%	39.1		%	51.8		%	85.9		%	30.2		%

(1)  Due to the timing of receipts of reports prepared by our ceding companies, present value of financial guaranty gross written premiums (PVP) for installment premiums, par written and par outstanding in our Financial Guaranty Reinsurance segment are reported on a one-quarter lag.

(2)  Excludes $11.3 million of operating expenses, related to accelerated vesting of stock awards at the IPO date.

Note: Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and adjusted book value (c)].

6

Assured Guaranty Ltd.

Financial Guaranty Direct Segment (1 of 2)

(dollars in millions)

	1Q-04			2Q-04			3Q-04			4Q-04			1Q-05			2Q-05			YTD 2004			YTD 2005
Present value of gross written premiums (PVP) (a)	$	7.9		$	14.4		$	7.9		$	39.6		$	37.5		$	22.7		$	22.2		$	60.1
less: Present value of installment premiums (a)	(7.9		)	(14.4		)	(7.9		)	(33.9		)	(35.8		)	(17.6		)	(22.2		)	(53.4		)
Upfront gross written premiums (GWP)	—			—			—			5.7			1.7			5.1			—			6.8
plus: Installment GWP	25.6			17.7			16.2			15.6			22.1			15.8			43.3			37.9
Financial guaranty direct GWP	$	25.6		$	17.7		$	16.2		$	21.3		$	23.8		$	20.9		$	43.3		$	44.7
Income statement:
Gross written premiums	$	25.6		$	17.7		$	16.2		$	21.3		$	23.8		$	20.9		$	43.3		$	44.7
Net written premiums	25.3			17.3			14.2			20.9			23.1			20.4			42.6			43.5
Net earned premiums:
Public finance	—			—			—			0.1			0.1			0.4			—			0.5
Structured finance	40.7			16.1			16.5			15.4			20.3			15.6			56.8			35.9
Total net earned premiums	40.7			16.1			16.5			15.5			20.4			16.0			56.8			36.4
Loss and loss adjustment expenses	13.4			1.6			(1.2		)	1.0			(1.5		)	5.0			15.0			3.5
Profit commission expense	—			—			—			—			—			—			—			—
Acquisition costs	1.4			0.1			1.4			1.6			1.5			1.6			1.5			3.1
Operating expenses (1)	5.5			9.1			8.5			8.6			9.4			8.4			14.6			17.8
Total expenses	$	20.3		$	10.8		$	8.7		$	11.3		$	9.4		$	15.0		$	31.1		$	24.3
Underwriting gain	$	20.4		$	5.3		$	7.8		$	4.2		$	11.0		$	1.1		$	25.7		$	12.1
Loss and loss adjustment expense ratio	32.9		%	9.9		%	-7.3		%	6.5		%	-7.1		%	31.3		%	26.4		%	9.7		%
Expense ratio	17.0		%	57.1		%	59.8		%	66.3		%	53.1		%	62.2		%	28.3		%	57.1		%
Combined ratio	49.9		%	67.0		%	52.5		%	72.8		%	46.0		%	93.5		%	54.7		%	66.8		%

(1)  2Q-04 excludes the allocation of $11.3 million of consolidated operating expenses related to the accelerated vesting of stock awards at the IPO date.

Note: Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and present value of installment premiums in force adjusted book value (c)].

7

Assured Guaranty Ltd.

Financial Guaranty Direct Segment (2 of 2)

(dollars in millions)

	1Q-04		2Q-04		3Q-04		4Q-04		1Q-05		2Q-05		YTD 2004		YTD 2005
PVP (a):
Public finance	$	—	$	2.9	$	—	$	5.7	$	1.6	$	6.3	$	2.9	$	7.9
Structured finance	7.9		11.4		7.9		33.9		35.9		16.4		19.3		52.2
Total	$	7.9	$	14.4	$	7.9	$	39.6	$	37.5	$	22.7	$	22.2	$	60.1
U.S.	$	4.2	$	11.1	$	7.9	$	34.6	$	32.5	$	21.2	$	15.3	$	53.7
Non-U.S.	3.7		3.2		—		5.0		4.9		1.5		6.9		6.4
Total	$	7.9	$	14.4	$	7.9	$	39.6	$	37.5	$	22.7	$	22.2	$	60.1
Par written:
Public finance	$	—	$	246	$	508	$	194	$	77	$	386	$	246	$	463
Structured finance	1,488		2,444		854		7,263		1,438		2,137		3,932		3,575
Total	$	1,488	$	2,691	$	1,361	$	7,457	$	1,515	$	2,524	$	4,178	$	4,038
U.S.	$	1,435	$	2,397	$	854	$	7,357	$	1,250	$	2,422	$	3,832	$	3,672
International	53		293		508		100		265		102		346		367
Total	$	1,488	$	2,691	$	1,361	$	7,457	$	1,515	$	2,524	$	4,178	$	4,038
Par outstanding:
Public finance	$	2,112	$	2,321	$	2,852	$	3,144	$	3,146	$	3,463	$	2,321	$	3,463
Structured finance	21,737		23,454		23,605		28,468		27,444		26,556		23,454		26,556
Total	$	23,849	$	25,775	$	26,457	$	31,612	$	30,590	$	30,019	$	25,775	$	30,019
Present value of installment premiums in force: (a)	$	220.6	$	219.7	$	218.9	$	231.0	$	238.3	$	216.4	$	219.7	$	216.4
Unearned premium reserve net of ceded reinsurance	16.0		17.1		14.7		20.3		23.0		27.0		17.1		27.0

Note: Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and present value of installment premiums in force adjusted book value (c)].

8

Assured Guaranty Ltd.

Financial Guaranty Reinsurance Segment (1)(1 of 2)

(dollars in millions)

	1Q-04			2Q-04			3Q-04			4Q-04			1Q-05			2Q-05			YTD 2004			YTD 2005
Present value of gross written premiums (PVP) (a)	$	78.1		$	40.1		$	38.9		$	35.7		$	37.7		$	35.2		$	118.2		$	73.0
less: Present value of installment premiums (a)	(40.0		)	(17.2		)	(14.5		)	(11.6		)	(17.8		)	(20.7		)	(57.2		)	(38.4		)
Upfront gross written premiums (GWP)	38.1			22.9			24.5			24.1			20.0			14.6			61.0			34.5
plus: Upfront premium due to novations (4)	—			—			—			—			—			(18.4		)	—			(18.4		)
plus: Installment GWP (2)	14.3			12.9			11.1			12.4			14.0			12.0			27.2			26.1
Financial guaranty reinsurance GWP	$	52.4		$	35.8		$	35.6		$	36.5		$	34.0		$	8.2		$	88.2		$	42.2
Income statement:
Gross written premiums	$	52.4		$	35.8		$	35.6		$	36.5		$	34.0		$	8.2		$	88.2		$	42.2
Net written premiums	52.4			35.8			35.6			36.3			34.0			8.0			88.2			42.0
Net earned premiums:
Scheduled net earned premiums	17.5			21.2			26.7			31.5			21.6			23.6			38.7			45.2
Net premiums earned from refundings	2.9			4.4			5.2			5.0			1.4			3.6			7.3			5.0
Total net earned premiums	20.4			25.6			31.9			36.5			23.0			27.2			46.0			50.2
Loss and loss adjustment expenses	3.9			(0.9		)	10.8			1.6			(7.1		)	(64.1		)	3.0			(71.2		)
Profit commission expense	0.1			0.3			(0.2		)	0.9			—			2.3			0.4			2.3
Acquisition costs	7.1			6.6			12.1			13.0			8.1			9.5			13.7			17.6
Operating expenses (3)	3.0			5.0			4.7			4.8			4.4			5.7			8.0			10.1
Total expenses	$	14.1		$	11.0		$	27.4		$	20.2		$	5.4		$	(46.6	)	$	25.1		$	(41.2	)
Underwriting gain	$	6.3		$	14.6		$	4.5		$	16.2		$	17.6		$	73.8		$	20.9		$	91.4
Loss and loss adjustment expense ratio	19.1		%	-3.5		%	33.9		%	4.4		%	-30.9		%	-235.7		%	6.5		%	-141.8		%
Expense ratio	50.0		%	46.5		%	51.9		%	51.1		%	54.3		%	64.3		%	48.0		%	59.8		%
Combined ratio	69.1		%	43.0		%	85.8		%	55.5		%	23.4		%	-171.4		%	54.5		%	-82.0		%

(1)  Due to the timing of receipts of reports prepared by our ceding companies, present value of financial guaranty gross installment premiums written (PVP), par written and par outstanding in our Financial Guaranty Reinsurance segment are reported on a one-quarter lag.

(2)  Installment gross written premiums includes the reclassification of certain deals originally recorded as installment that were discovered during 3Q-04 to be upfront premiums.  As a result, prior period amounts have been restated.  This reclass had an immaterial impact on our QTD and YTD results of operations and financial condition.

(3)  2Q-04 excludes the allocation of $11.3 million of consolidated operating expenses related to the accelerated vesting of stock awards at the IPO date.

(4)  Relates to reassumption by FSA of approximately $820 million par value of healthcare related business.

Note: Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and present value of installment premiums in force adjusted book value (c)].

9

Assured Guaranty Ltd.

Financial Guaranty Reinsurance Segment (1)(2 of 2)

(dollars in millions)

	1Q-04		2Q-04		3Q-04		4Q-04		1Q-05		2Q-05		YTD 2004		YTD 2005
PVP  (a):
Public finance	$	45.8	$	31.2	$	33.9	$	26.4	$	34.7	$	15.8	$	77.0	$	50.5
Structured finance	32.3		8.9		5.0		9.3		3.1		19.4		41.2		22.5
Total	$	78.1	$	40.1	$	38.9	$	35.7	$	37.7	$	35.2	$	118.2	$	73.0
Par written:
Public finance	$	1,932	$	1,590	$	2,262	$	1,443	$	2,206	$	98	$	3,522	$	2,304
Structured finance	1,154		629		507		861		1,718		893		1,783		2,611
Total	$	3,086	$	2,219	$	2,769	$	2,304	$	3,924	$	991	$	5,305	$	4,915
Par outstanding:
Public finance	$	51,806	$	52,061	$	52,926	$	51,324	$	52,579	$	51,039	$	52,061	$	51,039
Structured finance	13,935		13,514		13,084		12,656		13,225		13,809		13,514		13,809
Total	$	65,741	$	65,575	$	66,010	$	63,980	$	65,804	$	64,848	$	65,575	$	64,848
Present value of installment premiums in force (a)	$	140.3	$	147.2	$	138.0	$	138.9	$	146.9	$	152.3	$	147.2	$	152.3
Unearned premium reserve net of ceded reinsurance	436.4		441.0		444.2		443.8		454.8		435.6		441.0		435.6

(1)  Due to the timing of receipts of reports prepared by our ceding companies, present value of financial guaranty gross installment premiums written (PVP), par written and par outstanding in our Financial Guaranty Reinsurance segment are reported on a one-quarter lag.

Note: Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and present value of installment premiums in force adjusted book value (c)].

10

Assured Guaranty Ltd.

Mortgage Guaranty Segment

(dollars in millions)

	1Q-04			2Q-04			3Q-04			4Q-04			1Q-05			2Q-05			YTD 2004			YTD 2005
Present value of gross written premiums (PVP) (a)	$	19.2		$	—		$	1.1		$	6.9		$	13.1		$	—		$	19.2		$	13.1
less: Present value of installment premiums (a)	(8.9		)	—			(1.1		)	(6.9		)	—			—			(8.9		)	—
Upfront gross written premiums (GWP)	10.3			—			—			—			13.1			—			10.3			13.1
plus: Installment GWP	3.7			0.9			5.3			4.2			6.3			1.9			4.6			8.2
Mortgage guaranty GWP	$	14.0		$	0.9		$	5.3		$	4.2		$	19.4		$	1.9		$	14.9		$	21.3
Income statement:
Gross written premiums	$	14.0		$	0.9		$	5.3		$	4.2		$	19.4		$	1.9		$	14.9		$	21.3
Net written premiums	14.0			0.9			5.3			4.2			19.4			1.9			14.9			21.3
Net earned premiums	8.4			15.0			5.1			5.2			4.6			5.1			23.4			9.7
Loss and loss adjustment expenses	(1.2		)	(3.3		)	(5.4		)	(2.0		)	0.2			—			(4.5		)	0.2
Profit commission expense	5.0			4.3			1.3			3.5			1.0			1.0			9.3			2.0
Acquisition costs	0.9			1.7			0.5			0.6			0.5			0.6			2.6			1.1
Operating expenses (1)	0.6			1.1			1.0			1.0			0.7			0.4			1.8			1.1
Total expenses	$	5.3		$	3.8		$	(2.6	)	$	3.2		$	2.4		$	2.0		$	9.2		$	4.4
Underwriting gain	$	3.1		$	11.2		$	7.7		$	2.0		$	2.2		$	3.1		$	14.3		$	5.3
Loss and loss adjustment expense ratio	-14.3		%	-22.0		%	-105.9		%	-37.8		%	4.3		%	—			-19.2		%	2.1		%
Expense ratio	77.6		%	47.5		%	55.5		%	98.5		%	47.4		%	39.6		%	58.3		%	43.3		%
Combined ratio	63.3		%	25.5		%	-50.4		%	60.7		%	51.7		%	39.6		%	39.1		%	45.4		%
Risk in force	$	2,201		$	2,394		$	2,437		$	2,325		$	2,582		$	2,547		$	2,394		$	2,547
Risk written	237			—			136			271			419			—			237			419
Unearned premium reserve net of ceded reinsurance	57.6			43.5			43.7			42.7			57.5			54.2			43.5			54.2

(1).  2Q-04 excludes the allocation of $11.3 million of consolidated operating expenses related to the accelerated vesting of stock awards at the IPO date.

Note: Please refer to endnotes for explanation of non-GAAP financial measures [PVP (a), operating income and operating ROE (b), and adjusted book value (c)].

11

Assured Guaranty Ltd.

Other Segment

(dollars in millions)

	1Q-04			2Q-04			3Q-04		4Q-04			1Q-05			2Q-05		YTD 2004			YTD 2005
Income statement:
Gross written premiums	$	(93.6	)	$	10.0		$	5.2	$	3.8		$	0.9		$	9.5	$	(83.6	)	$	10.4
Net written premiums	(98.5		)	(84.0		)	—		—			—			—		(182.5		)	—
Net earned premiums	17.2			(66.0		)	—		—			—			—		(48.9		)	—
Loss and loss adjustment expenses	7.5			(57.4		)	—		(0.4		)	(1.1		)	—		(49.9		)	(1.1		)
Profit commission expense	0.4			0.2			—		—			—			—		0.6			—
Acquisition costs	3.6			—			—		—			—			—		3.7			—
Operating expenses (1)	3.5			—			—		—			—			—		3.5			—
Total expenses	$	15.1		$	(57.2	)	$	—	$	(0.4	)	$	(1.1	)	$	—	$	(42.0	)	$	(1.1	)
Underwriting gain (loss)	$	2.1		$	(8.8	)	$	—	$	0.4		$	1.1		$	—	$	(7.1	)	$	1.1
Loss and loss adjustment expense ratio	43.6		%	87.0		%	—		—			—			—		102.0		%	—
Expense ratio	44.0		%	-0.3		%	—		—			—			—		-16.1		%	—
Combined ratio	87.6		%	86.7		%	—		—			—			—		85.9		%	—
Net earned premiums:
Equity layer credit protection	$	5.4		$	—		$	—	$	—		$	—		$	—	$	5.4		$	—
Trade credit reinsurance	9.3			(34.6		)	—		—			—			—		(25.3		)	—
Title reinsurance	2.5			0.8			—		—			—			—		3.3			—
Auto residual value reinsurance	—			(32.2		)	—		—			—			—		(32.2		)	—
Total net earned premiums	$	17.2		$	(66.0	)	$	—	$	—		$	—		$	—	$	(48.9	)	$	—
Underwriting gain (loss): (1)
Equity layer credit protection	$	2.5		$	0.5		$	—	$	0.4		$	1.1		$	—	$	3.0		$	1.1
Trade credit reinsurance	1.4			(4.2		)	—		—			—			—		(2.8		)	—
Title reinsurance	0.7			0.3			—		—			—			—		1.0			—
Auto residual value reinsurance	(2.5		)	(5.4		)	—		—			—			—		(7.9		)	—
Total underwriting gain (loss)	$	2.1		$	(8.8	)	$	—	$	0.4		$	1.1		$	—	$	(7.1	)	$	1.1

(1).  2Q-04 excludes the allocation of $11.3 million of consolidated operating expenses related to the accelerated vesting of stock awards at the IPO date.

12

Assured Guaranty Ltd.

Loss and LAE Reserves by Segment, Type of Reserve and by Segment and Type of Reserve

(dollars in millions)

	As of June 30, 2005		As of December 31, 2004
Loss and LAE reserves by segment:
Financial guaranty direct	$	22.6	$	19.9
Financial guaranty reinsurance	74.0		78.8
Mortgage guaranty	11.2		11.2
Other	98.6		116.6
Total	$	206.4	$	226.5
	As of June 30, 2005		As of December 31, 2004
Loss and LAE reserves by type:
Case	$	51.7	$	53.5
IBNR	91.2		105.8
Portfolio	63.5		67.2
Total	$	206.4	$	226.5
	As of June 30, 2005
	Financial Guaranty Direct		Financial Guaranty Reinsurance		Mortgage Guaranty		Total Financial Guaranty		Other		Total
Reserves by segment and type:
Case	$	7.9	$	27.6	$	0.6	$	36.1	$	15.6	$	51.7
IBNR	—		—		8.2		8.2		83.0		91.2
Portfolio	14.7		46.4		2.4		63.5		—		63.5
Total	$	22.6	$	74.0	$	11.2	$	107.8	$	98.6	$	206.4
	As of December 31, 2004
	Financial Guaranty Direct		Financial Guaranty Reinsurance		Mortgage Guaranty		Total Financial Guaranty		Other		Total
Reserves by segment and type:
Case	$	4.3	$	29.1	$	0.8	$	34.2	$	19.3	$	53.5
IBNR	—		—		8.5		8.5		97.3		105.8
Portfolio	15.6		49.7		1.9		67.2		—		67.2
Total	$	19.9	$	78.8	$	11.2	$	109.9	$	116.6	$	226.5

13

Assured Guaranty Ltd.

Investment Portfolio

as of June 30, 2005

(dollars in millions)

	Amortized Cost		Pre-Tax Book Yield		Fair Value		Annualized Investment Income
Fixed maturity securities available for sale:
U.S. Treasury securities and obligations of U.S. government agencies	$	158.5	3.9	%	$	162.4	$	6.2
Agency obligations	192.8		5.2	%	201.4		10.0
Foreign government securities	17.6		4.9	%	18.0		0.9
Obligations of states and political subdivisions	298.2		4.8	%	318.5		14.2
Insured obligations of state and political subdivisions	519.4		4.9	%	560.2		25.2
Corporate securities	139.0		5.6	%	147.5		7.8
Mortgage-backed securities:
Pass-thrus	477.4		5.0	%	485.2		23.7
PACs	76.7		4.6	%	77.0		3.6
Asset-backed securities	106.2		3.9	%	106.6		4.1
Total fixed maturity securities available for sale	1,985.8		4.8	%	2,076.8		95.7
Short-term investments	121.1		2.9	%	121.1		3.5
Total investments	$	2,106.9	4.7	%	$	2,197.9	$	99.1
	Fair Value		%
Ratings distribution(1):
Treasury and U.S. government obligations	$	162.4	7.8	%
Agency obligations	201.4		9.7	%
AAA/Aaa	1,376.1		66.3	%
AA/Aa	234.3		11.3	%
A/A	102.6		4.9	%
BBB/Baa	—		—
Total	$	2,076.8	100.0	%
Duration of investment portfolio (in years):			4.2

(1). Ratings are represented by the lower of the Moody’s Investor Services and Standard & Poor’s classifications.

14

Assured Guaranty Ltd.

Financial Guaranty Profile (1 of 3)

(dollars in millions)

	Gross Par Written					As of June 30, 2005:
Sector	2Q 2005			2Q 2004		Net Par Outstanding			%		Avg. Rating (7)
U.S. public finance
General obligation	$	176		$	517	$		11,898	12.5	%	A+
Municipal utilities	43			82		10,813			11.4	%	A+
Tax backed	319			128		10,604			11.2	%	A+
Transportation	217			85		5,937			6.3	%	A
Healthcare	(564		)	335		5,742			6.1	%	A
Investor-owned utilities	24			29		1,284			1.4	%	A-
Housing	(11		)	21		1,160			1.2	%	AA-
Higher education	114			10		1,080			1.1	%	A
Structured municipal (1)	—			—		1,050			1.1	%	AAA
Other public finance (2)	19			131		731			0.8	%	A+
Total public finance	$	338		$	1,337	$	50,299		53.0	%	A+
U.S. structured finance
CDOs (3)	$	1,514		$	1,056	$	15,811		16.7	%	AA+
Mortgage-backed and home equity	268			1,092		10,030			10.6	%	AA
Commercial receivables (4)	600			192		4,401			4.6	%	AA-
Consumer receivables (5)	30			23		2,426			2.6	%	A-
Other structured finance (6)	56			129		1,509			1.6	%	AA
Single name corporate CDS	—			—		21			0.0	%	A+
Total structured finance	$	2,467		$	2,492	$	34,198		36.0	%	AA
International
Structured finance	$	563		$	581	$	6,167		6.5	%	AA-
Project finance/PFI/PPP	146			253		3,176			3.3	%	BBB+
Public finance	—			245		1,026			1.1	%	A-
Total international	$	709		$	1,080	$	10,370		10.9	%	A+
Total exposures	$	3,515		$	4,910	$		94,867	100.0	%	AA-
Mortgage guaranty risk in force	$	—		$	—	$		2,547	NA		NA

(1).  Structured municipal: includes excess of loss reinsurance on portfolios of municipal credits where the Company attached in excess of the AAA rating level.

(2).  Other public finance: primarily includes student loans and government-sponsored project finance.

(3).  Collateralized debt obligations (CDOs) are structured financings backed by a pool of debt obligations. These financings are typically structured in multiple tranches (layers) from equity (first loss) through super senior (high excess). Losses on defaulted pool assets are allocated successively first to the equity tranche then to higher rated tranches.

(4).  Commercial receivables: principally includes equipment leases and commercial mortgage-backed securities.

(5).  Consumer receivables: principally includes auto loan receivables and credit card receivables.

(6).  Other structured finance: predominantly trade receivable securitization, secured structured lending, and future flow transactions.

(7).  Assured Guaranty internal rating. Our scale is comparable to that of the nationally recognized rating agencies.

15

Assured Guaranty Ltd.

Financial Guaranty Profile (2 of 3)

(dollars in millions)

Distribution by ratings of financial guaranty portfolio

	June 30, 2005				December 31, 2004
Ratings (1)	Net Par Outstanding		%		Net Par Outstanding		%
AAA/Aaa	$	28,291	29.8	%	$	29,696	31.1	%
AA/Aa	20,486		21.6	%	19,856		20.8	%
A/A	31,051		32.7	%	31,393		32.8	%
BBB/Baa	13,709		14.5	%	13,137		13.7	%
Below investment grade	1,330		1.4	%	1,509		1.6	%
Total exposures	$	94,867	100	%	$	95,592	100	%

Distribution by ratings of CDO exposure

	June 30, 2005				December 31, 2004
	Net Par				Net Par
Ratings (1)	Outstanding		%		Outstanding		%
AAA/Aaa	$	12,646	70.4	%	$	12,975	75.2	%
AA/Aa	3,972		22.1	%	2,784		16.1	%
A/A	1,035		5.8	%	1,155		6.7	%
BBB/Baa	198		1.1	%	216		1.3	%
Below investment grade	117		0.7	%	116		0.7	%
Total exposures	$	17,968	100	%	$	17,246	100	%

Distribution of CDOs by year of issue as of June 30, 2005

	Net Par Outstanding		%
1999 and prior	50		0.3	%
2000	1,098		6.1	%
2001	4,251		23.7	%
2002	3,562		19.8	%
2003	3,583		19.9	%
2004	1,578		8.8	%
2005 year to date	3,847		21.4	%
	$	17,968	100.0	%

(1) Assured Guaranty internal rating. Our scale is comparable to that of the nationally recognized rating agencies.

16

Assured Guaranty Ltd.

Financial Guaranty Profile (3 of 3)

(dollars in millions)

Geographic distribution of financial guaranty portfolio, as of June 30, 2005

U.S.:	Net Par Outstanding		%
California	$	7,332	7.7	%
New York	5,730		6.0	%
Texas	3,462		3.6	%
Florida	2,694		2.8	%
Illinois	2,693		2.8	%
Massachusetts	2,318		2.4	%
New Jersey	2,206		2.3	%
Pennsylvania	2,152		2.3	%
Puerto Rico	1,773		1.9	%
Washington	1,710		1.8	%
Other states	18,229		19.2	%
Mortgage and structured (multiple states)	34,198		36.0	%
Total U.S.	$	84,497	89.1	%
International:
United Kingdom	$	5,529	5.8	%
Germany	863		0.9	%
Australia	780		0.8	%
Italy	386		0.4	%
Brazil	347		0.4	%
Other	2,465		2.6	%
Total International	$	10,370	10.9	%
Total exposures	$	94,867	100	%

17

Assured Guaranty Ltd.

Non-Investment Grade Exposures

as of June 30, 2005

(dollars in millions)

Asset Type	Weighted Average Remaining Life	Net Par Outstanding		Average Rating (6)
Public finance
Transportation	18.4	$	408.0	BB-
Healthcare	12.7	51.2		BB-
General obligation	8.6	1.0		BB+
Other public finance (1)	17.3	3.5		D
Investor-owned utilities	16.2	15.2		BB-
Municipal utilities	11.2	13.5		C
Tax backed	10.0	7.4		BB-
Housing	8.6	3.1		B
Higher education	12.0	1.0		BB+
Total public finance	17.3	$	503.8	BB-
Structured finance
Consumer receivables (2)	4.3	$	273.1	BB
Mortgage-backed and home equity	6.9	151.4		CCC+
Commercial receivables (3)	8.4	278.9		BB-
CDOs (4)	2.3	117.0		B+
Other structured finance (5)	4.9	6.2		CCC-
Total structured finance	5.9	$	826.6	B+
Total non-investment grade exposures	10.2	$	1,330.4	B+

(1).  Other public finance: primarily includes student loans and government-sponsored project finance.

(2).  Consumer receivables: principally includes auto loan receivables and credit card receivables.

(3).  Commercial receivables: principally includes equipment leases and commercial mortgage-backed securities.

(4).  Collateralized debt obligations (CDOs) are structured financings backed by a pool of debt obligations. These financings are typically structured in multiple tranches (layers) from equity (first loss) through super senior (high excess). Losses on defaulted pool assets are allocated successively first to the equity tranche then to higher rated tranches.

(5).  Other structured finance: predominantly trade receivable securitization, secured structured lending, and future flow transactions.

(6).  Assured Guaranty internal rating. Our scale is comparable to that of the nationally recognized rating agencies.

18

Assured Guaranty Ltd.

Closely Monitored Credits (“CMC”)

(dollars in millions)

Net par outstanding by credit monitoring category (1)

	June 30, 2005
Description	Net Par Outstanding		%		Number of credits in category
Fundamentally sound, normal risk	$	93,507	98.6	%
Closely monitored:
Category 1	922		1.0	%	25
Category 2	295		0.3	%	10
Category 3	131		0.1	%	17
Category 4	12		—		9
CMC Total	1,360		1.4	%	61
Total	$	94,867	100	%
	December 31, 2004
Description	Net Par Outstanding		%		Number of credits in category
Fundamentally sound, normal risk	$	93,855	98.2	%
Closely monitored:
Category 1	1,490		1.6	%	35
Category 2	165		0.2	%	9
Category 3	70		0.1	%	16
Category 4	12		—		8
CMC Total	1,737		1.8	%	68
Total	$	95,592	100	%
Top Ten Non-Investment Grade Exposures as of June 30, 2005
Name or description	Average Rating		Weighted Average Remaining Life		Net Par Outstanding
Public Finance Domestic Project Finance Transaction	BB		21.9		$	176
Public Finance International Project Finance Transaction	B		17.8		170
Structured Finance Domestic Credit Card Transaction	BB		3.0		163
Structured Finance Domestic EETC Transaction	B+		8.8		147
Structured Finance Domestic Credit Card Transaction	BB+		3.4		79
Structured Finance Domestic Manufactured Housing Transaction	CCC+		6.6		78
Structured Finance Domestic EETC Transaction	BB		9.8		67
Structured Finance Domestic Securitized Franchise Receivables	B		4.8		41
International Airport Facility	BB		7.8		34
Structured Finance Domestic Residential Mortgage Transaction	B-		4.2		29
Total	BB-		11.7		$	983

(1)  Our risk management department is responsible for monitoring our portfolio of credits and maintains a list of closely monitored credits. The closely monitored credits are divided into four categories: Category 1 (low priority; fundamentally sound, greater than normal risk); Category 2 (medium priority; weakening credit profile, may result in loss); Category 3 (high priority; claim/default probable, case reserve established); Category 4 (claim paid, case reserve established for future payments). Credits that are not included in the closely monitored credit list are categorized as fundamentally sound, normal risk.

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Assured Guaranty Ltd.

Largest Exposures by Sector (Part 1 of 2)

as of June 30, 2005

(dollars in millions)

10 Largest U.S. Public Finance Exposures

Revenue Source	Net Par Outstanding			Rating(1)
California State General Obligation & Leases	$		802	A-
Massachusetts State General Obligation & Bay	712			AA-
Long Island Power Authority	711			A-
New Jersey State General Obligation & Leases	687			AA-
New York City General Obligation & Leases	686			A
Jefferson County Alabama Sewer	660			A
New York City Municipal Water Finance Authority	634			AA+
Denver Colorado Airport System	626			A
Houston Texas Water & Sewer System	563			A+
New York State Metro Trans Auth - Transportation Revenue	535			A
Total top 10 public finance exposures	$	6,617

10 Largest U.S. Structured Finance Exposures

Revenue Source	Net Par Outstanding		Rating(1)
Park Place (Ameriquest) PPSI 2004-MHQ1 Class A-1	$	1,311	AAA
Ameriquest Mortgage Securities Inc. 2004-R10 A-1	850		AAA
Argent Securities Inc. 2004-W11 Class A-1	811		AAA
Structured Finance Corporate Pool	781		AA
Synthetic CDO - IG Corporate	740		AAA
Synthetic CDO - IG ABS	594		AAA
Synthetic CDO - IG ABS	579		AAA
Synthetic CDO - IG Corporate	567		A+
Bear Stearns ABS I Trust 2004-FR3 2-A	565		AAA
Synthetic Credit Card Master Trust	550		AAA
Total top 10 structured finance exposures	$	7,349

(1)  Assured Guaranty internal rating. Our scale is comparable to that of the nationally recognized rating agencies.

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Assured Guaranty Ltd.

Largest Exposures by Sector (Part 2 of 2)

as of June 30, 2005

(dollars in millions)

10 Largest Healthcare Exposures

Revenue Source	Net Par Outstanding		Rating(1)
Public Finance Domestic Hospital System	$	205	A-
Public Finance Domestic Hospital System	194		AAA(2)
Public Finance Domestic Hospital System	186		A+
Public Finance Domestic Hospital System	158		AA
Public Finance Domestic Hospital - Stand Alone	148		AAA(2)
Public Finance Domestic Hospital System	131		AA-
Public Finance Domestic Hospital System	113		A+
Public Finance Domestic Hospital System	111		BBB
Public Finance Domestic Hospital System	108		BBB+
Public Finance Domestic Hospital - Stand Alone	102		AA
Total top 10 healthcare exposures	$	1,455

10 Largest International Exposures

Revenue Source	Net Par Outstanding		Rating(1)
Synthetic CDO - IG ABS	$	579	AAA
Synthetic CDO - IG Corporate	500		AAA
Structured Finance - Whole Business Securitization	276		BBB+
Structured Finance - Equipment Leasing Receivables	231		A
Synthetic CDO - IG Corporate	200		AAA
Structured Finance - Whole Business Securitization	189		BBB+
Public Finance International Project Finance Transaction	170		B
Private UK RMBS	166		A+
Synthetic CDO - IG ABS	153		AAA
International PFI Transportation Authority	142		BBB
Total top 10 international exposures	$	2,606

(1) Assured Guaranty internal rating. Our scale is comparable to that of the nationally recognized rating agencies.

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Assured Guaranty Ltd.

Consolidated Capital and Claims Paying Resources

(dollars in millions)

	As of June 30, 2005						As of December 31, 2004
	AGC		AG Re (1)		Consolidated		AGC		AG Re (1)		Consolidated
Statutory surplus and reserves
Unearned premium reserve (2)	$	227	$	347	$	574	$	406	$	186	$	592
Contingency reserve	543		—		543		518		—		518
Policyholders’ surplus	277		655		932		237		596		833
Loss & loss adjustment expense reserves	12		118		130		32		103		135
Total policyholders’ surplus & reserves	$	1,059	$	1,120	$	2,179	$	1,193	$	885	$	2,078
Claims paying resources
Policyholders’ surplus	$	277	$	655	$	932	$	237	$	596	$	833
Contingency reserve	543		—		543		518		—		518
Qualified statutory capital	820		655		1,475		755		596		1,351
Unearned premium reserve (2)	227		347		574		406		186		592
Loss & loss adjustment expense reserves	12		118		130		32		103		135
Total policyholders’ surplus & reserves	1,059		1,120		2,179		1,193		885		2,078
Present value of installment premium	233		161		394		268		132		400
Standby line of credit/stop loss	455		—		455		255		—		255
Total claims paying resources	$	1,747	$	1,281	$	3,028	$	1,716	$	1,017	$	2,734
Net par insured outstanding	$	52,051	$	42,816	$	94,867	$	74,001	$	21,590	$	95,592
Net debt service outstanding	$	71,101	$	66,004	$	137,104	$	105,831	$	30,288	$	136,120
Ratios:
Net par insured to statutory capital	63.5		65.4		64.3		98.0		36.2		70.8
Capital ratio(3)	86.7		100.8		92.9		140.2		50.8		100.7
Financial resources ratio(4)	40.7		51.5		45.3		61.7		29.8		49.8

(1)  AG Re numbers are our estimate of US statutory as the company files Bermuda statutory financial statements.

(2)  Unearned premium reserve for AG Re is U.S. GAAP based and net of prepaid reinsurance premiums.

(3)  Capital ratio is net par and interest insured divided by qualified statutory capital.

(4)  Financial resources ratio is calculated by dividing net par and interest insured by total claims paying resources.

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Assured Guaranty Ltd.

Summary Financial and Statistical Data

(dollars in millions, except per share amounts)

	YTD 2005			2004			2003			2002			2001			2000
GAAP Summary Income Statement Data
Gross premiums written	$	118.6		$	190.9		$	349.2		$	417.2		$	442.9		$	206.0
Net earned premiums	96.4			187.9			310.9			247.4			293.5			140.7
Net investment income	46.8			94.8			96.3			97.2			99.5			98.1
Total expenses	(4.1		)	114.6			266.1			218.8			282.8			131.8
Income before provision for income taxes	141.4			233.3			246.2			83.2			110.1			118.1
Net income	111.1			182.8			214.5			72.6			63.8			93.2
Operating income	116.6			141.1			127.3			115.7			96.1			87.6
Net income per diluted share	$	1.49		$	2.44		$	2.86		$	0.97		$	0.85		$	1.24
Operating income per diluted share	$	1.56		$	1.88		$	1.70		$	1.54		$	1.28		$	1.17
Financial Ratios
Loss and LAE ratio	-71.1		%	-17.0		%	46.5		%	48.6		%	60.5		%	21.6		%
Expense ratio	57.2		%	65.4		%	37.2		%	35.5		%	30.6		%	61.2		%
Combined ratio	-13.9		%	48.4		%	83.7		%	84.1		%	91.1		%	82.8		%
GAAP Summary Balance Sheet Data (end of period)
Total investments and cash	$	2,202.6		$	2,157.9		$	2,222.1		$	2,061.9		$	1,710.8		$	1,549.6
Total assets	2,771.6			2,694.0			2,857.9			2,719.9			2,322.1			1,913.7
Unearned premium reserves	530.2			521.3			625.4			613.3			500.3			444.6
Loss and LAE reserves	206.4			226.5			522.6			458.8			401.1			171.0
Long-term debt	197.3			197.4			75.0			75.0			150.0			150.0
Shareholders’ equity	1,619.5			1,527.6			1,437.6			1,257.2			1,061.6			994.5
Book value per share	$	21.63		$	20.19		$	19.17		$	16.76		$	14.15		$	13.26
Other Financial Information
Net debt service outstanding (end of period)	$	137,104		$	136,120		$	130,047		$	124,082		$	117,909		$	102,744
Net par outstanding (end of period)	94,867			95,592			87,524			80,394			75,249			65,756
Consolidated qualified statutory capital	1,475			1,351			1,216			1,133			1,095			1,004
Consolidated policyholders’ surplus & reserves	2,179			2,078			1,145			2,041			1,744			1,482
Ratios:
Par insured to statutory capital	64.3			70.8			72.0			71.0			68.7			65.5
Capital ratio(1)	92.9			100.7			106.9			109.5			107.7			102.3
Financial resources ratio(2)	45.3			49.8			43.4			39.8			50.1			56.3
Debt service written:
Public finance	$	1,029		$	14,493		$	12,130		$	14,312		$	8,694		$	7,385
Structured finance	3,525			16,477			11,038			13,210			12,627			9,054
Total debt service written	$	4,554		$	30,970		$	23,168		$	27,522		$	21,321		$	16,439
U.S.	$	3,129		$	27,073		$	19,346		$	25,453		$	19,196		$	15,451
International	1,426			3,897			3,822			2,069			2,125			988
Total debt service written	$	4,554		$	30,970		$	23,168		$	27,522		$	21,321		$	16,439

(1).  Capital ratio is net par and interest insured divided by qualified statutory capital.

(2).  Financial resources ratio is calculated by dividing net par and interest insured by total claims paying resources.

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Endnotes related to non-GAAP financial measures discussed in the operating supplement:

(a) PVP, which is a non-GAAP financial measure, represents gross premiums and fees related to financial guaranty and mortgage guaranty contracts written in the current period, including upfront and installment premiums received on contracts written in the current period and the present value of estimated future installment premiums, discounted at 6% per year.   We use 6% as the present value discount because it is the approximate taxable equivalent yield on our investment portfolio for the periods presented.  Present value of installment premiums in-force, which is a non-GAAP financial measure, represents our future premiums on our in-force book of installment premium business in our financial guaranty direct and financial guaranty reinsurance segments. It is calculated net of reinsurance ceded and using a discount rate of 6%. We believe PVP and Present value of installment premiums in-force are useful measures for management, equity analysts and investors because they permit the evaluation of the value of new business production for Assured Guaranty by taking into account the value of installment premiums on new contracts underwritten in a reporting period, which the GAAP gross premiums written does not adequately measure.

(b) Operating income, which is a non-GAAP financial measure, is defined as net income excluding after-tax realized gains (losses) on investments and after-tax unrealized gains (losses) on derivative financial instruments.  Operating ROE represents operating income as a percentage of average shareholder’s equity, excluding accumulated other comprehensive income (AOCI).  We believe the presentation of operating income and operating ROE enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business.  We exclude net realized gains (losses) on investments and net unrealized gains (losses) on derivative financial instruments because the amount of these gains (losses) is heavily influenced by, and fluctuates in part according to, the market interest rates, credit spreads and other factors that management cannot control or predict.  This measure should not be viewed as a substitute for net income determined in accordance with GAAP.

(c) Adjusted book value, which is a non-GAAP financial measure, is derived by beginning with shareholder’s equity (book value) and adding or subtracting the after-tax value of: the financial guaranty and mortgage guaranty net unearned premium reserve; deferred acquisition costs and the present value of estimated net future installment premiums (discounted at 6%).  The adjustments described above will not be realized until future periods and may differ materially from the amounts used in determining adjusted book value.  Management, investors and analysts use the calculation of adjusted book value to evaluate the net present value of the Company’s in-force premium and capital base.

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	Contacts:
	Equity investors and media
	Sabra Purtill
	Managing Director, Investor Relations
	(212) 408-6044
	spurtill@assuredguaranty.com
	Chris McNamee
	Assistant Vice President, Investor Relations
	(212) 261-5509
	cmcnamee@assuredguaranty.com
	Fixed income investors
Assured Guaranty Ltd.	Patrick Early
30 Woodbourne Avenue	Director, Fixed Income Investor Relations
Hamilton HM 08 Bermuda	(212) 408 6043
www.assuredguaranty.com	pearly@assuredguaranty.com

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