Subsidiary Information

The following tables present the condensed consolidating financial information for AGMH and AGUS (which are wholly-owned subsidiaries of AGL), which have issued publicly traded debt securities that are fully and unconditionally guaranteed by AGL as of September 30, 2012 and December 31, 2011 and for the three and nine months ended September 30, 2012 and 2011. The information for AGMH and AGUS presents its subsidiaries on the equity method of accounting.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2012

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)		AGMH (Issuer)			Other Subsidiaries		Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
ASSETS
Total investment portfolio and cash	$	225	$	32	$	47		$	10,916	$	—		$	11,220
Investment in subsidiaries	4,711		3,917		3,113			3,470		(15,211		)	—
Premiums receivable, net of ceding commissions payable	—		—		—			1,073		(129		)	944
Ceded unearned premium reserve	—		—		—			1,534		(984		)	550
Deferred acquisition costs	—		—		—			207		(80		)	127
Reinsurance recoverable on unpaid losses	—		—		—			214		(158		)	56
Credit derivative assets	—		—		—			520		(70		)	450
Deferred tax asset, net	—		22		(77		)	799		(15		)	729
Intercompany receivable	—		—		—			473		(473		)	—
Financial guaranty variable interest entities’ assets, at fair value	—		—		—			2,693		—			2,693
Other	24		29		24			858		(141		)	794
TOTAL ASSETS	$	4,960	$	4,000	$	3,107		$	22,757	$	(17,261	)	$	17,563
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unearned premium reserves	$	—	$	—	$	—		$	6,285	$	(953	)	$	5,332
Loss and LAE reserve	—		—		—			761		(167		)	594
Long-term debt	—		347		421			72		—			840
Intercompany payable	—		173		—			300		(473		)	—
Credit derivative liabilities	—		—		—			2,221		(70		)	2,151
Financial guaranty variable interest entities’ liabilities, at fair value	—		—		—			3,187		—			3,187
Other	8		10		21			726		(258		)	507
TOTAL LIABILITIES	8		530		442			13,552		(1,921		)	12,611
TOTAL SHAREHOLDERS’ EQUITY	4,952		3,470		2,665			9,205		(15,340		)	4,952
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	4,960	$	4,000	$	3,107		$	22,757	$	(17,261	)	$	17,563

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	$	33	$	99		$	61		$	11,121	$	—		$	11,314
Investment in subsidiaries	4,607		3,730			2,802			3,258		(14,397		)	—
Premiums receivable, net of ceding commissions payable	—		—			—			1,150		(147		)	1,003
Ceded unearned premium reserve	—		—			—			1,739		(1,030		)	709
Deferred acquisition costs	—		—			—			223		(91		)	132
Reinsurance recoverable on unpaid losses	—		—			—			212		(143		)	69
Credit derivative assets	—		—			—			503		(34		)	469
Deferred tax asset, net	—		22			(77		)	867		(8		)	804
Intercompany receivable	—		—			—			300		(300		)	—
Financial guaranty variable interest entities’ assets, at fair value	—		—			—			2,819		—			2,819
Other	23		(71		)	27			836		(109		)	706
TOTAL ASSETS	$	4,663	$	3,780		$	2,813		$	23,028	$	(16,259	)	$	18,025
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unearned premium reserves	$	—	$	—		$	—		$	6,950	$	(987	)	$	5,963
Loss and LAE reserve	—		—			—			834		(155		)	679
Long-term debt	—		519			415			104		—			1,038
Intercompany payable	—		—			—			300		(300		)	—
Credit derivative liabilities	—		0			—			1,807		(34		)	1,773
Financial guaranty variable interest entities’ liabilities, at fair value	—		—			—			3,458		—			3,458
Other	11		3			16			675		(243		)	462
TOTAL LIABILITIES	11		522			431			14,128		(1,719		)	13,373
TOTAL SHAREHOLDERS’ EQUITY	4,652		3,258			2,382			8,900		(14,540		)	4,652
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	4,663	$	3,780		$	2,813		$	23,028	$	(16,259	)	$	18,025

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2012

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—	$	—		$	—		$	219		$	3		$	222
Net investment income	—		—			0			107			(5		)	102
Net realized investment gains (losses)	—		—			—			2			—			2
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—		—			—			2			—			2
Net unrealized gains (losses)	—		—			—			(38		)	—			(38		)
Net change in fair value of credit derivatives	—		—			—			(36		)	—			(36		)
Equity in earnings of subsidiaries	146		105			157			100			(508		)	—
Other	—		—			—			53			(1		)	52
TOTAL REVENUES	146		105			157			445			(511		)	342
EXPENSES
Loss and LAE	—		—			—			90			—			90
Amortization of deferred acquisition costs	—		—			—			6			(2		)	4
Interest expense	—		7			13			6			(5		)	21
Other operating expenses	4		0			1			44			(1		)	48
TOTAL EXPENSES	4		7			14			146			(8		)	163
INCOME (LOSS) BEFORE INCOME TAXES	142		98			143			299			(503		)	179
Total provision (benefit) for income taxes	—		(3		)	(5		)	42			3			37
NET INCOME (LOSS)	$	142	$	101		$	148		$	257		$	(506	)	$	142

COMPREHENSIVE INCOME (LOSS)	$	243	$	175		$	190		$	432		$	(797	)	$	243

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2011

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—	$	—		$	—		$	208		$	3		$	211
Net investment income	—		—			0			99			(4		)	95
Net realized investment gains (losses)	—		—			—			(11		)	—			(11		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—		—			—			0			—			0
Net unrealized gains (losses)	—		—			—			1,156			—			1,156
Net change in fair value of credit derivatives	—		—			—			1,156			—			1,156
Equity in earnings of subsidiaries	766		586			15			579			(1,946		)	—
Other	—		—			—			(106		)	—			(106		)
TOTAL REVENUES	766		586			15			1,925			(1,947		)	1,345
EXPENSES
Loss and LAE	—		—			—			219			(4		)	215
Amortization of deferred acquisition costs	—		—			—			7			(3		)	4
Interest expense	—		10			13			6			(4		)	25
Other operating expenses	5		1			0			43			(3		)	46
TOTAL EXPENSES	5		11			13			275			(14		)	290
INCOME (LOSS) BEFORE INCOME TAXES	761		575			2			1,650			(1,933		)	1,055
Total provision (benefit) for income taxes	—		(4		)	(5		)	296			7			294
NET INCOME (LOSS)	$	761	$	579		$	7		$	1,354		$	(1,940	)	$	761

COMPREHENSIVE INCOME (LOSS)	$	882	$	664		$	55		$	1,560		$	(2,279	)	$	882

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—	$	—		$	—		$	625		$	10		$	635
Net investment income	0		—			1			313			(13		)	301
Net realized investment gains (losses)	0		—			0			0			—			0
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—		—			—			(78		)	—			(78		)
Net unrealized gains (losses)	—		—			—			(388		)	—			(388		)
Net change in fair value of credit derivatives	—		—			—			(466		)	—			(466		)
Equity in earnings of subsidiaries	52		112			319			94			(577		)	—
Other	—		—			—			276			(2		)	274
TOTAL REVENUES	52		112			320			842			(582		)	744
EXPENSES
Loss and LAE	—		—			—			461			(2		)	459
Amortization of deferred acquisition costs	—		—			—			24			(10		)	14
Interest expense	—		27			40			17			(13		)	71
Other operating expenses	16		1			1			149			(4		)	163
TOTAL EXPENSES	16		28			41			651			(29		)	707
INCOME (LOSS) BEFORE INCOME TAXES	36		84			279			191			(553		)	37
Total provision (benefit) for income taxes	—		(10		)	(14		)	17			8			1
NET INCOME (LOSS)	$	36	$	94		$	293		$	174		$	(561	)	$	36

COMPREHENSIVE INCOME (LOSS)	$	199	$	212		$	364		$	455		$	(1,031	)	$	199

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2011

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—	$	—		$	—		$	687		$	8		$	695
Net investment income	—		—			0			306			(11		)	295
Net realized investment gains (losses)	—		—			—			(13		)	—			(13		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—		—			—			25			—			25
Net unrealized gains (losses)	—		—			—			830			—			830
Net change in fair value of credit derivatives	—		—			—			855			—			855
Equity in earnings of subsidiaries	876		715			352			695			(2,638		)	—
Other	—		—			—			(90		)	(2		)	(92		)
TOTAL REVENUES	876		715			352			2,440			(2,643		)	1,740
EXPENSES
Loss and LAE	—		—			—			314			(1		)	313
Amortization of deferred acquisition costs	—		—			—			28			(15		)	13
Interest expense	—		30			40			15			(11		)	74
Other operating expenses	19		1			1			147			(5		)	163
TOTAL EXPENSES	19		31			41			504			(32		)	563
INCOME (LOSS) BEFORE INCOME TAXES	857		684			311			1,936			(2,611		)	1,177
Total provision (benefit) for income taxes	—		(11		)	(14		)	335			10			320
NET INCOME (LOSS)	$	857	$	695		$	325		$	1,601		$	(2,621	)	$	857

COMPREHENSIVE INCOME (LOSS)	$	1,072	$	867		$	426		$	1,988		$	(3,281	)	$	1,072

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012

(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	$	98		$	23		$	14		$	(82	)	$	(276	)	$	(223	)
Cash flows from investing activities
Fixed maturity securities:
Purchases	(160		)	(1		)	(11		)	(1,150		)	—			(1,322		)
Sales	—			—			1			682			—			683
Maturities	1			—			3			754			—			758
Sales (purchases) of short-term investments, net	(34		)	27			23			266			—			282
Net proceeds from financial guaranty variable entities’ assets	—			—			—			407			—			407
Acquisition of MIAC	—			(91		)	—			—			—			(91		)
Intercompany debt	—			—			—			(173		)	173			—
Investment in subsidiary	—			—			50			—			(50		)	—
Other	—			—			—			85			—			85
Net cash flows used in investing activities	(193		)	(65		)	66			871			123			802
Cash flows from financing activities
Issuance of common stock	173			—			—			—			—			173
Return of capital	—			—			—			(50		)	50			—
Dividends paid	(51		)	—			(80		)	(196		)	276			(51		)
Repurchases of common stock	(24		)	—			—			—			—			(24		)
Share activity under option and incentive plans	(3		)	—			—			—			—			(3		)
Net paydowns of financial guaranty variable entities’ liabilities	—			—			—			(553		)	—			(553		)
Payment of long-term debt	—			(173		)	—			(31		)	—			(204		)
Intercompany debt	—			173			—			—			(173		)	—
Net cash flows provided by (used in) financing activities	95			—			(80		)	(830		)	153			(662		)
Effect of exchange rate changes	—			—			—			1			—			1
Increase (decrease) in cash	—			(42		)	—			(40		)	—			(82		)
Cash at beginning of period	—			72			0			143			—			215
Cash at end of period	$	—		$	30		$	0		$	103		$	—		$	133

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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	$	41		$	13		$	(20	)	$	641		$	(74	)	$	601
Cash flows from investing activities
Fixed maturity securities:
Purchases	—			—			(3		)	(1,785		)	—			(1,788		)
Sales	—			—			—			849			—			849
Maturities	—			—			1			502			—			503
Sales (purchases) of short-term investments, net	10			(24		)	(3		)	199			—			182
Net proceeds from financial guaranty variable entities’ assets	—			—			—			598			—			598
Investment in subsidiary	—			—			25			—			(25		)	—
Other	—			—			—			14			—			14
Net cash flows used in investing activities	10			(24		)	20			377			(25		)	358
Cash flows from financing activities
Return of capital	—			—			—			(25		)	25			—
Dividends paid	(25		)	—			—			(74		)	74			(25		)
Repurchases of common stock	(23		)	—			—			—			—			(23		)
Share activity under option and incentive plans	(3		)	—			—			—			—			(3		)
Net paydowns of financial guaranty variable entities’ liabilities	—			—			—			(830		)	—			(830		)
Payment of long-term debt	—			—			—			(17		)	—			(17		)
Net cash flows provided by (used in) financing activities	(51		)	—			—			(946		)	99			(898		)
Effect of exchange rate changes	—			—			—			4			—			4
Increase (decrease) in cash	—			(11		)	—			76			—			65
Cash at beginning of period	—			13			—			95			—			108
Cash at end of period	$	0		$	2		$	—		$	171		$	—		$	173