Subsidiary Information (Tables)

9 Months Ended

Sep. 30, 2013

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2013

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)		AGMH (Issuer)		Other Entities		Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
ASSETS
Total investment portfolio and cash	$	36	$	133	$	49	$	10,948	$	(300	)	$	10,866
Investment in subsidiaries	4,779		4,030		3,497		280		(12,586		)	—
Premiums receivable, net of ceding commissions payable	—		—		—		1,047		(141		)	906
Ceded unearned premium reserve	—		—		—		1,646		(1,166		)	480
Deferred acquisition costs	—		—		—		204		(79		)	125
Reinsurance recoverable on unpaid losses	—		—		—		196		(137		)	59
Credit derivative assets	—		—		—		530		(424		)	106
Deferred tax asset, net	—		76		—		805		(114		)	767
Intercompany receivable	—		—		—		90		(90		)	—
Financial guaranty variable interest entities’ assets, at fair value	—		—		—		2,515		—			2,515
Other	26		2		39		716		(253		)	530
TOTAL ASSETS	$	4,841	$	4,241	$	3,585	$	18,977	$	(15,290	)	$	16,354
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unearned premium reserves	$	—	$	—	$	—	$	5,820	$	(1,144	)	$	4,676
Loss and LAE reserve	—		—		—		751		(150		)	601
Long-term debt	—		348		428		43		—			819
Intercompany payable	—		90		—		300		(390		)	—
Credit derivative liabilities	—		—		—		2,451		(424		)	2,027
Deferred tax liabilities, net	—		—		91		—		(91		)	—
Financial guaranty variable interest entities’ liabilities, at fair value	—		—		—		2,875		—			2,875
Other	7		7		21		877		(390		)	522
TOTAL LIABILITIES	7		445		540		13,117		(2,589		)	11,520
TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO ASSURED GUARANTY LTD.	4,834		3,796		3,045		5,580		(12,421		)	4,834
Noncontrolling interest	—		—		—		280		(280		)	—
TOTAL SHAREHOLDERS' EQUITY	4,834		3,796		3,045		5,860		(12,701		)	4,834
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	4,841	$	4,241	$	3,585	$	18,977	$	(15,290	)	$	16,354

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2012

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)		AGMH (Issuer)			Other Entities		Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
ASSETS
Total investment portfolio and cash	$	245	$	15	$	30		$	11,233	$	(300	)	$	11,223
Investment in subsidiaries	4,734		3,958		3,225			3,524		(15,441		)	—
Premiums receivable, net of ceding commissions payable	—		—		—			1,147		(142		)	1,005
Ceded unearned premium reserve	—		—		—			1,550		(989		)	561
Deferred acquisition costs	—		—		—			190		(74		)	116
Reinsurance recoverable on unpaid losses	—		—		—			223		(165		)	58
Credit derivative assets	—		—		—			553		(412		)	141
Deferred tax asset, net	—		48		(94		)	789		(22		)	721
Intercompany receivable	—		—		—			173		(173		)	—
Financial guaranty variable interest entities’ assets, at fair value	—		—		—			2,688		—			2,688
Other	23		29		26			816		(165		)	729
TOTAL ASSETS	$	5,002	$	4,050	$	3,187		$	22,886	$	(17,883	)	$	17,242
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unearned premium reserves	$	—	$	—	$	—		$	6,168	$	(961	)	$	5,207
Loss and LAE reserve	—		—		—			778		(177		)	601
Long-term debt	—		347		423			66		—			836
Intercompany payable	—		173		—			300		(473		)	—
Credit derivative liabilities	—		—		—			2,346		(412		)	1,934
Financial guaranty variable interest entities’ liabilities, at fair value	—		—		—			3,141		—			3,141
Other	8		6		15			803		(303		)	529
TOTAL LIABILITIES	8		526		438			13,602		(2,326		)	12,248
TOTAL SHAREHOLDERS’ EQUITY	4,994		3,524		2,749			9,284		(15,557		)	4,994
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,002	$	4,050	$	3,187		$	22,886	$	(17,883	)	$	17,242

Condensed Consolidating Statement of Operations and Comprehensive Income

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2013

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	156		$	3		$	159
Net investment income	—			—			1			101			(3		)	99
Net realized investment gains (losses)	—			—			(1		)	33			(39		)	(7		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—			—			—			24			—			24
Net unrealized gains (losses)	—			—			—			330			—			330
Net change in fair value of credit derivatives	—			—			—			354			—			354
Other	—			—			—			65			—			65
TOTAL REVENUES	—			—			—			709			(39		)	670
EXPENSES
Loss and LAE	—			—			—			52			3			55
Amortization of deferred acquisition costs	—			—			—			6			(2		)	4
Interest expense	—			6			13			6			(4		)	21
Other operating expenses	5			—			1			49			(1		)	54
TOTAL EXPENSES	5			6			14			113			(4		)	134
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES	(5		)	(6		)	(14		)	596			(35		)	536
Total (provision) benefit for income taxes	—			3			5			(172		)	12			(152		)
Equity in net earnings of subsidiaries	389			316			151			10			(866		)	—
NET INCOME (LOSS)	384			313			142			434			(889		)	384
Less: noncontrolling interest	—			—			—			10			(10		)	—
NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD.	$	384		$	313		$	142		$	424		$	(879	)	$	384

COMPREHENSIVE INCOME (LOSS)	$	381		$	317		$	145		$	411		$	(873	)	$	381

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 Entities			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	—			—			—			1			1			2
Net unrealized gains (losses)	—			—			—			(38		)	—			(38		)
Net change in fair value of credit derivatives	—			—			—			(37		)	1			(36		)
Other	—			—			—			49			(1		)	48
TOTAL REVENUES	—			—			—			340			(2		)	338
EXPENSES
Loss and LAE	—			—			—			86			—			86
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			142			(8		)	159
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES	(4		)	(7		)	(14		)	198			6			179
Total (provision) benefit for income taxes	—			3			5			(42		)	(3		)	(37		)
Equity in net earnings of subsidiaries	146			105			157			100			(508		)	—
NET INCOME (LOSS)	$	142		$	101		$	148		$	256		$	(505	)	$	142

COMPREHENSIVE INCOME (LOSS)	$	243		$	175		$	190		$	431		$	(796	)	$	243

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	563		$	7		$	570
Net investment income	0			0			1			298			(13		)	286
Net realized investment gains (losses)	0			—			0			58			(35		)	23
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—			—			—			(44		)	—			(44		)
Net unrealized gains (losses)	—			—			—			(120		)	—			(120		)
Net change in fair value of credit derivatives	—			—			—			(164		)	—			(164		)
Other	—			—			—			244			—			244
TOTAL REVENUES	—			—			1			999			(41		)	959
EXPENSES
Loss and LAE	—			—			—			69			—			69
Amortization of deferred acquisition costs	—			—			—			3			5			8
Interest expense	—			21			40			17			(15		)	63
Other operating expenses	17			—			1			151			(3		)	166
TOTAL EXPENSES	17			21			41			240			(13		)	306
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES	(17		)	(21		)	(40		)	759			(28		)	653
Total (provision) benefit for income taxes	—			8			14			(226		)	10			(194		)
Equity in net earnings of subsidiaries	476			486			533			10			(1,505		)	—
NET INCOME (LOSS)	$	459		$	473		$	507		$	543		$	(1,523	)	$	459
Less: noncontrolling interest	—			—			—			10			(10		)	—
NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD.	$	459		$	473		$	507		$	533		$	(1,513	)	$	459

COMPREHENSIVE INCOME (LOSS)	$	150		$	272		$	384		$	16		$	(672	)	$	150

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 Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	625		$	10		$	635
Net investment income	0			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		)
Other	—			—			—			263			(2		)	261
TOTAL REVENUES	—			—			1			735			(5		)	731
EXPENSES
Loss and LAE	—			—			—			448			(2		)	446
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			638			(29		)	694
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES	(16		)	(28		)	(40		)	97			24			37
Total (provision) benefit for income taxes	—			10			14			(17		)	(8		)	(1		)
Equity in net earnings of subsidiaries	52			112			319			94			(577		)	—
NET INCOME (LOSS)	$	36		$	94		$	293		$	174		$	(561	)	$	36

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

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2013

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
Net cash flows provided by (used in) operating activities	$	108		$	123		$	68		$	207		$	(360	)	$	146
Cash flows from investing activities
Fixed maturity securities:
Purchases	—			(35		)	(23		)	(1,570		)	65			(1,563		)
Sales	171			1			25			680			(65		)	812
Maturities	21			—			2			620			—			643
Sales (purchases) of short-term investments, net	16			(94		)	(24		)	146			—			44
Net proceeds from financial guaranty variable entities’ assets	—			—			—			553			—			553
Intercompany debt	—			—			—			7			(7		)	—
Investment in subsidiary	—			—			50			—			(50		)	—
Other	—			—			—			81			—			81
Net cash flows provided by (used in) investing activities	208			(128		)	30			517			(57		)	570
Cash flows from financing activities
Return of capital	—			—			—			(50		)	50			—
Dividends paid	(57		)	—			(98		)	(262		)	360			(57		)
Repurchases of common stock	(259		)	—			—			—			—			(259		)
Share activity under option and incentive plans	—			—			—			—			—			—
Net paydowns of financial guaranty variable entities’ liabilities	—			—			—			(409		)	—			(409		)
Payment of long-term debt	—			—			—			(22		)	—			(22		)
Intercompany debt	—			(7		)	—			—			7			—
Net cash flows provided by (used in) financing activities	(316		)	(7		)	(98		)	(743		)	417			(747		)
Effect of exchange rate changes	—			—			—			(1		)	—			(1		)
Increase (decrease) in cash	—			(12		)	—			(20		)	—			(32		)
Cash at beginning of period	—			13			0			125			—			138
Cash at end of period	$	—		$	1		$	0		$	105		$	—		$	106

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 Entities			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 MAC, net of cash acquired	—			(91		)	—			—			—			(91		)
Intercompany debt	—			—			—			(173		)	173			—
Investment in subsidiary	—			—			50			—			(50		)	—
Other	—			—			—			85			—			85
Net cash flows provided by (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