Subsidiary Information (Tables)

12 Months Ended

Dec. 31, 2013

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 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	$	33	$	186	$	42	$	11,008	$	(300	)	$	10,969
Investment in subsidiaries	5,066		4,191		3,574		289		(13,120		)	—
Premiums receivable, net of commissions payable	—		—		—		1,025		(149		)	876
Ceded unearned premium reserve	—		—		—		1,598		(1,146		)	452
Deferred acquisition costs	—		—		—		198		(74		)	124
Reinsurance recoverable on unpaid losses	—		—		—		170		(134		)	36
Credit derivative assets	—		—		—		482		(388		)	94
Deferred tax asset, net	—		97		—		681		(90		)	688
Intercompany receivable	—		—		—		90		(90		)	—
Financial guaranty variable interest entities’ assets, at fair value	—		—		—		2,565		—			2,565
Other	23		17		31		638		(226		)	483
TOTAL ASSETS	$	5,122	$	4,491	$	3,647	$	18,744	$	(15,717	)	$	16,287
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unearned premium reserves	$	—	$	—	$	—	$	5,720	$	(1,125	)	$	4,595
Loss and LAE reserve	—		—		—		733		(141		)	592
Long-term debt	—		348		430		38		—			816
Intercompany payable	—		90		—		300		(390		)	—
Credit derivative liabilities	—		—		—		2,175		(388		)	1,787
Deferred tax liabilities, net	—		—		95		—		(95		)	—
Financial guaranty variable interest entities’ liabilities, at fair value	—		—		—		2,871		—			2,871
Other	7		7		16		853		(372		)	511
TOTAL LIABILITIES	7		445		541		12,690		(2,511		)	11,172
TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO ASSURED GUARANTY LTD.	5,115		4,046		3,106		5,765		(12,917		)	5,115
Noncontrolling interest	—		—		—		289		(289		)	—
TOTAL SHAREHOLDERS’ EQUITY	5,115		4,046		3,106		6,054		(13,206		)	5,115
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,122	$	4,491	$	3,647	$	18,744	$	(15,717	)	$	16,287

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 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	—		0		—			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 YEAR ENDED DECEMBER 31, 2013

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	740		$	12		$	752
Net investment income	0			0			1			408			(16		)	393
Net realized investment gains (losses)	0			0			0			87			(35		)	52
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—			—			—			(42		)	—			(42		)
Net unrealized gains (losses)	—			—			—			107			—			107
Net change in fair value of credit derivatives	—			—			—			65			—			65
Other	—			—			—			348			(2		)	346
TOTAL REVENUES	0			0			1			1,648			(41		)	1,608
EXPENSES
Loss and LAE	—			—			—			144			10			154
Amortization of deferred acquisition costs	—			—			—			12			0			12
Interest expense	—			28			54			20			(20		)	82
Other operating expenses	22			1			1			199			(5		)	218
TOTAL EXPENSES	22			29			55			375			(15		)	466
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES	(22		)	(29		)	(54		)	1,273			(26		)	1,142
Total (provision) benefit for income taxes	—			9			17			(387		)	27			(334		)
Equity in earnings of subsidiaries	$	830		$	768		$	701		$	19		$	(2,318	)	—
NET INCOME (LOSS)	808			748			664			905			(2,317		)	808
Less: noncontrolling interest	—			—			—			19			(19		)	—
NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD.	$	808		$	748		$	664		$	886		$	(2,298	)	$	808

COMPREHENSIVE INCOME (LOSS)	$	453		$	522		$	515		$	309		$	(1,346	)	$	453

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2012

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	833		$	20		$	853
Net investment income	0			—			1			422			(19		)	404
Net realized investment gains (losses)	—			—			—			1			—			1
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—			—			—			(108		)	—			(108		)
Net unrealized gains (losses)	—			—			—			(477		)	—			(477		)
Net change in fair value of credit derivatives	—			—			—			(585		)	—			(585		)
Other	—			—			—			284			(3		)	281
TOTAL REVENUES	0			—			1			955			(2		)	954
EXPENSES
Loss and LAE	—			—			—			509			(5		)	504
Amortization of deferred acquisition costs	—			—			—			28			(14		)	14
Interest expense	—			35			54			22			(19		)	92
Other operating expenses	21			2			1			194			(6		)	212
TOTAL EXPENSES	21			37			55			753			(44		)	822
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES	(21		)	(37		)	(54		)	202			42			132
Total (provision) benefit for income taxes	—			13			19			(38		)	(16		)	(22		)
Equity in earnings of subsidiaries	131			177			424			153			(885		)	—
NET INCOME (LOSS)	$	110		$	153		$	389		$	317		$	(859	)	$	110

COMPREHENSIVE INCOME (LOSS)	$	257		$	266		$	465		$	577		$	(1,308	)	$	257

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2011

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	904		$	16		$	920
Net investment income	—			—			1			410			(15		)	396
Net realized investment gains (losses)	—			—			—			(18		)	—			(18		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—			—			—			6			—			6
Net unrealized gains (losses)	—			—			—			554			—			554
Net change in fair value of credit derivatives	—			—			—			560			—			560
Other	—			—			—			(48		)	(5		)	(53		)
TOTAL REVENUES	—			—			1			1,808			(4		)	1,805
EXPENSES
Loss and LAE	—			—			—			440			8			448
Amortization of deferred acquisition costs	—			—			—			37			(20		)	17
Interest expense	—			39			54			21			(15		)	99
Other operating expenses	25			1			1			194			(9		)	212
TOTAL EXPENSES	25			40			55			692			(36		)	776
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES	(25		)	(40		)	(54		)	1,116			32			1,029
Total (provision) benefit for income taxes	—			14			19			(277		)	(12		)	(256		)
Equity in earnings of subsidiaries	798			640			398			614			(2,450		)	—
NET INCOME (LOSS)	$	773		$	614		$	363		$	1,453		$	(2,430	)	$	773

COMPREHENSIVE INCOME (LOSS)	$	1,029		$	824		$	507		$	1,918		$	(3,249	)	$	1,029

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 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	$	128		$	178		$	133		$	347		$	(542	)	$	244
Cash flows from investing activities
Fixed-maturity securities:
Purchases	—			(93		)	(26		)	(1,832		)	65			(1,886		)
Sales	176			1			25			892			(65		)	1,029
Maturities	29			3			2			849			—			883
Sales (purchases) of short-term investments, net	7			(28		)	(15		)	(51		)	—			(87		)
Net proceeds from financial guaranty variable entities’ assets	—			—			—			663			—			663
Intercompany debt	—			—			—			7			(7		)	—
Investment in subsidiary	—			0			49			—			(49		)	—
Other	—			—			—			79			—			79
Net cash flows provided by (used in) investing activities	212			(117		)	35			607			(56		)	681
Cash flows from financing activities
Return of capital	—			—			—			(50		)	50			—
Capital contribution from parent	—			—			—			1			(1		)	—
Dividends paid	(75		)	—			(168		)	(374		)	542			(75		)
Repurchases of common stock	(264		)	—			—			—			—			(264		)
Share activity under option and incentive plans	(1		)	—			—			—			—			(1		)
Net paydowns of financial guaranty variable entities’ liabilities	—			—			—			(511		)	—			(511		)
Payment of long-term debt	—			—			—			(27		)	—			(27		)
Intercompany debt	—			(7		)	—			—			7			—
Net cash flows provided by (used in) financing activities	(340		)	(7		)	(168		)	(961		)	598			(878		)
Effect of exchange rate changes	—			—			—			(1		)	—			(1		)
Increase (decrease) in cash	0			54			—			(8		)	—			46
Cash at beginning of period	—			13			0			125			—			138
Cash at end of period	$	0		$	67		$	0		$	117		$	—		$	184

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 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	$	138		$	6		$	20		$	5		$	(334	)	$	(165	)
Cash flows from investing activities
Fixed-maturity securities:
Purchases	(211		)	(1		)	(13		)	(1,424		)	—			(1,649		)
Sales	—			—			13			899			—			912
Maturities	3			—			6			1,096			—			1,105
Sales (purchases) of short-term investments, net	(7		)	27			26			(17		)	—			29
Net proceeds from financial guaranty variable entities’ assets	—			—			—			545			—			545
Acquisition of MAC	—			(91		)	—			—			—			(91		)
Intercompany debt	—			—			—			(173		)	173			—
Investment in subsidiary	—			—			46			—			(46		)	—
Other	—			—			—			92			—			92
Net cash flows provided by (used in) investing activities	(215		)	(65		)	78			1,018			127			943
Cash flows from financing activities																—
Issuance of common stock	173			—			—			—			—			173
Return of capital	—			—			—			(50		)	50			—
Capital contribution from parent	—			—			—			4			(4		)	—
Dividends paid	(69		)	—			(98		)	(236		)	334			(69		)
Repurchases of common stock	(24		)	—			—			—			—			(24		)
Share activity under option and incentive plans	(3		)	—			—			—			—			(3		)
Net paydowns of financial guaranty variable entities’ liabilities	—			—			—			(724		)	—			(724		)
Payment of long-term debt	—			(173		)	—			(36		)	—			(209		)
Intercompany debt	—			173			—			—			(173		)	—
Net cash flows provided by (used in) financing activities	77			—			(98		)	(1,042		)	207			(856		)
Effect of exchange rate changes	—			—			—			1			—			1
Increase (decrease) in cash	—			(59		)	—			(18		)	—			(77		)
Cash at beginning of period	—			72			0			143			—			215
Cash at end of period	$	—		$	13		$	—		$	125		$	—		$	138

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2011

(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	$	68		$	84		$	(36	)	$	676		$	(116	)	$	676
Cash flows from investing activities
Fixed-maturity securities:
Purchases	—			—			(14		)	(2,294		)	—			(2,308		)
Sales	—			—			—			1,107			—			1,107
Maturities	—			—			1			662			—			663
Sales (purchases) of short-term investments, net	(11		)	(25		)	(1		)	357			—			320
Net proceeds from financial guaranty variable entities’ assets	—			—			—			760			—			760
Investment in subsidiary	—			—			50			—			(50		)	—
Other	—			—			—			19			—			19
Net cash flows provided by (used in) investing activities	(11		)	(25		)	36			611			(50		)	561
Cash flows from financing activities
Return of capital	—			—			—			(50		)	50			—
Dividends paid	(33		)	—			—			(116		)	116			(33		)
Repurchases of common stock	(23		)	—			—			—			—			(23		)
Share activity under option and incentive plans	(1		)	—			—			—			—			(1		)
Net paydowns of financial guaranty variable entities’ liabilities	—			—			—			(1,053		)	—			(1,053		)
Payment of long-term debt	—			—			—			(22		)	—			(22		)
Net cash flows provided by (used in) financing activities	(57		)	—			—			(1,241		)	166			(1,132		)
Effect of exchange rate changes	—			—			—			2			—			2
Increase (decrease) in cash	—			59			—			48			—			107
Cash at beginning of period	—			13			—			95			—			108
Cash at end of period	$	—		$	72		$	—		$	143		$	—		$	215