Subsidiary Information (Tables)

12 Months Ended

Dec. 31, 2014

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2014

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)		AGMH (Issuer)		Other Entities		Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
ASSETS
Total investment portfolio and cash	$	126	$	204	$	47	$	11,382	$	(300	)	$	11,459
Investment in subsidiaries	5,612		5,072		3,965		339		(14,988		)	—
Premiums receivable, net of commissions payable	—		—		—		864		(135		)	729
Ceded unearned premium reserve	—		—		—		1,469		(1,088		)	381
Deferred acquisition costs	—		—		—		186		(65		)	121
Reinsurance recoverable on unpaid losses	—		—		—		338		(260		)	78
Credit derivative assets	—		—		—		277		(209		)	68
Deferred tax asset, net	—		54		—		295		(89		)	260
Intercompany receivable	—		—		—		90		(90		)	—
Financial guaranty variable interest entities’ assets, at fair value	—		—		—		1,402		—			1,402
Other	27		77		27		538		(242		)	427
TOTAL ASSETS	$	5,765	$	5,407	$	4,039	$	17,180	$	(17,466	)	$	14,925
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unearned premium reserves	$	—	$	—	$	—	$	5,328	$	(1,067	)	$	4,261
Loss and LAE reserve	—		—		—		1,066		(267		)	799
Long-term debt	—		847		437		19		—			1,303
Intercompany payable	—		90		—		300		(390		)	—
Credit derivative liabilities	—		—		—		1,172		(209		)	963
Deferred tax liabilities, net	—		—		94		—		(94		)	—
Financial guaranty variable interest entities’ liabilities, at fair value	—		—		—		1,419		—			1,419
Other	7		9		16		764		(374		)	422
TOTAL LIABILITIES	7		946		547		10,068		(2,401		)	9,167
TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO ASSURED GUARANTY LTD.	5,758		4,461		3,492		6,773		(14,726		)	5,758
Noncontrolling interest	—		—		—		339		(339		)	—
TOTAL SHAREHOLDERS’ EQUITY	5,758		4,461		3,492		7,112		(15,065		)	5,758
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,765	$	5,407	$	4,039	$	17,180	$	(17,466	)	$	14,925

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 Statement of Operations and Comprehensive Income

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE YEAR ENDED DECEMBER 31, 2014

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	566		$	4		$	570
Net investment income	0			0			1			412			(10		)	403
Net realized investment gains (losses)	0			0			0			(58		)	(2		)	(60		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—			—			—			23			—			23
Net unrealized gains (losses)	—			—			—			800			—			800
Net change in fair value of credit derivatives	—			—			—			823			—			823
Other	0			0			—			259			(1		)	258
TOTAL REVENUES	0			0			1			2,002			(9		)	1,994
EXPENSES
Loss and LAE	—			—			—			122			4			126
Amortization of deferred acquisition costs	—			—			—			33			(8		)	25
Interest expense	—			40			54			16			(18		)	92
Other operating expenses	31			1			1			195			(8		)	220
TOTAL EXPENSES	31			41			55			366			(30		)	463
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES	(31		)	(41		)	(54		)	1,636			21			1,531
Total (provision) benefit for income taxes	—			14			19			(469		)	(7		)	(443		)
Equity in net earnings of subsidiaries	$	1,119		$	983		$	513		$	32		$	(2,647	)	—
NET INCOME (LOSS)	1,088			956			478			1,199			(2,633		)	1,088
Less: noncontrolling interest	—			—			—			32			(32		)	—
NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD.	$	1,088		$	956		$	478		$	1,167		$	(2,601	)	$	1,088

COMPREHENSIVE INCOME (LOSS)	$	1,298		$	1,114		$	577		$	1,570		$	(3,261	)	$	1,298

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 net 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 net 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 Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED DECEMBER 31, 2014

(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	$	758		$	223		$	144		$	663		$	(1,211	)	$	577
Cash flows from investing activities
Fixed-maturity securities:
Purchases	—			(540		)	(8		)	(2,253		)	—			(2,801		)
Sales	—			464			10			777			—			1,251
Maturities	—			6			1			870			—			877
Sales (purchases) of short-term investments, net	(93		)	(15		)	(3		)	269			—			158
Net proceeds from financial guaranty variable entities’ assets										408			—			408
Intercompany debt	—			—			—			—			—			—
Investment in subsidiary	—			—			50			—			(50		)	—
Other	—			—			—			11			—			11
Net cash flows provided by (used in) investing activities	(93		)	(85		)	50			82			(50		)	(96		)
Cash flows from financing activities
Return of capital	—			—			—			(50		)	50			—
Capital contribution from parent	—			—			—			—			—			—
Dividends paid	(76		)	(700		)	(190		)	(321		)	1,211			(76		)
Repurchases of common stock	(590		)	—			—			—			—			(590		)
Share activity under option and incentive plans	1			—			—			—			—			1
Net paydowns of financial guaranty variable entities’ liabilities	—			—			—			(396		)	—			(396		)
Net proceeds from issuance of long-term debt	—			495			—			—			—			495
Payment of long-term debt	—			—			—			(19		)	—			(19		)
Intercompany debt	—			—			—			—			—			—
Net cash flows provided by (used in) financing activities	(665		)	(205		)	(190		)	(786		)	1,261			(585		)
Effect of exchange rate changes	—			—			—			(5		)	—			(5		)
Increase (decrease) in cash	—			(67		)	4			(46		)	—			(109		)
Cash at beginning of period	0			67			0			117			—			184
Cash at end of period	$	0		$	0		$	4		$	71		$	—		$	75

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		$	0		$	125		$	—		$	138