Subsidiary Information (Tables)

9 Months Ended

Sep. 30, 2015

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2015

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)		AGMH (Issuer)		Other Entities		Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
ASSETS
Total investment portfolio and cash	$	100	$	61	$	22	$	11,595	$	(369	)	$	11,409
Investment in subsidiaries	5,696		5,348		4,042		369		(15,455		)	—
Premiums receivable, net of commissions payable	—		—		—		814		(138		)	676
Ceded unearned premium reserve	—		—		—		1,316		(1,053		)	263
Deferred acquisition costs	—		—		—		182		(64		)	118
Reinsurance recoverable on unpaid losses	—		—		—		461		(372		)	89
Credit derivative assets	—		—		—		249		(178		)	71
Deferred tax asset, net	—		37		—		517		(128		)	426
Intercompany receivable	—		—		—		90		(90		)	—
Financial guaranty variable interest entities’ assets, at fair value	—		—		—		1,547		—			1,547
Other	28		107		39		599		(338		)	435
TOTAL ASSETS	$	5,824	$	5,553	$	4,103	$	17,739	$	(18,185	)	$	15,034
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unearned premium reserves	$	—	$	—	$	—	$	5,285	$	(1,173	)	$	4,112
Loss and LAE reserve	—		—		—		1,438		(431		)	1,007
Long-term debt	—		847		444		15		—			1,306
Intercompany payable	—		90		—		300		(390		)	—
Credit derivative liabilities	—		—		—		1,096		(178		)	918
Deferred tax liabilities, net	—		—		91		—		(91		)	—
Financial guaranty variable interest entities’ liabilities, at fair value	—		—		—		1,482		—			1,482
Other	5		24		20		816		(475		)	390
TOTAL LIABILITIES	5		961		555		10,432		(2,738		)	9,215
TOTAL SHAREHOLDERS’ EQUITY ATTRIBUTABLE TO ASSURED GUARANTY LTD.	5,819		4,592		3,548		6,938		(15,078		)	5,819
Noncontrolling interest	—		—		—		369		(369		)	—
TOTAL SHAREHOLDERS' EQUITY	5,819		4,592		3,548		7,307		(15,447		)	5,819
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	5,824	$	5,553	$	4,103	$	17,739	$	(18,185	)	$	15,034

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 Statement of Operations and Comprehensive Income

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2015

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	219		$	(6	)	$	213
Net investment income	0			0			0			113			(1		)	112
Net realized investment gains (losses)	0			0			0			(22		)	(5		)	(27		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—			—			—			6			0			6
Net unrealized gains (losses)	—			—			—			81			(1		)	80
Net change in fair value of credit derivatives	—			—			—			87			(1		)	86
Bargain purchase gain and settlement of pre-existing relationships	—			—			—			—			—			—
Other	0			—			—			(16		)	—			(16		)
TOTAL REVENUES	0			0			0			381			(13		)	368
EXPENSES
Loss and LAE	—			—			—			114			(2		)	112
Amortization of deferred acquisition costs	—			—			—			8			(3		)	5
Interest expense	—			13			13			4			(5		)	25
Other operating expenses	7			0			1			47			(1		)	54
TOTAL EXPENSES	7			13			14			173			(11		)	196
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES	(7		)	(13		)	(14		)	208			(2		)	172
Total (provision) benefit for income taxes	—			5			5			(55		)	2			(43		)
Equity in net earnings of subsidiaries	136			126			133			10			(405		)	—
NET INCOME (LOSS)	$	129		$	118		$	124		$	163		$	(405	)	$	129
Less: noncontrolling interest	—			—			—			10			(10		)	—
NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD.	$	129		$	118		$	124		$	153		$	(395	)	$	129

COMPREHENSIVE INCOME (LOSS)	$	163		$	138		$	139		$	199		$	(476	)	$	163

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2014

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	142		$	2		$	144
Net investment income	0			0			1			104			(3		)	102
Net realized investment gains (losses)	0			0			0			(19		)	—			(19		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—			—			—			(14		)	0			(14		)
Net unrealized gains (losses)	—			—			—			269			—			269
Net change in fair value of credit derivatives	—			—			—			255			0			255
Other	—			—			—			43			—			43
TOTAL REVENUES	0			0			1			525			(1		)	525
EXPENSES
Loss and LAE	—			—			—			(44		)	—			(44		)
Amortization of deferred acquisition costs	—			—			—			6			(2		)	4
Interest expense	—			13			13			5			(4		)	27
Other operating expenses	8			0			1			43			(2		)	50
TOTAL EXPENSES	8			13			14			10			(8		)	37
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES	(8		)	(13		)	(13		)	515			7			488
Total (provision) benefit for income taxes	—			4			5			(140		)	(2		)	(133		)
Equity in net earnings of subsidiaries	363			290			147			8			(808		)	—
NET INCOME (LOSS)	$	355		$	281		$	139		$	383		$	(803	)	$	355
Less: noncontrolling interest	—			—			—			24			(24		)	—
NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD.	$	355		$	281		$	139		$	359		$	(779	)	$	355

COMPREHENSIVE INCOME (LOSS)	$	356		$	294		$	146		$	397		$	(837	)	$	356

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	585		$	(11	)	$	574
Net investment income	0			0			0			318			(7		)	311
Net realized investment gains (losses)	0			0			1			(13		)	(8		)	(20		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—			—			—			35			0			35
Net unrealized gains (losses)	—			—			—			292			(27		)	265
Net change in fair value of credit derivatives	—			—			—			327			(27		)	300
Bargain purchase gain and settlement of pre-existing relationships	—			—			—			54			160			214
Other	0			0			—			53			0			53
TOTAL REVENUES	0			0			1			1,324			107			1,432
EXPENSES
Loss and LAE	—			—			—			316			2			318
Amortization of deferred acquisition costs	—			—			—			22			(7		)	15
Interest expense	—			39			40			11			(14		)	76
Other operating expenses	24			1			1			152			(2		)	176
TOTAL EXPENSES	24			40			41			501			(21		)	585
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES	(24		)	(40		)	(40		)	823			128			847
Total (provision) benefit for income taxes	—			14			14			(205		)	(43		)	(220		)
Equity in net earnings of subsidiaries	651			594			347			30			(1,622		)	—
NET INCOME (LOSS)	$	627		$	568		$	321		$	648		$	(1,537	)	$	627
Less: noncontrolling interest	—			—			—			30			(30		)	—
NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD.	$	627		$	568		$	321		$	618		$	(1,507	)	$	627

COMPREHENSIVE INCOME (LOSS)	$	530		$	482		$	269		$	554		$	(1,305	)	$	530

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2014

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	408		$	4		$	412
Net investment income	0			0			1			307			(7		)	301
Net realized investment gains (losses)	0			0			0			(23		)	(2		)	(25		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—			—			—			20			0			20
Net unrealized gains (losses)	—			—			—			127			—			127
Net change in fair value of credit derivatives	—			—			—			147			0			147
Other	—			—			—			239			(1		)	238
TOTAL REVENUES	0			0			1			1,078			(6		)	1,073
EXPENSES
Loss and LAE	—			—			—			48			6			54
Amortization of deferred acquisition costs	—			—			—			17			(5		)	12
Interest expense	—			27			40			13			(13		)	67
Other operating expenses	24			1			1			142			(3		)	165
TOTAL EXPENSES	24			28			41			220			(15		)	298
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN NET EARNINGS OF SUBSIDIARIES	(24		)	(28		)	(40		)	858			9			775
Total (provision) benefit for income taxes	—			9			14			(240		)	(2		)	(219		)
Equity in net earnings of subsidiaries	580			529			436			24			(1,569		)	—
NET INCOME (LOSS)	$	556		$	510		$	410		$	642		$	(1,562	)	$	556
Less: noncontrolling interest	—			—			—			24			(24		)	—
NET INCOME (LOSS) ATTRIBUTABLE TO ASSURED GUARANTY LTD.	$	556		$	510		$	410		$	618		$	(1,538	)	$	556

COMPREHENSIVE INCOME (LOSS)	$	729		$	650		$	495		$	957		$	(2,102	)	$	729

Condensed Consolidating Statement of Cash Flows

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015

(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	$	451		$	209		$	134		$	99		$	(932	)	$	(39	)
Cash flows from investing activities
Fixed-maturity securities:
Purchases	—			(72		)	(8		)	(1,830		)	66			(1,844		)
Sales	—			170			27			1,522			—			1,719
Maturities	—			8			—			627			—			635
Sales (purchases) of short-term investments, net	26			42			4			679			—			751
Net proceeds from financial guaranty variable entities’ assets	—			—			—			114			—			114
Intercompany debt	—			—			—			—			—			—
Investment in subsidiary	—			—			25			—			(25		)	—
Acquisition of Radian Asset, net of cash acquired	—			—			—			(800		)	—			(800		)
Other	—			(5		)	—			64			—			59
Net cash flows provided by (used in) investing activities	26			143			48			376			41			634
Cash flows from financing activities
Return of capital	—			—			—			(25		)	25			—
Dividends paid	(55		)	(351		)	(182		)	(333		)	866			(55		)
Repurchases of common stock	(420		)	—			—			—			—			(420		)
Share activity under option and incentive plans	(2		)	—			—			—			—			(2		)
Net paydowns of financial guaranty variable entities’ liabilities	—			—			—			(122		)	—			(122		)
Payment of long-term debt	—			—			—			(3		)	—			(3		)
Intercompany debt	—			—			—			—			—			—
Net cash flows provided by (used in) financing activities	(477		)	(351		)	(182		)	(483		)	891			(602		)
Effect of exchange rate changes	—			—			—			(2		)	—			(2		)
Increase (decrease) in cash	—			1			—			(10		)	—			(9		)
Cash at beginning of period	0			0			4			71			—			75
Cash at end of period	$	0		$	1		$	4		$	61		$	—		$	66

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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	$	762		$	170		$	84		$	408		$	(1,077	)	$	347
Cash flows from investing activities
Fixed-maturity securities:
Purchases	—			(356		)	(7		)	(1,668		)	—			(2,031		)
Sales	—			399			8			544			—			951
Maturities	—			4			1			552			—			557
Sales (purchases) of short-term investments, net	(265		)	(74		)	14			414			—			89
Net proceeds from financial guaranty variable entities’ assets	—			—			—			346			—			346
Intercompany debt	—			—			—			—			—			—
Investment in subsidiary	—			—			50			—			(50		)	—
Other	—			—			—			9			—			9
Net cash flows provided by (used in) investing activities	(265		)	(27		)	66			197			(50		)	(79		)
Cash flows from financing activities
Return of capital	—			—			—			(50		)	50			—
Dividends paid	(58		)	(700		)	(150		)	(227		)	1,077			(58		)
Repurchases of common stock	(438		)	—			—			—			—			(438		)
Share activity under option and incentive plans	(1		)	—			—			—			—			(1		)
Net paydowns of financial guaranty variable entities’ liabilities	—			—			—			(348		)	—			(348		)
Net proceeds from issuance of long-term debt	—			495			—			—			—			495
Payment of long-term debt	—			—			—			(18		)	—			(18		)
Intercompany debt	—			—			—			—			—			—
Net cash flows provided by (used in) financing activities	(497		)	(205		)	(150		)	(643		)	1,127			(368		)
Effect of exchange rate changes	—			—			—			(2		)	—			(2		)
Increase (decrease) in cash	—			(62		)	—			(40		)	—			(102		)
Cash at beginning of period	0			67			0			117			—			184
Cash at end of period	$	0		$	5		$	0		$	77		$	—		$	82