Acquisitions (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of fair values of assets and liabilities acquired from acquisition

The following table shows the net effect of the CIFG Acquisition, including the effects of the settlement of pre-existing relationships.



	Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships		Net effect of Settlement of Pre-existing Relationships			Net Effect of CIFG Acquisition
	(in millions)
Cash Purchase Price (1)	$	443	$	—		$	443

Identifiable assets acquired:
Investments	770		—			770
Cash	8		—			8
Premiums receivable, net of commissions payable	18		—			18
Ceded unearned premium reserve	173		(173		)	—
Deferred acquisition costs	1		(1		)	—
Salvage and subrogation recoverable	23		—			23
Credit derivative assets	1		—			1
Deferred tax asset, net	194		34			228
Other assets	4		—			4
Total assets	1,192		(140		)	1,052

Liabilities assumed:
Unearned premium reserves	306		(10		)	296
Loss and loss adjustment expense reserve	1		(66		)	(65		)
Credit derivative liabilities	68		0			68
Other liabilities	17		—			17
Total liabilities	392		(76		)	316
Net asset effect of CIFG Acquisition	800		(64		)	736
Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, after-tax	357		(64		)	293
Deferred tax	—		(34		)	(34		)
Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, pre-tax	$	357	$	(98	)	$	259

_____________________


(1)	The cash purchase price of $443 million represents the cash transferred for the acquisition which was allocated as follows: (1) $270 million for the purchase of net assets of $627 million, and (2) the settlement of pre-existing relationships between CIFGH and Assured Guaranty at a fair value of $173 million.

The following table shows the net effect of the Radian Asset Acquisition at the Radian Acquisition Date, including the effects of the settlement of pre-existing relationships.



	Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships			Net effect of Settlement of Pre-existing Relationships			Net Effect of Radian Asset Acquisition
	(in millions)
Cash purchase price(1)	$	804		$	—		$	804
Identifiable assets acquired:
Investments	1,473			—			1,473
Cash	4			—			4
Ceded unearned premium reserve	(3		)	(65		)	(68		)
Credit derivative assets	30			—			30
Deferred tax asset, net	263			(56		)	207
Financial guaranty variable interest entities’ assets	122			—			122
Other assets	86			(67		)	19
Total assets	1,975			(188		)	1,787

Liabilities assumed:
Unearned premium reserves	697			(216		)	481
Credit derivative liabilities	271			(26		)	245
Financial guaranty variable interest entities’ liabilities	118			—			118
Other liabilities	30			(49		)	(19		)
Total liabilities	1,116			(291		)	825
Net asset effect of Radian Asset Acquisition	859			103			962
Bargain purchase gain and settlement of pre-existing relationships resulting from Radian Asset Acquisition, after-tax	55			103			158
Deferred tax	—			56			56
Bargain purchase gain and settlement of pre-existing relationships resulting from Radian Asset Acquisition, pre-tax	$	55		$	159		$	214

_____________________


(1)	The cash purchase price of $804 million was the cash transferred for the acquisition which was allocated as follows: (1) $987 million for the purchase of net assets of $1,042 million, and (2) the settlement of pre-existing relationships between Radian Asset and Assured Guaranty at a fair value of $(183) million.

Schedule of settlement of pre-existing relationships

The following table shows the net effect of the CIFG Acquisition, including the effects of the settlement of pre-existing relationships.



	Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships		Net effect of Settlement of Pre-existing Relationships			Net Effect of CIFG Acquisition
	(in millions)
Cash Purchase Price (1)	$	443	$	—		$	443

Identifiable assets acquired:
Investments	770		—			770
Cash	8		—			8
Premiums receivable, net of commissions payable	18		—			18
Ceded unearned premium reserve	173		(173		)	—
Deferred acquisition costs	1		(1		)	—
Salvage and subrogation recoverable	23		—			23
Credit derivative assets	1		—			1
Deferred tax asset, net	194		34			228
Other assets	4		—			4
Total assets	1,192		(140		)	1,052

Liabilities assumed:
Unearned premium reserves	306		(10		)	296
Loss and loss adjustment expense reserve	1		(66		)	(65		)
Credit derivative liabilities	68		0			68
Other liabilities	17		—			17
Total liabilities	392		(76		)	316
Net asset effect of CIFG Acquisition	800		(64		)	736
Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, after-tax	357		(64		)	293
Deferred tax	—		(34		)	(34		)
Bargain purchase gain and settlement of pre-existing relationships resulting from CIFG Acquisition, pre-tax	$	357	$	(98	)	$	259

_____________________


(1)	The cash purchase price of $443 million represents the cash transferred for the acquisition which was allocated as follows: (1) $270 million for the purchase of net assets of $627 million, and (2) the settlement of pre-existing relationships between CIFGH and Assured Guaranty at a fair value of $173 million.

The following table shows the net effect of the Radian Asset Acquisition at the Radian Acquisition Date, including the effects of the settlement of pre-existing relationships.



	Fair Value of Net Assets Acquired, before Settlement of Pre-existing Relationships			Net effect of Settlement of Pre-existing Relationships			Net Effect of Radian Asset Acquisition
	(in millions)
Cash purchase price(1)	$	804		$	—		$	804
Identifiable assets acquired:
Investments	1,473			—			1,473
Cash	4			—			4
Ceded unearned premium reserve	(3		)	(65		)	(68		)
Credit derivative assets	30			—			30
Deferred tax asset, net	263			(56		)	207
Financial guaranty variable interest entities’ assets	122			—			122
Other assets	86			(67		)	19
Total assets	1,975			(188		)	1,787

Liabilities assumed:
Unearned premium reserves	697			(216		)	481
Credit derivative liabilities	271			(26		)	245
Financial guaranty variable interest entities’ liabilities	118			—			118
Other liabilities	30			(49		)	(19		)
Total liabilities	1,116			(291		)	825
Net asset effect of Radian Asset Acquisition	859			103			962
Bargain purchase gain and settlement of pre-existing relationships resulting from Radian Asset Acquisition, after-tax	55			103			158
Deferred tax	—			56			56
Bargain purchase gain and settlement of pre-existing relationships resulting from Radian Asset Acquisition, pre-tax	$	55		$	159		$	214

_____________________


(1)	The cash purchase price of $804 million was the cash transferred for the acquisition which was allocated as follows: (1) $987 million for the purchase of net assets of $1,042 million, and (2) the settlement of pre-existing relationships between Radian Asset and Assured Guaranty at a fair value of $(183) million.

Schedule of business combination related expenses

Radian Asset Acquisition-Related Expenses



	Year Ended December 31, 2015
	(in millions)
Professional services	$	2
Financial advisory fees	10
Total	$	12



	Year Ended December 31, 2016
	(in millions)
Professional services	$	2
Financial advisory fees	4
Total	$	6

Schedule of unaudited pro forma results of operations

Unaudited Pro Forma Results of Operations



	Year Ended December 31, 2015		Year Ended December 31, 2014
	(in millions, except per share amounts)
Pro forma revenues	$	2,030	$	2,501
Pro forma net income	922		1,531
Pro forma earnings per share (EPS):
Basic	6.22		8.86
Diluted	6.18		8.81