Subsidiary Information

9 Months Ended

Sep. 30, 2019

Condensed Financial Information Disclosure [Abstract]

The following tables present the condensed consolidating financial information for AGUS and AGMH, 100%-owned subsidiaries of AGL, which have issued publicly traded debt securities that are fully and unconditionally guaranteed by AGL. The information for AGL, AGUS and AGMH presents their subsidiaries on the equity method of accounting.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF SEPTEMBER 30, 2019

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer) (1)		AGMH (Issuer)		Other Entities		Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
Assets
Total investment portfolio and cash	$	41	$	416	$	24	$	10,655	$	(431	)	$	10,705
Investment in subsidiaries	6,531		5,898		4,135		204		(16,768		)	—
Premiums receivable, net of commissions payable	—		—		—		997		(153		)	844
Deferred acquisition costs	—		—		—		142		(35		)	107
Intercompany loan receivable	—		—		—		50		(50		)	—
FG VIEs’ assets, at fair value	—		—		—		469		—			469
Dividends receivable from affiliate	70		10		—		—		(80		)	—
Other	25		84		32		2,723		(1,622		)	1,242
Total assets	$	6,667	$	6,408	$	4,191	$	15,240	$	(19,139	)	$	13,367
Liabilities and shareholders' equity
Unearned premium reserves	$	—	$	—	$	—	$	4,228	$	(894	)	$	3,334
Loss and LAE reserve	—		—		—		1,251		(244		)	1,007
Long-term debt	—		844		474		4		(88		)	1,234
Intercompany loan payable	—		50		—		300		(350		)	—
Credit derivative liabilities	—		—		—		249		(35		)	214
FG VIEs’ liabilities, at fair value	—		—		—		493		—			493
Dividends payable to affiliate	—		70		10		—		(80		)	—
Other	15		75		71		894		(622		)	433
Total liabilities	15		1,039		555		7,419		(2,313		)	6,715
Total shareholders' equity attributable to Assured Guaranty Ltd.	6,652		5,369		3,636		7,617		(16,622		)	6,652
Noncontrolling interest	—		—		—		204		(204		)	—
Total shareholders' equity	6,652		5,369		3,636		7,821		(16,826		)	6,652
Total liabilities and shareholders' equity	$	6,667	$	6,408	$	4,191	$	15,240	$	(19,139	)	$	13,367

____________________


(1)	The fair value of the AGMH debt purchased by AGUS, and recorded in the AGUS investment portfolio, was $131 million.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2018

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer) (1)		AGMH (Issuer)		Other Entities		Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
Assets
Total investment portfolio and cash	$	45	$	334	$	23	$	11,000	$	(425	)	$	10,977
Investment in subsidiaries	6,440		5,835		3,991		226		(16,492		)	—
Premiums receivable, net of commissions payable	—		—		—		1,071		(167		)	904
Deferred acquisition costs	—		—		—		143		(38		)	105
Deferred tax asset, net	—		—		—		162		(94		)	68
Intercompany loan receivable	—		—		—		50		(50		)	—
FG VIEs’ assets, at fair value	—		—		—		569		—			569
Dividends receivable from affiliate	60		—		—		—		(60		)	—
Other	29		66		24		2,437		(1,576		)	980
Total assets	$	6,574	$	6,235	$	4,038	$	15,658	$	(18,902	)	$	13,603
Liabilities and shareholders' equity
Unearned premium reserves	$	—	$	—	$	—	$	4,452	$	(940	)	$	3,512
Loss and LAE reserve	—		—		—		1,467		(290		)	1,177
Long-term debt	—		844		468		5		(84		)	1,233
Intercompany loan payable	—		50		—		300		(350		)	—
Credit derivative liabilities	—		—		—		236		(27		)	209
Deferred tax liabilities, net	—		49		50		—		(99		)	—
FG VIEs’ liabilities, at fair value	—		—		—		619		—			619
Dividends payable to affiliate	—		60		—		—		(60		)	—
Other	19		3		17		763		(504		)	298
Total liabilities	19		1,006		535		7,842		(2,354		)	7,048
Total shareholders' equity attributable to Assured Guaranty Ltd.	6,555		5,229		3,503		7,590		(16,322		)	6,555
Noncontrolling interest	—		—		—		226		(226		)	—
Total shareholders' equity	6,555		5,229		3,503		7,816		(16,548		)	6,555
Total liabilities and shareholders' equity	$	6,574	$	6,235	$	4,038	$	15,658	$	(18,902	)	$	13,603

____________________


(1)	The fair value of the AGMH debt purchased by AGUS, and recorded in the AGUS investment portfolio, was $125 million.

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
Revenues
Net earned premiums	$	—		$	—		$	—		$	126		$	(3	)	$	123
Net investment income	—			2			—			91			(5		)	88
Net realized investment gains (losses)	—			—			—			16			—			16
Net change in fair value of credit derivatives	—			—			—			5			—			5
Other	3			—			—			20			(49		)	(26		)
Total revenues	3			2			—			258			(57		)	206
Expenses
Loss and LAE	—			—			—			32			(2		)	30
Amortization of deferred acquisition costs	—			—			—			4			(1		)	3
Interest expense	—			12			13			3			(6		)	22
Other operating expenses	10			1			—			103			(49		)	65
Total expenses	10			13			13			142			(58		)	120
Equity in net earnings of investees	—			—			—			—			—			—
Income (loss) before income taxes and equity in net earnings of subsidiaries	(7		)	(11		)	(13		)	116			1			86
Total (provision) benefit for income taxes	—			3			2			(21		)	(1		)	(17		)
Equity in net earnings of subsidiaries	76			71			52			5			(204		)	—
Net income (loss)	$	69		$	63		$	41		$	100		$	(204	)	$	69
Less: noncontrolling interest	—			—			—			5			(5		)	—
Net income (loss) attributable to Assured Guaranty Ltd.	$	69		$	63		$	41		$	95		$	(199	)	$	69

Comprehensive income (loss)	$	93		$	73		$	38		$	124		$	(235	)	$	93

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2018

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
Revenues
Net earned premiums	$	—		$	—		$	—		$	146		$	(4	)	$	142
Net investment income	—			2			—			101			(4		)	99
Net realized investment gains (losses)	—			—			—			(7		)	—			(7		)
Net change in fair value of credit derivatives	—			—			—			21			—			21
Other	3			—			—			72			(55		)	20
Total revenues	3			2			—			333			(63		)	275
Expenses
Loss and LAE	—			—			—			18			(1		)	17
Amortization of deferred acquisition costs	—			—			—			5			(2		)	3
Interest expense	—			13			13			2			(5		)	23
Other operating expenses	10			6			(1		)	93			(52		)	56
Total expenses	10			19			12			118			(60		)	99
Equity in net earnings of investees	—			—			—			(1		)	—			(1		)
Income (loss) before income taxes and equity in net earnings of subsidiaries	(7		)	(17		)	(12		)	214			(3		)	175
Total (provision) benefit for income taxes	—			45			3			(58		)	(4		)	(14		)
Equity in net earnings of subsidiaries	168			111			108			7			(394		)	—
Net income (loss)	$	161		$	139		$	99		$	163		$	(401	)	$	161
Less: noncontrolling interest	—			—			—			7			(7		)	—
Net income (loss) attributable to Assured Guaranty Ltd.	$	161		$	139		$	99		$	156		$	(394	)	$	161

Comprehensive income (loss)	$	87		$	76		$	61		$	92		$	(229	)	$	87

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
Revenues
Net earned premiums	$	—		$	—		$	—		$	361		$	(8	)	$	353
Net investment income	—			8			—			302			(14		)	296
Net realized investment gains (losses)	—			—			—			12			—			12
Net change in fair value of credit derivatives	—			—			—			(25		)	—			(25		)
Other	7			—			—			179			(155		)	31
Total revenues	7			8			—			829			(177		)	667
Expenses
Loss and LAE	—			—			—			84			(9		)	75
Amortization of deferred acquisition costs	—			—			—			16			(3		)	13
Interest expense	—			37			40			8			(18		)	67
Other operating expenses	30			3			—			308			(152		)	189
Total expenses	30			40			40			416			(182		)	344
Equity in net earnings of investees	—			—			—			3			—			3
Income (loss) before income taxes and equity in net earnings of subsidiaries	(23		)	(32		)	(40		)	416			5			326
Total (provision) benefit for income taxes	—			7			8			(74		)	(2		)	(61		)
Equity in net earnings of subsidiaries	288			275			215			14			(792		)	—
Net income (loss)	$	265		$	250		$	183		$	356		$	(789	)	$	265
Less: noncontrolling interest	—			—			—			14			(14		)	—
Net income (loss) attributable to Assured Guaranty Ltd.	$	265		$	250		$	183		$	342		$	(775	)	$	265

Comprehensive income (loss)	$	491		$	388		$	299		$	584		$	(1,271	)	$	491

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Entities			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
Revenues
Net earned premiums	$	—		$	—		$	—		$	434		$	(11	)	$	423
Net investment income	—			6			—			301			(10		)	297
Net realized investment gains (losses)	—			—			—			(14		)	—			(14		)
Net change in fair value of credit derivatives	—			—			—			103			—			103
Other	9			—			—			137			(167		)	(21		)
Total revenues	9			6			—			961			(188		)	788
Expenses
Loss and LAE	—			—			—			48			(5		)	43
Amortization of deferred acquisition costs	—			—			—			16			(4		)	12
Interest expense	—			37			40			7			(13		)	71
Other operating expenses	30			9			—			293			(149		)	183
Total expenses	30			46			40			364			(171		)	309
Equity in net earnings of investees	—			—			—			—			—			—
Income (loss) before income taxes and equity in net earnings of subsidiaries	(21		)	(40		)	(40		)	597			(17		)	479
Total (provision) benefit for income taxes	—			50			9			(103		)	(2		)	(46		)
Equity in net earnings of subsidiaries	454			336			219			20			(1,029		)	—
Net income (loss)	$	433		$	346		$	188		$	514		$	(1,048	)	$	433
Less: noncontrolling interest	—			—			—			20			(20		)	—
Net income (loss) attributable to Assured Guaranty Ltd.	$	433		$	346		$	188		$	494		$	(1,028	)	$	433

Comprehensive income (loss)	$	171		$	150		$	54		$	255		$	(459	)	$	171

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

(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	$	408		$	217		$	157		$	(280	)	$	(867	)	$	(365	)
Cash flows from investing activities
Fixed-maturity securities:
Purchases	—			(3		)	—			(688		)	3			(688		)
Sales	—			—			—			1,306			—			1,306
Maturities and paydowns	—			4			7			653			—			664
Short-term investments with maturities of over three months:
Purchases	—			—			—			(216		)	—			(216		)
Sales	—			—			—			2			—			2
Maturities and paydowns	—			12			—			194			—			206
Net sales (purchases) of short-term investments with maturities of less than three months	4			(90		)	(3		)	(315		)	—			(404		)
Net proceeds from paydowns on FG VIEs’ assets	—			—			—			119			—			119
Net proceeds from sales of FG VIEs’ assets	—			—			—			51			—			51
Proceeds from stock redemption and return of capital from subsidiaries	—			100			—			10			(110		)	—
Other	—			—			—			30			—			30
Net cash flows provided by (used in) investing activities	4			23			4			1,146			(107		)	1,070
Cash flows from financing activities
Return of capital	—			—			—			(10		)	10			—
Dividends paid	(56		)	(237		)	(156		)	(474		)	867			(56		)
Repurchases of common stock	(340		)	—			—			(100		)	100			(340		)
Net paydowns of FG VIEs’ liabilities	—			—			—			(162		)	—			(162		)
Paydown of long-term debt	—			—			—			(1		)	(3		)	(4		)
Other	(16		)	—			—			—			—			(16		)
Net cash flows provided by (used in) financing activities	(412		)	(237		)	(156		)	(747		)	974			(578		)
Effect of exchange rate changes	—			—			—			(2		)	—			(2		)
Increase (decrease) in cash and restricted cash	—			3			5			117			—			125
Cash and restricted cash at beginning of period	—			1			—			103			—			104
Cash and restricted cash at end of period	$	—		$	4		$	5		$	220		$	—		$	229

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018

(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	$	454		$	101		$	126		$	448		$	(777	)	$	352
Cash flows from investing activities
Fixed-maturity securities:
Purchases	—			(76		)	(12		)	(1,462		)	72			(1,478		)
Sales	—			31			8			869			—			908
Maturities and paydowns	—			28			—			718			—			746
Short-term investments with maturities of over three months:
Purchases	—			—			—			(148		)	—			(148		)
Sales	—			—			—			1			—			1
Maturities and paydowns	—			—			—			136			—			136
Net sales (purchases) of short-term investments with maturities of less than three months	(11		)	60			(74		)	(55		)	—			(80		)
Net proceeds from paydowns on FG VIEs’ assets	—			—			—			90			—			90
Proceeds from stock redemption and return of capital from subsidiaries	—			200			—			—			(200		)	—
Other	—			(15		)	—			34			—			19
Net cash flows provided by (used in) investing activities	(11		)	228			(78		)	183			(128		)	194
Cash flows from financing activities
Dividends paid	(55		)	(362		)	(50		)	(365		)	777			(55		)
Repurchases of common stock	(380		)	—			—			(200		)	200			(380		)
Net paydowns of FG VIEs’ liabilities	—			—			—			(90		)	—			(90		)
Paydown of long-term debt	—			—			—			(1		)	(72		)	(73		)
Other	(8		)	—			—			—			—			(8		)
Net cash flows provided by (used in) financing activities	(443		)	(362		)	(50		)	(656		)	905			(606		)
Effect of exchange rate changes	—			—			—			(2		)	—			(2		)
Increase (decrease) in cash and restricted cash	—			(33		)	(2		)	(27		)	—			(62		)
Cash and restricted cash at beginning of period	—			33			2			109			—			144
Cash and restricted cash at end of period	$	—		$	—		$	—		$	82		$	—		$	82