Earnings Per Share

12 Months Ended

Dec. 31, 2019

Accounting Policy

The Company computes EPS using a two-class method, which is an earnings allocation formula that determines EPS for (i) each class of common stock (the Company has a single class of common stock), and (ii) participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. Restricted stock awards and share units under the AGS SERP are considered participating securities as they received non-forfeitable rights to dividends (or dividend equivalents) similar to common stock.

Basic EPS is calculated by dividing net income (loss) available to common shareholders of Assured Guaranty by the weighted‑average number of common shares outstanding during the period. Diluted EPS adjusts basic EPS for the effects of restricted stock, restricted stock units, stock options and other potentially dilutive financial instruments (dilutive securities), only in the periods in which such effect is dilutive. The effect of the dilutive securities is reflected in diluted EPS by application of the more dilutive of (1) the treasury stock method or (2) the two-class method assuming nonvested shares are not converted into common shares.

Computation of Earnings Per Share



	Year Ended December 31,
	2019		2018		2017
	(in millions, except per share amounts)
Basic EPS:
Net income (loss) attributable to AGL	$	402	$	521	730
Less: Distributed and undistributed income (loss) available to nonvested shareholders	1		1		1
Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic	$	401	$	520	729
Basic shares	99.3		110.0		120.6
Basic EPS	$	4.04	$	4.73	$	6.05

Diluted EPS:
Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic	$	401	$	520	$	729
Plus: Re-allocation of undistributed income (loss) available to nonvested shareholders of AGL and subsidiaries	—		—		—
Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, diluted	$	401	$	520	$	729

Basic shares	99.3		110.0		120.6
Dilutive securities:
Options and restricted stock awards	0.9		1.3		1.7
Diluted shares	100.2		111.3		122.3
Diluted EPS	$	4.00	$	4.68	$	5.96
Potentially dilutive securities excluded from computation of EPS because of antidilutive effect	—		0.1		0.1