Subsidiary Information

The following tables present the condensed consolidating financial information for AGMH and AGUS (which are wholly-owned subsidiaries of AGL), which have issued publicly traded debt securities that are fully and unconditionally guaranteed by AGL as of June 30, 2012 and December 31, 2011 and for the three and six months ended June 30, 2012 and 2011. The information for AGMH and AGUS presents its subsidiaries on the equity method of accounting.

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF JUNE 30, 2012

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)		AGMH (Issuer)			Other Subsidiaries		Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
ASSETS
Total investment portfolio and cash	$	214.9	$	33.3	$	52.9		$	11,195.9	$	—		$	11,497.0
Investment in subsidiaries	4,503.9		3,738.1		2,915.4			3,296.2		(14,453.6		)	—
Premiums receivable, net of ceding commissions payable	—		—		—			1,099.1		(135.0		)	964.1
Ceded unearned premium reserve	—		—		—			1,601.0		(1,010.2		)	590.8
Deferred acquisition costs	—		—		—			209.5		(82.7		)	126.8
Reinsurance recoverable on unpaid losses	—		—		—			421.8		(251.3		)	170.5
Credit derivative assets	—		—		—			508.5		(78.6		)	429.9
Deferred tax asset, net	—		22.5		(75.8		)	882.3		(13.9		)	815.1
Intercompany receivable	—		—		—			472.5		(472.5		)	—
Financial guaranty variable interest entities’ assets, at fair value	—		—		—			2,726.0		—			2,726.0
Other	26.5		24.8		17.8			854.0		(168.8		)	754.3
TOTAL ASSETS	$	4,745.3	$	3,818.7	$	2,910.3		$	23,266.8	$	(16,666.6	)	$	18,074.5
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unearned premium reserves	$	—	$	—	$	—		$	6,558.0	$	(974.6	)	$	5,583.4
Loss and LAE reserve	—		—		—			1,257.4		(262.2		)	995.2
Long-term debt	—		347.5		418.9			80.0		—			846.4
Intercompany payable	—		172.5		—			300.0		(472.5		)	—
Credit derivative liabilities	—		0.2		—			2,173.8		(78.1		)	2,095.9
Financial guaranty variable interest entities’ liabilities, at fair value	—		—		—			3,281.3		—			3,281.3
Other	21.2		2.3		15.8			802.7		(293.8		)	548.2
TOTAL LIABILITIES	21.2		522.5		434.7			14,453.2		(2,081.2		)	13,350.4
TOTAL SHAREHOLDERS’ EQUITY	4,724.1		3,296.2		2,475.6			8,813.6		(14,585.4		)	4,724.1
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	4,745.3	$	3,818.7	$	2,910.3		$	23,266.8	$	(16,666.6	)	$	18,074.5

CONDENSED CONSOLIDATING BALANCE SHEET

AS OF DECEMBER 31, 2011

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries		Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
ASSETS
Total investment portfolio and cash	$	32.9	$	99.5		$	61.4		$	11,119.5	$	—		$	11,313.3
Investment in subsidiaries	4,606.7		3,730.0			2,801.3			3,258.1		(14,396.1		)	—
Premiums receivable, net of ceding commissions payable	—		—			—			1,149.6		(146.7		)	1,002.9
Ceded unearned premium reserve	—		—			—			1,739.1		(1,030.2		)	708.9
Deferred acquisition costs	—		—			—			223.3		(90.9		)	132.4
Reinsurance recoverable on unpaid losses	—		—			—			211.8		(142.5		)	69.3
Credit derivative assets	—		—			—			503.4		(34.5		)	468.9
Deferred tax asset, net	—		22.5			(76.9		)	867.2		(9.3		)	803.5
Intercompany receivable	—		—			—			300.0		(300.0		)	—
Financial guaranty variable interest entities’ assets, at fair value	—		—			—			2,819.1		—			2,819.1
Other	23.1		(71.3		)	26.9			836.5		(108.8		)	706.4
TOTAL ASSETS	$	4,662.7	$	3,780.7		$	2,812.7		$	23,027.6	$	(16,259.0	)	$	18,024.7
LIABILITIES AND SHAREHOLDERS’ EQUITY
Unearned premium reserves	$	—	$	—		$	—		$	6,949.4	$	(986.6	)	$	5,962.8
Loss and LAE reserve	—		—			—			834.2		(155.2		)	679.0
Long-term debt	—		519.5			415.1			103.7		—			1,038.3
Intercompany payable	—		—			—			300.0		(300.0		)	—
Credit derivative liabilities	—		0.2			—			1,807.1		(34.5		)	1,772.8
Financial guaranty variable interest entities’ liabilities, at fair value	—		—			—			3,458.4		—			3,458.4
Other	11.1		2.9			15.7			674.7		(242.6		)	461.8
TOTAL LIABILITIES	11.1		522.6			430.8			14,127.5		(1,718.9		)	13,373.1
TOTAL SHAREHOLDERS’ EQUITY	4,651.6		3,258.1			2,381.9			8,900.1		(14,540.1		)	4,651.6
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	4,662.7	$	3,780.7		$	2,812.7		$	23,027.6	$	(16,259.0	)	$	18,024.7

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED JUNE 30, 2012

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)			AGMH (Issuer)		Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—	$	—		$	—	$	217.1		$	2.2		$	219.3
Net investment income	—		—			0.3		105.7			(4.4		)	101.6
Net realized investment gains (losses)	—		—			—		(3.1		)	—			(3.1		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—		—			—		(22.2		)	(0.5		)	(22.7		)
Net unrealized gains (losses)	—		—			—		283.4			—			283.4
Net change in fair value of credit derivatives	—		—			—		261.2			(0.5		)	260.7
Equity in earnings of subsidiaries	381.7		360.5			168.3		353.7			(1,264.2		)	—
Other	—		—			—		181.9			(0.9		)	181.0
TOTAL REVENUES	381.7		360.5			168.6		1,116.5			(1,267.8		)	759.5
EXPENSES
Loss and LAE	—		—			—		121.7			0.8			122.5
Amortization of deferred acquisition costs	—		—			—		9.1			(4.6		)	4.5
Interest expense	—		9.9			13.4		6.5			(4.4		)	25.4
Other operating expenses	5.2		0.6			0.2		49.1			(1.6		)	53.5
TOTAL EXPENSES	5.2		10.5			13.6		186.4			(9.8		)	205.9
INCOME (LOSS) BEFORE INCOME TAXES	376.5		350.0			155.0		930.1			(1,258.0		)	553.6
Total provision (benefit) for income taxes	—		(3.7		)	2.9		183.8			(5.9		)	177.1
NET INCOME (LOSS)	$	376.5	$	353.7		$	152.1	$	746.3		$	(1,252.1	)	$	376.5

COMPREHENSIVE INCOME (LOSS)	$	407.5	$	372.9		$	164.4	$	796.0		$	(1,333.3	)	$	407.5

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED JUNE 30, 2011

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	227.5		$	2.5		$	230.0
Net investment income	—			—			0.1			106.3			(3.8		)	102.6
Net realized investment gains (losses)	—			—			—			(5.1		)	—			(5.1		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—			—			—			(10.8		)	—			(10.8		)
Net unrealized gains (losses)	—			—			—			(54.0		)	—			(54.0		)
Net change in fair value of credit derivatives	—			—			—			(64.8		)	—			(64.8		)
Equity in earnings of subsidiaries	(37.7		)	(46.5		)	45.0			(53.0		)	92.2			—
Other	—			—			—			(146.0		)	(0.4		)	(146.4		)
TOTAL REVENUES	(37.7		)	(46.5		)	45.1			64.9			90.5			116.3
EXPENSES
Loss and LAE	—			—			—			122.0			1.9			123.9
Amortization of deferred acquisition costs	—			—			—			9.7			(3.9		)	5.8
Interest expense	—			9.9			13.4			5.2			(3.8		)	24.7
Other operating expenses	5.4			0.1			0.2			47.8			(0.3		)	53.2
TOTAL EXPENSES	5.4			10.0			13.6			184.7			(6.1		)	207.6
INCOME (LOSS) BEFORE INCOME TAXES	(43.1		)	(56.5		)	31.5			(119.8		)	96.6			(91.3		)
Total provision (benefit) for income taxes	—			(3.5		)	(4.7		)	(40.9		)	0.9			(48.2		)
NET INCOME (LOSS)	$	(43.1	)	$	(53.0	)	$	36.2		$	(78.9	)	$	95.7		$	(43.1	)

COMPREHENSIVE INCOME (LOSS)	$	76.1		$	52.1		$	109.3		$	145.1		$	(306.5	)	$	76.1

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—		$	—		$	—		$	405.6		$	7.4		$	413.0
Net investment income	—			—			0.6			206.9			(8.1		)	199.4
Net realized investment gains (losses)	—			—			—			(1.8		)	—			(1.8		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—			—			—			(79.1		)	(0.5		)	(79.6		)
Net unrealized gains (losses)	—			—			—			(350.4		)	—			(350.4		)
Net change in fair value of credit derivatives	—			—			—			(429.5		)	(0.5		)	(430.0		)
Equity in earnings of subsidiaries	(94.8		)	7.2			161.8			(6.3		)	(67.9		)	—
Other	—			—			—			222.7			(1.2		)	221.5
TOTAL REVENUES	(94.8		)	7.2			162.4			397.6			(70.3		)	402.1
EXPENSES
Loss and LAE	—			—			—			370.9			(1.6		)	369.3
Amortization of deferred acquisition costs	—			—			—			18.0			(8.1		)	9.9
Interest expense	—			19.8			26.8			11.6			(8.1		)	50.1
Other operating expenses	11.7			1.0			0.4			104.2			(2.5		)	114.8
TOTAL EXPENSES	11.7			20.8			27.2			504.7			(20.3		)	544.1
INCOME (LOSS) BEFORE INCOME TAXES	(106.5		)	(13.6		)	135.2			(107.1		)	(50.0		)	(142.0		)
Total provision (benefit) for income taxes	—			(7.3		)	(9.3		)	(24.6		)	5.7			(35.5		)
NET INCOME (LOSS)	$	(106.5	)	$	(6.3	)	$	144.5		$	(82.5	)	$	(55.7	)	$	(106.5	)

COMPREHENSIVE INCOME (LOSS)	$	(44.6	)	$	38.0		$	173.8		$	23.5		$	(235.3	)	$	(44.6	)

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

AND COMPREHENSIVE INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(in millions)



	Assured Guaranty Ltd. (Parent)		AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
REVENUES
Net earned premiums	$	—	$	—		$	—		$	478.9		$	5.1		$	484.0
Net investment income	—		—			0.3			207.2			(7.5		)	200.0
Net realized investment gains (losses)	—		—			—			(2.3		)	—			(2.3		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	—		—			—			24.6			—			24.6
Net unrealized gains (losses)	—		—			—			(325.6		)	—			(325.6		)
Net change in fair value of credit derivatives	—		—			—			(301.0		)	—			(301.0		)
Equity in earnings of subsidiaries	110.0		128.6			336.6			115.6			(690.8		)	—
Other	—		—			—			16.1			(1.5		)	14.6
TOTAL REVENUES	110.0		128.6			336.9			514.5			(694.7		)	395.3
EXPENSES
Loss and LAE	—		—			—			95.2			3.2			98.4
Amortization of deferred acquisition costs	—		—			—			20.8			(11.3		)	9.5
Interest expense	—		19.7			26.8			10.5			(7.5		)	49.5
Other operating expenses	13.8		0.3			0.7			102.9			(1.7		)	116.0
TOTAL EXPENSES	13.8		20.0			27.5			229.4			(17.3		)	273.4
INCOME (LOSS) BEFORE INCOME TAXES	96.2		108.6			309.4			285.1			(677.4		)	121.9
Total provision (benefit) for income taxes	—		(7.0		)	(9.5		)	38.5			3.7			25.7
NET INCOME (LOSS)	$	96.2	$	115.6		$	318.9		$	246.6		$	(681.1	)	$	96.2

COMPREHENSIVE INCOME (LOSS)	$	190.0	$	202.9		$	372.0		$	427.5		$	(1,002.4	)	$	190.0

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2012

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
Net cash flows provided by (used in) operating activities	$	56.0		$	24.9		$	21.0		$	295.5		$	(235.3	)	$	162.1
Cash flows from investing activities
Fixed maturity securities:
Purchases	(91.6		)	(1.3		)	(10.4		)	(820.4		)	—			(923.7		)
Sales	—			—			1.0			524.5			—			525.5
Maturities	—			—			1.5			513.2			—			514.7
Sales (purchases) of short-term investments, net	(77.6		)	27.0			17.0			(74.4		)	—			(108.0		)
Net proceeds from financial guaranty variable entities’ assets	—			—			—			282.8			—			282.8
Acquisition of MIAC	—			(91.1		)	—			—			—			(91.1		)
Intercompany debt	—			—			—			(172.5		)	172.5			—
Investment in subsidiary	—			—			50.0			—			(50.0		)	—
Other	—			—			—			73.2			—			73.2
Net cash flows used in investing activities	(169.2		)	(65.4		)	59.1			326.4			122.5			273.4
Cash flows from financing activities
Issuance of common stock	172.5			—			—			—			—			172.5
Return of capital	—			—			—			(50.0		)	50.0			—
Dividends paid	(32.9		)	—			(80.0		)	(155.3		)	235.3			(32.9		)
Repurchases of common stock	(24.3		)	—			—			—			—			(24.3		)
Share activity under option and incentive plans	(2.1		)	—			—			—			—			(2.1		)
Net paydowns of financial guaranty variable entities’ liabilities	—			—			—			(388.6		)	—			(388.6		)
Payment of long-term debt	—			(172.5		)	—			(23.2		)	—			(195.7		)
Intercompany debt	—			172.5			—			—			(172.5		)	—
Net cash flows provided by (used in) financing activities	113.2			—			(80.0		)	(617.1		)	112.8			(471.1		)
Effect of exchange rate changes	—			—			—			(3.6		)	—			(3.6		)
Increase (decrease) in cash	—			(40.5		)	0.1			1.2			—			(39.2		)
Cash at beginning of period	—			71.7			—			142.8			—			214.5
Cash at end of period	$	—		$	31.2		$	0.1		$	144.0		$	—		$	175.3

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2011

(in millions)



	Assured Guaranty Ltd. (Parent)			AGUS (Issuer)			AGMH (Issuer)			Other Subsidiaries			Consolidating Adjustments			Assured Guaranty Ltd. (Consolidated)
Net cash flows provided by (used in) operating activities	$	12.7		$	6.6		$	(13.0	)	$	659.6		$	(34.0	)	$	631.9
Cash flows from investing activities
Fixed maturity securities:
Purchases	—			—			(0.3		)	(1,349.4		)	—			(1,349.7		)
Sales	—			—			—			686.0			—			686.0
Maturities	—			—			0.4			325.3			—			325.7
Sales (purchases) of short-term investments, net	6.5			(17.3		)	(12.1		)	(27.0		)	—			(49.9		)
Net proceeds from financial guaranty variable entities’ assets	—			—			—			424.0			—			424.0
Investment in subsidiary	—			—			25.0			—			(25.0		)
Other	—			—			—			8.7			—			8.7
Net cash flows used in investing activities	6.5			(17.3		)	13.0			67.6			(25.0		)	44.8
Cash flows from financing activities
Return of capital	—			—			—			(25.0		)	25.0			—
Dividends paid	(16.6		)	—			—			(34.0		)	34.0			(16.6		)
Share activity under option and incentive plans	(2.6		)	—			—			—			—			(2.6		)
Net paydowns of financial guaranty variable entities’ liabilities	—			—			—			(593.3		)	—			(593.3		)
Payment of long-term debt	—			—			—			(10.3		)	—			(10.3		)
Net cash flows provided by (used in) financing activities	(19.2		)	—			—			(662.6		)	59.0			(622.8		)
Effect of exchange rate changes	—			—			—			3.2			—			3.2
Increase (decrease) in cash	—			(10.7		)	—			67.8			—			57.1
Cash at beginning of period	—			13.0			—			95.4			—			108.4
Cash at end of period	$	—		$	2.3		$	—		$	163.2		$	—		$	165.5