ASSURED GUARANTY LTD

The summarized condensed consolidated statements of cash flows in the table below present the cash flow effect for the aggregate of the Insurance and Asset Management businesses and holding companies, separately from the aggregate effect of consolidating FG VIEs and CIVs. In the third quarter 2023, as a result of the Sound Point Transaction and AHP Transaction, the Company deconsolidated all CLOs and CLO warehouses and certain funds. Therefore, beginning July 1, 2023, the Company’s cash flow statements no longer includes all the operating, investing and financing cash flow activity of those deconsolidated CIVs. See Item 1, Financial Statements, Note 1, Business and Basis of Presentation, and Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles, for additional information.

Summarized Condensed Consolidated Cash Flows

(1) Claims paid on consolidated FG VIEs are presented in the condensed consolidated statements of cash flows as a component of paydowns on FG VIEs’ liabilities in financing activities as opposed to operating activities.

Cash flows from operations, excluding FG VIEs and CIVs, was an outflow of $16 million in nine months 2024 and an outflow of $217 million in nine months 2023. The decrease in cash outflows, other than those of the FG VIEs and CIVs, during nine months 2024 was primarily due to a $97 million increase in premiums received, a $78 million decrease in net claim payments, a $31 million increase in return on capital from equity method investees, a $13 million increase in interest on short-term investments, and Sound Point Transaction and AHP Transaction expenses in 2023, which were partially offset by a $56 million increase in tax payments and the inclusion of cash flows for asset management subsidiaries in the nine months 2023 prior to the Sound Point Transaction. Cash flows from operations attributable to FG VIEs and CIVs were inflows in nine months 2024 and nine months 2023. Cash flow from operations in nine months 2023 included the operating activities of the CLOs and CLO warehouses in the first half of 2023 prior to the Sound Point Transaction. The condensed consolidated statements of cash flows present the investing activities of the consolidated Sound Point funds, which were formerly known as AssuredIM funds, and CLOs as cash flows from operations.

Investing activities primarily consisted of net sales (purchases) of fixed-maturity and short-term investments and paydowns on and sales of FG VIEs’ assets. The increase in investing cash inflows in nine months 2024 compared with the nine months 2023 was mainly attributable to net purchases of short-term and fixed-maturity securities in the nine months 2023, higher sales of trading securities in nine months 2024 and lower net sales of fixed-maturity securities in nine months 2024. Investing inflows in both periods were used to fund claim payments and share repurchases. See Item 1, Financial Statements, Condensed Consolidated Statements of Cash Flows, and Note 3, Outstanding Exposure, for additional information.

Financing activities primarily consist of (i) AGL share repurchases and dividends, (ii) paydowns of FG VIEs’ liabilities, and (iii) until July 1, 2023, CLO issuances and CLO warehouse financing activities. The CIVs’ financing cash flows mainly included repayments of CLO warehouse financing debt and distributions from noncontrolling interests to CIVs. Nine months 2024 FG VIE financing cash flows included the par paydown of Puerto Rico Trust liabilities of $144 million. See Item 1, Financial Statements, Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.

From October 1, 2024 through November 8, 2024, the Company repurchased an additional 692,513 of common shares. As of November 8, 2024, the Company was authorized to purchase approximately $385 million of its common shares. For more information about the Company’s share repurchases and authorizations, see Item 1, Financial Statements, Note 12, Shareholders’ Equity.