ASSURED GUARANTY LTD

Financial Results

(1) See “— Non-GAAP Financial Measures” for a definition of the financial measures that were not determined in accordance with accounting principles generally accepted in the United States of America (GAAP), a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP measure, if available, and for additional details.

(2) Relates to the effect of consolidating FG VIEs and CIVs.

(3) See “— Overview — Key Business Strategies — Capital Management” above for information on common share repurchases.

Condensed Consolidated Results of Operations

Condensed Consolidated Results of Operations

Third Quarter 2024 Compared with Third Quarter 2023

Net income attributable to AGL for third quarter 2024 was higher compared with the three-month period ended September 30, 2023 (third quarter 2023) primarily due to:

•a benefit in net loss and LAE in third quarter 2024 of $51 million, compared with loss and LAE of $100 million in third quarter 2023, and

•foreign exchange gains on remeasurement of $55 million in third quarter 2024, compared with foreign exchange losses of $39 million in third quarter 2023.

These increases were offset in part by:

•the gain associated with the Sound Point Transaction and AHP Transaction, net of transaction expenses, of $241 million (pre-tax) in third quarter 2023.

Nine Months 2024 Compared with Nine Months 2023

Net income attributable to AGL for the nine-month period ended September 30, 2024 (nine months 2024) was lower compared with the nine-month period ended September 30, 2023 (nine months 2023) primarily due to:

•the gain associated with the Sound Point Transaction and AHP Transaction, net of transaction expenses, of $215 million (pre-tax) in nine months 2023,

•lower fair value gains on credit derivatives,

•lower net investment income primarily due to lower income on Loss Mitigation Securities, which were partially offset by higher short-term income, and

•lower other income mainly due to the reversal of a previously recorded litigation accrual of $20 million in nine months 2023.

These decreases were offset in part by:

•a benefit in net loss and LAE in nine months 2024 of $54 million, compared with loss and LAE of $159 in nine months 2023,

•higher net earned premiums in nine months 2024 compared with nine months 2023 primarily due to one large refunded transaction, and

•higher foreign exchange gains on remeasurement of $43 million in nine months 2024, compared with $9 million in nine months 2023.

The Company’s effective tax rate reflects the proportion of income recognized by each of the Company’s operating subsidiaries, with U.S. subsidiaries generally taxed at the U.S. marginal corporate income tax rate of 21%, U.K. subsidiaries taxed at the U.K. marginal corporate tax rate of 19% prior to March 31, 2023 and 25% after April 1, 2023, the French subsidiary taxed at the French marginal corporate tax rate of 25%, and Assured Guaranty Re Ltd. (AG Re) and Cedar Personnel Ltd. taxed at the Bermuda marginal corporate tax rate of 0%. Effective January 1, 2024, the U.K. adopted a global minimum tax rate of 15% under the Organization for Economic Co-Operation and Development’s Base Erosion and Profit Shifting Pillar Two rules. See Item 1, Financial Statements, Note 10, Income Taxes.

Adjusted Operating Income

Adjusted operating income in third quarter 2024 was $130 million compared with $206 million in third quarter 2023. The decrease was primarily due to the gain associated with the Sound Point Transaction and AHP Transaction in third quarter 2023, offset in part by a benefit in loss expense in third quarter 2024 compared with loss expense in third quarter 2023.

Adjusted operating income in nine months 2024 was $323 million, compared with $310 million in nine months 2023. The increase was primarily due to a benefit in loss expense in nine months 2024, compared with a loss expense in nine months 2023, offset in part by a gain from the Sound Point Transaction and AHP Transaction in nine months 2023. See “— Results of Operations — Reconciliation to GAAP” for the reconciliation of net income (loss) attributable to AGL to adjusted operating income (loss).

Book Value and Adjusted Book Value

Shareholders’ equity attributable to AGL as of September 30, 2024 increased compared with December 31, 2023, primarily due to net income of $358 million and other comprehensive income of $128 million, offset in part by share repurchases of $412 million and dividends of $52 million. Adjusted operating shareholders’ equity and adjusted book value decreased primarily due to share repurchases and dividends, partially offset by operating income of $323 million and, in the case of adjusted book value, GWP of $254 million. See “— Non-GAAP Financial Measures” below for the reconciliation of shareholders’ equity attributable to AGL to adjusted operating shareholders' equity and adjusted book value.

On a per share basis, shareholders’ equity attributable to AGL, adjusted operating shareholders’ equity and adjusted book value increased as of September 30, 2024 compared with December 31, 2023, due, in part, to the accretive effect of the share repurchase program. See “— Non-GAAP Financial Measures” for the reconciliation of shareholders’ equity attributable to AGL to adjusted operating shareholders' equity and adjusted book value.