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) In 2023, the Corporate division results include the gain on the Sound Point Transaction and AHP Transaction.

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

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

Consolidated Results of Operations

Consolidated Results of Operations

Net income attributable to AGL in 2024 was lower compared with 2023 primarily due to the following:

•the gain associated with the Sound Point Transaction and AHP Transaction, net of transaction expenses, of $175 million (after-tax) in 2023,

•the benefit related to Bermuda tax law changes of $189 million in 2023,

•lower fair value gains on credit derivatives of $24 million in 2024 compared with $114 million in 2023,

•foreign exchange remeasurement losses of $27 million in 2024, compared with gains of $53 million in 2023, and

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

These decreases were partially offset by:

•lower loss and LAE, which was a benefit of $26 million in 2024 compared with a loss of $162 million in 2023,

•a large refunded transaction which was the primary driver of the increase in net earned premiums to $403 million in 2024 from $344 million in 2023, and

•higher equity earnings from the alternative investment portfolio, which was $62 million in 2024 compared with $28 million in 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 25% for periods starting April 1, 2023, and 19% for periods ending on or before March 31, 2023, and 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 Part I, Item 1, Business - Regulation, and Part II, Item 8, Financial Statements and Supplementary Data, Note 13, Income Taxes.

Adjusted Operating Income

Adjusted operating income in 2024 was $389 million, compared with $648 million in 2023. The decrease was primarily due to the gain associated with the Sound Point Transaction and AHP Transaction and the benefit attributable to Bermuda tax law changes in 2023, offset in part by a benefit in loss expense in 2024 compared with a loss expense in 2023 and higher net earned premiums in 2024. 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 December 31, 2024 decreased compared with December 31, 2023, due to share repurchases of $508 million and dividends of $68 million, offset in part by net income. Adjusted operating shareholders’ equity and adjusted book value also decreased primarily due to share repurchases and dividends, partially offset by adjusted operating income of $389 million, and in the case of adjusted book value, the increase was also due to GWP of $440 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 December 31, 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.