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

Second Quarter 2025 Compared with Second Quarter 2024

Net income attributable to AGL for second quarter 2025 was higher compared with the three-month period ended June 30, 2024 (second quarter 2024) primarily due to foreign exchange gains on remeasurement of $79 million in second quarter 2025, offset in part by a loss and LAE in second quarter 2025 of $28 million, compared with benefit of $2 million in second quarter 2024.

Six Months 2025 Compared with Six Months 2024

Net income attributable to AGL for six months 2025 was higher compared with six months 2024 primarily due to:

•foreign exchange gains on remeasurement of $116 million in six months 2025, compared with losses of $12 million in six months 2024,

•a fair value gain on credit derivatives related to the resolution of the LBIE litigation of $103 million in six months 2025, and

•higher equity in earnings of investees in six months 2025, primarily generated by the Company’s investments in Sound Point, healthcare funds and legacy alternative investments.

These increases were offset in part by:

•a loss and LAE in six months 2025 of $68 million, compared with a benefit of $3 million in six months 2024,

•lower fair value gains on trading securities, which primarily consists of Puerto Rico CVIs, in six months 2025,

•net realized investment losses in six months 2025 primarily due to a change in the allowance for credit losses for Loss Mitigation Securities and realized losses on sales of securities, compared with gains in six months 2024, and

•lower net earned premiums in six months 2025, compared with six months 2024 due to lower refundings of financial guaranty insurance exposures.

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%, 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 15% starting January 1, 2025 and 0% for 2024. See Item 1, Financial Statements, Note 10, Income Taxes.

The following tables present pre-tax income by jurisdiction.

Pre-tax Income (Loss) by Tax Jurisdiction

Adjusted Operating Income

Adjusted operating income in second quarter 2025 was $50 million, compared with $80 million in second quarter 2024. The decrease was primarily due to higher loss expense in U.S. and non-U.S. public finance sectors and lower unrealized gains on the trading portfolio in second quarter 2025, partially offset by certain one-time gains related to a loss mitigation effort. See “— Results of Operations — Reconciliation to GAAP” for the reconciliation of net income (loss) attributable to AGL to adjusted operating income (loss).

Adjusted operating income in six months 2025 was $212 million, compared with $193 million in six months 2024. The increase was primarily due to the gain related to the resolution of the LBIE litigation, certain one time gains related to loss mitigation and workout efforts and a higher contribution to adjusted operating income from the Asset Management segment in six months 2025, offset in part by a higher loss expense in U.S. and non-U.S. public finance sectors, lower fair value gains on the trading portfolio and lower earned premiums on refundings of financial guaranty insurance contracts in six months 2025. 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 ABV

Shareholders’ equity attributable to AGL as of June 30, 2025 increased compared with December 31, 2024, primarily due to net income and unrealized gains on the investment portfolio, partially offset by share repurchases and dividends. Adjusted operating shareholders’ equity and ABV decreased primarily due to share repurchases and dividends, partially offset by adjusted operating income and GWP. See “— Non-GAAP Financial Measures” below for the reconciliation of shareholders’ equity attributable to AGL to adjusted operating shareholders' equity and ABV.

On a per share basis, shareholders’ equity attributable to AGL, adjusted operating shareholders’ equity and ABV increased as of June 30, 2025 compared with December 31, 2024, 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 ABV.