Form 8-K ASSURED GUARANTY LTD For: Aug 05

FREE Breaking News Alerts from StreetInsider.com!

StreetInsider.com Top Tickers, 4/25/2024

1. TSLA
2. META
3. ENPH
4. TXN
5. BA

6. SPOT
7. IBM
8. V
9. HCP
10. KMB

Top News Most Read Special Reports

August 6, 2015 6:11 AM EDT

E-mail

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15 (d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) — August 5, 2015

ASSURED GUARANTY LTD.

(Exact name of registrant as specified in its charter)




Bermuda	001-32141	98-0429991
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

Assured Guaranty Ltd.

30 Woodbourne Avenue

Hamilton HM 08 Bermuda

(Address of principal executive offices)

Registrant’s telephone number, including area code: (441) 279-5700

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d‑2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e‑4(c))



Item 2.02	Results of Operations and Financial Condition On August 5, 2015, Assured Guaranty Ltd. issued a press release reporting its second quarter 2015 results and the availability of its June 30, 2015 financial supplement. The press release and the financial supplement are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated by reference herein.



Item 9.01	Financial Statements and Exhibits. (d) Exhibits
Exhibit Number	Description
99.1	Assured Guaranty Ltd. Press Release dated August 5, 2015 reporting second quarter 2015 results
99.2	June 30, 2015 Financial Supplement of Assured Guaranty Ltd.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ASSURED GUARANTY LTD.

By: /s/ Robert A. Bailenson

Name: Robert A. Bailenson

Title: Chief Financial Officer

DATE: August 5, 2015

EXHIBIT INDEX



Exhibit Number	Description
99.1	Assured Guaranty Ltd. Press Release dated August 5, 2015 reporting second quarter 2015 results
99.2	June 30, 2015 Financial Supplement of Assured Guaranty Ltd.

Assured Guaranty Ltd. Reports Results for Second Quarter 2015


•	Net income was $297 million, or $1.96 per share, for second quarter 2015, compared with $159 million, or $0.89 per share, for second quarter 2014. Net income was $498 million, or $3.23 per share, for six months 2015, compared with $201 million, or $1.11 per share, for six months 2014.


•	Operating income¹ was $278 million, or $1.83 per share, for second quarter 2015, compared with $101 million, or $0.56 per share, for second quarter 2014. Operating income was $418 million, or $2.71 per share for six months 2015, compared with $233 million, or $1.28 per share, for six months 2014.


•	Acquisition of Radian Asset for $804.5 million resulted in an after-tax bargain purchase gain plus settlement of pre-existing relationships totaling $193 million, or $1.27 per share, which contributed to a record high quarterly operating income, and increased adjusted book value at the acquisition date by $570 million, or $3.73 per share.


•	Second quarter 2015 share repurchases totaled $133 million, or 4.7 million shares.

Hamilton, Bermuda, August 5, 2015 -- Assured Guaranty Ltd. (NYSE: AGO) (AGL and, together with its consolidated entities, Assured Guaranty or the Company) announced today its financial results for the three-month period ended June 30, 2015 (second quarter 2015).

Summary Financial Results

(in millions, except per share amounts)



	Quarter Ended
	June 30,
	2015		2014
Net income	$	297	$	159
Operating income¹	278		101

Net income per diluted share	1.96		0.89
Operating income¹ per diluted share	1.83		0.56

Diluted shares²	151.6		179.5

PVP¹	$	26	$	27
Gross par written	5,581		2,658

¹Please see “Non-GAAP Financial Measures” at the end of this press release.

² Diluted shares for generally accepted accounting principles (GAAP) net income and non-GAAP operating income were the same.

Summary Financial Results (continued)

(in millions, except per share amounts)



	As of
	June 30, 2015				December 31, 2014
	Amount		Per Share		Amount		Per Share
Shareholders' equity	$	5,806	$	39.16	$	5,758	$	36.37
Operating shareholders' equity¹	6,011		40.55		5,933		37.48
Adjusted book value¹	8,701		58.69		8,495		53.66

Common shares outstanding	148.3				158.3

________________________________________________


(1)	Please see “Non-GAAP Financial Measures” at the end of this press release.

“Assured Guaranty produced excellent results in the second quarter,” said Dominic Frederico, President

and CEO. “Operating income reached a record $278 million, with the closing of our Radian Asset acquisition providing a significant benefit. We also further strengthened our balance sheet, and we continue to be the industry leader, insuring nearly two-thirds of the U.S. municipal insured par sold during the quarter. Lastly, on June 29, S&P affirmed our AA stable financial strength ratings in its annual review of the company, and we estimate that at December 31, 2014 we had $1.9 billion of excess capital above their AAA requirement.”

Second Quarter Results

GAAP Financial Information

Net income for second quarter 2015 was $297 million, compared with net income of $159 million for the three-month period ended June 30, 2014 (second quarter 2014). The increase in pre-tax income was primarily attributable to (i) the acquisition of Radian Asset, which resulted in a bargain purchase gain of $55 million and a gain on settlement of pre-existing reinsurance relationships of $159 million, (ii) an $83 million increase in net earned premiums, and (iii) gains on commutations of previously ceded business of $33 million in second quarter 2015. The Company also recorded higher loss and loss adjustment expenses (LAE) of $131 million. Second quarter 2015 net income includes $12 million of operating expenses related to the Radian Asset acquisition.

Consolidated Statements of Operations (unaudited)

(in millions)



	Quarter Ended
	June 30,
	2015			2014
Revenues:
Net earned premiums	$	219		$	136
Net investment income	98			96
Net realized investment gains (losses)	(9		)	(8		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	8			15
Net unrealized gains (losses)	82			88
Net change in fair value of credit derivatives	90			103
Fair value gains (losses) on committed capital securities (CCS)	23			(6		)
Fair value gains (losses) on FG VIEs	5			25
Bargain purchase gain and settlement of pre-existing relationships	214			—
Other income (loss)	55			7
Total revenues	695			353

Expenses:
Loss and LAE	188			57
Amortization of deferred acquisition costs	6			3
Interest expense	26			20
Other operating expenses	66			55
Total expenses	286			135

Income (loss) before income taxes	409			218
Provision (benefit) for income taxes	112			59
Net income (loss)	$	297		$	159

Economic Loss Development

Economic loss development in second quarter 2015 was $192 million, primarily related to Puerto Rico developments. Following the developments in Puerto Rico and the Governor's speech claiming that its public debt, considering the current level of economic activity, is unpayable, the Company internally downgraded all its Puerto Rico exposures. Increases in loss development during the quarter were offset by a $47 million benefit due to the increase in the risk-free rates used to discount expected losses.

Roll Forward of Net Expected Loss to be Paid (1)

(in millions)



	Net Expected Loss to be Paid (Recovered) as			Expected Losses to be Paid (Recovered) on Radian Asset Portfolio			Economic Loss			Losses			Net Expected Loss to be Paid (Recovered) as
	of March 31, 2015			as of April 1, 2015			Development/ (Benefit)			(Paid)/ Recovered			of June 30, 2015

Public finance	$	352		$	85		$	224		$	(4	)	$	657
U.S. RMBS:
Before representations and warranties (R&W) benefit	815			6			(28		)	(44		)	749
R&W benefit	(245		)	(2		)	(4		)	26			(225		)
U.S. RMBS	570			4			(32		)	(18		)	524
Other structured finance	232			101			0			(4		)	329
Total	$	1,154		$	190		$	192		$	(26	)	$	1,510

________________________________________________

(1)

Economic loss development represents the change in net expected loss to be paid attributable to the effects of changes in assumptions based on observed market trends, changes in discount rates, accretion of discount and the economic effects of loss mitigation efforts. Economic loss development is the principal measure that the Company uses to evaluate the loss experience in its insured portfolio. Expected loss to be paid includes all transactions insured by the Company, whether written in insurance or credit derivative form, regardless of the accounting model prescribed under GAAP.

New Business Production

(in millions)



	Quarter Ended June 30,
	2015				2014
	PVP(1)		Gross Par Written		PVP(1)		Gross Par Written

Public finance - U.S.	$	25	$	5,581	$	16	$	2,453
Public finance - non - U.S.	—		—		—		—
Structured finance - U.S.	1		—		6		5
Structured finance - non-U.S.	—		—		5		200
Total	$	26	$	5,581	$	27	$	2,658

________________________________________________


(1)	Please see “Non-GAAP Financial Measures” at the end of this press release.

In the U.S. public finance sector, the Company's PVP, par written and number of issues insured increased in second quarter 2015 compared with second quarter 2014 due to increased market issuance, higher interest rates with intermittently wider credit spreads, and increased demand for bond insurance. During second quarter 2015, Assured Guaranty once again wrote the majority of insured par. The average rating of par written in second quarter 2015 was A-, consistent with second quarter 2014.

Municipal market issuance was $111 billion in second quarter 2015, compared with $83 billion in second quarter 2014, representing a 34% increase, and industry-wide insured penetration (based on par) increased to 7.5%, compared with 5.5% in second quarter 2014.

Other Non-GAAP Financial Measures

Operating income was $278 million in second quarter 2015, compared with operating income of $101 million in second quarter 2014. The increase in pre-tax operating income was due primarily to (i) the acquisition of Radian Asset, which resulted in a bargain purchase gain of $90 million (operating basis) and gains on settlements of pre-existing relationships of $159 million, (ii) commutation gains in second quarter 2015 and (iii) higher net earned premiums. The Company also recorded higher loss expense of $134 million due primarily to developments in Puerto Rico in second quarter 2015. Second quarter operating income includes $12 million in operating expenses related to the Radian Asset acquisition. Bargain purchase gain and loss expense amounts that are included in operating income differ from amounts reported in GAAP net income due to the elimination of the effects of non-economic fair value adjustments on credit derivatives, and the elimination of the effects of consolidating FG VIEs. See "Explanation of Non-GAAP Financial Measures" below.

Total net earned premiums and credit derivative revenues in second quarter 2015 were $259 million, compared with $162 million in second quarter 2014. Accelerations of premium and credit derivative revenues were $98 million in second quarter 2015, which included $28 million from the Radian Asset portfolio, compared with $25 million in second quarter 2014. Second quarter 2015 scheduled premium and credit derivative revenues also increased due primarily to the Radian Asset acquisition. On an operating income basis, credit derivative contracts are accounted for as insurance.

Operating shareholders' equity and adjusted book value increased in second quarter 2015 primarily due to the Radian Asset acquisition, which contributed $193 million to operating shareholders' equity, and $570 million to adjusted book value on April 1, 2015, the acquisition date. The increase in qualified statutory capital (which is policyholders' surplus plus contingency reserves determined in accordance with accounting practices prescribed or permitted by the New York State Department of Financial Services and the Maryland Insurance Administration) associated with Radian Asset was $494 million on the acquisition date.

Common Share Repurchases

As of August 5, 2015, the Company's remaining share repurchase authorization was $280 million.

Summary of Share Repurchases



	Amount		Number of Shares	Average price per share
	(in millions, except per share data)

2013	$	264	12.5	$	21.12
2014	590		24.4	24.17
Six months 2015	285		10.6	26.88
Cumulative as of June 30, 2015	1,139		47.5	23.97
Third quarter through August 5, 2015	45		1.8	24.76

As in the past, the Company's execution of its capital management strategy is contingent upon its available free cash and the capital position of the parent company, market conditions, the maintenance of its strong financial strength ratings and other factors. The repurchase program may be modified, extended or terminated by the board of directors at any time. It does not have an expiration date.

Consolidated Balance Sheets (unaudited)

(in millions)



	As of
	June 30, 2015		December 31, 2014
Assets
Investment portfolio:
Fixed maturity securities, available-for-sale, at fair value	$	10,582	$	10,491
Short-term investments, at fair value	834		767
Other invested assets	215		126
Total investment portfolio	11,631		11,384

Cash	75		75
Premiums receivable, net of commissions payable	703		729
Ceded unearned premium reserve	282		381
Deferred acquisition costs	119		121
Reinsurance recoverable on unpaid losses	77		78
Salvage and subrogation recoverable	139		151
Credit derivative assets	81		68
Deferred tax asset, net	439		260
Current income tax receivable	11		—
FG VIE assets, at fair value	1,601		1,402
Other assets	321		276
Total assets	$	15,479	$	14,925

Liabilities and shareholders' equity
Liabilities
Unearned premium reserve	$	4,389	$	4,261
Loss and LAE reserve	996		799
Reinsurance balances payable, net	66		107
Long-term debt	1,305		1,303
Credit derivative liabilities	1,007		963
Current income tax payable	—		5
FG VIE liabilities with recourse, at fair value	1,361		1,277
FG VIE liabilities without recourse, at fair value	171		142
Other liabilities	378		310
Total liabilities	9,673		9,167

Shareholders' equity
Common stock	1		2
Additional paid-in capital	1,606		1,887
Retained earnings	3,955		3,494
Accumulated other comprehensive income	239		370
Deferred equity compensation	5		5
Total shareholders' equity	5,806		5,758
Total liabilities and shareholders' equity	$	15,479	$	14,925

Explanation of Non-GAAP Financial Measures

The Company references financial measures that are not in accordance with GAAP. Management and the board of directors utilize non-GAAP financial measures in evaluating the Company's financial performance. By providing these non-GAAP financial measures, the Company gives investors, analysts and financial news reporters access to the same information that management reviews internally. In addition, Assured Guaranty's presentation of non-GAAP financial measures is consistent with how analysts calculate their estimates of Assured Guaranty's financial results in their research reports on Assured Guaranty and with how investors, analysts and the financial news media evaluate Assured Guaranty's financial results.

The following paragraphs and tables define each non-GAAP financial measure, describe why it is useful and provides reconciliations to the most comparable GAAP financial measure. Non-GAAP financial measures should not be viewed as substitutes for their most directly comparable GAAP measures.

Operating Income

Management believes that operating income is a useful measure because it clarifies the understanding of the underwriting results of the Company's financial guaranty business, and also includes financing costs and net investment income, and enables investors and analysts to evaluate the Company's financial results as compared with the consensus analyst estimates distributed publicly by financial databases. Operating income is defined as net income (loss) attributable to AGL, as reported under GAAP, adjusted for the following:

Elimination of the after-tax realized gains (losses) on the Company's investments, except for gains and losses on securities classified as trading. The timing of realized gains and losses, which depends largely on market credit cycles, can vary considerably across periods. The timing of sales is largely subject to the Company's discretion and influenced by market opportunities, as well as the Company's tax and capital profile. Trends in the underlying profitability of the Company's business can be more clearly identified without the fluctuating effects of these transactions.

Elimination of the after-tax non-credit-impairment unrealized fair value gains (losses) on credit derivatives, which is the amount in excess of the present value of the expected estimated economic credit losses and non-economic payments. Such fair value adjustments are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss. Additionally, such adjustments present all financial guaranty contracts on a more consistent basis of accounting, whether or not they are subject to derivative accounting rules.


3)	Elimination of the after-tax fair value gains (losses) on the Company's CCS. Such amounts are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss.


4)	Elimination of the after-tax foreign exchange gains (losses) on remeasurement of net premium receivables and loss and LAE reserves. Long-dated receivables constitute a significant portion of the net premium receivable balance and represent the present value of future contractual or expected collections. Therefore, the current period's foreign exchange remeasurement gains (losses) are not

necessarily indicative of the total foreign exchange gains (losses) that the Company will ultimately recognize.


5)	Elimination of the effects of consolidating FG VIEs in order to present all financial guaranty contracts on a more consistent basis of accounting, whether or not GAAP requires consolidation. GAAP requires the Company to consolidate certain VIEs that have issued debt obligations insured by the Company even though the Company does not own such VIEs.

Summary Reconciliation of

GAAP Net Income to Non-GAAP Operating Income (1)

(in millions)



	Quarter Ended
	June 30,
	2015			2014
Net income (loss)	$	297		$	159
Less after-tax adjustments:
Realized gains (losses) on investments	(8		)	(2		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	0			47
Fair value gains (losses) on CCS	15			(5		)
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	9			5
Effect of consolidating FG VIEs	3			13
Operating income	$	278		$	101

________________________________________________


(1)	The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Detailed Reconciliation of GAAP Net Income

to Non-GAAP Operating Income (1)

(in millions, except per share amounts)



	Quarter Ended June 30, 2015									Quarter Ended June 30, 2014
	GAAP Income Statement Line Items As Reported			Less: Operating Income Adjustments			Non-GAAP Operating Income Components			GAAP Income Statement Line Items As Reported			Less: Operating Income Adjustments			Non-GAAP Operating Income Components
Revenues:
Net earned premiums	$	219		$	(5	)	$	224		$	136		$	(5	)	$	141
Net investment income	98			(1		)	99			96			(1		)	97
Net realized investment gains (losses)	(9		)	(9		)	0			(8		)	(8		)	0
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	8			8			—			15			15			—
Net unrealized gains (losses)	82			82			—			88			88			—
Credit derivative revenues	—			(35		)	35			—			(21		)	21
Net change in fair value of credit derivatives	90			55			35			103			82			21
Fair value gains (losses) on CCS	23			23			—			(6		)	(6		)	—
Fair value gains (losses) on FG VIEs	5			5			—			25			25			—
Bargain purchase gain and settlement of pre-existing relationships	214			(35		)	249			—			—			—
Other income (loss)	55			13			42			7			6			1
Total revenues	695			46			649			353			93			260

Expenses:
Loss expense:
Financial guaranty insurance	188			(1		)	189			57			(7		)	64
Credit derivatives	—			9			(9		)	—			18			(18		)
Amortization of deferred acquisition costs	6			—			6			3			—			3
Interest expense	26			—			26			20			—			20
Other operating expenses	66			1			65			55			—			55
Total expenses	286			9			277			135			11			124

Income (loss) before income taxes	409			37			372			218			82			136
Provision (benefit) for income taxes	112			18			94			59			24			35
Income (loss)	$	297		$	19		$	278		$	159		$	58		$	101

Diluted shares	151.6						151.6			179.5						179.5

Earnings per share, diluted	$	1.96					$	1.83		$	0.89					$	0.56

________________________________________________

(1) The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

Non-GAAP Loss Expense

Loss Expense Included in

Non-GAAP Operating Income

(in millions)



	Quarter Ended June 30,
	2015			2014

GAAP losses	$	188		$	57
Loss and LAE (FG VIEs)(1)	1			7
Losses incurred (benefit) on credit derivatives (2)	(9		)	(18		)
Loss expense (benefit) included in non-GAAP operating income	$	180		$	46

________________________________________________


(1)	Represents loss and LAE that is eliminated for GAAP upon consolidation.


(2)	Represents a benefit on credit derivatives under a present value, probability-weighted insurance accounting model.

Adjusted Book Value and Operating Shareholders’ Equity

Management also uses adjusted book value to measure the intrinsic value of the Company, excluding franchise value. Growth in adjusted book value per share is one of the key financial measures used in determining the amount of certain long-term compensation to management and employees and used by rating agencies and investors.

Management believes that operating shareholders' equity is a useful measure because it presents the equity of Assured Guaranty Ltd. with all financial guaranty contracts accounted for on a more consistent basis and excludes fair value adjustments that are not expected to result in economic gain or loss. Many investors, analysts and financial news reporters use operating shareholders' equity as the principal financial measure for valuing Assured Guaranty Ltd.'s current share price or projected share price and also as the basis of their decision to recommend, buy or sell Assured Guaranty Ltd.'s common shares. Many of the Company's fixed income investors also use operating shareholders' equity to evaluate the Company's capital adequacy. Operating shareholders' equity is the basis of the calculation of adjusted book value (see below). Operating shareholders' equity is defined as shareholders' equity attributable to AGL, as reported under GAAP, adjusted for the following:


1)	Elimination of the effects of consolidating FG VIEs in order to present all financial guaranty contracts on a more consistent basis of accounting, whether or not GAAP requires consolidation. GAAP requires the Company to consolidate certain VIEs that have issued debt obligations insured by the Company even though the Company does not own such VIEs.


3)	Elimination of the after-tax fair value gains (losses) on the Company's CCS. Such amounts are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss.

Elimination of the after-tax unrealized gains (losses) on the Company's investments that are recorded as a component of accumulated other comprehensive income (AOCI) (excluding foreign exchange remeasurement). The AOCI component of the fair value adjustment on the investment portfolio is not deemed economic because the Company generally holds these investments to maturity and therefore should not recognize an economic gain or loss.

Management believes that adjusted book value is a useful measure because it enables an evaluation of the net present value of the Company's in-force premiums and revenues in addition to operating shareholders' equity. The premiums and revenues included in adjusted book value will be earned in future periods, but actual earnings may differ materially from the estimated amounts used in determining current adjusted book value due to changes in foreign exchange rates, prepayment speeds, terminations, credit defaults and other factors. Many investors, analysts and financial news reporters use adjusted book value to evaluate Assured Guaranty Ltd.'s share price and as the basis of their decision to recommend, buy or sell the Assured Guaranty Ltd. common shares. Adjusted book value is operating shareholders' equity, as defined above, further adjusted for the following:


1)	Elimination of after-tax deferred acquisition costs, net. These amounts represent net deferred expenses that have already been paid or accrued and will be expensed in future accounting periods.


2)	Addition of the after-tax net present value of estimated net future credit derivative revenue. See below.


3)	Addition of the after-tax value of the unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed, net of reinsurance. This amount represents the expected future net earned premiums, net of expected losses to be expensed, which are not reflected in GAAP equity.

Net Present Value of Estimated Net Future Credit Derivative Revenue

Management believes that this amount is a useful measure because it enables an evaluation of the value of future estimated credit derivative revenue. There is no corresponding GAAP financial measure. This amount represents the present value of estimated future revenue from the Company's credit derivative in-force book of business, net of reinsurance, ceding commissions and premium taxes, for contracts without expected economic losses, and is discounted at 6%. Estimated net future credit derivative revenue may change from period to period due to changes in foreign exchange rates, prepayment speeds, terminations, credit defaults or other factors that affect par outstanding or the ultimate maturity of an obligation.

Reconciliation of GAAP Shareholders' Equity to

Operating Shareholders' Equity (1) and Adjusted Book Value (1)

(in millions, except per share amounts)



	As of
	June 30, 2015			December 31, 2014

Shareholders' equity	$	5,806		$	5,758
Less after-tax adjustments:
Effect of consolidating FG VIEs	(40		)	(44		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(447		)	(527		)
Fair value gains (losses) on CCS	39			23
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	243			373
Operating shareholders' equity	6,011			5,933
After-tax adjustments:
Less: Deferred acquisition costs	150			156
Plus: Net present value of estimated net future credit derivative revenue	155			109
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	2,685			2,609
Adjusted book value	$	8,701		$	8,495

Shares outstanding at the end of the period	148.3			158.3

Per share:
Shareholders' equity	$	39.16		$	36.37
Operating shareholders' equity	40.55			37.48
Adjusted book value	58.69			53.66

________________________________________________


(1)	The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.

PVP or Present Value of New Business Production

Management believes that PVP is a useful measure because it enables the evaluation of the value of new business production for the Company by taking into account the value of estimated future installment premiums on all new contracts underwritten in a reporting period as well as premium supplements and additional installment premium on existing contracts as to which the issuer has the right to call the insured obligation but has not exercised such right, whether in insurance or credit derivative contract form, which GAAP gross premiums written and the net credit derivative premiums received and receivable portion of net realized gains and other settlements on credit derivatives (Credit Derivative Revenues) do not adequately measure. PVP in respect of financial guaranty contracts written in a specified period is defined as gross upfront and installment premiums received and the present value of gross estimated future installment premiums, in each case, discounted at 6%. For purposes of the PVP calculation, management discounts estimated future installment premiums on insurance contracts at 6%, while under GAAP, these amounts are

discounted at a risk-free rate. Additionally, under GAAP, management records future installment premiums on financial guaranty insurance contracts covering non-homogeneous pools of assets based on the contractual term of the transaction, whereas for PVP purposes, management records an estimate of the future installment premiums the Company expects to receive, which may be based upon a shorter period of time than the contractual term of the transaction. Actual future net earned or written premiums and Credit Derivative Revenues may differ from PVP due to factors including, but not limited to, changes in foreign exchange rates, prepayment speeds, terminations, credit defaults, or other factors that affect par outstanding or the ultimate maturity of an obligation.

Reconciliation of PVP

to Gross Written Premiums (1)

(in millions)



	Quarter Ended
	June 30,
	2015			2014
Total PVP	$	26		$	27
Less: Financial guaranty installment premium PVP	1			11
Total: Financial guaranty upfront gross written premiums	25			16
Plus: Installment gross written premiumsand other GAAP adjustments(2)	(3		)	1
Total gross written premiums	$	22		$	17

________________________________________________


(1)	The non-GAAP measures presented in the table above should not be considered a substitute for financial results and measures determined or calculated in accordance with GAAP.


(2)	Includes present value of new business on installment policies, gross written premiums adjustment on existing installment policies due to changes in assumptions, any cancellations of assumed reinsurance contracts, and other GAAP adjustments.

Conference Call and Webcast Information

The Company will host a conference call for investors at 8:30 a.m. Eastern Time (9:30 a.m. Atlantic Time) on Thursday, August 6, 2015. The conference call will be available via live and archived webcast in the Investor Information section of the Company's website at AssuredGuaranty.com or by dialing 1-877-281-1545 (in the U.S.) or 1-412-902-6609 (International). A replay of the call will be made available through November 6, 2015. To listen to the replay, dial 1-877-344-7529 (in the U.S.) or 1-412-317-0088 (International), passcode 10070090. The replay will be available one hour after the conference call ends.

Please refer to Assured Guaranty's June 30, 2015 Financial Supplement, which is posted on the Company's website at assuredguaranty.com/investor-information/by-company/assured-guaranty-ltd, for more information on the Company's financial guaranty portfolios, investment portfolio and other items. The Company is also posting on the same page of its website:


•	“Public Finance Transactions in 2Q 2015,” which lists the U.S. public finance new issues insured by the Company in second quarter 2015, and


•	“Structured Finance Transactions at June 30, 2015,” which lists the Company's structured finance exposure as of that date.

In addition, the Company is posting at assuredguaranty.com/presentations the “June 30, 2015 Equity Investor Presentation.” Furthermore, the Company's separate-company subsidiary financial supplements and its Fixed Income Presentation for the current quarter will be posted on the Company's website when available. Those documents will be furnished to the Securities and Exchange Commission in a Current Report on Form 8-K.

# # #

Assured Guaranty Ltd. is a publicly traded (NYSE: AGO) Bermuda-based holding company. Its operating subsidiaries provide credit enhancement products to the U.S. and international public finance, infrastructure and structured finance markets. More information on Assured Guaranty Ltd. and its subsidiaries can be found at AssuredGuaranty.com.

Cautionary Statement Regarding Forward-Looking Statements

Any forward-looking statements made in this press release reflect the Company's current views with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. For example, Assured Guaranty's calculations of adjusted book value, PVP, net present value of estimated future installment premiums in force and total estimated net future premium earnings and statements regarding its capital position and demand for its insurance and other forward-looking statements could be affected by rating agency action, including a ratings downgrade, a change in outlook, the placement of ratings on watch for downgrade, or a change in rating criteria, at any time, of AGL or any of its subsidiaries, and/or of any securities AGL or any of its subsidiaries have issued, and/or of transactions that AGL’s subsidiaries have insured; reduction in the amount of available insurance opportunities and/or in the demand for Assured Guaranty's insurance; developments in the world’s financial and capital markets that adversely affect obligors’ payment rates, Assured Guaranty’s loss experience, or its exposure to refinancing risk in transactions (which could result in substantial liquidity claims on its guarantees); the possibility that budget shortfalls or other factors will result in credit losses or impairments on obligations of state, territorial and local governments and their related authorities and public corporations that Assured Guaranty insures or reinsures; the failure of Assured Guaranty to realize loss recoveries that are assumed in its expected loss estimates; deterioration in the financial condition of Assured Guaranty’s reinsurers, the amount and timing of reinsurance recoverables actually received and the risk that reinsurers may dispute amounts owed to Assured Guaranty under its reinsurance agreements; increased competition, including from new entrants into the financial guaranty industry; rating agency action on obligors, including sovereign debtors, resulting in a reduction in the value of securities in Assured Guaranty's investment portfolio and in collateral posted by and to Assured Guaranty; the inability of Assured Guaranty to access external sources of capital on acceptable terms; changes in the world’s credit markets, segments thereof, interest rates or general economic conditions; the impact of market volatility on the mark-to-market of Assured Guaranty’s contracts written in credit default swap form; changes in applicable accounting policies or practices; changes in applicable laws or regulations, including insurance and tax laws, or other governmental actions; difficulties with the execution of Assured Guaranty’s business strategy; loss of key personnel; the effects of mergers, acquisitions and divestitures; natural or man-made catastrophes; other risks and uncertainties that have not been identified at this time; management’s response to these factors; and other risk factors identified in AGL’s filings with the U.S. Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made as of August 5, 2015, and Assured Guaranty undertakes no obligation to update publicly or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Contact Information

Robert Tucker

Managing Director, Investor Relations and Corporate Communications

212-339-0861

[email protected]

Ashweeta Durani

Vice President, Corporate Communications

212-408-6042

[email protected]

Assured Guaranty Ltd.

June 30, 2015

Financial Supplement



Table of Contents		Page
	Selected Financial Highlights	1
	Consolidated Balance Sheets (unaudited)	2
	Consolidated Statements of Operations (unaudited)	3
	Net Income (Loss) Reconciliation to Operating Income	4
	Adjusted Book Value	6
	Claims-Paying Resources	7
	New Business Production	8
	Gross Par Written	9
	New Business Production by Quarter	10
	Available-for-Sale Investment Portfolio and Cash	11
	Estimated Net Exposure Amortization and Estimated Future Net Premium and Credit Derivative Revenues	12
	Expected Amortization of Net Par Outstanding	13
	Present Value of Net Expected Loss to be Expensed	14
	Financial Guaranty Profile	15
	Exposure to Puerto Rico	19
	Direct Pooled Corporate Obligations Profile	22
	U.S. RMBS Profile	23
	Direct U.S. Commercial Real Estate Profile	24
	Below Investment Grade Exposures	25
	Largest Exposures by Sector	30
	Rollforward of Net Expected Loss and Loss Adjustment Expenses to be Paid	34
	Financial Guaranty Insurance and Credit Derivative U.S. RMBS Representations and Warranties Benefit Development	35
	Losses Incurred	36
	Summary Financial and Statistical Data	37
	Glossary	38
	Non-GAAP Financial Measures	41

This financial supplement should be read in conjunction with documents filed by Assured Guaranty Ltd. (‘‘AGL’’ and, together with its subsidiaries, ‘‘Assured Guaranty’’ or the ‘‘Company’’) with the Securities and Exchange Commission ("SEC"), including its Annual Report on Form 10-K for the year ended December 31, 2014 and its Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 2015 and June 30, 2015.

Some amounts in this financial supplement may not add due to rounding.

Cautionary Statement Regarding Forward Looking Statements:

Any forward looking statements made in this supplement reflect the current views of Assured Guaranty with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Assured Guaranty's forward looking statements could be affected by many events. These events include (1) rating agency action, including a ratings downgrade, a change in outlook, the placement of ratings on watch for downgrade, or a change in rating criteria, at any time, of AGL or any of its subsidiaries, and/or of any securities AGL or any of its subsidiaries have issued, and/or of transactions that AGL’s subsidiaries have insured; (2) reduction in the amount of available insurance opportunities and/or in the demand for Assured Guaranty's insurance; (3) developments in the world’s financial and capital markets that adversely affect obligors’ payment rates, Assured Guaranty’s loss experience, or its exposure to refinancing risk in transactions (which could result in substantial liquidity claims on its guarantees); (4) the possibility that budget shortfalls or other factors will result in credit losses or impairments on obligations of state, territorial and local governments and their related authorities and public corporations that Assured Guaranty insures or reinsures; (5) the failure of Assured Guaranty to realize loss recoveries that are assumed in its expected loss estimates; (6) deterioration in the financial condition of Assured Guaranty’s reinsurers, the amount and timing of reinsurance recoverables actually received and the risk that reinsurers may dispute amounts owed to Assured Guaranty under its reinsurance agreements; (7) increased competition, including from new entrants into the financial guaranty industry; (8) rating agency action on obligors, including sovereign debtors, resulting in a reduction in the value of securities in Assured Guaranty’s investment portfolio and in collateral posted by and to Assured Guaranty; (9) the inability of Assured Guaranty to access external sources of capital on acceptable terms; (10) changes in the world’s credit markets, segments thereof, interest rates or general economic conditions; (11) the impact of market volatility on the mark-to-market of Assured Guaranty’s contracts written in credit default swap form; (12) changes in applicable accounting policies or practices; (13) changes in applicable laws or regulations, including insurance and tax laws, or other governmental actions; (14) difficulties with the execution of Assured Guaranty’s business strategy; (15) loss of key personnel; (16) the effects of mergers, acquisitions and divestitures; (17) natural or man-made catastrophes; (18) other risks and uncertainties that have not been identified at this time; (19) management’s response to these factors; and (20) other risk factors identified in AGL’s filings with the SEC. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the dates on which they are made. Assured Guaranty undertakes no obligation to update publicly or review any forward looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Assured Guaranty Ltd.

Selected Financial Highlights

(dollars in millions, except per share amounts)



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Operating income reconciliation:
Operating income	$	278		$	101		$	418		$	233
Plus after-tax adjustments:
Realized gains (losses) on investments	(8		)	(2		)	1			(3		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	0			47			66			(124		)
Fair value gains (losses) on committed capital securities	15			(5		)	16			(10		)
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and loss adjustment expense (LAE) reserves	9			5			0			5
Effect of consolidating financial guaranty variable interest entities (FG VIEs)	3			13			(3		)	100
Net income (loss)	$	297		$	159		$	498		$	201

Earnings per diluted share:
Operating income	$	1.83		$	0.56		$	2.71		$	1.28
Plus after-tax adjustments:
Realized gains (losses) on investments	(0.05		)	(0.01		)	0.01			(0.02		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	0.00			0.26			0.43			(0.68		)
Fair value gains (losses) on committed capital securities	0.10			(0.02		)	0.10			(0.05		)
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	0.06			0.02			0.00			0.03
Effect of consolidating FG VIEs	0.02			0.08			(0.02		)	0.55
Net income (loss)	$	1.96		$	0.89		$	3.23		$	1.11

Weighted average shares outstanding
Basic shares outstanding	150.6			178.4			153.2			180.3
Diluted shares outstanding⁽¹⁾	151.6			179.5			154.1			181.3
Shares outstanding at the end of period	148.3			174.2

Effect of refundings and terminations, net
Net earned premiums from refundings and terminations	$	96		$	24		$	137		$	53
Realized gains (losses) and other settlements from CDS terminations	2			1			13			1
Operating income effect	68			16			103			36
Operating income per diluted share effect	0.44			0.09			0.67			0.20

Effective tax rate on operating income	25.4		%	25.6		%	24.3		%	26.2		%
Effective tax rate on net income	27.5		%	27.2		%	26.2		%	26.2		%

Return on equity (ROE) calculations ⁽²⁾:
ROE, excluding unrealized gain (loss) on investment portfolio	21.7		%	12.9		%	18.2		%	8.2		%
Operating ROE	18.7		%	6.5		%	14.0		%	7.6		%

New business:
Gross par written	$	5,581		$	2,658		$	8,289		$	4,527
Present value of new business production (PVP) ⁽³⁾	$	26		$	27		$	62		$	58

							As of
							June 30,			December 31,
Other information:							2015			2014
Net debt service outstanding							$	584,429		$	609,622
Net par outstanding							390,384			403,729
Claims-paying resources ⁽⁴⁾							12,646			12,189


1)	Non-GAAP diluted shares outstanding were the same as GAAP diluted shares.

2) Quarterly ROE calculations represent annualized returns.

3) Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

4) See page 7 for additional detail on claims-paying resources.

Assured Guaranty Ltd.

Consolidated Balance Sheets (unaudited)

(dollars in millions)



	As of:
	June 30,		December 31,
	2015		2014
Assets:
Investment portfolio:
Fixed maturity securities, available-for-sale, at fair value	$	10,582	$	10,491
Short-term investments, at fair value	834		767
Other invested assets	215		126
Total investment portfolio	11,631		11,384

Cash	75		75
Premiums receivable, net of commissions payable	703		729
Ceded unearned premium reserve	282		381
Deferred acquisition costs	119		121
Reinsurance recoverable on unpaid losses	77		78
Salvage and subrogation recoverable	139		151
Credit derivative assets	81		68
Deferred tax asset, net	439		260
Current income tax receivable	11		—
FG VIE assets, at fair value	1,601		1,402
Other assets	321		276
Total assets	$	15,479	$	14,925

Liabilities and shareholders' equity:
Liabilities:
Unearned premium reserve	$	4,389	$	4,261
Loss and loss adjustment expense reserve	996		799
Reinsurance balances payable, net	66		107
Long-term debt	1,305		1,303
Credit derivative liabilities	1,007		963
Current income tax payable	—		5
FG VIE liabilities with recourse, at fair value	1,361		1,277
FG VIE liabilities without recourse, at fair value	171		142
Other liabilities	378		310
Total liabilities	9,673		9,167

Shareholders' equity:
Common stock	1		2
Additional paid-in capital	1,606		1,887
Retained earnings	3,955		3,494
Accumulated other comprehensive income	239		370
Deferred equity compensation	5		5
Total shareholders' equity	5,806		5,758
Total liabilities and shareholders' equity	$	15,479	$	14,925

Assured Guaranty Ltd.

Consolidated Statements of Operations (unaudited)

(dollars in millions, except per share amounts)



				Three Months Ended						Six Months Ended
				June 30,						June 30,
				2015			2014			2015			2014
Revenues:
	Net earned premiums			$	219		$	136		$	361		$	268
	Net investment income			98			96			199			199
	Net realized investment gains (losses)			(9		)	(8		)	7			(6		)
	Net change in fair value of credit derivatives:
		Realized gains (losses) and other settlements		8			15			29			34
		Net unrealized gains (losses)		82			88			185			(142		)
			Net change in fair value of credit derivatives	90			103			214			(108		)
	Fair value gains (losses) on committed capital securities			23			(6		)	25			(15		)
	Fair value gains (losses) on FG VIEs			5			25			(2		)	182
	Bargain purchase gain and settlement of pre-existing relationship			214			—			214			—
	Other income (loss)			55			7			46			28
		Total revenues		695			353			1,064			548

Expenses:
	Loss and loss adjustment expenses			188			57			206			98
	Amortization of deferred acquisition costs			6			3			10			8
	Interest expense			26			20			51			40
	Other operating expenses			66			55			122			115
		Total expenses		286			135			389			261

Income (loss) before income taxes				409			218			675			287
	Provision (benefit) for income taxes			112			59			177			86
Net income (loss)				$	297		$	159		$	498		$	201

Earnings per share:
	Basic			$	1.97		$	0.89		$	3.25		$	1.12
	Diluted			$	1.96		$	0.89		$	3.23		$	1.11

Assured Guaranty Ltd.

Net Income (Loss) Reconciliation to Operating Income (1 of 2)

(dollars in millions)



	Three Months Ended										Three Months Ended
	June 30, 2015										June 30, 2014
	GAAP Income Statement Line Items As Reported			Less: Operating Income Adjustments				Non-GAAP Operating Income Components			GAAP Income Statement Line Items As Reported			Less: Operating Income Adjustments				Non-GAAP Operating Income Components
Revenues:
Net earned premiums	$	219		$	(5	)	(1)	$	224		$	136		$	(5	)	(1)	$	141
Net investment income	98			(1		)	(1)	99			96			(1		)	(1)	97
Net realized investment gains (losses)	(9		)	(9		)	(2)	0			(8		)	(8		)	(2)	0
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	8			8				—			15			15				—
Net unrealized gains (losses)	82			82				—			88			88				—
Credit derivative revenues				(35		)		35			—			(21		)		21
Net change in fair value of credit derivatives	90			55			(3)	35			103			82			(3)	21
Fair value gains (losses) on committed capital securities	23			23			(4)	—			(6		)	(6		)	(4)	—
Fair value gains (losses) on FG VIEs	5			5			(1)	—			25			25			(1)	—
Bargain purchase gain and settlement of pre-existing relationship	214			(35		)	(1)(3)	249			—			—				—
Other income (loss)	55			13			(1)(5)	42			7			6			(1)(5)	1
Total revenues	695			46				649			353			93				260

Expenses:
Loss and loss adjustment expenses:
Financial guaranty insurance	188			(1		)	(1)	189			57			(7		)	(1)	64
Credit derivatives	—			9			(3)	(9		)	—			18			(3)	(18		)
Amortization of deferred acquisition costs	6			0				6			3			—				3
Interest expense	26			—				26			20			—				20
Other operating expenses	66			1				65			55			—				55
Total expenses	286			9				277			135			11				124

Income (loss) before income taxes	409			37				372			218			82				136
Provision (benefit) for income taxes	112			18			(6)	94			59			24			(6)	35
Net income (loss)	$	297		$	19			$	278		$	159		$	58			$	101


1)	Include adjustments related to elimination of the effects of consolidating FG VIEs.


2)	Adjustments to eliminate realized gains (losses) on available-for-sale investments.


3)	Adjustments to eliminate non-economic fair value gains (losses) on credit derivatives and reclassification to revenues and loss expense.


4)	Adjustments to eliminate fair value gain (loss) on committed capital securities.


5)	Include adjustments related to elimination of foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves.


6)	Tax effect of the above adjustments.

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Assured Guaranty Ltd.

Net Income (Loss) Reconciliation to Operating Income (2 of 2)

(dollars in millions)



	Six Months Ended										Six Months Ended
	June 30, 2015										June 30, 2014
	GAAP Income Statement Line Items As Reported			Less: Operating Income Adjustments				Non-GAAP Operating Income Components			GAAP Income Statement Line Items As Reported			Less: Operating Income Adjustments				Non-GAAP Operating Income Components
Revenues:
Net earned premiums	$	361		$	(10	)	(1)	$	371		$	268		$	(22	)	(1)	$	290
Net investment income	199			(2		)	(1)	201			199			3			(1)	196
Net realized investment gains (losses)	7			7			(2)	—			(6		)	(8		)	(2)	2
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	29			29				—			34			34				—
Net unrealized gains (losses)	185			185				—			(142		)	(142		)		—
Credit derivative revenues	—			(59		)		59			—			(41		)		41
Net change in fair value of credit derivatives	214			155			(3)	59			(108		)	(149		)	(3)	41
Fair value gains (losses) on committed capital securities	25			25			(4)	—			(15		)	(15		)	(4)	—
Fair value gains (losses) on FG VIEs	(2		)	(2		)	(1)	—			182			182			(1)	—
Bargain purchase gain and settlement of pre-existing relationship	214			(35		)	(1)(3)	249			—			—				—
Other income (loss)	46			—			(1)(5)	46			28			—			(1)(5)	28
Total revenues	1,064			138				926			548			(9		)		557

Expenses:
Loss and loss adjustment expenses:
Financial guaranty insurance	206			(7		)	(1)	213			98			(6		)	(1)	104
Credit derivatives	—			21			(3)	(21		)	—			26			(3)	(26		)
Amortization of deferred acquisition costs	10			0				10			8			—				8
Interest expense	51			—				51			40			—				40
Other operating expenses	122			1				121			115			—				115
Total expenses	389			15				374			261			20				241

Income (loss) before income taxes	675			123				552			287			(29		)		316
Provision (benefit) for income taxes	177			43			(6)	134			86			3			(6)	83
Net income (loss)	$	498		$	80			$	418		$	201		$	(32	)		$	233


1)	Include adjustments related to elimination of the effects of consolidating FG VIEs.


2)	Adjustments to eliminate realized gains (losses) on available-for-sale investments.


3)	Adjustments to eliminate non-economic fair value gains (losses) on credit derivatives and reclassification to revenues and loss expense.


4)	Adjustments to eliminate fair value gain (loss) on committed capital securities.


5)	Include adjustments related to elimination of foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves.


6)	Tax effect of the above adjustments.

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Assured Guaranty Ltd.

Adjusted Book Value

(dollars in millions, except per share amounts)



	As of:
	June 30, 2015						December 31, 2014
	Total			Per Share			Total			Per Share
Reconciliation of shareholders' equity to adjusted book value:
Shareholders' equity	$	5,806		$	39.16		$	5,758		$	36.37
Less after-tax adjustments:
Effect of consolidating FG VIEs	(40		)	(0.27		)	(44		)	(0.28		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(447		)	(3.02		)	(527		)	(3.33		)
Fair value gains (losses) on committed capital securities	39			0.26			23			0.14
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	243			1.64			373			2.36
Operating shareholders' equity	6,011			40.55			5,933			37.48
After-tax adjustments:
Less: Deferred acquisition costs	150			1.01			156			0.99
Plus: Net present value of estimated net future credit derivative revenue	155			1.04			109			0.69
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	2,685			18.11			2,609			16.48
Adjusted book value	$	8,701		$	58.69		$	8,495		$	53.66

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Assured Guaranty Ltd.

Claims-Paying Resources

(dollars in millions)



	As of June 30, 2015
	Assured Guaranty Municipal Corp.		Assured Guaranty Corp.		Municipal Assurance Corp.		Assured Guaranty Re Ltd. ⁽¹⁰⁾		Eliminations⁽⁴⁾			Consolidated
Claims-paying resources
Policyholders' surplus	$	2,181	$	1,393	$	642	$	1,010	$	(897	)	$	4,329
Contingency reserve⁽¹⁾	1,548		1,008		321		—		(321		)	2,556
Qualified statutory capital	3,729		2,401		963		1,010		(1,218		)	6,885
Unearned premium reserve⁽¹⁾	1,670		744		521		836		(521		)	3,250
Loss and LAE reserves ^{(1) (2)}	520		116		—		323		—			959
Total policyholders' surplus and reserves	5,919		3,261		1,484		2,169		(1,739		)	11,094
Present value of installment premium⁽¹⁾	290		246		3		166		(3		)	702
Committed Capital Securities	200		200		—		—		—			400
Excess of loss reinsurance facility ⁽³⁾	450		450		450		—		(900		)	450
Total claims-paying resources (including proportionate MAC ownership for AGM and AGC)	6,859		4,157		1,937		2,335		(2,642		)	12,646
Adjustment for MAC ⁽⁵⁾	942		545		—		—		(1,487		)	—
Total claims-paying resources (excluding proportionate MAC ownership for AGM and AGC)	$	5,917	$	3,612	$	1,937	$	2,335	$	(1,155	)	$	12,646

Statutory net par outstanding ⁽⁶⁾	$	140,951	$	54,382	$	70,922	$	94,953	$	(1,993	)	$	359,215
Equity method adjustment ⁽⁷⁾	43,050		27,872		—		—		(70,922		)	—
Adjusted statutory net par outstanding ⁽¹⁾	$	184,001	$	82,254	$	70,922	$	94,953	$	(72,915	)	$	359,215

Net debt service outstanding ⁽⁶⁾	$	218,848	$	80,458	$	105,416	$	149,739	$	(3,891	)	$	550,570
Equity method adjustment ⁽⁷⁾	63,988		41,429		—		—		(105,417		)	—
Adjusted net debt service outstanding ⁽¹⁾	$	282,836	$	121,887	$	105,416	$	149,739	$	(109,308	)	$	550,570
Ratios:
Adjusted net par outstanding to qualified statutory capital	49:1		34:1		74:1		94:1					52:1
Capital ratio ⁽⁸⁾	76:1		51:1		109:1		148:1					80:1
Financial resources ratio ⁽⁹⁾	41:1		29:1		54:1		64:1					44:1

The numbers shown for Assured Guaranty Municipal Corp. (AGM) and Assured Guaranty Corp. (AGC) have been adjusted to include (i) their 100% share of their respective U.K. insurance subsidiaries and (ii) their indirect share of Municipal Assurance Corp. (MAC). AGM and AGC own 60.7% and 39.3%, respectively, of the outstanding stock of Municipal Assurance Holdings Inc., which owns 100% of the outstanding common stock of MAC. Amounts include financial guaranty insurance and credit derivatives.


2)	Reserves are reduced by approximately $0.2 billion for benefit related to representation and warranty recoverables.


3)	Represents an aggregate $450 million excess-of-loss reinsurance facility for the benefit of AGC, AGM and MAC, which became effective January 1, 2014. The facility terminates on January 1, 2016, unless AGC, AGM and MAC choose to extend it.

Eliminations are primarily for (i) intercompany surplus notes between AGM and AGC, and between AGM and MAC, and (ii) MAC amounts, whose proportionate share are included in AGM and AGC based on ownership percentages. Net par and net debt service outstanding eliminations relate to second-to-pay policies under which an Assured Guaranty insurance subsidiary guarantees an obligation already insured by another Assured Guaranty insurance subsidiary, and net par related to intercompany cessions from AGM and AGC to MAC.


5)	Represents adjustment for AGM's and AGC's interest and indirect ownership of MAC's total policyholders' surplus, unearned premium reserve, and loss reserves and present value of installment premium.

Net par outstanding and net debt service outstanding are presented on a statutory basis. Under statutory accounting, such amounts would be reduced both when an outstanding issue is legally defeased (i.e., an issuer has legally discharged its obligations with respect to a municipal security by satisfying conditions set forth in defeasance provisions contained in transaction documents and is no longer responsible for the payment of debt service with respect to such obligations) and when such issue is economically defeased (i.e., transaction documents for a municipal security do not contain defeasance provisions but the issuer establishes an escrow account with U.S. government securities in amounts sufficient to pay the refunded bonds when due; the refunded bonds are not considered paid and continue to be outstanding under the transaction documents and the issuer remains responsible to pay debt service when due to the extent monies on deposit in the escrow account are insufficient for such purpose).


7)	Equity method adjustment is an adjustment made to reflect AGM's and AGC's net exposure to MAC, as determined by their indirect equity ownership.


8)	The capital ratio is calculated by dividing adjusted net debt service outstanding by qualified statutory capital.


9)	The financial resources ratio is calculated by dividing adjusted net debt service outstanding by total claims-paying resources (including MAC adjustment for AGM and AGC).


10)	Assured Guaranty Re Ltd. (AG Re) numbers represent the Company's estimate of U.S. statutory accounting practices prescribed or permitted by insurance regulatory authorities.

Assured Guaranty Ltd.

New Business Production

(dollars in millions)



	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2015			2014		2015		2014
New business production analysis:
PVP:
Public finance - U.S.	$	25		$	16	$	38	$	39
Public finance - non-U.S.	—			—		—		7
Structured finance - U.S.	1			6		19		7
Structured finance - non-U.S.	—			5		5		5
Total PVP	$	26		27		$	62	$	58

Reconciliation of PVP to gross written premiums (GWP):

Total PVP	$	26		$	27	$	62	$	58
Less: PVP of non-financial guaranty insurance	—			—		6		—
PVP of financial guaranty insurance	26			27		56		58
Less: Financial guaranty installment premium PVP	1			11		18		21
Total: Financial guaranty upfront GWP	25			16		38		37
Plus: Installment GWP and other GAAP adjustments (1)	(3		)	1		16		10
Total GWP	$	22		17		54		47

Gross par written:
Public finance - U.S.	$	5,581		$	2,453	$	8,022	$	4,190
Public finance - non-U.S.	—			—		—		128
Structured finance - U.S.	—			5		261		9
Structured finance - non-U.S.	—			200		6		200
Total	$	5,581		$	2,658	$	8,289	$	4,527


1)	Includes present value of new business on installment policies plus GWP adjustment on existing installment policies due to changes in assumptions and any cancellations of assumed reinsurance contracts and other GAAP adjustments.

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Assured Guaranty Ltd.

Gross Par Written

(dollars in millions)

Gross Par Written by Asset Type



	Three Months Ended			Six Months Ended
	June 30, 2015			June 30, 2015
	Gross Par Written		Avg. Internal Rating	Gross Par Written		Avg. Internal Rating
Sector:
U.S. public finance
General obligation	$	3,613	A	$	4,944	A
Tax backed	1,011		A-	1,580		A-
Municipal utilities	534		A-	821		A-
Transportation	227		BBB	385		BBB
Higher education	196		A	292		A
Total U.S. public finance	5,581		A-	8,022		A-
Non-U.S. public finance:
Total non-U.S. public finance	—		—	—		—
Total public finance	$	5,581	A-	$	8,022	A-

U.S. structured finance:
Insurance securitization	$	—	—	$	250	AA
Other structure finance	—		—	11		A
Total U.S. structured finance	—		—	261		AA
Non-U.S. structured finance:
Other structured finance	—		—	6		AA-
Total non-U.S. structured finance	—		—	6		AA-
Total structured finance	$	—	—	$	267	AA

Total gross par written	$	5,581	A-	$	8,289	A-

Please refer to the Glossary for a description of internal ratings and sectors.

Assured Guaranty Ltd.

New Business Production by Quarter

(dollars in millions)



																Six Months
	1Q-14		2Q-14		3Q-14			4Q-14			1Q-15		2Q-15			2014		2015
PVP:
Public finance - U.S.	$	23	$	16	$	51		$	38		$	13	$	25		$	39	$	38
Public finance - non-U.S.	7		—		—			—			—		—			7		—
Structured finance - U.S.	1		6		1			16			18		1			7		19
Structured finance - non-U.S.	—		5		4			—			5		—			5		5
Total PVP	$	31	$	27	$	56		$	54		$	36	$	26		$	58	$	62

Reconciliation of PVP to GWP:

Total PVP	$	31	$	27	$	56		$	54		$	36	$	26		$	58	$	62
Less: PVP of non-financial guaranty insurance	—		—		—			—			6		—			—		6
PVP of financial guaranty insurance	31		27		56			54			30		26			58		56
Less: Financial guaranty installment premium PVP	10		11		4			17			17		1			21		18
Total: Financial guaranty upfront GWP	21		16		52			37			13		25			37		38
Plus: Installment GWP and other GAAP adjustments	9		1		(5		)	(27		)	19		(3		)	10		16
Total GWP	$	30	$	17	$	47		$	10		$	32	$	22		$	47	$	54

Gross par written:
Public finance - U.S.	$	1,737	$	2,453	$	4,018		$	4,067		$	2,441	$	5,581		$	4,190	$	8,022
Public finance - non-U.S.	128		—		—			—			—		—			128		—
Structured finance - U.S.	4		5		9			400			261		—			9		261
Structured finance - non-U.S.	—		200		150			—			6		—			200		6
Total	$	1,869	$	2,658	$	4,177		$	4,467		$	2,708	$	5,581		$	4,527	$	8,289

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Assured Guaranty Ltd.

Available-for-Sale Investment Portfolio and Cash

As of June 30, 2015

(dollars in millions)



			Amortized Cost		Pre-Tax Book Yield		After-Tax Book Yield		Fair Value		Annualized Investment Income ⁽¹⁾
Investment portfolio, available-for-sale:
Fixed maturity securities:
	Obligations of states and political subdivisions		$	5,012	3.87	%	3.59	%	$	5,204	$	194
	Insured obligations of state and political subdivisions⁽²⁾⁽⁴⁾		724		4.69	%	4.39	%	782		34
	U.S. Treasury securities and obligations of U.S. government agencies		294		1.84	%	1.30	%	303		5
	Agency obligations		165		4.33	%	3.58	%	183		7
	Corporate securities		1,415		3.69	%	2.91	%	1,442		52
	Mortgage-backed securities (MBS)⁽³⁾:
		Residential MBS (RMBS) ⁽⁴⁾	1,584		4.49	%	3.32	%	1,600		71
		Commercial MBS (CMBS)	588		3.56	%	2.92	%	601		21
	Asset-backed securities		416		3.26	%	2.26	%	431		14
	Foreign government securities		302		2.44	%	1.59	%	307		8
		Total fixed maturity securities	10,500		3.86	%	3.30	%	10,853		406
Short-term investments			828		0.03	%	0.02	%	828		0
Cash ⁽⁵⁾			75		—	%	—	%	75		—
		Total	$	11,403	3.58	%	3.06	%	$	11,756	$	406

Less: FG VIEs			265		4.71	%	3.06	%	265		13

		Total	$	11,138	3.55	%	3.06	%	$	11,491	$	393



Ratings⁽⁶⁾:			Fair Value		% of Portfolio
	U.S. Treasury securities and obligations of U.S. government agencies		$	303	2.8	%
	Agency obligations		183		1.7	%
	AAA/Aaa		1,338		12.3	%
	AA/Aa		5,784		53.3	%
	A/A		2,422		22.3	%
	BBB		45		0.4	%
	Below investment grade (BIG)⁽⁷⁾		749		6.9	%
	Not rated		29		0.3	%
		Total fixed maturity securities, available-for-sale	10,853		100.0	%

	Less: FG VIEs		271

		Total fixed maturity securities, available-for-sale	$	10,582


Duration of fixed maturity securities and short-term investments (in years):					5.2

Average ratings of fixed maturity securities and short-term investments					AA-


1)	Represents annualized investment income based on amortized cost and pre-tax book yields.


2)	Reflects obligations of state and local political subdivisions that have been insured by other financial guarantors. The underlying ratings of these bonds, after giving effect to the lower of the rating assigned by Standard & Poor's Ratings Services (S&P) or Moody's Investors Service, Inc. (Moody's), average A+. Includes fair value of $214 million insured by AGC and AGM.


3)	Includes fair value of $306 million in subprime RMBS, which has an average rating of BIG.


4)	Includes securities purchased or obtained as part of loss mitigation or other risk management strategies.


5)	Represents operating cash and is not included in yield calculations.


6)	Ratings are represented by the lower of the Moody's and S&P classifications except for bonds purchased for loss mitigation (loss mitigation bonds) or other risk management strategies which use internal ratings classifications.


7)	Includes below investment grade securities that were purchased or obtained as part of loss mitigation or other risk management strategies of $1,511 million in par with carrying value of $737 million.

Assured Guaranty Ltd.

Estimated Net Exposure Amortization⁽¹⁾ and Estimated Future Net Premium

and Credit Derivative Revenues

(dollars in millions)



						Financial Guaranty Insurance ⁽²⁾
		Estimated Net Debt Service Amortization		Estimated Ending Net Debt Service Outstanding		Expected PV Net Earned Premiums		Accretion of Discount		Future Net Premiums Earned ⁽³⁾		Future Credit Derivative Revenues ⁽⁴⁾		Total

2015 (as of June 30)				$	584,429
2015 Q3		$	16,780	567,649		$	108	$	5	$	113	$	31	$	144
2015 Q4		13,125		554,524		105		5		110		31		141
2016		50,201		504,323		400		19		419		118		537
2017		50,248		454,075		349		18		367		30		397
2018		32,920		421,155		314		17		331		14		345
2019		29,497		391,658		285		15		300		13		313

2015-2019		192,771		391,658		1,561		79		1,640		237		1,877
2020-2024		130,553		261,105		1,108		60		1,168		55		1,223
2025-2029		103,574		157,531		704		37		741		38		779
2030-2034		73,840		83,691		425		21		446		32		478
After 2034		83,691		—		350		15		365		22		387
	Total	$	584,429			$	4,148	$	212	$	4,360	$	384	$	4,744


1)	Represents the future expected amortization of current debt service outstanding (principal and interest), assuming no advance refundings, as of June 30, 2015. Actual amortization differs from expected maturities because borrowers may have the right to call or prepay guaranteed obligations and because of management's assumptions on structured finance amortization.


2)	See page 14 for ‘‘Present Value of Financial Guaranty Insurance Net Expected Loss to be Expensed.’’


3)	Includes $130 million in future net premiums earned related to FG VIEs.


4)	Excludes contracts with credit impairment.

Assured Guaranty Ltd.

Expected Amortization of Net Par Outstanding

(dollars in millions)

Structured Finance



		Estimated Net Par Amortization
		U.S. and Non-U.S. Pooled Corporate		U.S. RMBS		Financial Products			Other Structured Finance		Total		Estimated Ending Net Par Outstanding

2015 (as of June 30)													$	45,883
2015 Q3		$	1,385	$	402	$	103		$	579	$	2,469	43,414
2015 Q4		1,017		365		6			635		2,023		41,391
2016		5,747		1,357		140			1,198		8,442		32,949
2017		10,704		1,199		56			1,161		13,120		19,829
2018		1,093		1,011		(22		)	698		2,780		17,049
2019		568		1,016		9			671		2,264		14,785

2015-2019		20,514		5,350		292			4,942		31,098		14,785
2020-2024		687		2,317		140			2,609		5,753		9,032
2025-2029		480		669		524			1,210		2,883		6,149
2030-2034		741		156		792			759		2,448		3,701
After 2034		1,672		436		266			1,327		3,701		—
	Total structured finance	$	24,094	$	8,928	$	2,014		$	10,847	$	45,883

Public Finance



		Estimated Net Par Amortization		Estimated Ending Net Par Outstanding

2015 (as of June 30)				$	344,501
2015 Q3		$	10,175	334,326
2015 Q4		6,894		327,432
2016		25,897		301,535
2017		22,638		278,897
2018		16,680		262,217
2019		14,551		247,666

2015-2019		96,835		247,666
2020-2024		71,904		175,762
2025-2029		64,830		110,932
2030-2034		49,751		61,181
After 2034		61,181		—
	Total public finance	$	344,501

Net par outstanding (end of period)



		1Q-14		2Q-14		3Q-14		4Q-14		1Q-15		2Q-15
Public finance - U.S.		$	346,428	$	338,956	$	329,225	$	322,123	$	313,444	$	312,182
Public finance - non-U.S.		34,826		35,408		33,487		31,359		29,619		32,319
Structured finance - U.S.		55,393		51,442		44,874		41,171		38,430		38,906
Structured finance - non-U.S.		12,978		11,770		10,429		9,076		7,606		6,977
	Net par outstanding	449,625		437,576		418,015		403,729		389,099		390,384

Please refer to the Glossary for an explanation of the presentation of net par outstanding and of the various sectors.

Assured Guaranty Ltd.

Present Value (PV) of Net Expected Loss to be Expensed

As of June 30, 2015

(dollars in millions)



		Net Expected Loss to be Expensed ⁽¹⁾
		Operating⁽²⁾		GAAP⁽²⁾

2015 Q3		$	15	$	12
2015 Q4		16		12
2016		129		40
2017		46		33
2018		38		30
2019		35		29

2015-2019		279		156
2020-2024		124		106
2025-2029		86		77
2030-2034		64		55
After 2034		34		27
	Total expected PV of net expected loss to be expensed	587		421
Discount		531		494
	Total expected future loss and LAE	$	1,118	$	915


1)	The present value of net expected loss to be paid is discounted using weighted-average risk free rates ranging from 0.0% to 3.37% for U.S. dollar denominated obligations.


2)	Net expected loss to be expensed for GAAP reported income is different than operating income, a non-GAAP financial measure, by the amount related to consolidated FG VIEs and credit derivatives.

Assured Guaranty Ltd.

Financial Guaranty Profile (1 of 4)

(dollars in millions)

Net Par Outstanding and Average Rating by Asset Type



			June 30, 2015			December 31, 2014
			Net Par Outstanding		Avg. Internal Rating	Net Par Outstanding		Avg. Internal Rating
U.S. public finance:
	General obligation		$	135,967	A	$	140,276	A
	Tax backed		60,982		A	62,525		A
	Municipal utilities		49,567		A	52,090		A
	Transportation		26,070		A	27,823		A
	Healthcare		15,886		A	14,848		A
	Higher education		12,673		A	13,099		A
	Infrastructure finance		4,312		BBB	4,181		BBB
	Housing		2,373		A	2,779		A+
	Investor-owned utilities		951		A-	944		A-
	Other public finance		3,401		A	3,558		A
		Total U.S. public finance	312,182		A	322,123		A
Non-U.S. public finance:
	Infrastructure finance		13,111		BBB	12,808		BBB
	Regulated utilities		11,651		BBB+	10,914		BBB+
	Pooled infrastructure		2,368		AA	2,420		AA
	Other public finance		5,189		A	5,217		A
		Total non-U.S. public finance	32,319		BBB+	31,359		BBB+
Total public finance			$	344,501	A	$	353,482	A

U.S. structured finance:
	Pooled corporate obligations		$	19,456	AA+	$	20,646	AAA
	RMBS		8,928		BBB-	9,417		BBB-
	Insurance securitizations		3,383		A-	3,433		A-
	Consumer receivables		2,129		A-	2,099		BBB+
	Financial products		2,014		AA-	2,276		AA-
	CMBS and other commercial real estate related exposures		1,749		AA	1,957		AAA
	Commercial receivables		488		BBB+	560		BBB+
	Structured credit		71		BBB	69		BB
	Other structured finance		688		AA	714		AA
		Total U.S. structured finance	38,906		A+	41,171		AA-

Non-U.S. structured finance:
	Pooled corporate obligations		4,638		AA	6,604		AA+
	Commercial receivables		871		BBB	944		BBB
	RMBS		745		A	794		A
	Structured credit		7		BBB+	9		BBB+
	Other structured finance		716		AA	725		AA
		Total non-U.S. structured finance	6,977		AA-	9,076		AA
Total structured finance			$	45,883	AA-	$	50,247	AA-

Total			$	390,384	A	$	403,729	A

Please refer to the Glossary for an explanation of the presentation of net par outstanding and in the Company's internal rating approach, and of the various sectors.

Assured Guaranty Ltd.

Financial Guaranty Profile (2 of 4)

As of June 30, 2015

(dollars in millions)

Distribution by Ratings of Financial Guaranty Portfolio



		Public Finance - U.S.				Public Finance - Non-U.S.				Structured Finance - U.S.				Structured Finance - Non-U.S.				Total
Ratings:		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%		Net Par Outstanding		%
AAA		$	3,280	1.1	%	$	695	2.1	%	$	17,619	45.3	%	$	3,715	53.2	%	$	25,309	6.5	%
AA		80,550		25.8		2,735		8.5		8,628		22.2		395		5.7		92,308		23.6
A		171,633		55.0		7,627		23.6		2,684		6.9		378		5.4		182,322		46.7
BBB		46,822		15.0		19,651		60.8		1,797		4.6		1,771		25.4		70,041		17.9
BIG		9,897		3.1		1,611		5.0		8,178		21.0		718		10.3		20,404		5.3
	Net Par Outstanding (1)	$	312,182	100.0	%	$	32,319	100.0	%	$	38,906	100.0	%	$	6,977	100.0	%	$	390,384	100.0	%


1)	Excludes $1.2 billion of loss mitigation securities insured and held by the Company as of June 30, 2015, which are primarily in the BIG category. The June 30, 2015 amounts include 13.1 billion of net par acquired from Radian Asset.

Please refer to the Glossary for an explanation of the presentation of net par outstanding and in the Company's internal rating approach, and of the various sectors.

Assured Guaranty Ltd.

Financial Guaranty Profile (3 of 4)

As of June 30, 2015

(dollars in millions)

Geographic Distribution of Financial Guaranty Portfolio



			Net Par Outstanding		% of Total
U.S.:
U.S. public finance:
	California		$	50,588	13.0	%
	Pennsylvania		25,902		6.6
	Texas		24,946		6.4
	New York		24,329		6.2
	Illinois		22,578		5.8
	Florida		18,639		4.8
	New Jersey		14,211		3.6
	Michigan		11,510		2.9
	Ohio		7,498		1.9
	Georgia		7,281		1.9
	Other states and U.S. territories		104,700		26.8
		Total public finance	312,182		79.9
U.S. structured finance:			38,906		10.0
		Total U.S.	351,088		89.9

Non-U.S.:
	United Kingdom		20,312		5.2
	Australia		4,302		1.1
	Canada		3,384		0.9
	France		2,540		0.7
	Italy		1,385		0.4
	Other		7,373		1.8
		Total non-U.S.	39,296		10.1

Total net par outstanding			$	390,384	100.0	%

Please refer to the Glossary for an explanation of the presentation of net par outstanding and of the various sectors.

Assured Guaranty Ltd.

Financial Guaranty Profile (4 of 4)

As of June 30, 2015

(dollars in millions)

Net Direct Economic Exposure to Selected European Countries



			Hungary		Italy		Portugal		Spain		Total
Sovereign and sub-sovereign exposure:
	Non-infrastructure public finance		$	—	$	813	$	90	$	257	$	1,160
	Infrastructure finance		291		11		11		126		439
		Total sovereign and sub-sovereign exposure	291		824		101		383		1,599
Non-sovereign exposure:
	Regulated utilities		—		226		—		—		226
	RMBS and other structured finance		175		256		—		13		444
		Total non-sovereign exposure	175		482		—		13		670
		Total	$	466	$	1,306	$	101	$	396	$	2,269

		Total BIG	$	397	$	—	$	101	$	396	$	894

Note: While the Company’s exposures are shown in U.S. dollars, the obligations the Company insures are in various currencies, primarily Euros. One of the residential mortgage-backed securities included in the table above includes residential mortgages in both Italy and Germany, and only the portion of the transaction equal to the portion of the original mortgage pool in Italian mortgages is shown in the table.

Please refer to the Glossary for an explanation of the Company's net par outstanding, internal rating approach and of the various sectors.

Assured Guaranty Ltd.

Exposure to Puerto Rico (1 of 3)

As of June 30, 2015

(dollars in millions)

Gross Par and Gross Debt Service Outstanding of Puerto Rico



	Gross Par Outstanding		Net Par Outstanding		Gross Debt Service Outstanding		Net Debt Service Outstanding
Previously Subject to the Voided Puerto Rico Public Corporation Debt Enforcement and Recovery Act (the "Recovery Act")⁽¹⁾	$	3,135	$	2,705	$	5,408	$	4,736
Not Previously Subject to the Voided Recovery Act	3,087		2,725		4,852		4,376
Total	$	6,222	$	5,430	$	10,260	$	9,112

1) On February 6, 2015, the U.S. District Court for the District of Puerto Rico ruled that the Recovery Act is preempted by the Federal Bankruptcy Code and is therefore void, and on July 6, 2015, the U.S. Court of Appeals for the First Circuit upheld that ruling.

Net Exposure to Puerto Rico by Risk



	Net Par Outstanding
	AGM Consolidated		AGC Consolidated		AG Re Consolidated		Eliminations (1)			Total Net Par Outstanding (2)(3)(4)		Gross Par Outstanding		Internal Rating
Exposures Previously Subject to the Voided Recovery Act:
Puerto Rico Highways and Transportation Authority (Transportation revenue)	$	303	$	482	$	229	$	(80	)	$	934	$	961	CCC-
Puerto Rico Electric Power Authority	488		74		256		—			818		1,015		CC
Puerto Rico Aqueduct and Sewer Authority	—		307		96		—			403		403		CCC
Puerto Rico Highways and Transportation Authority (Highway revenue)	221		103		52		—			376		582		CCC
Puerto Rico Convention Center District Authority	—		87		87		—			174		174		CCC-
Total	1,012		1,053		720		(80		)	2,705		3,135

Exposures Not Previously Subject to the Voided Recovery Act:
Commonwealth of Puerto Rico - General Obligation Bonds	754		484		506		—			1,744		1,889		CCC
Puerto Rico Municipal Finance Agency	237		75		132		—			444		656		CCC-
Puerto Rico Sales Tax Financing Corporation	261		—		8		—			269		269		CCC+
Puerto Rico Public Buildings Authority	18		157		41		—			216		221		CCC
Government Development Bank for Puerto Rico	—		33		—		—			33		33		CCC
Puerto Rico Infrastructure Financing Authority	—		10		8		—			18		18		CCC-
University of Puerto Rico	—		1		—		—			1		1		CCC-
Total	1,270		760		695		—			2,725		3,087
Total net exposure to Puerto Rico	$	2,282	$	1,813	$	1,415	$	(80	)	$	5,430	$	6,222


1)	Net par outstanding eliminations relate to second-to-pay policies under which an Assured Guaranty insurance subsidiary guarantees an obligation already insured by another Assured Guaranty insurance subsidiary.


2)	Reported figures reflect the impact of the Radian Asset acquisition, which increased net par by $422 million; and a commutation of previously ceded Puerto Rico exposures.


3)	In July 2015, various Puerto Rico issuers made scheduled principal payments, reducing Assured Guaranty’s aggregate net par exposure by $293 million. Of that amount, $124 million related to Commonwealth General Obligation bonds and $75 million related to Puerto Rico Electric Power Authority revenue bonds.

Includes exposure to Capital Appreciation Bonds with a current aggregate net par outstanding of $36 million and a fully accreted net par at maturity of $72 million. Of these amounts, current net par of $17 million and fully accreted net par at maturity of $50 million relate to the Puerto Rico Sales Tax Financing Corporation, current net par of $14 million and fully accreted net par at maturity of $15 million relate to the Puerto Rico Highway and Transportation Authority, and current net par of $4 million and fully accreted net par at maturity of $5 million relate to the Commonwealth General Obligation Bonds.

Assured Guaranty Ltd.

Exposure to Puerto Rico (2 of 3)

As of June 30, 2015

(dollars in millions)

Amortization Schedule of Net Par Outstanding of Puerto Rico



	Scheduled Net Par Amortization (1)(2)(3)
	2015 (3Q)			2015 (4Q)		2016			2017			2018			2019			2020			2021			2022			2023		2024		2025 -2029			2030 -2034		2035 -2039			2040 -2044		2045 -2047		Total

Exposures Previously Subject to the Voided Recovery Act:
Puerto Rico Highways and Transportation Authority (Transportation revenue)	$	25		$	0	$	32		$	36		$	42		$	28		$	23		$	18		$	19		$	21	$	1	$	148		$	166	$	293		$	82	$	—	$	934
Puerto Rico Electric Power Authority	75			0		20			5			4			25			42			22			22			81		78		319			121		4			—		—		818
Puerto Rico Aqueduct and Sewer Authority	14			—		15			—			—			—			—			—			—			—		2		109			—		2			15		246		403
Puerto Rico Highways and Transportation Authority (Highway revenue)	6			—		20			10			10			21			22			26			6			8		8		24			142		73			—		—		376
Puerto Rico Convention Center District Authority	11			—		11			—			—			—			—			—			—			—		—		19			76		57			—		—		174
Total	131			0		98			51			56			74			87			66			47			110		89		619			505		429			97		246		2,705

Exposures Not Previously Subject to the Voided Recovery Act:
Commonwealth of Puerto Rico - General Obligation Bonds	124			0		142			95			75			82			137			16			37			15		73		286			397		265			—		—		1,744
Puerto Rico Municipal Finance Agency	57			—		55			47			47			44			37			33			33			16		12		59			4		—			—		—		444
Puerto Rico Sales Tax Financing Corporation	(1		)	0		(1		)	(1		)	(1		)	(1		)	(1		)	(2		)	(2		)	1		0		(10		)	34		(1		)	255		—		269
Puerto Rico Public Buildings Authority	27			—		8			30			—			5			10			13			0			7		0		60			39		17			—		—		216
Government Development Bank for Puerto Rico	—			33		—			—			—			—			—			—			—			—		—		—			—		—			—		—		33
Puerto Rico Infrastructure Financing Authority	—			—		—			—			2			—			—			—			—			2		—		—			—		2			12		—		18
University of Puerto Rico	0			—		0			0			0			0			0			0			0			0		0		0			1		—			—		—		1
Total	207			33		204			171			123			130			183			60			68			41		85		395			475		283			267		—		2,725
Total net par for Puerto Rico	$	338		$	33	$	302		$	222		$	179		$	204		$	270		$	126		$	115		$	151	$	174	$	1,014		$	980	$	712		$	364	$	246	$	5,430


1)	Reported figures reflect the impact of the Radian Asset acquisition, which increased net par by $422 million; and a commutation of previously ceded Puerto Rico exposures.


2)	In July 2015, various Puerto Rico issuers made scheduled principal payments, reducing Assured Guaranty’s aggregate net par exposure by $293 million. Of that amount, $124 million related to Commonwealth General Obligation bonds and $75 million related to Puerto Rico Electric Power Authority revenue bonds.

Assured Guaranty Ltd.

Exposure to Puerto Rico (3 of 3)

As of June 30, 2015

(dollars in millions)

Amortization Schedule of Net Debt Service Outstanding of Puerto Rico



	Scheduled Net Debt Service Amortization (1)(2)(3)
	2015 (3Q)		2015 (4Q)		2016		2017		2018		2019		2020		2021		2022		2023		2024		2025 -2029		2030 -2034		2035 -2039		2040 -2044		2045 -2047		Total

Exposures Previously Subject to the Voided Recovery Act:
Puerto Rico Highways and Transportation Authority (Transportation revenue)	$	49	$	—	$	80	$	82	$	86	$	69	$	63	$	57	$	57	$	58	$	37	$	314	$	294	$	354	$	89	$	—	$	1,689
Puerto Rico Electric Power Authority	92		2		55		38		37		58		74		52		50		109		102		389		136		5		—		—		1,199
Puerto Rico Aqueduct and Sewer Authority	25		—		35		19		19		19		19		19		19		19		21		191		68		70		82		272		897
Puerto Rico Highways and Transportation Authority (Highway revenue)	17		—		40		29		29		39		39		42		20		21		20		86		186		78		—		—		646
Puerto Rico Convention Center District Authority	15		—		19		7		7		7		7		7		7		7		7		52		103		60		—		—		305
Total	198		2		229		175		178		192		202		177		153		214		187		1,032		787		567		171		272		4,736

Exposures Not Previously Subject to the Voided Recovery Act:
Commonwealth of Puerto Rico - General Obligation Bonds	168		1		226		172		146		150		201		73		93		69		127		506		547		295		—		—		2,774
Puerto Rico Municipal Finance Agency	68		—		74		64		62		56		47		40		39		21		16		68		4		—		—		—		559
Puerto Rico Sales Tax Financing Corporation	6		—		13		13		13		13		13		13		13		16		15		64		107		64		283		—		646
Puerto Rico Public Buildings Authority	33		—		18		39		8		12		18		20		6		14		6		82		50		18		—		—		324
Government Development Bank for Puerto Rico	1		34		—		—		—		—		—		—		—		—		—		—		—		—		—		—		35
Puerto Rico Infrastructure Financing Authority	0		—		1		1		3		1		1		1		1		3		1		3		3		5		13		—		37
University of Puerto Rico	0		0		0		0		0		0		0		0		0		0		0		0		1		—		—		—		1
Total	276		35		332		289		232		232		280		147		152		123		165		723		712		382		296		—		4,376
Total net debt service for Puerto Rico	$	474	$	37	$	561	$	464	$	410	$	424	$	482	$	324	$	305	$	337	$	352	$	1,755	$	1,499	$	949	$	467	$	272	$	9,112


1)	Reported figures reflect the impact of the Radian Asset acquisition, which increased net debt service outstanding by $670 million; and a commutation of previously ceded Puerto Rico exposures.


2)	In July 2015, various Puerto Rico issuers made scheduled debt service payments, reducing Assured Guaranty’s aggregate net debt service exposure by $409 million. Of that amount, $166 million related to Commonwealth General Obligation bonds and $92 million related to Puerto Rico Electric Power Authority revenue bonds.

Assured Guaranty Ltd.

Direct Pooled Corporate Obligations Profile

As of June 30, 2015

(dollars in millions)

Distribution of Direct Pooled Corporate Obligations by Ratings



			Net Par Outstanding		% of Total		Avg. Initial Credit Enhancement		Avg. Current Credit Enhancement
Ratings:
	AAA		$	16,998	71.1	%	25.9	%	29.4	%
	AA		2,781		11.6		43.7		46.1
	A		1,138		4.8		47.6		48.0
	BBB		1,323		5.5		41.5		35.9
	BIG		1,682		7.0		35.8		20.3
		Total exposures	$	23,922	100.0	%	30.3	%	32.1	%

Distribution of Direct Pooled Corporate Obligations by Asset Class



			Net Par Outstanding		% of Total		Avg. Initial Credit Enhancement		Avg. Current Credit Enhancement		Avg. Rating
Asset class:
	CBOs/CLOs		$	10,130	42.3	%	30.5	%	37.7	%	AAA
	Synthetic investment grade pooled corporates		7,118		29.8		21.7		19.3		AAA
	Market value CDOs of corporates		1,113		4.7		17.0		15.1		AAA
	Trust preferred
		Banks and insurance	2,981		12.5		45.6		44.7		A
		U.S. mortgage and real estate investment trusts	1,306		5.5		49.0		43.1		BBB-
		European mortgage and real estate investment trusts	563		2.3		36.5		32.6		BBB-
	Other pooled corporates		711		2.9		—		—		BBB
		Total exposures	$	23,922	100.0	%	30.3	%	32.1	%	AA+

Please refer to the Glossary for an explanation of internal ratings, performance indicators and sectors.

Assured Guaranty Ltd.

U.S. RMBS Profile

As of June 30, 2015

(dollars in millions)

Distribution of Consolidated U.S. RMBS by Rating and Type of Exposure



Ratings:			Prime First Lien		Closed-End Second Lien		HELOC		Alt-A First Lien		Option ARMs		Subprime First Lien		Total Net Par Outstanding
	AAA		$	10	$	—	$	0	$	294	$	47	$	1,409	$	1,760
	AA		108		77		51		341		108		805		1,491
	A		6		0		—		—		18		39		64
	BBB		38		—		57		13		4		109		221
	BIG		336		131		1,459		1,750		160		1,557		5,393
		Total exposures	$	498	$	208	$	1,567	$	2,397	$	338	$	3,919	$	8,928

Distribution of U.S. RMBS by Year Insured and Type of Exposure



Year insured:	Prime First Lien		Closed-End Second Lien		HELOC		Alt-A First Lien		Option ARMs		Subprime First Lien		Total Net Par Outstanding
2004 and prior	$	64	$	0	$	132	$	62	$	19	$	1,122	$	1,400
2005	143		—		396		491		39		189		1,258
2006	92		52		459		275		43		842		1,762
2007	199		156		581		1,189		201		1,697		4,023
2008	—		—		—		379		36		70		485
Total exposures	$	498	$	208	$	1,567	$	2,397	$	338	$	3,919	$	8,928

Please refer to the Glossary for an explanation of the Company's presentation of net par outstanding and a description of performance indicators and sectors.

Assured Guaranty Ltd.

Direct U.S. Commercial Real Estate Profile

As of June 30, 2015

(dollars in millions)

Distribution of Direct U.S. CMBS Insured January 1, 2005 or Later by Exposure Type, Internal Rating, Average Pool Factor, Subordination, Cumulative Losses and 60+ Day Delinquencies

U.S. CMBS



Rating:			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	AAA		$	1,153	58.5	%	46.8	%	5.3	%	7.6	%	117
	AA		—		—		—		—		—		—
	A		—		—		—		—		—		—
	BBB		—		—		—		—		—		—
	BIG		—		—		—		—		—		—
		Total exposures	$	1,153	58.5	%	46.8	%	5.3	%	7.6	%	$	117

CDOs of U.S. Commercial Real Estate⁽¹⁾



	Net Par Outstanding		Avg. Initial Credit Enhancement		Avg. Current Credit Enhancement
CDOs of commercial real estate	$	162	53.4	%	62.2	%
CDOs of CMBS	430		7.0	%	7.0	%
Total Exposure	$	592	19.7	%	22.1	%


1)	Represents other U.S. Commercial Real Estate not included in the table above.

Please refer to the Glossary for a description of net par outstanding, performance indicators and sectors.

Assured Guaranty Ltd.

Below Investment Grade Exposures (1 of 5)

(dollars in millions)

BIG Exposures by Asset Exposure Type



			BIG Net Par Outstanding
			June 30, 2015		December 31, 2014
U.S. public finance:
	General obligation		$	3,371	$	2,537
	Tax backed		2,664		2,033
	Infrastructure finance		1,673		1,795
	Municipal utilities		1,343		1,236
	Healthcare		376		57
	Higher education		268		14
	Transportation		86		75
	Housing		19		2
	Other public finance		97		101
		Total U.S. public finance	9,897		7,850
Non-U.S. public finance:
	Infrastructure finance		1,264		1,074
	Other public finance		347		330
		Total non-U.S. public finance	1,611		1,404
Total public finance			$	11,508	$	9,254

U.S. structured finance:
	RMBS		$	5,393	$	5,643
	Pooled corporate obligations		1,233		1,333
	Insurance securitizations		598		598
	CMBS		430		—
	Consumer receivables		320		356
	Commercial receivables		87		94
	Structured credit		8		69
	Other structured finance		109		93
		Total U.S. structured finance	8,178		8,186
Non-U.S. structured finance:
	Pooled corporate obligations		543		623
	RMBS		106		112
	Commercial receivables		69		72
		Total non-U.S. structured finance	718		807
Total structured finance			$	8,896	$	8,993
Total BIG net par outstanding			$	20,404	$	18,247

Please refer to the Glossary for an explanation of the Company's presentation of net par outstanding and a description of various sectors.

Assured Guaranty Ltd.

Below Investment Grade Exposures (2 of 5)

(dollars in millions)

Net Par Outstanding by BIG Category⁽¹⁾



				Financial Guaranty Insurance and Credit Derivatives Surveillance Categories
				June 30, 2015		December 31, 2014
Category 1
	U.S. public finance			$	7,622	$	6,577
	Non-U.S. public finance			952		1,402
	U.S. structured finance			3,475		3,124
	Non-U.S. structured finance			673		762
		Total Category 1		12,722		11,865
Category 2
	U.S. public finance			2,132		1,156
	Non-U.S. public finance			659		2
	U.S. structured finance			1,276		1,486
	Non-U.S. structured finance			45		45
		Total Category 2		4,112		2,689
Category 3
	U.S. public finance			143		117
	Non-U.S. public finance			—		—
	U.S. structured finance			3,427		3,576
	Non-U.S. structured finance			—		—
		Total Category 3		3,570		3,693
			BIG Total	$	20,404	$	18,247

Assured Guaranty's surveillance department is responsible for monitoring our portfolio of credits and maintains a list of BIG credits. BIG Category 1: Below-investment-grade transactions showing sufficient deterioration to make future losses possible, but for which none are currently expected. BIG Category 2: Below-investment-grade transactions for which future losses are expected but for which no claims (other than liquidity claims which is a claim that the Company expects to be reimbursed within one year) have yet been paid. BIG Category 3: Below-investment-grade transactions for which future losses are expected and on which claims (other than liquidity claims) have been paid.

Please refer to the Glossary for an explanation of the Company's internal rating approach, presentation of net par outstanding and a description of various sectors.

Assured Guaranty Ltd.

Below Investment Grade Exposures (3 of 5)

As of June 30, 2015

(dollars in millions)

Public Finance BIG Exposures with Revenue Sources Greater Than $50 Million



			Net Par Outstanding		Internal Rating
Name or description
U.S. public finance:
		Puerto Rico General Obligation, Appropriations and Guarantees of the Commonwealth	$	2,011	CCC
		Puerto Rico Highway and Transportation Authority	1,310		CCC-
		Skyway Concession Company LLC	1,269		BB
		Puerto Rico Electric Power Authority	818		CC
		Puerto Rico Municipal Finance Agency	444		CCC-
		Puerto Rico Aqueduct & Sewer Authority	403		CCC
		Louisville Arena Authority Inc.	337		BB
		Puerto Rico Sales Tax Financing Corporation	269		CCC+
		Lackawanna County, Pennsylvania	177		BB-
		Puerto Rico Convention Center District Authority	174		CCC-
		Woonsocket (City of), Rhode Island	143		BB
		Stockton City, California	117		D
		Wayne County, Michigan	101		BB-
		Ebert Metropolitan District, CO Limited Tax General Obligation Bonds	87		B+
		City of Atlantic City, Atlantic County, New Jersey General Obligation Bonds	87		BB
		Orlando Tourist Development Tax - Florida	85		B
		Xenia Rural Water District, Iowa	77		B
		Knox Hills, LLC (Certificates of Participation; Fort Knox Military Housing Privatization Project, Class 1-A and Class 1-B)	65		B
		Pennsylvania Economic Development Financing Authority (Capitol Region Parking System)	60		BB
		Emerson Hospital, Massachusetts	58		BB+
		Robert Wood Johnson Health Care Corp at Hamilton	54		B+
		Southlands Metropolitan District No. 1, Colorado	54		BB
		Pacific Lutheran University, Washington	53		BB+
		University of the Arts, Pennsylvania Pennsylvania Higher Educational Facilities Authority	53		BB
		Stockton Public Financing Authority, California	50		B+
	Total		$	8,356

Non-U.S. public finance:
		Reliance Rail Finance Pty. Limited	$	657	BB
		M6 Duna Autopalya Koncesszios Zartkoruen Mukodo Reszvenytarsasag	291		BB-
		Valencia Fair	248		BB-
		Autovia de la Mancha, S.A.	120		BB-
		CountyRoute (A130) plc	119		BB-
		Metropolitano de Porto Lease and Sublease of Railroad Equipment	56		B+
		Alte Liebe I Limited (Wind Farm)	54		BB
	Total		$	1,545
Total			$	9,901

Please refer to the Glossary for an explanation of the Company's internal rating approach, presentation of net par outstanding and a description of various sectors.

Assured Guaranty Ltd.

Below Investment Grade Exposures (4 of 5)

As of June 30, 2015

(dollars in millions)

Structured Finance BIG Exposures Greater Than $50 Million



	BIG Net Par Outstanding		Internal Rating	Current Credit Enhancement	60+ Day Delinquencies
Name or description
U.S. structured finance:
RMBS:
Option One 2007-FXD2	$	288	CCC	0.0%	21.0%
Deutsche Alt-A Securities Mortgage Loan 2007-2	268		BB	0.0%	22.6%
MABS 2007-NCW	250		CCC	4.2%	44.1%
Countrywide HELOC 2006-I	248		BB	0.0%	2.5%
Private Residential Mortgage Transaction	211		CCC	11.5%	22.3%
Nomura Asset Accept. Corp. 2007-1	201		CCC	0.0%	31.2%
MortgageIT Securities Corp. Mortgage Loan 2007-2	199		BB	0.0%	16.0%
Soundview 2007-WMC1	172		CCC	—%	47.1%
Countrywide Home Equity Loan Trust 2007-D	153		B	0.0%	2.8%
Countrywide HELOC 2005-D	148		B	0.0%	3.6%
Countrywide Home Equity Loan Trust 2005-J	143		BB	0.0%	3.3%
New Century 2005-A	136		CCC	9.2%	24.0%
Countrywide HELOC 2006-F	134		BB	0.0%	4.7%
Private Residential Mortgage Transaction	124		CCC	5.8%	22.2%
Countrywide HELOC 2007-A	119		BB	0.0%	2.6%
Countrywide HELOC 2007-B	118		BB	0.0%	2.7%
Deutsche Alt-A Securities Mortgage Loan 2007-2	118		BB	0.0%	22.6%
CSAB 2006-3	104		CCC	0.0%	41.4%
GMACM 2004-HE3	100		CCC	0.0%	5.2%
IndyMac 2007-H1 HELOC	98		BB	0.0%	2.4%
Soundview Home Loan Trust 2008-1	70		CCC	7.9%	25.2%
Deutsche Alt-A Securities Mortgage Loan 2007-2	65		BB	0.0%	22.6%
Countrywide HELOC 2005-C	65		CCC	0.0%	7.0%
IMPAC CMB Trust Series 2007-A Class M-1	59		BB	9.7%	17.6%
MASTR Asset-Backed Securities Trust 2005-NC2	54		CCC	—%	20.5%
CSAB 2006-2	53		CCC	0.0%	37.5%
Terwin Mortgage Trust 2005-16HE	52		CCC	—%	20.1%
Total RMBS	$	3,750

Please refer to the Glossary for the Company's internal rating approach, presentation of net par outstanding and a description of performance indicators and sectors.

Assured Guaranty Ltd.

Below Investment Grade Exposures (5 of 5)

As of June 30, 2015

(dollars in millions)

Structured Finance BIG Exposures Greater Than $50 Million (continued)



	BIG Net Par Outstanding		Internal Rating	Current Credit Enhancement
Name or description
U.S. structured finance:
Non-RMBS:
Aphex Capital NSCR 2006-2 LTD	$	430	BB	7.0%
Orkney Re II, Plc	423		CCC	N/A
Zohar II 2005-1 Limited CDO	368		B-	12.6%
Taberna Preferred Funding III, Ltd.	220		B	29.0%
ALESCO Preferred Funding XVI, Ltd.	215		BB	18.6%
Ballantyne Re Plc	175		CC	N/A
Taberna Preferred Funding II, Ltd.	172		CCC	28.6%
US Capital Funding IV, LTD	134		CCC	15.0%
Taberna Preferred Funding VI, Ltd.	125		BB-	24.7%
NRG Peaker¹	100		BB	N/A
National Collegiate Trust Series 2006-2	68		CCC	N/A
National Collegiate Trust Series 2007-4	57		CCC	N/A
Conseco Finance Manufactured Housing Series 2001-2	53		CCC	15.4%
Subtotal non-RMBS	$	2,540
Subtotal U.S. structured finance	$	6,290

Non-U.S. structured finance:
Gleneagles Funding Ltd.	$	231	BB	N/A
Private Pooled Corporate Transaction	88		BB	N/A
Private Pooled Corporate Transaction	64		BB	N/A
Babcock & Brown Air Funding I Ltd. Series 2007-1	63		BB	N/A
FHB 8.95% 2016	57		BB-	N/A
Subtotal Non-U.S. structured finance	$	503
Total	$	6,793


1)	In accordance with the terms of certain credit derivative contracts, the referenced obligations in such contracts have been delivered to the Company and therefore are included in the investment portfolio. Net par shown is net of $36 million of ceded par. The Company holds 100% of the bonds referenced in this transaction and reports them in the investment portfolio.

Please refer to the Glossary for the Company's internal rating approach, presentation of net par outstanding and a description of performance indicators and sectors.

Assured Guaranty Ltd.

Largest Exposures by Sector (1 of 4)

As of June 30, 2015

(dollars in millions)

50 Largest U.S. Public Finance Exposures by Revenue Source



Credit names:	Net Par Outstanding		Internal Rating
New Jersey (State of)	$	4,818	A-
California (State of)	3,004		A
New York (City of) New York	2,363		AA-
Illinois (State of)	2,148		A-
Puerto Rico General Obligation, Appropriations and Guarantees of the Commonwealth	2,011		CCC
Chicago (City of) Illinois	1,971		BBB+
New York (State of)	1,934		A+
Massachusetts (Commonwealth of)	1,838		AA
Miami-Dade County Florida Aviation Authority - Miami International Airport	1,815		A
Houston, Texas Water and Sewer Authority	1,749		AA-
Los Angeles, California Unified School District	1,703		AA-
New York Metropolitan Transportation Authority	1,684		A
Philadelphia (City of) Pennsylvania	1,608		BBB+
Pennsylvania (Commonwealth of)	1,587		A+
Wisconsin (State of)	1,497		A+
Port Authority of New York and New Jersey	1,471		AA-
Chicago, Illinois Public Schools	1,451		BBB+
Chicago-O'Hare International Airport	1,447		A-
Illinois Toll Highway Authority	1,413		AA
Georgia Board of Regents	1,337		A
Puerto Rico Highway and Transportation Authority	1,310		CCC-
Skyway Concession Company LLC	1,269		BB
Massachusetts (Commonwealth of) Water Resources	1,265		AA
Michigan (State of)	1,262		A+
Miami-Dade County Florida School Board	1,258		A-
Washington (State of)	1,249		AA
Arizona (State of)	1,229		A+
Pennsylvania Turnpike Commission	1,172		A-
Philadelphia School District, Pennsylvania	1,158		A
North Texas Tollway Authority	1,154		A
Long Island Power Authority	1,145		A-
Detroit Michigan Sewer	1,048		BBB
Los Angeles, California Department of Water & Power - Electric Revenue Bonds	1,027		AA-
New York City Municipal Water Finance Authority	946		AA
Garden State Preservation Trust, New Jersey Open Space & Farmland	919		AA
Detroit Michigan Water Supply System	878		BBB
San Diego Unified School District, California	859		AA
Kentucky (Commonwealth of)	859		A+
Orlando-Orange County Expressway Authority, Florida	854		A+
Atlanta Georgia Water & Sewer System	830		A-
District of Columbia	829		AA-
Puerto Rico Electric Power Authority (PREPA)	818		CC
Miami-Dade County, Florida Water & Sewer	810		A+
California State University System Trustee	808		A+
Louisiana (State of) Gas and Fuel Tax	790		AA
Broward County Florida School Board	772		A+
Metro Washington Airport Authority	761		A+
Dade County, Florida	759		A+
Oglethorpe Power Corporation, Georgia	719		BBB+
Nassau County, New York	701		A-
Total top 50 U.S. public finance exposures	$	68,307

Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

Assured Guaranty Ltd.

Largest Exposures by Sector (2 of 4)

As of June 30, 2015

(dollars in millions)

50 Largest U.S. Structured Finance Exposures



Credit Name	Net Par Outstanding		Internal Rating	Credit Enhancement
Fortress Credit Opportunities I, LP.	$	969	AA	36.0%
Stone Tower Credit Funding	835		AAA	15.1%
Private Other Structured Finance Transaction	800		AA	N/A
Synthetic Investment Grade Pooled Corporate CDO	767		AAA	14.8%
Synthetic Investment Grade Pooled Corporate CDO	744		AAA	26.7%
Synthetic Investment Grade Pooled Corporate CDO	655		AAA	14.9%
Wachovia Super Senior CDO 2007-1	563		AAA	23.4%
Synthetic Investment Grade Pooled Corporate CDO	516		AAA	14.3%
Private US Insurance Securitization	500		AA	N/A
Shenandoah Trust Capital I Term Securities	484		A+	N/A
SLM Private Credit Student Trust 2007-A	450		A-	17.9%
MS SS UK 2007-1	450		AAA	17.7%
BNP 2007-1 10 Year Super Senior CDO	440		AAA	21.2%
Aphex Capital NSCR 2006-2 LTD	430		BB	7.0%
LIICA Holdings, LLC	428		AA	N/A
Orkney Re II, Plc	423		CCC	N/A
Denali CLO VII, LTD.	412		AAA	22.8%
SLM Private Credit Student Loan Trust 2007-6	392		AAA	4.2%
Eastland CLO, LTD	388		AAA	46.5%
Synthetic Investment Grade Pooled Corporate CDO	380		AAA	29.2%
Zohar II 2005-1 Limited CDO	368		B-	12.6%
SLM Private Credit Student Loan Trust 2006-C	356		A-	19.1%
Synthetic Investment Grade Pooled Corporate CDO	345		AAA	16.3%
Churchill Financial Cayman	325		AAA	48.7%
Synthetic Investment Grade Pooled Corporate CDO	312		AAA	14.2%
Cent CDO 15 Limited	303		AAA	18.6%
Option One 2007-FXD2	288		CCC	0.0%
Synthetic Investment Grade Pooled Corporate CDO	283		AAA	30.3%
Grayson CLO	281		AAA	36.6%
Cent CDO 12 Limited	278		AAA	25.0%
Synthetic Investment Grade Pooled Corporate CDO	270		AAA	26.9%
Deutsche Alt-A Securities Mortgage Loan 2007-2	268		BB	0.0%
MABS 2007-NCW	250		CCC	4.2%
Bergen, LLC	250		AA	N/A
Countrywide HELOC 2006-I	248		BB	0.0%
ALESCO Preferred Funding XIV	240		A+	41.3%
KKR Financial CLO 2007-1	232		AAA	62.0%
Taberna Preferred Funding IV, Ltd.	227		BBB-	34.2%
Phoenix CLO II	222		AAA	33.6%
Taberna Preferred Funding III, Ltd.	220		B	29.0%
Timberlake Financial, LLC Floating Insured Notes	217		BBB-	N/A
ALESCO Preferred Funding XVI, Ltd.	215		BB	18.6%
Private Residential Mortgage Transaction	211		CCC	11.5%
Kingsland V	207		AAA	31.7%
ALESCO Preferred Funding X LTD	207		AA	52.9%
UBS 2007-1 CDO	204		AAA	10.4%
UBS 2007-2 CDO	204		AAA	9.2%
Nomura Asset Accept. Corp. 2007-1	201		CCC	0.0%
Private Other Structured Finance Transaction	200		AAA	N/A
MortgageIT Securities Corp. Mortgage Loan 2007-2	198		BB	0.0%
Total top 50 U.S. structured finance exposures	$	18,656

Please refer to the Glossary for the Company's internal rating approach, presentation of net par outstanding and a description of various sectors.

Assured Guaranty Ltd.

Largest Exposures by Sector (3 of 4)

As of June 30, 2015

(dollars in millions)

25 Largest Non-U.S. Exposures by Revenue Source



Credit Name	Country	Net Par Outstanding		Internal Rating
Quebec Province	Canada	$	2,317	A+
Thames Water Utility Finance PLC	United Kingdom	1,580		A-
Channel Link Enterprises Finance PLC	France, United Kingdom	968		BBB
Southern Gas Networks PLC	United Kingdom	939		BBB
Capital Hospitals (Issuer) PLC	United Kingdom	854		BBB-
Societe des Autoroutes du Nord et de l'Est de France S.A.	France	812		BBB+
Southern Water Services Limited	United Kingdom	776		A-
Sydney Airport Finance Company	Australia	726		BBB
International Infrastructure Pool	United Kingdom	717		AA
Reliance Rail Finance Pty. Limited	Australia	657		BB
International Infrastructure Pool	United Kingdom	645		AA
International Infrastructure Pool	United Kingdom	645		AA
Verbund - Lease and Sublease of Hydro-Electric equipment	Austria	627		AAA
Campania Region - Healthcare receivable	Italy	590		BBB-
Central Nottinghamshire Hospitals PLC	United Kingdom	554		BBB
Scotland Gas Networks Plc (A2)	United Kingdom	542		BBB
NewHospitals (St Helens & Knowsley) Finance PLC	United Kingdom	514		BBB
Envestra Limited	Australia	501		BBB
The Hospital Company (QAH Portsmouth) Limited	United Kingdom	490		BBB
Integrated Accomodation Services PLC	United Kingdom	459		BBB+
Yorkshire Water Services Finance Plc	United Kingdom	446		A-
Dali Capital PLC-Northumbrian Water (Swap)	United Kingdom	438		BBB+
A28 Motorway	France	422		BBB-
Octagon Healthcare Funding PLC	United Kingdom	418		BBB
Wessex Water PLC	United Kingdom	386		BBB+
Total top 25 non-U.S. exposures		$	18,023

Please refer to the Glossary for an explanation of net par outstanding, internal ratings and sectors.

Assured Guaranty Ltd.

Largest Exposures by Sector (4 of 4)

As of June 30, 2015

(dollars in millions)

10 Largest U.S. Residential Mortgage Servicer Exposures



Servicer:	Net Par Outstanding
Ocwen Loan Servicing, LLC¹	$	2,394
Bank of America, N.A.²	1,833
Specialized Loan Servicing, LLC	1,752
Wells Fargo Bank NA	1,498
JPMorgan Chase Bank	347
Select Portfolio Servicing, Inc.	338
Nationstar Mortgage LLC	153
Residential Credit Solutions, Inc.	118
Banco Popular de Puerto Rico	92
Green Tree Servicing LLC	60
Total top 10 U.S. residential mortgage servicer exposures	$	8,585

1) Includes Homeward Residential Inc.


2)	Includes Countrywide Home Loans Servicing LP.

10 Largest U.S. Healthcare Exposures



Credit Name:	Net Par Outstanding		Internal Rating	State
Methodist Healthcare	$	449	A+	TN
MultiCare Health System	396		AA-	WA
CHRISTUS Health	374		A	TX
Children's National Medical Center	356		A-	DC
Bon Secours Health System Obligated Group	327		A-	MD
Catholic Health Initiatives	325		A-	CO
Carolina HealthCare System	319		AA-	NC
Asante Health System	292		A+	OR
Catholic Health Partners	287		A+	OH
Dignity Health, California	284		A	CA
Total top 10 U.S. healthcare exposures	$	3,409

Please refer to the Glossary for the Company's internal rating approach and presentation of net par outstanding.

Assured Guaranty Ltd.

Rollforward of Net Expected Loss and LAE to be Paid

(dollars in millions)

Rollforward of Net Expected Loss and LAE to be Paid for the Three Months Ended June 30, 2015



Financial Guaranty Insurance Contracts and Credit Derivatives	Net Expected Loss to be Paid (Recovered) as of March 31, 2015			Net Expected Loss to be Paid (Recovered) on Radian Asset portfolio as of April 1, 2015			Economic Loss Development During 2Q-15⁽¹⁾			(Paid) Recovered Losses During 2Q-15			Net Expected Loss to be Paid (Recovered) as of June 30, 2015
Public Finance:
U.S. public finance	$	310		$	81		$	226		$	(4	)	$	613
Non-U.S public finance	42			4			(2		)	—			44
Public Finance	352			85			224			(4		)	657

U.S. RMBS
First lien:
Prime first lien	3			—			(1		)	(1		)	1
Alt-A first lien	289			7			(16		)	(15		)	265
Option ARMs	(16		)	0			(3		)	1			(18		)
Subprime first lien	293			(4		)	(6		)	(10		)	273
Total first lien	569			3			(26		)	(25		)	521
Second lien:
Closed-end second lien	11			—			(3		)	1			9
HELOC	(10		)	1			(3		)	6			(6		)
Total second lien	1			1			(6		)	7			3
Total U.S. RMBS	570			4			(32		)	(18		)	524
Triple-X life insurance transactions	165			—			2			(2		)	165
Trust preferred securities (TruPS)	14			—			(4		)	—			10
Student loans	62			—			1			(5		)	58
Other structured finance	(9		)	101			1			3			96
Structured Finance	802			105			(32		)	(22		)	853
Total	$	1,154		$	190		$	192		$	(26	)	$	1,510

Rollforward of Net Expected Loss and LAE to be Paid for the Six Months Ended June 30, 2015



Financial Guaranty Insurance Contracts and Credit Derivatives	Net Expected Loss to be Paid (Recovered) as of December 30, 2014			Net Expected Loss to be Paid (Recovered) on Radian Asset portfolio as of April 1, 2015			Economic Loss Development During 2015⁽¹⁾			(Paid) Recovered Losses During 2015			Net Expected Loss to be Paid (Recovered) as of June 30, 2015
Public Finance:
U.S. public finance	$	303		$	81		$	235		$	(6	)	$	613
Non-U.S public finance	45			4			(5		)	—			44
Public Finance	348			85			230			(6		)	657

U.S. RMBS
First lien:
Prime first lien	4			—			(1		)	(2		)	1
Alt-A first lien	304			7			(21		)	(25		)	265
Option ARMs	(16		)	0			1			(3		)	(18		)
Subprime first lien	303			(4		)	(7		)	(19		)	273
Total first lien	595			3			(28		)	(49		)	521
Second lien:
Closed-end second lien	8			—			(2		)	3			9
HELOC	(19		)	1			2			10			(6		)
Total second lien	(11		)	1			0			13			3
Total U.S. RMBS	584			4			(28		)	(36		)	524
Triple-X life insurance transactions	161			—			7			(3		)	165
TruPS	23			—			(13		)	—			10
Student loans	68			—			(5		)	(5		)	58
Other structured finance	(15		)	101			(2		)	12			96
Structured Finance	821			105			(41		)	(32		)	853
Total	$	1,169		$	190		$	189		$	(38	)	$	1,510

1) Includes the effect of changes in the Company's estimate of future recovery on representations and warranties (R&W).

Assured Guaranty Ltd.

Financial Guaranty Insurance and Credit Derivative U.S. RMBS R&W Benefit Development

(dollars in millions)

Financial Guaranty Insurance and Credit Derivatives U.S. RMBS Benefit Development for the Three Months Ended June 30, 2015



	Future Net R&W Benefit at March 31 , 2015			R&W benefit of Radian Asset as of April 1, 2015		R&W Economic Loss Development During 2Q-15			R&W (Recovered) During 2Q-15			Future Net R&W Benefit at June 30, 2015
Financial guaranty insurance:
Prime first lien	$	1		$	—	$	—		$	—		$	1
Alt-A first lien	19			—		1			(1		)	19
Option ARMs	(20		)	—		6			(19		)	(33		)
Subprime first lien	87			1		(4		)	(3		)	81
Closed-end second lien	83			1		2			(3		)	83
Subtotal	170			2		5			(26		)	151

Credit derivatives:
Alt-A first lien	75			—		(1		)	—			74
Subtotal	75			—		(1		)	—			74

Total	$	245		$	2	$	4		$	(26	)	$	225

Financial Guaranty Insurance and Credit Derivatives U.S. RMBS Benefit Development for the Six Months Ended June 30, 2015



	Future Net R&W Benefit at December 31, 2014		R&W benefit of Radian Asset as of April 1, 2015		R&W Economic Loss Development During 2015			R&W (Recovered) During 2015			Future Net R&W Benefit at June 30, 2015
Financial guaranty insurance:
Prime first lien	$	2	$	—	$	(1	)	$	—		$	1
Alt-A first lien	20		—		1			(2		)	19
Option ARMs	15		—		(14		)	(34		)	(33		)
Subprime first lien	109		1		(23		)	(6		)	81
Closed-end second lien	85		1		1			(4		)	83
Subtotal	231		2		(36		)	(46		)	151

Credit derivatives:
Alt-A first lien	86		—		(11		)	(1		)	74
Subtotal	86		—		(11		)	(1		)	74

Total	$	317	$	2	$	(47	)	$	(47	)	$	225

The number of risks subject to R&W recovery is 30, with related net debt service of $2.0 billion as of June 30, 2015 compared to 29 with net debt service of $2.1 billion as of December 31, 2014. Included in these amounts is net debt service related to transactions not yet subject to an agreement. A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making Debt Service payments.

Please refer to the Glossary for an explanation of the presentation of net debt service outstanding and of the various sectors.

Assured Guaranty Ltd.

Losses Incurred

As of June 30, 2015

(dollars in millions)



Financial Guaranty Insurance Contracts and Credit Derivatives	Total Net Par Outstanding for BIG Transactions		2Q-15 Losses Incurred			2015 Losses Incurred			Net Expected Loss to be Expensed
Public Finance:
U.S. public finance	$	9,897	$	196		$	209		$	180
Non-U.S public finance	1,611		(1		)	4			15
Public Finance	11,508		195			213			195
Structured Finance:
U.S. RMBS:
First lien:
Prime first lien	336		(1		)	—			0
Alt-A first lien	1,750		(11		)	(20		)	45
Option ARMs	160		(1		)	1			22
Subprime	1,557		(3		)	(4		)	77
Total first lien	3,803		(16		)	(23		)	144
Second lien:
Closed-end second lien	131		(1		)	—			41
HELOCs	1,459		2			11			101
Total second lien	1,590		1			11			142
Total U.S. RMBS	5,393		(15		)	(12		)	286
Triple-X life insurance transactions	598		1			7			15
TruPS	866		(4		)	(11		)	0
Student loans	167		1			(5		)	3
Other structured finance	1,872		2			0			88
Structured Finance	8,896		(15		)	(21		)	392
Subtotal	20,404		180			192			587
Non-GAAP adjustments	—		(1		)	(7		)	(166		)
Total	$	20,404	$	179		$	185		$	421

Please refer to the Glossary for an explanation of the presentation of net par outstanding and of the various sectors.

Assured Guaranty Ltd.

Summary Financial and Statistical Data

(dollars in millions, except per share amounts)



			As of and for Six Months Ended June 30, 2015			Year Ended December 31,
						2014			2013			2012			2011
GAAP Summary Income Statement Data
	Net earned premiums		$	361		$	570		$	752		$	853		$	920
	Net investment income		199			403			393			404			396
	Realized gains and other settlements on credit derivatives		29			23			(42		)	(108		)	6
	Total expenses		389			463			466			822			776
	Income (loss) before income taxes		675			1,531			1,142			132			1,029
	Net income (loss)		498			1,088			808			110			773
	Net income (loss) per diluted share		3.23			6.26			4.30			0.57			4.16

GAAP Summary Balance Sheet Data
	Total investments and cash		$	11,706		$	11,459		$	10,969		$	11,223		$	11,314
	Total assets		15,479			14,925			16,287			17,242			17,709
	Unearned premium reserve		4,389			4,261			4,595			5,207			5,963
	Loss and LAE reserve		996			799			592			601			679
	Long-term debt		1,305			1,303			816			836			1,038
	Shareholders’ equity		5,806			5,758			5,115			4,994			4,652
	Shareholders’ equity per share		39.16			36.37			28.07			25.74			25.52

Non-GAAP Financial Measures
	Operating income		$	418		$	491		$	609		$	535		$	601
	Operating income per diluted share		2.71			2.83			3.25			2.81			3.24
	Operating shareholder's equity		6,011			5,933			6,164			5,830			5,201
	Operating shareholder's equity per share		40.55			37.48			33.83			30.05			28.54
	Adjusted book value		8,701			8,495			9,033			9,151			8,987
	PVP		62			168			141			210			243

Other Financial Information (GAAP Basis)
	Net debt service outstanding (end of period)		$	584,428		$	609,622		$	690,535		$	780,356		$	844,447
	Gross debt service outstanding (end of period)		611,993			646,722			737,380			833,098			934,914
	Net par outstanding (end of period)		390,384			403,729			459,107			518,772			556,830
	Gross par outstanding (end of period)		407,839			426,705			487,895			550,908			613,124

Other Financial Information (Statutory Basis)⁽¹⁾
	Net debt service outstanding (end of period)		$	550,570		$	583,598		$	663,797		$	756,044		$	828,327
	Gross debt service outstanding (end of period)		576,824			619,475			709,000			807,420			916,501
	Net par outstanding (end of period)		359,215			379,714			434,597			496,237			541,882
	Gross par outstanding (end of period)		375,445			401,552			461,845			527,126			593,072

	Consolidated qualified statutory capital		6,885			6,472			6,136			5,943			5,688
	Consolidated policyholders' surplus and reserves		11,094			10,623			10,454			10,288			10,626

	Ratios:
		Net par outstanding to qualified statutory capital	52		:1	59		:1	71		:1	83:1			95:1
		Capital ratio⁽²⁾	80		:1	90		:1	108		:1	127:1			145:1
		Financial resources ratio⁽²⁾	44		:1	48		:1	55		:1	61:1			65:1

	Gross debt service written:
		Public finance - U.S.	$	12,479		$	20,804		$	15,559		$	25,252		$	26,630
		Public finance - non-U.S.	—			233			674			40			208
		Structured finance - U.S.	263			423			297			623			1,731
		Structured finance - non-U.S.	6			387			—			—			—
	Total gross debt service written		$	12,748		$	21,847		$	16,530		$	25,915		$	28,569

	Net debt service written		$	12,748		$	21,847		$	16,497		$	25,915		$	28,569
	Net par written		8,289			13,171			9,331			16,816			16,892
	Gross par written		8,289			13,171			9,350			16,816			16,892

1) Statutory amounts prepared on a consolidated basis. The NAIC Annual Statements for U.S. Domiciled Insurance Subsidiaries are prepared on a stand-alone basis.


2)	See page 7 for additional detail on claims-paying resources.

Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

Please refer to the Glossary for an explanation of the presentation of net debt service and net par outstanding and of the various sectors.

Glossary

Net Par Outstanding and Internal Ratings

Net par outstanding is insured par exposure, net of reinsurance cessions. Unless otherwise indicated, GAAP net par outstanding amounts exclude amounts related to securities the Company has purchased for loss mitigation purposes.

Internal Rating utilizes the Company’s ratings scale, which is similar to that used by the nationally recognized statistical rating organizations; however, the ratings in the tables may not be the same as ratings assigned by any such rating agency.

Performance Indicators

The performance information described below is obtained from third parties and/or provided by the trustee and may be subject to revision as updated or additional information are obtained:

60+ Day Delinquencies are defined as loans that are greater than 60 days delinquent and all loans that are in foreclosure, bankruptcy or real estate owned divided by current collateral balance.

Average Credit Enhancement is intended to provide a measure of the amount of equity and/or subordinated tranches that are junior in the capital structure to Assured Guaranty’s exposure, expressed as a percentage of the total transaction size, and reflects any reduction of that credit support resulting from defaults or other factors. For transactions where excess spread may be available to absorb certain losses, the amounts shown do not include any benefit from excess spread. The calculation methodologies differ for the various asset classes to reflect differences in transaction structures in order to provide a measure that management believes is comparable across asset classes. Some asset classes may not have subordinated tranches so they are excluded from the weighted averages.

Cumulative Losses are defined as net charge-offs on the underlying loan collateral divided by the original collateral balance.

Pool Factor is the percentage of the current collateral balance divided by the original collateral balance of the transactions at inception.

Subordination represents the sum of subordinate tranches and overcollateralization, expressed as a percentage of total transaction size, and does not include any benefit from excess spread collections that may be used to absorb losses. Many of the closed-end second lien RMBS transactions insured by the Company have unique structures whereby the collateral may be written down for losses without a corresponding write-down of the obligations insured by the Company. Many of these transactions are currently undercollateralized, with the principal amount of collateral being less than the principal amount of the obligation insured by the Company. The Company is not required to pay principal shortfalls until legal maturity (rather than making timely principal payments), and takes the undercollateralization into account when estimating expected losses for these transactions.

Sectors

Below are brief descriptions of selected types of public and structured finance obligations that the Company insures and reinsures. For a more complete description, please refer to Assured Guaranty Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2014.

Public Finance:

General Obligation Bonds are full faith and credit bonds that are issued by states, their political subdivisions and other municipal issuers, and are supported by the general obligation of the issuer to pay from available funds and by a pledge of the issuer to levy ad valorem taxes in an amount sufficient to provide for the full payment of the bonds.

Tax-Backed Bonds are obligations that are supported by the issuer from specific and discrete sources of taxation. They include tax-backed revenue bonds, general fund obligations and lease revenue bonds. Tax-backed obligations may be secured by a lien on specific pledged tax revenues, such as a gasoline or excise tax, or incrementally from growth in property tax revenue associated with growth in property values. These obligations also include obligations secured by special assessments levied against property owners and often benefit from issuer covenants to enforce collections of such assessments and to foreclose on delinquent properties. Lease revenue bonds typically are general fund obligations of a municipality or other governmental authority that are subject to annual appropriation or abatement; projects financed and subject to such lease payments ordinarily include real estate or equipment serving an essential public purpose. Bonds in this category also include moral obligations of municipalities or governmental authorities.

Municipal Utility Bonds are obligations of all forms of municipal utilities, including electric, water and sewer utilities and resource recovery revenue bonds. These utilities may be organized in various forms, including municipal enterprise systems, authorities or joint action agencies.

Transportation Bonds include a wide variety of revenue-supported bonds, such as bonds for airports, ports, tunnels, municipal parking facilities, toll roads and toll bridges.

Healthcare Bonds are obligations of healthcare facilities, including community-based hospitals and systems, as well as of health maintenance organizations and long-term care facilities.

Glossary (continued)

Sectors (continued)

Higher Education Bonds are obligations secured by revenue collected by either public or private secondary schools, colleges and universities. Such revenue can encompass all of an institution’s revenue, including tuition and fees, or in other cases, can be specifically restricted to certain auxiliary sources of revenue.

Infrastructure Bonds include obligations issued by a variety of entities engaged in the financing of infrastructure projects, such as roads, airports, ports, social infrastructure and other physical assets delivering essential services supported by long-term concession arrangements with a public sector entity.

Investor-Owned Utility Bonds are obligations primarily backed by investor-owned utilities, first mortgage bond obligations of for-profit electric or water utilities providing retail, industrial and commercial service, and also include sale-leaseback obligation bonds supported by such entities.

Housing Revenue Bonds are obligations relating to both single and multi-family housing, issued by states and localities, supported by cash flow and, in some cases, insurance from entities such as the Federal Housing Administration.

Regulated Utilities Obligations are issued by government-regulated providers of essential services and commodities, including electric, water and gas utilities. The majority of the Company's international regulated utility business is conducted in the United Kingdom.

Pooled Infrastructure Obligations are synthetic asset-backed obligations that take the form of CDS obligations or credit‑-linked notes that reference either infrastructure finance obligations or a pool of such obligations, with a defined deductible to cover credit risks associated with the referenced obligations.

Other Public Finance primarily includes government insured student loans, government-sponsored project finance and structured municipal transactions, which includes excess of loss reinsurance on portfolios of municipal credits.

Structured Finance:

Pooled Corporate Obligations are securities primarily backed by various types of corporate debt obligations, such as secured or unsecured bonds, bank loans or loan participations and trust preferred securities. These securities are often issued in ‘‘tranches,’’ with subordinated tranches providing credit support to the more senior tranches. The Company’s financial guaranty exposures generally are to the more senior tranches of these issues.

Residential Mortgage-Backed Securities (RMBS) are obligations backed by closed-end and open-end first and second lien mortgage loans on one-to-four family residential properties, including condominiums and cooperative apartments. First lien mortgage loan products in these transactions include fixed rate, adjustable rate (ARM) and option adjustable-rate (Option ARM) mortgages. The credit quality of borrowers covers a broad range, including ‘‘prime’’, ‘‘subprime’’ and ‘‘Alt-A’’. A prime borrower is generally defined as one with strong risk characteristics as measured by factors such as payment history, credit score, and debt-to-income ratio. A subprime borrower is a borrower with higher risk characteristics, usually as determined by credit score and/or credit history. An Alt-A borrower is generally defined as a prime quality borrower that lacks certain ancillary characteristics, such as fully documented income.

Additional insured obligations within RMBS include Home Equity Lines of Credit (HELOCs), which refers to a type of residential mortgage-backed transaction backed by second-lien loan collateral consisting of home equity lines of credit. U.S. Prime First Lien is a type of residential mortgage-backed securities transaction backed primarily by prime first-lien loan collateral plus an insignificant amount of other miscellaneous RMBS transactions.

CBOs/CLOs (collateralized bond obligations and collateralized loan obligations) are asset-backed securities largely backed by non-investment grade/high yield collateral.

Commercial Mortgage-Backed Securities (CMBS) are obligations backed by pools of commercial mortgages. The collateral supporting CMBS include office, multifamily, retail, hotel, industrial and other specialized or mixed-use properties.

Financial Products is the way in which the Company refers to the guaranteed investment contracts (GICs) portion of a line of business previously conducted by AGMH that the Company did not acquire when it purchased AGMH in 2009. That line of business, which the Company refers to as the former "Financial Products Business" of AGMH, was comprised of its guaranteed investment contracts business, its medium term notes business and the equity payment agreements associated with AGMH's leveraged lease business. When AGMH was still conducting Financial Products Business, AGM issued financial guaranty insurance policies on GICs and in respect of the GIC business; those policies cannot be revoked or canceled. Assured Guaranty is indemnified by Dexia against loss from the former Financial Products Business. The Financial Products Business is currently being run off.

Glossary (continued)

Sectors (continued)

Consumer Receivables Securities are obligations backed by non-mortgage consumer receivables, such as student loans, automobile loans and leases, manufactured home loans and other consumer receivables.

Commercial Receivables Securities are obligations backed by equipment loans or leases, aircraft and aircraft engine financings, business loans and trade receivables. Credit support is derived from the cash flows generated by the underlying obligations, as well as property or equipment values as applicable.

Insurance Securitization Securities are obligations secured by the future earnings from pools of various types of insurance/reinsurance policies and income produced by invested assets.

Other Structured Finance Securities are obligations backed by assets not generally described in any of the other described categories. One such type of asset is a tax benefit to be realized by an investor in one of the Federal or state programs that permit such investor to receive a credit against taxes (such as Federal corporate income tax or state insurance premium tax) for making qualified investments in specified enterprises, typically located in designated low-income areas.

Non-GAAP Financial Measures

The Company references financial measures that are not in accordance with accounting principles generally accepted in the United States of America (GAAP).

Management and the board of directors utilize non-GAAP financial measures in evaluating the Company’s financial performance. By providing these non-GAAP financial measures, the Company gives investors, analysts and financial news reporters access to the same information that management reviews internally. In addition, Assured Guaranty’s presentation of non-GAAP financial measures is consistent with how analysts calculate their estimates of Assured Guaranty’s financial results in their research reports on Assured Guaranty and with how investors, analysts and the financial news media evaluate Assured Guaranty’s financial results.

The following paragraphs define each non-GAAP financial measure and describe why it is useful. A reconciliation of the non-GAAP financial measure and the most directly comparable GAAP financial measure, is presented within this financial supplement. Non-GAAP financial measures should not be viewed as substitutes for their most directly comparable GAAP measures.

Operating Income: Management believes that operating income is a useful measure because it clarifies the understanding of the underwriting results of the Company’s financial guaranty business, and also includes financing costs and net investment income, and enables investors and analysts to evaluate the Company’s financial results as compared with the consensus analyst estimates distributed publicly by financial databases. Operating income is defined as net income (loss) attributable to Assured Guaranty Ltd., as reported under GAAP, adjusted for the following:

1) Elimination of the after-tax realized gains (losses) on the Company’s investments, except for gains and losses on securities classified as trading. The timing of realized gains and losses, which depends largely on market credit cycles, can vary considerably across periods. The timing of sales is largely subject to the Company’s discretion and influenced by market opportunities, as well as the Company’s tax and capital profile. Trends in the underlying profitability of the Company’s business can be more clearly identified without the fluctuating effects of these transactions.

2) Elimination of the after-tax non-credit-impairment unrealized fair value gains (losses) on credit derivatives, which is the amount in excess of the present value of the expected estimated economic credit losses and non-economic payments. Such fair value adjustments are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss. Additionally, such adjustments present all financial guaranty contracts on a more consistent basis of accounting, whether or not they are subject to derivative accounting rules.

3) Elimination of the after-tax fair value gains (losses) on the Company’s committed capital securities. Such amounts are heavily affected by, and in part fluctuate with, changes in market interest rates, credit spreads and other market factors and are not expected to result in an economic gain or loss.

4) Elimination of the after-tax foreign exchange gains (losses) on remeasurement of net premium receivables and loss and LAE reserves. Long-dated receivables constitute a significant portion of the net premium receivable balance and represent the present value of future contractual or expected collections. Therefore, the current period’s foreign exchange remeasurement gains (losses) are not necessarily indicative of the total foreign exchange gains (losses) that the Company will ultimately recognize.

5) Elimination of the effects of consolidating FG VIEs in order to present all financial guaranty contracts on a more consistent basis of accounting, whether or not GAAP requires consolidation. GAAP requires the Company to consolidate certain VIEs that have issued debt obligations insured by the Company even though the Company does not own such VIEs.

Operating Shareholders’ Equity: Management believes that operating shareholders’ equity is a useful measure because it presents the equity of Assured Guaranty Ltd. with all financial guaranty contracts accounted for on a more consistent basis and excludes fair value adjustments that are not expected to result in economic gain or loss. Many investors, analysts and financial news reporters use operating shareholders’ equity as the principal financial measure for valuing Assured Guaranty Ltd.’s current share price or projected share price and also as the basis of their decision to recommend buy or sell Assured Guaranty Ltd.’s common shares. Many of the Company’s fixed income investors also use operating shareholders’ equity to evaluate the Company’s capital adequacy. Operating shareholders’ equity is the basis of the calculation of adjusted book value (see below). Operating shareholders’ equity is defined as shareholders’ equity attributable to Assured Guaranty Ltd., as reported under GAAP, adjusted for the following:

1) Elimination of the effects of consolidating FG VIEs in order to present all financial guaranty contracts on a more consistent basis of accounting, whether or not GAAP requires consolidation. GAAP requires the Company to consolidate certain VIEs that have issued debt obligations insured by the Company even though the Company does not own such VIEs.

Non-GAAP Financial Measures (continued)

Operating Shareholders’ Equity (continued):

4) Elimination of the after-tax unrealized gains (losses) on the Company’s investments, that are recorded as a component of accumulated other comprehensive income (AOCI) (excluding foreign exchange remeasurement). The AOCI component of the fair value adjustment on the investment portfolio is not deemed economic because the Company generally holds these investments to maturity and therefore should not recognize an economic gain or loss.

Operating return on equity (Operating ROE): Operating ROE represents operating income for a specified period divided by the average of operating shareholders’ equity at the beginning and the end of that period. Management believes that operating ROE is a useful measure to evaluate the Company’s return on invested capital. Many investors, analysts and members of the financial news media use operating ROE to evaluate Assured Guaranty Ltd.’s share price and as the basis of their decision to recommend, buy or sell the Assured Guaranty Ltd. common shares. Quarterly and year-to-date operating ROE are calculated on an annualized basis.

Adjusted Book Value: Management believes that adjusted book value is a useful measure because it enables an evaluation of the net present value of the Company’s in-force premiums and revenues in addition to operating shareholders’ equity. The premiums and revenues included in adjusted book value will be earned in future periods, but actual earnings may differ materially from the estimated amounts used in determining current adjusted book value due to changes in foreign exchange rates, prepayment speeds, terminations, credit defaults and other factors. Many investors, analysts and financial news reporters use adjusted book value to evaluate Assured Guaranty Ltd.’s share price and as the basis of their decision to recommend, buy or sell the Assured Guaranty Ltd. common shares. Adjusted book value is operating shareholders’ equity, as defined above, further adjusted for the following:

1) Elimination of after-tax deferred acquisition costs, net. These amounts represent net deferred expenses that have already been paid or accrued and will be expensed in future accounting periods.

2) Addition of the after-tax net present value of estimated net future credit derivative revenue. See below.

3) Addition of the after-tax value of the unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed, net of reinsurance. This amount represents the expected future net earned premiums, net of expected losses to be expensed, which are not reflected in GAAP equity.

Net present value of estimated net future credit derivative revenue: Management believes that this amount is a useful measure because it enables an evaluation of the value of future estimated credit derivative revenue. There is no corresponding GAAP financial measure. This amount represents the present value of estimated future revenue from the Company’s credit derivative in-force book of business, net of reinsurance, ceding commissions and premium taxes for contracts without expected economic losses, and is discounted at 6%. Estimated net future credit derivative revenue may change from period to period due to changes in foreign exchange rates, prepayment speeds, terminations, credit defaults or other factors that affect par outstanding or the ultimate maturity of an obligation.

PVP or present value of new business production: Management believes that PVP is a useful measure because it enables the evaluation of the value of new business production for Assured Guaranty by taking into account the value of estimated future installment premiums on all new contracts underwritten in a reporting period as well as premium supplements and additional installment premium on existing contracts as to which the issuer has the right to call the insured obligation but has not exercised such right, whether in insurance or credit derivative contract form, which GAAP gross premiums written and the net credit derivative premiums received and receivable portion of net realized gains and other settlements on credit derivatives (Credit Derivative Revenues) do not adequately measure. PVP in respect of financial guaranty contracts written in a specified period is defined as gross upfront and installment premiums received and the present value of gross estimated future installment premiums, in each case, discounted at 6%. For purposes of the PVP calculation, management discounts estimated future installment premiums on insurance contracts at 6%, while under GAAP, these amounts are discounted at a risk free rate. Additionally, under GAAP, management records future installment premiums on financial guaranty insurance contracts covering non-homogeneous pools of assets based on the contractual term of the transaction, whereas for PVP purposes, management records an estimate of the future installment premiums the Company expects to receive, which may be based upon a shorter period of time than the contractual term of the transaction. Actual future net earned or written premiums and Credit Derivative Revenues may differ from PVP due to factors including, but not limited to, changes in foreign exchange rates, prepayment speeds, terminations, credit defaults, or other factors that affect par outstanding or the ultimate maturity of an obligation.