ASSURED GUARANTY LTD

Financial Results

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

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

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

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

Consolidated Results of Operations

Consolidated Results of Operations

Net income attributable to AGL in 2025 was higher compared with 2024 primarily due to the following:

•foreign exchange remeasurement gains of $96 million in 2025, compared with losses of $27 million in 2024,

•a gain on credit derivatives related to the resolution of the LBIE litigation of $103 million in 2025,

•higher other income due to a gain of $23 million recognized in connection with the sale in 2025 of a commercially leased building that was part of a loss mitigation strategy for a troubled insured exposure and $15 million associated with the workout and purchase of bonds issued by a U.K. regulated utility to which the Company has insured exposure and interest on late financial guaranty premiums,

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

•fair value gains on committed capital securities in 2025, compared with losses in 2024.

These increases were partially offset by:

•loss and LAE in 2025 of $56 million, compared with a benefit of $26 million in 2024,

•net realized investment losses in 2025 primarily due to changes in the allowance for credit losses for alternative investments and Loss Mitigation Securities,

•lower fair value gains on trading securities in 2025, and

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

The Company’s effective tax rate reflects the proportion of income recognized by each of the Company’s operating subsidiaries in the jurisdiction in which they are taxed, with U.S. subsidiaries and foreign subsidiaries that have made an election to be a U.S. taxpayer taxed at the U.S. marginal corporate income tax rate of 21%, U.K. subsidiaries taxed at the U.K. marginal corporate tax rate of 25% for periods starting April 1, 2023, and 19% for periods ending on or before March 31, 2023, and the French subsidiary taxed at the French marginal corporate tax rate of 25%, and AG Re and Cedar Personnel Ltd. taxed at the Bermuda marginal corporate tax rate of 15% starting January 1, 2025 and 0% for 2024 and 2023. See Part I, Item 1. Business– Regulation, and Part II, Item 8. Financial Statements and Supplementary Data, Note 13. Income Taxes.

Adjusted Operating Income

Adjusted operating income in 2025 was $445 million, compared with $389 million in 2024. The increase was primarily due to the gain related to the resolution of the LBIE litigation in 2025, higher equity in earnings of investees and the gain recognized in connection with the sale of a commercially leased building that was part of a loss mitigation strategy for a troubled insured exposure, offset in part by a higher loss expense in public finance sectors, lower fair value gains on the trading portfolio and lower earned premiums on refundings of financial guaranty insurance contracts in 2025. See “— Results of Operations — Reconciliation to GAAP” for the reconciliation of net income (loss) attributable to AGL to adjusted operating income (loss).

Book Value and ABV

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

On a per share basis, shareholders’ equity attributable to AGL, adjusted operating shareholders’ equity and ABV increased as of December 31, 2025 compared with December 31, 2024, due, in part, to the accretive effect of the share repurchase program. See “— Non-GAAP Financial Measures” for the reconciliation of shareholders’ equity attributable to AGL to adjusted operating shareholders' equity and ABV.