ASSURED GUARANTY LTD

Financial results include the results of Assured Life Re, which is included in Annuity Reinsurance segment, after the date of acquisition on January 21, 2026.

Financial Results

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

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

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

Condensed Consolidated Results of Operations

Condensed Consolidated Results of Operations

Third Quarter 2026 Compared with Third Quarter 2025

Net income attributable to AGL for third quarter 2026 was lower compared with the three-month period ended September 30, 2025 (third quarter 2025) primarily due to the following:

•loss and LAE in third quarter 2026 of $2 million compared with a loss and LAE benefit of $30 million in third quarter 2025 primarily due to updates of recoveries for charged-off second lien U.S. RMBS loans in third quarter 2025.

This decrease was partially offset by:

•lower foreign exchange losses on remeasurement of $1 million in third quarter 2026, compared with losses of $23 million in third quarter 2025, and

•higher net earned premiums of $112 million in third quarter 2026, compared with $94 million in third quarter 2025 due to higher refundings and higher scheduled net earned premiums.

Nine Months 2026 Compared with Nine Months 2025

Net income attributable to AGL for nine months 2026 was lower compared with nine months 2025 primarily due to the following:

•foreign exchange losses on remeasurement of $22 million in nine months 2026, compared with gains of $93 million in nine months 2025,

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

•a decrease of $44 million in equity in earnings of investees in nine months 2026, primarily due to losses generated by the Company’s investment in a collateralized loan obligation (CLO) equity fund.

These decreases were partially offset by:

•a discrete tax benefit of $33 million in the three-month period ended March 31, 2026 (first quarter 2026) resulting from the enactment of the U.K. Finance Act 2026, which clarified that certain Bermuda pre-regime deferred taxes are excluded from covered taxes under the Pillar Two global minimum tax framework, and

•an increase of $19 million in performance fees (net of related expenses) due to the impact of the payout of carried interest from the sale of the underlying asset in a single-asset fund in first quarter 2026.

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%, 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. See Item 1. Financial Statements, Note 12. Income Taxes.

The following tables present pre-tax income by jurisdiction.

Pre-tax Income (Loss) by Tax Jurisdiction

Adjusted Operating Income

Adjusted operating income in third quarter 2026 was $86 million, compared with $124 million in third quarter 2025. The decrease was primarily due to unfavorable loss expense variance of $32 million, mainly related to updates of recoveries for charged-off second lien U.S. RMBS loans in third quarter 2025, and fair value gains on trading securities in third quarter 2025, partially offset by the increase of $16 million in net earned premiums and credit derivative revenues due to higher refunding. See “— Results of Operations — Reconciliation to GAAP” for the reconciliation of net income (loss) attributable to AGL to adjusted operating income (loss).

Adjusted operating income in nine months 2026 was $256 million, compared with $336 million in nine months 2025. The decrease was primarily due to a $103 million gain related to the resolution of the LBIE litigation in nine months 2025 and a decrease of $44 million in equity in earnings of investees in nine months 2026 primarily due to losses generated by the Company’s investment in a CLO equity fund. These decreases were offset in part by a $33 million discrete tax benefit resulting from the enactment of the U.K. Finance Act 2026; a $23 million increase in net investment income; a $21 million increase in net earned premiums and credit derivative revenues, excluding the effect of LBIE litigation, due to higher refundings and higher scheduled premiums; and a $19 million increase in performance fees, net of related expenses, due to the impact of the payout of carried interest from the sale of the underlying asset in a single-asset fund in nine months 2026. 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 September 30, 2026 decreased compared with December 31, 2025, primarily due to unrealized losses on the investment portfolio, share repurchases and dividends, partially offset by net income. Adjusted operating shareholders’ equity increased primarily due to adjusted operating income, partially offset by share repurchases and dividends. ABV increased primarily due to adjusted operating income, GWP and the accretive effect of the Assured Life Re Acquisition, partially offset by share repurchases, dividends and loss development. 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 decreased primarily due to unrealized losses on the investment portfolio. Adjusted operating shareholders’ equity per share and ABV per share increased as of September 30, 2026 compared with December 31, 2025, due, in part, to the accretive effect of the share repurchase program and the Assured Life Re Acquisition. See “— Non-GAAP Financial Measures” for the reconciliation of shareholders’ equity attributable to AGL to adjusted operating shareholders’ equity and ABV.