8-K

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) — February 22, 2018

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

1

Item 2.02 Results of Operations and Financial Condition On February 22, 2018, Assured Guaranty Ltd. issued a press release reporting its fourth quarter 2017 results and the availability of its December 31, 2017 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 February 22, 2018 reporting fourth quarter 2017 results
99.2	December 31, 2017 Financial Supplement of Assured Guaranty Ltd.

2

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: February 22, 2018

3

EX-99.1

Assured Guaranty Ltd. Reports Results for Fourth Quarter 2017 and Full Year 2017

• Net income was $52 million, or $0.44 per share, for fourth quarter 2017 and $730 million, or $5.96 per share, for FY 2017. Fourth quarter and FY 2017 net income includes a tax expense of $61 million for the estimated effect of the 2017 Tax Cuts and Jobs Act.

• Non-GAAP operating income¹ was $91 million, or $0.77 per share, for fourth quarter 2017, and $661 million, or $5.41 per share, for FY 2017.

• Settlement reached in fourth quarter 2017 regarding a breach of representations and warranties claim, resulting in a pretax gain of $105 million.

• Shareholders' equity per share, non-GAAP operating shareholders' equity¹per share and non-GAAP adjusted book value¹per share reached new records at $58.95, $56.20 and $77.74, respectively.

• Share repurchases totaled $70 million, or 1.9 million shares, in fourth quarter 2017, for a total of $501 million, or 12.7 million shares, in FY 2017.

• Gross written premium nearly doubled to $307 million in 2017 from $154 million in 2016, while PVP¹ increased by approximately 35% to $289 million in 2017 from $214 million in 2016.

Hamilton, Bermuda, February 22, 2018 -- 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 December 31, 2017 (fourth quarter 2017) and the year ended December 31, 2017 (FY 2017).

¹ Please see “Explanation of Non-GAAP Financial Measures.” When a financial measure is described as "operating," it is a non-GAAP financial measure.

1

Summary Financial Results

(in millions, except per share amounts)

	Quarter Ended				Year Ended
	December 31,				December 31,
	2017		2016		2017		2016
Net income	$	52	$	197	$	730	$	881
Non-GAAP operating income (1)	91		139		661		895
Gain (loss) related to the effect of consolidating financial guaranty variable interest entities (FG VIE consolidation) included in non-GAAP operating income	2		16		11		12
Net income per diluted share	$	0.44	$	1.49	$	5.96	$	6.56
Non-GAAP operating income (1) per diluted share	0.77		1.05		5.41		6.68
Gain (loss) related to FG VIE consolidation included in non-GAAP operating income per diluted share	0.02		0.12		0.10		0.10
Diluted shares	118.9		131.7		122.3		134.1
Gross written premiums (GWP)	$	72	$	83	$	307	$	154
Present value of new business production (PVP) (1)	77		85		289		214
Gross par written	4,776		5,643		18,024		17,854

Summary Financial Results (continued)

(in millions, except per share amounts)

	As of
	December 31, 2017						December 31, 2016
	Amount			Per Share			Amount			Per Share
Shareholders' equity	$	6,839		$	58.95		$	6,504		$	50.82
Non-GAAP operating shareholders' equity(1)	6,521			56.20			6,386			49.89
Non-GAAP adjusted book value(1)	9,020			77.74			8,506			66.46
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity	5			0.03			(7		)	(0.06		)
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value	(14		)	(0.12		)	(24		)	(0.18		)
Common shares outstanding	116.0						128.0

________________________________________________

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

2

“We continued to strengthen the enterprise in 2017 through our strategies of new business production, efficient capital management, alternative strategies including acquisitions and commutations, and determined loss mitigation,” said Dominic Frederico, President and CEO. "The intrinsic value of an Assured Guaranty common share reached new heights, reflected in record non-GAAP adjusted book value per share, which increased 17% during the year. Our U.S. public finance, international infrastructure and structured finance new business operations combined to produce more annual PVP than in any year since 2010."

Tax Reform

The Company recognized a provisional tax expense of $61 million attributable to the estimated effect of tax reform under the 2017 Tax Cuts and Jobs Act (Tax Act). This charge includes the net impact of the deemed repatriation of all previously untaxed unremitted earnings of controlled foreign corporations of $24 million, as well as the permanent write down of various tax attributes and other net deferred tax assets of $37 million for the reduction of the statutory corporate tax rate from 35% to 21%. Excluding the write down of tax attributes of non-GAAP adjustments, the estimated effect of tax reform on non-GAAP operating income was $35 million. (Please see “Explanation of Non-GAAP Financial Measures” at the end of this press release).

Fourth Quarter Results

GAAP Financial Information

Net income for fourth quarter 2017 was $52 million, compared with net income of $197 million for the three-month period ended December 31, 2016 (fourth quarter 2016). The decrease was primarily attributable to lower fair value gains, lower net earned premiums due mainly to lower refundings and terminations, the provisional tax expense related to the enactment of the Tax Act, offset in part, by lower loss and loss adjustment expenses (LAE).

Loss and LAE were $34 million in fourth quarter 2017, compared with $112 million in fourth quarter 2016. The expense in fourth quarter 2017 was due mainly to the increase in loss reserves on Puerto Rico exposures, partially offset by a gain on the settlement of a breach of representations and warranties (R&W) claim. The expense in fourth quarter 2016 was primarily related to an increase in Puerto Rico loss reserves and a reduction in excess spread on certain first-lien United States (U.S.) residential mortgage-backed securities (RMBS) exposures, which were partially offset by a benefit due to an increase in discount rates.

Fair value gains on credit derivatives were $5 million in fourth quarter 2017, compared with $74 million in fourth quarter 2016. Fourth quarter 2017 and 2016 fair value gains were generated primarily by the run-off of credit derivative par and price improvements on the underlying collateral, while fourth quarter 2016 also included a gain resulting from the termination of several credit derivative transactions. Except for credit impairment, the fair value adjustments on credit derivatives in the insured portfolio are non-economic adjustments that reverse to zero over the remaining term of that portfolio. Fair value gains on financial guaranty variable interest entities (FG VIEs) and committed capital securities (CCS) were also lower in fourth quarter 2017 compared with fourth quarter 2016.

3

Consolidated Statements of Operations (unaudited)

(in millions)

	Quarter Ended
	December 31,
	2017			2016
Revenues:
Net earned premiums	$	178		$	236
Net investment income	96			117
Net realized investment gains (losses)	(14		)	(24		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	(29		)	(18		)
Net unrealized gains (losses)	34			92
Net change in fair value of credit derivatives	5			74
Fair value gains (losses) on CCS	2			50
Fair value gains (losses) on FG VIEs	5			27
Other income (loss)	9			(10		)
Total revenues	281			470
Expenses:
Loss and LAE	34			112
Amortization of deferred acquisition costs	6			5
Interest expense	24			25
Other operating expenses	61			57
Total expenses	125			199
Income (loss) before income taxes	156			271
Provision (benefit) for income taxes	104			74
Net income (loss)	$	52		$	197

Economic Loss Development

The economic development in fourth quarter 2017 was $15 million. The development was primarily related to Puerto Rico exposures, partially offset by a $105 million benefit attributable to an R&W settlement. The economic loss development attributable to the change in discount rates was a benefit of $3 million for fourth quarter 2017.

4

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

(in millions)

	Net Expected Loss to be Paid (Recovered) as of September 30, 2017		Economic Loss Development/ (Benefit)			Losses (Paid)/ Recovered			Net Expected Loss to be Paid (Recovered) as of December 31, 2017
Public finance	$	1,093	$	122		$	(12	)	$	1,203
U.S. RMBS	176		(111		)	8			73
Other structured finance	23		4			—			27
Total	$	1,292	$	15		$	(4	)	$	1,303

________________________________________________

(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 accounting principles generally accepted in the United States of America (GAAP).

New Business Production

New Business Production

(in millions)

	Quarter Ended December 31,
	2017							2016
	GWP			PVP(1)		Gross Par Written		GWP		PVP(1)		Gross Par Written
Public finance - U.S.	$	58		$	59	$	4,367	$	70	$	72	$	5,465
Public finance - non-U.S.	13			8		116		9		9		107
Structured finance - U.S.	(4		)	7		246		4		3		47
Structured finance - non-U.S.	5			3		47		0		1		24
Total	$	72		$	77	$	4,776	$	83	$	85	$	5,643

________________________________________________

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

GWP include amounts collected upfront on all new business written, the present value of future premiums on new financial guaranty business written (discounted at risk free rates), the effects of changes in the estimated lives of transactions in the inforce book of financial guaranty business, and the current installments of non-financial guaranty new business. In fourth quarter 2017, U.S. public finance GWP decreased to $58 million from $70 million in fourth quarter 2016, due primarily to a decrease in new business production.

U.S. public finance PVP decreased in fourth quarter 2017 compared with fourth quarter 2016 due to lower par written in the secondary market. PVP written in the primary market increased 46% compared with fourth quarter 2016 due in part to several large transactions, with higher premium rates. Assured Guaranty once again guaranteed the majority of insured par issued.

5

Outside the U.S., the Company generated $8 million of international public finance PVP and $3 million of international structured finance in fourth quarter 2017. The transactions written in fourth quarter 2017 include secondary market guarantees on regulated utilities and reinsurance on aircraft residual value insurance transactions.

The average rating on all new business production was A- in both fourth quarter 2017 and 2016.

Other Non-GAAP Financial Measures

Non-GAAP operating income was $91 million in fourth quarter 2017, compared with $139 million in fourth quarter 2016. Non-GAAP operating income decreased in fourth quarter 2017 compared with fourth quarter 2016 due mainly to lower net earned premiums and the provisional tax expense related to the enactment of the Tax Act, offset in part by lower operating loss expense.

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Year-to-Date Results

GAAP Financial Information

Net income was $730 million for FY 2017, compared with $881 million for the year ended December 31, 2016 (FY 2016). Net income in both FY 2017 and FY 2016 had significant gains attributable to our strategic initiatives. FY 2017 included pretax commutation gains of $328 million related to the reassumption of previously ceded contracts, a pretax gain of $58 million related to the acquisition of MBIA UK Insurance Limited (MBIA UK) (MBIA UK Acquisition), and a pretax gain of $151 million related to litigation and R&W settlements. FY 2016 included a pretax gain of $259 million related to the acquisition of CIFG Holding Inc. (CIFG Acquisition) and a pretax gain of $89 million related to a loss mitigation transaction. Excluding these items, net income decreased in FY 2017 compared with FY 2016 due mainly to higher loss and LAE, lower net earned premiums from refundings and terminations, and the provisional tax expense related to the Tax Act.

Loss and LAE expense was $388 million in FY 2017, compared with $295 million in FY 2016. The expense in FY 2017 mainly includes an increase in loss reserves on Puerto Rico, offset in part by benefits attributable to litigation and R&W settlements. FY 2016 loss and LAE expense consisted primarily of an increase in loss reserves on certain Puerto Rico exposures.

7

Consolidated Statements of Operations (unaudited)

(in millions)

	Year Ended
	December 31,
	2017			2016
Revenues:
Net earned premiums	$	690		$	864
Net investment income	418			408
Net realized investment gains (losses)	40			(29		)
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	(10		)	29
Net unrealized gains (losses)	121			69
Net change in fair value of credit derivatives	111			98
Fair value gains (losses) on CCS	(2		)	0
Fair value gains (losses) on FG VIEs	30			38
Bargain purchase gain and settlement of pre-existing relationships, net	58			259
Other income (loss)	394			39
Total revenues	1,739			1,677
Expenses:
Loss and LAE	388			295
Amortization of deferred acquisition costs	19			18
Interest expense	97			102
Other operating expenses	244			245
Total expenses	748			660
Income (loss) before income taxes	991			1,017
Provision (benefit) for income taxes	261			136
Net income (loss)	$	730		$	881

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Economic Loss Development

The economic loss development for FY 2017 was $313 million, primarily related to the Company’s Puerto Rico exposure, partially offset by benefits recognized as a result of loss mitigation strategies including benefits attributable to litigation and R&W settlements.

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

(in millions)

	Net Expected Loss to be Paid (Recovered) as of December 31, 2016		Net Expected Loss to be Paid (Recovered) on MBIA UK  as of January 10, 2017		Economic Loss Development/ (Benefit)			Losses (Paid)/ Recovered			Net Expected Loss to be Paid (Recovered) as of December 31, 2017
Public finance	$	904	$	13	$	549		$	(263	)	$	1,203
U.S. RMBS	206		—		(181		)	48			73
Other structured finance	88		8		(55		)	(14		)	27
Total	$	1,198	$	21	$	313		$	(229	)	$	1,303

________________________________________________

(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

New Business Production

(in millions)

	Year Ended December 31,
	2017							2016
	GWP			PVP(1)		Gross Par Written		GWP			PVP(1)		Gross Par Written
Public finance - U.S.	$	190		$	196	$	15,957	$	142		$	161	$	16,039
Public finance - non - U.S.	105			66		1,376		15			25		677
Structured finance - U.S.	(1		)	12		489		(1		)	27		1,114
Structured finance - non-U.S.	13			15		202		(2		)	1		24
Total	$	307		$	289	$	18,024	$	154		$	214	$	17,854

________________________________________________

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

In FY 2017, GWP increased to $307 million from $154 million in FY 2016, due to increased new financial guaranty business production in U.S. public finance and international infrastructure markets.

9

U.S. public finance PVP increased in FY 2017 compared with the comparable prior-year period due mainly to a higher number of large transactions and a more diverse book of underlying credits. The Company's market share, based on par, rose to 58.5% in FY 2017 from 56.2% in FY 2016. Assured Guaranty once again guaranteed the majority of insured par issued while maintaining an A- average rating on new business written.

Outside the U.S., the Company generated $66 million of public finance PVP in FY 2017, compared with $25 million in FY 2016. In 2017 this included several university housing and regulated utilities transactions, a senior liquidity guarantee as part of a European infrastructure refinancing and a project finance infrastructure/public-private-partnership healthcare transaction. Non-U.S. PVP was strong in both the primary and secondary markets in 2017.

In addition, the Company generated $15 million of non-U.S. structured finance PVP in FY 2017 by providing reinsurance of aircraft residual value policies and triple-X life reinsurance polices.

Other Non-GAAP Financial Measures

Non-GAAP operating income for FY 2017 was $661 million, compared with non-GAAP operating income for FY 2016 of $895 million. Similar to net income results, non-GAAP operating income in FY 2017 included pretax commutation gains of $328 million, a pretax gain of $58 million related to the MBIA UK Acquisition and a pretax gain of $151 million related to litigation and R&W settlements. FY 2016 non-GAAP operating income included a pretax gain of $259 million related to the CIFG Acquisition and a pretax gain of $89 million related to a loss mitigation transaction. Excluding these gains, non-GAAP operating income decreased in FY 2017 compared with FY 2016 due mainly to higher loss and LAE, lower net earned premiums and the provisional tax expense related to the enactment of the Tax Act.

On a per-share basis, shareholders' equity, non-GAAP operating shareholders' equity and non-GAAP adjusted book value increased due to the benefit of the acquisitions and commutations over the past several years and the related recurring income, favorable litigation outcomes and R&W settlements, as well as the accretive effect of the share repurchase program that has been in effect since January of 2013.

Common Share Repurchases

Summary of Share Repurchases

(in millions, except per share amounts)

	Amount		Number of Shares	Average Price Per Share
2017 (January 1 - March 31)	$	216	5.43	$	39.83
2017 (April 1 - June 30)	135		3.46	39.05
2017 (July 1 - September 30)	80		1.85	43.29
2017 (October 1 - December 31)	70		1.93	36.18
2017	501		12.67	39.57
2018 (January 1 - February 22)	$	43	1.23	$	34.90

10

From 2013 through February 22, 2018, the Company repurchased 82.5 million common shares at an average price of $27.37, representing approximately 43% of the total shares outstanding at the beginning of the repurchase program in 2013. These repurchases can be made from time to time in the open market or in privately negotiated transactions.

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.

Insurance Company Subsidiaries’ Share Repurchases

In 2017, the respective regulators of Assured Guaranty Corp. (AGC) and Assured Guaranty Municipal Corp. (AGM) approved transfers of approximately $200 million and $101 million, respectively,  to the U.S. holding companies in the form of share repurchases.  AGM transferred $101 million to Assured Guaranty Municipal Holdings Inc. in 2017, and AGC transferred $200 million to Assured Guaranty US Holdings Inc. in January 2018.

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Consolidated Balance Sheets (unaudited)

(in millions)

	As of
	December 31, 2017		December 31, 2016
Assets
Investment portfolio:
Fixed maturity securities, available-for-sale, at fair value	$	10,674	$	10,233
Short-term investments, at fair value	627		590
Other invested assets	94		162
Total investment portfolio	11,395		10,985
Cash	144		118
Premiums receivable, net of commissions payable	915		576
Ceded unearned premium reserve	119		206
Deferred acquisition costs	101		106
Reinsurance recoverable on unpaid losses	44		80
Salvage and subrogation recoverable	572		365
Credit derivative assets	2		13
Deferred tax asset, net	98		497
Current income tax receivable	21		12
FG VIE assets, at fair value	700		876
Other assets	322		317
Total assets	$	14,433	$	14,151
Liabilities and shareholders' equity
Liabilities
Unearned premium reserve	$	3,475	$	3,511
Loss and LAE reserve	1,444		1,127
Reinsurance balances payable, net	61		64
Long-term debt	1,292		1,306
Credit derivative liabilities	271		402
FG VIE liabilities with recourse, at fair value	627		807
FG VIE liabilities without recourse, at fair value	130		151
Other liabilities	294		279
Total liabilities	7,594		7,647
Shareholders' equity
Common stock	1		1
Additional paid-in capital	573		1,060
Retained earnings	5,892		5,289
Accumulated other comprehensive income (AOCI)	372		149
Deferred equity compensation	1		5
Total shareholders' equity	6,839		6,504
Total liabilities and shareholders' equity	$	14,433	$	14,151

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Explanation of Non-GAAP Financial Measures

To reflect the key financial measures that management analyzes in evaluating the Company’s operations and progress towards long-term goals, the Company discloses both financial measures determined in accordance with GAAP and financial measures not determined in accordance with GAAP (non-GAAP financial measures).

Financial measures identified as non-GAAP should not be considered substitutes for GAAP financial measures. The primary limitation of non-GAAP financial measures is the potential lack of comparability to financial measures of other companies, whose definitions of non-GAAP financial measures may differ from those of the Company.

By disclosing non-GAAP financial measures, the Company gives investors, analysts and financial news reporters access to information that management and the Board of Directors review internally. The Company believes its presentation of non-GAAP financial measures, along with the effect of FG VIE consolidation, provides information that is necessary for analysts to calculate their estimates of Assured Guaranty’s financial results in their research reports on Assured Guaranty and for investors, analysts and the financial news media to evaluate Assured Guaranty’s financial results.

GAAP requires the Company to consolidate certain VIEs that have issued debt obligations insured by the Company. However, the Company does not own such VIEs and its exposure is limited to its obligation under its financial guaranty insurance contract. Management and the Board of Directors use non-GAAP financial measures adjusted to remove FG VIE consolidation (which the Company refers to as its core financial measures), as well as GAAP financial measures and other factors, to evaluate the Company’s results of operations, financial condition and progress towards long-term goals. The Company uses these core financial measures in its decision making process and in its calculation of certain components of management compensation. Wherever possible, the Company has separately disclosed the effect of FG VIE consolidation.

Many investors, analysts and financial news reporters use non-GAAP operating shareholders’ equity, adjusted to remove the effect of FG VIE consolidation, as the principal financial measure for valuing AGL’s current share price or projected share price and also as the basis of their decision to recommend, buy or sell AGL’s common shares. Many of the Company’s fixed income investors also use this measure to evaluate the Company’s capital adequacy.

Many investors, analysts and financial news reporters also use non-GAAP adjusted book value, adjusted to remove the effect of FG VIE consolidation, to evaluate AGL’s share price and as the basis of their decision to recommend, buy or sell the AGL common shares. Non-GAAP operating income adjusted for the effect of FG VIE consolidation enables investors and analysts to evaluate the Company’s financial results in comparison with the consensus analyst estimates distributed publicly by financial databases.

The core financial measures that the Company uses to help determine compensation are: (1) non-GAAP operating income, adjusted to remove the effect of FG VIE consolidation, (2) non-GAAP operating shareholders' equity, adjusted to remove the effect of FG VIE consolidation, (3) growth in non-GAAP adjusted book value per share, adjusted to remove the effect of FG VIE consolidation, and (4) PVP.

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The following paragraphs and tables define each non-GAAP financial measure disclosed by the Company and describe why it is useful. A reconciliation of the non-GAAP financial measure and the most directly comparable GAAP financial measure is presented below.

Non-GAAP Operating Income

Management believes that non-GAAP operating income is a useful measure because it clarifies the understanding of the underwriting results and financial condition of the Company and presents the results of operations of the Company excluding the fair value adjustments on credit derivatives and CCS that are not expected to result in economic gain or loss, as well as other adjustments described below. Management adjusts non-GAAP operating income further by removing FG VIE consolidation to arrive at its core operating income measure. Non-GAAP operating income is defined as net income (loss) attributable to AGL, as reported under GAAP, adjusted for the following:

1) Elimination of 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.

2) Elimination of non-credit-impairment unrealized fair value gains (losses) on credit derivatives, which is the amount of unrealized fair value gains (losses) 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, the Company's credit spreads, and other market factors and are not expected to result in an economic gain or loss.

3) Elimination of fair value gains (losses) on the Company’s CCS. Such amounts are affected by changes in market interest rates, the Company's credit spreads, price indications on the Company's publicly traded debt, and other market factors and are not expected to result in an economic gain or loss.

4) Elimination of foreign exchange gains (losses) on remeasurement of net premium receivables and loss and LAE reserves. Long-dated receivables and loss and LAE reserves represent the present value of future contractual or expected cash flows. 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 tax effects related to the above adjustments, which are determined by applying the statutory tax rate in each of the jurisdictions that generate these adjustments.

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Summary Reconciliation of

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

(in millions)

	Quarter Ended						Year Ended
	December 31,						December 31,
	2017			2016			2017			2016
Net income (loss)	$	52		$	197		$	730		$	881
Less pre-tax adjustments:
Realized gains (losses) on investments	(14		)	(24		)	40			(30		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(17		)	68			43			36
Fair value gains (losses) on CCS	2			50			(2		)	0
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	8			(12		)	57			(33		)
Total pre-tax adjustments	(21		)	82			138			(27		)
Less tax effect on pre-tax adjustments	(18		)	(24		)	(69		)	13
Non-GAAP operating income	$	91		$	139		$	661		$	895
Gain (loss) related to FG VIE consolidation (net of tax provision of $1, $9, $6 and $7) included in non-GAAP operating income	$	2		$	16		$	11		$	12

________________________________________________

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

15

Non-GAAP Operating Income Adjustments and

Effect of FG VIE Consolidation

(in millions)

	Quarter Ended December 31, 2017							Quarter Ended December 31, 2016
	Non-GAAP Operating Income Adjustments (1)				Effect of FG VIE Consolidation (2)			Non-GAAP Operating Income Adjustments (1)			Effect of FG VIE Consolidation (2)
Adjustments to revenues:
Net earned premiums	$	—			$	(3	)	$	—		$	(4	)
Net investment income	—				(1		)	—			(1		)
Net realized investment gains (losses)	(14		)		—			(24		)	—
Net change in fair value of credit derivatives	1				—			64			—
Fair value gains (losses) on CCS	2				—			50			—
Fair value gains (losses) on FG VIEs	—				5			—			27
Other income (loss)	8				0			(13		)	0
Total revenue adjustments	(3		)		1			77			22
Adjustments to expenses:
Loss expense	18				(2		)	(5		)	(3		)
Total expense adjustments	18				(2		)	(5		)	(3		)
Pre-tax adjustments	(21		)		3			82			25
Tax effect of adjustments	18			(3)	1			24			9
After-tax adjustments	$	(39	)		$	2		$	58		$	16

________________________________________________

(1) The "Non-GAAP Operating Income Adjustments" column represents the amounts recorded in the consolidated statements of operations that the Company removes to arrive at non-GAAP operating income.

(2) The "Effect of FG VIE Consolidation" column represents the amounts included in the consolidated statements of operations and non-GAAP operating income that the Company removes to arrive at the core financial measures that management uses in certain of its compensation calculations and its decision making process. 

(3) Fourth quarter 2017 includes $26 million adjustment to tax expense related to the estimated effect of tax reform.

16

Non-GAAP Operating Income Adjustments and

Effect of FG VIE Consolidation

(in millions)

	Year Ended December 31, 2017							Year Ended December 31, 2016
	Non-GAAP Operating Income Adjustments (1)				Effect of FG VIE Consolidation (2)			Non-GAAP Operating Income Adjustments (1)			Effect of FG VIE Consolidation (2)
Adjustments to revenues:
Net earned premiums	$	—			$	(15	)	$	—		$	(16	)
Net investment income	—				(5		)	8			(10		)
Net realized investment gains (losses)	40				—			(29		)	—
Net change in fair value of credit derivatives	86				—			49			—
Fair value gains (losses) on CCS	(2		)		—			0			—
Fair value gains (losses) on FG VIEs	—				30			—			38
Other income (loss)	57				0			(34		)	0
Total revenue adjustments	181				10			(6		)	12
Adjustments to expenses:
Loss expense	43				(7		)	20			(7		)
Other operating expenses	—				—			1			—
Total expense adjustments	43				(7		)	21			(7		)
Pre-tax adjustments	138				17			(27		)	19
Tax effect of adjustments	69			(3)	6			(13		)	7
After-tax adjustments	$	69			$	11		$	(14	)	$	12

________________________________________________

(1) The "Non-GAAP Operating Income Adjustments" column represents the amounts recorded in the consolidated statements of operations that the Company removes to arrive at non-GAAP operating income.

(2) The "Effect of FG VIE Consolidation" column represents the amounts included in the consolidated statements of operations and non-GAAP operating income that the Company removes to arrive at the core financial measures that management uses in certain of its compensation calculations and its decision making process. 

(3) FY 2017 includes $26 million adjustment to tax expense related to the estimated effect of tax reform.

Non-GAAP Operating Shareholders’ Equity and Non-GAAP Adjusted Book Value

Management believes that non-GAAP operating shareholders’ equity is a useful measure because it presents the equity of the Company excluding the fair value adjustments on investments, credit derivatives and CCS, that are not expected to result in economic gain or loss, along with other adjustments described below. Management adjusts non-GAAP operating shareholders’ equity further by removing FG VIE consolidation to arrive at its core operating shareholders' equity and core adjusted book value.

Non-GAAP operating shareholders’ equity is the basis of the calculation of non-GAAP adjusted book value (see below). Non-GAAP operating shareholders’ equity is defined as shareholders’ equity attributable to AGL, as reported under GAAP, adjusted for the following:

17

1) Elimination of non-credit-impairment unrealized fair value gains (losses) on credit derivatives, which is the amount of unrealized fair value gains (losses) 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.

2) Elimination of fair value gains (losses) on the Company’s CCS. Such amounts are affected by changes in market interest rates, the Company's credit spreads, price indications on the Company's publicly traded debt, and other market factors and are not expected to result in an economic gain or loss.

3) Elimination of unrealized gains (losses) on the Company’s investments that are recorded as a component of 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.

 4) Elimination of the tax effects related to the above adjustments, which are determined by applying the statutory tax rate in each of the jurisdictions that generate these adjustments.

Management uses non-GAAP adjusted book value, adjusted for FG VIE consolidation, to measure the intrinsic value of the Company, excluding franchise value. Growth in non-GAAP adjusted book value per share, adjusted for FG VIE consolidation (core adjusted book value), is one of the key financial measures used in determining the amount of certain long-term compensation elements to management and employees and used by rating agencies and investors. Management believes that non-GAAP adjusted book value is a useful measure because it enables an evaluation of the Company’s in-force premiums and revenues net of expected losses. Non-GAAP adjusted book value is non-GAAP operating shareholders’ equity, as defined above, further adjusted for the following:

1) Elimination of 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 net present value of estimated net future revenue on non-financial guaranty contracts. See below.

3) Addition of the deferred premium revenue 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.

4) Elimination of the tax asset or liability related to the above adjustments, which are determined by applying the statutory tax rate in each of the jurisdictions that generate these adjustments.

The unearned premiums and revenues included in non-GAAP adjusted book value will be earned in future periods, but actual earnings may differ materially from the estimated amounts used in determining current non-GAAP adjusted book value due to changes in foreign exchange rates, prepayment speeds, terminations, credit defaults and other factors.

18

Reconciliation of GAAP Shareholders' Equity to

Non-GAAP Operating Shareholders' Equity (1) and Non-GAAP Adjusted Book Value (1)

(in millions, except per share amounts)

	As of
	December 31, 2017			December 31, 2016
Shareholders' equity	$	6,839		$	6,504
Less pre-tax adjustments:
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(146		)	(189		)
Fair value gains (losses) on CCS	60			62
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	487			316
Less taxes	(83		)	(71		)
Non-GAAP operating shareholders' equity	6,521			6,386
Pre-tax adjustments:
Less: Deferred acquisition costs	101			106
Plus: Net present value of estimated net future revenue	146			136
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	2,966			2,922
Plus taxes	(512		)	(832		)
Non-GAAP adjusted book value	$	9,020		$	8,506
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity (net of tax (provision) benefit of $(2) and $4)	$	5		$	(7	)
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value (net of tax benefit of $3 and $12)	$	(14	)	$	(24	)
Shares outstanding at the end of the period	116.0			128.0
Per share:
Shareholders' equity	$	58.95		$	50.82
Non-GAAP operating shareholders' equity	56.20			49.89
Non-GAAP adjusted book value	77.74			66.46

________________________________________________

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

19

Net Present Value of Estimated Net Future Revenue

Management believes that this amount is a useful measure because it enables an evaluation of the value of future estimated revenue for non-financial guaranty insurance contracts. There is no corresponding GAAP financial measure. This amount represents the present value of estimated future revenue from the Company’s non-financial guaranty insurance contracts, net of reinsurance, ceding commissions and premium taxes, for contracts without expected economic losses, and is discounted at 6%. Estimated net future 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 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 management believes GAAP gross written premiums and the net credit derivative premiums received and receivable portion of net realized gains and other settlements on credit derivatives (Credit Derivative Realized Gains (Losses)) do not adequately measure. PVP in respect of 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, discounted, in each case, at 6%. Under GAAP, financial guaranty installment premiums 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 earned or written premiums and Credit Derivative Realized Gains (Losses) 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 GWP to PVP(1)

(in millions)

	Quarter Ended
	December 31, 2017
	Public Finance					Structured Finance
	U.S.			Non - U.S.		U.S.			Non - U.S.		Total
GWP	$	58		$	13	$	(4	)	$	5	$	72
Less: Installment GWPand other GAAP adjustments(2)	(2		)	13		(4		)	2		9
Upfront GWP	60			—		0			3		63
Plus: Installment premium PVP	(1		)	8		7			—		14
PVP	$	59		$	8	$	7		$	3	$	77

20

	Quarter Ended
	December 31, 2016
	Public Finance					Structured Finance
	U.S.			Non - U.S.		U.S.		Non - U.S.		Total
GWP	$	70		$	9	$	4	$	0	$	83
Less: Installment GWPand other GAAP adjustments(2)	(2		)	9		1		0		8
Upfront GWP	72			—		3		—		75
Plus: Installment premium PVP	—			9		0		1		10
PVP	$	72		$	9	$	3	$	1	$	85

	Year Ended
	December 31, 2017
	Public Finance					Structured Finance
	U.S.			Non - U.S.		U.S.			Non - U.S.		Total
GWP	$	190		$	105	$	(1	)	$	13	$	307
Less: Installment GWPand other GAAP adjustments(2)	(3		)	103		(1		)	0		99
Upfront GWP	193			2		0			13		208
Plus: Installment premium PVP	3			64		12			2		81
PVP	$	196		$	66	$	12		$	15	$	289

	Year Ended
	December 31, 2016
	Public Finance					Structured Finance
	U.S.			Non - U.S.		U.S.			Non - U.S.			Total
GWP	$	142		$	15	$	(1	)	$	(2	)	$	154
Less: Installment GWPand other GAAP adjustments(2)	(19		)	15		(4		)	(2		)	(10		)
Upfront GWP	161			—		3			—			164
Plus: Installment premium PVP	0			25		24			1			50
PVP	$	161		$	25	$	27		$	1		$	214

________________________________

(1) The non-GAAP financial 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, discounted at the prescribed GAAP discount rates, GWP adjustments on existing installment policies due to changes in assumptions, any cancellations of assumed reinsurance contracts, and other GAAP adjustments.

21

Conference Call and Webcast Information

The Company will host a conference call for investors at 8:00 a.m. Eastern Time (9:00 a.m. Atlantic Time) on Friday, February 23, 2018. 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 May 24, 2018. To listen to the replay, dial 1-877-344-7529 (in the U.S.) or 1-412-317-0088 (International), passcode 10116879. The replay will be available one hour after the conference call ends.

Please refer to Assured Guaranty's December 31, 2017 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 portfolio, investment portfolio and other items. The Company is also posting on the same page of its website:

• “Public Finance Transactions in 4Q 2017,” which lists the U.S. public finance new issues insured by the Company in fourth quarter 2017, and

• “Structured Finance Transactions at December 31, 2017,” which lists the Company's structured finance exposure as of that date.

In addition, the Company is posting at assuredguaranty.com/presentations the “December 31, 2017 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.

22

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 non-GAAP 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 reduction in the amount of available insurance opportunities and/or in the demand for Assured Guaranty's insurance;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; developments in the world’s financial and capital markets that adversely affect obligors’ payment rates or Assured Guaranty’s loss experience; the possibility that budget or pension 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; 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, bankruptcy and tax laws, or other governmental actions; the impact of changes in the world’s economy and credit and currency markets and in applicable laws or regulations relating to the decision of the United Kingdom to exit the European Union; the possibility that acquisitions or alternative investments made by Assured Guaranty do not result in the benefits anticipated or subject Assured Guaranty to unanticipated consequences; 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; 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 risk factors identified in AGL's filings with the U.S. Securities and Exchange Commission; other risks and uncertainties that have not been identified at this time; and management’s response to these factors. Readers are cautioned not to place undue reliance on these forward-looking statements. These forward-looking statements are made as of February 22, 2018, 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.

23

Contact Information

Robert Tucker

Senior Managing Director, Investor Relations and Corporate Communications

212-339-0861

rtucker@agltd.com

Ashweeta Durani

Vice President, Corporate Communications

212-408-6042

adurani@agltd.com

24

EX-99.2

Assured Guaranty Ltd.

December 31, 2017

Financial Supplement

Table of Contents		Page
	Selected Financial Highlights	1
	Consolidated Balance Sheets (unaudited)	3
	Consolidated Statements of Operations (unaudited)	4
	Non-GAAP Operating Income Adjustments and Effect of FG VIE Consolidation	5
	Selected Financial Highlights GAAP to Non-GAAP Reconciliations	6
	Claims-Paying Resources	9
	New Business Production	10
	Gross Par Written	11
	New Business Production by Quarter	12
	Available-for-Sale Investment Portfolio and Cash	13
	Estimated Net Exposure Amortization and Estimated Future Net Premium and Credit Derivative Revenues	14
	Expected Amortization of Net Par Outstanding	15
	Net Expected Loss to be Expensed	16
	Financial Guaranty Profile	17
	Exposure to Puerto Rico	20
	Direct Pooled Corporate Obligations Profile	23
	Consolidated U.S. RMBS Profile	24
	Below Investment Grade Exposures	25
	Largest Exposures by Sector	29
	Rollforward of Net Expected Loss and Loss Adjustment Expenses to be Paid	33
	Loss Measures	34
	Summary of Financial and Statistical Data	35
	Summary of GAAP to Non-GAAP Reconciliations	36
	Glossary	38
	Non-GAAP Financial Measures	40

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, 2017.

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) reduction in the amount of available insurance opportunities and/or in the demand for Assured Guaranty's insurance; (2) 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; (3) developments in the world’s financial and capital markets that adversely affect obligors’ payment rates or Assured Guaranty’s loss experience; (4) the possibility that budget or pension 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) increased competition, including from new entrants into the financial guaranty industry; (7) 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; (8) the inability of Assured Guaranty to access external sources of capital on acceptable terms; (9) changes in the world’s credit markets, segments thereof, interest rates or general economic conditions; (10) the impact of market volatility on the mark-to-market of Assured Guaranty’s contracts written in credit default swap form; (11) changes in applicable accounting policies or practices; (12) changes in applicable laws or regulations, including insurance, bankruptcy and tax laws, or other governmental actions; (13) the impact of changes in the world’s economy and credit and currency markets and in applicable laws or regulations relating to the decision of the United Kingdom to exit the European Union; (14) the possibility that acquisitions or alternative investments made by Assured Guaranty do not result in the benefits anticipated or subject Assured Guaranty to unanticipated consequences;(15) 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; (16) difficulties with the execution of Assured Guaranty’s business strategy; (17) loss of key personnel; (18) the effects of mergers, acquisitions and divestitures; (19) natural or man-made catastrophes; (20) other risk factors identified in AGL's filings with the SEC; (21) other risks and uncertainties that have not been identified at this time and; (22) management’s response to these factors. 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 (1 of 2)

(dollars in millions, except per share amounts)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2017			2016			2017			2016
Net income (loss)	$	52		$	197		$	730		$	881
Non-GAAP operating income(1)	91			139			661			895
Gain (loss) related to the effect of consolidating financial guaranty variable interest entities (FG VIE consolidation) (net of tax provision (benefit) of $1, $9, $6 and $7) included in non-GAAP operating income	2			16			11			12
Net income (loss) per diluted share	$	0.44		$	1.49		$	5.96		$	6.56
Non-GAAP operating income per diluted share(1)	0.77			1.05			5.41			6.68
Gain (loss) related to FG VIE consolidation included in non-GAAP operating income per diluted share	0.02			0.12			0.10			0.10
Weighted average shares outstanding
Basic shares outstanding	117.1			130.0			120.6			133.0
Diluted shares outstanding (1)	118.9			131.7			122.3			134.1
Effective tax rate on net income	66.6		%	27.6		%	26.3		%	13.4		%
Effective tax rate on non-GAAP operating income (3)	48.4		%	26.6		%	22.5		%	14.3		%
Effect of FG VIE consolidation included in effective tax rate on non-GAAP operating income	(0.5		)%	1.3		%	0.2		%	0.4		%
Return on equity (ROE) calculations (4):
GAAP ROE	3.0		%	12.0		%	10.9		%	14.0		%
Non-GAAP Operating ROE (1)	5.6		%	8.7		%	10.2		%	14.5		%
Effect of FG VIE consolidation on non-GAAP operating ROE	0.2		%	1.1		%	0.1		%	0.2		%
New business:
Gross written premiums (GWP)	$	72		$	83		$	307		$	154
Present value of new business production (PVP) (1)	77			85			289			214
Gross par written	4,776			5,643			18,024			17,854
							As of
							December 31,			December 31,
							2017			2016
Shareholders' equity							$	6,839		$	6,504
Non-GAAP operating shareholders' equity (1)							6,521			6,386
Non-GAAP adjusted book value (1)							9,020			8,506
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity							5			(7		)
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value							(14		)	(24		)
Shares outstanding at the end of period							116.0			128.0
Shareholders' equity per share							$	58.95		$	50.82
Non-GAAP operating shareholders' equity per share (1)							56.20			49.89
Non-GAAP adjusted book value per share (1)							77.74			66.46
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity							0.03			(0.06		)
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value							(0.12		)	(0.18		)
Net debt service outstanding							$	401,118		$	437,535
Net par outstanding							264,952			296,318
Claims-paying resources (5)							11,752			11,701

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

2) Non-GAAP diluted shares outstanding were the same as diluted shares calculated in accordance with accounting principles generally accepted in the United States of America (GAAP) since both net income and non-GAAP operating income were positive for all periods.

3) Represents the ratio of non-GAAP operating provision for income taxes to non-GAAP operating income before income taxes.

4) Quarterly ROE calculations represent annualized returns. See page 7 for additional information on calculation.

5) See page 9 for additional detail on claims-paying resources.

1

Assured Guaranty Ltd.

Selected Financial Highlights (2 of 2)

(dollars in millions, except per share amounts)

	Three Months Ended				Year Ended
	December 31,				December 31,
	2017		2016		2017		2016
Effect of refundings and terminations on GAAP measures:
Net earned premiums, pre-tax	$	82	$	137	$	286	$	469
Net change in fair value of credit derivatives, pre-tax	0		31		26		123
Net income effect	53		117		212		452
Net income per diluted share	0.44		0.88		1.73		3.37
Effect of refundings and terminations on non-GAAP measures:
Operating net earned premiums and credit derivative revenues(1), pre-tax	82		150		286		506
Non-GAAP operating income(1) effect	53		103		190		392
Non-GAAP operating income per diluted share (1)	0.44		0.78		1.55		2.92
Gain (loss) related to FG VIE consolidation included in the effect of refundings and terminations above for the following measures:
Net earned premiums, pre-tax	—		—		—		1
Net income and non-GAAP operating income, after-tax	—		—		—		1
Net income and non-GAAP operating income, after-tax, per diluted share	—		—		—		0.00

1) Consolidated statement of operations items mentioned in this Financial Supplement that are described as operating (i.e. operating net earned premiums) are non-GAAP measures and represent components of non-GAAP operating income. Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement. The prior-year non-GAAP financial measures have been updated to reflect the revised calculation as discussed in the explanation of Non-GAAP Financial Measures at the end of this Financial Supplement.

2

Assured Guaranty Ltd.

Consolidated Balance Sheets (unaudited)

(dollars in millions)

	As of:
	December 31,		December 31,
	2017		2016
Assets:
Investment portfolio:
Fixed maturity securities, available-for-sale, at fair value	$	10,674	$	10,233
Short-term investments, at fair value	627		590
Other invested assets	94		162
Total investment portfolio	11,395		10,985
Cash	144		118
Premiums receivable, net of commissions payable	915		576
Ceded unearned premium reserve	119		206
Deferred acquisition costs	101		106
Reinsurance recoverable on unpaid losses	44		80
Salvage and subrogation recoverable	572		365
Credit derivative assets	2		13
Deferred tax asset, net	98		497
Current income tax receivable	21		12
Financial guaranty variable interest entities (FG VIE) assets, at fair value	700		876
Other assets	322		317
Total assets	$	14,433	$	14,151
Liabilities and shareholders' equity:
Liabilities:
Unearned premium reserve	$	3,475	$	3,511
Loss and loss adjustment expense reserve	1,444		1,127
Reinsurance balances payable, net	61		64
Long-term debt	1,292		1,306
Credit derivative liabilities	271		402
FG VIE liabilities with recourse, at fair value	627		807
FG VIE liabilities without recourse, at fair value	130		151
Other liabilities	294		279
Total liabilities	7,594		7,647
Shareholders' equity:
Common stock	1		1
Additional paid-in capital	573		1,060
Retained earnings	5,892		5,289
Accumulated other comprehensive income (AOCI)	372		149
Deferred equity compensation	1		5
Total shareholders' equity	6,839		6,504
Total liabilities and shareholders' equity	$	14,433	$	14,151

3

Assured Guaranty Ltd.

Consolidated Statements of Operations (unaudited)

(dollars in millions, except per share amounts)

				Three Months Ended						Year Ended
				December 31,						December 31,
				2017			2016			2017			2016
Revenues:
	Net earned premiums			$	178		$	236		$	690		$	864
	Net investment income			96			117			418			408
	Net realized investment gains (losses)			(14		)	(24		)	40			(29		)
	Net change in fair value of credit derivatives:
		Realized gains (losses) and other settlements		(29		)	(18		)	(10		)	29
		Net unrealized gains (losses)		34			92			121			69
			Net change in fair value of credit derivatives	5			74			111			98
	Fair value gains (losses) on committed capital securities (CCS)			2			50			(2		)	0
	Fair value gains (losses) on FG VIEs			5			27			30			38
	Bargain purchase gain and settlement of pre-existing relationships			—			—			58			259
	Other income (loss)			9			(10		)	394			39
		Total revenues		281			470			1,739			1,677
Expenses:
	Loss and loss adjustment expenses (LAE)			34			112			388			295
	Amortization of deferred acquisition costs			6			5			19			18
	Interest expense			24			25			97			102
	Other operating expenses			61			57			244			245
		Total expenses		125			199			748			660
Income (loss) before income taxes				156			271			991			1,017
	Provision (benefit) for income taxes			104			74			261			136
Net income (loss)				$	52		$	197		$	730		$	881
Earnings per share:
	Basic			$	0.44		$	1.51		$	6.05		$	6.61
	Diluted			$	0.44		$	1.49		$	5.96		$	6.56

4

Assured Guaranty Ltd.

Non-GAAP Operating Income Adjustments and Effect of FG VIE Consolidation

(dollars in millions)

Non-GAAP Operating Income Adjustments and Effect of FG VIE Consolidation for the Three Months EndedDecember 31, 2017 and December 31, 2016

	Three Months Ended							Three Months Ended
	December 31, 2017							December 31, 2016
	Non-GAAP Operating Income Adjustments (1)				Effect of FG VIE Consolidation (2)			Non-GAAP Operating Income Adjustments (1)			Effect of FG VIE Consolidation (2)
Adjustments to revenues:
Net earned premiums	$	—			$	(3	)	$	—		$	(4	)
Net investment income	—				(1		)	—			(1		)
Net realized investment gains (losses)	(14		)		—			(24		)	—
Net change in fair value of credit derivatives	1				—			64			—
Fair value gains (losses) on CCS	2				—			50			—
Fair value gains (losses) on FG VIEs	—				5			—			27
Other income (loss)	8				0			(13		)	0
Total revenue adjustments	(3		)		1			77			22
Adjustments to expenses:
Loss expense	18				(2		)	(5		)	(3		)
Total expense adjustments	18				(2		)	(5		)	(3		)
Pre-tax adjustments	(21		)		3			82			25
Tax effect of adjustments	18			(3)	1			24			9
After-tax adjustments	$	(39	)		$	2		$	58		$	16

Non-GAAP Operating Income Adjustments and Effect of FG VIE Consolidation for the Year EndedDecember 31, 2017 and December 31, 2016

	Year Ended							Year Ended
	December 31, 2017							December 31, 2016
	Non-GAAP Operating Income Adjustments (1)				Effect of FG VIE Consolidation (2)			Non-GAAP Operating Income Adjustments (1)			Effect of FG VIE Consolidation (2)
Adjustments to revenues:
Net earned premiums	$	—			$	(15	)	$	—		$	(16	)
Net investment income	—				(5		)	8			(10		)
Net realized investment gains (losses)	40				—			(29		)	—
Net change in fair value of credit derivatives	86				—			49			—
Fair value gains (losses) on CCS	(2		)		—			0			—
Fair value gains (losses) on FG VIEs	—				30			—			38
Other income (loss)	57				0			(34		)	0
Total revenue adjustments	181				10			(6		)	12
Adjustments to expenses:
Loss expense	43				(7		)	20			(7		)
Other operating expenses	—				—			1			—
Total expense adjustments	43				(7		)	21			(7		)
Pre-tax adjustments	138				17			(27		)	19
Tax effect of adjustments	69			(3)	6			(13		)	7
After-tax adjustments	$	69			$	11		$	(14	)	$	12

1) The "Non-GAAP Operating Income Adjustments" column represents the amounts recorded in the consolidated statements of operations that the Company removes to arrive at non-GAAP operating income. Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

2) The "Effect of FG VIE Consolidation" column represents the amounts included in the consolidated statements of operations and non-GAAP operating income that the Company removes to arrive at the core financial measures that management uses in certain of its compensation calculations and its decision making process. Please refer to the explanation of Non-GAAP Financial Measures set forth at the end of this Financial Supplement.

3) Three months and year ended December 31, 2017 include $26 million adjustment to tax expense related to the estimated effect of tax reform under the 2017 Tax Cuts and Jobs Act.

5

Assured Guaranty Ltd.

Selected Financial Highlights

GAAP to Non-GAAP Reconciliations (1 of 3)

(dollars in millions, except per share amounts)

Non-GAAP operating income Reconciliation	Three Months Ended						Year Ended
	December 31,						December 31,
	2017			2016			2017			2016
Net income (loss)	$	52		$	197		$	730		$	881
Less pre-tax adjustments:
Realized gains (losses) on investments	(14		)	(24		)	40			(30		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(17		)	68			43			36
Fair value gains (losses) on CCS	2			50			(2		)	0
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	8			(12		)	57			(33		)
Total pre-tax adjustments	(21		)	82			138			(27		)
Less tax effect on pre-tax adjustments	(18		)	(24		)	(69		)	13
Non-GAAP operating income	$	91		$	139		$	661		$	895
Gain (loss) related to FG VIE consolidation (net of tax provision (benefit) of $1, $9, $6 and $7) included in non-GAAP operating income	$	2		$	16		$	11		$	12
Per diluted share:
Net income (loss)	$	0.44		$	1.49		$	5.96		$	6.56
Less pre-tax adjustments:
Realized gains (losses) on investments	(0.12		)	(0.18		)	0.33			(0.23		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(0.14		)	0.52			0.35			0.27
Fair value gains (losses) on CCS	0.01			0.38			(0.02		)	0.00
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	0.07			(0.09		)	0.46			(0.25		)
Total pre-tax adjustments	(0.18		)	0.63			1.12			(0.21		)
Less tax effect on pre-tax adjustments	(0.15		)	(0.19		)	(0.57		)	0.09
Non-GAAP operating income	$	0.77		$	1.05		$	5.41		$	6.68
Gain (loss) related to FG VIE consolidation included in non-GAAP operating income per diluted share	$	0.02		$	0.12		$	0.10		$	0.10

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

6

Assured Guaranty Ltd.

Selected Financial Highlights

GAAP to Non-GAAP Reconciliations (2 of 3)

(dollars in millions)

ROE Reconciliation and Calculation
	December 31,		September 30,			December 31,			September 30,			December 31,
	2017		2017			2016			2016			2015
Shareholders' equity	$	6,839	$	6,878		$	6,504		$	6,640		$	6,063
Non-GAAP operating shareholders' equity	6,521		6,590			6,386			6,432			5,925
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity	5		3			(7		)	(24		)	(21		)
			Three Months Ended						Year Ended
			December 31,						December 31,
			2017			2016			2017			2016
Net income (loss)			$	52		$	197		$	730		$	881
Non-GAAP operating income			91			139			661			895
Gain (loss) related to FG VIE consolidation included in non-GAAP operating income			2			16			11			12
Average shareholders' equity			$	6,859		$	6,572		$	6,672		$	6,284
Average non-GAAP operating shareholders' equity			6,556			6,409			6,454			6,156
Gain (loss) related to FG VIE consolidation included in average non-GAAP operating shareholders' equity			4			(16		)	(1		)	(14		)
GAAP ROE (1)			3.0		%	12.0		%	10.9		%	14.0		%
Non-GAAP operating ROE (1)			5.6		%	8.7		%	10.2		%	14.5		%
Effect of FG VIE consolidation included in non-GAAP operating ROE			0.2		%	1.1		%	0.1		%	0.2		%

1) Quarterly ROE calculations represent annualized returns.

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

7

Assured Guaranty Ltd.

Selected Financial Highlights

GAAP to Non-GAAP Reconciliations (3 of 3)

(dollars in millions)

	As of
	December 31,			September 30,			December 31,			September 30,			December 31,
	2017			2017			2016			2016			2015
Reconciliation of shareholders' equity to non-GAAP adjusted book value:
Shareholders' equity	$	6,839		$	6,878		$	6,504		$	6,640		$	6,063
Less pre-tax reconciling items:
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(146		)	(129		)	(189		)	(284		)	(241		)
Fair value gains (losses) on CCS	60			58			62			12			62
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	487			506			316			571			373
Less taxes	(83		)	(147		)	(71		)	(91		)	(56		)
Non-GAAP operating shareholders' equity (1)	6,521			6,590			6,386			6,432			5,925
Pre-tax reconciling items:
Less: Deferred acquisition costs	101			106			106			108			114
Plus: Net present value of estimated net future revenue	146			144			136			155			169
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	2,966			3,091			2,922			3,038			3,384
Plus taxes	(512		)	(899		)	(832		)	(868		)	(968		)
Non-GAAP adjusted book value (2)	$	9,020		$	8,820		$	8,506		$	8,649		$	8,396
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity (net of tax (provision) benefit of $(2), $(1), $4, $13 and $11)	5			3			(7		)	(24		)	(21		)
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value (net of tax benefit of $3, $7, $12, $21 and $22)	(14		)	(13		)	(24		)	(40		)	(43		)

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

1) The December 31, 2017 amount includes a charge of $114 million related to the estimated effect of tax reform.

2) The December 31, 2017 amount includes a benefit of $239 million related to the estimated effect of tax reform.

8

Assured Guaranty Ltd.

Claims-Paying Resources

(dollars in millions)

	As of December 31, 2017
	Assured Guaranty Municipal Corp.		Assured Guaranty Corp.		Municipal Assurance Corp.		Assured Guaranty Re Ltd. (8)		Eliminations(3)			Consolidated
Claims-paying resources
Policyholders' surplus	$	2,254	$	2,073	$	270	$	1,041	$	(427	)	$	5,211
Contingency reserve(1)	1,108		642		224		—		(224		)	1,750
Qualified statutory capital	3,362		2,715		494		1,041		(651		)	6,961
Unearned premium reserve(1)	1,657		354		248		663		(248		)	2,674
Loss and LAE reserves (1)	634		135		0		323		0			1,092
Total policyholders' surplus and reserves	5,653		3,204		742		2,027		(899		)	10,727
Present value of installment premium(1)	183		126		1		136		(1		)	445
CCS	200		200		—		—		—			400
Excess of loss reinsurance facility (2)	180		180		180		—		(360		)	180
Total claims-paying resources (including proportionate MAC ownership for AGM and AGC)	6,216		3,710		923		2,163		(1,260		)	11,752
Adjustment for MAC (4)	451		292		—		—		(743		)	—
Total claims-paying resources (excluding proportionate MAC ownership for AGM and AGC)	$	5,765	$	3,418	$	923	$	2,163	$	(517	)	$	11,752
Statutory net par outstanding (5)	$	120,504	$	23,914	$	30,100	$	65,174	$	(689	)	$	239,003
Equity method adjustment (4)	18,271		11,829		—		—		(30,100		)	—
Adjusted statutory net par outstanding (1)	$	138,775	$	35,743	$	30,100	$	65,174	$	(30,789	)	$	239,003
Net debt service outstanding (5)	$	191,884	$	36,018	$	44,323	$	102,187	$	(1,072	)	$	373,340
Equity method adjustment (4)	26,904		17,419		—		—		(44,323		)	—
Adjusted net debt service outstanding (1)	$	218,788	$	53,437	$	44,323	$	102,187	$	(45,395	)	$	373,340
Ratios:
Adjusted net par outstanding to qualified statutory capital	41:1		13:1		61:1		63:1					34:1
Capital ratio (6)	65:1		20:1		90:1		98:1					54:1
Financial resources ratio (7)	35:1		14:1		48:1		47:1					32:1

1) The numbers shown for Assured Guaranty Municipal Corp. (AGM) and Assured Guaranty Corp. (AGC) have been adjusted to include, as applicable, (i) their 100% share of their respective European 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) Represents the $180 million portion placed with an unaffiliated reinsurer of a $400 million aggregate excess-of-loss reinsurance facility for the benefit of AGC, AGM and MAC, which became effective January 1, 2018. The facility terminates on January 1, 2020, unless AGC, AGM and MAC choose to extend it.

3) Eliminations are primarily for (i) intercompany surplus notes between AGM and AGC, and (ii) MAC amounts, whose proportionate share are included in AGM and AGC based on ownership percentages and (iii) eliminations related to the sale of European Subsidiaries from AGC to AGM. 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.

4) Represents adjustments for AGM's and AGC's interest and indirect ownership of MAC.

5) Net par outstanding and net debt service outstanding are presented on a statutory basis.

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

7) 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).

8) Assured Guaranty Re Ltd. (AG Re) numbers represent the Company's estimate of United States (U.S.) statutory accounting practices prescribed or permitted by insurance regulatory authorities, except for contingency reserves.

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

9

Assured Guaranty Ltd.

New Business Production

(dollars in millions)

Reconciliation of GWP to PVP for the Three Months EndedDecember 31, 2017 and December 31, 2016

	Three Months Ended												Three Months Ended
	December 31, 2017												December 31, 2016
	Public Finance					Structured Finance							Public Finance					Structured Finance
	U.S.			Non - U.S.		U.S.			Non - U.S.		Total		U.S.			Non - U.S.		U.S.		Non - U.S.		Total
Total GWP	$	58		$	13	$	(4	)	$	5	$	72	$	70		$	9	$	4	$	0	$	83
Less: Installment GWP and other GAAP adjustments(1)	(2		)	13		(4		)	2		9		(2		)	9		1		0		8
Upfront GWP	60			—		0			3		63		72			—		3		—		75
Plus: Installment premium PVP	(1		)	8		7			—		14		—			9		0		1		10
Total PVP	$	59		$	8	$	7		$	3	$	77	$	72		$	9	$	3	$	1	$	85
Gross par written	$	4,367		$	116	$	246		$	47	$	4,776	$	5,465		$	107	$	47	$	24	$	5,643

Reconciliation of GWP to PVP for the Year EndedDecember 31, 2017 and December 31, 2016

	Year Ended												Year Ended
	December 31, 2017												December 31, 2016
	Public Finance					Structured Finance							Public Finance					Structured Finance
	U.S.			Non - U.S.		U.S. (2)			Non - U.S.		Total		U.S.			Non - U.S.		U.S.			Non - U.S.			Total
Total GWP	$	190		$	105	$	(1	)	$	13	$	307	$	142		$	15	$	(1	)	$	(2	)	$	154
Less: Installment GWP and other GAAP adjustments(1)	(3		)	103		(1		)	0		99		(19		)	15		(4		)	(2		)	(10		)
Upfront GWP	193			2		0			13		208		161			—		3			—			164
Plus: Installment premium PVP	3			64		12			2		81		0			25		24			1			50
Total PVP	$	196		$	66	$	12		$	15	$	289	$	161		$	25	$	27		$	1		$	214
Gross par written	$	15,957		$	1,376	$	489		$	202	$	18,024	$	16,039		$	677	$	1,114		$	24		$	17,854

1) Includes present value of new business on installment policies discounted at the prescribed GAAP discount rates, GWP adjustments on existing installment policies due to changes in assumptions, 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.

10

Assured Guaranty Ltd.

Gross Par Written

(dollars in millions)

Gross Par Written by Asset Type

	Three Months Ended			Year Ended
	December 31, 2017			December 31, 2017
	Gross Par Written		Avg. Internal Rating	Gross Par Written		Avg. Internal Rating
Sector:
U.S. public finance
General obligation	$	1,783	A-	$	7,156	A-
Tax backed	521		A-	3,268		A
Municipal utilities	1,046		A-	2,256		A-
Transportation	195		A-	1,423		BBB+
Infrastructure finance	378		BBB-	723		BBB+
Higher education	69		A	624		A
Healthcare	147		BBB-	269		BBB
Housing revenue	228		BBB	228		BBB
Other public finance	—		—	10		A
Total U.S. public finance	4,367		BBB+	15,957		A-
Non-U.S. public finance:
Infrastructure finance	—		—	870		BBB+
Regulated utilities	116		BBB+	506		BBB+
Total non-U.S. public finance	116		BBB+	1,376		BBB+
Total public finance	$	4,483	BBB+	$	17,333	A-
U.S. structured finance:
Insurance securitization	$	201	AA	$	444	AA
Structured credit	39		BBB	39		BBB
Consumer receivables	4		BBB+	4		BBB+
Other structured finance	2		A-	2		A-
Total U.S. structured finance	246		AA-	489		AA
Non-U.S. structured finance:
Commercial receivables	47		BBB+	202		BBB+
Total non-U.S. structured finance	47		BBB+	202		BBB+
Total structured finance	$	293	A+	$	691	A+
Total gross par written	$	4,776	A-	$	18,024	A-

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

11

Assured Guaranty Ltd.

New Business Production by Quarter

(dollars in millions)

																			Year Ended
	1Q-16			2Q-16		3Q-16			4Q-16		1Q-17		2Q-17		3Q-17		4Q-17		2016			2017
PVP:
Public finance - U.S.	$	31		$	33	$	25		$	72	$	52	$	46	$	39	$	59	$	161		$	196
Public finance - non-U.S.	7			7		2			9		40		14		4		8		25			66
Structured finance - U.S.	0			1		23			3		5		0		0		7		27			12
Structured finance - non-U.S.	—			—		—			1		2		10		—		3		1			15
Total PVP	$	38		$	41	$	50		$	85	$	99	$	70	$	43	$	77	$	214		$	289
Reconciliation of GWP to PVP:
Total GWP	$	19		$	36	$	16		$	83	$	111	$	79	$	45	$	72	$	154		$	307
Less: Installment GWP and other GAAP adjustments	(12		)	3		(9		)	8		55		25		10		9		(10		)	99
Upfront GWP	31			33		25			75		56		54		35		63		164			208
Plus: Installment premium PVP	7			8		25			10		43		16		8		14		50			81
Total PVP	$	38		$	41	$	50		$	85	$	99	$	70	$	43	$	77	$	214		$	289
Gross par written:
Public finance - U.S.	$	2,749		$	4,366	$	3,459		$	5,465	$	3,430	$	4,832	$	3,328	$	4,367	$	16,039		$	15,957
Public finance - non-U.S.	—			406		164			107		990		181		89		116		677			1,376
Structured finance - U.S.	—			3		1,064			47		243		—		—		246		1,114			489
Structured finance - non-U.S.	—			—		—			24		28		127		—		47		24			202
Total	$	2,749		$	4,775	$	4,687		$	5,643	$	4,691	$	5,140	$	3,417	$	4,776	$	17,854		$	18,024

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

12

Assured Guaranty Ltd.

Available-for-Sale Investment Portfolio and Cash

As of December 31, 2017

(dollars in millions)

			Amortized Cost		Pre-Tax Book Yield		After-Tax Book Yield (8)		Fair Value		Annualized Investment Income (1)
Investment portfolio, available-for-sale:
Fixed maturity securities:
	Obligations of states and political subdivisions(4)		$	5,259	3.59	%	3.35	%	$	5,495	$	189
	Insured obligations of state and political subdivisions (2)(4)		245		4.89	%	4.57	%	265		12
	U.S. Treasury securities and obligations of U.S. government agencies		212		2.06	%	1.66	%	217		4
	Agency obligations		60		5.14	%	4.67	%	68		3
	Corporate securities (4)		1,973		3.04	%	2.66	%	2,018		60
	Mortgage-backed securities (MBS):
		Residential MBS (RMBS) (3)(4)	852		4.59	%	3.93	%	861		39
		Commercial MBS (CMBS)	540		3.26	%	2.84	%	549		18
	Asset-backed securities (4)		730		8.49	%	6.74	%	896		62
	Foreign government securities		316		1.56	%	1.23	%	305		5
		Total fixed maturity securities	10,187		3.84	%	3.42	%	10,674		392
Short-term investments			627		1.10	%	0.89	%	627		6
Cash (5)			144		—	%	—	%	144		—
		Total	$	10,958	3.68	%	3.27	%	$	11,445	$	398
Ratings (6):			Fair Value		% of Portfolio
	U.S. Treasury securities and obligations of U.S. government agencies		$	217	2.0	%
	Agency obligations		68		0.6	%
	AAA/Aaa		1,528		14.3	%
	AA/Aa		5,312		49.8	%
	A/A		2,014		18.9	%
	BBB		365		3.4	%
	Below investment grade (BIG) (7)		1,115		10.5	%
	Not rated		55		0.5	%
		Total fixed maturity securities, available-for-sale	$	10,674	100.0	%
Duration of fixed maturity securities and short-term investments (in years):					5.3
Average ratings of fixed maturity securities and short-term investments					A+

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 S&P Global Ratings, a division of Standard & Poor's Financial Services LLC (S&P) or Moody's Investors Service, Inc. (Moody's), average A+. Includes fair value of $98 million insured by AGC and AGM.

3) Includes fair value of $221 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) Cash is not included in the yield calculation.

6) Ratings are represented by the lower of the Moody's and S&P classifications except for bonds purchased for loss mitigation (loss mitigation securities) 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 $1,638 million in par with carrying value of $1,093 million.

8) After tax book yield reflects a decrease in the tax rate from 35% to 21%.

13

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		Effect of FG VIE Consolidation on Expected PV Net Earned Premiums and Accretion of Discount			Future Credit Derivative Revenues
2017 (as of December 31)				$	401,118
2018 Q1		$	8,591	392,527		$	89	$	5	$	(3	)	$	2
2018 Q2		10,568		381,959		88		5		(3		)	2
2018 Q3		11,566		370,393		84		5		(3		)	2
2018 Q4		8,402		361,991		82		5		(3		)	2
2019		29,744		332,247		295		17		(9		)	9
2020		22,195		310,052		266		16		(7		)	8
2021		22,447		287,605		244		14		(6		)	8
2022		21,293		266,312		223		13		(5		)	7
2018-2022		134,806		266,312		1,371		80		(39		)	40
2023-2027		90,064		176,248		866		51		(17		)	30
2028-2032		71,232		105,016		565		29		(12		)	25
2033-2037		50,648		54,368		324		15		(11		)	21
After 2037		54,368		—		281		13		0			24
	Total	$	401,118			$	3,407	$	188	$	(79	)	$	140

1) Represents the future expected amortization of current debt service outstanding (principal and interest), assuming no advance refundings, as of December 31, 2017. Actual amortization differs from expected maturities because borrowers may have the right to call or prepay guaranteed obligations, terminations and because of management's assumptions on structured finance amortization.

2) See page 16, ‘‘Net Expected Loss to be Expensed.’’

14

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
2017 (as of December 31)													$	12,638
2018 Q1		$	19	$	202	$	34		$	195	$	450	12,188
2018 Q2		9		211		2			146		368		11,820
2018 Q3		16		202		(2		)	115		331		11,489
2018 Q4		10		191		(52		)	151		300		11,189
2019		81		770		7			579		1,437		9,752
2020		82		618		(2		)	363		1,061		8,691
2021		65		562		2			498		1,127		7,564
2022		41		404		96			492		1,033		6,531
2018-2022		323		3,160		85			2,539		6,107		6,531
2023-2027		278		1,035		162			1,157		2,632		3,899
2028-2032		219		255		880			364		1,718		2,181
2033-2037		602		307		226			757		1,892		289
After 2037		82		61		65			81		289		—
	Total structured finance	$	1,504	$	4,818	$	1,418		$	4,898	$	12,638

Public Finance

		Estimated Net Par Amortization		Estimated Ending Net Par Outstanding
2017 (as of December 31)				$	252,314
2018 Q1		$	5,101	247,213
2018 Q2		7,213		240,000
2018 Q3		8,404		231,596
2018 Q4		5,337		226,259
2019		17,834		208,425
2020		11,322		197,103
2021		12,081		185,022
2022		11,568		173,454
2018-2022		78,860		173,454
2023-2027		51,541		121,913
2028-2032		45,634		76,279
2033-2037		34,974		41,305
After 2037		41,305		—
	Total public finance	$	252,314

Net par outstanding (end of period)

		1Q-16		2Q-16		3Q-16		4Q-16		1Q-17		2Q-17		3Q-17		4Q-17
Public finance - U.S.		$	282,055	$	272,114	$	258,650	$	244,798	$	238,050	$	232,418	$	218,216	$	209,392
Public finance - non-U.S.		29,385		28,128		28,239		26,381		39,343		40,533		42,727		42,922
Structured finance - U.S.		30,452		25,562		24,387		22,057		18,446		15,655		13,142		11,224
Structured finance - non-U.S.		5,123		4,060		4,049		3,082		2,404		2,014		1,682		1,414
	Net par outstanding	$	347,015	$	329,864	$	315,325	$	296,318	$	298,243	$	290,620	$	275,767	$	264,952

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

15

Assured Guaranty Ltd.

Net Expected Loss to be Expensed

As of December 31, 2017

(dollars in millions)

		Net Expected Loss to be Expensed (1)
		GAAP
2018 Q1		$	8
2018 Q2		9
2018 Q3		10
2018 Q4		10
2019		42
2020		39
2021		35
2022		32
2018-2022		185
2023-2027		131
2028-2032		78
2033-2037		36
After 2037		12
	Total expected present value of net expected loss to be expensed(2)	442
Future accretion		88
	Total expected future loss and LAE	$	530

1) The present value of net expected loss to be paid is discounted using risk free rates ranging from 0.0% to 2.78% for U.S. dollar denominated obligations.

2) Excludes $52 million related to FG VIEs, which are eliminated in consolidation.

16

Assured Guaranty Ltd.

Financial Guaranty Profile (1 of 3)

(dollars in millions)

Net Par Outstanding and Average Rating by Asset Type

			December 31, 2017			December 31, 2016
			Net Par Outstanding		Avg. Internal Rating	Net Par Outstanding		Avg. Internal Rating
U.S. public finance:
	General obligation		$	90,705	A-	$	107,717	A
	Tax backed		44,350		A-	49,931		A-
	Municipal utilities		32,357		A-	37,603		A
	Transportation		17,030		A-	19,403		A-
	Healthcare		8,763		A	11,238		A
	Higher education		8,195		A	10,085		A
	Infrastructure finance		4,216		BBB+	3,769		BBB+
	Housing revenue		1,319		BBB+	1,559		A-
	Investor-owned utilities		523		A-	697		BBB+
	Other public finance		1,934		A	2,796		A
		Total U.S. public finance	209,392		A-	244,798		A
Non-U.S. public finance:
	Infrastructure finance		18,234		BBB	10,731		BBB
	Regulated utilities		16,689		BBB+	9,263		BBB+
	Pooled infrastructure		1,561		AAA	1,513		AAA
	Other public finance		6,438		A	4,874		A
		Total non-U.S. public finance	42,922		BBB+	26,381		BBB+
Total public finance			$	252,314	A-	$	271,179	A-
U.S. structured finance:
	RMBS		$	4,818	BBB-	$	5,637	BBB-
	Consumer receivables		1,590		A-	1,652		BBB+
	Insurance securitizations		1,449		A+	2,308		A+
	Financial products		1,418		AA-	1,540		AA-
	Pooled corporate obligations		1,347		A	10,050		AAA
	Commercial receivables		146		BBB	230		BBB-
	Other structured finance		456		A+	640		AA-
		Total U.S. structured finance	11,224		BBB+	22,057		A+
Non-U.S. structured finance:
	RMBS		637		A-	604		A-
	Commercial receivables		296		A	356		BBB+
	Pooled corporate obligations		157		A+	1,535		AA
	Other structured finance		324		A	587		AA
		Total non-U.S. structured finance	1,414		A	3,082		AA-
Total structured finance			$	12,638	A-	$	25,139	AA-
Total			$	264,952	A-	$	296,318	A

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

17

Assured Guaranty Ltd.

Financial Guaranty Profile (2 of 3)

As of December 31, 2017

(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		$	877	0.4	%	$	2,541	5.9	%	1,655		14.7	%	319		22.5	%	$	5,392	2.1	%
AA		30,016		14.3		205		0.5		3,915		34.9		76		5.4		34,212		12.9
A		118,620		56.7		13,936		32.5		1,630		14.5		210		14.9		134,396		50.7
BBB		52,739		25.2		24,509		57.1		763		6.8		703		49.7		78,714		29.7
BIG		7,140		3.4		1,731		4.0		3,261		29.1		106		7.5		12,238		4.6
	Net Par Outstanding (1)	$	209,392	100.0	%	$	42,922	100.0	%	$	11,224	100.0	%	$	1,414	100.0	%	$	264,952	100.0	%

1) As of December 31, 2017, excludes $2.0 billion of net par attributable to loss mitigation strategies, including loss mitigation securities held in the investment portfolio, which are primarily BIG.

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

18

Assured Guaranty Ltd.

Financial Guaranty Profile (3 of 3)

As of December 31, 2017

(dollars in millions)

Geographic Distribution of Financial Guaranty Portfolio

			Net Par Outstanding		% of Total
U.S.:
U.S. public finance:
	California		$	36,507	13.8	%
	Texas		19,027		7.2
	Pennsylvania		18,061		6.8
	Illinois		17,044		6.4
	New York		15,672		5.9
	New Jersey		12,441		4.7
	Florida		10,272		3.9
	Michigan		6,353		2.4
	Puerto Rico		4,968		1.9
	Alabama		4,808		1.8
	Other		64,239		24.3
		Total public finance	209,392		79.1
U.S. structured finance:			11,224		4.2
		Total U.S.	220,616		83.3
Non-U.S.:
	United Kingdom		30,062		11.3
	France		3,167		1.2
	Canada		2,690		1.0
	Australia		2,309		0.9
	Italy		1,497		0.6
	Other		4,611		1.7
		Total non-U.S.	44,336		16.7
Total net par outstanding			$	264,952	100.0	%

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

19

Assured Guaranty Ltd.

Exposure to Puerto Rico (1 of 3)

As of December 31, 2017

(dollars in millions)

Exposure to Puerto Rico

	Gross Par Outstanding		Net Par Outstanding		Gross Debt Service Outstanding		Net Debt Service Outstanding
Total	$	5,186	$	4,966	$	8,514	$	8,195

Exposure to Puerto Rico by Risk⁽¹⁾ 

	Net Par Outstanding
	AGM		AGC		AG Re		Eliminations (2)			Total Net Par Outstanding (3)		Gross Par Outstanding
Commonwealth Constitutionally Guaranteed
Commonwealth of Puerto Rico - General Obligation Bonds (4)	$	670	$	343	$	407	$	(1	)	$	1,419	$	1,469
Puerto Rico Public Buildings Authority (PBA)	9		141		0		(9		)	141		146
Public Corporations - Certain Revenues Potentially Subject to Clawback
Puerto Rico Highways and Transportation Authority (PRHTA) (Transportation revenue) (4)	252		511		204		(85		)	882		913
PRHTA (Highways revenue) (4)	358		93		44		—			495		556
Puerto Rico Convention Center District Authority (PRCCDA)	—		152		—		—			152		152
Puerto Rico Infrastructure Financing Authority (PRIFA)	—		17		1		—			18		18
Other Public Corporations
Puerto Rico Electric Power Authority (PREPA) (4)	547		73		233		—			853		870
Puerto Rico Aqueduct and Sewer Authority (PRASA) (5)	—		284		89		—			373		373
Puerto Rico Municipal Finance Agency (MFA) (5)	221		54		85		—			360		416
Puerto Rico Sales Tax Financing Corporation (COFINA) (4)	263		—		9		—			272		272
University of Puerto Rico (5)	—		1		—		—			1		1
Total exposure to Puerto Rico	$	2,320	$	1,669	$	1,072	$	(95	)	$	4,966	$	5,186

1) The general obligation bonds of Puerto Rico and various obligations of its related authorities and public corporations are rated BIG. The December 31, 2017 amounts include $389 million (which comprises $36 million of General Obligation Bonds, $134 million of PREPA, $144 million of PRHTA (Highways revenue), and $75 million of MFA) related to 2017 commutations of previously ceded business.

2) 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.

3) Includes exposure to capital appreciation bonds with a current aggregate net par outstanding of $26 million and a fully accreted net par at maturity of $56 million. Of these amounts, current net par of $20 million and fully accreted net par at maturity of $50 million relate to the COFINA, current net par of $4 million and fully accreted net par at maturity of $4 million relate to the PRHTA, and current net par of $2 million and fully accreted net par at maturity of $2 million relate to the Commonwealth General Obligation Bonds.

4) As of the date of this filing, the seven-member federal financial oversight board established by the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) has certified a filing under Title III of PROMESA for these exposures.

5) As of the date of this filing, the Company has not paid claims on these credits.

20

Assured Guaranty Ltd.

Exposure to Puerto Rico (2 of 3)

As of December 31, 2017

(dollars in millions)

Amortization Schedule of Net Par Outstanding of Puerto Rico ⁽¹⁾ 

	2018 Q1		2018 Q2		2018Q3		2018 Q4		2019			2020			2021			2022			2023		2024		2025			2026			2027			2028 -2032			2033 -2037		2038 -2042		2043 -2047		Total
Commonwealth Constitutionally Guaranteed
Commonwealth of Puerto Rico - General Obligation Bonds	$	0	$	0	$	78	$	0	$	87		$	141		$	15		$	37		$	14	$	73	$	68		$	34		$	90		$	215		$	567	$	—	$	—	$	1,419
PBA	—		—		—		—		3			5			13			0			6		0		7			11			40			16			40		—		—		141
Public Corporations - Certain Revenues Potentially Subject to Clawback
PRHTA (Transportation revenue)	0		0		38		—		32			25			18			28			34		4		29			24			29			157			279		185		—		882
PRHTA (Highway revenue)	—		—		20		—		21			22			35			6			32		33		34			1			—			112			179		—		—		495
PRCCDA	—		—		—		—		—			—			—			—			—		—		—			—			19			24			109		—		—		152
PRIFA	—		—		2		—		—			—			—			—			2		—		—			—			—			—			—		14		—		18
Other Public Corporations
PREPA	—		—		5		—		26			48			28			28			95		93		68			106			105			238			13		—		—		853
PRASA	—		—		—		—		—			—			—			—			—		2		25			26			28			29			—		2		261		373
MFA	—		—		57		—		55			45			40			40			22		17		17			34			12			21			—		—		—		360
COFINA	0		0		0		0		(1		)	(1		)	(2		)	(2		)	1		0		(2		)	(2		)	(2		)	(1		)	30		252		2		272
University of Puerto Rico	—		—		0		—		0			0			0			0			0		0		0			0			0			1			0		—		—		1
Total	$	0	$	0	$	200	$	0	$	223		$	285		$	147		$	137		$	206	$	222	$	246		$	234		$	321		$	812		$	1,217	$	453	$	263	$	4,966

1) Includes exposure to capital appreciation bonds with a current aggregate net par outstanding of $26 million and a fully accreted net par at maturity of $56 million. Of these amounts, current net par of $20 million and fully accreted net par at maturity of $50 million relate to the COFINA, current net par of $4 million and fully accreted net par at maturity of $4 million relate to the PRHTA, and current net par of $2 million and fully accreted net par at maturity of $2 million relate to the Commonwealth General Obligation Bonds.

21

Assured Guaranty Ltd.

Exposure to Puerto Rico (3 of 3)

As of December 31, 2017

(dollars in millions)

Amortization Schedule of Net Debt Service Outstanding of Puerto Rico⁽¹⁾ 

	2018 Q1		2018 Q2		2018Q3		2018 Q4		2019		2020		2021		2022		2023		2024		2025		2026		2027		2028 -2032		2033 -2037		2038 -2042		2043 -2047		Total
Commonwealth Constitutionally Guaranteed
Commonwealth of Puerto Rico - General Obligation Bonds	$	37	$	0	$	114	$	0	$	156	$	206	$	74	$	94	$	71	$	128	$	119	$	82	$	136	$	396	$	649	$	—	$	—	$	2,262
PBA	4		—		4		—		10		12		20		6		13		6		12		17		45		30		45		—		—		224
Public Corporations - Certain Revenues Potentially Subject to Clawback
PRHTA (Transportation revenue)	23		0		61		—		76		67		59		68		72		41		66		59		63		300		372		210		—		1,537
PRHTA (Highways revenue)	13		—		33		—		47		46		58		27		52		51		51		17		15		182		203		—		—		795
PRCCDA	3		—		3		—		7		7		7		7		7		7		7		7		26		55		121		—		—		264
PRIFA	0		—		2		—		1		1		1		1		2		1		1		1		1		4		3		16		—		35
Other Public Corporations
PREPA	18		3		22		3		65		87		63		62		128		121		91		126		122		273		15		—		—		1,199
PRASA	10		—		10		—		19		19		19		19		19		21		44		44		44		99		68		69		314		818
MFA	9		—		67		—		70		58		50		48		28		23		21		37		14		22		—		—		—		447
COFINA	6		0		6		0		13		13		13		13		16		15		13		13		13		74		96		307		2		613
University of Puerto Rico	0		—		0		—		0		0		0		0		0		0		0		0		0		1		0		—		—		1
Total	$	123	$	3	$	322	$	3	$	464	$	516	$	364	$	345	$	408	$	414	$	425	$	403	$	479	$	1,436	$	1,572	$	602	$	316	$	8,195

1) Includes exposure to capital appreciation bonds with a current aggregate net par outstanding of $26 million and a fully accreted net par at maturity of $56 million. Of these amounts, current net par of $20 million and fully accreted net par at maturity of $50 million relate to the COFINA, current net par of $4 million and fully accreted net par at maturity of $4 million relate to the PRHTA, and current net par of $2 million and fully accreted net par at maturity of $2 million relate to the Commonwealth General Obligation Bonds.

22

Assured Guaranty Ltd.

Direct Pooled Corporate Obligations Profile

As of December 31, 2017

(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		$	168	11.5	%	44.3%	80.1%
	AA		714		48.8		46.3	55.4
	A		224		15.3		44.5	53.2
	BBB		155		10.5		39.4	35.3
	BIG		203		13.9		45.3	37.3
		Total exposures	$	1,464	100.0	%	45.0%	52.8%

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:
	Trust preferred
		Banks and insurance	$	1,099	75.0	%	44.5%	52.6%	A+
		U.S. mortgage and real estate investment trusts	250		17.1		47.3	53.7	BBB+
	Other pooled corporates		115		7.9		N/A	N/A	A+
		Total exposures	$	1,464	100.0	%	45.0%	52.8%	A

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

23

Assured Guaranty Ltd.

Consolidated U.S. RMBS Profile

As of December 31, 2017

(dollars in millions)

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

Ratings:	Prime First Lien		Alt-A First Lien		Option ARMs		Subprime First Lien		Second Lien		Total Net Par Outstanding
AAA	$	4	$	117	$	25	$	1,257	$	0	$	1,404
AA	25		207		31		238		—		500
A	0		—		0		85		0		85
BBB	2		0		—		63		2		67
BIG	117		490		59		1,055		1,039		2,761
Total exposures	$	150	$	814	$	115	$	2,698	$	1,041	$	4,818

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

Year insured:	Prime First Lien		Alt-A First Lien		Option ARMs		Subprime First Lien		Second Lien		Total Net Par Outstanding
2004 and prior	$	19	$	37	$	13	$	815	$	51	$	935
2005	74		268		27		155		217		742
2006	57		57		20		573		301		1,009
2007	—		451		55		1,084		472		2,063
2008	—		—		—		70		—		70
Total exposures	$	150	$	814	$	115	$	2,698	$	1,041	$	4,818

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

24

Assured Guaranty Ltd.

Below Investment Grade Exposures (1 of 4)

(dollars in millions)

BIG Exposures by Asset Exposure Type

			December 31, 2017		December 31, 2016
U.S. public finance:
	General obligation		$	3,097	$	3,186
	Tax backed		2,408		2,249
	Municipal utilities		1,324		1,152
	Higher education		102		87
	Transportation		94		164
	Healthcare		77		134
	Housing revenue		18		19
	Infrastructure finance		2		368
	Other public finance		18		21
		Total U.S. public finance	7,140		7,380
Non-U.S. public finance:
	Infrastructure finance		1,320		1,037
	Other public finance		411		305
		Total non-U.S. public finance	1,731		1,342
Total public finance			$	8,871	$	8,722
U.S. structured finance:
	RMBS		$	2,761	$	3,151
	Consumer receivables		186		233
	Pooled corporate obligations		161		430
	Insurance securitizations		85		126
	Commercial receivables		60		103
	Other structured finance		8		16
		Total U.S. structured finance	3,261		4,059
Non-U.S. structured finance:
	RMBS		48		61
	Pooled corporate obligations		42		185
	Commercial receivables		16		47
		Total non-U.S. structured finance	106		293
Total structured finance			$	3,367	$	4,352
Total BIG net par outstanding			$	12,238	$	13,074

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

25

Assured Guaranty Ltd.

Below Investment Grade Exposures (2 of 4)

(dollars in millions)

Net Par Outstanding by BIG Category⁽¹⁾  

				December 31, 2017		December 31, 2016
Category 1
	U.S. public finance			$	2,368	$	2,403
	Non-U.S. public finance			1,455		1,288
	U.S. structured finance			603		594
	Non-U.S. structured finance			102		210
		Total Category 1		4,528		4,495
Category 2
	U.S. public finance			663		3,122
	Non-U.S. public finance			276		54
	U.S. structured finance			418		800
	Non-U.S. structured finance			4		83
		Total Category 2		1,361		4,059
Category 3
	U.S. public finance			4,109		1,855
	Non-U.S. public finance			—		—
	U.S. structured finance			2,240		2,665
	Non-U.S. structured finance			—		—
		Total Category 3		6,349		4,520
			BIG Total	$	12,238	$	13,074

1) Assured Guaranty's surveillance department is responsible for monitoring the Company's 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 are claims 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.

26

Assured Guaranty Ltd.

Below Investment Grade Exposures (3 of 4)

As of December 31, 2017

(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	$	1,578	CCC-
		Puerto Rico Highways & Transportation Authority	1,377		CC-
		Puerto Rico Electric Power Authority	853		CC
		Puerto Rico Aqueduct & Sewer Authority	373		CCC
		Puerto Rico Municipal Finance Agency	360		CCC-
		Oyster Bay, New York	342		BB+
		Hartford, Connecticut	339		B
		Puerto Rico Sales Tax Financing Corporation	272		CCC+
		Virgin Islands Public Finance Authority	169		BB
		Puerto Rico Convention Center District Authority	152		CC-
		Stockton Pension Obligation Bonds, California	113		D
		Penn Hills School District, Pennsylvania	107		BB
		Butler County General Authority, Pennsylvania	99		BB
		Detroit-Wayne County Stadium Authority, Michigan	84		BB+
		Pennsylvania Economic Development Financing Authority (Capitol Region Parking System)	69		BB
		Atlantic City, New Jersey	61		BB
		Virgin Islands Water and Power Authority	56		BB
	Total U.S. public finance		$	6,404
Non-U.S. public finance:
		Coventry & Rugby Hospital Company	$	572	BB+
		Valencia Fair	337		BB-
		Road Management Services PLC (A13 Highway)	222		B+
		M6 Duna Autopalya Koncesszios Zartkoruen Mukodo Reszvenytarsasag	218		BB+
		Autovia de la Mancha, S.A.	121		BB
		CountyRoute (A130) plc	91		BB-
		Breeze Finance S.A.	54		B-
		Metropolitano de Porto Lease and Sublease of Railroad Equipment	53		B+
	Total non-U.S. public finance		$	1,668
Total			$	8,072

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.

27

Assured Guaranty Ltd.

Below Investment Grade Exposures (4 of 4)

As of December 31, 2017

(dollars in millions)

Structured Finance BIG Exposures Greater Than $50 Million

		Net Par Outstanding		Internal Rating	60+ Day Delinquencies
Name or description
U.S. structured finance:
RMBS:
Option One 2007-FXD2		$	217	CCC	16.8%
Soundview 2007-WMC1		163		CCC	40.6%
Countrywide HELOC 2006-I		160		BB	2.2%
Nomura Asset Accept. Corp. 2007-1		140		CCC	24.3%
MABS 2007-NCW		129		CCC	25.9%
New Century 2005-A		104		CCC	18.1%
Countrywide Home Equity Loan Trust 2007-D		95		B	2.4%
Countrywide HELOC 2007-A		87		B	2.8%
Countrywide HELOC 2007-B		86		B	3.6%
Countrywide HELOC 2006-F		85		B	3.5%
Countrywide Home Equity Loan Trust 2005-J		83		CCC	3.8%
Countrywide HELOC 2005-D		80		B	2.9%
Soundview (Delta) 2008-1		70		CCC	21.9%
IndyMac 2007-H1 HELOC		67		CCC	3.1%
Ace 2007-D1		62		CCC	28.6%
Doral 2006-1		57		CCC	30.7%
Ace Home Equity Loan Trust 2007-SL1		54		CCC	6.7%
Subtotal RMBS		$	1,739
Non-RMBS:
Taberna Preferred Funding II, Ltd.		$	101	BB	N/A
Ballantyne Re Plc		85		CC	N/A
National Collegiate Trust Series 2006-2		68		CCC	N/A
US Capital Funding IV, LTD		60		B	N/A
Subtotal non-RMBS	Subtotal non-RMBS	314
Total U.S. structured finance	Subtotal U.S. structured finance	$	2,053
Total non-U.S. structured finance		$	—
Total	Subtotal Non-U.S. structured finance	$	2,053

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.

28

Assured Guaranty Ltd.

Largest Exposures by Sector (1 of 4)

As of December 31, 2017

(dollars in millions)

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

Credit Name:	Net Par Outstanding		Internal Rating
New Jersey (State of)	$	4,821	BBB
Illinois (State of)	2,059		BBB
Chicago (City of) Illinois	1,659		BBB+
Puerto Rico, General Obligation, Appropriations and Guarantees of the Commonwealth	1,578		CCC-
Pennsylvania (Commonwealth of)	1,481		A-
North Texas Tollway Authority	1,383		A
Puerto Rico Highways & Transportation Authority	1,377		CC-
California (State of)	1,312		A
Chicago Public Schools, Illinois	1,227		BBB-
Massachusetts (Commonwealth of)	1,200		AA-
Philadelphia (City of) Pennsylvania	1,193		BBB+
Wisconsin (State of)	1,176		A+
New York (City of) New York	1,138		AA-
Great Lakes Water Authority (Sewerage), Michigan	1,011		BBB+
Massachusetts (Commonwealth of) Water Resources	938		AA
Arizona (State of)	906		A+
Port Authority of New York & New Jersey	905		BBB
Long Island Power Authority	866		BBB+
Puerto Rico Electric Power Authority	853		CC
Philadelphia School District, Pennsylvania	822		A-
Georgia Board of Regents	821		A
New York Metropolitan Transportation Authority	815		A
Miami-Dade County Aviation, Florida	811		A
Suffolk County, New York	784		BBB
Metropolitan Pier & Exposition Authority, Illinois	780		BBB
Pennsylvania Turnpike Commission	767		A-
New York (State of)	726		A+
Regional Transportation Authority, Illinois	725		AA-
Nassau County, New York	662		A-
Jefferson County Alabama Sewer	662		BBB-
Pittsburgh Water & Sewer, Pennsylvania	639		BBB+
Kentucky (Commonwealth of)	617		A
Miami-Dade County, Florida	604		A+
Sacramento County, California	603		A-
Oglethorpe Power Corporation, Georgia	600		BBB
Garden State Preservation Trust (Open Space & Farmland), New Jersey	594		BBB+
Metro Washington Airports Authority (Dulles Toll Road)	594		BBB+
New Jersey Turnpike Authority, New Jersey	563		A-
Atlanta, Georgia Water & Sewer System	530		A-
San Francisco (City & County) Airports Commission	526		A
Connecticut (State of)	499		A
Industry Public Facilities Authority, California	495		BBB+
Utah Transit Authority (Sales Tax)	495		AA+
California (State of) Department of Water Resources - Electric Power Revenue	493		AA-
Miami-Dade County School Board, Florida	491		A
Yankee Stadium LLC New York City Industrial Development Authority	461		BBB-
Anaheim Public Financing Authority, California	456		BBB+
Dade County Sales Tax, Florida	455		AA-
Central Florida Expressway Authority, Florida (fka Orlando-Orange County Expressway Authority)	447		A+
Houston Water and Sewer Authority, Texas	438		AA-
Total top 50 U.S. public finance exposures	$	46,058

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

29

Assured Guaranty Ltd.

Largest Exposures by Sector (2 of 4)

As of December 31, 2017

(dollars in millions)

50 Largest U.S. Structured Finance Exposures

Credit Name:		Net Par Outstanding		Internal Rating	Credit Enhancement
	Private US Insurance Securitization	$	500	AA	N/A
	SLM Private Credit Student Trust 2007-A	500		A+	18.3%
	Private US Insurance Securitization	424		AA	N/A
	SLM Private Credit Student Loan Trust 2006-C	327		A+	29.8%
	Private US Insurance Securitization	250		AA	N/A
	Option One 2007-FXD2	217		CCC	0.0%
	Timberlake Financial, LLC Floating Insured Notes	190		BBB-	N/A
	Soundview 2007-WMC1	163		CCC	—%
	Countrywide HELOC 2006-I	160		BB	0.0%
	Nomura Asset Accept. Corp. 2007-1	140		CCC	0.0%
	Access Group Private Student Loan Series 2007-A	139		A-	26.7%
	CWALT Alternative Loan Trust 2007-HY9	136		A	0.1%
	CWABS 2007-4	135		A+	0.0%
	MABS 2007-NCW	129		CCC	0.0%
	ALESCO Preferred Funding XIII, Ltd.	128		AA	53.2%
	First Franklin Mortgage Loan ABS 2005-FF12	111		AAA	85.6%
	OwnIt Mortgage Loan ABS Certificates 2006-3	111		AAA	22.9%
	Structured Asset Investment Loan Trust 2006-1	111		AAA	10.6%
	Soundview Home Equity Loan Trust 2006-OPT1	111		AAA	51.2%
	New Century Home Equity Loan Trust 2006-1	111		AAA	10.0%
	ALESCO Preferred Funding XI	105		AA	52.7%
	New Century 2005-A	103		CCC	4.3%
	Taberna Preferred Funding II, Ltd.	102		BB	47.4%
	Countrywide 2007-13	101		AA-	20.3%
	Trapeza CDO XI	100		A-	61.3%
	National Collegiate Trust Series 2005-GT3 Grantor Trust Certificates	99		BBB	9.1%
	Countrywide Home Equity Loan Trust 2007-D	95		B	0.0%
	ALESCO Preferred Funding XII, Ltd.	88		A-	47.9%
	Private Other Structured Finance Transaction	88		AAA	N/A
	Countrywide HELOC 2007-A	87		B	0.0%
	Preferred Term Securities XXIV, Ltd.	87		AA-	47.0%
	Countrywide HELOC 2007-B	86		B	0.0%
	Ballantyne Re Plc	85		CC	N/A
	Countrywide HELOC 2006-F	85		B	0.0%
	IMPAC CMB Trust Series 2007-A	84		AAA	10.6%
	Countrywide Home Equity Loan Trust 2005-J	83		CCC	0.0%
	Countrywide HELOC 2005-D	80		B	0.0%
	First Franklin Mortgage Loan ABS 2005-FF12	80		AAA	85.6%
	Trapeza CDO X, Ltd.	78		AA	59.1%
	Attentus CDO I Limited	73		AA	59.2%
	Alesco Preferred Funding XVI, Ltd.	70		BBB-	24.9%
	Soundview (Delta) 2008-1	70		CCC	0.0%
	National Collegiate Trust Series 2006-2	68		CCC	—%
	IndyMac 2007-H1 HELOC	67		CCC	—%
	Private Other Structured Finance Transaction	66		A-	N/A
	Specialty Underwriting & Residential Fin 06-BC1	66		AAA	81.6%
	MASTR Asset Backed Securities Trust 2005-NC2	66		AAA	—%
	National Collegiate Trust Series 2005-1 CLASS A-5-1 Grantor Trust Certificates	66		A+	26.2%
	CAPCO - Excess SIPC Excess of Loss Reinsurance	63		BBB	N/A
	Ace 2007-D1	62		CCC	0.0%
	Total top 50 U.S. structured finance exposures	$	6,546

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

30

Assured Guaranty Ltd.

Largest Exposures by Sector (3 of 4)

As of December 31, 2017

(dollars in millions)

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

Credit Name:		Country	Net Par Outstanding		Internal Rating
	Southern Water Services Limited	United Kingdom	$	2,567	A-
	Hydro-Quebec, Province of Quebec	Canada	2,062		A+
	Societe des Autoroutes du Nord et de l'Est de France S.A.	France	1,808		BBB+
	Thames Water Utility Finance PLC	United Kingdom	1,519		A-
	Anglian Water Services Financing	United Kingdom	1,466		A-
	Dwr Cymru Financing Limited	United Kingdom	1,447		A-
	Southern Gas Networks PLC	United Kingdom	1,082		BBB
	Channel Link Enterprises Finance PLC	France, United Kingdom	1,014		BBB
	National Grid Gas PLC	United Kingdom	978		BBB+
	British Broadcasting Corporation	United Kingdom	959		A+
	Verbund - Lease and Sublease of Hydro-Electric equipment	Austria	953		AAA
	Aspire Defence Finance plc	United Kingdom	928		BBB+
	Capital Hospitals (Barts)	United Kingdom	755		BBB-
	Sydney Airport Finance Company	Australia	692		BBB
	Verdun Participations 2 S.A.S.	France	681		BBB-
	United Utilities Water PLC	United Kingdom	672		BBB+
	InspirED Education (South Lanarkshire) plc	United Kingdom	663		BBB-
	Envestra Limited	Australia	645		BBB+
	Campania Region - Healthcare receivable	Italy	639		BBB-
	Coventry & Rugby Hospital Company	United Kingdom	572		BB+
	NATS (En Route) PLC	United Kingdom	548		A
	Derby Healthcare PLC	United Kingdom	544		BBB
	International Infrastructure Pool	United Kingdom	520		AAA
	International Infrastructure Pool	United Kingdom	520		AAA
	International Infrastructure Pool	United Kingdom	520		AAA
	Total top 25 non-U.S. exposures		$	24,754

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

31

Assured Guaranty Ltd.

Largest Exposures by Sector (4 of 4)

As of December 31, 2017

(dollars in millions)

10 Largest U.S. Residential Mortgage Servicer Exposures

Servicer:		Net Par Outstanding
	Specialized Loan Servicing, LLC	$	1,567
	Ocwen Loan Servicing, LLC (1)	1,235
	Bank of America, N.A.(2)	930
	Wells Fargo Bank NA	377
	JPMorgan Chase Bank	204
	Select Portfolio Servicing, Inc.	176
	Ditech Financial LLC	61
	Banco Popular de Puerto Rico	57
	Carrington Mortgage Services, LLC	54
	Citicorp Mortgage Securities, Inc.	30
	Total top 10 U.S. residential mortgage servicer exposures	$	4,691

1) Includes GMAC Mortgage LLC, Residential Funding Company LLC and Homeward Residential Inc.

2) Includes Countrywide Home Loans, Inc.

10 Largest U.S. Healthcare Exposures

Credit Name:		Net Par Outstanding		Internal Rating	State
	Children's National Medical Center, District of Columbia	$	404	A-	DC
	CHRISTUS Health	338		A-	TX
	Methodist Healthcare	326		A+	TN
	Carolina HealthCare System	289		AA-	NC
	Dignity Health, California	285		A-	CA
	Mercy Health (f/k/a Catholic Health Partners)	268		A	OH
	Palmetto Health Alliance, South Carolina	267		BBB+	SC
	Asante Health System	259		A+	OR
	Palomar Pomerado Health	250		BBB-	CA
	Bon Secours Health System Obligated Group	233		A-	MD
	Total top 10 U.S. healthcare exposures	$	2,919

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

32

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⁽¹⁾ for the Three Months Ended December 31, 2017

	Net Expected Loss to be Paid (Recovered) at September 30, 2017		Economic Loss Development During 4Q-17			(Paid) Recovered Losses During 4Q-17			Net Expected Loss to be Paid  (Recovered) as of December 31, 2017
Public Finance:
U.S. public finance	$	1,046	$	123		$	(12	)	$	1,157
Non-U.S public finance	47		(1		)	0			46
Public Finance	1,093		122			(12		)	1,203
Structured Finance:
U.S. RMBS (2)	176		(111		)	8			73
Other structured finance	23		4			0			27
Structured Finance	199		(107		)	8			100
Total	$	1,292	$	15		$	(4	)	$	1,303

Rollforward of Net Expected Loss and LAE to be Paid⁽¹⁾ for the Year Ended December 31, 2017

	Net Expected Loss to be Paid  (Recovered) as of December 31, 2016		Net Expected Loss to be Paid  (Recovered) on MBIA UK as of January 10, 2017		Economic Loss Development During 2017			(Paid) Recovered Losses During 2017			Net Expected Loss to be Paid  (Recovered) as of December 31, 2017
Public Finance:
U.S. public finance	$	871	$	—	$	554		$	(268	)	$	1,157
Non-U.S public finance	33		13		(5		)	5			46
Public Finance	904		13		549			(263		)	1,203
Structured Finance:
U.S. RMBS (2)	206		—		(181		)	48			73
Other structured finance	88		8		(55		)	(14		)	27
Structured Finance	294		8		(236		)	34			100
Total	$	1,198	$	21	$	313		$	(229	)	$	1,303

1) Includes expected loss to be paid, economic loss development and paid (recovered) losses for all contracts (i.e. those accounted for as insurance, credit derivatives and FG VIEs).

2) Includes future net representations and warranties (R&W) receivable of $117 million as of December 31, 2017, and payables of $6 million as of December 31, 2016 and $3 million as of September 30, 2017.

33

Assured Guaranty Ltd.

Loss Measures

As of December 31, 2017

(dollars in millions)

	Total Net Par Outstanding for BIG Transactions		4Q-17  Loss and LAE			4Q-17 Loss and LAE included in non-GAAP Operating Income (1)			4Q-17 Effect of FG VIE Consolidation (2)			2017  Loss and LAE			2017 Loss and LAE included in non-GAAP Operating Income (1)			2017 Effect of FG VIE Consolidation (2)
Public finance:
U.S. public finance	$	7,140	$	129		$	127		$	—		$	553		$	553		$	—
Non-U.S public finance	1,731		(1		)	(1		)	—			(4		)	(4		)	—
Public finance	8,871		128			126			—			549			549			—
Structured finance:
U.S. RMBS	2,761		(94		)	(111		)	(2		)	(113		)	(149		)	(7		)
Other structured finance	606		0			1			—			(48		)	(55		)	—
Structured finance	3,367		(94		)	(110		)	(2		)	(161		)	(204		)	(7		)
Total	$	12,238	$	34		$	16		$	(2	)	$	388		$	345		$	(7	)

1) Non-GAAP operating income includes financial guaranty insurance and credit derivatives.

2) The "Effect of FG VIE Consolidation" column represents amounts included in the consolidated statements of operations and non-GAAP operating income that the Company removes to arrive at the core financial measures that management uses in certain of its compensation calculations and its decision making process. 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 par outstanding and of the various sectors.

34

Assured Guaranty Ltd.

Summary of Financial and Statistical Data

(dollars in millions, except per share amounts)

			Year Ended December 31,
			2017			2016		2015			2014			2013
GAAP Summary Income Statement Data
	Net earned premiums		$	690		$	864	$	766		$	570		$	752
	Net investment income		418			408		423			403			393
	Realized gains and other settlements on credit derivatives		(10		)	29		(18		)	23			(42		)
	Total expenses		748			660		776			463			466
	Income (loss) before income taxes		991			1,017		1,431			1,531			1,142
	Net income (loss)		730			881		1,056			1,088			808
	Net income (loss) per diluted share		5.96			6.56		7.08			6.26			4.30
GAAP Summary Balance Sheet Data
	Total investments and cash		$	11,539		$	11,103	$	11,358		$	11,459		$	10,969
	Total assets		14,433			14,151		14,544			14,919			16,285
	Unearned premium reserve		3,475			3,511		3,996			4,261			4,595
	Loss and LAE reserve		1,444			1,127		1,067			799			592
	Long-term debt		1,292			1,306		1,300			1,297			814
	Shareholders’ equity		6,839			6,504		6,063			5,758			5,115
	Shareholders’ equity per share		58.95			50.82		43.96			36.37			28.07
Other Financial Information (GAAP Basis)
	Net debt service outstanding (end of period)		$	401,118		$	437,535	$	536,341		$	609,622		$	690,535
	Gross debt service outstanding (end of period)		408,492			455,000		559,470			646,722			737,380
	Net par outstanding (end of period)		264,952			296,318		358,571			403,729			459,107
	Gross par outstanding (end of period)		269,386			307,474		373,192			426,705			487,895
Other Financial Information (Statutory Basis)(1)
	Net debt service outstanding (end of period)		$	373,340		$	401,004	$	502,331		$	583,598		$	663,797
	Gross debt service outstanding (end of period)		380,478			417,072		524,104			619,475			709,000
	Net par outstanding (end of period)		239,003			262,468		327,306			379,714			434,597
	Gross par outstanding (end of period)		243,217			272,286		340,662			401,552			461,845
Claims-paying resources
	Policyholders' surplus		$	5,211		$	5,036	$	4,550		$	4,142		$	3,202
	Contingency reserve		1,750			2,008		2,263			2,330			2,934
	Qualified statutory capital		6,961			7,044		6,813			6,472			6,136
	Unearned premium reserve		2,674			2,509		3,045			3,299			3,545
	Loss and LAE reserves		1,092			888		1,043			852			773
	Total policyholders' surplus and reserves		10,727			10,441		10,901			10,623			10,454
	Present value of installment premium		445			500		645			716			858
	CCS and standby line of credit		400			400		400			400			400
	Excess of loss reinsurance facility		180			360		360			450			435
	Total claims-paying resources		$	11,752		$	11,701	$	12,306		$	12,189		$	12,147
	Ratios:
		Net par outstanding to qualified statutory capital	34		:1	37:1		48		:1	59		:1	71		:1
		Capital ratio(2)	54		:1	57:1		74		:1	90		:1	108		:1
		Financial resources ratio(2)	32		:1	34:1		41		:1	48		:1	55		:1
Par and Debt Service Written
	Gross debt service written:
		Public finance - U.S.	$	26,988		$	25,423	$	25,832		$	20,804		$	15,559
		Public finance - non-U.S.	2,811			848		2,054			233			674
		Structured finance - U.S.	500			1,143		355			423			297
		Structured finance - non-U.S.	202			30		69			387			—
	Total gross debt service written		$	30,501		$	27,444	$	28,310		$	21,847		$	16,530
	Net debt service written		$	30,476		$	27,444	$	28,310		$	21,847		$	16,497
	Net par written		17,962			17,854		17,336			13,171			9,331
	Gross par written		18,024			17,854		17,336			13,171			9,350

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

2) See page 9 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.

35

Assured Guaranty Ltd.

Summary of GAAP to Non-GAAP Reconciliations⁽¹⁾ (1 of 2)

(dollars in millions, except per share amounts)

	Year Ended December 31,
	2017			2016			2015			2014			2013
Total GWP	$	307		$	154		$	181		$	104		$	123
Less: Installment GWP and other GAAP adjustments (2)	99			(10		)	55			(22		)	8
Upfront GWP	208			164			126			126			115
Plus: Installment premium PVP	81			50			53			42			26
Total PVP	$	289		$	214		$	179		$	168		$	141
PVP:
Public finance - U.S.	$	196		$	161		$	124		$	128		$	116
Public finance - non-U.S.	66			25			27			7			18
Structured finance - U.S.	12			27			22			24			7
Structured finance - non-U.S.	15			1			6			9			—
Total PVP	$	289		$	214		$	179		$	168		$	141
Non-GAAP operating income reconciliation:
Net income (loss)	$	730		$	881		$	1,056		$	1,088		$	808
Less pre-tax adjustments:
Realized gains (losses) on investments	40			(30		)	(27		)	(56		)	56
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	43			36			505			687			(49		)
Fair value gains (losses) on CCS	(2		)	0			27			(11		)	10
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	57			(33		)	(15		)	(21		)	(1		)
Total pre-tax adjustments	138			(27		)	490			599			16
Less tax effect on pre-tax adjustments	(69		)	13			(144		)	(158		)	(9		)
Non-GAAP operating income	$	661		$	895		$	710		$	647		$	801
Gain (loss) related to FG VIE consolidation included in non-GAAP operating income (net of tax provision of $6, $7, $4, $84 and $102)	$	11		$	12		$	11		$	156		$	192
Non-GAAP operating income per diluted share reconciliation:
Net income (loss) per diluted share	$	5.96		$	6.56		$	7.08		$	6.26		$	4.30
Less pre-tax adjustments:
Realized gains (losses) on investments	0.33			(0.23		)	(0.18		)	(0.32		)	0.30
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	0.35			0.27			3.39			3.95			(0.26		)
Fair value gains (losses) on CCS	(0.02		)	0.00			0.18			(0.06		)	0.05
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	0.46			(0.25		)	(0.10		)	(0.12		)	(0.01		)
Total pre-tax adjustments	1.12			(0.21		)	3.29			3.45			0.08
Less tax effect on pre-tax adjustments	(0.57		)	0.09			(0.97		)	(0.92		)	(0.06		)
Non-GAAP operating income per diluted share	$	5.41		$	6.68		$	4.76		$	3.73		$	4.28
Gain (loss) related to FG VIE consolidation included in non-GAAP operating income per diluted share	$	0.10		$	0.10		$	0.07		$	0.90		$	1.03

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

2) Includes present value of new business on installment policies discounted at the prescribed GAAP discount rates, GWP adjustments on existing installment policies due to changes in assumptions, any cancellations of assumed reinsurance contracts, and other GAAP adjustments.

36

Assured Guaranty Ltd.

Summary of GAAP to Non-GAAP Reconciliations⁽¹⁾ (2 of 2)

(dollars in millions, except per share amounts)

	As of December 31,
	2017			2016			2015			2014			2013
Adjusted book value reconciliation:
Shareholders' equity	$	6,839		$	6,504		$	6,063		$	5,758		$	5,115
Less pre-tax adjustments:
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(146		)	(189		)	(241		)	(741		)	(1,447		)
Fair value gains (losses) on CCS	60			62			62			35			46
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	487			316			373			523			236
Less taxes	(83		)	(71		)	(56		)	45			306
Non-GAAP operating shareholders' equity	6,521			6,386			5,925			5,896			5,974
Pre-tax adjustments:
Less: Deferred acquisition costs	101			106			114			121			124
Plus: Net present value of estimated net future revenue	146			136			169			159			214
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	2,966			2,922			3,384			3,461			3,791
Plus taxes	(512		)	(832		)	(968		)	(960		)	(1,070		)
Non-GAAP adjusted book value	$	9,020		$	8,506		$	8,396		$	8,435		$	8,785
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity (net of tax (provision) benefit of $(2), $4, $11, $20 and $103)	$	5		$	(7	)	$	(21	)	$	(37	)	$	(190	)
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value (net of tax benefit of $3, $12, $22, $33, and $134)	$	(14	)	$	(24	)	$	(43	)	$	(60	)	$	(248	)
Adjusted book value per share reconciliation:
Shareholders' equity per share	$	58.95		$	50.82		$	43.96		$	36.37		$	28.07
Less pre-tax adjustments:
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(1.26		)	(1.48		)	(1.75		)	(4.68		)	(7.94		)
Fair value gains (losses) on CCS	0.52			0.48			0.45			0.22			0.25
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	4.20			2.47			2.71			3.30			1.29
Less taxes	(0.71		)	(0.54		)	(0.41		)	0.29			1.68
Non-GAAP operating shareholders' equity per share	56.20			49.89			42.96			37.24			32.79
Pre-tax adjustments:
Less: Deferred acquisition costs	0.87			0.83			0.83			0.76			0.68
Plus: Net present value of estimated net future revenue	1.26			1.07			1.23			1.00			1.17
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	25.56			22.83			24.53			21.86			20.81
Plus taxes	(4.41		)	(6.50		)	(7.02		)	(6.07		)	(5.87		)
Non-GAAP adjusted book value per share	$	77.74		$	66.46		$	60.87		$	53.27		$	48.22
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity per share	$	0.03		$	(0.06	)	$	(0.15	)	$	(0.24	)	$	(1.04	)
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value per share	$	(0.12	)	$	(0.18	)	$	(0.31	)	$	(0.39	)	$	(1.36	)

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

37

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 as a result of loss mitigation strategies, including securities the Company has purchased for loss mitigation purposes that are held in the investment portfolio.

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.

Statutory Net Par and Net Debt Service Outstanding. Under statutory accounting, net par and net debt service outstanding 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).

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 is obtained:

60+ Day Delinquenciesare 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 Enhancementis 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.

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, 2017.

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.

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.

38

Glossary (continued)

Sectors (continued)

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.

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.

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.

Regulated Utility 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 credit default swap 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 include excess of loss reinsurance on portfolios of municipal credits.

Structured Finance:

Pooled Corporate Obligationsare 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 (TruPS). 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), whichrefers 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.

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

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

Financial Products Businessis how the Company refers to the guaranteed investment contracts (GICs) portion of a line of business previously conducted by Assured Guaranty Municipal Holdings Inc. (AGMH) that the Company did not acquire when it purchased AGMH in 2009 from Dexia SA and that is being run off. That line of business was comprised of AGMH's GICs business, its medium term notes business and the equity payment agreements associated with AGMH's leveraged lease business. Assured Guaranty is indemnified by Dexia SA and certain of its affiliates against loss from the former Financial Products Business.

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

Commercial Receivables Securitiesare 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.

Other Structured Finance Obligationsare obligations backed by assets not generally described in any of the other described categories.

39

Non-GAAP Financial Measures

To reflect the key financial measures that management analyzes in evaluating the Company’s operations and progress towards long-term goals, the Company discloses both financial measures determined in accordance with GAAP and financial measures not determined in accordance with GAAP (non-GAAP financial measures).

Financial measures identified as non-GAAP should not be considered substitutes for GAAP financial measures. The primary limitation of non-GAAP financial measures is the potential lack of comparability to financial measures of other companies, whose definitions of non-GAAP financial measures may differ from those of the Company.

By disclosing non-GAAP financial measures, the Company gives investors, analysts and financial news reporters access to information that management and the Board of Directors review internally. The Company believes its presentation of non-GAAP financial measures, along with the effect of FG VIE consolidation, provides information that is necessary for analysts to calculate their estimates of Assured Guaranty’s financial results in their research reports on Assured Guaranty and for investors, analysts and the financial news media to evaluate Assured Guaranty’s financial results.

GAAP requires the Company to consolidate certain VIEs that have issued debt obligations insured by the Company. However, the Company does not own such VIEs and its exposure is limited to its obligation under its financial guaranty insurance contract. Management and the Board of Directors use non-GAAP financial measures adjusted to remove FG VIE consolidation (which the Company refers to as its core financial measures), as well as GAAP financial measures and other factors, to evaluate the Company’s results of operations, financial condition and progress towards long-term goals. The Company uses these core financial measures in its decision making process and in its calculation of certain components of management compensation. Wherever possible, the Company has separately disclosed the effect of FG VIE consolidation.

Many investors, analysts and financial news reporters use non-GAAP operating shareholders’ equity, adjusted to remove the effect of FG VIE consolidation, as the principal financial measure for valuing AGL’s current share price or projected share price and also as the basis of their decision to recommend, buy or sell AGL’s common shares. Many of the Company’s fixed income investors also use this measure to evaluate the Company’s capital adequacy.

Many investors, analysts and financial news reporters also use non-GAAP adjusted book value, adjusted to remove the effect of FG VIE consolidation, to evaluate AGL’s share price and as the basis of their decision to recommend, buy or sell the AGL common shares. Non-GAAP operating income adjusted for the effect of FG VIE consolidation enables investors and analysts to evaluate the Company’s financial results in comparison with the consensus analyst estimates distributed publicly by financial databases.

The core financial measures that the Company uses to help determine compensation are: (1) non-GAAP operating income, adjusted to remove the effect of FG VIE consolidation, (2) non-GAAP operating shareholders' equity, adjusted to remove the effect of FG VIE consolidation, (3) growth in non-GAAP adjusted book value per share, adjusted to remove the effect of FG VIE consolidation, and (4) PVP.

The following paragraphs define each non-GAAP financial measure disclosed by the Company and describe why it is useful. To the extent there is a directly comparable GAAP financial measure, a reconciliation of the non-GAAP financial measure and the most directly comparable GAAP financial measure is presented below.

Non-GAAP operating income: Management believes that non-GAAP operating income is a useful measure because it clarifies the understanding of the underwriting results and financial condition of the Company and presents the results of operations of the Company excluding the fair value adjustments on credit derivatives and CCS that are not expected to result in economic gain or loss, as well as other adjustments described below. Management adjusts non-GAAP operating income further by removing FG VIE consolidation to arrive at its core operating income measure. Non-GAAP operating income is defined as net income (loss) attributable to AGL, as reported under GAAP, adjusted for the following:

1)Elimination of 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.

2)Elimination of non-credit-impairment unrealized fair value gains (losses) on credit derivatives, which is the amount of unrealized fair value gains (losses) 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, the Company's credit spreads, and other market factors and are not expected to result in an economic gain or loss.

3)Elimination of fair value gains (losses) on the Company’s CCS. Such amounts are affected by changes in market interest rates, the Company's credit spreads, price indications on the Company's publicly traded debt, and other market factors and are not expected to result in an economic gain or loss.

40

Non-GAAP Financial Measures (continued)

4)Elimination of foreign exchange gains (losses) on remeasurement of net premium receivables and loss and LAE reserves. Long-dated receivables and loss and LAE reserves represent the present value of future contractual or expected cash flows. 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 tax effects related to the above adjustments, which are determined by applying the statutory tax rate in each of the jurisdictions that generate these adjustments.

Non-GAAP Operating Shareholders’ Equity and Non-GAAP Adjusted Book Value: Management believes that non-GAAP operating shareholders’ equity is a useful measure because it presents the equity of the Company excluding the fair value adjustments on investments, credit derivatives and CCS, that are not expected to result in economic gain or loss, along with other adjustments described below. Management adjusts non-GAAP operating shareholders’ equity further by removing FG VIE consolidation to arrive at its core operating shareholders' equity and core adjusted book value.

Non-GAAP operating shareholders’ equity is the basis of the calculation of non-GAAP adjusted book value (see below). Non-GAAP operating shareholders’ equity is defined as shareholders’ equity attributable to AGL, as reported under GAAP, adjusted for the following:

1)Elimination of non-credit-impairment unrealized fair value gains (losses) on credit derivatives, which is the amount of unrealized fair value gains (losses) 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.

2)Elimination of fair value gains (losses) on the Company’s CCS. Such amounts are affected by changes in market interest rates, the Company's credit spreads, price indications on the Company's publicly traded debt, and other market factors and are not expected to result in an economic gain or loss.

3)Elimination of unrealized gains (losses) on the Company’s investments that are recorded as a component of 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.

 4) Elimination of the tax effects related to the above adjustments, which are determined by applying the statutory tax rate in each of the jurisdictions that generate these adjustments.

Management uses non-GAAP adjusted book value, adjusted for FG VIE consolidation, to measure the intrinsic value of the Company, excluding franchise value. Growth in non-GAAP adjusted book value per share, adjusted for FG VIE consolidation (core adjusted book value), is one of the key financial measures used in determining the amount of certain long-term compensation elements to management and employees and used by rating agencies and investors. Management believes that non-GAAP adjusted book value is a useful measure because it enables an evaluation of the Company’s in-force premiums and revenues net of expected losses. Non-GAAP adjusted book value is non-GAAP operating shareholders’ equity, as defined above, further adjusted for the following:

1)Elimination of 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 net present value of estimated net future revenue on non-financial guaranty contracts. See below.

3)Addition of the deferred premium revenue 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.

4) Elimination of the tax asset or liability related to the above adjustments, which are determined by applying the statutory tax rate in each of the jurisdictions that generate these adjustments.

The unearned premiums and revenues included in non-GAAP adjusted book value will be earned in future periods, but actual earnings may differ materially from the estimated amounts used in determining current non-GAAP adjusted book value due to changes in foreign exchange rates, prepayment speeds, terminations, credit defaults and other factors.

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Non-GAAP Financial Measures (continued)

Non-GAAP Operating Return on Equity (Non-GAAP Operating ROE): Non-GAAP operating ROE represents non-GAAP operating income for a specified period divided by the average of non-GAAP operating shareholders’ equity at the beginning and the end of that period. Management believes that non-GAAP 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 non-GAAP operating ROE, adjusted for FG VIE consolidation, to evaluate AGL’s share price and as the basis of their decision to recommend, buy or sell the AGL common shares. Quarterly and year-to-date non-GAAP operating ROE are calculated on an annualized basis. Non-GAAP operating ROE, adjusted for FG VIE consolidation, is one of the key management financial measures used in determining the amount of certain long-term compensation to management and employees and used by rating agencies and investors.

Net Present Value of Estimated Net Future Revenue: Management believes that this amount is a useful measure because it enables an evaluation of the value of future estimated revenue for non-financial guaranty insurance contracts. There is no corresponding GAAP financial measure. This amount represents the present value of estimated future revenue from the Company’s non-financial guaranty insurance contracts, net of reinsurance, ceding commissions and premium taxes, for contracts without expected economic losses, and is discounted at 6%. Estimated net future 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 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 management believes GAAP gross written premiums and the net credit derivative premiums received and receivable portion of net realized gains and other settlements on credit derivatives (Credit Derivative Realized Gains (Losses)) do not adequately measure. PVP in respect of 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, discounted, in each case, at 6%. Under GAAP, financial guaranty installment premiums 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 earned or written premiums and Credit Derivative Realized Gains (Losses) 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.

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Assured Guaranty Ltd.    

30 Woodbourne Avenue

Hamilton HM 08

Bermuda

(441) 279-5705

www.assuredguaranty.com

Contacts:

Equity and Fixed Income Investors:

Robert Tucker

Senior Managing Director, Investor Relations and Corporate Communications

(212) 339-0861

rtucker@agltd.com

Michael Walker

Managing Director, Fixed Income Investor Relations

(212) 261-5575

mwalker@agltd.com

Andre Thomas

Managing Director, Equity Investor Relations

(212) 339-3551

athomas@agltd.com

Media:

Ashweeta Durani

Vice President, Corporate Communications

(212) 408-6042

adurani@agltd.com