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) — November 8, 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

Item 2.02 Results of Operations and Financial Condition On November 8, 2018, Assured Guaranty Ltd. issued a press release reporting its third quarter 2018 results and the availability of its September 30, 2018 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 November 8, 2018 reporting third quarter 2018 results
99.2	September 30, 2018 Financial Supplement of Assured Guaranty Ltd.

SIGNATURES

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

ASSURED GUARANTY LTD.
By:	/s/ Robert A. Bailenson
	Name: Robert A. Bailenson
	Title: Chief Financial Officer

DATE: November 8, 2018

EX-99.1

Assured Guaranty Ltd. Reports Results for Third Quarter 2018

• Shareholders' equity per share, non-GAAP operating shareholders' equity¹ per share and non-GAAP adjusted book value¹ per share reached new records at $61.73, $60.20 and $84.51, respectively.

• Net income and non-GAAP operating income¹ were each $161 million, or $1.47 per share, for third quarter 2018.

• PVP¹ increased 21% to $52 million compared to third quarter 2017.

• In third quarter 2018, 3.3 million shares were repurchased for $130 million. Year-to-date repurchases (through November 8, 2018) were 11.4 million shares or $429 million.

Hamilton, Bermuda, November 8, 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 September 30, 2018 (third quarter 2018).

Summary Financial Results

(in millions, except per share amounts)

	Quarter Ended
	September 30,
	2018			2017
Net income	$	161		$	208
Non-GAAP operating income(1)	161			156
Gain (loss) related to the effect of consolidating financial guaranty variable interest entities (FG VIE consolidation) included in non-GAAP operating income	(2		)	(1		)
Net income per diluted share	$	1.47		$	1.72
Non-GAAP operating income(1) per diluted share	1.47			1.29
Gain (loss) related to FG VIE consolidation included in non-GAAP operating income per diluted share	(0.02		)	(0.01		)
Diluted shares	109.3			120.7
Gross written premiums (GWP)	$	50		$	45
Present value of new business production (PVP)(1)	52			43
Gross par written	3,001			3,417

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

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Summary Financial Results (continued)

(in millions, except per share amounts)

	As of
	September 30, 2018						December 31, 2017
	Amount			Per Share			Amount			Per Share
Shareholders' equity	$	6,583		$	61.73		$	6,839		$	58.95
Non-GAAP operating shareholders' equity (1)	6,420			60.20			6,521			56.20
Non-GAAP adjusted book value (1)	9,012			84.51			9,020			77.74
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity	3			0.03			5			0.03
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value	(14		)	(0.14		)	(14		)	(0.12		)
Common shares outstanding	106.6						116.0

________________________________________________

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

“In the third quarter of 2018, we increased the company’s intrinsic value per share, measured as non-GAAP adjusted value per share, to a new high of $84.51 per share,” said Dominic Frederico, President and CEO of Assured Guaranty. “We saw positive activity in each of our financial guaranty businesses, leading the industry again in the U.S. public finance market, generating premiums in the international markets for the twelfth consecutive quarter, and continuing to close transactions and further develop opportunities in structured finance.”

Third Quarter Results

GAAP Financial Information

Net income for third quarter 2018 was $161 million, compared with $208 million for the three-month period ended September 30, 2017 (third quarter 2017). Excluding third quarter 2017 commutation gains, net income increased due mainly to lower loss and loss adjustment expenses (LAE), a fair value gain on the sale of an equity security and a lower effective tax rate, offset in part by lower premium accelerations, lower fair value gains on credit derivatives and foreign exchange losses in third quarter 2018.

Loss and LAE was $17 million in third quarter 2018, compared with $223 million in third quarter 2017. The losses in third quarter 2017 were composed primarily of increases in reserves for Puerto Rico exposures.

The Company recorded, in other income, a gain on change in fair value of equity securities of $32 million in third quarter 2018, including a gain of $31 million related to the Company's minority interest in the parent company of TMC Bonds LLC, which it sold in third quarter 2018.

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The effective tax rate was 8.3% for third quarter 2018, compared with an effective tax rate for third quarter 2017 of 33.6%. The effective tax rate for third quarter 2018 represents a lower corporate tax rate than third quarter 2017 and includes a release of reserves for uncertain tax positions. The effective tax rate fluctuates from quarter to quarter based on the proportion of income in different tax jurisdictions.

Net earned premiums in third quarter 2018 were $142 million, compared with $186 million in third quarter 2017. The decline in net earned premiums was attributable mainly to reduced refunding activity. Accelerations due to refundings and terminations were $40 million in third quarter 2018, compared with $87 million in third quarter 2017. Third quarter 2018 reflects the elimination of the tax-exempt status of advance refunding bonds, as well as the reduction in the insured portfolio subject to a call provision.

Fair value gains on credit derivatives were $21 million in third quarter 2018, compared with $58 million in third quarter 2017. Third quarter 2018 fair value gains were attributable primarily to price improvements on the underlying collateral of the Company's insured credit default swaps, while third quarter 2017 gains were attributable primarily to the termination of several transactions, the runoff of net par outstanding and changes in the Company's own credit risk. 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.

Foreign exchange gains and losses relate primarily to premiums receivable and are due mainly to changes in the exchange rate of the British pound sterling relative to the United States (U.S.) dollar. Third quarter 2018 foreign exchange losses were $9 million, compared with gains of $17 million in third quarter 2017.

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Condensed Consolidated Statements of Operations (unaudited)

(in millions)

	Quarter Ended
	September 30,
	2018			2017
Revenues:
Net earned premiums	$	142		$	186
Net investment income	98			99
Net realized investment gains (losses)	(7		)	7
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	1			(1		)
Net unrealized gains (losses)	20			59
Net change in fair value of credit derivatives	21			58
Fair value gains (losses) on financial guaranty variable interest entities (FG VIEs)	5			3
Commutation gains (losses)	1			255
Other income (loss)	14			15
Total revenues	274			623
Expenses:
Loss and LAE	17			223
Amortization of deferred acquisition costs	3			5
Interest expense	23			24
Other operating expenses	56			58
Total expenses	99			310
Income (loss) before income taxes	175			313
Provision (benefit) for income taxes	14			105
Net income (loss)	$	161		$	208

Economic Loss Development

Total economic loss development was de minimis in third quarter 2018. Net economic development in U.S. residential mortgage-backed securities (RMBS) was a benefit of $40 million due to improved performance of the underlying collateral, while certain Puerto Rico exposures had increased expected losses. The economic development attributable to changes in discount rates was a benefit of $9 million in third quarter 2018.

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

(in millions)

	Net Expected Loss to be Paid (Recovered) as of June 30, 2018		Economic Loss Development/ (Benefit)			Losses (Paid)/ Recovered			Net Expected Loss to be Paid (Recovered) as of September 30, 2018
Public finance	$	1,082	$	39		$	(251	)	$	870
U.S. RMBS	326		(40		)	17			303
Other structured finance	24		1			(7		)	18
Total	$	1,432	$	0		$	(241	)	$	1,191

________________________________________________

(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

Financial guaranty GWP includes amounts collected upfront on new business written, the present value of future premiums on new business written (discounted at risk free rates), as well as the effects of changes in the estimated lives of transactions in the inforce book of business. Non-financial guaranty GWP is recorded as premiums are received. Non-GAAP PVP includes upfront premiums and future installments on new business as estimated at the time of issuance, discounted at 6% for all contracts.

New Business Production

(in millions)

	Quarter Ended September 30,
	2018						2017
	GWP		PVP(1)		Gross Par Written		GWP			PVP(1)		Gross Par Written
Public finance - U.S.	$	24	$	33	$	2,338	$	37		$	39	$	3,328
Public finance - non - U.S.	17		12		189		8			4		89
Structured finance - U.S.	9		7		473		1			0		—
Structured finance - non-U.S.	0		0		1		(1		)	—		—
Total	$	50	$	52	$	3,001	$	45		$	43	$	3,417

________________________________________________

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

In the U.S. public finance sector, Assured Guaranty once again guaranteed the majority of insured par issued.

Outside the U.S. the Company closed three new transactions during the quarter: a guarantee of an accommodation project for Durham University; a restructuring of an existing guarantee with a bank; and the

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Company's first post-financial crisis transaction in Australia, a guarantee of a bond issue for the Port of Brisbane. This is the twelfth consecutive quarter that the Company generated new business outside the U.S. Quarterly business activity in the international infrastructure sector is influenced by typically long lead times and therefore may vary from quarter to quarter.

In structured finance, the Company continued to execute transactions in the aviation and commercial real estate markets, and guaranteed a collateralized loan obligation for the first time since 2008.

Other Non-GAAP Financial Measures

Non-GAAP operating income was $161 million in third quarter 2018, compared with $156 million in third quarter 2017. Non-GAAP operating income in third quarter 2018 was higher than the comparable prior year primarily due to lower loss and LAE, the gain on sale of TMC Bonds LLC, and a lower effective tax rate, offset in part by lower commutation gains and lower net earned premiums from accelerations in third quarter 2018.

Common Share Repurchases

Summary of Share Repurchases

(in millions, except per share amounts)

	Amount		Number of Shares	Average Price Per Share
2018 (January 1 - March 31)	$	98	2.79	$	35.20
2018 (April 1 - June 30)	152		4.16	36.48
2018 (July 1 - September 30)	130		3.30	39.41
2018 (October 1 - November 8, 2018)	49		1.18	41.29
Total 2018	$	429	11.43	$	37.51

From 2013 through November 8, 2018, the Company repurchased a total of 92.7 million common shares at an average price of $28.52, representing approximately 48% of the total shares outstanding at the beginning of the repurchase program in 2013. On August 1, 2018, the Board of Directors approved an incremental $250 million share repurchase authorization. As of November 8, the Company was authorized to purchase $169 million of its common shares. 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.

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Condensed Consolidated Balance Sheets (unaudited)

(in millions)

	As of
	September 30, 2018		December 31, 2017
Assets
Investment portfolio:
Fixed maturity securities, available-for-sale, at fair value	$	10,192	$	10,674
Short-term investments, at fair value	738		627
Other invested assets	95		94
Total investment portfolio	11,025		11,395
Cash	82		144
Premiums receivable, net of commissions payable	916		915
Ceded unearned premium reserve	61		119
Deferred acquisition costs	103		101
Salvage and subrogation recoverable	471		572
FG VIEs' assets, at fair value	596		700
Other assets	485		487
Total assets	$	13,739	$	14,433
Liabilities and shareholders' equity
Liabilities
Unearned premium reserve	$	3,538	$	3,475
Loss and LAE reserve	1,147		1,444
Long-term debt	1,249		1,292
Credit derivative liabilities	239		271
FG VIEs' liabilities with recourse, at fair value	545		627
FG VIEs' liabilities without recourse, at fair value	104		130
Other liabilities	334		355
Total liabilities	7,156		7,594
Shareholders' equity
Common stock	1		1
Additional paid-in capital	200		573
Retained earnings	6,303		5,892
Accumulated other comprehensive income	78		372
Deferred equity compensation	1		1
Total shareholders' equity	6,583		6,839
Total liabilities and shareholders' equity	$	13,739	$	14,433

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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 that are recognized in net income, 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 that are recognized in net income. 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 that are recognized in net income. 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

(in millions, except per share amounts)

	Quarter Ended September 30,
	2018						2017
	Total			Per Diluted Share			Total			Per Diluted Share
Net income (loss)	$	161		$	1.47		$	208		$	1.72
Less pre-tax adjustments:
Realized gains (losses) on investments	(7		)	(0.07		)	7			0.06
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	17			0.16			55			0.46
Fair value gains (losses) on committed capital securities (CCS)	(1		)	(0.01		)	(4		)	(0.03		)
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	(8		)	(0.07		)	18			0.14
Total pre-tax adjustments	1			0.01			76			0.63
Less tax effect on pre-tax adjustments	(1		)	(0.01		)	(24		)	(0.20		)
Non-GAAP operating income	$	161		$	1.47		$	156		$	1.29
Gain (loss) related to FG VIE consolidation (net of tax provision (benefit) of $0 and $(1)) included in non-GAAP operating income	$	(2	)	$	(0.02	)	$	(1	)	$	(0.01	)

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Non-GAAP Operating Income Adjustments and

Effect of FG VIE Consolidation

(in millions)

	Quarter Ended						Quarter Ended
	September 30, 2018						September 30, 2017
	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		)	—			(2		)
Net realized investment gains (losses)	(7		)	—			7			—
Net change in fair value of credit derivatives	16			—			54			—
Fair value gains (losses) on FG VIEs	—			5			—			3
Other income (loss)	(9		)	0			14			0
Total revenue adjustments	0			1			75			(3		)
Adjustments to expenses:
Loss expense	(1		)	3			(1		)	(1		)
Total expense adjustments	(1		)	3			(1		)	(1		)
Pre-tax adjustments	1			(2		)	76			(2		)
Tax effect of adjustments	1			0			24			(1		)
After-tax adjustments	$	0		$	(2	)	$	52		$	(1	)

________________________________________________

(1) The "Non-GAAP Operating Income Adjustments" column represents the amounts recorded in the condensed 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 condensed 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. 

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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 accumulated other comprehensive income (AOCI) (excluding foreign exchange remeasurement). The AOCI component of the fair value adjustment on the investment portfolio is not deemed economic because the Company generally holds these investments to maturity and therefore should not recognize an economic gain or loss.

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.

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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 effects 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.

Reconciliation of GAAP Shareholders' Equity to

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

(in millions, except per share amounts)

	As of
	September 30, 2018						December 31, 2017
	Total			Per Share			Total			Per Share
Shareholders' equity	$	6,583		$	61.73		$	6,839		$	58.95
Less pre-tax adjustments:
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(55		)	(0.51		)	(146		)	(1.26		)
Fair value gains (losses) on CCS	57			0.53			60			0.52
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	215			2.02			487			4.20
Less taxes	(54		)	(0.51		)	(83		)	(0.71		)
Non-GAAP operating shareholders' equity	6,420			60.20			6,521			56.20
Pre-tax adjustments:
Less: Deferred acquisition costs	103			0.97			101			0.87
Plus: Net present value of estimated net future revenue	211			1.99			146			1.26
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	3,012			28.24			2,966			25.56
Plus taxes	(528		)	(4.95		)	(512		)	(4.41		)
Non-GAAP adjusted book value	$	9,012		$	84.51		$	9,020		$	77.74
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity (net of tax provision of $1 and $2)	$	3		$	0.03		$	5		$	0.03
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value (net of tax benefit of $4 and $3)	$	(14	)	$	(0.14	)	$	(14	)	$	(0.12	)
Shares outstanding at the end of the period	106.6						116.0

13

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.

14

Reconciliation of GWP to PVP

(in millions)

	Quarter Ended
	September 30, 2018
	Public Finance					Structured Finance
	U.S.			Non - U.S.		U.S.		Non - U.S.		Total
GWP	$	24		$	17	$	9	$	0	$	50
Less: Installment GWPand other GAAP adjustments(1)	(9		)	17		4		0		12
Upfront GWP	33			—		5		—		38
Plus: Installment premium PVP	0			12		2		0		14
PVP	$	33		$	12	$	7	$	0	$	52

	Quarter Ended
	September 30, 2017
	Public Finance				Structured Finance
	U.S.		Non - U.S.		U.S.		Non - U.S.			Total
GWP	$	37	$	8	$	1	$	(1	)	$	45
Less: Installment GWPand other GAAP adjustments(1)	2		8		1		(1		)	10
Upfront GWP	35		—		—		—			35
Plus: Installment premium PVP	4		4		0		—			8
PVP	$	39	$	4	$	0	$	—		$	43

________________________________________________

(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.

15

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, November 9, 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 February 8, 2019. To listen to the replay, dial 1-877-344-7529 (in the U.S.) or 1-412-317-0088 (International), passcode 10125893. The replay will be available one hour after the conference call ends.

Please refer to Assured Guaranty's September 30, 2018 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 3Q 2018,” which lists the U.S. public finance new issues insured by the Company in third quarter 2018, and

• “Structured Finance Transactions at September 30, 2018,” which lists the Company's structured finance exposure as of that date.

In addition, the Company is posting at assuredguaranty.com/presentations the “September 30, 2018 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.

16

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 November 8, 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.

17

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

18

EX-99.2

Assured Guaranty Ltd.

September 30, 2018

Financial Supplement

Table of Contents		Page
	Selected Financial Highlights	1
	Condensed Consolidated Balance Sheets (unaudited)	3
	Condensed 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
	Investment Portfolio and Cash	13
	Estimated Net Exposure Amortization and Estimated Future Financial Guaranty 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
	Non-Financial Guaranty Exposure	20
	Exposure to Puerto Rico	21
	Direct Pooled Corporate Obligations Profile	24
	Consolidated U.S. RMBS Profile	25
	Below Investment Grade Exposures	26
	Largest Exposures by Sector	30
	Rollforward of Net Expected Loss and Loss Adjustment Expenses to be Paid	34
	Loss Measures	35
	Summary of Financial and Statistical Data	36
	Summary of GAAP to Non-GAAP Reconciliations	37
	Glossary	39
	Non-GAAP Financial Measures	41

This financial supplement should be read in conjunction with documents filed by Assured Guaranty Ltd. (AGL and, together with its subsidiaries, Assured Guaranty or the Company) with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year ended December 31, 2017 and its Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 2018, June 30, 2018 and September 30, 2018.

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						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Net income (loss)	$	161		$	208		$	433		$	678
Non-GAAP operating income(1)	161			156			390			570
Gain (loss) related to the effect of consolidating financial guaranty variable interest entities (FG VIE consolidation) (net of tax provision (benefit) of $0, $(1), $0 and $5) included in non-GAAP operating income	(2		)	(1		)	(1		)	9
Net income (loss) per diluted share	$	1.47		$	1.72		$	3.83		$	5.48
Non-GAAP operating income per diluted share (1)	1.47			1.29			3.45			4.62
Gain (loss) related to FG VIE consolidation included in non-GAAP operating income per diluted share	(0.02		)	(0.01		)	(0.01		)	0.08
Weighted average shares outstanding
Basic shares outstanding	108.0			118.7			111.6			121.8
Diluted shares outstanding (2)	109.3			120.7			112.9			123.5
Effective tax rate on net income	8.3		%	33.6		%	9.7		%	18.8		%
Effective tax rate on non-GAAP operating income(3)	7.4		%	34.2		%	8.1		%	15.7		%
Effect of FG VIE consolidation included in effective tax rate on non-GAAP operating income	(0.2		)%	0.0		%	(0.1		)%	0.5		%
Return on equity (ROE) calculations (4):
GAAP ROE	9.7		%	12.2		%	8.6		%	13.5		%
Non-GAAP operating ROE (1)	10.0		%	9.5		%	8.0		%	11.7		%
Effect of FG VIE consolidation on non-GAAP operating ROE	(0.2		)%	(0.1		)%	(0.1		)%	0.2		%
New business:
Gross written premiums (GWP)	$	50		$	45		$	516		$	235
Present value of new business production (PVP) (1)	52			43			567			212
Gross par written	3,001			3,417			19,774			13,248
							As of
							September 30, 2018			December 31, 2017
Shareholders' equity							$	6,583		$	6,839
Non-GAAP operating shareholders' equity (1)							6,420			6,521
Non-GAAP adjusted book value (1)							9,012			9,020
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity							3			5
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value							(14		)	(14		)
Shares outstanding at the end of period							106.6			116.0
Shareholders' equity per share							$	61.73		$	58.95
Non-GAAP operating shareholders' equity per share (1)							60.20			56.20
Non-GAAP adjusted book value per share (1)							84.51			77.74
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity							0.03			0.03
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value							(0.14		)	(0.12		)
Net debt service outstanding							$	378,693		$	401,118
Net par outstanding							246,940			264,952
Claims-paying resources (5)							11,789			12,021

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				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Effect of refundings and terminations on GAAP measures:
Net earned premiums, pre-tax	$	40	$	87	$	131	$	204
Net change in fair value of credit derivatives, pre-tax	—		8		6		24
Net income effect	31		68		108		161
Net income per diluted share	0.29		0.56		0.95		1.30
Effect of refundings and terminations on non-GAAP measures:
Operating net earned premiums and credit derivative revenues(1), pre-tax	40		87		135		213
Non-GAAP operating income(1) effect	31		61		105		149
Non-GAAP operating income per diluted share (1)	0.29		0.51		0.93		1.21

1) Condensed 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.

2

Assured Guaranty Ltd.

Condensed Consolidated Balance Sheets (unaudited)

(dollars in millions)

	As of
	September 30,		December 31,
	2018		2017
Assets:
Investment portfolio:
Fixed maturity securities, available-for-sale, at fair value	$	10,192	$	10,674
Short-term investments, at fair value	738		627
Other invested assets	95		94
Total investment portfolio	11,025		11,395
Cash	82		144
Premiums receivable, net of commissions payable	916		915
Ceded unearned premium reserve	61		119
Deferred acquisition costs	103		101
Salvage and subrogation recoverable	471		572
Financial guaranty variable interest entities' (FG VIEs') assets, at fair value	596		700
Other assets	485		487
Total assets	$	13,739	$	14,433
Liabilities and shareholders' equity:
Liabilities:
Unearned premium reserve	$	3,538	$	3,475
Loss and loss adjustment expense (LAE) reserve	1,147		1,444
Long-term debt	1,249		1,292
Credit derivative liabilities	239		271
FG VIEs' liabilities with recourse, at fair value	545		627
FG VIEs' liabilities without recourse, at fair value	104		130
Other liabilities	334		355
Total liabilities	7,156		7,594
Shareholders' equity:
Common stock	1		1
Additional paid-in capital	200		573
Retained earnings	6,303		5,892
Accumulated other comprehensive income	78		372
Deferred equity compensation	1		1
Total shareholders' equity	6,583		6,839
Total liabilities and shareholders' equity	$	13,739	$	14,433

3

Assured Guaranty Ltd.

Condensed Consolidated Statements of Operations (unaudited)

(dollars in millions, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Revenues:
Net earned premiums	$	142		$	186		$	423		$	512
Net investment income	98			99			298			322
Net realized investment gains (losses)	(7		)	7			(14		)	54
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	1			(1		)	4			19
Net unrealized gains (losses)	20			59			99			87
Net change in fair value of credit derivatives	21			58			103			106
Fair value gains (losses) on FG VIEs	5			3			11			25
Bargain purchase gain and settlement of pre-existing relationships	—			—			—			58
Commutation gains (losses)	1			255			(16		)	328
Other income (loss)	14			15			(17		)	53
Total revenues	274			623			788			1,458
Expenses:
Loss and LAE	17			223			43			354
Amortization of deferred acquisition costs	3			5			12			13
Interest expense	23			24			71			73
Other operating expenses	56			58			183			183
Total expenses	99			310			309			623
Income (loss) before income taxes	175			313			479			835
Provision (benefit) for income taxes	14			105			46			157
Net income (loss)	$	161		$	208		$	433		$	678
Earnings per share:
Basic	$	1.48		$	1.75		$	3.87		$	5.56
Diluted	$	1.47		$	1.72		$	3.83		$	5.48

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 EndedSeptember 30, 2018 and September 30, 2017

	Three Months Ended						Three Months Ended
	September 30, 2018						September 30, 2017
	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		)	—			(2		)
Net realized investment gains (losses)	(7		)	—			7			—
Net change in fair value of credit derivatives	16			—			54			—
Fair value gains (losses) on FG VIEs	—			5			—			3
Other income (loss)	(9		)	0			14			0
Total revenue adjustments	0			1			75			(3		)
Adjustments to expenses:
Loss expense	(1		)	3			(1		)	(1		)
Total expense adjustments	(1		)	3			(1		)	(1		)
Pre-tax adjustments	1			(2		)	76			(2		)
Tax effect of adjustments	1			0			24			(1		)
After-tax adjustments	$	0		$	(2	)	$	52		$	(1	)

Non-GAAP Operating Income Adjustments and Effect of FG VIE Consolidation for the Nine Months EndedSeptember 30, 2018 and September 30, 2017

	Nine Months Ended						Nine Months Ended
	September 30, 2018						September 30, 2017
	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	$	—		$	(9	)	$	—	$	(12	)
Net investment income	—			(3		)	—		(4		)
Net realized investment gains (losses)	(14		)	—			54		—
Net change in fair value of credit derivatives	88			—			85		—
Fair value gains (losses) on FG VIEs	—			11			—		25
Other income (loss)	(23		)	0			45		0
Total revenue adjustments	51			(1		)	184		9
Adjustments to expenses:
Loss expense	(3		)	0			25		(5		)
Total expense adjustments	(3		)	0			25		(5		)
Pre-tax adjustments	54			(1		)	159		14
Tax effect of adjustments	11			0			51		5
After-tax adjustments	$	43		$	(1	)	$	108	$	9

1) The "Non-GAAP Operating Income Adjustments" column represents the amounts recorded in the condensed 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 condensed 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.

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						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Net income (loss)	$	161		$	208		$	433		$	678
Less pre-tax adjustments:
Realized gains (losses) on investments	(7		)	7			(14		)	54
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	17			55			91			60
Fair value gains (losses) on committed capital securities (CCS) (1)	(1		)	(4		)	(3		)	(4		)
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves (1)	(8		)	18			(20		)	49
Total pre-tax adjustments	1			76			54			159
Less tax effect on pre-tax adjustments	(1		)	(24		)	(11		)	(51		)
Non-GAAP operating income	$	161		$	156		$	390		$	570
Gain (loss) related to FG VIE consolidation (net of tax provision (benefit) of $0, $(1), $0 and $5) included in non-GAAP operating income	$	(2	)	$	(1	)	$	(1	)	$	9
Per diluted share:
Net income (loss)	$	1.47		$	1.72		$	3.83		$	5.48
Less pre-tax adjustments:
Realized gains (losses) on investments	(0.07		)	0.06			(0.13		)	0.43
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	0.16			0.46			0.81			0.49
Fair value gains (losses) on CCS (1)	(0.01		)	(0.03		)	(0.02		)	(0.03		)
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves (1)	(0.07		)	0.14			(0.18		)	0.39
Total pre-tax adjustments	0.01			0.63			0.48			1.28
Less tax effect on pre-tax adjustments	(0.01		)	(0.20		)	(0.10		)	(0.42		)
Non-GAAP operating income	$	1.47		$	1.29		$	3.45		$	4.62
Gain (loss) related to FG VIE consolidation included in non-GAAP operating income per diluted share	$	(0.02	)	$	(0.01	)	$	(0.01	)	$	0.08

1) Included in other income (loss) in the condensed consolidated statements of operations.

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
	September 30,		June 30,		December 31,			September 30,			June 30,			December 31,
	2018		2018		2017			2017			2017			2016
Shareholders' equity	$	6,583	$	6,634	$	6,839		$	6,878		$	6,750		$	6,504
Non-GAAP operating shareholders' equity	6,420		6,423		6,521			6,590			6,502			6,386
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity	3		7		5			3			3			(7		)
					Three Months Ended						Nine Months Ended
					September 30,						September 30,
					2018			2017			2018			2017
Net income (loss)					$	161		$	208		$	433		$	678
Non-GAAP operating income					161			156			390			570
Gain (loss) related to FG VIE consolidation included in non-GAAP operating income					(2		)	(1		)	(1		)	9
Average shareholders' equity					$	6,609		$	6,814		$	6,711		$	6,691
Average non-GAAP operating shareholders' equity					6,422			6,546			6,471			6,488
Gain (loss) related to FG VIE consolidation included in average non-GAAP operating shareholders' equity					5			3			4			(2		)
GAAP ROE (1)					9.7		%	12.2		%	8.6		%	13.5		%
Non-GAAP operating ROE (1)					10.0		%	9.5		%	8.0		%	11.7		%
Effect of FG VIE consolidation included in non-GAAP operating ROE					(0.2		)%	(0.1		)%	(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
	September 30,			June 30,			December 31,			September 30,			June 30,			December 31,
	2018			2018			2017			2017			2017			2016
Reconciliation of shareholders' equity to non-GAAP adjusted book value:
Shareholders' equity	$	6,583		$	6,634		$	6,839		$	6,878		$	6,750		$	6,504
Less pre-tax reconciling items:
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(55		)	(72		)	(146		)	(129		)	(185		)	(189		)
Fair value gains (losses) on CCS	57			58			60			58			62			62
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	215			290			487			506			504			316
Less taxes	(54		)	(65		)	(83		)	(147		)	(133		)	(71		)
Non-GAAP operating shareholders' equity	6,420			6,423			6,521			6,590			6,502			6,386
Pre-tax reconciling items:
Less: Deferred acquisition costs	103			102			101			106			106			106
Plus: Net present value of estimated net future revenue	211			217			146			144			148			136
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	3,012			3,083			2,966			3,091			3,173			2,922
Plus taxes	(528		)	(542		)	(512		)	(899		)	(924		)	(832		)
Non-GAAP adjusted book value	$	9,012		$	9,079		$	9,020		$	8,820		$	8,793		$	8,506
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity (net of tax (provision) benefit of $(1), $(2), $(2), $(1), $(1) and $4)	$	3		$	7		$	5		$	3		$	3		$	(7	)
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value (net of tax benefit of $4, $3, $3, $7, $8 and $12)	$	(14	)	$	(12	)	$	(14	)	$	(13	)	$	(13	)	$	(24	)

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

8

Assured Guaranty Ltd.

Claims-Paying Resources

(dollars in millions)

	As of September 30, 2018
	Assured Guaranty Municipal Corp.		Assured Guaranty Corp.		Municipal Assurance Corp.			Assured Guaranty Re Ltd. (8)		Eliminations(3)			Consolidated
Claims-paying resources
Policyholders' surplus	$	2,203	$	1,806	$	269		$	967	$	(319	)	$	4,926
Contingency reserve(1)	1,187		655		240			—		(240		)	1,842
Qualified statutory capital	3,390		2,461		509			967		(559		)	6,768
Unearned premium reserve and net deferred ceding commission income(1)	1,863		504		207			698		(316		)	2,956
Loss and LAE reserves (1)	544		224		0			262		0			1,030
Total policyholders' surplus and reserves	5,797		3,189		716			1,927		(875		)	10,754
Present value of installment premium	173		143		(1		)	139		1			455
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)	6,350		3,712		895			2,066		(1,234		)	11,789
Adjustment for MAC (4)	434		281		—			—		(715		)	—
Total claims-paying resources (excluding proportionate MAC ownership for AGM and AGC)	$	5,916	$	3,431	$	895		$	2,066	$	(519	)	$	11,789
Statutory net par outstanding (5)	$	114,974	$	27,757	$	24,881		$	65,662	$	(333	)	$	232,941
Equity method adjustment (4)	15,103		9,778		—			—		(24,881		)	—
Adjusted statutory net par outstanding (1)	$	130,077	$	37,535	$	24,881		$	65,662	$	(25,214	)	$	232,941
Net debt service outstanding (5)	$	182,480	$	42,079	$	36,708		$	102,683	$	(460	)	$	363,490
Equity method adjustment (4)	22,282		14,426		—			—		(36,708		)	—
Adjusted net debt service outstanding (1)	$	204,762	$	56,505	$	36,708		$	102,683	$	(37,168	)	$	363,490
Ratios:
Adjusted net par outstanding to qualified statutory capital	38:1		15:1		49:1			68:1					34:1
Capital ratio (6)	60:1		23:1		72:1			106:1					54:1
Financial resources ratio (7)	32:1		15:1		41:1			50:1					31:1

1) The numbers shown for Assured Guaranty Municipal Corp. (AGM) and Assured Guaranty Corp. (AGC) have been adjusted to include 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. AGM has been adjusted to include 100% share of its European insurance subsidiaries. Amounts include financial guaranty insurance and credit derivatives. Beginning in the second quarter of 2018, the Company incorporates deferred ceding commission income in claims-paying resources.

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 (Assured Guaranty (UK) plc, Assured Guaranty (London) plc and CIFG Europe S.A.) 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 EndedSeptember 30, 2018 and September 30, 2017

	Three Months Ended											Three Months Ended
	September 30, 2018											September 30, 2017
	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	$	24		$	17	$	9	$	0	$	50	$	37	$	8	$	1	$	(1	)	$	45
Less: Installment GWP and other GAAP adjustments(1)	(9		)	17		4		0		12		2		8		1		(1		)	10
Upfront GWP	33			—		5		—		38		35		—		—		—			35
Plus: Installment premium PVP	0			12		2		0		14		4		4		0		—			8
Total PVP	$	33		$	12	$	7	$	0	$	52	$	39	$	4	$	0	$	—		$	43
Gross par written	$	2,338		$	189	$	473	$	1	$	3,001	$	3,328	$	89	$	—	$	—		$	3,417

Reconciliation of GWP to PVP for the Nine Months EndedSeptember 30, 2018 and September 30, 2017

	Nine Months Ended										Nine Months Ended
	September 30, 2018										September 30, 2017
	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	$	227	$	111	$	168	$	10	$	516	$	132		$	92	$	3	$	8		$	235
Less: Installment GWP and other GAAP adjustments(1)	9		72		10		1		92		(1		)	90		3		(2		)	90
Upfront GWP	218		39		158		9		424		133			2		—		10			145
Plus: Installment premium PVP(2)	84		52		7		0		143		4			56		5		2			67
Total PVP	$	302	$	91	$	165	$	9	$	567	$	137		$	58	$	5	$	12		$	212
Gross par written	$	15,017	$	3,721	$	877	$	159	$	19,774	$	11,590		$	1,260	$	243	$	155		$	13,248

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.

2) Includes PVP of credit derivatives assumed in the Syncora Guarantee Inc. (SGI) transaction in the second quarter of 2018.

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			Nine Months Ended
	September 30, 2018			September 30, 2018
	Gross Par Written		Avg. Internal Rating	Gross Par Written		Avg. Internal Rating
Sector:
U.S. public finance
General obligation	$	1,077	A-	$	4,570	A-
Tax backed	334		A	2,732		A-
Municipal utilities	514		BBB+	2,389		A
Infrastructure finance	0		BBB-	1,116		A+
Investor owned utilities	—		--	862		A-
Transportation	16		A-	804		A
Higher education	52		BBB+	705		A
Healthcare	316		BBB	495		BBB-
Housing	19		BBB-	204		BBB
Other	10		A	1,140		A
Total U.S. public finance	2,338		BBB+	15,017		A-
Non-U.S. public finance:
Regulated utilities	—		--	2,590		BBB+
Infrastructure finance	189		BBB	998		BBB-
Other	—		--	133		A+
Total non-U.S. public finance	189		BBB	3,721		BBB
Total public finance	$	2,527	BBB+	$	18,738	A-
U.S. structured finance:
Residential mortgage-backed securities (RMBS)	$	—	--	$	327	B-
Pooled corporate obligations	249		A-	271		A
Commercial receivables	139		BBB	139		BBB
Commercial mortgage-backed securities (CMBS)	85		BBB	85		BBB
Structured credit	—		--	41		BBB
Other	—		--	14		A-
Total U.S. structured finance	473		BBB +	877		BB+
Non-U.S. structured finance
Commercial receivable	—		--	139		BBB+
RMBS	—		--	19		BBB
Pooled corporate obligations	1		A-	1		A-
Total Non-U.S. structured finance	1		A-	159		BBB+
Total structured finance	$	474	BBB +	$	1,036	BBB-
Total gross par written	$	3,001	BBB+	$	19,774	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)

															Nine Months
	1Q-17		2Q-17		3Q-17		4Q-17		1Q-18		2Q-18		3Q-18		2017		2018
PVP:
Public finance - U.S.	$	52	$	46	$	39	$	59	$	35	$	234	$	33	$	137	$	302
Public finance - non-U.S.	40		14		4		8		26		53		12		58		91
Structured finance - U.S.	5		0		0		7		0		158		7		5		165
Structured finance - non-U.S.	2		10		—		3		—		9		0		12		9
Total PVP	$	99	$	70	$	43	$	77	$	61	$	454	$	52	$	212	$	567
Reconciliation of GWP to PVP:
Total GWP	$	111	$	79	$	45	$	72	$	73	$	393	$	50	$	235	$	516
Less: Installment GWP and other GAAP adjustments	55		25		10		9		22		58		12		90		92
Upfront GWP	56		54		35		63		51		335		38		145		424
Plus: Installment premium PVP	43		16		8		14		10		119		14		67		143
Total PVP	$	99	$	70	$	43	$	77	$	61	$	454	$	52	$	212	$	567
Gross par written:
Public finance - U.S.	$	3,430	$	4,832	$	3,328	$	4,367	$	2,004	$	10,675	$	2,338	$	11,590	$	15,017
Public finance - non-U.S.	990		181		89		116		187		3,345		189		1,260		3,721
Structured finance - U.S.	243		—		—		246		11		393		473		243		877
Structured finance - non-U.S.	28		127		—		47		—		158		1		155		159
Total	$	4,691	$	5,140	$	3,417	$	4,776	$	2,202	$	14,571	$	3,001	$	13,248	$	19,774

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

12

Assured Guaranty Ltd.

Investment Portfolio and Cash

As of September 30, 2018

(dollars in millions)

	Amortized Cost		Pre-Tax Book Yield		After-Tax Book Yield		Fair Value		Annualized Investment Income (1)
Investment portfolio:
Fixed maturity securities, available-for-sale:
U.S. obligations of states and political subdivisions(4)	$	4,724	3.55	%	3.30	%	$	4,816	$	167
Insured obligations of state and political subdivisions (2)	161		4.92		4.54		172		8
U.S. Treasury securities and obligations of U.S. government agencies	179		2.75		2.21		181		5
Agency obligations	56		5.34		4.87		61		3
Corporate securities (4)	2,187		3.16		2.73		2,147		69
Mortgage-backed securities:
RMBS (3)(4)	967		4.64		3.93		948		45
CMBS	537		3.30		2.86		528		18
Asset-backed securities (4)	893		7.65		6.09		1,055		68
Non-U.S. government securities	302		1.50		1.21		284		5
Total fixed maturity securities	10,006		3.88		3.41		10,192		388
Short-term investments	738		1.96		1.61		738		14
Cash (5)	82		—		—		82		—
Total	$	10,826	3.74	%	3.29	%	$	11,012	$	402
Ratings (6):	Fair Value		% of Portfolio
U.S. Treasury securities and obligations of U.S. government agencies	$	181	1.8	%
Agency obligations	61		0.6
AAA/Aaa	1,588		15.6
AA/Aa	4,702		46.1
A/A	2,029		19.9
BBB	450		4.4
Below investment grade (BIG) (7)	1,128		11.1
Not rated	53		0.5
Total fixed maturity securities, available-for-sale	$	10,192	100.0	%
Duration of fixed maturity securities and short-term investments (in years):			5.0
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 $44 million insured by AGC and AGM.

3) Includes fair value of $212 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 $1,593 million in par with carrying value of $1,104 million.

13

Assured Guaranty Ltd.

Estimated Net Exposure Amortization⁽¹⁾ and Estimated Future Financial Guaranty 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
2018 (as of September 30)			$	378,693
2018 Q4	$	8,998	369,695		$	91	$	5	$	(3	)	$	5
2019	29,210		340,485		329		18		(9		)	15
2020	22,622		317,863		299		16		(7		)	13
2021	23,419		294,444		272		15		(6		)	12
2022	20,958		273,486		247		14		(5		)	11
2018-2022	105,207		273,486		1,238		68		(30		)	56
2023-2027	89,886		183,600		963		52		(16		)	47
2028-2032	72,146		111,454		639		30		(12		)	38
2033-2037	52,083		59,371		378		15		(11		)	30
After 2037	59,371		—		320		14		(1		)	33
Total	$	378,693			$	3,538	$	179	$	(70	)	$	204

1) Represents the future expected amortization of current debt service outstanding (principal and interest), assuming no advance refundings, as of September 30, 2018. 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
2018 (as of September 30)												$	11,787
2018 Q4	$	32	$	266	$	(45	)	$	193	$	446	11,341
2019	71		724		6			622		1,423		9,918
2020	186		572		(2		)	414		1,170		8,748
2021	148		484		1			500		1,133		7,615
2022	106		470		84			483		1,143		6,472
2018-2022	543		2,516		44			2,212		5,315		6,472
2023-2027	302		1,187		140			1,073		2,702		3,770
2028-2032	227		314		762			458		1,761		2,009
2033-2037	287		412		196			707		1,602		407
After 2037	80		137		57			133		407		—
Total structured finance	$	1,439	$	4,566	$	1,199		$	4,583	$	11,787

Public Finance

	Estimated Net Par Amortization		Estimated Ending Net Par Outstanding
2018 (as of September 30)			$	235,153
2018 Q4	$	5,649	229,504
2019	17,105		212,399
2020	11,547		200,852
2021	12,962		187,890
2022	11,049		176,841
2018-2022	58,312		176,841
2023-2027	50,715		126,126
2028-2032	45,628		80,498
2033-2037	35,869		44,629
After 2037	44,629		—
Total public finance	$	235,153

Net par outstanding (end of period)

	1Q-17		2Q-17		3Q-17		4Q-17		1Q-18		2Q-18		3Q-18
Public finance - U.S.	$	238,050	$	232,418	$	218,216	$	209,392	$	201,337	$	200,378	$	190,418
Public finance - non-U.S.	39,343		40,533		42,727		42,922		43,747		45,442		44,735
Structured finance - U.S.	18,446		15,655		13,142		11,224		10,681		10,749		10,611
Structured finance - non-U.S.	2,404		2,014		1,682		1,414		1,324		1,235		1,176
Net par outstanding	$	298,243	$	290,620	$	275,767	$	264,952	$	257,089	$	257,804	$	246,940

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 September 30, 2018

(dollars in millions)

	Net Expected Loss to be Expensed (1)
	GAAP
2018 Q4	$	9
2019	37
2020	38
2021	42
2022	42
2018-2022	168
2023-2027	171
2028-2032	112
2033-2037	61
After 2037	13
Total expected present value of net expected loss to be expensed(2)	525
Future accretion	181
Total expected future loss and LAE	$	706

1) The present value of net expected loss to be paid is discounted using risk free rates ranging from 0.0% to 3.20% for U.S. dollar denominated obligations.

2) Excludes $45 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

	September 30, 2018			December 31, 2017
	Net Par Outstanding		Avg. Internal Rating	Net Par Outstanding		Avg. Internal Rating
U.S. public finance:
General obligation	$	80,521	A-	$	90,705	A-
Tax backed	41,308		A-	44,350		A-
Municipal utilities	29,901		A-	32,357		A-
Transportation	15,347		A-	17,030		A-
Higher education	6,739		A-	8,195		A
Healthcare	6,668		A-	8,763		A
Infrastructure finance	5,300		A-	4,216		BBB+
Housing revenue	1,367		BBB+	1,319		BBB+
Investor-owned utilities	1,061		A-	523		A-
Other public finance	2,206		A-	1,934		A
Total U.S. public finance	190,418		A-	209,392		A-
Non-U.S. public finance:
Regulated utilities	18,561		BBB+	16,689		BBB+
Infrastructure finance	18,380		BBB	18,234		BBB
Pooled infrastructure	1,408		AAA	1,561		AAA
Other public finance	6,386		A	6,438		A
Total non-U.S. public finance	44,735		BBB+	42,922		BBB+
Total public finance	$	235,153	A-	$	252,314	A-
U.S. structured finance:
RMBS	$	4,566	BBB-	$	4,818	BBB-
Insurance securitizations	1,435		A+	1,449		A+
Consumer receivables	1,318		A-	1,590		A-
Pooled corporate obligations	1,313		A+	1,347		A
Financial products	1,199		AA-	1,418		AA-
Other structured finance	780		A-	602		A
Total U.S. structured finance	10,611		BBB+	11,224		BBB+
Non-U.S. structured finance:
RMBS	594		A-	637		A-
Pooled corporate obligations	126		A	157		A+
Other structured finance	456		A+	620		A
Total non-U.S. structured finance	1,176		A	1,414		A
Total structured finance	$	11,787	A-	$	12,638	A-
Total	$	246,940	A-	$	264,952	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 September 30, 2018

(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	$	428	0.2	%	$	2,422	5.4	%	$	1,691	15.9	%	$	278	23.6	%	$	4,819	1.9	%
AA	22,715		12.0		200		0.4		3,412		32.2		65		5.5		26,392		10.7
A	108,914		57.2		14,047		31.4		1,532		14.4		213		18.1		124,706		50.5
BBB	52,190		27.4		26,995		60.4		1,027		9.7		518		44.1		80,730		32.7
BIG	6,171		3.2		1,071		2.4		2,949		27.8		102		8.7		10,293		4.2
Net Par Outstanding (1)	$	190,418	100.0	%	$	44,735	100.0	%	$	10,611	100.0	%	$	1,176	100.0	%	$	246,940	100.0	%

1) As of September 30, 2018, excludes $1.9 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 September 30, 2018

(dollars in millions)

Geographic Distribution of Financial Guaranty Portfolio

	Net Par Outstanding		% of Total
U.S.:
U.S. public finance:
California	$	33,930	13.7	%
Pennsylvania	17,317		7.0
Texas	16,960		6.9
Illinois	15,496		6.3
New York	15,135		6.1
New Jersey	11,529		4.7
Florida	9,273		3.8
Michigan	5,325		2.2
Puerto Rico	4,767		1.9
Alabama	4,318		1.7
Other	56,368		22.8
Total U.S. public finance	190,418		77.1
U.S. structured finance	10,611		4.3
Total U.S.	201,029		81.4
Non-U.S.:
United Kingdom	31,536		12.8
France	3,247		1.3
Canada	2,697		1.1
Australia	2,158		0.9
Italy	1,216		0.5
Other	5,057		2.0
Total non-U.S.	45,911		18.6
Total net par outstanding	$	246,940	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.

Non-Financial Guaranty Exposure

As of September 30, 2018

(dollars in millions)

	Gross Exposure				Net Exposure
	As of September 30, 2018		As of December 31, 2017		As of September 30, 2018		As of December 31, 2017
Capital relief triple-X life reinsurance (1)	$	883	$	773	$	766	$	675
Aircraft residual value insurance policies	340		201		218		140

1) The capital relief triple-X life reinsurance net exposure is expected to increase to approximately $1.0 billion prior to September 30, 2036.

20

Assured Guaranty Ltd.

Exposure to Puerto Rico (1 of 3)

As of September 30, 2018

(dollars in millions)

Exposure to Puerto Rico

	Par Outstanding				Debt Service Outstanding
	Gross		Net		Gross		Net
Total	$	4,971	$	4,767	$	8,037	$	7,746

Exposure to Puerto Rico by Risk

	Net Par Outstanding
	AGM		AGC		AG Re		Eliminations (1)			Total Net Par Outstanding (2)		Gross Par Outstanding
Commonwealth Constitutionally Guaranteed
Commonwealth of Puerto Rico - General Obligation Bonds (3)	$	647	$	302	$	393	$	(1	)	$	1,341	$	1,385
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) (3)	233		495		195		(79		)	844		874
PRHTA (Highways revenue) (3)	351		84		40		—			475		536
Puerto Rico Convention Center District Authority (PRCCDA)	—		152		—		—			152		152
Puerto Rico Infrastructure Financing Authority (PRIFA)	—		15		1		—			16		16
Other Public Corporations
Puerto Rico Electric Power Authority (PREPA) (3)	544		72		232		—			848		866
Puerto Rico Aqueduct and Sewer Authority (PRASA) (4)	—		284		89		—			373		373
Puerto Rico Municipal Finance Agency (MFA) (4)	189		40		74		—			303		349
Puerto Rico Sales Tax Financing Corporation (COFINA) (3)	264		—		9		—			273		273
University of Puerto Rico (U of PR) (4)	—		1		—		—			1		1
Total exposure to Puerto Rico	$	2,237	$	1,586	$	1,033	$	(89	)	$	4,767	$	4,971

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

2) Includes exposure to capital appreciation bonds with a current aggregate net par outstanding of $23 million and a fully accreted net par at maturity of $53 million. Of these amounts, current net par of $21 million and fully accreted net par at maturity of $50 million relate to the COFINA and current net par of $2 million and fully accreted net par at maturity of $3 million relate to the Commonwealth General Obligation Bonds.

3) As of the date of this filing, the seven-member 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.

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

21

Assured Guaranty Ltd.

Exposure to Puerto Rico (2 of 3)

As of September 30, 2018

(dollars in millions)

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

	2018 (4Q)		2019 (1Q)		2019 (2Q)		2019 (3Q)		2019 (4Q)		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	$	0	$	87	$	—	$	141		$	15		$	37		$	14	$	73	$	68		$	34		$	90		$	215		$	567	$	—	$	—	$	1,341
PBA	—		—		—		3		—		5			13			0			6		0		7			11			40			16			40		—		—		141
Public Corporations - Certain Revenues Potentially Subject to Clawback
PRHTA (Transportation revenue)	—		—		—		32		—		25			18			28			34		4		29			24			29			157			279		185		—		844
PRHTA (Highway revenue)	—		—		—		21		—		22			35			6			32		33		34			1			—			112			179		—		—		475
PRCCDA	—		—		—		—		—		—			—			—			—		—		—			—			19			24			109		—		—		152
PRIFA	—		—		—		—		—		—			—			—			2		—		—			—			—			—			—		14		—		16
Other Public Corporations
PREPA	—		—		—		26		—		48			28			28			95		93		68			106			105			238			13		—		—		848
PRASA	—		—		—		—		—		—			—			—			—		2		25			26			28			29			—		2		261		373
MFA	—		—		—		55		—		45			40			40			22		17		17			34			12			21			—		—		—		303
COFINA	0		0		0		0		0		(1		)	(2		)	(2		)	1		0		(2		)	(2		)	(2		)	(1		)	30		252		2		273
U of PR	—		—		—		0		—		0			0			0			0		0		0			0			0			1			0		—		—		1
Total	$	0	$	0	$	0	$	224	$	0	$	285		$	147		$	137		$	206	$	222	$	246		$	234		$	321		$	812		$	1,217	$	453	$	263	$	4,767

1) Includes exposure to capital appreciation bonds with a current aggregate net par outstanding of $23 million and a fully accreted net par at maturity of $53 million. Of these amounts, current net par of $21 million and fully accreted net par at maturity of $50 million relate to the COFINA and current net par of $2 million and fully accreted net par at maturity of $3 million relate to the Commonwealth General Obligation Bonds.

22

Assured Guaranty Ltd.

Exposure to Puerto Rico (3 of 3)

As of September 30, 2018

(dollars in millions)

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

	2018 (4Q)		2019 (1Q)		2019 (2Q)		2019 (3Q)		2019 (4Q)		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	$	35	$	0	$	121	$	—	$	206	$	74	$	94	$	71	$	128	$	119	$	82	$	136	$	396	$	649	$	—	$	—	$	2,111
PBA	—		3		—		7		—		12		20		6		13		6		12		17		44		31		45		—		—		216
Public Corporations - Certain Revenues Potentially Subject to Clawback
PRHTA (Transportation revenue)	—		22		—		54		—		67		59		68		72		41		66		59		63		300		372		210		—		1,453
PRHTA (Highway revenue)	—		13		—		34		—		46		58		27		52		51		51		17		15		182		203		—		—		749
PRCCDA	—		3		—		4		—		7		7		7		7		7		7		7		26		54		121		—		—		257
PRIFA	—		0		—		0		—		1		1		1		2		1		1		1		1		4		3		16		—		32
Other Public Corporations
PREPA	3		17		3		43		3		87		63		62		128		121		91		126		122		273		15		—		—		1,157
PRASA	—		10		—		10		—		19		19		19		19		21		44		44		44		99		68		69		314		799
MFA	—		8		—		62		—		58		50		48		28		23		21		37		14		22		—		—		—		371
COFINA	0		6		0		6		0		13		13		13		16		15		13		13		13		74		96		307		2		600
U of PR	—		0		—		0		—		0		0		0		0		0		0		0		0		1		0		—		—		1
Total	$	3	$	117	$	3	$	341	$	3	$	516	$	364	$	345	$	408	$	414	$	425	$	403	$	478	$	1,436	$	1,572	$	602	$	316	$	7,746

1) Includes exposure to capital appreciation bonds with a current aggregate net par outstanding of $23 million and a fully accreted net par at maturity of $53 million. Of these amounts, current net par of $21 million and fully accreted net par at maturity of $50 million relate to the COFINA and current net par of $2 million and fully accreted net par at maturity of $3 million relate to the Commonwealth General Obligation Bonds.

23

Assured Guaranty Ltd.

Direct Pooled Corporate Obligations Profile

As of September 30, 2018

(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	$	277	20.1	%	46.5%	67.0%
AA	494		35.8	%	45.8%	55.4%
A	382		27.7	%	34.7%	35.4%
BBB	103		7.5	%	35.3%	32.4%
BIG	123		8.9	%	48.4%	61.9%
Total exposures	$	1,379	100.0	%	42.0%	50.1%

Distribution of Direct Pooled Corporate Obligations by Asset Class

	Net Par Outstanding		% of Total		Avg. Initial Credit Enhancement	Avg. Current Credit Enhancement	Avg. Rating
Asset class:
Trust preferred
Banks and insurance	$	865	62.8	%	44.7%	54.2%	AA-
U.S. mortgage and real estate investment trusts	149		10.8		47.4%	61.4%	BBB
Collateralized bond obligations / collateralized loan obligations	250		18.1		29.2%	29.2%	A-
Other pooled corporates	115		8.3		N/A	N/A	A+
Total exposures	$	1,379	100.0	%	42.0%	50.1%	A+

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

24

Assured Guaranty Ltd.

Consolidated U.S. RMBS Profile

As of September 30, 2018

(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	$	136	$	22	$	1,125	$	2	$	1,289
AA	30		145		22		224		—		421
A	0		—		0		101		0		101
BBB	0		11		—		29		155		196
BIG	108		434		49		1,167		802		2,560
Total exposures	$	142	$	727	$	93	$	2,645	$	959	$	4,566

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	$	29	$	24	$	2	$	752	$	74	$	880
2005	63		248		30		236		183		760
2006	50		51		15		489		282		887
2007	—		404		46		1,107		420		1,977
2008	—		—		—		61		—		61
Total exposures	$	142	$	727	$	93	$	2,645	$	959	$	4,566

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

25

Assured Guaranty Ltd.

Below Investment Grade Exposures (1 of 4)

(dollars in millions)

BIG Exposures by Asset Exposure Type

	September 30, 2018		December 31, 2017
U.S. public finance:
Tax backed	$	2,281	$	2,408
General obligation	2,040		3,097
Municipal utilities	1,491		1,324
Transportation	87		94
Healthcare	72		77
Higher education	70		102
Housing revenue	18		18
Infrastructure finance	2		2
Other public finance	110		18
Total U.S. public finance	6,171		7,140
Non-U.S. public finance:
Infrastructure finance	680		1,320
Other public finance	391		411
Total non-U.S. public finance	1,071		1,731
Total public finance	$	7,242	$	8,871
U.S. structured finance:
RMBS	$	2,560	$	2,761
Consumer receivables	176		186
Insurance securitizations	85		85
Pooled corporate obligations	81		161
Other structured finance	47		68
Total U.S. structured finance	2,949		3,261
Non-U.S. structured finance:
RMBS	45		48
Pooled corporate obligations	42		42
Other structured finance	15		16
Total non-U.S. structured finance	102		106
Total structured finance	$	3,051	$	3,367
Total BIG net par outstanding	$	10,293	$	12,238

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

26

Assured Guaranty Ltd.

Below Investment Grade Exposures (2 of 4)

(dollars in millions)

Net Par Outstanding by BIG Category⁽¹⁾  

	September 30, 2018		December 31, 2017
Category 1
U.S. public finance	$	1,558	$	2,368
Non-U.S. public finance	821		1,455
U.S. structured finance	424		603
Non-U.S. structured finance	99		102
Total Category 1	2,902		4,528
Category 2
U.S. public finance	391		663
Non-U.S. public finance	250		276
U.S. structured finance	335		418
Non-U.S. structured finance	—		4
Total Category 2	976		1,361
Category 3
U.S. public finance	4,222		4,109
Non-U.S. public finance	—		—
U.S. structured finance	2,190		2,240
Non-U.S. structured finance	3		—
Total Category 3	6,415		6,349
BIG Total	$	10,293	$	12,238

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.

27

Assured Guaranty Ltd.

Below Investment Grade Exposures (3 of 4)

As of September 30, 2018

(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	$	1,498	CCC-
Puerto Rico Highways & Transportation Authority	1,319		CC-
Puerto Rico Electric Power Authority	848		CC
Puerto Rico Aqueduct & Sewer Authority	373		CCC
Puerto Rico Municipal Finance Agency	303		CCC-
Puerto Rico Sales Tax Financing Corporation	273		CC
Jackson Water & Sewer System, Mississippi	193		BB
Virgin Islands Public Finance Authority	169		BB
Puerto Rico Convention Center District Authority	152		C
Stockton Pension Obligation Bonds, California	110		B
Penn Hills School District, Pennsylvania	107		BB
Pennsylvania Economic Development Financing Authority (Capitol Region Parking System)	70		BB
Atlantic City, New Jersey	60		BB
Virgin Islands Water and Power Authority	54		BB
Total U.S. public finance	$	5,529
Non-U.S. public finance:
Valencia Fair	$	320	BB-
Road Management Services PLC (A13 Highway)	200		B+
M6 Duna Autopalya Koncesszios Zartkoruen Mukodo Reszvenytarsasag	179		BB+
Autovia de la Mancha, S.A.	114		BB
CountyRoute (A130) plc	83		BB-
Metropolitano de Porto Lease and Sublease of Railroad Equipment	51		B+
Total non-U.S. public finance	$	947
Total	$	6,476

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.

28

Assured Guaranty Ltd.

Below Investment Grade Exposures (4 of 4)

As of September 30, 2018

(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	$	200	CCC	14.1%
Soundview 2007-WMC1	160		CCC	34.8%
Nomura Asset Accept. Corp. 2007-1	126		CCC	21.0%
Option One MLT 2007-Hl, Cl I-A-1	113		CCC	26.3%
MABS 2007-NCW	109		CCC	21.7%
New Century 2005-A	96		CCC	14.0%
Argent Securities Inc. 2005-W4	93		CCC	14.2%
Countrywide Home Equity Loan 2007-D	80		B	2.7%
Countrywide HELOC 2007-A	76		BB	3.9%
Countrywide HELOC 2006-F	73		B	2.3%
Countrywide HELOC 2007-B	73		B	2.6%
Countrywide HELOC 2005-D	66		B	3.5%
Countrywide Home Equity Loan 2005-J	66		B	3.9%
Soundview (Delta) 2008-1	61		CCC	21.4%
ACE 2007-D1 (formerly DMSI 2007-D1)	59		CCC	24.6%
IndyMac 2007-H1 HELOC	57		CCC	3.7%
ACE 2007-SL1	54		CCC	4.2%
Subtotal RMBS	$	1,562
Non-RMBS:
Ballantyne Re Plc Class A-2	$	85	CC	N/A
Taberna Preferred Funding II, Ltd.	81		BB	N/A
National Collegiate Trust 2006-2	68		CCC	3.2%
Subtotal non-RMBS	$	234
Total U.S. structured finance	$	1,796
Total non-U.S. structured finance	$	—
Total	$	1,796

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.

29

Assured Guaranty Ltd.

Largest Exposures by Sector (1 of 4)

As of September 30, 2018

(dollars in millions)

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

Credit Name:	Net Par Outstanding		Internal Rating
New Jersey (State of)	$	4,638	BBB
Illinois (State of)	2,059		BBB
Pennsylvania (Commonwealth of)	1,998		A-
Puerto Rico, General Obligation, Appropriations and Guarantees of the Commonwealth	1,498		CCC-
Chicago (City of) Illinois	1,326		BBB
Puerto Rico Highways & Transportation Authority	1,319		CC-
North Texas Tollway Authority	1,226		BBB+
Massachusetts (Commonwealth of)	1,200		AA-
California (State of)	1,180		A
Wisconsin (State of)	1,130		A+
New York (City of) New York	1,118		AA-
Philadelphia (City of) Pennsylvania	1,089		BBB+
Chicago Public Schools, Illinois	1,030		BBB-
Great Lakes Water Authority (Sewerage), Michigan	1,005		BBB+
New York Metropolitan Transportation Authority	979		A
San Diego Family Housing, LLC Military Housing	963		AA
Philadelphia School District, Pennsylvania	857		A-
Port Authority of New York & New Jersey	854		BBB-
Puerto Rico Electric Power Authority	848		CC
Massachusetts (Commonwealth of) Water Resources	848		AA
Clarksville Natural Gas Acquisition Corporation, Tennessee	816		A
Long Island Power Authority	806		BBB+
Metropolitan Pier & Exposition Authority, Illinois	804		BBB-
Arizona (State of)	797		A+
Connecticut (State of)	788		A-
Georgia Board of Regents	783		A
Pennsylvania Turnpike Commission	756		A-
Suffolk County, New York	754		BBB
Miami-Dade County Aviation, Florida	719		A
Regional Transportation Authority, Illinois	693		AA-
Jefferson County Alabama Sewer	675		BBB-
LCOR Alexandria LLC	615		BBB+
Kentucky (Commonwealth of)	613		A
Metro Washington Airports Authority (Dulles Toll Road)	609		BBB+
Garden State Preservation Trust (Open Space & Farmland), New Jersey	603		BBB+
Nassau County, New York	601		A-
Oglethorpe Power Corporation, Georgia	575		BBB
Sacramento County, California	567		A-
New Jersey Turnpike Authority, New Jersey	546		A-
Miami-Dade County, Florida	523		A+
Pittsburgh Water & Sewer, Pennsylvania	522		BBB+
Atlanta, Georgia Water & Sewer System	472		BBB+
Yankee Stadium LLC New York City Industrial Development Authority	466		BBB-
Miami-Dade County School Board, Florida	464		A
San Bernardino County, California	458		A+
Oyster Bay, New York	452		BBB-
Anaheim (City of), California	451		BBB+
Central Florida Expressway Authority, Florida (fka Orlando-Orange County Expressway Authority)	442		A+
Oregon School Boards Association	441		A+
New Haven (City of), Connecticut	430		BBB-
Total top 50 U.S. public finance exposures	$	45,406

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

30

Assured Guaranty Ltd.

Largest Exposures by Sector (2 of 4)

As of September 30, 2018

(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+	20.0%
Private US Insurance Securitization	424		AA	N/A
SLM Private Credit Student Loan Trust 2006-C	274		A+	33.3%
Private US Insurance Securitization	250		AA	N/A
Brightwood Fund III Static 2018-1, LLC	249		A-	29.2%
Option One 2007-FXD2	200		CCC	0.0%
Timberlake Financial, LLC Floating Insured Notes	176		BBB-	N/A
Soundview 2007-WMC1	160		CCC	—%
Countrywide HELOC 2006-I	139		BBB-	0.0%
CWABS 2007-4	127		A+	0.0%
Nomura Asset Accept. Corp. 2007-1	126		CCC	0.0%
CWALT Alternative Loan Trust 2007-HY9	120		A	0.0%
Option One Mortgage Loan Trust 2007-Hl1	113		CCC	—%
OwnIt Mortgage Loan ABS Certificates 2006-3	111		AAA	24.7%
New Century Home Equity Loan Trust 2006-1	111		AAA	9.2%
Soundview Home Equity Loan Trust 2006-OPT1	111		AAA	54.1%
MABS 2007-NCW	109		CCC	0.0%
Structured Asset Investment Loan Trust 2006-1	104		AAA	10.7%
ALESCO Preferred Funding XIII, Ltd.	104		AA	57.8%
New Century 2005-A	96		CCC	2.8%
Countrywide 2007-13	93		AA-	19.5%
Argent Securities Inc., Asset Backed Pass Through Certificates 2005-W4	93		CCC	—%
ALESCO Preferred Funding XI	92		AA	56.1%
Private Commercial Receivable Transaction	86		BBB	N/A
Preferred Term Securities XXIV, Ltd.	86		AA-	47.9%
ALESCO Preferred Funding XII, Ltd.	85		A-	48.3%
Ballantyne Re Plc	85		CC	N/A
Trapeza CDO XI	85		AA-	59.8%
National Collegiate Trust Series 2005-GT3 Grantor Trust Certificates	84		BBB	12.0%
Taberna Preferred Funding II, Ltd.	81		BB	61.9%
Countrywide Home Equity Loan Trust 2007-D	80		B	0.0%
Private Other Structured Finance Transaction	79		AAA	N/A
Countrywide HELOC 2007-A	76		BB	0.0%
Trapeza CDO X, Ltd.	74		AAA	60.2%
Countrywide HELOC 2006-F	73		B	0.0%
Countrywide HELOC 2007-B	73		B	0.0%
IMPAC CMB Trust Series 2007-A	73		AAA	41.8%
Private Commercial Receivable Transaction	68		BBB	N/A
National Collegiate Trust Series 2006-2	68		CCC	—%
Private Other Structured Finance Transaction	66		A-	N/A
Countrywide HELOC 2005-D	66		B	0.0%
Countrywide Home Equity Loan Trust 2005-J	66		B	0.0%
Alesco Preferred Funding XVI, Ltd.	65		BBB-	26.8%
CAPCO - Excess SIPC Excess of Loss Reinsurance	63		BBB	N/A
MASTR Asset Backed Securities Trust 2005-NC2	61		AAA	—%
Soundview (Delta) 2008-1	61		CCC	0.0%
Preferred Term Securities XXIII	60		AA	51.0%
National Collegiate Trust Series 2006-3	60		BBB-	8.2%
Private Balloon Note Guarantee	60		BBB	N/A
Total top 50 U.S. structured finance exposures	$	6,266

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.

31

Assured Guaranty Ltd.

Largest Exposures by Sector (3 of 4)

As of September 30, 2018

(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	$	2,639	A-
Hydro-Quebec, Province of Quebec	Canada	2,082		A+
Thames Water Utility Finance Plc	United Kingdom	1,923		A-
Societe des Autoroutes du Nord et de l'Est de France S.A.	France	1,748		BBB+
Southern Gas Networks PLC	United Kingdom	1,655		BBB
Anglian Water Services Financing	United Kingdom	1,433		A-
Dwr Cymru Financing Limited	United Kingdom	1,412		A-
British Broadcasting Corporation (BBC)	United Kingdom	1,334		A+
National Grid Gas PLC	United Kingdom	1,257		BBB+
Channel Link Enterprises Finance PLC	France, United Kingdom	1,230		BBB
Verbund - Lease and Sublease of Hydro-Electric equipment	Austria	990		AAA
Capital Hospitals (Barts)	United Kingdom	893		BBB-
Aspire Defence Finance plc	United Kingdom	874		BBB+
Verdun Participations 2 S.A.S.	France	728		BBB-
National Grid Company PLC	United Kingdom	681		BBB+
Sydney Airport Finance Company	Australia	641		BBB+
Yorkshire Water Services Finance Plc	United Kingdom	621		A-
InspirED Education (South Lanarkshire) plc	United Kingdom	615		BBB-
Campania Region - Healthcare receivable	Italy	608		BBB-
Envestra Limited	Australia	599		BBB+
Coventry & Rugby Hospital Company	United Kingdom	552		BBB-
Derby Healthcare PLC	United Kingdom	522		BBB
Wessex Water Services Finance plc	United Kingdom	502		BBB+
Severn Trent Water Utilities Finance Plc	United Kingdom	495		BBB+
International Infrastructure Pool	United Kingdom	469		AAA
Total top 25 non-U.S. exposures		$	26,503

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

32

Assured Guaranty Ltd.

Largest Exposures by Sector (4 of 4)

As of September 30, 2018

(dollars in millions)

10 Largest U.S. Residential Mortgage Servicer Exposures

Servicer:	Net Par Outstanding
Specialized Loan Servicing, LLC	$	1,371
Ocwen Loan Servicing, LLC (1)	1,369
Bank of America, N.A.(2)	831
Wells Fargo Bank N.A.	335
JPMorgan Chase Bank	187
Select Portfolio Servicing, Inc.	179
Carrington Mortgage Services, LLC	67
Ditech Financial LLC	58
Banco Popular de Puerto Rico	50
Citicorp Mortgage Securities, Inc.	26
Total top 10 U.S. residential mortgage servicer exposures	$	4,473

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
Montefiore Medical Center Obligated Group, New York	$	377	BBB	NY, WI
CHRISTUS Health	314		A-	TX
Methodist Healthcare	292		A+	TN
Atrium Health (fka Carolinas HealthCare System)	289		AA-	NC
Dignity Health, California	282		A-	CA
Asante Health System	254		A+	OR
Palomar Pomerado Health	251		BBB-	CA
OU Medicine, Oklahoma	246		BBB-	OK
Bon Secours Health System Obligated Group	228		A	MD
UnityPoint Health System (fka Iowa Health System)	211		AA-	IA
Total top 10 U.S. healthcare exposures	$	2,744

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

33

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 EndedSeptember 30, 2018

	Net Expected Loss to be Paid (Recovered) as of June 30, 2018		Economic Loss Development During 3Q-18			(Paid) Recovered Losses During 3Q-18			Net Expected Loss to be Paid (Recovered) as of September 30, 2018
Public Finance:
U.S. public finance	$	1,041	$	42		$	(251	)	$	832
Non-U.S public finance	41		(3		)	—			38
Public Finance	1,082		39			(251		)	870
Structured Finance:
U.S. RMBS (2)	326		(40		)	17			303
Other structured finance	24		1			(7		)	18
Structured Finance	350		(39		)	10			321
Total	$	1,432	$	0		$	(241	)	$	1,191

Rollforward of Net Expected Loss and LAE to be Paid⁽¹⁾ for the Nine Months EndedSeptember 30, 2018

	Net Expected Loss to be Paid (Recovered) as of December 31, 2017		Net Expected Loss to be Paid on SGI Portfolio as of June 1, 2018		Economic Loss Development During 2018			(Paid) Recovered Losses During 2018			Net Expected Loss to be Paid (Recovered) as of September 30, 2018
Public Finance:
U.S. public finance	$	1,157	$	0	$	59		$	(384	)	$	832
Non-U.S public finance	46		1		(9		)	0			38
Public Finance	1,203		1		50			(384		)	870
Structured Finance:
U.S. RMBS (2)	73		130		(52		)	152			303
Other structured finance	27		—		(3		)	(6		)	18
Structured Finance	100		130		(55		)	146			321
Total	$	1,303	$	131	$	(5	)	$	(238	)	$	1,191

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 receivable of $13 million as of September 30, 2018, $17 million as of June 30, 2018 and $117 million as of December 31, 2017.

34

Assured Guaranty Ltd.

Loss Measures

As of September 30, 2018

(dollars in millions)

	Total Net Par Outstanding for BIG Transactions		3Q-18  Loss and LAE			3Q-18 Loss and LAE included in Non-GAAP Operating Income (1)			3Q-18 Effect of FG VIE Consolidation (2)		2018 Loss and LAE			2018 Loss and LAE included in Non-GAAP Operating Income (1)			2018 Effect of FG VIE Consolidation (2)
Public finance:
U.S. public finance	$	6,171	$	42		$	42		$	—	$	76		$	76		$	—
Non-U.S public finance	1,071		(3		)	(3		)	—		(5		)	(5		)	—
Public finance	7,242		39			39			—		71			71			—
Structured finance:
U.S. RMBS	2,560		(21		)	(23		)	3		(17		)	(18		)	0
Other structured finance	491		(1		)	2			—		(11		)	(7		)	—
Structured finance	3,051		(22		)	(21		)	3		(28		)	(25		)	0
Total	$	10,293	$	17		$	18		$	3	$	43		$	46		$	0

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 condensed 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.

35

Assured Guaranty Ltd.

Summary of Financial and Statistical Data

(dollars in millions, except per share amounts)

	As of and for Nine Months Ended September 30, 2018			Year Ended December 31,
				2017			2016			2015			2014
GAAP Summary Statements of Operations Data
Net earned premiums	$	423		$	690		$	864		$	766		$	570
Net investment income	298			418			408			423			403
Realized gains and other settlements on credit derivatives	4			(10		)	29			(18		)	23
Total expenses	309			748			660			776			463
Income (loss) before income taxes	479			991			1,017			1,431			1,531
Net income (loss)	433			730			881			1,056			1,088
Net income (loss) per diluted share	3.83			5.96			6.56			7.08			6.26
GAAP Summary Balance Sheet Data
Total investments and cash	$	11,107		$	11,539		$	11,103		$	11,358		$	11,459
Total assets	13,739			14,433			14,151			14,544			14,919
Unearned premium reserve	3,538			3,475			3,511			3,996			4,261
Loss and LAE reserve	1,147			1,444			1,127			1,067			799
Long-term debt	1,249			1,292			1,306			1,300			1,297
Shareholders’ equity	6,583			6,839			6,504			6,063			5,758
Shareholders’ equity per share	61.73			58.95			50.82			43.96			36.37
Other Financial Information (GAAP Basis)
Net debt service outstanding (end of period)	$	378,693		$	401,118		$	437,535		$	536,341		$	609,622
Gross debt service outstanding (end of period)	382,301			408,492			455,000			559,470			646,722
Net par outstanding (end of period)	246,940			264,952			296,318			358,571			403,729
Gross par outstanding (end of period)	249,403			269,386			307,474			373,192			426,705
Other Financial Information (Statutory Basis)(1)
Net debt service outstanding (end of period)	$	363,490		$	373,340		$	401,004		$	502,331		$	583,598
Gross debt service outstanding (end of period)	367,047			380,478			417,072			524,104			619,475
Net par outstanding (end of period)	232,941			239,003			262,468			327,306			379,714
Gross par outstanding (end of period)	235,355			243,217			272,286			340,662			401,552
Claims-paying resources(2)
Policyholders' surplus	$	4,926		$	5,305		$	5,126		$	4,631		$	4,222
Contingency reserve	1,842			1,750			2,008			2,263			2,330
Qualified statutory capital	6,768			7,055			7,134			6,894			6,552
Unearned premium reserve and net deferred ceding commission income	2,956			2,849			2,672			3,225			3,492
Loss and LAE reserves	1,030			1,092			888			1,043			852
Total policyholders' surplus and reserves	10,754			10,996			10,694			11,162			10,896
Present value of installment premium	455			445			500			645			716
CCS and standby line of credit	400			400			400			400			400
Excess of loss reinsurance facility	180			180			360			360			450
Total claims-paying resources	$	11,789		$	12,021		$	11,954		$	12,567		$	12,462
Ratios:
Net par outstanding to qualified statutory capital	34		:1	34		:1	37		:1	47		:1	58		:1
Capital ratio	54		:1	53		:1	56		:1	73		:1	89		:1
Financial resources ratio	31		:1	31		:1	34		:1	40		:1	47		:1
Par and Debt Service Written
Gross debt service written:
Public finance - U.S.	$	23,764		$	26,988		$	25,423		$	25,832		$	20,804
Public finance - non-U.S.	7,011			2,811			848			2,054			233
Structured finance - U.S.	1,154			500			1,143			355			423
Structured finance - non-U.S.	174			202			30			69			387
Total gross debt service written	$	32,103		$	30,501		$	27,444		$	28,310		$	21,847
Net debt service written	$	32,017		$	30,476		$	27,444		$	28,310		$	21,847
Net par written	19,574			17,962			17,854			17,336			13,171
Gross par written	19,774			18,024			17,854			17,336			13,171

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. Beginning in the second quarter of 2018, the Company incorporates deferred ceding commission income in claims-paying resources. The claims paying resources in prior periods have been updated to reflect this change.

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.

36

Assured Guaranty Ltd.

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

(dollars in millions, except per share amounts)

	Nine Months Ended September 30, 2018			Year Ended December 31,
				2017			2016			2015			2014
Total GWP	$	516		$	307		$	154		$	181		$	104
Less: Installment GWP and other GAAP adjustments (2)	92			99			(10		)	55			(22		)
Upfront GWP	424			208			164			126			126
Plus: Installment premium PVP	143			81			50			53			42
Total PVP	$	567		$	289		$	214		$	179		$	168
PVP:
Public finance - U.S.	$	302		$	196		$	161		$	124		$	128
Public finance - non-U.S.	91			66			25			27			7
Structured finance - U.S.	165			12			27			22			24
Structured finance - non-U.S.	9			15			1			6			9
Total PVP	$	567		$	289		$	214		$	179		$	168
Non-GAAP operating income reconciliation:
Net income (loss)	$	433		$	730		$	881		$	1,056		$	1,088
Less pre-tax adjustments:
Realized gains (losses) on investments	(14		)	40			(30		)	(27		)	(56		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	91			43			36			505			687
Fair value gains (losses) on CCS	(3		)	(2		)	0			27			(11		)
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	(20		)	57			(33		)	(15		)	(21		)
Total pre-tax adjustments	54			138			(27		)	490			599
Less tax effect on pre-tax adjustments	(11		)	(69		)	13			(144		)	(158		)
Non-GAAP operating income	$	390		$	661		$	895		$	710		$	647
Gain (loss) related to FG VIE consolidation included in non-GAAP operating income (net of tax provision of $0, $6, $7, $4, and $84)	$	(1	)	$	11		$	12		$	11		$	156
Non-GAAP operating income per diluted share reconciliation:
Net income (loss) per diluted share	$	3.83		$	5.96		$	6.56		$	7.08		$	6.26
Less pre-tax adjustments:
Realized gains (losses) on investments	(0.13		)	0.33			(0.23		)	(0.18		)	(0.32		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	0.81			0.35			0.27			3.39			3.95
Fair value gains (losses) on CCS	(0.02		)	(0.02		)	0.00			0.18			(0.06		)
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	(0.18		)	0.46			(0.25		)	(0.10		)	(0.12		)
Total pre-tax adjustments	0.48			1.12			(0.21		)	3.29			3.45
Less tax effect on pre-tax adjustments	(0.10		)	(0.57		)	0.09			(0.97		)	(0.92		)
Non-GAAP operating income per diluted share	$	3.45		$	5.41		$	6.68		$	4.76		$	3.73
Gain (loss) related to FG VIE consolidation included in non-GAAP operating income per diluted share	$	(0.01	)	$	0.10		$	0.10		$	0.07		$	0.90

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.

37

Assured Guaranty Ltd.

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

(dollars in millions, except per share amounts)

	As of and for Nine Months Ended September 30, 2018			As of December 31,
				2017			2016			2015			2014
Adjusted book value reconciliation:
Shareholders' equity	$	6,583		$	6,839		$	6,504		$	6,063		$	5,758
Less pre-tax adjustments:
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(55		)	(146		)	(189		)	(241		)	(741		)
Fair value gains (losses) on CCS	57			60			62			62			35
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	215			487			316			373			523
Less taxes	(54		)	(83		)	(71		)	(56		)	45
Non-GAAP operating shareholders' equity	6,420			6,521			6,386			5,925			5,896
Pre-tax adjustments:
Less: Deferred acquisition costs	103			101			106			114			121
Plus: Net present value of estimated net future revenue	211			146			136			169			159
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	3,012			2,966			2,922			3,384			3,461
Plus taxes	(528		)	(512		)	(832		)	(968		)	(960		)
Non-GAAP adjusted book value	$	9,012		$	9,020		$	8,506		$	8,396		$	8,435
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity (net of tax (provision) benefit of $(1), $(2), $4, $11, and $20)	$	3		$	5		$	(7	)	$	(21	)	$	(37	)
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value (net of tax benefit of $4, $3, $12, $22, and $33)	$	(14	)	$	(14	)	$	(24	)	$	(43	)	$	(60	)
Adjusted book value per share reconciliation:
Shareholders' equity per share	$	61.73		$	58.95		$	50.82		$	43.96		$	36.37
Less pre-tax adjustments:
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(0.51		)	(1.26		)	(1.48		)	(1.75		)	(4.68		)
Fair value gains (losses) on CCS	0.53			0.52			0.48			0.45			0.22
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	2.02			4.20			2.47			2.71			3.30
Less taxes	(0.51		)	(0.71		)	(0.54		)	(0.41		)	0.29
Non-GAAP operating shareholders' equity per share	60.20			56.20			49.89			42.96			37.24
Pre-tax adjustments:
Less: Deferred acquisition costs	0.97			0.87			0.83			0.83			0.76
Plus: Net present value of estimated net future revenue	1.99			1.26			1.07			1.23			1.00
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	28.24			25.56			22.83			24.53			21.86
Plus taxes	(4.95		)	(4.41		)	(6.50		)	(7.02		)	(6.07		)
Non-GAAP adjusted book value per share	$	84.51		$	77.74		$	66.46		$	60.87		$	53.27
Gain (loss) related to FG VIE consolidation included in non-GAAP operating shareholders' equity per share	$	0.03		$	0.03		$	(0.06	)	$	(0.15	)	$	(0.24	)
Gain (loss) related to FG VIE consolidation included in non-GAAP adjusted book value per share	$	(0.14	)	$	(0.12	)	$	(0.18	)	$	(0.31	)	$	(0.39	)

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

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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.

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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 Securitiesare 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.

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

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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 within this financial supplement.

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 that are recognized in net income, 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 that are recognized in net income. 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.

41

Non-GAAP Financial Measures (continued)

4) Elimination of foreign exchange gains (losses) on remeasurement of net premium receivables and loss and LAE reserves that are recognized in net income. 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 accumulated other comprehensive income (AOCI) (excluding foreign exchange remeasurement). The AOCI component of the fair value adjustment on the investment portfolio is not deemed economic because the Company generally holds these investments to maturity and therefore should not recognize an economic gain or loss.

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 effects 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.

43

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