ASSURED GUARANTY LTD - FORM 8-K - EX-99.2 - AGL FINANCIAL SUPPLEMENT

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8-K - 8-K - ASSURED GUARANTY LTD	a8-k4q2013agl.htm
EX-99.1 - AGL PRESS RELEASE - ASSURED GUARANTY LTD	agl4q13pressrelease.htm

Assured Guaranty Ltd.

December 31, 2013

Financial Supplement



Table of Contents		Page
	Selected Financial Highlights	1
	Consolidated Statements of Operations (unaudited)	2
	Net Income (Loss) Reconciliation to Operating Income	3
	Consolidated Balance Sheets	5
	Adjusted Book Value	6
	Claims Paying Resources	7
	New Business Production	8
	Financial Guaranty Gross Par Written	9
	New Business Production by Quarter	10
	Available-for-Sale Investment Portfolio and Cash	11
	Estimated Net Exposure Amortization and Estimated Future Net Premium and Credit Derivative Revenues	12
	Expected Amortization of Net Par Outstanding	13
	Present Value of Financial Guaranty Insurance Net Expected Loss to be Expensed	14
	Financial Guaranty Profile	15
	Exposure to Puerto Rico	19
	Direct Pooled Corporate Obligations Profile	20
	Consolidated U.S. RMBS Profile	21
	Direct U.S. RMBS Profile	22
	Direct U.S. Commercial Real Estate Profile	24
	Below Investment Grade Exposures	25
	Largest Exposures by Sector	30
	Rollforward of Net Expected Loss and Loss Adjustment Expenses to be Paid	34
	Financial Guaranty Insurance and Credit Derivative U.S. RMBS Representations and Warranties Benefit Development	35
	Losses Incurred	36
	Summary Financial and Statistical Data	37
	Glossary	38
	Non-GAAP Financial Measures	41

This financial supplement should be read in conjunction with documents filed by Assured Guaranty Ltd. (‘‘AGL’’ and, together with its subsidiaries, ‘‘Assured Guaranty’’ or the ‘‘Company’’) with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year ended December 31, 2013.

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

Cautionary Statement Regarding Forward Looking Statements:

Any forward looking statements made in this supplement reflect the current views of Assured Guaranty with respect to future events and financial performance and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Assured Guaranty's forward looking statements could be affected by many events. These events include (1) rating agency action, including a ratings downgrade, a change in outlook, the placement of ratings on watch for downgrade, or a change in rating criteria, at any time, of Assured Guaranty or any of its subsidiaries and/or of transactions that Assured Guaranty’s subsidiaries have insured; (2) reduction in the amount of available insurance opportunities and/or in the demand for Assured Guaranty's insurance; (3) developments in the world’s financial and capital markets that adversely affect obligors’ payment rates, Assured Guaranty’s loss experience, or its exposure to refinancing risk in transactions (which could result in substantial liquidity claims on its guarantees); (4) the possibility that budget shortfalls or other factors will result in credit losses or impairments on obligations of state and local governments that the Company insures or reinsures; (5) the failure of Assured Guaranty to realize insurance loss recoveries or damages through loan putbacks, settlement negotiations or litigation; (6) deterioration in the financial condition of Assured Guaranty’s reinsurers, the amount and timing of reinsurance recoverables actually received and the risk that reinsurers may dispute amounts owed to Assured Guaranty under its reinsurance agreements; (7) increased competition, including from new entrants into the financial guaranty industry; (8) rating agency action on obligors, including sovereign debtors, resulting in a reduction in the value of securities in the Company’s investment portfolio and in collateral posted by and to the Company; (9) the inability of Assured Guaranty to access external sources of capital on acceptable terms; (10) changes in the world’s credit markets, segments thereof or general economic conditions; (11) the impact of market volatility on the mark-to-market of Assured Guaranty’s contracts written in credit default swap form; (12) changes in applicable accounting policies or practices; (13) changes in applicable laws or regulations, including insurance and tax laws; (14) other governmental actions; (15) difficulties with the execution of Assured Guaranty’s business strategy; (16) contract cancellations; (17) loss of key personnel; (18) adverse technological developments; (19) the effects of mergers, acquisitions and divestitures; (20) natural or man-made catastrophes; (21) other risks and uncertainties that have not been identified at this time; (22) management’s response to these factors; and (23) other risk factors identified in Assured Guaranty’s filings with the SEC. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the dates on which they are made. Assured Guaranty undertakes no obligation to update publicly or review any forward looking statement, whether as a result of new information, future developments or otherwise, except as required by law.

Assured Guaranty Ltd.

Selected Financial Highlights

(dollars in millions, except per share amounts)



	Three Months Ended						Year Ended
	December 31,						December 31,
	2013			2012			2013			2012
Operating income reconciliation:
Operating income	$	134		$	184		$	609		$	535
Plus after-tax adjustments:
Realized gains (losses) on investments	22			1			40			(4		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	133			(92		)	(40		)	(486		)
Fair value gains (losses) on committed capital securities	10			(4		)	7			(12		)
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and loss adjustment expense (LAE) reserves	3			1			(1		)	15
Effect of consolidating financial guaranty variable interest entities (FG VIEs)	47			(16		)	193			62
Net income (loss)	$	349		$	74		$	808		$	110


Earnings per diluted share:
Operating income	$	0.73		$	0.95		$	3.25		$	2.81
Plus after-tax adjustments:
Realized gains (losses) on investments	0.12			0.00			0.22			(0.02		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	0.73			(0.47		)	(0.23		)	(2.55		)
Fair value gains (losses) on committed capital securities	0.05			(0.02		)	0.04			(0.06		)
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves	0.01			0.01			(0.01		)	0.08
Effect of consolidating FG VIEs	0.26			(0.08		)	1.03			0.31
Net income (loss)	$	1.90		$	0.38		$	4.30		$	0.57

Effective tax rate on operating income	25.2		%	26.3		%	26.7		%	25.0		%
Effective tax rate on net income	28.6		%	21.5		%	29.2		%	16.5		%

Return on equity (ROE) calculations ⁽¹⁾:
ROE, excluding unrealized gain (loss) on investment portfolio	28.9		%	6.6		%	17.0		%	2.5		%
Operating ROE	8.8		%	12.9		%	10.2		%	9.7		%

New business:
Gross par written	$	2,865		$	4,041		$	9,350		$	16,816
Present value of new business production (PVP) ⁽²⁾	$	67		$	69		$	141		$	210

							As of
							December 31,			December 31,
Other information:							2013			2012
Net debt service outstanding							$	690,535		$	780,356
Net par outstanding							459,107			518,772
Claims paying resources ⁽³⁾							12,147			12,328

1) Quarterly and year-to-date ROE calculations represent annualized returns.

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

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

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

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

Assured Guaranty Ltd.

Consolidated Statements of Operations (unaudited)

(dollars in millions, except per share amounts)



				Three Months Ended						Year Ended
				December 31,						December 31,
				2013			2012			2013			2012
Revenues:
	Net earned premiums			$	182		$	218		$	752		$	853
	Net investment income			107			103			393			404
	Net realized investment gains (losses)			29			1			52			1
	Net change in fair value of credit derivatives:
		Realized gains (losses) and other settlements		2			(30		)	(42		)	(108		)
		Net unrealized gains (losses)		227			(89		)	107			(477		)
			Net change in fair value of credit derivatives	229			(119		)	65			(585		)
	Fair value gains (losses) on committed capital securities			14			(6		)	10			(18		)
	Fair value gains (losses) on FG VIEs			93			30			346			191
	Other income (loss)			(5		)	(4		)	(10		)	108
		Total revenues		649			223			1,608			954

Expenses:
	Loss and loss adjustment expenses			85			58			154			504
	Amortization of deferred acquisition costs			4			0			12			14
	Interest expense			19			21			82			92
	Other operating expenses			52			49			218			212
		Total expenses		160			128			466			822

Income (loss) before income taxes				489			95			1,142			132
	Provision (benefit) for income taxes			140			21			334			22
Net income (loss)				$	349		$	74		$	808		$	110

Less after-tax adjustments:
	Realized gains (losses) on investments			22			1			40			(4		)
	Non-credit impairment unrealized fair value gains (losses) on credit derivatives			133			(92		)	(40		)	(486		)
	Fair value gains (losses) on committed capital securities			10			(4		)	7			(12		)
	Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves			3			1			(1		)	15
	Effect of consolidating FG VIEs			47			(16		)	193			62
Operating income				$	134		$	184		$	609		$	535

Weighted average shares outstanding
	Basic shares outstanding			182.0			194.0			186.6			189.2
	Diluted shares outstanding ⁽¹⁾			183.0			194.7			187.6			190.7
	Shares outstanding at the end of period			182.2			194.0

Effect of refundings and terminations, net
	Net earned premiums from refundings and terminations			$	64		$	153		$	263		$	331
	Realized gains (losses) and other settlements from CDS terminations			6			2			21			3
	Operating income effect			53			101			191			219
	Operating income per diluted share effect			0.29			0.53			1.02			1.15


1)	Non-GAAP diluted shares outstanding were 183.0 million and 194.7 million for the three months ended December 31, 2013 and 2012, respectively, and 187.6 million and 190.7 million for the year ended December 31, 2013 and 2012, respectively.

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

Assured Guaranty Ltd.

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

(dollars in millions)



	Three Months Ended											Three Months Ended
	December 31, 2013											December 31, 2012
	GAAP Income As Reported			Less: Operating Income Adjustments					Non-GAAP Operating Income Results			GAAP Income As Reported			Less: Operating Income Adjustments					Non-GAAP Operating Income Results
Revenues:
Net earned premiums	$	182		$	(12	)	(1	)	$	194		$	218		$	(103	)	(1	)	$	321
Net investment income	107			0			(1	)	107			103			4			(1	)	99
Net realized investment gains (losses)	29			29			(2	)	0			1			0			(2	)	1
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	2			2					—			(30		)	(30		)			—
Net unrealized gains (losses)	227			227					—			(89		)	(89		)			—
Credit derivative revenues	—			(28		)			28			—			(31		)			31
Net change in fair value of credit derivatives	229			201			(3	)	28			(119		)	(150		)	(3	)	31
Fair value gains (losses) on committed capital securities	14			14			(4	)	—			(6		)	(6		)	(4	)	—
Fair value gains (losses) on FG VIEs	93			93			(1	)	—			30			30			(1	)	—
Other income (loss)	(5		)	3			(5	)	(8		)	(4		)	1			(5	)	(5		)
Total revenues	649			328					321			223			(224		)			447

Expenses:
Loss and loss adjustment expenses:
Financial guaranty insurance	85			4			(1	)	81			58			(50		)	(1	)	108
Credit derivatives	—			14			(3	)	(14		)	—			(19		)	(3	)	19
Amortization of deferred acquisition costs	4			—					4			0			—					0
Interest expense	19			—					19			21			—					21
Other operating expenses	52			—					52			49			—					49
Total expenses	160			18					142			128			(69		)			197

Income (loss) before income taxes	489			310					179			95			(155		)			250
Provision (benefit) for income taxes	140			95			(6	)	45			21			(45		)	(6	)	66
Net income (loss)	$	349		$	215				$	134		$	74		$	(110	)			$	184


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


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


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


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


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


6)	Tax effect of the above adjustments.

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

Assured Guaranty Ltd.

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

(dollars in millions)



	Year Ended											Year Ended
	December 31, 2013											December 31, 2012
	GAAP Income As Reported			Less: Operating Income Adjustments					Non-GAAP Operating Income Results			GAAP Income As Reported			Less: Operating Income Adjustments					Non-GAAP Operating Income Results
Revenues:
Net earned premiums	$	752		$	(59	)	(1	)	$	811		$	853		$	(153	)	(1	)	$	1,006
Net investment income	393			1			(1	)	392			404			14			(1	)	390
Net realized investment gains (losses)	52			56			(2	)	(4		)	1			(6		)	(2	)	7
Net change in fair value of credit derivatives:
Realized gains (losses) and other settlements	(42		)	(42		)			—			(108		)	(108		)			—
Net unrealized gains (losses)	107			107					—			(477		)	(477		)			—
Credit derivative revenues	—			(121		)			121			—			(127		)			127
Net change in fair value of credit derivatives	65			(56		)	(3	)	121			(585		)	(712		)	(3	)	127
Fair value gains (losses) on committed capital securities	10			10			(4	)	—			(18		)	(18		)	(4	)	—
Fair value gains (losses) on FG VIEs	346			346			(1	)	—			191			191			(1	)	—
Other income (loss)	(10		)	(7		)	(5	)	(3		)	108			11			(5	)	97
Total revenues	1,608			291					1,317			954			(673		)			1,627

Expenses:
Loss and loss adjustment expenses:
Financial guaranty insurance	154			(21		)	(1	)	175			504			(64		)	(1	)	568
Credit derivatives	—			1			(3	)	(1		)	—			(28		)	(3	)	28
Amortization of deferred acquisition costs	12			—					12			14			—					14
Interest expense	82			—					82			92			—					92
Other operating expenses	218			—					218			212			—					212
Total expenses	466			(20		)			486			822			(92		)			914

Income (loss) before income taxes	1,142			311					831			132			(581		)			713
Provision (benefit) for income taxes	334			112			(6	)	222			22			(156		)	(6	)	178
Net income (loss)	$	808		$	199				$	609		$	110		$	(425	)			$	535


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


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


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


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


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


6)	Tax effect of the above adjustments.

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

Assured Guaranty Ltd.

Consolidated Balance Sheets

(dollars in millions)



	As of:
	December 31,		December 31,
	2013		2012
Assets:
Investment portfolio:
Fixed maturity securities, available-for-sale, at fair value	$	9,711	$	10,056
Short-term investments, at fair value	904		817
Other invested assets	170		212
Total investment portfolio	10,785		11,085

Cash	184		138
Premiums receivable, net of commissions payable	876		1,005
Ceded unearned premium reserve	452		561
Deferred acquisition costs	124		116
Reinsurance recoverable on unpaid losses	36		58
Salvage and subrogation recoverable	174		456
Credit derivative assets	94		141
Deferred tax asset, net	688		721
FG VIE assets, at fair value	2,565		2,688
Other assets	309		273
Total assets	$	16,287	$	17,242

Liabilities and shareholders' equity:
Liabilities:
Unearned premium reserve	$	4,595	$	5,207
Loss and loss adjustment expense reserve	592		601
Reinsurance balances payable, net	148		219
Long-term debt	816		836
Credit derivative liabilities	1,787		1,934
Current income tax payable	44		—
FG VIE liabilities with recourse, at fair value	1,790		2,090
FG VIE liabilities without recourse, at fair value	1,081		1,051
Other liabilities	319		310
Total liabilities	11,172		12,248

Shareholders' equity:
Common stock	2		2
Additional paid-in capital	2,466		2,724
Retained earnings	2,482		1,749
Accumulated other comprehensive income	160		515
Deferred equity compensation	5		4
Total shareholders' equity	5,115		4,994
Total liabilities and shareholders' equity	$	16,287	$	17,242

Assured Guaranty Ltd.

Adjusted Book Value

(dollars in millions, except per share amounts)



	As of:
	December 31, 2013						December 31, 2012
	Total			Per Share			Total			Per Share
Reconciliation of shareholders' equity to adjusted book value:
Shareholders' equity	$	5,115		$	28.07		$	4,994		$	25.74
Less after-tax adjustments:
Effect of consolidating FG VIEs	(172		)	(0.95		)	(348		)	(1.79		)
Non-credit impairment unrealized fair value gains (losses) on credit derivatives	(1,052		)	(5.77		)	(988		)	(5.09		)
Fair value gains (losses) on committed capital securities	30			0.16			23			0.12
Unrealized gain (loss) on investment portfolio excluding foreign exchange effect	145			0.80			477			2.45
Operating shareholders' equity	6,164			33.83			5,830			30.05
After-tax adjustments:
Less: Deferred acquisition costs	161			0.88			165			0.85
Plus: Net present value of estimated net future credit derivative revenue	146			0.80			220			1.14
Plus: Net unearned premium reserve on financial guaranty contracts in excess of expected loss to be expensed	2,884			15.83			3,266			16.83
Adjusted book value	$	9,033		$	49.58		$	9,151		$	47.17

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

Assured Guaranty Ltd.

Claims Paying Resources

(dollars in millions)



	As of December 31, 2013
	Assured Guaranty Municipal Corp.		Assured Guaranty Corp.		Municipal Assurance Corp.⁽²⁾		Assured Guaranty Re Ltd. ⁽³⁾		Eliminations⁽⁴⁾			Consolidated
Claims paying resources
Policyholders' surplus	$	1,746	$	693	$	514	$	1,063	$	(814	)	$	3,202
Contingency reserve⁽¹⁾⁽²⁾	1,783		1,151		320		—		(320		)	2,934
Qualified statutory capital	3,529		1,844		834		1,063		(1,134		)	6,136
Unearned premium reserve⁽¹⁾⁽²⁾	1,891		720		671		934		(671		)	3,545
Loss and LAE reserves ^{(5) (6)}	340		153		—		280		—			773
Total policyholders' surplus and reserves	5,760		2,717		1,505		2,277		(1,805		)	10,454
Present value of installment premium⁽¹⁾⁽⁶⁾	395		262		5		201		(5		)	858
Standby line of credit/stop loss	200		200		—		—		—			400
Excess of loss reinsurance facility	435		435		—		—		(435		)	435
Total claims paying resources (including MAC adjustment for AGM and AGC)	6,790		3,614		1,510		2,478		(2,245		)	12,147
Adjustment for MAC	917		593		—		—		(1,510		)	—
Total claims paying resources (excluding MAC adjustment for AGM and AGC)	$	5,873	$	3,021	$	1,510	$	2,478	$	(735	)	$	12,147

Statutory net par outstanding ⁽⁷⁾	$	171,279	$	57,227	$	96,141	$	111,575	$	(1,625	)	$	434,597
Equity method adjustment ⁽⁸⁾	58,358		37,783		—		—		(96,141		)	—
Adjusted statutory net par outstanding ⁽⁷⁾	$	229,637	$	95,010	$	96,141	$	111,575	$	(97,766	)	$	434,597

Net debt service outstanding ⁽⁷⁾	$	263,089	$	82,478	$	144,672	$	177,105	$	(3,547	)	$	663,797
Equity method adjustment ⁽⁸⁾	87,816		56,856		—		—		(144,672		)	—
Adjusted net debt service outstanding ⁽⁷⁾	$	350,905	$	139,334	$	144,672	$	177,105	$	(148,219	)	$	663,797

Ratios:
Adjusted net par outstanding to qualified statutory capital	65:1		52:1		115:1		105:1		N/A			71:1
Capital ratio ⁽⁹⁾	99:1		76:1		173:1		167:1		N/A			108:1
Financial resources ratio ⁽¹⁰⁾	52:1		39:1		96:1		71:1		N/A			55:1


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). See footnote 2 below for additional detail.

Assured Guaranty US Holdings Inc. acquired Municipal and Infrastructure Assurance Corporation, which it has renamed MAC, from Radian Asset Assurance Inc. (Radian) in May 2012. In July 2013, Municipal Assurance Holdings Inc. (MAC Holdings) was formed to own 100% of MAC's outstanding stock. AGM and AGC subscribed for 60.7% and 39.3% of the MAC Holdings outstanding stock. In July 2013, MAC was launched as a new US municipal only bond insurance company with $1.5 billion in claims-paying resources and capitalized to approximately $800 million through cash and securities.


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


4)	In 2009, AGC issued a $300 million note payable 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.


5)	Reserves are reduced by approximately $0.7 billion for benefit related to representation and warranty recoverables.


6)	Includes financial guaranty insurance and credit derivatives.

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


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


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


10)	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).

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

Assured Guaranty Ltd.

New Business Production

(dollars in millions)



	Three Months Ended					Year Ended
	December 31,					December 31,
	2013			2012		2013		2012
New business production analysis:
PVP
Public finance - U.S.:
Assumed from Radian	$	—		$	—	$	—	$	22
Other	61			37		116		144
Public finance - non-U.S.	5			—		18		1
Structured finance - U.S.	1			32		7		43
Structured finance - non-U.S.	—			—		—		—
Total PVP	$	67		$	69	$	141	$	210

Reconciliation of PVP to gross written premiums (GWP):

PVP of financial guaranty insurance	$	67		$	69	$	141	$	210
Less: financial guaranty installment premium PVP	7			33		26		45
Total: financial guaranty upfront gross written premiums	60			36		115		165
Plus: financial guaranty installment GWP and other GAAP adjustments⁽¹⁾	(2		)	73		8		88
Total GWP	$	58		$	109	$	123	$	253


Financial guaranty gross par written:
Public finance - U.S.:
Assumed from Radian	$	—		$	—	$	—	$	1,797
Other	2,743			3,641		8,671		14,364
Public finance - non-U.S.	122			—		392		35
Structured finance - U.S.	—			400		287		620
Structured finance - non-U.S.	—			—		—		—
Total	$	2,865		$	4,041	$	9,350	$	16,816


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

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

Assured Guaranty Ltd.

Financial Guaranty Gross Par Written

(dollars in millions)

Financial Guaranty Gross Par Written by Asset Type



	Three Months Ended			Year Ended
	December 31, 2013			December 31, 2013
	Gross Par Written		Avg. Internal Rating	Gross Par Written		Avg. Internal Rating
Sector:
U.S. public finance
General obligation	$	850	A-	$	3,856	A-
Municipal utilities	912		BBB	1,895		BBB+
Tax backed	436		A-	1,464		A-
Transportation	458		BBB	1,099		BBB+
Higher education	73		A-	155		A-
Healthcare	4		BBB+	115		BBB+
Infrastructure finance	10		A	88		A
Total U.S. public finance	2,743		BBB+	8,672		A-
Non-U.S. public finance:
Total non-U.S. public finance	122		BBB-	391		BBB-
Total public finance	$	2,865	BBB+	$	9,063	A-

U.S. structured finance:
Commercial receivables	—		—	273		AA
Other structure finance	—		—	14		A-
Total U.S. structured finance	—		—	287		AA
Non-U.S. structured finance:
Total non-U.S. structured finance	—		—	—		—
Total structured finance	$	—	—	$	287	AA

Total gross par written	$	2,865	BBB+	$	9,350	A-

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

Assured Guaranty Ltd.

New Business Production by Quarter

(dollars in millions)



																				Year End
	1Q-12		2Q-12			3Q-12			4Q-12		1Q-13		2Q-13		3Q-13		4Q-13			2012		2013
PVP:
Public finance - U.S.:
Assumed from Radian	$	22	$	—		$	—		$	—	$	—	$	—	$	—	$	—		$	22	$	—
Other	30		47			30			37		16		15		24		61			144		116
Public finance - non-U.S.	—		1			—			—		—		—		13		5			1		18
Structured finance - U.S.	4		2			5			32		2		1		3		1			43		7
Structured finance - non-U.S.	—		—			—			—		—		—		—		—			—		—
Total PVP	$	56	$	50		$	35		$	69	$	18	$	16	$	40	$	67		$	210	$	141

Reconciliation of PVP to GWP:

Total PVP of financial guarantee insurance	$	56	$	50		$	35		$	69	$	18	$	16	$	40	$	67		$	210	$	141
Less: financial guaranty installment premium PVP	4		3			5			33		1		—		18		7			45		26
Total: financial guaranty upfront GWP	52		47			30			36		17		16		22		60			165		115
Plus: financial guaranty installment GWP and other GAAP adjustments⁽¹⁾	36		(16		)	(5		)	73		—		6		4		(2		)	88		8
Total GWP	$	88	$	31		$	25		$	109	$	17	$	22	$	26	$	58		$	253	$	123

Financial guaranty gross par written:
Public finance - U.S.:
Assumed from Radian	$	1,797	$	—		$	—		$	—	$	—	$	—	$	—	$	—		$	1,797	$	—
Other	3,046		4,670			3,007			3,641		1,580		2,276		2,072		2,743			14,364		8,671
Public finance - non-U.S.	—		35			—			—		—		—		270		122			35		392
Structured finance - U.S.	38		—			182			400		14		—		273		—			620		287
Structured finance - non-U.S.	—		—			—			—		—		—		—		—			—		—
Total	$	4,881	$	4,705		$	3,189		$	4,041	$	1,594	$	2,276	$	2,615	$	2,865		$	16,816	$	9,350


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

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

Assured Guaranty Ltd.

Available-for-Sale Investment Portfolio and Cash

As of December 31, 2013

(dollars in millions)



			Amortized Cost			Pre-Tax Book Yield		After-Tax Book Yield		Fair Value		Annualized Investment Income ⁽¹⁾
Investment portfolio, available-for-sale:
Fixed maturity securities:
	Obligations of states and political subdivisions		$	3,740		3.99	%	3.76	%	$	3,856	$	149
	Insured obligations of state and political subdivisions⁽²⁾⁽⁴⁾		1,159			4.63	%	4.38	%	1,223		54
	U.S. Treasury securities and obligations of U.S. government agencies		431			2.03	%	1.39	%	438		9
	Agency obligations		243			3.77	%	3.11	%	262		9
	Corporate securities		1,314			3.85	%	2.97	%	1,340		51
	Mortgage-backed securities (MBS)⁽³⁾:
		Residential MBS (RMBS) ⁽⁴⁾	1,285			6.31	%	4.65	%	1,220		81
		Commercial MBS (CMBS)	536			3.74	%	3.14	%	549		20
	Asset-backed securities		605			4.23	%	2.88	%	608		26
	Foreign government securities		300			2.50	%	1.65	%	313		7
		Total fixed maturity securities	9,613			4.22	%	3.57	%	9,809		406
Short-term investments			895			0.03	%	0.02	%	895		0
Cash ⁽⁵⁾			183			—	%	—	%	183		—
		Total	$	10,691		3.86	%	3.27	%	$	10,887	$	406

Less: FG VIEs			116			10.90	%	7.10	%	88		13

		Total	$	10,575		3.79	%	3.22	%	$	10,799	$	393



Ratings⁽⁶⁾:			Fair Value			% of Portfolio
	U.S. Treasury securities and obligations of U.S. government agencies		$	438		4.5	%
	Agency obligations		262			2.7	%
	AAA/Aaa		1,601			16.3	%
	AA/Aa		4,884			49.8	%
	A/A		1,714			17.4	%
	BBB		87			0.9	%
	Below investment grade (BIG)⁽⁷⁾		823			8.4	%
		Total fixed maturity securities, available-for-sale	9,809			100.0	%

	Less: FG VIEs		(98		)

		Total fixed maturity securities, available-for-sale	$	9,711


Duration of fixed maturity securities and short-term investments (in years):						4.9

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


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


2)	Reflects obligations of state and local political subdivisions that have been insured by other financial guarantors. The underlying ratings of these bonds, after giving effect to the lower of the rating assigned by Standard & Poor's Ratings Services (S&P) or Moody's Investors Service, Inc. (Moody's), average A+. Includes fair value of $280 million insured by AGC and AGM.


3)	Includes fair value of $198 million in subprime RMBS, which has an average rating of BIG.


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


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


6)	Ratings are represented by the lower of the Moody's and S&P classifications except for bonds purchased for loss mitigation or risk management strategies ("loss mitigation bonds") 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 $2,036 million in par with carrying value of $823 million.

Assured Guaranty Ltd.

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

and Credit Derivative Revenues

(dollars in millions)



						Financial Guaranty Insurance ⁽²⁾
		Estimated Net Debt Service Amortization ⁽⁵⁾		Estimated Ending Net Debt Service Outstanding ⁽⁵⁾		Expected PV Net Earned Premiums		Accretion of Discount		Future Net Premiums Earned ⁽³⁾		Future Credit Derivative Revenues ⁽⁴⁾		Total

2013 (as of December 31)				$	690,535
2014 Q1		$	12,919	677,616		$	118	$	6	$	124	$	17	$	141
2014 Q2		16,787		660,829		116		6		122		17		139
2014 Q3		16,338		644,491		113		6		119		15		134
2014 Q4		16,234		628,257		109		6		115		15		130
2015		57,703		570,554		398		21		419		45		464
2016		46,428		524,126		349		20		369		31		400
2017		44,792		479,334		311		18		329		21		350
2018		33,513		445,821		282		16		298		10		308

2014-2018		244,714		445,821		1,796		99		1,895		171		2,066
2019-2023		149,014		296,807		1,086		66		1,152		42		1,194
2024-2028		118,812		177,995		685		40		725		26		751
2029-2033		83,500		94,495		417		23		440		23		463
After 2033		94,495		—		380		17		397		23		420
	Total	$	690,535			$	4,364	$	245	$	4,609	$	285	$	4,894


1)	Represents the future expected amortization of current debt service outstanding (principal and interest), assuming no advance refundings, as of December 31, 2013. Actual amortization differs from expected maturities because borrowers may have the right to call or prepay guaranteed obligations and because of management's assumptions on structured finance amortization.


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


3)	Includes $193 million in future net premiums earned related to FG VIEs.


4)	Excludes contracts with credit impairment.


5)	Amount is shown net of loss mitigation bonds.

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

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

2013 (as of December 31)												$	72,928
2014 Q1		$	1,317	$	591	$	292	$	343	$	2,543	70,385
2014 Q2		4,701		612		96		405		5,814		64,571
2014 Q3		2,915		593		43		219		3,770		60,801
2014 Q4		3,583		586		10		550		4,729		56,072
2015		10,709		2,187		239		2,019		15,154		40,918
2016		6,282		1,890		140		1,890		10,202		30,716
2017		8,466		1,587		69		1,577		11,699		19,017
2018		698		1,312		76		787		2,873		16,144

2014-2018		38,671		9,358		965		7,790		56,784		16,144
2019-2023		1,045		2,829		332		3,054		7,260		8,884
2024-2028		439		857		306		1,364		2,966		5,918
2029-2033		401		226		607		782		2,016		3,902
After 2033		1,827		451		499		1,125		3,902		—
	Total structured finance	$	42,383	$	13,721	$	2,709	$	14,115	$	72,928

Public Finance



		Estimated Net Par Amortization		Estimated Ending Net Par Outstanding

2013 (as of December 31)				$	386,179
2014 Q1		$	5,458	380,721
2014 Q2		6,041		374,680
2014 Q3		7,779		366,901
2014 Q4		6,807		360,094
2015		24,691		335,403
2016		19,639		315,764
2017		17,669		298,095
2018		16,140		281,955

2014-2018		104,224		281,955
2019-2023		81,176		200,779
2024-2028		74,775		126,004
2029-2033		56,734		69,270
After 2033		69,270		—
	Total public finance	$	386,179

Net par outstanding (end of period)



		1Q-12		2Q-12		3Q-12		4Q-12		1Q-13		2Q-13		3Q-13		4Q-13
Public finance - U.S.		$	416,499	$	409,877	$	399,176	$	387,929	$	378,418	$	371,020	$	361,203	$	352,181
Public finance - non-U.S.		39,913		38,769		38,720		37,540		35,067		33,700		34,912		33,998
Structured finance - U.S.		87,361		82,893		77,893		74,535		70,129		65,159		62,584		58,907
Structured finance - non-U.S.		21,979		19,935		19,070		18,768		17,092		15,915		14,671		14,021
	Net par outstanding (excluding loss mitigation bonds)	565,752		551,474		534,859		518,772		500,706		485,794		473,370		459,107
Loss mitigation bonds		1,346		1,460		1,534		1,121		1,111		1,195		1,297		1,195
	Net par outstanding (including loss mitigation bonds)	$	567,098	$	552,934	$	536,393	$	519,893	$	501,817	$	486,989	$	474,667	$	460,302

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

Assured Guaranty Ltd.

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

As of December 31, 2013

(dollars in millions)



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

2014 Q1		$	13	$	11
2014 Q2		14		11
2014 Q3		13		10
2014 Q4		13		10
2015		52		41
2016		42		33
2017		39		30
2018		35		27

2014-2018		221		173
2019-2023		120		99
2024-2028		68		56
2029-2033		44		36
After 2033		36		27
	Total expected PV of net expected loss to be expensed	489		391
Discount		457		406
	Total future value	$	946	$	797


1)	The present value of net expected loss to be paid is discounted using weighted-average risk free rates ranging from 0.0% to 4.44% for U.S. dollar denominated obligations.


2)	Operating income includes net expected loss to be expensed on consolidated FG VIEs. Losses on consolidated FG VIEs are eliminated for GAAP.

Assured Guaranty Ltd.

Financial Guaranty Profile (1 of 4)

(dollars in millions)

Net Par Outstanding and Average Rating by Asset Type



			December 31, 2013							December 31, 2012
			Net Par Outstanding (including loss mitigation bonds)		Loss Mitigation Bonds		Net Par Outstanding (excluding loss mitigation bonds)		Avg. Internal Rating	Net Par Outstanding (including loss mitigation bonds)		Loss Mitigation Bonds		Net Par Outstanding (excluding loss mitigation bonds)		Avg. Internal Rating
U.S. public finance:
	General obligation		$	155,277	$	—	$	155,277	A+	$	169,985	$	—	$	169,985	A+
	Tax backed		66,856		32		66,824		A+	73,787		38		73,749		A+
	Municipal utilities		56,324		—		56,324		A	62,116		—		62,116		A
	Transportation		30,830		—		30,830		A	33,799		—		33,799		A
	Healthcare		16,132		—		16,132		A	17,838		—		17,838		A
	Higher education		14,071		—		14,071		A	15,770		—		15,770		A+
	Infrastructure finance		4,114		—		4,114		BBB	4,210		—		4,210		BBB
	Housing		3,386		—		3,386		A+	4,633		—		4,633		AA-
	Investor-owned utilities		991		—		991		A-	1,069		—		1,069		A-
	Other public finance		4,232		—		4,232		A	4,760		—		4,760		A
		Total U.S. public finance	352,213		32		352,181		A	387,967		38		387,929		A
Non-U.S. public finance:
	Infrastructure finance		14,703		—		14,703		BBB	15,812		—		15,812		BBB
	Regulated utilities		11,205		—		11,205		BBB+	12,494		—		12,494		BBB+
	Pooled infrastructure		2,520		—		2,520		A	3,200		—		3,200		AA-
	Other public finance		5,570		—		5,570		A	6,034		—		6,034		A
		Total non-U.S. public finance	33,998		—		33,998		BBB+	37,540		—		37,540		BBB+
Total public finance			$	386,211	$	32	386,179		A	$	425,507	$	38	$	425,469	A

U.S. structured finance:
	Pooled corporate obligations		$	31,325	$	—	$	31,325	AAA	$	41,886	$	—	41,886		AAA
	RMBS		14,559		838		13,721		BBB-	17,827		792		17,035		BB+
	CMBS and other commercial real estate related exposures		3,952		—		3,952		AAA	4,247		—		4,247		AAA
	Insurance securitizations		3,360		325		3,035		A-	3,113		170		2,943		BBB+
	Financial products		2,709		—		2,709		AA-	3,653		—		3,653		AA-
	Consumer receivables		2,198		—		2,198		BBB+	2,369		—		2,369		BBB+
	Commercial receivables		911		—		911		A-	1,025		—		1,025		BBB+
	Structured credit		69		—		69		BB	319		121		198		B
	Other structured finance		987		—		987		A-	1,179		—		1,179		BBB+
		Total U.S. structured finance	60,070		1,163		58,907		AA-	75,618		1,083		74,535		AA-

Non-U.S. structured finance:
	Pooled corporate obligations		11,058		—		11,058		AAA	14,813		—		14,813		AAA
	Commercial receivables		1,263		—		1,263		BBB+	1,463		—		1,463		A-
	RMBS		1,146		—		1,146		AA-	1,424		—		1,424		AA-
	Structured credit		176		—		176		BBB	591		—		591		BBB
	CMBS and other commercial real estate related exposures		—		—		—		—	100		—		100		AAA
	Other structured finance		378		—		378		AAA	377		—		377		AAA
		Total non-U.S. structured finance	14,021		—		14,021		AA+	18,768		—		18,768		AA+
Total structured finance			$	74,091	$	1,163	$	72,928	AA	$	94,386	$	1,083	$	93,303	AA-

Total			$	460,302	$	1,195	$	459,107	A	$	519,893	$	1,121	$	518,772	A+

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

Assured Guaranty Ltd.

Financial Guaranty Profile (2 of 4)

As of December 31, 2013

(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		$	4,998	1.4	%	$	1,016	3.0	%	$	32,317	54.9	%	$	9,684	69.1	%	$	48,015	10.5	%
AA		107,503		30.5	%	422		1.2	%	9,431		16.0	%	577		4.1	%	117,933		25.7	%
A		192,841		54.8	%	9,453		27.9	%	2,580		4.4	%	742		5.3	%	205,616		44.8	%
BBB		37,745		10.7	%	21,499		63.2	%	3,815		6.4	%	1,946		13.9	%	65,005		14.1	%
BIG		9,094		2.6	%	1,608		4.7	%	10,764		18.3	%	1,072		7.6	%	22,538		4.9	%
	Net Par Outstanding (excluding loss mitigation bonds)	$	352,181	100.0	%	$	33,998	100.0	%	$	58,907	100.0	%	$	14,021	100.0	%	$	459,107	100.0	%

Loss Mitigation Bonds		32				—				1,163				—				1,195
	Net Par Outstanding (including loss mitigation bonds)	$	352,213			$	33,998			$	60,070			$	14,021			$	460,302

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

Assured Guaranty Ltd.

Financial Guaranty Profile (3 of 4)

As of December 31, 2013

(dollars in millions)

Geographic Distribution of Financial Guaranty Portfolio



			Net Par Outstanding (including loss mitigation bonds)		Loss Mitigation Bonds		Net Par Outstanding (excluding loss mitigation bonds)		% of Total
U.S.:
U.S. public finance:
	California		$	52,736	$	32	$	52,704	11.5	%
	New York		28,582		—		28,582		6.2
	Pensylvania		28,475		—		28,475		6.2
	Texas		27,249		—		27,249		5.9
	Illinois		24,138		—		24,138		5.3
	Florida		21,773		—		21,773		4.7
	New Jersey		14,462		—		14,462		3.2
	Michigan		14,250		—		14,250		3.1
	Georgia		9,364		—		9,364		2.0
	Ohio		8,763		—		8,763		1.9
	Other states and U.S. territories		122,421		—		122,421		26.7
		Total public finance	352,213		32		352,181		76.7
U.S. structured finance:			60,070		1,163		58,907		12.8
		Total U.S.	412,283		1,195		411,088		89.5

Non-U.S.:
	United Kingdom		21,405		—		21,405		4.7
	Australia		5,598		—		5,598		1.2
	Canada		3,851		—		3,851		0.8
	France		3,614		—		3,614		0.8
	Italy		1,808		—		1,808		0.4
	Other		11,743		—		11,743		2.6
		Total non-U.S.	48,019		—		48,019		10.5

Total net par outstanding			$	460,302	$	1,195	$	459,107	100.0	%

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

Assured Guaranty Ltd.

Financial Guaranty Profile (4 of 4)

As of December 31, 2013

(dollars in millions)

Net Direct Economic Exposure to Selected European Countries



			Hungary		Ireland		Italy		Portugal		Spain		Total
Sovereign and sub-sovereign exposure:
	Non-infrastructure public finance		$	—	$	—	$	1,024	$	98	$	275	$	1,397
	Infrastructure finance		384		—		18		12		155		569
		Total sovereign and sub-sovereign exposure	384		—		1,042		110		430		1,966
Non-sovereign exposure:
	Regulated utilities		—		—		234		—		—		234
	RMBS		224		144		315		—		—		683
		Total non-sovereign exposure	224		144		549		—		—		917
		Total	$	608	$	144	$	1,591	$	110	$	430	$	2,883

		Total BIG	$	608	$	—	$	—	$	110	$	430	$	1,148

Note: While the Company’s exposures are shown in U.S. dollars, the obligations the Company insures are in various currencies, including U.S. dollars, Euros and British pounds sterling. Included in the tables above is $144 million of reinsurance assumed on a 2004 - 2006 pool of Irish residential mortgages that is part of the Company’s remaining legacy mortgage reinsurance business. One of the residential mortgage-backed securities included in the table above includes residential mortgages in both Italy and Germany, and only the portion of the transaction equal to the portion of the original mortgage pool in Italian mortgages is shown in the table.

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

Assured Guaranty Ltd.

Exposure to Puerto Rico

As of December 31, 2013

(dollars in millions)

Net Exposure to Puerto Rico by Risk



	Net Par Outstanding		Internal Rating
Commonwealth of Puerto Rico - General Obligation Bonds	$	1,885	BB
Puerto Rico Highways and Transportation Authority (Transportation revenue)	869		BB-
Puerto Rico Electric Power Authority	860		BB-
Puerto Rico Municipal Finance Authority	450		BB-
Puerto Rico Aqueduct and Sewer Authority	384		BB-
Puerto Rico Highways and Transportation Authority (Highway revenue)	302		BB
Puerto Rico Sales Tax Financing Corporation	268		A-
Puerto Rico Convention Center District Authority	185		BB-
Puerto Rico Public Buildings Authority	139		BB
Puerto Rico Public Finance Corporation	44		B
Government Development Bank for Puerto Rico	33		BB
Puerto Rico Infrastructure Financing Authority	18		BB-
University of Puerto Rico	1		BB-
Total	$	5,438	BB

BIG Net Par Outstanding and BIG Net Debt Service Outstanding of Puerto Rico

Amortization Schedule



	Estimated BIG Net Par Amortization		Estimated BIG Ending Net Par Outstanding		Estimated BIG Net Debt Service Amortization		Estimated BIG Ending Net Debt Service Outstanding
2013 (as of December 31)			$	5,171			$	8,547
2014 (January 1 – March 31)	$	—	5,171		$	66	8,481
2014 (April 1 – June 30)	—		5,171		66		8,415
2014 (July 1 – September 30)	242		4,929		306		8,109
2014 (October 1 – December 31)	—		4,929		63		8,046
2015	364		4,565		608		7,438
2016	289		4,276		515		6,923
2017	208		4,068		421		6,502
2018	160		3,908		363		6,139

2014-2018	1,263		3,908		2,408		6,139
2019-2023	921		2,987		1,780		4,359
2024-2028	979		2,008		1,622		2,737
2029-2033	706		1,302		1,141		1,596
After 2033	1,302		—		1,596		—
Total	$	5,171			$	8,547

Net Exposure to Puerto Rico by Company



	AGM Consolidated		AGC Consolidated		AG Re Consolidated		Eliminations⁽¹⁾			Net Par Outstanding
Net par outstanding	$	2,480	$	1,514	$	1,539	$	(95	)	$	5,438


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.

Assured Guaranty Ltd.

Direct Pooled Corporate Obligations Profile

As of December 31, 2013

(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		$	34,761	82.9	%	29.4	%	30.4	%
	AA		2,184		5.2	%	39.8	%	34.3	%
	A		547		1.3	%	45.8	%	47.6	%
	BBB		2,224		5.3	%	39.2	%	33.4	%
	BIG		2,236		5.3	%	34.1	%	16.8	%
		Total exposures	$	41,952	100.0	%	30.9	%	30.3	%

Distribution of Direct Pooled Corporate Obligations by Asset Class



			Net Par Outstanding		% of Total		Avg. Initial Credit Enhancement		Avg. Current Credit Enhancement		Avg. Rating
Asset class:
	CBOs/CLOs		$	21,845	52.0	%	31.4	%	33.1	%	AAA
	Synthetic investment grade pooled corporates		9,754		23.3	%	21.6	%	20.0	%	AAA
	Market value CDOs of corporates		2,000		4.8	%	24.4	%	30.4	%	AAA
	Synthetic high yield pooled corporates		2,690		6.4	%	47.2	%	41.1	%	AAA
	Trust preferred
		Banks and insurance	2,564		6.1	%	45.7	%	39.1	%	BBB
		U.S. mortgage and real estate investment trusts	1,555		3.7	%	49.8	%	35.1	%	BB
		European mortgage and real estate investment trusts	851		2.0	%	36.8	%	30.7	%	BBB-
	Other pooled corporates		693		1.7	%	0.0	%	0.0	%	BBB-
		Total exposures	$	41,952	100.0	%	30.9	%	30.3	%	AAA

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

Assured Guaranty Ltd.

Consolidated U.S. RMBS Profile

As of December 31, 2013

(dollars in millions)

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



Ratings:			Prime First Lien		Closed-End Second Lien		HELOC		Alt-A First Lien		Option ARMs		Subprime First Lien		Total Net Par Outstanding
	AAA		$	1	$	0	$	20	$	218	$	4	$	2,210	$	2,453
	AA		98		98		99		407		290		1,675		2,668
	A		1		0		9		12		21		146		189
	BBB		38		—		254		224		23		155		694
	BIG		402		146		1,897		2,728		598		1,945		7,717
		Total exposures	$	541	$	244	$	2,279	$	3,590	$	937	$	6,130	$	13,721

Distribution of U.S. RMBS by Year Insured⁽¹⁾ and Type of Exposure



Year insured:			Prime First Lien		Closed-End Second Lien		HELOC		Alt-A First Lien		Option ARMs		Subprime First Lien		Total Net Par Outstanding
	2004 and prior		$	22	$	1	$	191	$	76	$	25	$	1,213	$	1,527
	2005		162		—		556		528		43		200		1,490
	2006		92		52		692		317		76		2,486		3,715
	2007		264		192		839		1,663		737		2,157		5,852
	2008		—		—		—		1,005		56		73		1,135
		Total exposures	$	541	$	244	$	2,279	$	3,590	$	937	$	6,130	$	13,721

Distribution of U.S. RMBS by Rating and Year Insured



Year insured:			AAA Rated			AA Rated			A Rated			BBB Rated			BIG Rated			Total
	2004 and prior		$	978		$	124		$	41		$	69		$	315		$	1,527
	2005		103			177			2			90			1,118			1,490
	2006		1,292			1,211			80			110			1,022			3,715
	2007		9			1,099			66			425			4,254			5,852
	2008		71			56			—			—			1,008			1,135
		Total exposures	$	2,453		$	2,668		$	189		$	694		$	7,717		$	13,721

	% of Total		17.9		%	19.4		%	1.4		%	5.1		%	56.2		%	100.0		%


1)	Assured Guaranty has not insured any U.S. RMBS transactions since 2008.

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

Assured Guaranty Ltd.

Direct U.S. RMBS Profile (1 of 2)

As of December 31, 2013

(dollars in millions)

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

U.S. Prime First Lien



Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	159	22.4	%	5.4	%	2.6	%	12.2	%	6
	2006		92		45.9	%	8.3	%	0.9	%	18.8	%	1
	2007		264		32.6	%	2.3	%	6.8	%	18.2	%	1
	2008		—		—	%	—	%	—	%	—	%	—
		Total	$	516	31.8	%	4.3	%	4.5	%	16.5	%	8

U.S. Closed-End Second Lien



Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	—	—	%	—	%	—	%	—	%	—
	2006		43		10.3	%	—	%	60.8	%	4.6	%	1
	2007		192		12.0	%	—	%	70.3	%	6.0	%	8
	2008		—		—	%	—	%	—	%	—	%	—
		Total	$	235	11.7	%	—	%	68.6	%	5.7	%	9

U.S. HELOC



Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	518	11.0	%	3.3	%	18.8	%	4.9	%	5
	2006		677		19.6	%	4.3	%	38.8	%	3.9	%	7
	2007		839		24.3	%	1.9	%	40.4	%	3.4	%	8
	2008		—		—	%	—	%	—	%	—	%	—
		Total	$	2,034	19.4	%	3.0	%	34.4	%	3.9	%	20

U.S. Alt-A First Lien



Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	526	23.4	%	8.8	%	7.7	%	17.0	%	20
	2006		317		29.0	%	0.0	%	22.7	%	37.0	%	7
	2007		1,663		36.8	%	0.6	%	18.5	%	28.2	%	11
	2008		1,005		34.9	%	13.1	%	17.2	%	25.7	%	5
		Total	$	3,512	33.6	%	5.3	%	16.9	%	26.6	%	43

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

Assured Guaranty Ltd.

Direct U.S. RMBS Profile (2 of 2)

As of December 31, 2013

(dollars in millions)

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

U.S. Option ARMs



Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	38	15.2	%	11.8	%	10.4	%	16.2	%	2
	2006		71		26.6	%	—	%	19.4	%	30.8	%	5
	2007		737		36.1	%	0.9	%	23.0	%	29.4	%	11
	2008		56		37.9	%	49.7	%	17.8	%	23.0	%	1
		Total	$	902	34.6	%	4.3	%	21.8	%	28.5	%	19

U.S. Subprime First Lien



Year insured			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	2005		$	192	32.7	%	15.3	%	9.6	%	26.9	%	3
	2006		2,481		17.4	%	62.4	%	20.5	%	31.5	%	4
	2007		2,157		39.6	%	8.2	%	28.3	%	40.0	%	13
	2008		73		50.6	%	13.5	%	24.3	%	28.8	%	1
		Total	$	4,904	28.3	%	36.0	%	23.5	%	35.1	%	21

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

Assured Guaranty Ltd.

Direct U.S. Commercial Real Estate Profile

As of December 31, 2013

(dollars in millions)

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

U.S. CMBS



Rating:			Net Par Outstanding		Pool Factor		Subordination		Cumulative Losses		60+ Day Delinquencies		Number of Transactions
	AAA		$	3,333	66.2	%	40.4	%	3.3	%	7.5	%	159
	AA		—		—	%	—	%	—	%	—	%	—
	A		29		13.8	%	48.6	%	2.8	%	0.0	%	1
	BBB		—		—	%	—	%	—	%	—	%	—
	BIG		—		—	%	—	%	—	%	—	%	—
		Total exposures	$	3,361	65.7	%	40.5	%	3.3	%	7.5	%	160

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



		Net Par Outstanding		% of Total		Avg. Initial Credit Enhancement		Avg. Current Credit Enhancement
CDOs of commercial real estate		$	344	100.0	%	52.2	%	57.2	%
	Total exposures	$	344	100.0	%	52.2	%	57.2	%


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

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

Assured Guaranty Ltd.

Below Investment Grade Exposures (1 of 5)

(dollars in millions)

BIG Exposures by Asset Exposure Type



			BIG Net Par Outstanding⁽¹⁾
			December 31, 2013		December 31, 2012
U.S. public finance:
	General obligation		$	3,126	$	1,122
	Tax backed		2,209		476
	Infrastructure finance		1,724		1,695
	Municipal utilities		1,360		596
	Transportation		320		245
	Healthcare		70		58
	Housing		17		2
	Higher education		15		18
	Other public finance		253		353
		Total U.S. public finance	9,094		4,565
Non-U.S. public finance:
	Infrastructure finance		1,236		1,923
	Other public finance		372		370
		Total non-U.S. public finance	1,608		2,293
Total public finance			$	10,702	$	6,858

U.S. structured finance:
	RMBS		$	7,717	$	9,839
	Pooled corporate obligations		1,722		2,873
	Insurance securitizations		598		753
	Consumer receivables		386		421
	Commercial receivables		157		182
	Structured credit		69		198
	Other structured finance		115		132
		Total U.S. structured finance	10,764		14,398
Non-U.S. structured finance:
	Pooled corporate obligations		767		805
	RMBS		224		220
	Commercial receivables		81		16
		Total non-U.S. structured finance	1,072		1,041
Total structured finance			$	11,836	$	15,439
Total BIG net par outstanding			$	22,538	$	22,297

In accordance with the terms of certain credit derivative contracts, the referenced obligations in such contracts have been delivered to the Company, and they therefore are included in the investment portfolio. Such amounts are still included in the financial guaranty insured portfolio, and totaled $195 million and $220 million in gross par outstanding as of December 31, 2013 and December 31, 2012, respectively.

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

Assured Guaranty Ltd.

Below Investment Grade Exposures (2 of 5)

(dollars in millions)

Net Par Outstanding by BIG Category⁽¹⁾



				Financial Guaranty Insurance and Credit Derivatives Surveillance Categories⁽²⁾
				December 31, 2013		December 31, 2012
Category 1
	U.S. public finance			$	8,205	$	3,290
	Non-U.S. public finance			1,009		2,293
	U.S. structured finance			4,513		4,253
	Non-U.S. structured finance			1,024		984
		Total Category 1		14,751		10,820
Category 2
	U.S. public finance			440		500
	Non-U.S. public finance			599		—
	U.S. structured finance			2,862		4,060
	Non-U.S. structured finance			48		57
		Total Category 2		3,949		4,617
Category 3
	U.S. public finance			449		775
	Non-U.S. public finance			—		—
	U.S. structured finance			3,389		6,085
	Non-U.S. structured finance			—		—
		Total Category 3		3,838		6,860
			BIG Total	$	22,538	$	22,297

Assured Guaranty's surveillance department is responsible for monitoring our portfolio of credits and maintains a list of BIG credits. In third quarter 2013, the Company refined the definitions of its BIG surveillance categories to be consistent with its new approach to assigning internal credit ratings. BIG Category 1: Below-investment-grade transactions showing sufficient deterioration to make future losses possible, but for which none are currently expected. BIG Category 2: Below-investment-grade transactions for which future losses are expected but for which no claims (other than liquidity claims which is a claim that the Company expects to be reimbursed within one year) have yet been paid. BIG Category 3: Below-investment-grade transactions for which future losses are expected and on which claims (other than liquidity claims) have been paid.

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

Assured Guaranty Ltd.

Below Investment Grade Exposures (3 of 5)

As of December 31, 2013

(dollars in millions)

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



			Net Par Outstanding (excluding loss mitigation bonds)		Internal Rating
Name or description
U.S. public finance:
		Puerto Rico General Obligation, Appropriations and Guarantees of the Commonwealth	$	2,119	BB
		Puerto Rico Highway and Transportation Authority	1,171		BB-
		Skyway Concession Company LLC	1,148		BB
		Puerto Rico Electric Power Authority	860		BB-
		Puerto Rico Municipal Finance Agency	450		BB-
		Puerto Rico Aqueduct & Sewer Authority	384		BB-
		Louisville Arena Authority Inc.	336		BB
		Detroit (City of) Michigan	321		D
		San Joaquin Hills California Transportation	244		BB-
		GMAC Military Housing Trust XVIII (Hickam Air Force Base)	215		BB
		Puerto Rico Hotel Occupancy Tax Puerto Rico Convention Center District Authority	185		BB-
		Lackawanna County, Pennsylvania	179		BB-
		Woonsocket (City of), Rhode Island	148		BB
		Guaranteed Student Loan Transaction	143		B
		City of Fresno	126		BB+
		Stockton City, California	119		D
		Orlando Tourist Development Tax - Florida	118		B+
		Wayne County, Michigan	111		BB+
		Xenia Rural Water District, Iowa	78		B
		Pennsylvania Economic Development Financing Authority (Capitol Region Parking System)	53		BB
		Guaranteed Student Loan Transaction	51		CCC
		Bridgeview Village Illinois General Obligation	50		BB+
	Total		$	8,609

Non-U.S. public finance:
		Reliance Rail Finance Pty. Limited	$	597	BB
		M6 Duna Autopalya Koncesszios Zartkoruen Mukodo Reszvenytarsasag	385		BB-
		Valencia Fair	263		BB-
		Autovia de la Mancha, S.A.	149		BB-
		Alte Liebe I Limited (Wind Farm)	81		BB
		Metropolitano de Porto Lease and Sublease of Railroad Equipment	56		B+
	Total		$	1,531
Total			$	10,140

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

Assured Guaranty Ltd.

Below Investment Grade Exposures (4 of 5)

As of December 31, 2013

(dollars in millions)

Structured Finance BIG Exposures Greater Than $50 Million



	BIG Net Par Outstanding (including loss mitigation bonds)		Loss Mitigation Bonds		BIG Net Par Outstanding (excluding loss mitigation bonds)		Internal Rating	Current Credit Enhancement	60+ Day Delinquencies
Name or description
U.S. structured finance:
U.S. RMBS:
Deutsche Alt-A Securities Mortgage Loan 2007-2	$	542	$	—	$	542	BB	0.0%	23.8%
MABS 2007-NCW	488		59		429		CCC	14.5%	53.5%
Option One 2007-FXD2	337		—		337		CCC	1.3%	27.1%
Private Residential Mortgage Transaction	323		—		323		CCC	1.0%	25.3%
Countrywide HELOC 2006-I	304		—		304		BB	0.0%	2.9%
Deutsche Alt-A Securities Mortgage Loan 2007-3	284		—		284		B	0.0%	19.8%
Private Residential Mortgage Transaction	276		—		276		B	13.0%	25.6%
Private Residential Mortgage Transaction	270		—		270		CCC	—	28.6%
MortgageIT Securities Corp. Mortgage Loan 2007-2	264		—		264		CCC	2.3%	18.2%
Nomura Asset Accept. Corp. 2007-1	240		1		239		CCC	0.0%	37.4%
Private Residential Mortgage Transaction	206		—		206		CCC	8.8%	25.6%
Countrywide Home Equity Loan Trust 2007-D	185		—		185		B	0.0%	3.6%
Countrywide HELOC 2005-D	182		—		182		BB	0.0%	5.3%
Soundview 2007-WMC1	176		—		176		CCC	—	59.4%
Countrywide Home Equity Loan Trust 2005-J	175		—		175		BB	0.0%	4.2%
Countrywide HELOC 2006-F	234		70		164		BB	0.0%	6.3%
Countrywide HELOC 2007-B	146		—		146		BB	0.0%	2.9%
New Century 2005-A	146		—		146		CCC	12.2%	27.1%
Countrywide HELOC 2007-A	159		14		145		BB	0.0%	3.4%
GMACM 2004-HE3	144		—		144		BB	3.0%	0.0%
AAA Trust 2007-2	260		126		134		BB	2.8%	33.9%
Private Residential Mortgage Transaction	128		—		128		BB	18.4%	28.6%
IndyMac 2007-H1 HELOC	114		—		114		BB	0.0%	3.0%
CSAB 2006-3	111		—		111		CCC	0.0%	44.5%
FHABS 2006-HE2 HELOC	95		—		95		BB	0.0%	2.8%
Countrywide HELOC 2005-C	86		—		86		B	0.0%	6.1%
Soundview Home Loan Trust 2008-1	75		2		73		CCC	13.5%	28.8%
American Home Mortgage Assets Trust 2007-4	67		—		67		CCC	0.0%	33.7%
MASTR Asset-Backed Securities Trust 2005-NC2	62		—		62		CCC	—	24.4%
CSAB 2006-2	70		10		60		CCC	0.0%	39.2%
Taylor Bean & Whitaker 2007-2	78		22		56		CCC	0.0%	20.8%
Terwin Mortgage Trust 2005-16HE	55		—		55		CCC	—	24.8%
CSMC 2007-3	59		8		51		CCC	0.0%	33.2%
Terwin Mortgage Trust 2006-10SL	181		138		43		CCC	—	4.6%
Renaissance (DELTA) 2007-3	144		130		14		CCC	—	30.8%
Terwin Mortgage Trust 2007-6ALT	54		51		3		CCC	0.0%	31.3%
Total U.S. RMBS	$	6,720	$	631	$	6,089

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

Assured Guaranty Ltd.

Below Investment Grade Exposures (5 of 5)

As of December 31, 2013

(dollars in millions)

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



			BIG Net Par Outstanding (including loss mitigation bonds)		Loss Mitigation Bonds		BIG Net Par Outstanding (excluding loss mitigation bonds)		Internal Rating	Current Credit Enhancement
Name or description
U.S. structured finance:
	Other:
		Orkney Re II, Plc	$	423	$	—	$	423	CCC	N/A
		Taberna Preferred Funding IV, LTD	292		—		292		B-	22.1%
		Taberna Preferred Funding III, LTD	267		—		267		CCC	17.1%
		Alesco Preferred Funding XVI, LTD.	227		—		227		B+	15.4%
		Taberna Preferred Funding II, LTD.	209		—		209		CCC	19.3%
		Ballantyne Re Plc	500		325		175		CC	N/A
		Alesco Preferred Funding XVII, LTD.	172		—		172		BB	24.7%
		Trapeza CDO XI	152		—		152		BB-	38.6%
		Taberna Preferred Funding VI, LTD	148		—		148		B-	16.3%
		US Capital Funding IV, LTD	136		—		136		CCC	7.2%
		Alesco Preferred Funding VI	119		—		119		BB+	45.5%
		NRG Peaker ⁽¹⁾	102		—		102		BB	N/A
		National Collegiate Trust Series 2007-4	72		—		72		CCC	N/A
		National Collegiate Trust Series 2006-2	68		—		68		CCC	N/A
		Conseco Finance Manufactured Housing Series 2001-2	65		—		65		CCC	15.6%
		CAPCO - Excess SIPC Excess of Loss Reinsurance	63		—		63		BB	N/A
		GreenPoint 2000-4	50		—		50		CCC	3.0%
		Subtotal other	$	3,065	$	325	$	2,740
		Subtotal U.S. structured finance	$	9,785	$	956	$	8,829

Non-U.S. structured finance:

		Gleneagles Funding LTD (1st Issue)	$	229	$	—	$	229	BB	N/A
		FHB 8.95% 2016	129		—		129		BB	N/A
		OTP 10% 2012	90		—		90		BB+	N/A
		Augusta Funding Limited 07 Perpetual Note Issue	81		—		81		BB	N/A
		Private Pooled Corporate Transaction	81		—		81		BB	N/A
		Augusta Funding Limited 05 Perpetual Note Issue	79		—		79		BB	N/A
		Babcock & Brown Air Funding I Ltd. Series 2007-1	70		—		70		BB	N/A
		Private Pooled Corporate Transaction	64		—		64		BB	N/A
		Private Pooled Corporate Transaction	56		—		56		BB	N/A
		Subtotal Non-U.S. structured finance	$	879	$	—	$	879
	Total		$	10,664	$	956	$	9,708


1)	In accordance with the terms of certain credit derivative contracts, the referenced obligations in such contracts have been delivered to the Company, and they therefore are included in the investment portfolio. Net par shown is net of $63 million of ceded par. The Company holds 100% of the bonds referenced in this transaction and reports them in the investment portfolio.

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

Assured Guaranty Ltd.

Largest Exposures by Sector (1 of 4)

As of December 31, 2013

(dollars in millions)

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



Credit names:	Net Par Outstanding		Internal Rating
Credit names:	Net Par Outstanding		Internal Rating
New Jersey (State of)	$	3,980	A+
California (State of)	3,356		A-
New York (City of) New York	3,064		AA-
Chicago (City of) Illinois	2,681		A-
Massachusetts (Commonwealth of)	2,521		AA
New York (State of)	2,408		A+
Miami-Dade County Florida Aviation Authority - Miami International Airport	2,146		A
Puerto Rico General Obligation, Appropriations and Guarantees of the Commonwealth	2,119		BB
Port Authority of New York and New Jersey	2,034		AA-
Illinois (State of)	1,987		A-
Houston Texas Water and Sewer Authority	1,962		AA-
Los Angeles California Unified School District	1,947		AA-
Wisconsin (State of)	1,836		A+
Pennsylvania (Commonwealth of)	1,736		AA-
Philadelphia (City of) Pennsylvania	1,725		BBB+
Washington (State of)	1,715		AA
Chicago-O'Hare International Airport	1,661		A
New York MTA Transportation Authority	1,639		A
Chicago Illinois Public Schools	1,608		A-
New York City Municipal Water Finance Authority	1,518		AA
Illinois Toll Highway Authority	1,500		AA
Miami-Dade County Florida School Board	1,461		A-
Arizona (State of)	1,399		A+
Atlanta Georgia Water & Sewer System	1,385		A-
Michigan (State of)	1,353		A+
Georgia Board of Regents	1,307		A
Massachusetts (Commonwealth of) Water Resources	1,304		AA
Metro Washington Airport Authority	1,252		A+
Philadelphia School District, Pennsylvania	1,238		A
Pennsylvania Turnpike Commission	1,175		A-
Puerto Rico Highway and Transportation Authority	1,171		BB-
Skyway Concession Company LLC	1,148		BB
Los Angeles California Department of Water & Power - Electric Revenue Bonds	1,144		AA-
Long Island Power Authority	1,131		A-
North Texas Tollway Authority	1,103		A
District of Columbia	1,083		A+
New York State Thruway Authority	1,061		A
California State University System Trustee	1,027		A+
Detroit Michigan Sewer	1,018		BBB
Kentucky (Commonwealth of)	1,013		A+
New York State Thruway - Highway Trust Fund	1,000		AA-
San Diego County, California Water	974		AA
Louisiana (State of) Gas and Fuel Tax	971		AA
Garden State Preservation Trust, New Jersey Open Space & Farmland	935		AA
San Diego Unified School District, California	927		AA
Broward County Florida School Board	908		A+
Hartfield Atlanta International Airport	896		A
University of California Board of Regents	893		AA
Orlando-Orange County Expressway Authority, Florida	874		A+
New Jersey Turnpike Authority	865		A-
Total top 50 U.S. public finance exposures	$	77,159

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

Assured Guaranty Ltd.

Largest Exposures by Sector (2 of 4)

As of December 31, 2013

(dollars in millions)

50 Largest U.S. Structured Finance Exposures



Credit Name		Net Par Outstanding		Internal Rating	Credit Enhancement
	Fortress Credit Opportunities I, LP.	$	1,328	AA	28.2%
	Synthetic Investment Grade Pooled Corporate CDO	1,188		AAA	13.4%
	Stone Tower Credit Funding	994		AAA	27.5%
	Synthetic High Yield Pooled Corporate CDO	978		AAA	40.6%
	Synthetic Investment Grade Pooled Corporate CDO	767		AAA	14.8%
	Synthetic Investment Grade Pooled Corporate CDO	763		AAA	29.0%
	Synthetic Investment Grade Pooled Corporate CDO	756		AAA	22.5%
	Synthetic Investment Grade Pooled Corporate CDO	745		AAA	28.0%
	Synthetic High Yield Pooled Corporate CDO	734		AAA	37.4%
	Synthetic Investment Grade Pooled Corporate CDO	655		AAA	15.8%
	Deutsche Alt-A Securities Mortgage Loan 2007-2	542		BB	0.0%
	Eastland CLO, LTD	532		AAA	39.3%
	Synthetic Investment Grade Pooled Corporate CDO	516		AAA	14.3%
	Denali CLO VII, LTD.	503		AAA	19.5%
	Private US Insurance Securitization	500		AA	N/A
	Synthetic High Yield Pooled Corporate CDO	496		AAA	46.7%
	Shenandoah Trust Capital I Term Securities	485		A+	N/A
	Churchill Financial Cayman	467		AAA	36.6%
	SLM Private Credit Student Trust 2007-A	450		BBB+	17.0%
	MABS 2007-NCW	429		CCC	14.5%
	LIICA Holdings, LLC	428		AA	N/A
	Orkney Re II, Plc	423		CCC	N/A
	Private Other Structured Finance Transaction	400		AA	N/A
	Phoenix CLO II	400		AAA	21.3%
	Grayson CLO	399		AAA	29.6%
	SLM Private Credit Student Loan Trust 2007-6	392		AAA	4.1%
	Synthetic Investment Grade Pooled Corporate CDO	385		AAA	14.2%
	Synthetic Investment Grade Pooled Corporate CDO	380		AAA	29.2%
	KKR Financial CLO 2007-1	379		AAA	51.8%
	Symphony Credit Opportunities Fund	364		AAA	24.5%
	Stone Tower CLO V	362		AAA	28.8%
	SLM Private Credit Student Loan Trust 2006-C	356		BBB	16.8%
	Fortress Credit Funding III	349		AAA	55.8%
	Muir Grove CLO	345		AAA	21.4%
	Synthetic Investment Grade Pooled Corporate CDO	343		AAA	16.3%
	Option One 2007-FXD2	337		CCC	1.3%
	Private Residential Mortgage Transaction	323		CCC	1.0%
	Cent CDO 15 Limited	307		AAA	18.2%
	Countrywide HELOC 2006-I	304		BB	0.0%
	Private Other Structured Finance Transaction	300		A+	N/A
	Cent CDO 12 Limited	293		AAA	23.8%
	Taberna Preferred Funding IV, LTD	292		B-	22.1%
	Centurion CDO 9	292		AAA	24.7%
	Deutsche Alt-A Securities Mortgage Loan 2007-3	284		B	0.0%
	Synthetic Investment Grade Pooled Corporate CDO	283		AAA	30.3%
	Private Residential Mortgage Transaction	276		B	13.0%
	Kingsland IV	274		AAA	23.1%
	Private Residential Mortgage Transaction	270		CCC	—
	Synthetic Investment Grade Pooled Corporate CDO	270		AAA	29.1%
	CIFC Funding 2007-II	268		AAA	42.8%
	Total top 50 U.S. structured finance exposures	$	23,906

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

Assured Guaranty Ltd.

Largest Exposures by Sector (3 of 4)

As of December 31, 2013

(dollars in millions)

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



Credit Name		Net Par Outstanding		Internal Rating
	Province of Quebec	$	2,386	A+
	Thames Water Utilities Finance Plc	1,499		A-
	Sydney Airport Finance Company Pty Limited	1,309		BBB
	Channel Link Enterprises Finance PLC	978		BBB
	Southern Gas Networks PLC	893		BBB
	Societe des Autoroutes du Nord et de l'Est de la France	858		BBB+
	Capital Hospitals	814		BBB-
	Campania Region - Healthcare receivable	752		BBB-
	Artesian Finance II Plc (Southern)	727		A-
	International Infrastructure Pool	700		A-
	International Infrastructure Pool	700		A-
	International Infrastructure Pool	700		A-
	Reliance Rail Finance Pty Limited	597		BB
	Central Nottinghamshire Hospitals PLC	578		BBB
	Synthetic Investment Grade Pooled Corporate CDO	564		AAA
	NewHospitals (St Helens & Knowsley) Finance PLC	528		BBB
	Scotland Gas Networks Plc (A2)	525		BBB
	Verbund - Lease and Sublease of Hydro-Electric equipment	519		AAA
	Integrated Accomodation Services PLC	510		BBB+
	The Hospital Company (QAH Portsmouth) Limited	507		BBB
	A28 Motorway	504		BBB
	Envestra Limited	481		BBB
	Octagon Healthcare Funding PLC	439		BBB
	Taberna Europe CDO II PLC	434		BBB-
	Stichting Profile Securitisation I	421		AAA
	Total top 25 non-U.S. exposures	$	18,923

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

Assured Guaranty Ltd.

Largest Exposures by Sector (4 of 4)

As of December 31, 2013

(dollars in millions)

10 Largest U.S. Residential Mortgage Servicer Exposures



Servicer:		Net Par Outstanding
	Ocwen Loan Servicing, LLC⁽¹⁾	$	3,926
	Bank of America, N.A.⁽²⁾	2,847
	Wells Fargo Bank N.A.	2,372
	Specialized Loan Servicing, LLC	2,251
	JPMorgan Chase Bank	609
	Select Portfolio Servicing, Inc.	558
	Carrington Mortgage Services, LLC	327
	First Horizon National Corporation	209
	OneWest Bank Group LLC	120
	Doral Bank	92
	Total top 10 U.S. residential mortgage servicer exposures	$	13,311

10 Largest U.S. Healthcare Exposures



Credit Name:		Net Par Outstanding		Internal Rating	State
	MultiCare Health System	$	456	AA-	WA
	CHRISTUS Health	421		A+	TX
	Methodist Healthcare	414		A	TN
	Children's National Medical Center	338		A-	DC
	Catholic Health Initiatives	328		AA-	CO
	Bon Secours Health System Obligated Group	322		A-	MD
	Carolina HealthCare System	319		AA-	NC
	Virtua Health	315		A+	NJ
	Iowa Health System	313		A+	IA
	Catholic Health Partners	313		A+	OH
	Total top 10 U.S. healthcare exposures	$	3,539


1)	Includes Homeward Residential Inc.


2)	Includes Countrywide Home Loans Servicing LP.

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

Assured Guaranty Ltd.

Rollforward of Net Expected Loss and LAE to be Paid

(dollars in millions)

Rollforward of Net Expected Loss and LAE to be Paid for the Three Months Ended December 31, 2013



Financial Guaranty Insurance Contracts and Credit Derivatives				Net Expected Loss to be Paid as of September 30, 2013			Economic Loss Development During 4Q-13⁽¹⁾			(Paid) Recovered Losses During 4Q-13			Net Expected Loss to be Paid as of December 31, 2013
U.S. RMBS
	First lien:
		Prime first lien		$	21		$	—		$	—		$	21
		Alt-A first lien		206			2			96			304
		Option ARMs		7			(6		)	(10		)	(9		)
		Subprime first lien		303			6			(5		)	304
			Total first lien	537			2			81			620
	Second lien:
		Closed-end second lien		(13		)	(1		)	3			(11		)
		HELOC		(129		)	(15		)	28			(116		)
			Total second lien	(142		)	(16		)	31			(127		)
Total U.S. RMBS				395			(14		)	112			493
TruPS				50			—			1			51
Other structured finance				128			(2		)	(6		)	120
U.S. public finance				183			101			(20		)	264
Non-U.S. public finance				53			4			—			57
			Subtotal	809			89			87			985
Other				(3		)	—			—			(3		)
Total				$	806		$	89		$	87		$	982

Rollforward of Net Expected Loss and LAE to be Paid for the Year Ended December 31, 2013



Financial Guaranty Insurance Contracts and Credit Derivatives				Net Expected Loss to be Paid as of December 31, 2012			Economic Loss Development During 2013⁽¹⁾			(Paid) Recovered Losses During 2013			Net Expected Loss to be Paid as of December 31, 2013
U.S. RMBS
	First lien:
		Prime first lien		$	6		$	16		$	(1	)	$	21
		Alt-A first lien		315			(81		)	70			304
		Option ARMs		(131		)	(98		)	220			(9		)
		Subprime first lien		242			92			(30		)	304
			Total first lien	432			(71		)	259			620
	Second lien:
		Closed-end second lien		(39		)	6			22			(11		)
		HELOC		(111		)	(91		)	86			(116		)
			Total second lien	(150		)	(85		)	108			(127		)
Total U.S. RMBS				282			(156		)	367			493
TruPS				27			7			17			51
Other structured finance				312			(41		)	(151		)	120
U.S. public finance				7			239			18			264
Non-U.S. public finance				52			17			(12		)	57
			Subtotal	680			66			239			985
Other				(3		)	(10		)	10			(3		)
Total				$	677		$	56		$	249		$	982


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

Assured Guaranty Ltd.

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

(dollars in millions)

Financial Guaranty Insurance and Credit Derivatives U.S. RMBS Benefit Development for the Three Months Ended December 31, 2013



			Future Net R&W Benefit at September 30, 2013		R&W Economic Loss Development During 4Q-13			R&W Recovered During 4Q-13			Future Net R&W Benefit at December 31, 2013
Financial guaranty insurance:
	Prime first lien		$	3	$	1		$	—		$	4
	Alt-A first lien		212		—			(112		)	100
	Option ARMs		236		(34		)	(35		)	167
	Subprime first lien		115		3			—			118
	Closed-end second lien		100		2			(4		)	98
	HELOC		55		24			(34		)	45
		Subtotal	721		(4		)	(185		)	532

Credit derivatives:
	Alt-A first lien		157		17			—			174
	Option ARMs		17		(11		)	—			6
		Subtotal	174		6			—			180

Total			$	895	$	2		$	(185	)	$	712

Financial Guaranty Insurance and Credit Derivatives U.S. RMBS Benefit Development for the Year Ended December 31, 2013



			Future Net R&W Benefit at December 31, 2012		R&W Economic Loss Development During 2013			R&W Recovered During 2013			Future Net R&W Benefit at December 31, 2013
Financial guaranty insurance:
	Prime first lien		$	4	$	—		$	—		$	4
	Alt-A first lien		158		30			(88		)	100
	Option ARMs		574		172			(579		)	167
	Subprime first lien		109		9			—			118
	Closed-end second lien		138		(9		)	(31		)	98
	HELOC		150		94			(199		)	45
		Subtotal	1,133		296			(897		)	532

Credit derivatives:
	Alt-A first lien		220		11			(57		)	174
	Option ARMs		17		(11		)	—			6
		Subtotal	237		—			(57		)	180

Total			$	1,370	$	296		$	(954	)	$	712

Financial Guaranty Insurance and Credit Derivatives U.S. RMBS Policies with R&W Benefit



			Number of Risks as of		Debt Service as of
			December 31, 2013	December 31, 2012	December 31, 2013		December 31, 2012
Financial guaranty insurance:
	Prime first lien		1	1	$	38	$	44
	Alt-A first lien		13	19	838		1,467
	Option ARMs		8	9	346		846
	Subprime first lien		5	5	998		989
	Closed-end second lien		4	4	158		260
	HELOC		4	7	320		549
		Subtotal	35	45	2,698		4,155

Credit derivatives:
	Alt-A first lien		6	7	2,018		2,706
	Option ARMs		1	1	295		337
		Subtotal	7	8	2,313		3,043

Total			42	53	$	5,011	$	7,198

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

Assured Guaranty Ltd.

Losses Incurred

As of December 31, 2013

(dollars in millions)



Financial Guaranty Insurance Contracts and Credit Derivatives				Total Net Par Outstanding for BIG Transactions (1)		4Q-13 Losses Incurred			2013 Losses Incurred			Net Reserve and Credit Impairment			Net Salvage and Subrogation Assets			Net Expected Loss to be Expensed
U.S. RMBS
	First lien:
		Prime first lien		$	403	$	—		$	16		$	19		$	—		$	—
		Alt-A first lien		2,728		(2		)	(20		)	164			—			75
		Option ARMs		598		(9		)	(49		)	29			47			35
		Subprime first lien		1,945		6			93			214			2			94
			Total first lien	5,674		(5		)	40			426			49			204
	Second lien:
		Closed-end second lien		146		(2		)	19			3			45			34
		HELOC		1,897		(8		)	(51		)	5			127			122
			Total second lien	2,043		(10		)	(32		)	8			172			156
Total U.S. RMBS				7,717		(15		)	8			434			221			360
TruPS				1,722		—			3			37			—			2
Other structured finance				2,397		2			(39		)	101			6			25
U.S. public finance				9,094		76			195			189			8			87
Non-U.S. public finance				1,608		4			17			35			—			15
			Subtotal	22,538		67			184			796			235			489
Other				—		—			(10		)	2			5			—
			Subtotal	22,538		67			174			798			240			489
Effect of consolidating FG VIEs				—		4			(21		)	(103		)	(85		)	(98		)
Total				$	22,538	$	71		$	153		$	695		$	155		$	391



		Insurance Reserves		Credit Impairment on Credit Derivative Contracts ⁽²⁾		Reserve and Credit Impairment		Salvage and Subrogation Recoverable			Net
Gross		$	592	$	142	$	734	$	174		$	560
Ceded		36		3		39		19		(3)	20
	Net	$	556	$	139	$	695	$	155		$	540


2)	Credit derivative assets and liabilities recorded on the balance sheet considers estimates of expected losses.


3)	Recorded in "reinsurance balances payable, net" on the consolidated balance sheets.

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

Assured Guaranty Ltd.

Summary Financial and Statistical Data

(dollars in millions, except per share amounts)



			Year Ended December 31,
			2013			2012			2011		2010		2009
GAAP Summary Income Statement Data
	Net earned premiums		$	752		$	853		$	920	$	1,187	$	930
	Net investment income		393			404			396		361		262
	Realized gains and other settlements on credit derivatives		(42		)	(108		)	6		153		164
	Total expenses		466			822			776		776		808
	Income (loss) before income taxes		1,142			132			1,029		534		109
	Net income (loss) attributable to Assured Guaranty Ltd.		808			110			773		484		82
	Net income (loss) attributable to Assured Guaranty Ltd. per diluted share		4.30			0.57			4.16		2.56		0.63

GAAP Summary Balance Sheet Data
	Total investments and cash		$	10,969		$	11,223		$	11,314	$	10,849	$	11,013
	Total assets		16,287			17,242			17,709		19,370		16,449
	Unearned premium reserve		4,595			5,207			5,963		6,973		8,381
	Loss and LAE reserve		592			601			679		574		300
	Long-term debt		816			836			1,038		1,053		1,066
	Shareholders’ equity attributable to Assured Guaranty Ltd.		5,115			4,994			4,652		3,670		3,455
	Book value attributable to Assured Guaranty Ltd. per share		28.07			25.74			25.52		19.97		18.76

Non-GAAP Financial Measures
	Operating income		$	609		$	535		$	601	$	655	$	278
	Operating income per diluted share		3.25			2.81			3.24		3.46		2.15
	Adjusted book value		9,033			9,151			8,987		8,989		8,887
	PVP		141			210			243		363		640

Other Financial Information (GAAP Basis)
	Net debt service outstanding (end of period)		$	690,535		$	780,356		$	844,447	$	926,698	$	958,037
	Gross debt service outstanding (end of period)		737,380			833,098			934,914		1,029,540		1,094,809
	Net par outstanding (end of period)		459,107			518,772			556,830		616,686		640,194
	Gross par outstanding (end of period)		487,895			550,908			613,124		680,803		726,701

Other Financial Information (Statutory Basis)⁽¹⁾
	Net debt service outstanding (end of period)		$	663,797		$	756,044		$	828,327	$	904,686	$	941,965
	Gross debt service outstanding (end of period)		709,000			807,420			916,501		1,003,651		1,072,811
	Net par outstanding (end of period)		434,597			496,237			541,882		598,398		626,046
	Gross par outstanding (end of period)		461,845			527,126			593,072		659,320		709,558

	Consolidated qualified statutory capital		6,136			5,943			5,688		4,915		4,841
	Consolidated policyholders' surplus and reserves		10,454			10,288			10,626		10,247		10,409

	Ratios:
		Net par outstanding to qualified statutory capital	71		:1	83:1			95:1		122:1		129:1
		Capital ratio⁽²⁾	108		:1	127:1			145:1		184:1		195:1
		Financial resources ratio⁽²⁾	55		:1	61:1			65:1		72:1		72:1

	Gross debt service written:
		Public finance - U.S.	$	15,559		$	25,252		$	26,630	$	48,990	$	87,940
		Public finance - non-U.S.	674			40			208		51		894
		Structured finance - U.S.	297			623			1,731		2,962		2,501
		Structured finance - non-U.S.	—			—			—		—		—
	Total gross debt service written		$	16,530		$	25,915		$	28,569	$	52,003	$	91,335

	Net debt service written		$	16,497		$	25,915		$	28,569	$	52,003	$	91,335
	Net par written		9,331			16,816			16,892		30,759		49,759
	Gross par written		9,350			16,816			16,892		30,759		49,921


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


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

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

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

Glossary

Net Par Outstanding and Internal Ratings

Net par outstanding is insured par exposure, net of reinsurance cessions. Unless otherwise indicated, GAAP net par outstanding amounts exclude amounts related to securities the Company has purchased for loss mitigation purposes, which securities the Company refers to as "loss mitigation bonds." See below for additional information.

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.

During the third quarter of 2013, the Company changed the manner in which it presents par outstanding and Debt Service in two ways. First, the Company had included loss mitigation bonds both in its invested assets portfolio and its financial guaranty insured portfolio. Beginning with the third quarter of 2013, the Company excluded loss mitigation bonds from its disclosure about its financial guaranty insured portfolio (unless otherwise indicated) because it manages such securities as investments and not insurance exposure. This reduced its BIG net par as of December 31, 2012 by $1,121 million. Second, the Company refined its approach to its internal credit ratings and surveillance categories, which resulted in the upgrade of $25 million from BIG to investment grade. Please refer to "Refinement of Approach to Internal Credit Ratings and Surveillance Categories" in note 3, Outstanding Exposure, of the Company's Annual Report on Form 10-K for the period ended December 31, 2013 for additional information.

Performance Indicators

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

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

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

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

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

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

Sectors

Below are brief descriptions of selected types of public and structured finance obligations that the Company insures and reinsures. For a more complete description, please refer to Assured Guaranty Ltd.’s Annual Report on Form 10-K for the year ended December 31, 2013.

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.

Glossary (continued)

Sectors (continued)

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.

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

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

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

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

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

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

Structured Finance:

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

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

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

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

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

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

Glossary (continued)

Sectors (continued)

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

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

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

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

Non-GAAP Financial Measures

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

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

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

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

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

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

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

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

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

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

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

Non-GAAP Financial Measures (continued)

Operating Shareholders’ Equity (continued):

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

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

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

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

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

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

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

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

Assured Guaranty Ltd.

30 Woodbourne Avenue

Hamilton HM 08

Bermuda

(441) 279-5705

www.assuredguaranty.com

Contacts:

Equity and Fixed Income Investors:

Robert Tucker

Managing Director, Investor Relations and Corporate Communications

(212) 339-0861

rtucker@assuredguaranty.com

Michael Walker

Managing Director, Fixed Income Investor Relations

(212) 261-5575

mwalker@assuredguaranty.com

Ross Aron

Vice President, Equity Investor Relations

(212) 261-5509

raron@assuredguaranty.com

Glenn Alterman

Associate, Investor Relations

(212) 339-0854

galterman@assuredguaranty.com

Media:

Ashweeta Durani

Vice President, Corporate Communications

(212) 408-6042

adurani@assuredguaranty.com

ASSURED GUARANTY LTD - FORM 8-K - EX-99.2 - AGL FINANCIAL SUPPLEMENT - February 26, 2014

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