-
GAAP Highlights:
- Net income attributable to Assured Guaranty Ltd. was $109 million, or $1.89 per share(1), for first quarter 2024.
- Shareholders’ equity attributable to Assured Guaranty Ltd. per share was $102.19 as of March 31, 2024.
- Gross written premiums (GWP) were $61 million for first quarter 2024.
-
Non-GAAP Highlights:
- Adjusted operating income(2) was $113 million, or $1.96 per share, for first quarter 2024.
- Adjusted operating shareholders’ equity(2) per share and adjusted book value (ABV)(2) per share were $107.69 and $157.31, respectively, as of March 31, 2024.
- Present value of new business production (PVP)(2) was $63 million for first quarter 2024.
-
Return of Capital to Shareholders:
- First quarter 2024 capital returned to shareholders was $148 million including share repurchases of $129 million and dividends of $19 million.
- Share repurchase authorization was increased by $300 million on May 2, 2024.
HAMILTON, Bermuda–(BUSINESS WIRE)–Assured Guaranty Ltd. (NYSE: AGO) (AGL and, together with its subsidiaries, Assured Guaranty or the Company) announced today its financial results for the three-month period ended March 31, 2024 (first quarter 2024).
“Assured Guaranty produced excellent first quarter 2024 results,” said Dominic Frederico, President and CEO. “First quarter net income increased 35% year over year, and adjusted operating income increased 66%. Shareholders’ equity per share, adjusted operating shareholders’ equity per share, and adjusted book value per share all reached record levels of $102.19, $107.69 and $157.31, respectively. New business written produced $61 million of GWP and $63 million of PVP, reflecting strong production in U.S. public finance and global structured finance.
“In U.S. public finance, we continued to lead the bond insurance industry in primary market par sold. Premiums were strong in the first quarter, with new municipal business producing approximately twice as much GWP and PVP as in last year’s first quarter, on a similar amount of gross par written, due to several large transportation revenue issuances this year.
“In April of this year, we celebrated the 20th anniversary of our IPO. Since that time through the end of the first quarter, our share price has increased almost 385%, more than those of the S&P 500 Financials, the S&P 500, the Dow Jones Industrial Average and the NYSE Composite Index, and we have paid common share dividends of $1 billion. For 2024, we have ramped up our share repurchase program, repurchasing $129 million of common shares in the first quarter alone, which equals 2.7% of our shares outstanding on December 31, 2023.”
|
(1) |
All per share information for net income and adjusted operating income is based on diluted shares. |
|
(2) |
Please see “Explanation of Non-GAAP Financial Measures.” |
|
Summary Financial Results (in millions, except per share amounts)
|
|||||||
|
|
Quarter Ended |
||||||
|
|
March 31, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
||||
|
GAAP (1) |
|
|
|
||||
|
Net income (loss) attributable to AGL |
$ |
109 |
|
|
$ |
81 |
|
|
Net income (loss) attributable to AGL per diluted share |
$ |
1.89 |
|
|
$ |
1.34 |
|
|
Weighted average diluted shares |
|
57.1 |
|
|
|
60.4 |
|
|
Non-GAAP |
|
|
|
||||
|
Adjusted operating income (loss) (2) |
$ |
113 |
|
|
$ |
68 |
|
|
Adjusted operating income per diluted share (2) |
$ |
1.96 |
|
|
$ |
1.12 |
|
|
Weighted average diluted shares |
|
57.1 |
|
|
|
60.4 |
|
|
Gain (loss) related to FG VIE and CIV consolidation (3) included in adjusted operating income |
$ |
— |
|
|
$ |
(4 |
) |
|
Gain (loss) related to FG VIE and CIV consolidation included in adjusted operating income per share |
$ |
— |
|
|
$ |
(0.06 |
) |
|
|
|
|
|
||||
|
Components of total adjusted operating income (loss) |
|
|
|
||||
|
Insurance segment |
$ |
149 |
|
|
$ |
117 |
|
|
Asset Management segment |
|
1 |
|
|
|
(1 |
) |
|
Corporate division |
|
(37 |
) |
|
|
(44 |
) |
|
Other |
|
— |
|
|
|
(4 |
) |
|
Adjusted operating income (loss) |
$ |
113 |
|
|
$ |
68 |
|
|
|
As of |
||||||||||||||
|
|
March 31, 2024 |
|
December 31, 2023 |
||||||||||||
|
|
Amount |
|
Per Share |
|
Amount |
|
Per Share |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Shareholders’ equity attributable to AGL |
$ |
5,629 |
|
$ |
102.19 |
|
$ |
5,713 |
|
$ |
101.63 |
||||
|
Adjusted operating shareholders’ equity (2) |
|
5,932 |
|
|
|
107.69 |
|
|
|
5,990 |
|
|
|
106.54 |
|
|
ABV (2) |
|
8,665 |
|
|
|
157.31 |
|
|
|
8,765 |
|
|
|
155.92 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Common Shares Outstanding |
|
55.1 |
|
|
|
|
|
56.2 |
|
|
|
||||
|
________________________________________________ |
|
|
(1) |
Generally accepted accounting principles in the United States of America. |
|
(2) |
Please see “Explanation of Non-GAAP Financial Measures” at the end of this press release. |
|
(3) |
The effect of consolidating financial guaranty variable interest entities (FG VIEs) and consolidated investment vehicles (CIVs). |
On a per share basis, shareholders’ equity attributable to AGL increased to $102.19 as of March 31, 2024 from $101.63 as of December 31, 2023, primarily due to net income and share repurchases, partially offset by dividends and unrealized losses in the investment portfolio. On a per share basis, ABV increased to $157.31 primarily due to adjusted operating income, new business production and share repurchases, partially offset by dividends.
Insurance Segment
The Insurance segment primarily consists of the Company’s insurance subsidiaries that provide credit protection products to the United States (U.S.) and non-U.S. public finance (including infrastructure) and structured finance markets.
Insurance Segment New Business Production
|
Insurance Segment New Business Production (in millions)
|
|||||||||||||||||||||||
|
|
Quarter Ended March 31, |
||||||||||||||||||||||
|
|
2024 |
|
2023 |
||||||||||||||||||||
|
|
GWP |
|
PVP (1) |
|
Gross Par Written (2) |
|
GWP |
|
PVP (1) |
|
Gross Par Written (2) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Public finance – U.S. |
$ |
44 |
|
$ |
43 |
|
$ |
2,909 |
|
$ |
22 |
|
$ |
22 |
|
$ |
2,907 |
||||||
|
Public finance – non-U.S. |
|
2 |
|
|
|
1 |
|
|
|
— |
|
|
|
36 |
|
|
|
30 |
|
|
|
360 |
|
|
Structured finance – U.S. |
|
13 |
|
|
|
15 |
|
|
|
480 |
|
|
|
28 |
|
|
|
27 |
|
|
|
582 |
|
|
Structured finance – non-U.S. |
|
2 |
|
|
|
4 |
|
|
|
354 |
|
|
|
— |
|
|
|
33 |
|
|
|
1,514 |
|
|
Total |
$ |
61 |
|
|
$ |
63 |
|
|
$ |
3,743 |
|
|
$ |
86 |
|
|
$ |
112 |
|
|
$ |
5,363 |
|
| ________________________________________________ | |
|
(1) |
PVP, a non-GAAP financial measure, measures the value of the Insurance segment’s new business production for all contracts regardless of form or GAAP accounting model. See “Explanation of Non-GAAP Financial Measures” at the end of this press release. PVP is based on “close date,” when the transaction settles. PVP was discounted at 5% and 4% in first quarter 2024 and in the three-month period ended March 31, 2023 (first quarter 2023), respectively. |
| (2) | Gross Par Written is based on “close date,” when the transaction settles. |
U.S. public finance GWP and PVP in first quarter 2024 were higher than the comparable GWP and PVP in first quarter 2023, primarily due to several large transportation revenue transactions that closed in first quarter 2024. The Company’s direct par written represented 53% of the total U.S. municipal market insured issuance in first quarter 2024, compared with 60% in first quarter 2023, and the Company’s penetration of all municipal issuance was 3.8% in first quarter 2024 compared with 4.6% in first quarter 2023.
Structured finance GWP and PVP in first quarter 2024 were primarily attributable to insurance securitization and subscription finance transactions.
Business activity in the non-U.S. public finance and structured finance sectors often has long lead times and therefore may vary from period to period.
Insurance Segment Adjusted Operating Income
Insurance segment adjusted operating income increased to $149 million in first quarter 2024, from $117 million in first quarter 2023. The increase was primarily due to higher net earned premiums and fair value gains on trading securities in first quarter 2024.
|
Insurance Segment Results (in millions)
|
|||||||
|
|
Quarter Ended |
||||||
|
|
March 31, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
Segment revenues |
|
|
|
||||
|
Net earned premiums and credit derivative revenues |
$ |
122 |
|
|
$ |
84 |
|
|
Net investment income |
|
83 |
|
|
|
82 |
|
|
Fair value gains (losses) on trading securities |
|
26 |
|
|
|
(2 |
) |
|
Foreign exchange gains (losses) on remeasurement |
|
— |
|
|
|
1 |
|
|
Other income (loss) |
|
(2 |
) |
|
|
25 |
|
|
Total segment revenues |
|
229 |
|
|
|
190 |
|
|
|
|
|
|
||||
|
Segment expenses |
|
|
|
||||
|
Loss expense (benefit) |
|
4 |
|
|
|
9 |
|
|
Amortization of deferred acquisition costs (DAC) |
|
6 |
|
|
|
3 |
|
|
Employee compensation and benefit expenses |
|
48 |
|
|
|
39 |
|
|
Other operating expenses |
|
27 |
|
|
|
28 |
|
|
Total segment expenses |
|
85 |
|
|
|
79 |
|
|
Equity in earnings (losses) of investees |
|
40 |
|
|
|
30 |
|
|
Segment adjusted operating income (loss) before income taxes |
|
184 |
|
|
|
141 |
|
|
Less: Provision (benefit) for income taxes |
|
35 |
|
|
|
24 |
|
|
Segment adjusted operating income (loss) |
$ |
149 |
|
|
$ |
117 |
|
The components of the Insurance segment’s premiums, losses and income from the investment portfolio are presented below.
Insurance Segment Net Earned Premiums and Credit Derivative Revenues
|
Insurance Segment Net Earned Premiums and Credit Derivative Revenues (in millions)
|
|||||||
|
|
Quarter Ended |
||||||
|
|
March 31, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
Scheduled net earned premiums and credit derivative revenues |
$ |
83 |
|
$ |
80 |
||
|
Accelerations |
|
39 |
|
|
|
4 |
|
|
Total |
$ |
122 |
|
|
$ |
84 |
|
Net earned premiums and credit derivative revenues increased in first quarter 2024 compared with first quarter 2023 primarily due to a large refunded transaction in first quarter 2024.
Insurance Segment Loss Expense (Benefit) and the Roll Forward of Expected Losses
Loss expense is a function of net economic loss development (benefit) and deferred premium revenue.
|
Insurance Segment Loss Expense (Benefit) (in millions)
|
|||||||
|
|
Quarter Ended |
||||||
|
|
March 31, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
Public finance |
$ |
1 |
|
$ |
1 |
||
|
U.S. residential mortgage-backed securities (RMBS) |
|
2 |
|
|
|
6 |
|
|
Other structured finance |
|
1 |
|
|
|
2 |
|
|
Total |
$ |
4 |
|
|
$ |
9 |
|
The table below presents the roll forward of net expected losses for first quarter 2024.
|
Roll Forward of Net Expected Loss to be Paid (Recovered) (1) (in millions)
|
|||||||||||||||
|
|
Net Expected Loss to be Paid (Recovered) as of December 31, 2023 |
|
Net Economic Loss Development (Benefit) |
|
Net (Paid) Recovered Losses |
|
Net Expected Loss to be Paid (Recovered) as of March 31, 2024 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
Public finance |
$ |
418 |
|
$ |
(3 |
) |
|
$ |
(17 |
) |
|
$ |
398 |
|
|
|
U.S. RMBS |
|
43 |
|
|
|
(3 |
) |
|
|
(42 |
) |
|
|
(2 |
) |
|
Other structured finance |
|
44 |
|
|
|
(1 |
) |
|
|
(6 |
) |
|
|
37 |
|
|
Total |
$ |
505 |
|
|
$ |
(7 |
) |
|
$ |
(65 |
) |
|
$ |
433 |
|
|
________________________________________________ |
|
|
(1) |
Net economic loss development (benefit) represents the change in net expected loss to be paid (recovered) attributable to the effects of changes in the economic performance of insured transactions, changes in assumptions based on observed market trends, changes in discount rates, accretion of discount and the economic effects of loss mitigation efforts, each net of reinsurance. Net economic loss development (benefit) is the principal measure that the Company uses to evaluate the loss experience in its insured portfolio. Expected loss to be paid (recovered) includes all transactions insured by the Company, regardless of the accounting model prescribed under GAAP and without consideration of deferred premium revenue. |
The net economic loss development was a benefit of $7 million in first quarter 2024, mainly attributable to improved performance across various public finance exposures and higher recoveries in second-lien RMBS. The effect of changes in risk-free rates used to discount expected losses was a benefit of $3 million.
Insurance Segment Income from Investment Portfolio
|
Insurance Segment Income from Investment Portfolio (in millions)
|
|||||||
|
|
Quarter Ended |
||||||
|
|
March 31, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
Net investment income |
$ |
83 |
|
$ |
82 |
|
|
|
Fair value gains (losses) on trading securities (1) |
|
26 |
|
|
|
(2 |
) |
|
Equity in earnings (losses) of investees (2) |
|
40 |
|
|
|
30 |
|
|
Total |
$ |
149 |
|
|
$ |
110 |
|
|
________________________________________________ |
|
|
(1) |
Represents contingent value instruments issued by Puerto Rico that are classified as trading securities with changes in fair value reported in the condensed consolidated statements of operations. |
|
(2) |
Equity in earnings (losses) of investees primarily relates to funds managed by Sound Point Capital Management, LP and certain of its investment management subsidiaries (Sound Point) and Assured Healthcare Partners, LLC (AHP), and certain other managers, as well as, prior to July 1, 2023, Assured Investment Management LLC and its investment management affiliates (AssuredIM). Investments in funds are reported on a one-quarter lag. |
Net investment income, which represents interest income on available-for-sale fixed-maturity debt securities and short-term investments, increased to $83 million in first quarter 2024 from $82 million in first quarter 2023 primarily due to higher short-term interest rates and average balances, partially offset by lower income on loss mitigation securities.
As of March 31, 2024, the Insurance segment had $796 million in alternative investments, which had an inception-to-date annualized internal rate of return of approximately 14.4%. In the Insurance segment, alternative investments consist primarily of funds managed by Sound Point, AHP and other managers, and are generally recorded at net asset value (NAV), with changes in NAV reported in “equity in earnings (losses) of investees.” Equity in earnings of investees is more volatile than net investment income on available-for-sale fixed-maturity securities and short-term investments. To the extent that the amounts invested in alternative fund investments increase and available-for-sale fixed-maturity securities decrease, net investment income may decline and mark-to-market volatility related to equity in earnings of investees may increase.
Ratings Action
On April 30th 2024, Moody’s Ratings (Moody’s) upgraded the insurance financial strength rating of Assured Guaranty Corp. (AGC) and affirmed the rating of Assured Guaranty Municipal Corp. (AGM), both with a stable outlook. In the report, Moody’s cited AGC’s strong risk-adjusted capital adequacy, the significant improvement in the credit quality of its insured portfolio, and an increased strategic role within Assured Guaranty. About AGM, Moody’s noted AGM’s strong capital profile and leading market position in the financial guaranty sector.
Asset Management Segment
Since July 2023, the Company participates in the asset management business through its ownership interest in Sound Point. Prior to July 1, 2023, the Company participated in the asset management business through AssuredIM. Asset Management segment adjusted operating income was $1 million for first quarter 2024 and a loss of $1 million for first quarter 2023. Sound Point’s results are reported on a one quarter lag and are included in “equity in earnings (losses) of investees.” In first quarter 2024, equity in earnings (losses) of investees consisted of a $4 million gain on the Company’s ownership interest in Sound Point and a $3 million impairment loss related to a legacy investment in a small financial services advisory firm.
Corporate Division
The Corporate division primarily consists of interest expense on the debt of Assured Guaranty US Holdings Inc. and Assured Guaranty Municipal Holdings Inc., as well as other operating expenses attributed to holding company activities. Adjusted operating loss for the Corporate division was $37 million in first quarter 2024 compared with $44 million in first quarter 2023. The decrease in the net loss attributable to the Corporate division is primarily due to an additional value added tax in the United Kingdom and expenses related to the Sound Point transaction in first quarter 2023, offset in part by increases in premises related expenses.
Reconciliation to GAAP
The following table presents a reconciliation of net income (loss) attributable to AGL to adjusted operating income (loss).
|
Reconciliation of Net Income (Loss) Attributable to AGL to Adjusted Operating Income (Loss) (in millions, except per share amounts)
|
|||||||||||||||
|
|
Quarter Ended |
||||||||||||||
|
|
March 31, |
||||||||||||||
|
|
2024 |
|
2023 |
||||||||||||
|
|
Total |
|
Per Diluted Share |
|
Total |
|
Per Diluted Share |
||||||||
|
Net income (loss) attributable to AGL |
$ |
109 |
|
|
$ |
1.89 |
|
|
$ |
81 |
|
|
$ |
1.34 |
|
|
Less pre-tax adjustments: |
|
|
|
|
|
|
|
||||||||
|
Realized gains (losses) on investments |
|
8 |
|
|
|
0.14 |
|
|
|
(2 |
) |
|
|
(0.03 |
) |
|
Non-credit impairment-related unrealized fair value gains (losses) on credit derivatives |
|
10 |
|
|
|
0.16 |
|
|
|
13 |
|
|
|
0.21 |
|
|
Fair value gains (losses) on committed capital securities (CCS) |
|
(10 |
) |
|
|
(0.17 |
) |
|
|
(16 |
) |
|
|
(0.26 |
) |
|
Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and loss adjustment expense (LAE) reserves |
|
(12 |
) |
|
|
(0.20 |
) |
|
|
20 |
|
|
|
0.32 |
|
|
Total pre-tax adjustments |
|
(4 |
) |
|
|
(0.07 |
) |
|
|
15 |
|
|
|
0.24 |
|
|
Less tax effect on pre-tax adjustments |
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
(0.02 |
) |
|
Adjusted operating income (loss) |
$ |
113 |
|
|
$ |
1.96 |
|
|
$ |
68 |
|
|
$ |
1.12 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Gain (loss) related to FG VIE and CIV consolidation included in adjusted operating income |
$ |
— |
|
|
$ |
— |
|
|
$ |
(4 |
) |
|
$ |
(0.06 |
) |
Non-credit impairment-related unrealized fair value gains on credit derivatives in first quarter 2024 were generated primarily as a result of the termination of certain structured finance contracts. Non-credit impairment-related unrealized fair value gains on credit derivatives in first quarter 2023 were generated primarily as a result of the increased cost to buy protection on AGC. Except for credit impairment, the fair value adjustments on credit derivatives in the insured portfolio are non-economic adjustments that reverse to zero over the remaining term of that portfolio.
Fair value losses on CCS in first quarter 2024 and first quarter 2023 were primarily due to a tightening in market spreads. Fair value of CCS is heavily affected by, and in part fluctuates with, changes in market interest rates, credit spreads and other market factors and is not expected to result in an economic gain or loss.
Foreign exchange gains (losses) in both periods primarily relate to remeasurement of premiums receivable and are mainly due to changes in the exchange rate relative to the U.S. dollar of the pound sterling and, to a lesser extent, the euro.
Common Share Repurchases
On May 2, 2024, AGL’s Board of Directors (the Board) authorized the repurchase of an additional $300 million of the Company’s common shares. From the beginning of the repurchase program in 2013 through May 7, 2024, the Company repurchased a total of 146 million common shares at an average price of $34.50, representing approximately 75% of the total shares outstanding. As of May 7, 2024, the Company was authorized to purchase $414 million of its common shares. These repurchases can be made from time to time in the open market or in privately negotiated transactions.
|
Summary of Share Repurchases (in millions, except per share amounts)
|
||||||||||
|
|
Amount (1) |
|
Number of Shares |
|
Average Price Per Share |
|||||
|
|
|
|
|
|
|
|||||
|
2024 (January 1 – March 31) |
$ |
129 |
|
1.54 |
|
$ |
84.07 |
|||
|
2024 (April 1 – May 7) |
|
61 |
|
|
0.75 |
|
|
|
80.70 |
|
|
Total 2024 |
$ |
190 |
|
|
2.29 |
|
|
|
82.96 |
|
|
________________________________________________ |
|
|
(1) |
Excludes commissions and excise taxes. |
The timing, form and amount of the share repurchases under the program are at the discretion of management and will depend on a variety of factors, including funds available at the parent company, other potential uses for such funds, market conditions, the Company’s capital position, legal requirements and other factors. The repurchase program may be modified, extended or terminated by the Board at any time. It does not have an expiration date.
Financial Statements
|
Condensed Consolidated Statements of Operations (unaudited) (in millions)
|
|||||||
|
|
Quarter Ended |
||||||
|
|
March 31, |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
Revenues |
|
|
|
||||
|
Net earned premiums |
$ |
119 |
|
|
$ |
81 |
|
|
Net investment income |
|
84 |
|
|
|
81 |
|
|
Asset management fees |
|
— |
|
|
|
26 |
|
|
Net realized investment gains (losses) |
|
8 |
|
|
|
(2 |
) |
|
Fair value gains (losses) on credit derivatives |
|
10 |
|
|
|
15 |
|
|
Fair value gains (losses) on CCS |
|
(10 |
) |
|
|
(16 |
) |
|
Fair value gains (losses) on FG VIEs |
|
(3 |
) |
|
|
(5 |
) |
|
Fair value gains (losses) on CIVs |
|
22 |
|
|
|
58 |
|
|
Foreign exchange gain (loss) on remeasurement |
|
(12 |
) |
|
|
20 |
|
|
Fair value gains (losses) on trading securities |
|
26 |
|
|
|
(2 |
) |
|
Other income (loss) |
|
1 |
|
|
|
27 |
|
|
Total revenues |
|
245 |
|
|
|
283 |
|
|
Expenses |
|
|
|
||||
|
Loss and LAE (benefit) |
|
(1 |
) |
|
|
4 |
|
|
Interest expense |
|
23 |
|
|
|
21 |
|
|
Amortization of DAC |
|
6 |
|
|
|
3 |
|
|
Employee compensation and benefit expenses |
|
58 |
|
|
|
82 |
|
|
Other operating expenses |
|
39 |
|
|
|
55 |
|
|
Total expenses |
|
125 |
|
|
|
165 |
|
|
Income (loss) before income taxes and equity in earnings (losses) of investees |
|
120 |
|
|
|
118 |
|
|
Equity in earnings (losses) of investees |
|
24 |
|
|
|
2 |
|
|
Income (loss) before income taxes |
|
144 |
|
|
|
120 |
|
|
Less: Provision (benefit) for income taxes |
|
31 |
|
|
|
23 |
|
|
Net income (loss) |
|
113 |
|
|
|
97 |
|
|
Less: Noncontrolling interests |
|
4 |
|
|
|
16 |
|
|
Net income (loss) attributable to AGL |
$ |
109 |
|
|
$ |
81 |
|
|
Condensed Consolidated Balance Sheets (unaudited) (in millions)
|
|||||||
|
|
As of |
||||||
|
|
March 31, 2024 |
|
December 31, 2023 |
||||
|
Assets |
|
|
|
||||
|
Investments: |
|
|
|
||||
|
Fixed-maturity securities available-for-sale, at fair value |
$ |
6,091 |
|
|
$ |
6,307 |
|
|
Fixed-maturity securities, trading, at fair value |
|
272 |
|
|
|
318 |
|
|
Short-term investments, at fair value |
|
1,649 |
|
|
|
1,661 |
|
|
Other invested assets |
|
875 |
|
|
|
829 |
|
|
Total investments |
|
8,887 |
|
|
|
9,115 |
|
|
Cash |
|
115 |
|
|
|
97 |
|
|
Premiums receivable, net of commissions payable |
|
1,450 |
|
|
|
1,468 |
|
|
DAC |
|
164 |
|
|
|
161 |
|
|
Salvage and subrogation recoverable |
|
295 |
|
|
|
298 |
|
|
FG VIEs’ assets |
|
167 |
|
|
|
328 |
|
|
Assets of CIVs |
|
377 |
|
|
|
366 |
|
|
Other assets |
|
713 |
|
|
|
706 |
|
|
Total assets |
$ |
12,168 |
|
|
$ |
12,539 |
|
|
|
|
|
|
||||
|
Liabilities |
|
|
|
||||
|
Unearned premium reserve |
$ |
3,612 |
|
|
$ |
3,658 |
|
|
Loss and LAE reserve |
|
307 |
|
|
|
376 |
|
|
Long-term debt |
|
1,695 |
|
|
|
1,694 |
|
|
Credit derivative liabilities, at fair value |
|
43 |
|
|
|
53 |
|
|
FG VIEs’ liabilities, at fair value |
|
399 |
|
|
|
554 |
|
|
Other liabilities |
|
430 |
|
|
|
439 |
|
|
Total liabilities |
|
6,486 |
|
|
|
6,774 |
|
|
|
|
|
|
||||
|
Shareholders’ equity |
|
|
|
||||
|
Common shares |
|
1 |
|
|
|
1 |
|
|
Retained earnings |
|
6,014 |
|
|
|
6,070 |
|
|
Accumulated other comprehensive income (loss) |
|
(387 |
) |
|
|
(359 |
) |
|
Deferred equity compensation |
|
1 |
|
|
|
1 |
|
|
Total shareholders’ equity attributable to AGL |
|
5,629 |
|
|
|
5,713 |
|
|
Nonredeemable noncontrolling interests |
|
53 |
|
|
|
52 |
|
|
Total shareholders’ equity |
|
5,682 |
|
|
|
5,765 |
|
|
Total liabilities and shareholders’ equity |
$ |
12,168 |
|
|
$ |
12,539 |
|
Explanation of Non-GAAP Financial Measures
The Company discloses both: (i) financial measures determined in accordance with GAAP; and (ii) financial measures not determined in accordance with GAAP (non-GAAP financial measures). Financial measures identified as non-GAAP should not be considered substitutes for GAAP financial measures. The primary limitation of non-GAAP financial measures is the potential lack of comparability to financial measures of other companies, whose definitions of non-GAAP financial measures may differ from those of the Company.
The Company believes its presentation of non-GAAP financial measures provides information that is necessary for analysts to calculate their estimates of Assured Guaranty’s financial results in their research reports on Assured Guaranty and for investors, analysts and the financial news media to evaluate Assured Guaranty’s financial results.
GAAP requires the Company to consolidate entities where it is deemed to be the primary beneficiary which include:
- FG VIEs, which the Company does not own and where its exposure is limited to its obligation under the financial guaranty insurance contract, and
- CIVs in which certain subsidiaries invest.
The Company discloses the effect of FG VIE and CIV consolidation that is embedded in each non-GAAP financial measure, as applicable. The Company believes this information may also be useful to analysts and investors evaluating Assured Guaranty’s financial results. In the case of both the consolidated FG VIEs and the CIVs, the economic effect on the Company of each of the consolidated FG VIEs and CIVs is reflected primarily in the results of the Insurance segment.
Management of the Company and AGL’s Board of Directors use non-GAAP financial measures further adjusted to remove the effect of FG VIE and CIV consolidation (which the Company refers to as its core financial measures), as well as GAAP financial measures and other factors, to evaluate the Company’s results of operations, financial condition and progress towards long-term goals.
Contacts
Robert Tucker
Senior Managing Director, Investor Relations and Corporate Communications
212-339-0861
rtucker@agltd.com
Ashweeta Durani
Director, Media Relations
212-408-6042
adurani@agltd.com
