What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-27 compared with 2025-02-28 · 829 added, 820 removed, 2607 unchanged (39% of the section changed)

14 unchanged sentences

Investments and Cash

Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles

Variable Interest Entities

Fair Value Measurement

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Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

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The determination of expected loss to be paid (recovered) is a subjective process involving numerous estimates, assumptions and judgments relating to internal credit ratings, timing of cash flows, recovery rates, and probability weightings, as used in the respective cash flow models used by management.

The principal considerations for our determination that performing procedures relating to the valuation of the loss and LAE reserve and the salvage and subrogation recoverable – estimation of the expected loss to be paid (recovered) related to public finance obligations is a critical audit matter are (i) the significant judgment by management when developing the estimate of the loss and LAE reserve and the salvage and subrogation recoverable – estimation of the expected loss to be paid (recovered) related to public finance obligations, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's significant assumptions related to internal credit ratings, timing of cash flows, recovery rates, and probability weightings;

and (iii) the audit effort included the involvement of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

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Total investments 8,487 8,663

Premiums receivable, net of commissions payable 1,551 1,468

Premiums receivable, net of commissions payable, net of allowance for credit losses of $ 3 and $ –

Deferred acquisition costs 192 176

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Long-term debt 1,704 1,699

Financial guaranty variable interest entities’ liabilities, at fair value (with recourse $ 155 and $ 543 , without recourse $ 9 and $ 11 )

Financial guaranty variable interest entities’ liabilities (includes $ 197 and $ 164 , at fair value, $ 182 and $ 155 with recourse, $ 16 and $ 9 without recourse)

Other liabilities (includes $ 21 and $ 34 at fair value)

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Total shareholders’ equity attributable to Assured Guaranty Ltd.

Nonredeemable noncontrolling interests (Note 8)

Non-redeemable noncontrolling interest (Note 8)

Total shareholders’ equity 5,789 5,553

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Net income (loss) 543 392 761

Noncontrolling interests 16 22 13

Noncontrolling interest 40 16 22

Net income (loss) attributable to Assured Guaranty Ltd.

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Comprehensive income (loss) 760 366 917

Comprehensive income (loss) attributable to noncontrolling interests 16 22 13

Comprehensive income (loss) attributable to noncontrolling interest 40 16 22

Comprehensive income (loss) attributable to Assured Guaranty Ltd.

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Common Shares Outstanding Total Shareholders’ Equity Attributable to Assured Guaranty Ltd.

Nonredeemable Noncontrolling Interests Total

Non-redeemable Noncontrolling Interest Total

Shareholders’ Equity

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Share-based compensation 420,158 — 21 — — 21 — 21

Reclassification to liabilities — — — — — — ( 16 ) ( 16 )

Contributions — — — — — — 20 20

Distributions — — — — — — ( 70 ) ( 70 )

Other comprehensive loss — — — ( 815 ) — ( 815 ) — ( 815 )

Other comprehensive income — — — 156 — 156 — 156

Deconsolidation of investment vehicles — — — — — — ( 132 ) ( 132 )

As of December 31, 2023 56,217,305 1 6,070 ( 359 ) 1 5,713 52 5,765

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Share-based compensation 468,789 — 8 — — 8 — 8

Reclassification to liabilities — — — — — — ( 16 ) ( 16 )

Contributions — — — — — — 20 20

Distributions — — — — — — ( 10 ) ( 10 )

Other comprehensive income — — — 156 — 156 — 156

Deconsolidation of investment vehicles — — — — — — ( 132 ) ( 132 )

Other comprehensive loss — — — ( 26 ) — ( 26 ) — ( 26 )

As of December 31, 2024 50,505,320 1 5,878 ( 385 ) 1 5,495 58 5,553

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— — ( 69 ) — — ( 69 ) — ( 69 )

Consolidation — — — — — — 28 28

Common shares repurchases ( 5,819,627 ) ( 1 ) ( 493 ) — — ( 494 ) — ( 494 )

Share-based compensation 499,098 — 11 — — 11 — 11

Distributions — — — — — — ( 10 ) ( 10 )

Other comprehensive loss — — — ( 26 ) — ( 26 ) — ( 26 )

Other comprehensive income — — — 217 — 217 — 217

As of December 31, 2025 45,184,791 $ — $ 5,830 $ ( 168 ) $ 1 $ 5,663 $ 126 $ 5,789

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Proceeds from (purchases of) money market funds — — 66

Purchases to cover securities sold short — — ( 223 )

Proceeds from securities sold short — — 188

Other changes in consolidated investment vehicles ( 68 ) 4 ( 85 )

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Paydowns on financial guaranty variable interest entities’ assets 20 23 175

Net proceeds from sale of assets and liabilities held for sale 49 — —

Other 12 ( 8 ) ( 3 )

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Cash flows from consolidated investment vehicles:

Proceeds from issuance of collateralized loan obligations — — 1,372

Repayment of collateralized loan obligations — ( 1 ) ( 373 )

Proceeds from issuance of warehouse financing debt — — 991

Repayment of warehouse financing debt — — ( 166 )

Contributions from noncontrolling interests to consolidated investment vehicles — — 74

Distributions to noncontrolling interests from consolidated investment vehicles ( 10 ) ( 80 ) ( 26 )

Borrowing (payment) under credit facility — ( 4 ) 41

Distributions to noncontrolling interest from consolidated investment vehicles — ( 10 ) ( 80 )

Other — — ( 5 )

Net cash flows provided by (used in) financing activities ( 616 ) ( 983 ) ( 670 )

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2025 2024 2023

Supplemental cash flow information

Income taxes paid (received) $ 90 $ 4 $ 105

Interest paid on long-term debt 88 77 77

Supplemental disclosure of non-cash activities:

Puerto Rico Salvage

Fixed-maturity securities, available-for-sale, received as salvage $ — $ 1 $ 986

Fixed-maturity securities, available-for-sale, ceded to a reinsurer — — 27

Fixed-maturity securities, trading, received as salvage — — 549

Fixed-maturity securities, trading, ceded to a reinsurer — — 6

Debt securities of financial guaranty variable interest entities received as salvage — — 234

Contributions from noncontrolling interests — 20 36

Distributions to noncontrolling interests — 27 56

Receipt of fixed-maturity securities, available-for-sale $ 9 $ — $ 1

Contributions from noncontrolling interest — — 20

Distributions to noncontrolling interest — — 27

Sale of asset management subsidiaries (See Note 1)

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Restricted cash (included in other assets) 1 5 —

Cash of financial guaranty variable interest entities (see Note 8)

Cash and cash equivalents of financial guaranty variable interest entities (see Note 8)

Cash and cash equivalents of consolidated investment vehicles (see Note 8)

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Through its insurance subsidiaries, the Company applies its credit underwriting judgment, risk management skills and capital markets experience primarily to offer financial guaranty insurance that protects holders of debt instruments and other monetary obligations from defaults in scheduled payments.

If an obligor defaults on a scheduled payment due on an obligation, including a scheduled principal or interest payment (collectively, debt service), the Company is required under its unconditional and irrevocable financial guaranty to pay the amount of the shortfall to the holder of the obligation.

If an obligor defaults on a scheduled payment, including a scheduled principal or interest payment (collectively, debt service), the Company is required under its unconditional and irrevocable financial guaranty to pay the shortfall of the scheduled amount to the holder of the obligation, but generally cannot be required by the holder to pay on an accelerated basis.

The Company markets its financial guaranty insurance directly to issuers and underwriters of public finance and structured finance securities as well as to investors in such obligations.

The Company guarantees obligations issued principally in the U.S.

and the United Kingdom (U.K.), and also guarantees obligations issued in other countries and regions, including Western Europe.

and the United Kingdom (U.K.), and also guarantees obligations issued in other countries and regions, including Western Europe and Australia.

The Company also provides specialty insurance and reinsurance on transactions with risk profiles similar to those of its structured finance exposures written in financial guaranty form.

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• Assured Guaranty Inc.

(AG), domiciled in Maryland and formerly known as Assured Guaranty Corp., and its insurance subsidiaries:

• Assured Guaranty UK Limited (AGUK), organized in the U.K.;

• Assured Guaranty (Europe) SA (AGE), organized in France;

(AG), domiciled in Maryland, and its insurance subsidiaries:

• Assured Guaranty UK Limited (AGUK), domiciled in the U.K.;

• Assured Guaranty (Europe) SA (AGE), domiciled in France;

• Assured Guaranty Re Ltd.

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(AGRO), domiciled in Bermuda.

Effective August 1, 2024, Assured Guaranty Municipal Corp.

(AGM) merged with and into AG, with AG as the surviving company.

Prior to the merger, AGM was a principal insurance subsidiary of the Company.

As a result of the merger, the Company wrote-off the $ 6 million carrying value of AGM’s insurance licenses in the third quarter of 2024, which was recorded in “other operating expenses” in the Insurance segment.

In connection with the merger, the Maryland Insurance Administration (MIA) approved, and in the third quarter of 2024 AG implemented, the redemption of approximately $ 300 million of AG’s shares of common stock from its parent, Assured Guaranty Municipal Holdings Inc.

(AGMH), in exchange for cash of $ 167 million and the remainder in alternative investments.

In May 2024, the New York State Department of Financial Services (NYDFS) approved, and AGM implemented, the redemption of approximately $ 100 million of AGM’s shares of common stock from its then parent, AGMH.

The Company designated certain assets and liabilities supporting the Insurance segment as held for sale in the first quarter of 2023.

The held for sale assets and liabilities were $ 28 million (reported in “other assets”) and $ 3 million (reported in “other liabilities”), respectively, as of December 31, 2024.

Acquisition of Assured Life Reinsurance (formerly Warwick Life Reinsurance)

On January 21, 2026, the Company purchased all of the outstanding share capital in Warwick Company (UK) Limited, which is the 100 % indirect owner of Assured Life Reinsurance Ltd.

(Assured Life Re, f/k/a Warwick Re Limited), for a purchase price of $ 158 million, subject to certain post-closing adjustments (Assured Life Re Acquisition).

Assured Life Re is a Class E long-term (life) reinsurance company incorporated and registered in Bermuda and is rated BBB (Outlook Positive) (1/28/26) by Fitch Ratings, Inc.

Assured Life Re focuses on annuity reinsurance including U.K.

bulk purchase annuity (pension risk transfers) and U.S.

multi-year guaranteed annuity transactions.

The Company funded the purchase price with available cash.

In addition to the purchase price, the Company may contribute additional capital to Assured Life Re depending on the amount of life and annuity liabilities assumed in future reinsurance transactions.

The Assured Life Re Acquisition represents the Company's first platform dedicated solely to the life and annuity reinsurance business.

Held for Sale

The Company designated certain assets (including a commercially leased building) and related liabilities as held for sale in the first quarter of 2023.

These assets and liabilities were associated with a loss mitigation strategy for a troubled exposure that had carrying values of $ 30 million (reported in “other assets”) and $ 4 million (reported in “other liabilities”), respectively, as of September 30, 2025.

In connection with the sale in October 2025 of the commercially leased building, the Company recognized a pre-tax gain of $ 23 million, which was recorded in “other income” in the Insurance segment.

Asset Management

Until July 1, 2023, the Company served as an investment adviser to primarily collateralized loan obligations (CLOs) and opportunity funds, through Assured Investment Management LLC (AssuredIM LLC) and its investment management affiliates (together with AssuredIM LLC, AssuredIM).

Beginning July 1, 2023, the Company participates in the asset management business through its ownership interest in Sound Point Capital Management, LP (Sound Point, LP) and certain of its investment management affiliates (together with Sound Point, LP, Sound Point), as described below.

On July 1, 2023, Assured Guaranty contributed to Sound Point, LP most of its asset management business, other than that conducted by Assured Healthcare Partners LLC (AHP) (AssuredIM Contributed Business), as contemplated by the transaction agreement entered into with Sound Point on April 5, 2023 (Transaction Agreement).

Assured Guaranty received, subject to certain potential post-closing adjustments, approximately 30 % of the common interests in Sound Point, LP, and certain other interests in Sound Point.

Beginning July 1, 2023, the Company participates in the asset

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

In addition, in accordance with the terms of a letter agreement (Letter Agreement), effective July 1, 2023, AG (i) engaged Sound Point as its sole alternative credit manager, and (ii) transitioned to Sound Point the management of certain existing alternative investments and related commitments.

The Letter Agreement also provides that, within the first two years of Sound Point’s engagement, AG, including through its investment subsidiary AG Asset Strategies LLC (AGAS), would, subject to regulatory approval, cure terms and other terms of the Letter Agreement, make new investments in funds, other vehicles and separately managed accounts managed by Sound Point which, when aggregated with the alternative investments and commitments transitioned from AssuredIM and any reinvestments (collectively, Sound Point Investments), and investments made by other Assured Guaranty affiliates, will total $ 1 billion.

The Letter Agreement contemplates a long-term investment partnership between Sound Point and Assured Guaranty, whereby AG has agreed to reinvest all returns of capital from Sound Point Investments for a period of 15 years, until July 1, 2038.

Similarly, the Letter Agreement provides that AG will reinvest all gains and dividends from Sound Point Investments for the first two years of Sound Point’s engagement, and reinvest half of all such gains and dividends thereafter until July 1, 2033 (the transactions contemplated under the Transaction Agreement and the Letter Agreement, the Sound Point Transaction).

On July 1, 2028, AG may choose to reduce the amounts invested or required to be reinvested in certain Sound Point Investments under the Letter Agreement, subject to adjustment of Assured Guaranty’s portion of its ownership interest in Sound Point.

To the extent not required to be reinvested by the Letter Agreement, all proceeds from Sound Point Investments received in accordance with their operative investment documents can be distributed to AG.

See Note 7, Investments and Cash.

In July 2023, Assured Guaranty sold all of its equity interests in AHP, which manages healthcare funds, to an entity owned and controlled by the managing partner of AHP (AHP Transaction).

management business through its ownership interest in Sound Point Capital Management, LP (Sound Point, LP) and certain of its investment management affiliates (together with Sound Point, LP, Sound Point), as described below.

Assured Guaranty received, subject to certain potential post-closing adjustments, approximately 30 % of the common interests in Sound Point, LP, and certain other interests in Sound Point.

The Company has committed capital to investments managed by Sound Point.

Investments and Cash.

In July 2023, Assured Guaranty also sold all of its equity interests in AHP, which manages healthcare funds, to an entity owned and controlled by the managing partner of AHP (AHP Transaction).

In connection with the AHP Transaction, the Company agreed to remain a strategic investor in certain AHP managed funds, retain its portion of carried interest in certain AHP managed funds and receive other consideration.

Upon closing of the Sound Point Transaction and the AHP Transaction, the Company deconsolidated most of the corresponding AssuredIM entities (which had previously been classified as held-for-sale) and reported an ownership interest in Sound Point that is accounted for under the equity method.

Upon closing of the Sound Point Transaction and the AHP Transaction, the Company deconsolidated most of the corresponding AssuredIM entities and reported an ownership interest in Sound Point that is accounted for under the equity method.

In connection with the Sound Point Transaction and AHP Transaction, the Company reevaluated its consolidation conclusion for each consolidated investment vehicle (CIV) and deconsolidated all but three CIVs.

See Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.

Variable Interest Entities.

After the Sound Point Transaction and AHP Transaction, the Company continues to consolidate the general partner of a fund that Sound Point now manages and reports any performance fees in “other income.”

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(2) Included goodwill and intangible assets of $ 155 million.

(3) Consisted of a $ 255 million gain on the Sound Point Transaction and a $ 7 million gain on the AHP Transaction, which were both reported in the Corporate division (as described in Note 2, Segment Information).

(3) Consisted of a $ 255 million gain on the Sound Point Transaction and a $ 7 million gain on the AHP Transaction, which were both reported in the Corporate division (as described in Note 2.

Segment Information).

The Company recognized expenses of $ 46 million during 2023 associated with the Sound Point Transaction and AHP Transaction.

Holding Companies

AGL directly or indirectly owns several holding companies, two of which - Assured Guaranty US Holdings Inc.

(AGUS) and AGMH (collectively, the U.S.

AGL directly or indirectly owns several holding companies.

Two of these holding companies, Assured Guaranty US Holdings Inc.

(AGUS) and Assured Guaranty Municipal Holdings Inc.

(AGMH) (collectively, the U.S.

Holding Companies), have public debt outstanding.

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The consolidated financial statements include the accounts of AGL, its direct and indirect subsidiaries, and its consolidated financial guaranty VIEs (FG VIEs) and CIVs.

See Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.

Variable Interest Entities.

Intercompany accounts and transactions between and among all consolidated entities have been eliminated.

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Investments and cash Note 7

Financial guaranty variable interest entities and consolidated investment vehicles Note 8

Variable interest entities Note 8

Fair value measurement Note 9

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Recent Accounting Standards Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The amendments in this ASU require disclosure of significant segment expenses regularly provided to the chief operating decision maker (CODM), extend certain annual disclosures to interim periods, and permit more than one measure of segment profit or loss to be reported under certain conditions.

This ASU is effective in fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company adopted this ASU during the fourth quarter of 2024 and applied its amendments retrospectively to all prior periods presented in its consolidated financial statements.

See Note 2, Segment Information.

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (ASU 2023-09).

This ASU requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid.

The Company prospectively adopted this ASU effective January 1, 2025 which affected certain of the Company’s income tax disclosures.

Income Taxes.

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606):

Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract .

This ASU refines the scope of Accounting Standards Codification (ASC) 815 to clarify which contracts are subject to derivative accounting and provides clarification under ASC 606 for share-

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

based payments from a customer in a revenue contract.

The Company elected to early adopt this ASU as of January 1, 2025, with no effect on the Company's consolidated financial statements.

Recent Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The amendments require enhanced annual disclosures regarding the rate reconciliation and income taxes paid.

This ASU is effective for fiscal years beginning after December 15, 2024.

The Company will apply the amendments in this ASU prospectively to all annual periods beginning after December 15, 2024.

The adoption of this ASU will affect certain of the Company’s income tax disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) .

The amendments in this ASU require disclosure about specific expense categories, including employee compensation, depreciation and intangible asset amortization, in the notes to financial statements at interim and annual reporting periods.

The amendments in this ASU require disclosure about specific expense categories, including employee compensation, depreciation and intangible asset amortization, in the notes to the financial statements at interim and annual reporting periods.

This ASU is effective in fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

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The Company is evaluating when and how it will adopt this ASU and the effect that the amendments in this ASU may have on its expense disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software .

This ASU updates the capitalization guidance for internal-use software development costs by removing all references to software development project stages and providing new guidance requiring an entity to start capitalizing when both of the following occur:

(i) management has authorized and committed to funding a software project;

and (ii) it is probable that the project will be completed and the software will be used to perform the function intended.

This ASU is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years, with early adoption permitted.

This ASU allows entities to adopt the new guidance prospectively, retrospectively or with a modified transition.

The Company is evaluating when and how it will adopt this ASU and the effect it may have on its consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements .

This ASU is intended to improve the navigability of guidance in ASC 270, Interim Reporting , and clarify when it applies.

The ASU also provides additional guidance on what disclosures should be provided in interim reporting periods.

This ASU is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, and permits prospective or full retrospective adoption.

Early adoption is permitted.

The Company is evaluating when and how it will adopt this ASU and the effect it may have on its consolidated financial statements and related disclosures.

Segment Information

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The Company separately reports the results of its Corporate division and the effects of consolidating FG VIEs and CIVs.

This presentation is consistent with the manner in which the Chief Executive Officer and President, the CODM, reviews the business to assess performance and allocate resources.

The CODM uses adjusted operating income to allocate resources for each segment predominantly in the annual budget and forecasting process and to assess the performance for each segment.

This presentation is consistent with the manner in which the Chief Executive Officer and President, the chief operating decision maker (CODM), reviews the business to assess performance and allocate resources.

The CODM predominantly uses adjusted operating income to allocate resources for each segment in the annual budget and forecasting process and to assess the performance for each segment.

The Company analyzes the operating performance of each segment using “segment adjusted operating income (loss).” Results for each segment and division include specifically identifiable expenses as well as intersegment expense allocations, as applicable, based on time studies and other cost allocation methodologies based on headcount or other metrics.

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• Elimination of realized gains (losses) on the Company’s investments, except for gains and losses on securities classified as trading.

• Elimination of non-credit impairment-related unrealized fair value gains (losses) on credit derivatives that are recognized in net income, which is the amount of unrealized fair value gains (losses) in excess of the present value of the expected estimated economic credit losses, and non-economic payments.

• Elimination of non-credit impairment-related fair value gains (losses) on credit derivatives that are recognized in net income, which is the amount of unrealized fair value gains (losses) in excess of the present value of the expected estimated economic credit losses.

• Elimination of fair value gains (losses) on the Company’s committed capital securities (CCS) that are recognized in net income.

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

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

In addition to the adjustments listed above, segment adjusted operating income (loss) differs from GAAP in other respects.

The Insurance segment includes:

(i) premiums and losses from the financial guaranty insurance policies issued by AG that guarantees the FG VIEs’ debt;

and (ii) the insurance subsidiaries’ share of earnings from investments in funds managed by Sound Point and AHP funds (prior to July 1, 2023, AssuredIM) in “equity in earnings (losses) of investees.” Under GAAP, (i) FG VIEs are consolidated by AG and the premiums and losses/recoveries associated with the financial guaranty policies in respect of the FG VIEs’ debt are eliminated (the reconciliation tables below present the FG VIEs and related eliminations in “other”);

(i) premiums and losses from the financial guaranty insurance policies issued by AG that guarantee FG VIE debt;

and (ii) the insurance subsidiaries’ share of earnings from all their investments in funds managed by Sound Point and AHP funds (prior to July 1, 2023, AssuredIM) in “equity in earnings (losses) of investees.” Under GAAP, (i) FG VIEs are consolidated by AG and the premiums and losses/recoveries associated with the financial guaranty policies in respect of the FG VIEs’ debt are eliminated (the reconciliation tables below present the FG VIEs and related eliminations in “other”);

and (ii) certain investments in funds managed by Sound Point (prior to July 1, 2023, AssuredIM) and AHP funds are, or were in prior periods, accounted for as CIVs (in the reconciliation tables below, the CIVs and related eliminations of the Insurance segment’s “equity in earnings (losses) of investees” associated with the Company’s ownership interest in CIVs are presented in “other”).

Until July 1, 2023, under GAAP, reimbursable fund expenses were shown as a component of “asset management fees” and included in total revenues, whereas in the Asset Management segment in the tables below these expenses were netted in “segment expenses.”

The Company does not report assets by reportable segment as the CODM does not assess performance and allocate resources based on assets.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

The Insurance segment primarily consists of the adjusted operating income (loss) of:

(i) the Company’s insurance subsidiaries;

and (ii) AGAS.

The Company does not report assets by reportable segment as the CODM does not assess performance or allocate resources based on assets.

The Insurance segment primarily consists of the adjusted operating income (loss) of the Company’s insurance subsidiaries and AG Asset Strategies LLC (AGAS).

Investments and Cash.

The Asset Management segment includes the results of the Company’s equity method ownership interest in Sound Point and other asset management-related incentive fees.

Prior to July 1, 2023, the Asset Management segment consisted of the adjusted operating income (loss) of AssuredIM.

Since July 2023, the Company participates in the asset management business through its ownership interest in Sound Point as described in Note 1, Business and Basis of Presentation.

Since July 2023, the Company participates in the asset management business through its ownership interest in Sound Point as described in Note 1.

Business and Basis of Presentation.

Beginning in the third quarter of 2023, the Asset Management segment primarily includes the results of the Company’s equity method ownership interest in Sound Point.

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(ii) other corporate operating expenses of AGL and the U.S.

Holding Companies, and (iii) beginning in the third quarter of 2024, equity in earnings from certain alternative investments that were transferred from AG to AGMH as part of the share redemption that occurred on August 5, 2024.

Holding Companies;

(iii) beginning in the third quarter of 2024, equity in earnings from certain alternative investments that were transferred from AG to AGMH as part of a stock redemption;

(iv) beginning in the fourth quarter of 2025, a portion of the equity in earnings of AHP managed funds that were transferred from AG to AGMH as a part of a stock redemption;

and (v) gains and losses associated with certain corporate development or other strategic initiatives.

The Corporate division also included the gain, net of transaction expenses, associated with the Sound Point Transaction and the AHP Transaction in 2023.

The Other category in the tables below primarily includes the effect of consolidating FG VIEs, CIVs, intersegment eliminations and, prior to July 1, 2023, the reclassification of reimbursable fund expenses.

See Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.

The Other category in the tables below primarily includes the effect of consolidating FG VIEs, CIVs and intersegment eliminations and, prior to July 1, 2023, the reclassification of reimbursable fund expenses.

Variable Interest Entities.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

The following table presents information for the Company’s operating segments.

Intersegment revenues include transactions between and among the segments, the Corporate division and other.

Intersegment revenues include transactions between and among the segments, the Corporate division and the Other category.

Segment Information

Years Ended December 31,

Year Ended December 31,

2025 2024 2023 (4)

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Segment employee compensation and benefit expenses 182 — 170 — 154 59

Segment amortization of DAC 20 — 13 — 14 —

Segment amortization of deferred acquisition costs (DAC) 22 — 20 — 13 —

Other segment items (2) 125 17 117 6 107 19

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_____________________

(1) Other segment items include professional services expenses, maintenance, depreciation expense, lease expense, investment management expenses and certain overhead expenses.

(2) Consists of depreciation and amortization, share-based compensation (see Note 12, Employee Benefit Plans) and the write-off of long-lived intangible assets related to AGM licenses (see Note 1, Business and Basis of Presentation).

(1) 2025 results include the gain recognized in connection with the Lehman Brothers International (Europe) (in administration) (LBIE) litigation, which represents the full satisfaction of the judgment the Company was awarded and its claims for attorneys’ fees, expenses and interest.

Contracts Accounted for as Credit Derivatives, for additional information.

(2) Other segment items for the Insurance segment include professional services expenses, maintenance, depreciation expense, lease expense, investment management expenses and certain overhead expenses;

and for the Asset Management segment include expenses associated with incentive fees.

(3) Amounts consist of depreciation, amortization and share-based compensation (see Note 12.

Employee Benefit Plans) and the write-off of long-lived intangible assets related to Assured Guaranty Municipal Corp.

(AGM) licenses in 2024.

(4) In 2023, the Corporate division had revenues of $ 275 million primarily consisting of a gain on the Sound Point and AHP transactions.

Expenses for the Corporate division consisted of $ 99 million of interest expense, $ 38 million of employee compensation and benefit expenses and $ 79 million of other expenses.

The tables below present a reconciliation of significant components of segment information to the comparable consolidated amounts.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

The tables below present a reconciliation of significant components of segment information to the comparable consolidated amounts.

Reconciliation of Segment Information to Consolidated Information

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Net Income (Loss) Attributable to AGL

Revenues Expenses Equity in Earnings (Losses) of Investees Provision (Benefit) for Income Taxes Noncontrolling Interests

Revenues Expenses Equity in Earnings (Losses) of Investees Provision (Benefit) for Income Taxes Noncontrolling Interest (NCI)

(in millions)

11 unchanged sentences

Tax effect — — — 13 — ( 13 )

Total consolidated $ 872 $ 446 $ 62 $ 96 $ 16 $ 376

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Consolidated $ 1,110 $ 550 $ 102 $ 119 $ 40 $ 503

Reconciliation of Segment Information to Consolidated Information

1 unchanged sentence

Net Income (Loss) Attributable to AGL

Revenues Expenses Equity in Earnings (Losses) of Investees Provision (Benefit) for Income Taxes (1) Noncontrolling Interests

Revenues Expenses Equity in Earnings (Losses) of Investees Provision (Benefit) for Income Taxes NCI

(in millions)

11 unchanged sentences

Tax effect — — — — — —

Total consolidated $ 1,373 $ 733 $ 28 $ ( 93 ) $ 22 $ 739

_____________________

(1) Includes $ 189 million of tax benefit related to a Bermuda tax law change, which is included in the Insurance segment.

See Note 13, Income Taxes.

Consolidated $ 872 $ 446 $ 62 $ 96 $ 16 $ 376

Assured Guaranty Ltd.

3 unchanged sentences

Net Income (Loss) Attributable to AGL

Revenues Expenses Equity in Earnings (Losses) of Investees Provision (Benefit) for Income Taxes Noncontrolling Interests

Revenues Expenses Equity in Earnings (Losses) of Investees Provision (Benefit) for Income Taxes (1) NCI

(in millions)

11 unchanged sentences

Tax effect — — — 17 — ( 17 )

Total consolidated $ 723 $ 536 $ ( 39 ) $ 11 $ 13 $ 124

Consolidated $ 1,373 $ 733 $ 28 $ ( 93 ) $ 22 $ 739

_____________________

(1) Includes $ 189 million of tax benefit related to a Bermuda tax law change, which is included in the Insurance segment.

Income Taxes.

Supplemental Information

10 unchanged sentences

Credit derivative impairment (recoveries) (2) — — 63 — —

Total consolidated $ 403 $ 340 $ ( 26 ) $ 20 $ 361

Consolidated $ 380 $ 359 $ 56 $ 22 $ 383

_____________________

15 unchanged sentences

Credit derivative impairment (recoveries) (2) — — ( 1 ) — —

Total consolidated $ 344 $ 365 $ 162 $ 13 $ 468

Consolidated $ 403 $ 340 $ ( 26 ) $ 20 $ 361

_____________________

13 unchanged sentences

Credit derivative impairment (recoveries) (2) — — ( 2 ) — —

Total consolidated $ 494 $ 269 $ 16 $ 14 $ 425

Consolidated $ 344 $ 365 $ 162 $ 13 $ 468

_____________________

1 unchanged sentence

(2) Credit derivative impairment (recoveries) are included in “fair value gains (losses) on credit derivatives” in the Company’s consolidated statements of operations and in loss and LAE (benefit) on a segment basis.

The table below summarizes revenues for the operating segments, Corporate division and Other category by country of domicile for each period indicated, based on the country of domicile of the Company’s subsidiaries that generated the revenues.

The table below summarizes revenues for the operating segments, the Corporate division and the Other category by country of domicile for each period indicated, based on the country of domicile of the Company’s subsidiaries that generated the revenues.

Assured Guaranty Ltd.

7 unchanged sentences

Bermuda 177 168 166

Other 1 1 ( 1 )

Total $ 976 $ 886 $ 1,267

1 unchanged sentence

The Company sells credit protection primarily in financial guaranty insurance form.

The Company may also sell credit protection by issuing policies that guarantee payment obligations under credit default swaps (CDS).

The Company may also sell credit protection in other forms of insurance or by issuing policies that guarantee payment obligations under credit default swaps (CDS).

The Company’s guaranties of CDS are generally structured such that the circumstances giving rise to the Company’s obligation to make loss payments are similar to those for its financial guaranty insurance contracts.

1 unchanged sentence

The Company also seeks to acquire portfolios of insurance from financial guarantors that are no longer writing new business by acquiring such companies, providing reinsurance on or novating a portfolio of insurance;

in such instances, it evaluates the risk characteristics of the target portfolio, which may include some BIG exposures, as a whole in the context of the proposed transaction.

in such instances, the Company evaluates the risk characteristics of the target portfolio, which may include some BIG exposures, as a whole in the context of the proposed transaction.

The Company diversifies its insured portfolio across sector and geography and, in the structured finance portfolio, generally requires subordination or collateral to protect it from loss.

5 unchanged sentences

Structured finance obligations insured by the Company are generally issued by special purpose entities, including VIEs, and backed by pools of assets having an ascertainable cash flow or market value or other specialized financial obligations.

Some of these VIEs are consolidated as described in Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.

Some of these VIEs are consolidated as described in Note 8.

Variable Interest Entities.

Unless otherwise specified, the outstanding par and debt service amounts presented in this note include outstanding exposures on these VIEs whether or not they are consolidated.

The Company also provides specialty insurance and reinsurance that are consistent with its risk profile and benefit from its underwriting experience and other types of financial guaranties.

The Company also provides specialty insurance and reinsurance and other types of financial guaranties that are consistent with its risk profile and benefit from its underwriting experience.

Significant Risk Management Activities

2 unchanged sentences

It implements specific underwriting procedures and limits and allocates underwriting capacity among the Company’s insurance subsidiaries.

All insurance transactions in new asset classes or new jurisdictions, or otherwise outside the Company’s Board-approved risk appetite statement or its risk limits, must be approved by this committee.

All insurance transactions in new asset classes or new jurisdictions, or otherwise outside the Company’s Board of Directors (the Board or AGL’s Board)-approved risk appetite statement or its risk limits, must be approved by this committee.

The risk management committees of the insurance subsidiaries conduct in-depth reviews of the insured portfolios of the relevant subsidiaries, focusing on varying portions of the portfolio at each meeting.

They review and may revise internal

These committees review and may

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

ratings assigned to the insured transactions and review sector reports, monthly product line surveillance reports and compliance reports.

All transactions in the insured portfolio are assigned internal credit ratings by the relevant underwriting committee at inception, and such credit ratings are updated by the relevant risk management committee based on changes in transaction credit quality.

revise internal ratings assigned to the insured transactions and review sector reports, monthly product line surveillance reports and compliance reports.

All transactions in the insured portfolio are assigned internal credit ratings by the relevant underwriting committee at inception, and such credit ratings are updated by the respective risk management committee based on changes in transaction credit quality.

As part of the surveillance process, the Company monitors trends and changes in transaction credit quality, and recommends such remedial actions as may be necessary or appropriate.

14 unchanged sentences

Below-investment-grade exposures for which future losses are expected, on a present value basis, and the aggregate probability weighting of scenarios with future losses is 50 % or more, and for which claims, other than liquidity claims, have been paid.

For purposes of classifying BIG exposures into one of the three BIG categories, the Company calculates the present value of projected claim payments and recoveries using the pre-tax book yield of the relevant insurance subsidiary’s investment portfolio as the applicable discount rate.

As discussed in Note 4, Expected Loss to be Paid (Recovered), for financial statement measurement purposes, the Company uses risk-free rates (as determined each quarter) for discounting, rather than pre-tax book yield of the investment portfolio, to calculate the expected losses to be paid.

Expected losses to be paid (recovered) are based on probability weighted scenarios and serve as the basis for the loss reserves reported in accordance with U.S.

For purposes of classifying BIG exposures into one of the three BIG categories, the Company calculates the present value of projected claim payments and recoveries using the pre-tax book yield of the investment portfolio as the applicable discount rate.

As discussed in Note 4.

Expected Loss to be Paid (Recovered), for financial statement measurement purposes, the Company uses risk-free rates (as determined each quarter) for discounting, rather than the pre-tax book yield of the investment portfolio, to calculate the expected losses to be paid.

Expected losses to be paid (recovered) are based on probability weighted scenarios and serve as the basis for the loss reserves reported in accordance with GAAP.

Assured Guaranty Ltd.

11 unchanged sentences

The Company has, from time to time, purchased securities that it has insured, and for which it had expected losses to be paid, in order to mitigate the economic effect of insured losses (Loss Mitigation Securities).

The Company excludes amounts attributable to Loss Mitigation Securities from par and debt service outstanding, and instead reports Loss Mitigation Securities in the investment portfolio.

Amounts attributable to Loss Mitigation Securities are excluded from par and debt service outstanding, and are instead reported as Loss Mitigation Securities in the investment portfolio.

The Company manages such securities as investments and not insurance exposure.

As of both December 31, 2024 and December 31, 2023 the Company excluded net par outstanding of $ 1.2 billion attributable to Loss Mitigation Securities.

As of December 31, 2025 and December 31, 2024, the Company excluded net par outstanding of $ 0.8 billion and $ 1.2 billion, respectively, attributable to Loss Mitigation Securities.

Gross debt service outstanding represents the sum of all estimated future debt service payments on the insured obligations, on an undiscounted basis.

14 unchanged sentences

Gross Net Gross Net

(in millions)

(in billions)

Public finance $ 428.5 $ 428.4 $ 403.8 $ 403.7

5 unchanged sentences

Total financial guaranty $ 277.6 $ 277.1 $ 262.0 $ 261.6

In addition to amounts shown in the table above, the Company had outstanding commitments to provide guaranties of $ 196 million of public finance gross par and $ 1.5 billion of structured finance gross par as of December 31, 2024.

These commitments are contingent on the satisfaction of all conditions set forth in the guaranties and may expire unused or be canceled at the counterparty’s request.

Therefore, the total commitment amount does not necessarily reflect actual future guaranteed amounts.

Also, in connection with a potential transaction that would accelerate the run-off of the insured portfolio of Financial Guaranty Insurance Company (FGIC) (the Proposed Transaction) pursuant to the First Amended Plan of Rehabilitation for FGIC, dated June 4, 2013, the Company and FGIC are parties to a novation agreement dated as of February 8, 2024 pursuant to which certain FGIC policies insuring approximately $ 353 million of public finance (including infrastructure) gross par and approximately $ 50 million of structured finance gross par as of December 31, 2023 may in the future be novated to the Company in accordance with the terms and conditions of the novation agreement.

The Proposed Transaction, including the novation of certain FGIC policies to the Company, is subject in all respects to review and approval by NYDFS, the reopening of FGIC’s rehabilitation proceeding, and ultimate approval by the Supreme Court of the State of New York.

On September 10, 2024, following the NYDFS’s review of the Proposed Transaction and information submitted by FGIC, FGIC received a written communication from the NYDFS stating that the NYDFS does not support the Proposed Transaction.

In the event the Proposed Transaction does not occur on or prior to September 30, 2025, either the Company or FGIC has the right to terminate the novation agreement in accordance with its terms.

The Company and Financial Guaranty Insurance Company (FGIC) had been parties to a novation agreement, dated as of February 8, 2024 (Novation Agreement) pursuant to which certain FGIC policies insuring approximately $ 353 million of public finance (including infrastructure) gross par and approximately $ 50 million of structured finance gross par as of December 31, 2023 could in the future have been novated to the Company in accordance with the terms and conditions of the Novation Agreement.

The Company terminated the Novation Agreement effective October 6, 2025.

Financial Guaranty Portfolio by Internal Rating

10 unchanged sentences

Outstanding %

(dollars in millions)

(dollars in billions)

AAA $ — — % $ 1.8 3.5 % $ 0.5 5.8 % $ 0.5 12.6 % $ 2.8 1.0 %

4 unchanged sentences

Total net par outstanding $ 215.0 100.0 % $ 50.6 100.0 % $ 7.9 100.0 % $ 3.6 100.0 % $ 277.1 100.0 %

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Financial Guaranty Portfolio by Internal Rating

10 unchanged sentences

Outstanding %

(dollars in millions)

(dollars in billions)

AAA $ — — % $ 2.1 4.2 % $ 0.5 6.1 % $ 0.5 17.3 % $ 3.1 1.2 %

11 unchanged sentences

Sector 2025 2024

(in millions)

(in billions)

Public finance:

7 unchanged sentences

Higher education 8.4 7.3

Housing revenue 1,272 1,152

Investor-owned utilities 325 329

Renewable energy 0.2 0.2

1 unchanged sentence

public finance 215.0 201.2

Non-U.S public finance:

public finance:

Regulated utilities 23.5 22.3

8 unchanged sentences

structured finance:

Insurance securitizations 4,495 4,379

RMBS 1,507 1,774

Insurance reserve financings and securitizations 4.4 4.5

Pooled corporate obligations 0.6 0.6

Financial products 0.4 0.5

Consumer receivables 212 314

Subscription finance facilities 185 178

Fund finance facilities 0.1 0.2

Other structured finance 1.0 1.2

1 unchanged sentence

structured finance:

Subscription finance facilities 1,385 444

Fund finance facilities 1.6 1.4

Pooled corporate obligations 0.5 0.5

Other structured finance 1.3 0.6

Total non-U.S structured finance 2,724 1,225

Total non-U.S.

structured finance 3.6 2.7

Total structured finance 11.5 11.2

6 unchanged sentences

Public Finance Structured Finance Total

(in millions)

(in billions)

0 to 5 years $ 56.1 $ 6.7 $ 62.8

4 unchanged sentences

Total net par outstanding $ 265.6 $ 11.5 $ 277.1

Actual amortization differs from expected maturities due to prepayments and terminations, and because interest rates, consumer price indices, foreign exchange rates and expected terms may be different than management had estimated.

Actual amortization may differ from expected maturities due to prepayments and terminations, and because interest rates, consumer price indices, foreign exchange rates and expected terms may be different than management had estimated.

The expected maturities of structured finance obligations are, in general, shorter than their contractual maturities.

2 unchanged sentences

As of December 31, 2025

BIG Net Par Outstanding Net Par

BIG 1 BIG 2 BIG 3 Total BIG Outstanding

(in millions)

BIG Net Par Outstanding

BIG 1 BIG 2 BIG 3 Total BIG

(in billions)

Public finance:

10 unchanged sentences

As of December 31, 2024

BIG Net Par Outstanding Net Par

BIG 1 BIG 2 BIG 3 Total BIG Outstanding

(in millions)

BIG Net Par Outstanding

BIG 1 BIG 2 BIG 3 Total BIG

(in billions)

Public finance:

18 unchanged sentences

Derivatives Total

(dollars in millions)

(dollars in billions)

BIG 1 $ 3.71 $ 0.03 $ 3.74 87 3 90

11 unchanged sentences

Derivatives Total

(dollars in millions)

(dollars in billions)

BIG 1 $ 8.07 $ 0.03 $ 8.10 98 3 101

5 unchanged sentences

(2) A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments.

When the Company insures an obligation, it assigns the obligation to a geographic location or locations based on its view of the geographic location of the risk.

When the Company insures an obligation, it assigns the obligation to one or more geographic location based on its view of the geographic location of the risk.

The Company seeks to maintain a diversified portfolio of insured obligations designed to spread its risk across a number of geographic areas.

5 unchanged sentences

Number of Risks Net Par Outstanding Percent of Total Net Par Outstanding

(dollars in millions)

(dollars in billions)

public finance:

15 unchanged sentences

Australia 7 1.9 0.7

Spain 9 1,506 0.6

France 6 1.8 0.7

Spain 10 1.8 0.6

Canada 4 1.2 0.4

8 unchanged sentences

Gross Exposure Net Exposure Gross Exposure Net Exposure

(in millions)

(in billions)

Diversified real estate (1) $ 2.0 $ 2.0 $ 2.0 $ 2.0

Insurance securitizations (2) 1,449 1,126 1,370 1,043

Insurance reserve financings and securitizations 1.5 1.2 1.4 1.1

Pooled corporate obligations 0.9 0.9 0.9 0.9

Aircraft residual value insurance 147 87 355 200

Aircraft residual value insurance (RVI) 0.2 0.1 0.2 0.1

____________________

(1) Excess-of-loss guaranty of a minimum amount of billed rent on a diversified portfolio of real estate properties with an internal rating of AAA that matures in 2044.

This guaranty is accounted for in accordance with Accounting Standards Codification (ASC) 460, Guarantees.

(2) Insurance securitizations exposure is projected to reach $ 1.5 billion gross and $ 1.2 billion net in 2025.

(1) An excess-of-loss guaranty of a minimum amount of billed rent on a diversified portfolio of real estate properties with an internal rating of AAA that matures in 2044.

This guaranty is accounted for in accordance with ASC 460, Guarantees.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

All exposures in the table above are rated investment-grade, except for aircraft residual value insurance gross and net exposure of $ 5 million as of December 31, 2024 and gross exposure of $ 144 million and net exposure of $ 84 million as of December 31, 2023.

In addition to the amounts shown in the table above, as of December 31, 2024, the Company had outstanding aggregate gross and net aircraft residual value insurance commitments of $ 90 million and $ 51 million, respectively.

All exposures in the table above are rated investment-grade, except for aircraft RVI gross and net exposure of $ 5 million as of both December 31, 2025 and December 31, 2024.

In addition to the exposure disclosed above, the Company had outstanding commitments to provide financial guaranties of $ 0.3 billion of public finance gross par and $ 2.1 billion of structured finance gross par as of December 31, 2025.

These commitments are contingent on the satisfaction of specified conditions and may expire unused or be cancelled at the request of the respective counterparty.

Therefore, the total commitment amount does not necessarily reflect actual future covered amounts .

Therefore, the total commitment amount does not necessarily reflect actual future guaranteed amounts .

Expected Loss to be Paid (Recovered)

9 unchanged sentences

Expected loss to be paid (recovered) is important in that it represents the present value of amounts that the Company expects to pay or recover in future periods.

The Company removes any related expected loss to be paid (recovered) associated with Loss Mitigation Securities.

The Company removes any expected loss to be paid (recovered) associated with Loss Mitigation Securities.

For Loss Mitigation Securities, the difference between the purchase price of the insured obligation and the fair value excluding the value of the Company’s insurance (on the date of acquisition) is treated as a paid loss.

See Note 7, Investments and Cash, and Note 9, Fair Value Measurement.

Similarly, in cases where issuers of insured obligations elected (or where an issuer and the Company negotiated) to deliver the underlying collateral, insured obligation or a new security to the Company, expected loss to be paid (recovered) is adjusted accordingly and the asset received is prospectively accounted for under the applicable guidance for that instrument.

Investments and Cash, and Note 9.

Fair Value Measurement.

Similarly, in cases where issuers of insured obligations elected (or where an issuer and the Company negotiated) to deliver the underlying collateral, insured obligation or a new security to the Company, expected loss to be paid (recovered) is adjusted accordingly and the asset received is prospectively recorded based on the applicable GAAP guidance for that instrument.

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.

In order to effectively evaluate and manage the economics and liquidity of the entire insured portfolio, management assigns ratings and calculates expected loss to be paid (recovered), on a contract-by-contract basis, in the same manner for all its exposures regardless of form or differing accounting models.

The exposure reported in Note 3, Outstanding Exposure, includes policies accounted for under various accounting models depending on the characteristics of the contract and the Company’s control rights.

The exposure reported in Note 3.

Outstanding Exposure, includes policies accounted for under various accounting models depending on the characteristics of the contract and the Company’s control rights.

The three primary models are:

(i) insurance, as described in Note 5, Contracts Accounted for as Insurance;

(ii) derivatives, as described in Note 6, Contracts Accounted for as Credit Derivatives, and Note 9, Fair Value Measurement;

and (iii) FG VIE consolidation, as described in Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.

(i) insurance, as described in Note 5.

Contracts Accounted for as Insurance;

(ii) derivatives, as described in Note 6.

Contracts Accounted for as Credit Derivatives, and Note 9.

Fair Value Measurement;

and (iii) FG VIE consolidation, as described in Note 8.

Variable Interest Entities.

The Company has paid and may pay future claims and/or recover past claims on policies which fall under each of these accounting models.

3 unchanged sentences

As a result, the Company’s estimate of ultimate loss on a policy is subject to significant uncertainty over the life of the insured transaction.

Credit performance can be affected by, among other things, economic, fiscal and financial market and political developments over the life of most contracts.

The Company guarantees payment of interest and principal when those amounts are scheduled to be paid and cannot be required to pay on an accelerated basis, although in certain

Credit performance can be affected by, among other things, economic, fiscal and financial conditions and political developments over the life of most contracts.

The Company guarantees payment of interest and principal when those amounts are scheduled to be paid and cannot be required to pay on an accelerated basis, although in

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

circumstances it may elect to do so.

certain circumstances it may elect to do so.

When obligors default on their obligations, the Company is only required to pay the shortfall between the debt service due in any given period and the amount paid by the obligors.

3 unchanged sentences

Each quarter, the Company may revise its scenarios and update its assumptions, including the probability weightings of its scenarios, based on public as well as nonpublic information obtained through its surveillance and loss mitigation activities.

Changes over a reporting period in the Company’s loss estimates for public finance obligations supported by specified revenue streams, such as revenue bonds issued by toll road authorities, municipal utilities, airport authorities or healthcare systems, generally will be influenced by factors impacting their revenue levels, such as changes in demand;

Changes over a reporting period in the Company’s loss estimates for public finance obligations supported by specified revenue streams, such as revenue bonds issued by toll road authorities, municipal and regulated utilities, airport authorities or healthcare systems, generally will be influenced by factors impacting their revenue levels, such as changes in demand;

changing demographics;

and other economic factors, especially if the obligations do not benefit from financial support from other tax revenues or governmental authorities.

and other economic and regulatory factors, especially if the obligations do not benefit from financial support from other tax revenues or governmental authorities.

Changes over a reporting period in the Company’s loss estimates for its tax-supported and general obligation public finance transactions generally will be influenced by factors impacting the public issuer’s ability and willingness to pay, such as changes in the economy and population of the relevant area;

2 unchanged sentences

rating agency actions that affect the issuer’s ability to refinance maturing obligations or issue new debt at a reasonable cost;

changes in the priority or amount of pensions and other obligations owed to workers;

changes in the priority and amount of pensions and other obligations owed to workers;

developments in restructuring or settlement negotiations;

2 unchanged sentences

Changes in the Company’s loss estimates for structured finance transactions can be influenced by the performance of the assets supporting those transactions, by macroeconomic factors and by specific actions taken to mitigate losses.

For example, changes over a reporting period in the Company’s loss estimates for its RMBS transactions may be influenced by factors such as prepayments, the level and timing of loan defaults experienced, changes in housing prices, discount rates and results from the Company’s loss mitigation activities.

For example, changes over a reporting period in the Company’s loss estimates for its RMBS transactions may be influenced by factors such as the level, timing and severity of loan defaults experienced, changes in housing prices, discount rates, prepayments and the results of the Company’s loss mitigation activities.

In recent years, expected losses to be paid (recovered) for U.S.

2 unchanged sentences

As a result, the Company’s current projections of certain losses may be subject to considerable uncertainty and may not reflect the Company’s ultimate claims paid.

In some instances, the terms of the Company’s policy or the terms of certain workout orders and resolutions give it the option to pay principal losses that have been recognized in the transaction but which it is not yet required to pay, thereby reducing the amount of guaranteed interest due in the future.

In some instances, the terms of the Company’s policy or the terms of certain workout orders and resolutions give the Company the option to pay principal losses that have been recognized in the transaction but which it is not yet required to pay, thereby reducing the amount of guaranteed interest due in the future.

The Company has sometimes exercised this option, which results in an acceleration of cash outflows but reduces overall losses paid.

18 unchanged sentences

Total $ 101 $ 106 $ ( 9 ) $ ( 3 ) $ 164

____________________

(1) In 2023, the net expected loss to be paid for FG VIEs primarily related to trusts established as a result of the Company’s resolution in 2022 of exposure to insured Puerto Rico credits experiencing payment default other than PREPA (2022 Puerto Rico Resolutions) (Puerto Rico Trusts), and in 2024 the Company satisfied its remaining direct insured obligations and deconsolidated the remaining Puerto Rico Trusts.

The following tables present a roll forward of net expected loss to be paid (recovered) for all contracts, which are accounted for under one of the following accounting models:

insurance, derivative or FG VIE.

The Company used risk-free rates that ranged from 1.98 % to 5.22 % with a weighted average of 4.38 % as of December 31, 2024 and 1.90 % to 5.40 % with a weighted average of 4.09 % as of December 31, 2023.

The Company used risk-free rates for U.S.

currencies that ranged from 1.93 % to 5.35 % with a weighted average of 3.92 % as of December 31, 2025 and 1.98 % to 5.22 % with a weighted average of 4.38 % as of December 31, 2024.

Net Expected Loss to be Paid (Recovered)

11 unchanged sentences

____________________

(1) Net (paid) recovered losses includes (i) securities received as recoveries in 2022 in connection with the 2022 Puerto Rico Resolutions, and in 2023 in connection with the satisfaction of insurance obligations in the Puerto Rico Trusts, and (ii) claims paid in 2022, 2023 and 2024 to extinguish certain insured Puerto Rico exposures.

(1) 2025 amounts include recoveries recognized in connection with the resolution of the LBIE litigation.

Contracts Accounted for as Credit Derivatives, for additional information.

(2) Net (paid) recovered losses includes (i) securities received as recoveries in 2023 in connection with the satisfaction of insurance obligations in the Puerto Rico Trusts, and (ii) claims paid in 2024 and 2023 to extinguish certain insured Puerto Rico exposures.

Assured Guaranty Ltd.

14 unchanged sentences

Other structured finance (2) 33 ( 63 ) 90 60

44 — ( 11 ) 33

Structured finance ( 10 ) ( 106 ) 122 6

15 unchanged sentences

Total $ 505 $ ( 3 ) $ ( 396 ) $ 106

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Year Ended December 31, 2023

14 unchanged sentences

____________________

(1) Net of ceded paid losses, whether or not such amounts have been settled with reinsurers.

(1) Amounts are net of ceded paid losses, whether or not such amounts have been settled with reinsurers.

Ceded paid losses are typically settled 45 days after the end of the reporting period.

Such amounts are recorded as reinsurance recoverable on paid losses in “other assets.”

The tables above include (i) net LAE paid of $ 30 million, $ 25 million and $ 33 million for the years ended

(2) 2025 amounts include recoveries recognized in connection with the resolution of the LBIE litigation.

Contracts Accounted for as Credit Derivatives, for additional information.

Includes cash proceeds for recoveries related to amounts previously paid.

The tables above include (i) net LAE paid (recovered) of $( 47 ) million, $ 30 million and $ 25 million for the years ended December 31, 2025, 2024 and 2023, respectively;

and (ii) net expected LAE to be paid of $ 8 million as of December 31, 2025 and $ 11 million as of December 31, 2024.

Public Finance

The largest components of the public finance net expected losses to be paid (recovered) relate to certain insured healthcare and U.K.

regulated utility exposures, as well as Puerto Rico Electric Power Authority (PREPA).

The total net expected loss to be paid for public finance exposures is net of expected recoveries of $ 311 million and $ 265 million as of December 31, 2025 and December 31, 2024, respectively, for certain claims and LAE that have already been paid.

In 2025, the economic loss development for public finance transactions was primarily attributable to PREPA, certain U.K.

student accommodation exposures, certain healthcare exposures and certain U.K.

regulated utility exposures.

As of December 31, 2025, the Company had £ 1.8 billion (or $ 2.4 billion) of net par outstanding of Thames Water Utilities Finance PLC (Thames), a BIG rated U.K.

regulated utility.

The Company, as part of the Thames senior Class A creditor group, continues to engage the Water Services Regulation Authority (the governmental body responsible for the economic regulation of the privatized water and sewage industry in England and Wales, or Ofwat), His Majesty’s Treasury and other members of the U.K.

Government in restructuring negotiations, and is taking other actions to work out this insured credit.

The first scheduled principal payment that comes due under the Company’s Thames exposure is in 2037.

The Company is actively working to mitigate losses and reduce risk.

Although uncertainty remains, the Thames creditors and Ofwat are engaged in discussions regarding a comprehensive settlement to restructure and recapitalize Thames.

European Renewable Energy and U.K.

Student Accommodation Transactions

As of December 31, 2025, the Company had insured net par of € 773 million (or $ 908 million) related to BIG European renewable energy transactions that are experiencing operational strain, and £ 292 million (or $ 393 million) in BIG U.K.

student accommodation transactions that are experiencing weak occupancy rates and financial strain.

The Company has guaranteed project financings involving National Health Service (NHS) Trusts.

As of December 31, 2025, the Company had £ 413 million (or $ 557 million) of BIG net par outstanding related to NHS Trusts.

Proceeds from the

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

December 31, 2024, 2023 and 2022, respectively, and, (ii) net expected LAE to be paid of $ 11 million as of December 31, 2024 and $ 22 million as of December 31, 2023.

Public Finance

The largest components of the public finance net expected losses to be paid (recovered) relate to certain healthcare and U.K.

regulated utilities exposures.

The total net expected loss to be paid for U.S.

public finance exposures is net of an expected recovery of certain claims already paid of $ 262 million and $ 193 million as of December 31, 2024 and December 31, 2023, respectively.

In 2024, the economic loss development for public finance transactions was primarily attributable to higher expected losses for certain U.K.

regulated utilities and certain Puerto Rico exposures, as well as changes in discount rates.

Regulated Utilities and European Renewable Energy

In the third quarter of 2024, the Company internally downgraded to BIG certain U.K.

regulated utilities and European renewable energy transactions that are experiencing operational strain, high financing costs and/or other capital constraints.

financings funded new and refurbished hospital buildings and facilities in the service area of the particular NHS Trust.

Certain of the bond issuers are involved in negotiations (including in some cases triggered by contract disputes) with the relevant NHS Trusts regarding various matters including the condition of the hospital facilities and service standards.

The Company takes into account in its internal ratings the nature and severity of any disputes.

Certain BIG healthcare exposures are experiencing rising labor costs due to competition for labor and shortages in certain markets.

Additionally, inflation has increased the cost of medical supplies, medical equipment and pharmacy products, while U.S.

hospitals with large Medicaid and Medicare payor mixes have not seen reimbursement levels keep pace with rising costs.

hospitals with large Medicaid and Medicare payor mixes have not seen reimbursement levels keep pace with rising costs and may be further impacted by recent cuts to Medicaid funding that will go into effect in 2026 and 2027.

The combined revenue and expense challenges have led to cash flow and liquidity stress in certain transactions.

In addition, certain credits are struggling to make necessary capital expenditures and improvements to facilities.

All of the Company’s insured exposure to the Commonwealth of Puerto Rico (Puerto Rico or the Commonwealth) and its various authorities and public corporations is rated BIG.

Puerto Rico net par and net debt service outstanding as of December 31, 2024 were $ 637 million and $ 756 million respectively, compared with net par and net debt service outstanding as of December 31, 2023 of $ 1,105 million and $ 1,508 million, respectively.

In 2024, the Company satisfied its remaining direct PRHTA insured obligations.

All of the Company’s exposure to the Commonwealth of Puerto Rico (Puerto Rico or the Commonwealth) and its various authorities and public corporations is rated BIG.

The Company’s Puerto Rico net par and net debt service outstanding as of December 31, 2025 were $ 553 million and $ 643 million, respectively, compared with net par and net debt service outstanding as of December 31, 2024 of $ 637 million and $ 756 million, respectively.

Defaulting Puerto Rico Exposure

As of December 31, 2024, the Company’s only unresolved outstanding insured Puerto Rico exposure subject to a payment default was the Puerto Rico Electric Power Authority (PREPA), which had net par and debt service outstanding of $ 532 million and $ 629 million, respectively.

As of December 31, 2023, PREPA net par and debt service outstanding were $ 624 million and $ 751 million, respectively.

As of December 31, 2025, the Company’s only unresolved outstanding insured Puerto Rico exposure subject to a payment default was PREPA.

As of December 31, 2025, the Company’s PREPA net par and debt service outstanding were $ 464 million and $ 537 million, respectively.

As of December 31, 2024, the Company’s PREPA net par and debt service outstanding were $ 532 million and $ 629 million, respectively.

The PREPA bonds are secured by a lien on the net revenues of the electric system.

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The Company has taken legal action, and may take additional legal action in the future, to enforce its rights with respect to the remaining Puerto Rico obligations it still insures.

In addition, the Commonwealth, the Financial Oversight and Management Board (the FOMB) and others have taken legal action naming the Company as a party.

In addition, the Commonwealth, the Financial Oversight and Management Board (FOMB) established under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) and others have taken legal action naming the Company as a party.

Certain legal actions involving the Company and relating to defaults by the Commonwealth and its authorities and public corporations were resolved in 2022.

The remaining proceedings relate to PREPA’s default, including recently active proceedings and a number of proceedings that remain stayed pending the United States District Court of the District of Puerto Rico’s (Federal District Court of Puerto Rico) determination on the FOMB PREPA Plan, as described below.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

PREPA – Current Proceedings

On April 8, 2022, the Federal District Court of Puerto Rico issued an order appointing three U.S.

Bankruptcy Judges as members of a PREPA mediation team.

The Federal District Court of Puerto Rico also entered a separate order establishing the terms and conditions of mediation.

Plan of Adjustment and Disclosure Statement.

The FOMB which was established under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) filed an initial plan of adjustment and disclosure statement for PREPA with the Federal District Court of Puerto Rico on December 16, 2022.

On November 17, 2023, the Federal District Court of Puerto Rico approved the supplemental disclosure statement (Supplemental Disclosure Statement) supporting the PREPA plan of adjustment filed by the FOMB (as amended or modified from time to time).

On February 16, 2024, the FOMB filed with the Federal District Court of Puerto Rico its most recent plan of adjustment for PREPA, the Modified Fourth Amended Title III Plan of Adjustment (FOMB PREPA Plan).

The Supplemental Disclosure Statement and the FOMB PREPA Plan are based on the last revised PREPA fiscal plan certified by the FOMB on June 23, 2023.

The confirmation hearing for the FOMB PREPA Plan occurred in March 2024.

At the end of the hearing, the Federal District Court of Puerto Rico stated that it was taking the confirmation of the FOMB PREPA Plan under advisement and gave no indication of timing for an opinion or order.

The remaining proceedings relate to PREPA’s default, including two recently active proceedings and a number of proceedings that remain stayed pending the U.S.

District Court for the District of Puerto Rico’s (Federal District Court of Puerto Rico) determination on a plan of adjustment and disclosure statement, as described below.

PREPA – Recently Active Proceedings

Lien Challenge Adversary Proceeding and Appeal.

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Subject to their appeal of the Federal District Court of Puerto Rico’s ruling on the scope of lien, PREPA bondholders had sought an unsecured net revenue claim of approximately $ 8.5 billion.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

On November 28, 2023, the Federal District Court of Puerto Rico finally adjudicated all claims and counterclaims in the PREPA lien challenge adversary proceeding.

On November 30, 2023, the Company filed a notice of appeal with the United States Court of Appeals for the First Circuit (First Circuit) for portions of the March 22, 2023 decision, including the lien scope ruling and the need for a claim estimation proceeding, as well as the June 26, 2023 claim estimation ruling.

On November 30, 2023, the Company filed a notice of appeal with the U.S.

Court of Appeals for the First Circuit (First Circuit) for portions of the March 22, 2023 decision, including the lien scope ruling and the need for a claim estimation proceeding, as well as the June 26, 2023 claim estimation ruling.

On June 12, 2024, the First Circuit held that bondholders have a claim against PREPA for the full principal amount of the bonds, plus matured interest, that there was no need for a claim estimation proceeding because the PREPA bonds specify the amount that PREPA legally owes bondholders, and that the claim is secured by PREPA’s net revenues, including future net revenues.

The FOMB asked the First Circuit to reconsider its determination that bondholders’ security interest in future net revenues is perfected twice, once on June 26, 2024, and again on November 27, 2024.

The First Circuit denied both requests, with the most recent denial published on December 31, 2024.

PREPA Mediation and Stayed Proceedings

On July 10, 2024, the Federal District Court of Puerto Rico ordered the FOMB and bondholders to resume mediation and instituted a 60-day stay of all PREPA litigation.

The Federal District Court of Puerto Rico most recently extended the PREPA litigation stay through March 24, 2025 and the term of mediation through April 30, 2025.

The following proceedings involving the Company and relating to the default by PREPA remain stayed in the Federal District Court of Puerto Rico pending its determination on the FOMB PREPA Plan:

• AG motion to compel the FOMB to certify the PREPA restructuring support agreement executed in May 2019 (PREPA RSA) for implementation under Title VI of PROMESA.

• AG motion to dismiss PREPA’s Title III Bankruptcy proceeding or, in the alternative, to lift the PROMESA automatic stay to allow for the appointment of a receiver.

In both instances, the First Circuit upheld its determination, with the most recent decision published on December 31, 2024.

Bondholders’ Administrative Expense Claim .

In light of the decision by the First Circuit described above in Lien Challenge Adversary Proceeding and Appeal, in March 2025, the Federal District Court of Puerto Rico ordered the parties to propose an agreed proposal or competing proposals for a litigation schedule for resolving certain key issues related to PREPA bondholders’ claims, including determining whether the bondholders’ perfected lien described above includes collateral used for PREPA’s administrative expenses, prior to a further plan confirmation hearing.

If the bondholders succeed in establishing that their perfected lien includes collateral used for PREPA’s administrative expenses, PREPA would be required under the U.S.

Bankruptcy Code to pay such claims in full in cash prior to exiting bankruptcy.

On March 13, 2025, the parties submitted competing proposals.

At an Omnibus Hearing held on March 19, 2025, the Federal District Court of Puerto Rico indicated that it would allow the bondholders, including the Company, to litigate an administrative expense claim based on PREPA’s post-petition use of the bondholders’ collateral and that the parties could revisit the possibility of litigating other key issues at a later time.

On November 24, 2025, the parties submitted to the Federal District Court of Puerto Rico a joint status report for the administrative expense claim.

On December 9, 2025, the Federal District Court of Puerto Rico ordered a schedule to finalize the scope of discovery production for the administrative expense claim but deferred setting a schedule for expert discovery and evidentiary proceedings;

a briefing on outstanding issues related to the discovery production was completed on February 6, 2026.

Financial Oversight and Management Board for Puerto Rico

In August 2025, the FOMB announced that the U.S.

administration terminated six of its seven board members.

On September 18, 2025, three of the terminated board members sued the U.S.

administration for reinstatement, alleging that they had been unlawfully terminated without cause and that their offices are a form of property protected by due process.

On October 3, 2025, the Federal District Court of Puerto Rico granted the plaintiffs’ request for a preliminary injunction.

On December 2, 2025, the U.S.

administration filed a notice of appeal of the preliminary injunction to the First Circuit.

Subsequently, the U.S.

administration requested a stay pending the U.S.

Supreme Court’s decision in Trump v.

Cook , a case involving related questions of the powers of the U.S.

President to terminate a member of the Federal Reserve Board of Governors;

the requested stay was unopposed and granted on December 30, 2025.

Oral arguments in the Trump v.

Cook case were heard on January 21, 2026, with a decision expected to follow by the end of the U.S.

Supreme Court’s current term in late June or early July 2026.

Mediation and PREPA Litigation Stay

On July 10, 2024, the Federal District Court of Puerto Rico ordered the FOMB and bondholders to resume mediation and instituted a 60-day stay of all PREPA litigation, subsequently extending mediation and the litigation stay several times.

Following the Omnibus Hearing held on March 19, 2025, the Federal District Court of Puerto Rico partially lifted the PREPA litigation stay and indicated that the PREPA litigation stay otherwise remains in place for the time being.

The Federal District Court of Puerto Rico most recently extended the term of mediation through April 30, 2026.

Plan of Adjustment, Disclosure Statement and Related Stayed Proceedings

The FOMB filed an initial plan of adjustment and disclosure statement for PREPA with the Federal District Court of Puerto Rico on December 16, 2022.

On November 17, 2023, the Federal District Court of Puerto Rico approved a supplemental disclosure statement (Supplemental Disclosure Statement) relating to the PREPA plan of adjustment filed by the FOMB (as amended or modified from time to time).

On February 16, 2024, the FOMB filed with the Federal District Court of Puerto Rico the Modified Fourth Amended Title III Plan of Adjustment (Fourth FOMB PREPA Plan).

The Supplemental Disclosure

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

• Adversary complaint by certain fuel line lenders of PREPA against AG, among other parties, including various PREPA bondholders and bond insurers, seeking, among other things, declarations that there is no valid lien securing the PREPA bonds unless and until such lenders are paid in full, as well as orders subordinating the PREPA bondholders’ lien and claims to such lenders’ claims, and declaring the PREPA RSA null and void.

• AG motion to intervene in lawsuit by the retirement system for PREPA employees against, among others, the FOMB, PREPA, the Commonwealth, and the trustee for PREPA bondholders seeking, among other things, declarations that there is no valid lien securing the PREPA bonds other than on amounts in the sinking funds, and order subordinating the PREPA bondholders’ lien and claim to the PREPA employees’ claims.

Statement and the Fourth FOMB PREPA Plan are based on the PREPA fiscal plan certified by the FOMB on June 23, 2023.

The confirmation hearing for the Fourth FOMB PREPA Plan occurred in March 2024.

At the end of the hearing, the Federal District Court of Puerto Rico stated that it was taking the confirmation of the Fourth FOMB PREPA Plan under advisement.

As directed by the Federal District Court of Puerto Rico, the FOMB filed on March 28, 2025 its Fifth Amended Title III Plan of Adjustment and related Disclosure Statement for informational purposes of the parties.

The following proceedings involving the Company and relating to the default by PREPA remain stayed in the Federal District Court of Puerto Rico pending its determination on a plan of adjustment and disclosure statement:

• The Company’s motion to compel the FOMB to certify the PREPA restructuring support agreement executed in May 2019 (PREPA RSA) for implementation under Title VI of PROMESA.

• The Company’s motion to dismiss PREPA’s Title III Bankruptcy proceeding or, in the alternative, to lift the PROMESA automatic stay to allow for the appointment of a receiver.

• Adversary complaint by certain fuel line lenders of PREPA against the Company, among other parties, including various PREPA bondholders and bond insurers, seeking, among other things, declarations that there is no valid lien securing the PREPA bonds unless and until such lenders are paid in full, as well as orders subordinating the PREPA bondholders’ lien and claims to such lenders’ claims, and declaring the PREPA RSA null and void.

• The Company’s motion to intervene in a lawsuit by the retirement system for PREPA employees against, among others, the FOMB, PREPA, the Commonwealth and the trustee for PREPA bondholders seeking, among other things, declarations that there is no valid lien securing the PREPA bonds other than on amounts in the sinking funds, and order subordinating the PREPA bondholders’ lien and claim to the PREPA employees’ claims.

Non-Defaulting Puerto Rico Exposure

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RMBS Loss Projections

The Company projects losses on its insured U.S.

RMBS on a transaction-by-transaction basis by projecting the performance of the underlying pool of mortgages over time and then applying the structural features (e.g., payment priorities and tranching) of the RMBS and any expected representation and warranty recoveries/payables to the projected performance of the collateral over time.

The Company projects losses (and recoveries) on its insured U.S.

RMBS on a transaction-by-transaction basis by projecting the future cash flow of the underlying collateral pool of mortgages over time.

The Company then uses individual models for each transaction to project the Company’s future claims and claim reimbursements based upon these collateral cashflow projections, the payment priorities among the transaction liabilities, and assumptions about future market conditions.

The resulting projected claim payments or reimbursements are then discounted using risk-free rates.

The rate at which borrowers from a particular delinquency category (number of monthly payments behind) eventually default is referred to as the “liquidation rate.” The Company derives its liquidation rate assumptions from observed roll rates, which are the rates at which loans progress from one delinquency category to the next and eventually to default and liquidation.

The Company applies liquidation rates to the mortgage loan collateral in each delinquency category and makes certain timing assumptions to project near-term mortgage collateral defaults from loans that are currently delinquent.

Each quarter the Company reviews recent third party data and (if necessary) adjusts its liquidation rates based on its observations.

Performing borrowers that eventually default will also need to progress through delinquency categories before any defaults occur.

The Company projects how many of the currently performing loans will default and when they will default, by first converting the projected near term defaults of delinquent borrowers derived from liquidation rates into a vector of conditional default rates (CDR), then projecting how the CDR will develop over time.

While the Company uses the liquidation rates to project defaults of non-performing loans (including current loans that were recently modified or delinquent), it projects defaults on presently current loans by applying a CDR curve.

The start of that CDR curve is based on the defaults the Company projects will emerge from currently nonperforming, recently nonperforming and modified loans.

The total amount of expected defaults from the non-performing loans is translated into a constant CDR (i.e., the CDR plateau), which, if applied for each of the next 36 months, results in the projection of the defaults that are expected to emerge from the various delinquency categories.

The CDR thus calculated individually on the delinquent collateral pool for each RMBS is then used as the starting point for the CDR curve used to project defaults of the presently performing loans.

In order to derive collateral pool losses from the collateral pool defaults it has projected, the Company applies a loss severity.

The loss severity is the amount of loss the transaction experiences on a defaulted loan after the application of net proceeds from the disposal of the underlying property.

The Company projects loss severities by sector and vintage based on its experience to date.

The Company continues to update its evaluation of these loss severities as new information becomes available.

The Company incorporates a recovery assumption into its loss modeling to reflect observed trends in recoveries of deferred principal balances of modified first lien loans that had been previously written off.

For transactions where the Company has detailed loan information, the Company assumes that a percentage of the deferred loan balances will eventually be recovered upon sale of the collateral or refinancing of the loans.

In 2024, due to observed trends and high levels of home equity, the Company increased its scenario-based recovery assumptions such that the weighted average recovery percentage increased from 30 % to approximately 50 %.

The effect of these updated assumptions on expected losses was a benefit of $ 15 million in 2024.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

When a second lien loan defaults, there is generally a low recovery.

The Company assumed that it will generally recover 2 % of future defaulting collateral at the time of charge-off.

Additional amounts of post charge-off recoveries are projected to come in evenly over the next five years in instances where the Company is able to obtain information on the lien status and the second lien is still intact.

The Company evaluates its assumptions quarterly based on actual recoveries of charged-off loans observed from period to period and reasonable expectations of future recoveries.

During 2024, due to observed trends and high levels of home equity, the Company updated its assumptions of such recoveries to reflect a base scenario and a weighted average recovery of 50 %, up from 40 %, which resulted in a benefit of $ 29 million.

The Company projects the overall future cash flow from a collateral pool by adjusting the payment stream from the principal and interest contractually due on the underlying mortgages for the collateral losses it projects as described above;

assumed voluntary prepayments;

and servicer advances.

The Company then applies an individual model of the structure of the transaction to the projected future cash flow from that transaction’s collateral pool to project the Company’s future claims and claim reimbursements for that individual transaction.

Finally, the projected claims and reimbursements are discounted using risk-free rates.

The Company runs several sets of assumptions regarding mortgage collateral performance, or scenarios, which are probability weighted.

Each period the Company reviews the assumptions it uses to make RMBS loss projections with consideration of updates on the performance of its insured transactions (including early-stage delinquencies, late-stage delinquencies and loss severity) as well as the residential property market and economy in general.

Each period the Company reviews the assumptions it uses to make RMBS loss and recovery projections based upon the performance of its insured transactions as well as the residential property market, interest rate environment and economy in general.

To the extent it observes changes, it makes a judgment as to whether those changes are normal fluctuations or part of a more prolonged trend.

Expected losses are also a function of the structure of the transaction, the prepayment speeds of the collateral, the interest rate environment and assumptions about loss severity.

Net Economic Loss Development (Benefit)

Year Ended December 31,

The loss and recovery projections for insured RMBS are affected by a variety of assumptions including:

(i) the rate at which borrowers from a particular delinquency category (number of monthly payments behind) eventually default (which is referred to as the “liquidation rate”), (ii) projections of how many of the currently performing loans will default and when they will default, (iii) loss severity, which is the amount of loss the transaction experiences on a defaulted loan after the application of net proceeds from the disposal of the underlying property, and (iv) recovery assumptions to reflect observed trends in recoveries of principal balances of modified loans that had been previously written off.

In recent years, the two primary drivers of changes in expected loss have been the projected and actual recoveries on previously written off or deferred loan balances, and changes in discount rates.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Expected Loss to be Paid (Recovered) and Net Economic Loss Development (Benefit)

Net Expected Loss to be Paid (Recovered) Economic Loss Development (Benefit)

As of December 31, Year Ended December 31,

2025 2024 2025 2024 2023

(in millions)

(dollars in millions)

First lien U.S.

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RMBS economic loss development (benefit) $ ( 54 ) $ ( 43 ) $ ( 43 ) $ ( 75 ) $ ( 56 )

Impact of changes in discount rates $ ( 1 ) $ ( 6 ) $ ( 2 )

Range of discount rates 3.45 % - 4.97 % 4.11 % - 4.89 %

Weighted average discount rate 3.84 % 4.41 %

First lien U.S.

RMBS weighted average future recovery for deferred principal balances 50 % 50 %

Second lien U.S.

RMBS weighted average future recoveries on charged-off loans 60 % 50 %

First Lien U.S.

RMBS Loss Projections:

Alt-A, Prime, Option ARM and Subprime

The majority of projected losses in first lien U.S.

RMBS transactions are expected to come from non-performing mortgage loans (those that are or have recently been two or more payments behind, have been modified, are in foreclosure, or have been foreclosed upon).

Collateral losses are projected to be offset by recoveries on deferred principal balances.

In the base scenario, the Company assumes the final CDR will be reached one year after the 36 -month CDR plateau period.

The Company then assumes that loss severities begin returning to levels consistent with underwriting assumptions beginning after the initial 18 -month period, staying or trending, as applicable, to 40 % in the base scenario over 2.5 years.

The following table shows the range as well as the average, weighted by outstanding net insured par, for key assumptions used in the calculation of expected loss to be paid (recovered) for individual transactions for vintage 2004 - 2008 first lien U.S.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Key Assumptions in Base Scenario Expected Loss Estimates

First Lien U.S.

As of December 31, 2024 As of December 31, 2023

Range Weighted Average Range Weighted Average

Plateau CDR 0.0 % – 8.8 % 3.4 % 0.0 % – 10.0 % 4.2 %

Final CDR 0.0 % – 0.4 % 0.2 % 0.0 % – 0.5 % 0.2 %

Initial loss severity 40.0 % – 50.0 % 43.1 % 50 %

Future recovery for deferred principal balances 50 % 30 %

Liquidation rates (1) 20 % – 50 % 20 % – 65 %

____________________

(1) The liquidation rates range from current but recently delinquent loans to foreclosed loans.

Certain transactions benefit from excess spread (the amount by which the interest paid by the borrowers on the underlying loan exceeds the amount of interest owed on the insured obligations) when they are supported by large portions of fixed rate assets (either originally fixed or modified to be fixed) but have insured floating rate debt linked to the Secured Overnight Finance Rate (SOFR).

An increase in projected SOFR decreases excess spread, while lower SOFR projections result in higher excess spread.

The Company establishes its scenarios by increasing and decreasing the periods and levels of stress from those used in the base scenario.

In the Company’s most stressful scenario where 20 % of deferred principal balances are assumed to be recovered, loss severities experience stress for nine years and the initial ramp-down of the CDR was assumed to occur over 16 months, expected loss to be paid would increase from current projections by approximately $ 31 million for all first lien U.S.

The majority of projected insured losses in first lien U.S.

RMBS transactions stem from future insurance claim payments related to structures that are currently undercollateralized (outstanding insured bonds that did not have their principal balance reduced by collateral losses, but will experience a shortfall at the transaction’s final maturity).

Most of any future collateral losses are expected to come from non-performing mortgage loans (those that are or have recently been two or more payments behind, have been modified, are in foreclosure or have been foreclosed upon).

Collateral losses are projected to be offset by recoveries on deferred principal balances (where information about the amount of deferred balances is disclosed by the trustee of the transaction).

The Company establishes its scenarios by assuming various levels of recoveries on known deferred balances and increasing and decreasing the periods and levels of stress on the remaining collateral.

In the Company’s most stressful scenario where 20 % of deferred principal balances are assumed to be recovered, loss severities experience stress for nine years and the initial ramp-down of the conditional default rates (CDR) was assumed to occur over 16 months, expected loss to be paid would increase from current projections by approximately $ 33 million for all first lien U.S.

RMBS transactions.

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RMBS transactions.

An increase in projected SOFR decreases excess spread, while lower SOFR projections can result in higher excess spread.

Due to the current level of SOFR, there are few transactions with substantial excess spread.

If projected future interest rates were to fall below the weighted average coupon of the underlying mortgages, excess spread projections may increase.

Second Lien U.S.

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The Company believes the most important driver of its projected second lien U.S.

RMBS losses is the performance of its HELOC transactions.

The Company believes the primary variable affecting its expected losses in second lien U.S.

RMBS transactions is the amount and timing of future losses or recoveries in the collateral pool supporting the transactions (including recoveries from previously charged-off loans).

For the base scenario, the CDR plateau is held constant for 36 months.

Once the plateau period ends, the CDR is assumed to trend down in uniform increments for one year to its final long-term steady state CDR ( 5 % of original plateau).

The following table shows the range as well as the average, weighted by net par outstanding, for key assumptions used in the calculation of expected loss to be paid (recovered) for individual transactions for vintage 2004 - 2008 HELOCs.

Key Assumptions in Base Scenario Expected Loss Estimates

As of December 31, 2024 As of December 31, 2023

Range Weighted Average Range Weighted Average

Plateau CDR 0.0 % – 5.6 % 2.2 % 0.0 % – 9.3 % 2.6 %

Final CDR 0.0 % – 0.3 % 0.1 % 0.0 % – 0.5 % 0.1 %

Liquidation rates (1) 20 % – 55 % 20 % – 60 %

Loss severity on future defaults 98 % 98 %

Projected future recoveries on previously charged-off loans 50 % 40 %

____________________

(1) The liquidation rates range from current but recently delinquent loans to foreclosed loans.

RMBS claims and

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

The Company modeled scenarios with a longer period of elevated defaults and others with a shorter period of elevated defaults as well as various levels of assumed recoveries.

In the Company’s most stressful scenario, assuming 20 % recoveries on charged-off loans, increasing the CDR plateau to 42 months, increasing the ramp-down by four months to 16 months (for a total stress period of 58 months) and using the ultimate prepayment rate of 15 % would decrease the expected recovery by approximately $ 78 million for HELOC transactions.

On the other hand, in the Company’s least stressful scenario, assuming 80 % recoveries on charged-off loans, reducing the CDR plateau to 30 months, decreasing the length of the CDR ramp-down to eight months (for a total stress period of 38 months) and lowering the ultimate prepayment rate to 10 % would increase the expected recovery by approximately $ 78 million for HELOC transactions.

reimbursements is dependent on the amount and timing of future recoveries from previously charged-off loans and changes in discount rates.

In the Company’s most stressful scenario, assuming 40 % recoveries on charged-off loans would decrease the expected recovery by approximately $ 48 million for HELOC transactions.

On the other hand, in the Company’s least stressful scenario, assuming 80 % recoveries on charged-off loans, would increase the expected recovery by approximately $ 48 million for HELOC transactions.

When a second lien loan defaults, there is generally a low recovery.

The Company assumes that it will generally recover 2 % of future defaulting collateral at the time of charge-off.

Additional amounts of post charge-off recoveries are projected to come in evenly over the next five years in instances where the Company is able to obtain information on the lien status.

The Company evaluates its assumptions regularly based on actual recoveries of charged-off loans observed from period to period and reasonable expectations of future recoveries.

During 2025, due to observed trends and high levels of home equity, the Company updated its assumptions of such recoveries to reflect a base scenario and a weighted average recovery of 60 %, up from 50 %, which resulted in an economic benefit of $ 26 million.

Recovery Litigation and Dispute Resolution

In the ordinary course of their respective businesses, certain of AGL’s subsidiaries are involved in litigation or other dispute resolution with third parties to recover insurance losses paid or return benefits received in prior periods or prevent or reduce losses in the future.

The impact, if any, of these and other proceedings on the amount of recoveries the Company ultimately receives and losses it pays in the future is uncertain, and the impact of any one or more of these proceedings during any quarter or year could be material to the Company’s financial statements.

The Company has asserted claims in a number of legal proceedings in connection with its exposure to Puerto Rico.

In the ordinary course of their respective businesses, certain of the Company’s subsidiaries are involved in litigation or other dispute resolution with third parties to recover insurance losses paid or return benefits received in prior periods or prevent or reduce losses in the future.

For example, the Company has asserted claims in a number of legal proceedings in connection with its exposure to Puerto Rico.

See above for a discussion of the Company’s exposure to Puerto Rico and related recovery litigation being pursued by the Company.

Contracts Accounted for as Insurance

The portfolio of outstanding exposures discussed in Note 3, Outstanding Exposure, and Note 4, Expected Loss to be Paid (Recovered), includes contracts that are accounted for as insurance contracts, derivatives and consolidated FG VIEs.

The portfolio of outstanding exposures discussed in Note 3.

Outstanding Exposure, and Note 4.

Expected Loss to be Paid (Recovered), includes contracts that are accounted for as insurance contracts, derivatives and consolidated FG VIEs.

Amounts presented in this note relate only to contracts accounted for as insurance, unless otherwise specified.

See Note 6, Contracts Accounted for as Credit Derivatives, for amounts related to CDS and Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles, for amounts related to consolidated FG VIEs.

Contracts Accounted for as Credit Derivatives, for amounts related to CDS and Note 8.

Variable Interest Entities, for amounts related to consolidated FG VIEs.

Accounting Policy

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Premiums receivable represent the present value of contractual or expected future premium collections, discounted using risk-free rates.

Unearned premium reserve represents deferred premium revenue less claim payments made (net of recoveries received) that have not yet been recognized in the statement of operations (i.e., contra-paid).

Unearned premium reserve represents deferred premium revenue less claim payments made (net of recoveries received) that have not yet been recognized in the consolidated statements of operations (i.e., contra-paid).

The following discussion relates to the deferred premium revenue component of the unearned premium reserve, while the contra-paid is discussed below under “Losses and Recoveries.”

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or (ii) in cases where the underlying collateral is composed of homogeneous pools of assets, the expected premiums to be collected over the life of the contract.

To be considered a homogeneous pool of assets, prepayments must be contractually allowable, the amount of prepayments must be probable, and the timing and amount of prepayments must be reasonably estimable.

Installment premiums typically relate to structured finance (e.g., securitized debt) and infrastructure transactions, where the insurance premium rate is determined at the inception of the contract, but the insured par is subject to prepayment throughout the life of the transaction.

To be considered a homogeneous pool of assets, prepayments must be contractually allowable, the amount of prepayments must be probable, and the timing and

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

amount of prepayments must be reasonably estimable.

Installment premiums typically relate to structured finance (e.g., securitized debt) transactions, where the insurance premium rate is determined at the inception of the contract but the insured par is subject to prepayment throughout the life of the transaction, and infrastructure transactions.

• For financial guaranty insurance contracts acquired in a business combination, deferred premium revenue is equal to the fair value of the Company’s stand-ready obligation portion of the insurance contract, at the date of acquisition, based on what a hypothetical similarly rated financial guaranty insurer would have charged for the contract at that date (not the discounted future cash flows under the insurance contract).

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Accordingly, the proportionate share of premium revenue recognized in a given reporting period is a constant rate calculated based on the relationship between the insured par amounts outstanding in the reporting period compared with the sum of each of the insured par amounts outstanding for all periods.

When an insured financial obligation is retired before its maturity, the financial guaranty insurance contract is extinguished, and any nonrefundable deferred premium revenue related to that contract is accelerated and recognized as premium revenue.

Any unamortized acquisition costs are expensed.

When an insured financial obligation is retired before its maturity, (i) the financial guaranty insurance contract is extinguished;

(ii) any nonrefundable deferred premium revenue related to that contract is accelerated and recognized as premium revenue;

and (iii) any unamortized acquisition costs are expensed.

The Company assesses the need for an allowance for credit loss on premiums receivable each reporting period.

19 unchanged sentences

Net earned premiums $ 380 $ 403 $ 344

____________________

(1) 2022 accelerations include $ 133 million related to 2022 Puerto Rico Resolutions.

See Note 4, Expected Loss to be Paid (Recovered), for additional information.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Gross Premium Receivable, Net of Commissions Payable on Assumed Business

Gross Premium Receivable,

Net of Commissions Payable on Assumed Business and Allowance for Credit Losses

Year Ended December 31,

9 unchanged sentences

Foreign exchange gain (loss) on remeasurement 82 ( 24 ) 51

Change in allowance for credit losses ( 3 ) — —

Financial guaranty insurance premium receivable 1,570 1,550 1,467

1 unchanged sentence

December 31, $ 1,572 $ 1,551 $ 1,468

Approximately 69 % and 70 % of gross premiums receivable, net of commissions payable at December 31, 2024 and December 31, 2023, respectively, are denominated in currencies other than the U.S.

Approximately 68 % and 69 % of gross premiums receivable, net of commissions payable as of December 31, 2025 and December 31, 2024, respectively, are denominated in currencies other than the U.S.

dollar, primarily the pound sterling and euro.

The timing and cumulative amount of actual collections and net earned premiums may differ from those of expected collections and of expected net earned premiums in the table below due to factors such as foreign exchange rate fluctuations, counterparty collectability issues, accelerations, commutations, restructurings, changes in the consumer price indices, changes in expected lives and new business.

Assured Guaranty Ltd.

36 unchanged sentences

Accounting Policy

Deferred acquisition costs (DAC) reported on the consolidated balance sheet represent the unamortized portion of (i) policy acquisition costs that are directly related and essential to the successful acquisition of an insurance contract and (ii) ceding commission income and expense.

DAC reported on the consolidated balance sheets represent the unamortized portion of (i) policy acquisition costs that are directly related and essential to the successful acquisition of an insurance contract and (ii) ceding commission income and expense.

Deferred policy acquisition costs include the cost of underwriting personnel attributable to successful underwriting efforts.

3 unchanged sentences

When an insured obligation is retired early, the remaining related DAC is expensed at that time.

Costs incurred for soliciting potential customers, market research, training, administration, unsuccessful acquisition efforts and product development as well as overhead costs are charged to expense as incurred.

Expected losses and LAE, investment income and the remaining costs of servicing the insured or reinsured business are considered in determining the recoverability of DAC.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Expected losses and LAE, investment income and the remaining costs of servicing the insured or reinsured business are considered in determining the recoverability of DAC.

Policy Acquisition Costs

Roll Forward of Deferred Acquisition Costs

Roll Forward of DAC

Year Ended December 31,

9 unchanged sentences

Loss and LAE reserve reported on the consolidated balance sheets relates only to direct and assumed reinsurance contracts that are accounted for as insurance, substantially all of which are financial guaranty insurance contracts.

The portion of any contract’s reserve that is ceded to a reinsurer is reported as reinsurance recoverable on unpaid losses and reported in “other assets.” Any loss and LAE reserves related to FG VIEs are eliminated upon consolidation.

The portion of any contract’s reserve that is ceded to a reinsurer is reported as reinsurance recoverable on unpaid losses and reported in “other assets.” Any loss and LAE reserve related to FG VIEs are eliminated upon consolidation.

Any expected losses to be paid (recovered) on credit derivatives are reflected in the fair value of credit derivatives.

5 unchanged sentences

To the extent there is insufficient loss and LAE reserve on a contract, then such claim payment is recorded as contra-paid, which reduces the unearned premium reserve.

The contra-paid is recognized in “loss and loss adjustment expenses (benefit)” in the consolidated statement of operations when and for the amount that total losses exceed the remaining deferred premium revenue on the insurance contract.

“Loss and loss adjustment expenses (benefit)” in the consolidated statement of operations is presented net of cessions to reinsurers.

The contra-paid is recognized in “loss and loss adjustment expenses (benefit)” in the consolidated statements of operations when and for the amount that total losses exceed the remaining deferred premium revenue on the insurance contract.

“Loss and loss adjustment expenses (benefit)” in the consolidated statements of operations is presented net of cessions to reinsurers.

Salvage and Subrogation Recoverable

1 unchanged sentence

Such reduction in expected loss to be paid can result in one of the following:

(i) a reduction in the corresponding loss and LAE reserve with a benefit to the consolidated statement of operations;

(i) a reduction in the corresponding loss and LAE reserve with a benefit to the consolidated statements of operations;

(ii) no effect on the consolidated balance sheets or statements of operations if total loss is not in excess of deferred premium revenue;

9 unchanged sentences

Loss and LAE reserve and salvage and subrogation recoverable are discounted at risk-free rates for financial guaranty insurance obligations that ranged from 1.93 % to 5.35 % with a weighted average of 3.93 % as of December 31, 2025 and 1.98 % to 5.22 % with a weighted average of 4.38 % as of December 31, 2024.

The following table provides information on net reserve (salvage), which includes loss and LAE reserves and salvage and subrogation recoverable, both net of reinsurance.

The following table provides information on net reserve (salvage), which includes loss and LAE reserve and salvage and subrogation recoverable, both net of reinsurance.

Net Reserve (Salvage) by Sector

26 unchanged sentences

The following table provides a schedule of the expected timing of financial guaranty net expected losses to be expensed.

The amount and timing of actual loss and LAE may differ from the estimates shown below due to factors such as accelerations, commutations, changes in expected lives and updates to loss estimates.

The amount and timing of actual loss and LAE may differ from the estimates shown below due to factors such as accelerations, commutations, changes in expected lives, changes in foreign exchange rates and updates to loss estimates.

This table excludes amounts related to FG VIEs, which are eliminated in consolidation.

35 unchanged sentences

BIG 1 BIG 2 BIG 3 Total BIG

(dollars in millions)

(dollars in billions)

Number of risks (1) 87 13 95 195 195

Remaining weighted-average period (in years) 14.0 24.1 5.4 18.7 18.7

18.6 8.8 6.1 16.6 16.6

Outstanding exposure:

2 unchanged sentences

Total (2) $ 6.25 $ 8.65 $ 1.53 $ 16.43 $ 16.41

Gross Net Total BIG

BIG 1 BIG 2 BIG 3 Total BIG

(in millions)

Expected cash outflows (inflows) $ 172 $ 1,141 $ 1,242 $ 2,555 $ 2,547

12 unchanged sentences

BIG 1 BIG 2 BIG 3 Total BIG

(dollars in millions)

(dollars in billions)

Number of risks (1) 98 12 97 207 207

5 unchanged sentences

Total (2) $ 15.63 $ 1.07 $ 1.80 $ 18.50 $ 18.48

Gross Net Total BIG

BIG 1 BIG 2 BIG 3 Total BIG

(in millions)

Expected cash outflows (inflows) $ 4,016 $ 342 $ 1,307 $ 5,665 $ 5,656

8 unchanged sentences

(2) Includes amounts related to FG VIEs.

The increase in BIG in 2024 relates mainly to the downgrade of certain U.K.

regulated utilities.

(3) Represents expected inflows from future payments by obligors pursuant to restructuring agreements, settlements, excess spread on any underlying collateral and other estimated recoveries.

26 unchanged sentences

____________________

(1) Negative assumed premiums written were due to terminations and changes in expected debt service schedules.

(2) See Note 4, Expected Loss to be Paid (Recovered), for additional information on the economic loss development (benefit).

(1) See Note 4.

Expected Loss to be Paid (Recovered), for additional information on the economic loss development (benefit).

Contracts Accounted for as Credit Derivatives

19 unchanged sentences

Accounting Policy

The Company’s credit derivatives qualify as derivatives under GAAP and require fair value measurement, with changes in fair value reported in “fair value gains (losses) on credit derivatives” in the consolidated statement of operations.

The fair value of credit derivatives is determined on a contract-by-contract basis and presented as either credit derivative assets reported in “other assets” or credit derivative liabilities reported in “other liabilities” in the consolidated balance sheets.

See Note 9, Fair Value Measurement, for a discussion on the fair value methodology for credit derivatives.

Fair Value Measurement, for a discussion on the fair value methodology for credit derivatives.

Credit Derivatives Net Par Outstanding and Fair Value

2 unchanged sentences

Credit Derivatives (1)

As of December 31, 2024 As of December 31, 2023

Sector Net Par

Outstanding Net Fair Value Asset (Liability) Net Par

Outstanding Net Fair Value Asset (Liability)

(in millions)

Net Par Outstanding Net Fair Value Asset (Liability)

Sector As of December 31, 2025 As of December 31, 2024 As of December 31, 2025 As of December 31, 2024

(in billions) (in millions)

public finance $ 1.0 $ 1.0 $ ( 2 ) $ ( 12 )

4 unchanged sentences

____________________

(1) See Note 4, Expected Loss to be Paid (Recovered), for expected loss to be paid on credit derivatives.

(1) See Note 4.

Expected Loss to be Paid (Recovered), for expected loss to be paid on credit derivatives.

Fair Value Gains (Losses) on Credit Derivatives

5 unchanged sentences

Fair value gains (losses) on credit derivatives $ 121 $ 24 $ 114

On November 28, 2011, LBIE sued AG Financial Products Inc.

(AGFP), a subsidiary of AGL which, in the past, had provided credit protection to counterparties under CDS.

Following defaults by LBIE under transaction documents governing CDS between LBIE and AGFP, AGFP terminated the CDS in compliance with the transaction documents and properly calculated that LBIE owed AGFP approximately $ 25 million in connection with the termination, whereas LBIE asserted in its complaint filed in the Supreme Court of the State of New York (the Court) that AGFP owed LBIE a termination payment of approximately $ 1.4 billion.

Following a bench trial, on March 8, 2023, the Court rendered its decision and found in favor of AGFP.

Following the exhaustion of LBIE’s appeals, the Company recognized a realized gain on credit derivatives in the first quarter of 2025 of $ 103 million, which represents the full satisfaction of the judgment it was awarded and its claims for attorneys’ fees, expenses and interest in connection with this litigation.

The impact of changes in credit spreads will vary based upon the volume, tenor, interest rates and other market conditions at the time these fair values are determined.

2 unchanged sentences

The Company determines its own credit risk primarily based on quoted CDS prices traded on AG at each balance sheet date.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

CDS Spread on AG (in basis points)

3 unchanged sentences

One-year CDS spread 23 25 23

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Fair Value of Credit Derivative Assets (Liabilities) and Effect of AG Credit Spread

13 unchanged sentences

the Sound Point investment being the most significant.

The Company reports its interest in the earnings of equity method investments in “equity in earnings (losses) of investees” in the consolidated statement of operations.

The Company reports its interest in the earnings of equity method investments in “equity in earnings (losses) of investees” in the consolidated statements of operations.

Most equity method investments are reported on a one-quarter lag.

At the time of acquisition, the difference between the Company’s cost of an equity method investment (fair value) and the Company’s proportionate share of the carrying value of the investee’s net assets is referred to as the basis difference.

The basis difference includes amounts attributed to finite-lived intangible assets, is amortized over the assets’ remaining useful lives, and is reported in “equity in earnings (losses) of investees.”

The basis difference includes amounts attributed to finite-lived intangible assets, which is amortized over the assets’ remaining useful lives, and is reported in “equity in earnings (losses) of investees.”

The Company classifies distributions received from equity method investments using the cumulative earnings approach in the consolidated statements of cash flows.

Under the cumulative earnings approach, distributions received up to the amount of cumulative equity in earnings recognized are treated as returns on investment within operating cash flows, and those in excess of that amount are treated as returns of investment within investing cash flows.

Sound Point managed funds (and prior to July 1, 2023, AssuredIM managed funds), in which the Company invests and where the Company has been deemed to be the primary beneficiary, are not reported in “investments” on the consolidated balance sheets, but rather in “assets of consolidated investment vehicles” and “other liabilities,” with the portion not owned by the Company presented as “nonredeemable noncontrolling interests”.

See Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles, for further information regarding the CIVs.

Sound Point managed funds in which the Company invests and where the Company has been deemed to be the primary beneficiary, are not reported in “investments” on the consolidated balance sheets, but rather in “assets of consolidated investment vehicles” and “other liabilities,” with the portion not owned by the Company presented as “non-redeemable noncontrolling interest.” See Note 8.

Variable Interest Entities, for further information regarding CIVs.

Cash consists of cash on hand and demand deposits.

See Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles, for the cash and cash equivalents of consolidated VIEs.

Variable Interest Entities, for the cash and cash equivalents of consolidated VIEs.

Net investment income primarily includes the income earned on fixed-maturity securities and short-term investments, including amortization of premiums and accretion of discounts.

For mortgage-backed securities and any other securities for which there is prepayment risk, prepayment assumptions are evaluated quarterly and revised as necessary.

For securities other than purchased credit deteriorated (PCD) securities, any necessary adjustments due to changes in effective yields and expected maturities are recognized in net investment income using the retrospective method.

PCD securities are defined as financial assets that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality since origination.

Realized gains and losses on sales of available-for-sale fixed-maturity securities and credit losses are reported in the consolidated statement of operations.

Net realized investment gains (losses) include sales of investments, which are determined

For securities other than purchased credit deteriorated (PCD) securities, any necessary adjustments due to changes in effective yields and expected

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

using the specific identification method, reductions to amortized cost of available-for-sale investments that have been written down due to the Company’s intent to sell them or it being more-likely-than-not that the Company will be required to sell them, and the change in allowance for credit losses (including accretion) as discussed below.

maturities are recognized in net investment income using the retrospective method.

PCD securities are defined as financial assets that, as of the date of acquisition, have experienced a more-than-insignificant deterioration in credit quality since origination.

Realized gains and losses on sales of available-for-sale fixed-maturity securities and credit losses are reported in the consolidated statements of operations.

Net realized investment gains (losses) include sales of investments, which are determined using the specific identification method, reductions to amortized cost of available-for-sale investments that have been written down due to the Company’s intent to sell them or it being more-likely-than-not that the Company will be required to sell them, and the change in allowance for credit losses on the investment portfolio (including accretion) as discussed below.

For all fixed-maturity securities that were originally purchased with credit deterioration, accrued interest is not separately presented but rather is a component of the amortized cost of the instrument.

29 unchanged sentences

All write-offs of accrued interest are recorded as a reduction to “net investment income” in the consolidated statements of operations.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

For impaired securities that (i) the Company intends to sell, or (ii) it is more-likely-than-not that the Company will be required to sell before recovering its amortized cost, the amortized cost is written down to fair value with a corresponding charge to net realized investment gains (losses).

1 unchanged sentence

The new cost basis is not adjusted for subsequent increases in estimated fair value.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

The Company monitors its equity method investments for indicators of other-than-temporary declines in fair value on an ongoing basis.

1 unchanged sentence

Investment Portfolio

The majority of the investment portfolio consists of investment grade fixed-maturity securities managed by outside managers.

The largest component of the investment portfolio is fixed-maturity securities, the majority of which are investment grade and managed by outside managers.

The Company has established investment guidelines for these investment managers regarding credit quality, exposure to a particular sector and exposure to a particular obligor within a sector.

Portions of the Company’s alternative investments portfolio are managed by Sound Point.

In accordance with the terms of a letter agreement (Letter Agreement), effective July 1, 2023, AG (i) engaged Sound Point as its sole alternative credit manager, and (ii) transitioned to Sound Point the management of certain existing alternative investments and related commitments.

The Letter Agreement also provides that AG, including through its investment subsidiary AGAS, would, subject to the terms and conditions of the Letter Agreement, make new investments in funds, other vehicles and separately managed accounts managed by Sound Point which, when aggregated with the alternative investments and commitments transitioned from the Company and any reinvestments (collectively, Sound Point Investments), and investments made by other Assured Guaranty affiliates, will total $ 1 billion.

AG has made substantial investments with Sound Point across a variety of their strategies in order to seek to enhance its investment returns and anticipates continuing to invest with Sound Point pursuant to the terms of the Letter Agreement.

Similarly, under the Letter Agreement AG agreed to reinvest all gains and dividends from Sound Point Investments through July 1, 2025, and reinvest half of all such gains and dividends thereafter until July 1, 2033.

Investment Portfolio

7 unchanged sentences

Equity method investments:

Ownership interest in Sound Point 415 418

Funds and other investments 664 496

1 unchanged sentence

____________________

(1) The aggregate carrying value of the Company’s investments in Sound Point managed investments, excluding the ownership interest in Sound Point of $ 418 million and $ 429 million as of December 31, 2024 and December 31, 2023, respectively, and excluding certain investments in funds that are consolidated and accounted for as CIVs, was $ 569 million and $ 202 million as of December 31, 2024 and December 31, 2023, respectively.

As of December 31, 2024 and December 31, 2023, 12.6 % and 9.2 %, respectively, of the available-for-sale fixed-maturity securities, were either rated BIG or not rated, primarily consisting of Loss Mitigation Securities and CLO equity tranches.

As of December 31, 2024 and December 31, 2023, the carrying value of Loss Mitigation Securities was $ 479 million and $ 459 million, respectively.

As of December 31, 2024 and December 31, 2023, the carrying value of CLO equity tranches was $ 277 million and $ 13 millions, respectively.

(1) In the investment portfolio, the aggregate carrying value of Sound Point managed investments was $ 628 million and $ 569 million as of December 31, 2025 and December 31, 2024, respectively, excluding the Company’s ownership interest in Sound Point and certain investments in funds that are accounted for as CIVs.

As of December 31, 2025 and December 31, 2024, 8.6 % and 12.6 %, respectively, of available-for-sale fixed-maturity securities were either rated BIG or not rated, primarily consisting of CLO equity tranches, liquidity bonds issued by a U.K.

regulated utility and Loss Mitigation Securities.

As of December 31, 2025 and December 31, 2024, the carrying value of CLO equity tranches was $ 228 million and $ 277 million, respectively.

As of December 31, 2025, the carrying value of liquidity bonds issued by a U.K.

regulated utility was $ 168 million.

As of December 31, 2025 and December 31, 2024, the carrying

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

value of Loss Mitigation Securities was $ 140 million and $ 479 million, respectively.

In July 2025, the Company’s largest BIG exposure in the investment portfolio, which was obtained as a part of a loss mitigation strategy, with an aggregate carrying value of $ 408 million as of June 30, 2025 reached its final resolution after many years of negotiation and was paid down after liquidation of the trust assets.

The Company received $ 459 million in connection with this resolution, including principal, accrued interest and other expected recoveries.

This resolution did not have a significant effect on the consolidated statements of operations.

Fixed-maturity securities classified as trading securities primarily include contingent value instruments (CVIs), and are not rated.

The investment portfolio includes $ 884 million in alternative investments primarily consisting of CLO equity securities, classified as available-for-sale fixed-maturity securities, and $ 508 million of investments across various asset classes that are reported in other invested assets.

In addition, as of December 31, 2024 and December 31, 2023, $ 33 million and $ 305 million, respectively, of the Company’s alternative investments in Sound Point managed funds were consolidated and reported in “assets of CIVs,” “other liabilities,” and “nonredeemable noncontrolling interests.” As of December 31, 2024, one active fund in which the Company invests was accounted for as a CIV.

See Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.

The Company’s alternative investment commitments as of December 31, 2024 include $ 610 million in unfunded commitments, which together with its $ 884 million in funded commitments total $ 1.5 billion, including a $ 1 billion commitment to invest in Sound Point managed alternative investments.

Capital allocated to alternative investments was committed to several funds pursuing various strategies, including private healthcare investing, asset-based/specialty finance, CLOs, and middle market direct lending.

See Note 1, Business and Basis of Presentation, for a description of the Sound Point Transaction.

In addition to the commitments above, the Company has agreed to subscribe for liquidity bonds to be issued by a U.K.

regulated utility to which it has insured exposure.

At this time the Company estimates that it will purchase approximately £ 110 million (or $ 139 million) in liquidity bonds under this commitment.

The investment portfolio includes $ 1.0 billion in alternative investments primarily consisting of (i) $ 228 million of CLO equity securities classified as available-for-sale fixed-maturity securities and (ii) $ 676 million of investments across various asset classes that are reported in “other invested assets”.

In addition, as of December 31, 2025 and December 31, 2024, $ 57 million and $ 33 million, respectively, of the Company’s total alternative investments was invested in a Sound Point managed fund which was reported in “assets of consolidated investment vehicles,” “other liabilities” and “non-redeemable noncontrolling interest.” See Note 8.

Variable Interest Entities.

The Company’s alternative investment commitments as of December 31, 2025 include $ 490 million in unfunded commitments which together with its $ 1.0 billion in funded commitments total $ 1.5 billion.

Alternative investment commitments of $ 1.5 billion include a $ 1 billion commitment to invest in Sound Point managed alternative investments, subject to certain conditions precedent.

Accrued investment income was $ 70 million and $ 64 million as of December 31, 2025 and December 31, 2024, respectively.

In 2025, 2024 and 2023, the Company did not write off any accrued investment income.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Available-for-Sale Fixed-Maturity Securities by Security Type

16 unchanged sentences

Total available-for-sale fixed-maturity securities 100 % $ 6,572 $ ( 54 ) $ 135 $ ( 284 ) $ 6,369

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Available-for-Sale Fixed-Maturity Securities by Security Type

17 unchanged sentences

____________________

(1) Based on amortized cost.

(2) Includes securities issued by taxable universities and hospitals.

government-agency obligations were approximately 68 % of mortgage-backed securities as of December 31, 2024 and 42 % as of December 31, 2023, based on fair value.

(4) Includes a security with an affiliated entity with amortized cost and fair value of $ 41 million and $ 42 million, respectively, as of December 31, 2024, and amortized cost and fair value of $ 21 million as of December 31, 2023.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

(1) Percentages are based on amortized cost.

(2) Corporate securities include securities issued by taxable universities and hospitals.

government-agency obligations represented 75 % and 68 % of mortgage-backed securities as of December 31, 2025 and December 31, 2024, respectively, based on fair value.

(4) This category includes an investment in an affiliated entity with amortized cost of $ 53 million and $ 41 million, and a fair value of $ 54 million and $ 42 million, as of December 31, 2025 and December 31, 2024, respectively.

Gross Unrealized Loss by Length of Time

18 unchanged sentences

Number of securities (1) 167 855 1,014

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Gross Unrealized Loss by Length of Time

23 unchanged sentences

The Company has determined that the unrealized losses recorded as of December 31, 2025 and December 31, 2024 were primarily related to higher interest rates rather than credit quality.

As of December 31, 2024, the Company did not intend to, and was not required to, sell investments in an unrealized loss position prior to expected recovery in value.

As of December 31, 2024, of the securities in an unrealized loss position for which an allowance for credit loss was not recorded, 438 securities had unrealized losses in excess of 10% of their carrying value, whereas as of December 31, 2023, 409 securities had unrealized losses in excess of 10% of their carrying

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

The total unrealized loss for these securities was $ 223 million as of December 31, 2024 and $ 200 million as of December 31, 2023.

As of December 31, 2025, the Company did not intend to and was not required to sell investments in an unrealized loss position prior to the expected recovery in value.

As of December 31, 2025, of the securities in an unrealized loss position for which an allowance for credit loss was not recorded, 253 securities had unrealized losses in excess of 10% of their carrying value, whereas as of December 31, 2024, 438 securities had unrealized losses in excess of 10% of their carrying value.

The total unrealized loss for these securities was $ 147 million and $ 223 million as of December 31, 2025 and December 31, 2024, respectively.

The amortized cost and estimated fair value of available-for-sale fixed-maturity securities by contractual maturity as of December 31, 2025 are shown below.

10 unchanged sentences

Total $ 6,572 $ 6,369

Based on fair value, fixed-maturity securities, short-term investments and cash that are either held in trust for the benefit of third-party ceding insurers in accordance with statutory requirements, placed on deposit to fulfill state licensing requirements, or otherwise pledged or restricted, totaled $ 79 million as of December 31, 2024 and $ 234 million as of December 31, 2023.

The investment portfolio also contains securities that are held in trust by certain AGL subsidiaries or are otherwise restricted for the benefit of other AGL subsidiaries in accordance with statutory and regulatory requirements with a fair value of $ 1,135 million and $ 1,154 million as of December 31, 2024 and December 31, 2023, respectively.

The fair value of investments that were non-income producing during twelve-month period ending December 31, 2024 was $ 42 million.

No material investments of the Company were non-income producing during the twelve-month period ending December 31, 2023.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Based on fair value, fixed-maturity securities, short-term investments and cash that are either held in trust for the benefit of third-party ceding insurers in accordance with statutory requirements, placed on deposit to fulfill state licensing requirements, or otherwise pledged or restricted, totaled $ 77 million and $ 79 million as of December 31, 2025 and December 31, 2024, respectively.

In addition, the total collateral funded into a reinsurance trust or a similar account by certain AGL subsidiaries or is otherwise restricted for the benefit of other AGL subsidiaries in accordance with statutory and regulatory requirements had a fair value of $ 813 million and $ 1,135 million as of December 31, 2025 and December 31, 2024, respectively.

No material investments of the Company were non-income producing during the twelve-month period ending December 31, 2025.

The fair value of investments that were non-income producing during twelve-month period ending December 31, 2024 was $ 42 million.

Income from Investments

13 unchanged sentences

Equity in earnings (losses) of investees

Sound Point (3) $ 6 $ 5 $ —

Funds and other (4) 56 23 ( 39 )

Ownership interest in Sound Point (4) $ 14 $ 6 $ 5

Funds and other investments (5) 88 56 23

Equity in earnings (losses) of investees $ 102 $ 62 $ 28

____________________

(1) Includes $ 28 million, $ 55 million and $ 31 million income on Loss Mitigation Securities for 2024, 2023 and 2022, respectively.

(1) Foreign exchange gains on remeasurement of certain investments were $ 5 million for 2025 and $ 1 million for 2023.

(2) Amounts include $ 24 million, $ 28 million and $ 55 million of investment income on Loss Mitigation Securities for 2025, 2024 and 2023, respectively.

The increase in investment income from available-for-sale fixed-maturity securities in 2025 is primarily due to investment income on CLO equity tranches in the available-for-sale portfolio.

Certain CLO equity tranche investments were reclassified to the available-for-sale fixed-maturity portfolio in the fourth quarter of 2024, with interest income now reported in net investment income, and changes in fair value reported in other comprehensive income (OCI).

The Company had previously held the CLO equity tranches in a Sound Point managed fund with changes in net asset value (NAV) reported in “equity in earnings (losses) of investees.”

(3) Fair value gains on trading securities pertaining to securities still held as of December 31, 2025 were $ 5 million for 2025.

Fair value gains on trading securities pertaining to securities still held as of December 31, 2024 were $ 15 million for 2024.

Fair value losses on trading securities pertaining to securities still held as of December 31, 2022 were $ 29 million for 2022.

Fair value gains on trading securities pertaining to securities still held as of December 31, 2023 were $ 31 million for 2023.

(4) Beginning in the fourth quarter of 2023, equity in earnings (losses) of investees includes the Company’s share of the earnings of Sound Point, which is reported on a one-quarter lag.

(5) Includes Sound Point and AHP funds and, prior to July 1, 2023, AssuredIM funds.

Fair Value Gains (Losses) on Trading Securities

Substantially all of the trading securities are Puerto Rico CVIs.

In 2022, as a result of the 2022 Puerto Rico Resolutions, the Company received cash, new general obligation bonds, new bonds backed by toll revenues (together, New Recovery Bonds) and CVIs.

A majority of the trading securities are Puerto Rico CVIs.

In 2022, as a result of the resolution of certain defaulting Puerto Rico exposures, the Company received Puerto Rico CVIs, along with other consideration.

The CVIs are intended to provide creditors with additional recoveries tied to the outperformance of the Puerto Rico 5.5% sales and use tax receipts against May 2020 certified fiscal plan projections, subject to annual and lifetime caps.

As of December 31, 2024, all but $ 123 million of the CVIs (at fair value), and substantially all of the New Recovery Bonds had been sold or redeemed.

The fair value of remaining CVIs as of

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

December 31, 2025 and December 31, 2024 was $ 114 million and $ 123 million, respectively.

The Company may sell in the future any CVIs it continues to hold.

2 unchanged sentences

The table below presents summarized financial information for equity method investments that meet, in aggregate, the requirements for reporting summarized disclosures.

Such requirements were met in 2024, and the information for 2023 and 2022 is presented for comparative purposes.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Aggregate Equity Method Investments’

10 unchanged sentences

Equity attributable to investees $ 3,087 $ 2,629

Noncontrolling interest 40 35

Total equity $ 3,139 $ 2,669

29 unchanged sentences

____________________

(1) Amounts in 2023 related primarily to sales of New Recovery Bonds received as part of the 2022 Puerto Rico Resolutions.

(2) Amounts in 2022 related primarily to sales of New Recovery Bonds received as part of the 2022 Puerto Rico Resolutions.

(3) Change in the allowance for credit losses for all periods was primarily related to Loss Mitigation Securities.

(1) Amounts in 2023 related primarily to sales of bonds received as part of the resolution of defaulting Puerto Rico exposures in 2022.

The following table presents the roll forward of the allowance for the credit losses on available-for-sale fixed-maturity securities.

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Additions for securities for which credit losses were not previously recognized 13 4 —

Additions for purchases of securities accounted for as purchased financial assets with credit deterioration — — 2

Additions (reductions) for securities for which credit losses were previously recognized 15 ( 21 ) 12

Write-offs charged against the allowance ( 34 ) — —

Balance, end of period $ 54 $ 60 $ 77

During 2022, the Company purchased a Loss Mitigation Security with a fair value of $ 22 million that was accounted for as a PCD security.

At acquisition, this security had unpaid principal on remaining collateral of $ 31 million, an allowance for credit losses of $ 2 million, and a non-credit related discount of $ 7 million.

The Company did not purchase any other securities with credit deterioration during the periods presented.

Most of the Company’s securities with credit deterioration are Loss Mitigation Securities.

Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles

Credit losses for 2025 were primarily associated with CLO equity tranches and Loss Mitigation Securities.

The change in allowance for credit losses for 2024 and 2023 were primarily related to Loss Mitigation Securities.

The Company did not purchase any securities with credit deterioration during the periods presented.

Variable Interest Entities

Accounting Policy

The types of entities that the Company assesses for consolidation principally include:

(i) financial guaranty variable interest entities, which include entities whose debt obligations the Company insures in its financial guaranty business and Puerto Rico Trusts, and (ii) investment vehicles in which the Company has a variable interest and which Sound Point manages, including (1) Sound Point funds since July 1, 2023 and (2) CLOs that are collateralized financing entities (CFEs), and CLO warehouses managed by AssuredIM prior to July 1, 2023.

(i) financial guaranty variable interest entities, which include entities whose debt obligations the Company insures in its financial guaranty business, and (ii) investment vehicles in which the Company has a variable interest and which Sound Point manages, including Sound Point funds, CLOs that are collateralized financing entities and CLO warehouses.

For each of these types of entities, the Company first determines whether the entity is a VIE or a voting interest entity (VOE) which involves assessing, among other conditions, (i) whether the equity investment at risk is sufficient to cover the entity’s expected losses and (ii) whether the holders of the equity investment at risk (as a group) have substantive voting rights.

The Company reassesses whether an entity is a VIE upon the occurrence of certain significant events.

If the entity being evaluated for consolidation is not initially determined to be a VIE (or if a significant event occurs later that causes an entity to no longer qualify as a VIE), then the entity is a VOE.

Consolidation is generally required when the Company, directly or indirectly, has a controlling financial interest in a VOE.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

entity’s expected losses and (ii) whether the holders of the equity investment at risk (as a group) have substantive voting rights.

The Company reassesses whether an entity is a VIE upon the occurrence of certain significant events.

If the entity being evaluated for consolidation is not initially determined to be a VIE (or, later, if a significant event occurs that causes an entity to no longer qualify as a VIE), then the entity is a VOE.

Consolidation generally is required when the Company, directly or indirectly, has a controlling financial interest of the VOE being assessed.

For entities determined to be a VIE and in which the Company has a variable interest, the Company assesses whether it is the primary beneficiary of the VIE at the time it becomes involved with the entity and performs this assessment quarterly.

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If the Company concludes that it is the primary beneficiary of the VIE, the VIE is consolidated in the Company’s consolidated financial statements.

If, as part of its continual reassessment of the primary beneficiary determination, the Company concludes that it is no longer the primary beneficiary of a VIE, the Company deconsolidates the VIE and recognizes the impact of that change on the consolidated financial statements.

For FG VIEs other than the Puerto Rico Trusts, the Company elected the fair value option (FVO) for all assets and liabilities.

Upon initial adoption of the accounting guidance for VIEs in 2010, the Company elected to fair value its structured finance FG VIEs’ assets and liabilities as the carrying amount transition method was not practical.

To allow for consistency in the accounting for the assets and liabilities of its consolidated FG VIEs other than the Puerto Rico Trusts, the Company elected the FVO.

The consolidated Puerto Rico Trusts described below primarily included (i) cash or fixed-maturity debt securities that were carried at fair value and classified as either available-for-sale or trading securities similar to the fixed-maturity debt securities received pursuant to the 2022 Puerto Rico Resolutions and reported in the investment portfolio, and (ii) Puerto Rico Trust liabilities for which the Company elected the FVO in order to simplify the accounting for these instruments

The change in fair value of FG VIEs’ assets and liabilities is reported in “fair value gains (losses) on FG VIEs” in the consolidated statement of operations, except for (i) the change in fair value attributable to change in instrument-specific credit risk (ISCR) on FG VIEs’ liabilities, and (ii) unrealized gains and losses on the New Recovery Bonds that were held in the Puerto Rico Trusts, which are both reported in “other comprehensive income (loss)” (OCI) in the consolidated statements of comprehensive income (loss).

Interest income and interest expense are derived from the trustee reports and also included in “fair value gains (losses) on FG VIEs.” Investment income on the New Recovery Bonds and changes in fair value on the CVIs that were held in the Puerto Rico Trusts were all reported in “fair value gains (losses) on FG VIEs” on the consolidated statement of operations.

For FG VIEs, the Company elected the fair value option (FVO) for all assets and liabilities, except for one VIE consolidated as of December 31, 2025.

Upon consolidation, the assets and liabilities of this VIE were recorded pursuant to the guidance in ASC 805, Business Combinations , which specifies that the VIE’s assets and liabilities are recorded at fair value except for a contract asset which is recognized and measured pursuant to ASC 606, Revenue from Contracts with Customers .

Upon initial adoption of the accounting guidance for VIEs in 2010, the Company elected to fair value its FG VIEs’ assets and liabilities as the carrying amount transition method was not practical.

To allow for consistency in the accounting for the assets and liabilities of its consolidated RMBS FG VIEs, the Company has elected the FVO for FG VIEs consolidated after the initial adoption.

The change in fair value of FG VIEs’ assets and liabilities where the FVO was elected is reported in “fair value gains (losses) on FG VIEs” in the consolidated statements of operations, except for the change in fair value attributable to change in instrument-specific credit risk (ISCR) on FG VIEs’ liabilities for which the FVO was elected, which is reported in “other comprehensive income” Interest income and interest expense are derived from the trustee reports and also included in “fair value gains (losses) on FG VIEs.”

For those FG VIE liabilities with recourse to the Company, the portion of the inception-to-date change in fair value, attributable to ISCR, is calculated by holding all current period assumptions constant for each security and isolating the effect of the change in AG’s CDS spread from the most recent date of consolidation to the current period.

In general, if the Company’s CDS spread tightens, more value will be assigned to AG’s credit;

however, if AG’s CDS spread widens, less value is assigned to the Company’s credit.

The Company has limited contractual rights to obtain the financial records of its consolidated structured finance FG VIEs.

The structured finance FG VIEs do not prepare separate GAAP financial statements;

therefore, the Company compiles the FG VIE GAAP financial information based on trustee reports prepared by and received from third parties.

Such trustee reports are not available to the Company in time for quarterly reporting and therefore FG VIEs other than the Puerto Rico Trusts are reported on a one-quarter lag.

In general, if AG’s CDS spread tightens, more value will be assigned to AG’s credit;

however, if AG’s CDS spread widens, less value is assigned to AG’s credit.

The Company has limited contractual rights to obtain the financial records of its consolidated FG VIEs.

The FG VIEs do not typically prepare separate GAAP financial statements and, in these instances, the Company compiles the FG VIE GAAP financial information based on trustee reports prepared by and received from third parties.

Such trustee reports are not available to the Company in time for quarterly reporting and therefore FG VIEs are reported on a one-quarter lag.

As a result of the lag, cash and short-term investments do not reflect any cash outflows (due to claim payments made by the Company) to the holders of the FG VIEs’ debt until the subsequent reporting period.

The cash flows generated by the FG VIEs’ assets, except for interest income, are classified as cash flows from investing activities.

Paydowns of FG VIEs’ liabilities are supported by the cash flows generated by FG VIEs’ assets and, for liabilities with recourse, possibly claim payments made by AGM or AG under their financial guaranty insurance

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Paydowns of FG VIEs’ liabilities are supported by the cash flows generated by FG VIEs’ assets and, for liabilities with recourse, possibly claim payments made by the Company under their financial guaranty insurance contracts.

Paydowns of FG VIEs’ liabilities both with and without recourse are classified as cash flows used in financing activities.

Interest income, interest expense and other expenses of the FG VIEs’ assets and liabilities are classified as operating cash flows.

Claim payments made by AGM and AG under the financial guaranty contracts issued to the FG VIEs are eliminated upon consolidation.

Claim payments made by the Company under the financial guaranty contracts issued to the FG VIEs are eliminated upon consolidation.

Therefore, such claim payments are treated as paydowns of the FG VIEs’ liabilities and as a financing activity as opposed to an operating activity.

The Company’s exposure provided through its financial guaranties with respect to debt obligations of FG VIEs is included within net par outstanding in Note 3, Outstanding Exposure.

CIVs consist of certain Sound Point (and prior to July 1, 2023, AssuredIM) funds, CLOs and CLO warehouses in which the Company is the primary beneficiary.

The Company’s exposure provided through its financial guaranties with respect to debt obligations of FG VIEs is included within par and debt service outstanding in Note 3.

Outstanding Exposure.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

CIVs consist of certain Sound Point funds for which the Company is the primary beneficiary.

The consolidated funds are investment companies for accounting purposes and, therefore, account for their underlying investments at fair value.

All CLOs and CLO warehouses (collectively, the consolidated CLOs) were deconsolidated by the Company on July 1, 2023.

Changes in the fair value of assets and liabilities of CIVs, interest income and interest expense are reported in “fair value gains (losses) on consolidated investment vehicles” in the consolidated statements of operations.

Interest income from CLO assets is recorded based on contractual rates.

All CIVs are reported on a one-quarter lag.

Upon consolidation of a Sound Point (and prior to July 1, 2023, AssuredIM) fund, the Company records noncontrolling interest (NCI) for the portion of each fund owned by any third-party investors and employees.

Investment transactions in the consolidated Sound Point (and prior to July 1, 2023, AssuredIM) funds are recorded on a trade/contract date basis.

Upon consolidation of a Sound Point fund, the Company records NCI for the portion of the fund owned by any third-party investors and employees.

Investment transactions in the consolidated Sound Point funds are recorded on a trade/contract date basis.

Money market investments held by these consolidated funds are classified as cash equivalents and carried at cost, consistent with those funds’ separately issued financial statements.

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Borrowings under credit facilities, debt issuances and repayments and capital cash flows to and from investors are presented as financing activities, consistent with investment company guidelines.

Structured Finance FG VIEs

The insurance subsidiaries provide financial guaranties with respect to debt obligations of special purpose entities, including VIEs, but do not act as the servicer or collateral manager for any VIE obligations they guarantee.

The transaction structure generally provides certain financial protections to the insurance subsidiaries.

This financial protection can take several forms, the most common of which are overcollateralization, first loss protection (or subordination) and excess spread.

In the case of overcollateralization (i.e., the principal amount of the securitized assets exceeds the principal amount of the structured finance obligations), the structure allows defaults of the securitized assets before a default is experienced on the structured finance obligation guaranteed by the insurance subsidiaries.

In the case of first loss, the insurance subsidiaries’ financial guaranty insurance policy only covers a senior layer of losses experienced by multiple obligations issued by the VIEs.

The Company provides financial guaranties with respect to debt obligations of special purpose entities, including VIEs, but does not act as the servicer or collateral manager for any guaranteed VIE obligations.

The transaction structure generally provides certain financial protections to the Company that can take several forms, the most common of which are overcollateralization, first loss protection (or subordination) and excess spread.

In the case of overcollateralization (i.e., the principal amount of the securitized assets exceeds the principal amount of the structured finance obligations), the transaction structure allows defaults of the securitized assets before a default is experienced on the structured finance obligation guaranteed by the Company.

In the case of first loss, the Company’s financial guaranty insurance policy only covers a senior layer of losses experienced by multiple obligations issued by the VIEs.

The first loss exposure with respect to the assets is either retained by the seller or sold off in the form of equity or mezzanine debt to other investors.

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Such excess spread is typically distributed through the transaction’s cash flow waterfall and may be used to create additional credit enhancement, applied to redeem debt issued by the VIE (thereby, creating additional overcollateralization), or distributed to equity or other investors in the transaction.

The insurance subsidiaries are not primarily liable for the insured debt obligations issued by the structured finance FG VIEs (which excludes the Puerto Rico Trusts described below) and would only be required to make payments on those insured debt obligations in the event that the issuer of such debt obligations defaults on any principal or interest due and only for the amount of the shortfall.

AGL’s and its insurance subsidiaries’ creditors do not have any rights with regard to the collateral supporting the debt issued by the structured finance FG VIEs.

Proceeds from sales, maturities, prepayments and interest from such underlying collateral may only be used to pay debt service on the respective FG VIEs’ liabilities.

As part of the terms of its financial guaranty contracts, the insurance subsidiaries obtain certain protective rights with respect to the VIE that give them additional controls over a VIE.

These protective rights are triggered by the occurrence of

The Company is not primarily liable for the debt obligations issued by the VIEs it insures and would only be required to make payments on insured debt obligations in the event that the issuer defaults on any principal or interest due and only for the amount of the shortfall.

The Company’s creditors do not have any rights with regard to the collateral supporting the insured debt issued by the VIEs.

Proceeds from sales, maturities, prepayments and interest from the underlying collateral in the VIEs may only be used to pay debt service on the respective VIEs’ liabilities.

As part of the terms of its financial guaranty contracts insuring the debt obligations of a VIE, the Company obtains certain protective rights that give it additional controls over the VIE.

These protective rights are triggered by the occurrence of certain events, such as failure to be in compliance with a covenant due to poor deal performance or a deterioration in a servicer’s or collateral manager’s financial condition.

Typically, at deal inception, the Company is not deemed to control the VIEs whose debt it insures;

however, once a trigger event occurs, the Company’s control of the VIE typically increases.

With respect to the debt obligations of VIEs that it insures, the Company continuously evaluates its power to direct the activities that most significantly impact the VIE’s economic performance and the circumstances where it is obligated to absorb VIE losses or is entitled to receive benefits that could potentially be significant to the VIE.

Under GAAP, the Company is typically deemed to be the control party for a VIE when its protective rights give it the power to both terminate and replace the transaction’s servicer or collateral manager, which are characteristics specific to the Company’s financial guaranty contracts.

If the protective rights that could make the Company the control party have not been triggered, then the VIE is not consolidated.

If the Company is deemed to no longer have those protective rights, the VIE is deconsolidated.

If the Company consolidates a VIE whose debt it insures as a result of its consolidation analysis, the Company refers to such consolidated VIE as an FG VIE.

The FG VIEs’ liabilities that are insured by the Company are considered to be with

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

certain events, such as failure to be in compliance with a covenant due to poor deal performance or a deterioration in a servicer’s or collateral manager’s financial condition.

At deal inception, the insurance subsidiaries typically are not deemed to control the VIE;

however, once a trigger event occurs, the insurance subsidiaries’ control of the VIE typically increases.

The Company continuously evaluates its power to direct the activities that most significantly impact the economic performance of VIEs that have debt obligations insured by the insurance subsidiaries and, accordingly, where they are obligated to absorb VIE losses or receive benefits that could potentially be significant to the VIE.

The insurance subsidiaries are deemed to be the control party for certain VIEs under GAAP, typically when their protective rights give them the power to both terminate and replace the transaction’s servicer or collateral manager, which are characteristics specific to the Company’s financial guaranty contracts.

If the protective rights that could make the insurance subsidiaries the control party have not been triggered, then the VIE is not consolidated.

If the insurance subsidiaries are deemed to no longer have those protective rights, the VIE is deconsolidated.

The structured finance FG VIEs’ liabilities that are guaranteed by the insurance subsidiaries are considered to be with recourse, because the insurance subsidiaries guarantee the payment of principal and interest regardless of the performance of the related FG VIEs’ assets.

The structured finance FG VIEs’ liabilities that are not guaranteed by the insurance subsidiaries are considered to be without recourse, because the payment of principal and interest of these liabilities is wholly dependent on the performance of the FG VIEs’ assets.

Number of Consolidated

Structured Finance FG VIEs

recourse, because the Company guarantees the payment of principal and interest regardless of the performance of the related FG VIEs’ assets.

The FG VIEs’ liabilities that are not insured by the Company are considered to be without recourse, because the payment of principal and interest of these liabilities is wholly dependent on the performance of the FG VIEs’ assets.

Number of Consolidated FG VIEs

Year Ended December 31,

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December 31 24 23 48

Puerto Rico Trusts

With respect to certain insured securities covered by the 2022 Puerto Rico Resolutions, insured bondholders were permitted to elect to receive custody receipts that represented an interest in the legacy insurance policy plus cash and investments.

For those who made the election above, distributions of assets in the trusts were passed through to insured bondholders under the custody receipts to the extent of any cash or proceeds of new securities held in the custodial trust and were applied to make payments and/or prepayments of amounts due under the legacy insured bonds.

As of December 31, 2023, substantially all of the securities in the Puerto Rico Trusts had been called, and the assets in the Puerto Rico Trusts consisted primarily of cash.

In 2024, after notice to the remaining holders of the PRHTA custody receipts, the Company satisfied its remaining direct insured obligations and deconsolidated the 24 custodial trusts that had been consolidated as of December 31, 2023.

Components of FG VIEs’ Assets and Liabilities

Net fair value gains and losses on FG VIEs are expected to reverse to zero by the maturity of the FG VIEs’ debt, except for net premiums received and net claims paid by the insurance subsidiaries under the financial guaranty insurance contracts.

The Company’s estimate of expected loss to be paid (recovered) for FG VIEs is included in Note 4, Expected Loss to be Paid (Recovered).

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

____________________

(1) Includes deconsolidation of 24 FG VIEs in 2024 and 21 FG VIEs in 2023 related to trusts established as a result of the Company’s resolution of defaulting Puerto Rico exposures in 2022.

Components of FG VIE Assets and Liabilities

Net fair value gains and losses on FG VIEs are expected to reverse to zero by the maturity of the FG VIEs’ debt, except for net premiums received and net claims paid by the Company under its financial guaranty insurance contracts.

The Company’s estimate of expected loss to be paid (recovered) for FG VIEs is included in Note 4.

Expected Loss to be Paid (Recovered).

The table below shows the carrying value of FG VIEs’ assets and liabilities, segregated by type of collateral.

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RMBS (3) $ 142 $ 147

Puerto Rico Trusts’ assets (includes $ 1 at fair value in 2023) (1)

Other (includes $ 30 at fair value in 2025) (1) (2)

Total FG VIEs’ assets $ 212 $ 147

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RMBS (3) $ 147 $ 155

Puerto Rico Trusts’ liabilities — 366

Other, at fair value (2) 35 —

Total FG VIEs’ liabilities with recourse $ 182 $ 155

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RMBS (3) $ 9 $ 9

Other (includes $ 6 at fair value in 2025) (2)

Total FG VIEs’ liabilities without recourse $ 16 $ 9

____________________

(1) Includes $ 154 million of cash as of December 31, 2023.

The change in the ISCR of the FG VIEs’ assets for which the Company elected the FVO (FG VIEs’ assets at FVO) held as of December 31, 2024, 2023 and 2022 that was reported in the consolidated statements of operations was a loss of $ 5 million in 2024, gain of $ 3 million in 2023 and gain of $ 10 million in 2022.

(1) Includes a contract asset related to a services agreement of approximately $ 40 million as of December 31, 2025 accounted for in accordance with ASC 606, Revenue from Contracts with Customers , as well as debt and equity investments, and cash and cash equivalents.

(2) Other amounts represent the assets and liabilities of an FG VIE that was consolidated during 2025.

RMBS assets and liabilities are measured at fair value under the FVO.

The change in the ISCR of the FG VIEs’ assets for which the Company elected the FVO (FG VIEs’ assets at FVO) held as of December 31, 2025, 2024 and 2023 that was reported in the consolidated statements of operations was a gain of $ 7 million in 2025, loss of $ 5 million in 2024 and gain of $ 3 million in 2023.

The ISCR amount is determined by using expected cash flows at the most recent date of consolidation, discounted at the effective yield, less current expected cash flows discounted at that same original effective yield.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Selected Information for FG VIEs’ Assets and Liabilities

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The Company consolidates investment vehicles that are VIEs when it is deemed to be the primary beneficiary based on its power to direct the most significant activities of each VIE and its level of economic interest in the entities.

As a result of the Sound Point Transaction and AHP Transaction, the Company deconsolidated CIV assets of $ 4.7 billion and CIV liabilities of $ 4.4 billion in 2023, and recognized a loss on deconsolidation of $ 16 million, which was reported in “fair value gains (losses) on CIVs.” In addition, at the time of deconsolidation, NCI decreased by $ 132 million.

During 2022, the Company deconsolidated a CLO with assets and liabilities of $ 417 million.

As a result of the Sound Point Transaction and AHP Transaction, the Company deconsolidated CIV assets of $ 4.7 billion and CIV liabilities of $ 4.4 billion in 2023, and recognized a loss on deconsolidation of $ 16 million, which was reported in “fair value gains (losses) on consolidated investment vehicles.” In addition, at the time of deconsolidation in 2023, NCI decreased by $ 132 million.

The assets and liabilities of the Company’s CIVs are held within separate legal entities.

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In addition, creditors of the CIVs have no recourse against the assets of the Company, other than the assets of such applicable CIVs.

Liquidity available at the Company’s

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

CIVs is not available for corporate liquidity needs, except to the extent of the Company’s investment in the funds, subject to redemption provisions.

In 2024, two CIVs distributed substantially all of their invested assets.

After the distributions, as of December 31, 2024, the Company classifies the $ 293 million of the distributed investments as either (i) available-for-sale fixed-maturity securities (CLOs with a carrying value of $ 263 million), (ii) trading securities, (iii) equity method investments, or (iv) other invested assets.

The table below summarizes the change in the number of consolidated CIVs during each of the periods.

During 2022, two consolidated CLO warehouses became CLOs.

Roll Forward of Number of Consolidated CIVs

Year Ended December 31,

2024 2023 2022

Beginning of year 3 22 20

Consolidated — — 4

Deconsolidated ( 1 ) ( 19 ) ( 2 )

December 31 2 3 22

Assets and Liabilities of CIVs

As of December 31,

(in millions)

Cash and cash equivalents $ 2 $ 35

Equity securities and warrants 99 83

Structured products — 248

Total assets (1) $ 101 $ 366

Liabilities (2)

____________________

(1) Include investments with Sound Point affiliated entities of $ 99 million and $ 281 million as of December 31, 2024 and December 31, 2023, respectively.

(2) Includes $ 3 million with Sound Point affiliated entities as of December 31, 2023.

As of December 31, 2024, there were no derivative contracts in CIVs.

As of December 31, 2023, the CIVs included derivative contracts with average notional amounts of $ 41 million.

Derivative instruments, which included forward foreign currency contracts, served as a component of the CIVs’ investment strategies.

NCI represents the portion of the consolidated funds not owned by the Company and includes ownership interests of third parties and former employees.

Liquidity available at the Company’s CIVs is not available for corporate liquidity needs, except to the extent of the Company’s investment in the funds, subject to redemption provisions.

In 2024, two CIVs distributed substantially all of their invested assets of approximately $ 280 million.

After the distribution, the Company classifies the distributed investments as either available-for-sale fixed-maturity securities, trading securities, equity method investments or other invested assets.

As of December 31, 2025 and December 31, 2024, the Company consolidated one active CIV with assets of $ 175 million and $ 101 million, respectively, consisting primarily of investments with Sound Point affiliated entities.

NCI in FG VIEs and CIVs

NCI represents the portion of the consolidated FG VIEs and funds not owned by the Company and includes ownership interests of third parties and former employees.

The NCI is non-redeemable and presented on the statement of shareholders’ equity.

Other Consolidated VIEs

In certain instances where the Company consolidates a VIE that was established as part of a loss mitigation negotiated settlement that results in the termination of the obligations under the original financial guaranty insurance or insured credit derivative contract, the Company classifies the assets and liabilities of that VIE in the line items that most accurately reflect the nature of such assets and liabilities, as opposed to within FG VIEs’ assets and FG VIEs’ liabilities.

The largest of these VIEs had assets of $ 92 million and liabilities of $ 7 million as of December 31, 2023, which were reported in “investments” and “other liabilities,” respectively, on the consolidated balance sheets.

In the first quarter of 2024, the Company deconsolidated the largest of these VIEs.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Non-Consolidated VIEs

As described in Note 3, Outstanding Exposure, the Company monitors all policies in the insured portfolio.

Of the approximately 15 thousand policies monitored as of December 31, 2024, approximately 14 thousand policies are not within the scope of FASB ASC 810, Consolidation, because these financial guaranties relate to the debt obligations of governmental organizations or financing entities established by a governmental organization.

As described in Note 3.

Outstanding Exposure, the Company monitors all policies in the insured portfolio.

Of the approximately 16 thousand policies monitored as of December 31, 2025, approximately 14 thousand policies are not within the scope of ASC 810, Consolidation, because these financial guaranties relate to the debt obligations of governmental organizations or financing entities established by a governmental organization.

The majority of the remaining policies involve transactions where the Company is not deemed to currently have control over the FG VIEs’ most significant activities.

As of December 31, 2025 and 2024, the Company identified 53 and 50 policies, respectively, that contain provisions and experienced events that may trigger consolidation.

The Company holds variable interests in non-FG VIEs which are not consolidated, as the Company is not the primary beneficiary.

As of December 31, 2024 the Company’s maximum exposure to losses relating to these VIEs was $ 761 million, which is limited to the carrying value of these assets.

The Company holds variable interests in investment vehicles which are not consolidated, as the Company is not the primary beneficiary.

As of December 31, 2025, the Company’s maximum exposure to losses relating to these VIEs was $ 865 million, which is limited to the carrying value of the investment vehicles.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Fair Value Measurement

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As markets and products develop and the pricing transparency for certain products changes, the Company may refine its methodologies and assumptions.

During 2024, no changes were made to the Company’s valuation models that had (or are expected to have) a material impact on the Company’s consolidated balance sheets or statements of operations and comprehensive income.

During 2025, no changes were made to the Company’s valuation models that had (or are expected to have) a material impact on the Company’s consolidated balance sheets, consolidated statements of operations or consolidated statements of comprehensive income.

The Company’s valuation methods produce fair values that may not be indicative of net realizable value or future fair values.

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Level 3—Model derived valuations in which one or more significant inputs or significant value drivers are unobservable.

Financial instruments are considered Level 3 when their values are (i) determined using pricing models, discounted cash flow methodologies or similar techniques and (ii) at least one significant model assumption or input is

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

unobservable.

Level 3 financial instruments also include those for which the determination of fair value requires significant management judgment or estimation.

There were transfers of securities into Level 3 in the investment portfolio and CIVs, due to changes in observability of pricing inputs, and in CIVs, in connection with the distribution of assets from the CIV during 2024.

There was a transfer of a fixed-maturity security in the investment portfolio from Level 3 to Level 2 during 2023.

There was also a transfer of fixed-maturity securities in the investment and FG VIE portfolios from Level 2 to Level 3 during 2023.

Level 3 financial instruments include those for which the determination of fair value requires significant management judgment or estimation.

There were no other transfers from or into Level 3 during the periods presented.

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The fair value of fixed-maturity securities is generally based on prices received from third-party pricing services or alternative pricing sources that provide reasonable levels of price transparency.

The pricing services prepare estimates of fair value using their pricing models, which take into account:

The pricing services prepare estimates of fair

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

value using their pricing models, which take into account:

benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, industry and economic events and sector groupings.

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Committed Capital Securities

The fair value of CCS, which is reported in “other assets” in the consolidated balance sheets, represents the difference between the present value of the remaining expected put option premium payments under the put agreements and the estimated present value of the amounts that the Company would hypothetically have to pay as of the reporting date for a comparable security (see Note 11, Long-Term Debt and Credit Facilities).

Long-Term Debt and Credit Facilities).

The change in fair value of the CCS is reported in “fair value gains (losses) on committed capital securities” in the consolidated statements of operations.

The estimated current cost of the Company’s CCS as of the reporting date is based on several factors, including AG CDS spreads, the Company’s publicly traded debt and an estimation of the securities’ remaining term.

The estimated current cost of the Company’s CCS as of the reporting date is based on several factors, including AG’s CDS spreads, the Company’s publicly traded debt and an estimation of the securities’ remaining term.

The CCS are classified as Level 3.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Supplemental Executive Retirement Plans

The Company classified assets included in the Company’s various supplemental executive retirement plans as either Level 1 or Level 2.

The fair value of these assets is based on the observable published daily values of the underlying mutual funds included in the plans (Level 1) or based upon the net asset value (NAV) of the funds if a published daily value is not available (Level 2).

The fair value of these assets is based on the observable published daily values of the underlying mutual funds included in the plans (Level 1) or based upon the NAV of the funds if a published daily value is not available (Level 2).

The NAVs are based on observable information.

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There are multiple unobservable inputs deemed significant to the valuation model, most importantly the Company’s estimate of the value of the non-standard terms and conditions of its credit derivative contracts and how the Company’s own credit spread affects the pricing of its transactions.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

The fair value of the Company’s credit derivative contracts generally represents the difference between the present value of remaining premiums the Company expects to receive and the estimated present value of premiums that a financial guarantor of comparable credit-worthiness would hypothetically charge at the reporting date for the same protection.

3 unchanged sentences

A credit derivative liability on protection sold is the result of contractual cash inflows on in-force transactions that are lower than what a hypothetical financial guarantor could receive if it sold protection on the same risk as of the reporting date.

Consistent with previous years, market conditions at December 31, 2024 were such that market prices of the Company’s CDS contracts were not available.

Consistent with previous years, market conditions as of December 31, 2025 were such that market prices of the Company’s CDS contracts were not available.

Assumptions and Inputs

The main inputs and assumptions to the measurement of fair value for CDS contracts are the gross spread, the allocation of gross spread among the bank profit, net spread and hedge cost and the weighted average life (which is based on debt service schedules).

The primary sources of information used to determine gross spread and the fair value for CDS contracts include actual collateral credit spreads (if up-to-date and reliable market-based spreads are available), transactions priced or closed during a specific quarter within a specific asset class and specific rating and information provided by the counterparty of the CDS.

Credit spreads may also be interpolated based upon market indices adjusted to reflect the non-standard terms of the Company’s CDS contracts or extrapolated based upon transactions of similar asset classes, similar ratings and similar time to maturity.

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The Company obtains the quoted price of CDS contracts traded on AG from market data sources published by third parties.

The amount of premium a financial guaranty insurance market participant can demand (or “current premium”) is inversely related to the cost of credit protection on the insurance company as measured by market credit spreads assuming all other assumptions remain constant.

The amount of premium a financial guaranty insurance market participant can demand (current premium) is inversely related to the cost of credit protection on the insurance company as measured by market credit spreads assuming all other assumptions remain constant.

This is because the buyers of credit protection typically hedge a portion of their risk to the financial guarantor because the contractual terms of the Company’s contracts typically do not require the posting of collateral by the guarantor.

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This assumption can have the effect of limiting the amount of unrealized gains that are recognized on certain CDS contracts.

The minimum premium assumption had no effect on the fair value of CDS contracts as of December 31, 2024 or December 31, 2023.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

The minimum premium had no effect on the fair value of CDS contracts as of December 31, 2025 or December 31, 2024.

FG VIEs’ Assets and Liabilities

Structured finance FG VIEs’ assets and liabilities are carried at fair value under the FVO and are classified as Level 3.

The Company elected the FVO for the Puerto Rico Trusts’ liabilities and they were classified as Level 3.

FG VIEs’ assets and liabilities for which the Company elected the FVO are carried at fair value and classified as Level 3.

The fair value of the residential mortgage loans in the FG VIEs’ assets is generally sensitive to changes in estimated prepayment speeds;

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In general, the fair value of the FG VIEs’ assets is most sensitive to changes in the projected collateral losses, where an increase in collateral losses typically leads to a potential decrease in the fair value of FG VIEs’ assets, while a decrease in collateral losses typically leads to an increase in the fair value of FG VIEs’ assets.

The prices of the assets and liabilities of the FG VIEs are generally determined with the assistance of an independent third party and based on a discounted cash flow approach.

The prices of these assets and liabilities of the FG VIEs are generally determined with the assistance of an independent third party and based on a discounted cash flow approach.

The third party pricing service utilizes an internal model to determine an appropriate yield at which to discount the cash flows of the security by factoring in collateral types, weighted average lives and other structural attributes specific to the security being priced.

The expected yield is further calibrated by utilizing algorithms designed to aggregate market color, received by the independent third party, on comparable bonds.

The models used to price the FG VIEs’ liabilities (other than the liabilities of the Puerto Rico Trusts) generally apply the same inputs used in determining fair value of FG VIEs’ assets.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

The models used to price the FG VIEs’ liabilities generally apply the same inputs used in determining fair value of FG VIEs’ assets.

For those liabilities insured by the Company, the benefit of the Company’s insurance policy guaranteeing the timely payment of debt service is also taken into account.

The liabilities of the Puerto Rico Trusts were priced based on the value of the assets in the Puerto Rico Trusts including the value of the Company’s financial guaranty policy.

The timing of expected losses within an insured transaction is a significant factor in determining the implied benefit of the Company’s insurance policy, which guarantees the timely payment of principal and interest for the insured tranches of debt issued by the FG VIEs.

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(iii) calculating the present value of future cash flows;

(iv) assessing other data related to the investment that is an indication of value;

(iv) assessing other data related to the investment that may be an indication of value;

(v) obtaining information provided by third parties;

1 unchanged sentence

Inputs may include dealer price quotations, yield curves, credit curves, forward/CDS/index spreads, prepayments rates, strike and expiry dates, volatility statistics and other factors.

Significant changes to any of the inputs described above could have a material effect on the fair value of the CIV’s assets and liabilities.

Significant changes to any of the inputs described above could have a material effect on the fair value of the CIVs’ assets and liabilities.

Assured Guaranty Ltd.

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FG VIEs’ assets — — 147 147

Assets of CIVs:

Equity securities — 3 80 83

Structured products — 59 189 248

Total assets of CIVs — 62 269 331

Assets of CIVs, equity securities — — 99 99

Other assets 65 59 7 131

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____________________

(1) Includes Level 3 mortgage loans that are recorded at fair value on a non-recurring basis.

(2) Includes FG VIEs’ liabilities with recourse and FG VIEs’ liabilities without recourse.

See Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.

(1) Other invested assets include Level 3 mortgage loans that are recorded at fair value on a non-recurring basis.

(2) FG VIEs’ liabilities include those with and without recourse, some of which are measured at fair value on a nonrecurring basis as December 31, 2025.

Variable Interest Entities.

Assured Guaranty Ltd.

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Year Ended December 31, 2025

Fixed-Maturity Securities, Available-for-Sale Assets of CIVs

Subdivisions RMBS Asset-

Fixed-Maturity Securities, Available-for-Sale

Subdivisions Corporate RMBS Asset-

Securities Fixed-Maturity Securities, Trading FG VIEs’

Assets Equity Securities Structured Products Other

Assets Assets of CIVs, Equity Securities Other

(in millions)

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Settlements ( 2 ) — ( 24 ) ( 624 ) ( 2 ) ( 20 ) — —

Reclassifications (10) — — 245 8 — — ( 253 ) —

Deconsolidations — — — — — ( 1 ) ( 2 ) —

Transfers into Level 3 — — 20 — — 3 10 —

Transfers out of Level 3 — — — — — ( 2 ) ( 2 ) —

Consolidations — — — — — 8 — —

Fair value as of December 31, 2025 $ 10 $ 168 $ 144 $ 511 $ 4 $ 150 $ 167 $ 24

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Other comprehensive income (loss) — 1

Issuances ( 2 ) —

Settlements ( 107 ) 16

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Subdivisions RMBS Asset-

Securities FG VIEs’

Assets Equity Securities and Warrants Corporate Securities Structured Products Other

Securities Fixed-Maturity Securities, Trading FG VIEs’

Assets Equity Securities Structured Products Other

(in millions)

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Settlements — ( 25 ) ( 149 ) ( 3 ) ( 23 ) — — —

Reclassifications (9) — — 245 8 — — ( 253 ) —

Deconsolidations — — — — — ( 1 ) ( 2 ) —

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OCI $ 4 $ 2 $ ( 2 ) $ ( 1 ) $ 1

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis

Year Ended December 31, 2024

Credit Derivative Liability, net (5)

Credit Derivative Liability, net (5) FG VIEs’

Liabilities (8)

Liabilities of CIVs (9)

(in millions)

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Settlements ( 1 ) 375

Deconsolidations — 7 4,199

Fair value as of December 31, 2024 $ ( 29 ) $ ( 164 )

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(1) Included in “net realized investment gains (losses)” and “net investment income.”

(2) Reported in “fair value gains (losses) on FG VIEs.”

(3) Reported in “fair value gains (losses) on CCS,” “net investment income” and “other income (loss).”

(4) Reported in “fair value gains (losses) on CIVs.”

(2) Reported in “fair value gains (losses) on financial guaranty variable interest entities.”

(3) Reported in “fair value gains (losses) on committed capital securities,” “net investment income” and “other income (loss).”

(4) Reported in “fair value gains (losses) on consolidated investment vehicles.”

(5) Represents the net position of credit derivatives.

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(8) Includes FG VIEs’ liabilities with recourse and FG VIEs’ liabilities without recourse.

(9) Includes primarily various tranches of CLO debt.

The CLOs were CFEs that were consolidated until the Sound Point Transaction occurred on July 1, 2023.

(10) Represents securities transferred from two of the CIVs to the investment portfolio due to the distribution of assets of these CIVs.

See Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles, for additional information.

(9) Represents securities transferred from one of the CIVs to the investment portfolio due to the distribution of assets of that CIV.

Variable Interest Entities.

(10) Reported in “fair value gains (losses) on trading securities.”

Assured Guaranty Ltd.

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Obligations of state and political subdivisions $ 10 Yield 5.2 % - 15.0 % 6.6 %

Corporate 168 Yield 5.0 % - 8.0 % 5.2 %

RMBS 144 Conditional prepayment rate (CPR)

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Bank profit (in bps) 66.0 - 261.9 124.7

Internal floor (in bps) 10.0 - 85.5 29.7

Internal credit rating AAA - CCC A

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____________________

(1) Discounted cash flow is used as the primary valuation technique.

(2) Excludes several investments reported in “other invested assets” with a fair value of $ 4 million.

(1) Discounted cash flows are used as the primary valuation technique.

(2) This amount excludes several investments reported in “other invested assets” with a fair value of $ 3 million.

(3) The primary valuation technique uses the income and/or market approach.

(4) Weighted average is calculated as a percentage of current par outstanding for all categories except for assets of CIVs, for which it is calculated as a percentage of fair value.

(4) Weighted average is calculated as a percentage of current par outstanding for all categories except for assets of CIVs and “fixed-maturity securities trading,” for which it is calculated as a percentage of fair value.

Assured Guaranty Ltd.

9 unchanged sentences

Obligations of state and political subdivisions $ 10 Yield 5.5 % - 22.0 % 7.5 %

RMBS 154 CPR 0.1 % - 15.0 % 3.4 %

1.8 % - 17.0 % 2.8 %

CDR 1.8 % - 18.7 % 5.4 %

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CLOs 611 Discount margin 0.8 % - 2.9 % 1.9 %

Yield 12.5 % - 22.5 % 17.9 %

Others 420 Yield 6.4 % - 9.1 % 6.7 %

Fixed-maturity securities, trading (1) 5 Yield 19.8 % - 169.5 % 163.8 %

FG VIEs’ assets (1) 147 CPR 2.2 % - 25.0 % 5.7 %

2 unchanged sentences

Yield 6.8 % - 10.8 % 9.3 %

Assets of CIVs (3):

Equity securities 80 Discount rate 20.9 %

Assets of CIVs - equity securities (3) 99 Discount rate 24.3 %

Market multiple-price to book 1.05 x

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Exit multiple-price to earnings 5.50 x

Structured products 189 Yield 14.7 %

Other assets (1) 2 Implied Yield 6.5 % - 7.0 % 6.8 %

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____________________

(1) Discounted cash flow is used as the primary valuation technique.

(2) Excludes several investments reported in “other invested assets” with a fair value of $ 3 million.

(1) Discounted cash flows are used as the primary valuation technique.

(2) This amount excludes several investments reported in “other invested assets” with a fair value of $ 4 million.

(3) The primary valuation technique uses the income and/or market approach.

11 unchanged sentences

The market conventions utilize market quotations, market transactions for the Company’s comparable instruments, and to a lesser extent, similar instruments in the broader insurance industry.

Assets of CIVs

Cash equivalents are recorded at cost which approximates fair value and are considered Level 1 in the fair value hierarchy.

The carrying amount and estimated fair value of the Company’s financial instruments not carried at fair value are presented in the following table.

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Assets (liabilities):

Assets of CIVs $ — $ — $ 19 $ 19

Other assets (including other invested assets) $ 90 $ 91 $ 115 $ 116

5 unchanged sentences

Asset Management Fees

Prior to the Sound Point Transaction and AHP Transaction, the Company received management fees, as well as performance fees, incentive allocations or carried interest (collectively referred to as performance fees) in exchange for AssuredIM providing investment advisory services to manage investment funds and CLOs.

Accounting Policy

2 unchanged sentences

Performance fee contractual provisions are evaluated on an individual basis to determine the timing of revenue recognition.

Asset Management Fees

Asset management fees associated with the AssuredIM consolidated business for the first half of 2023, prior to the Sound Point Transaction and AHP Transaction, were $ 53 million, consisting of management fees of $ 21 million, performance fees of $ 18 million and reimbursable fund expenses of $ 14 million.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Asset Management Fees

The following table presents the sources of asset management fees on a consolidated basis.

Asset Management Fees

Year Ended December 31,

2024 2023 (1) 2022

(in millions)

Management fees $ — $ 21 $ 53

Performance fees — 18 19

Reimbursable fund expenses — 14 21

Total asset management fees $ — $ 53 $ 93

____________________

(1) Represents asset management fees associated with the AssuredIM consolidated business for the first half of 2023, prior to the Sound Point Transaction and AHP Transaction.

In the second half of 2023, after the consummation of the Sound Point Transaction, one AssuredIM general partnership is still consolidated in the Company’s financial statements, which had $ 10 million of revenues and $ 6 million of expenses in 2024, and $ 5 million of revenues and $ 3 million of expenses in 2023.

After the consummation of the Sound Point Transaction, one AssuredIM general partnership was still consolidated in the Company’s financial statements, which had $ 29 million of revenues and $ 17 million of expenses in 2025, $ 10 million of revenues and $ 6 million of expenses in 2024, and $ 5 million of revenues and $ 3 million of expenses in 2023.

Long-Term Debt and Credit Facilities

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(ii) unamortized acquisition date fair value adjustments for AGMH debt;

and (iii) debt issuance costs.

Original issue discount and premium, acquisition date fair value adjustments for AGMH debt, and debt issuance costs are accreted into interest expense over the contractual term of the applicable debt.

and (iii) debt issuance costs which are accreted into interest expense over the contractual term of the applicable debt.

When long-term debt is redeemed, the difference between the cash paid to redeem the debt and the carrying value of the debt is reported as a “loss on extinguishment of debt” in the consolidated statements of operations.

CCS are carried at fair value with changes in fair value reported in the consolidated statement of operations.

See Note 9, Fair Value Measurement, – Other Assets – Committed Capital Securities, for a discussion of the fair value measurement of the CCS.

CCS are carried at fair value with changes in fair value reported in the consolidated statements of operations.

Fair Value Measurement – Other Assets – Committed Capital Securities, for a discussion of the fair value measurement of the CCS.

Long-Term Debt

4 unchanged sentences

AGL’s guarantee of the junior subordinated debentures is on a junior subordinated basis.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Principal and Carrying Amounts of Debt

22 unchanged sentences

On August 21, 2023, AGUS issued $ 350 million of 6.125 % Senior Notes due 2028 ( 6.125 % Senior Notes) for net proceeds of $ 345 million.

The net proceeds from the issuance were used for the redemption on September 25, 2023, of $ 330 million of AGUS’s debt maturing in 2024.

The net proceeds from the issuance were used for the redemption on September 25, 2023, of $ 330 million of AGUS’ debt maturing in 2024.

AGUS may redeem all or part of the 6.125 % Senior Notes at any time or from time to time prior to August 15, 2028 (the date that is one month prior to the maturity of the 6.125 % Senior Notes), at its option, at a redemption price equal to the greater of:

1 unchanged sentence

and (ii) 100 % of the principal amount of the 6.125 % Senior Notes being redeemed;

plus, in each case, accrued and unpaid interest on the 6.125 % Senior Notes to be redeemed to, but excluding, the redemption date.

plus, in each case, accrued and unpaid interest on the 6.125 %

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Senior Notes to be redeemed to, but excluding, the redemption date.

AGUS may redeem all or part of the 6.125 % Senior Notes at any time or from time to time on and after August 15, 2028, at its option, at a redemption price equal to 100 % of the principal amount of the 6.125 % Senior Notes being redeemed, plus accrued and unpaid interest on the 6.125 % Senior Notes to be redeemed to, but excluding, the redemption date.

The 6.125 % Senior Notes are senior unsecured obligations of AGUS and rank equal in right of payment with all of AGUS’s other unsecured and unsubordinated indebtedness outstanding.

The 6.125 % Senior Notes are senior unsecured obligations of AGUS and rank equal in right of payment with all of AGUS’ other unsecured and unsubordinated indebtedness outstanding.

The 6.125 % Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by AGL and ranks equal in right of payment with all of AGL’s other unsecured and unsubordinated indebtedness outstanding.

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The 3.15 % Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by AGL.

The 3.15 % Senior Notes are senior unsecured obligations of AGUS and rank equal in right of payment with all of AGUS’s other unsecured and unsubordinated indebtedness outstanding.

The guarantee is a senior

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

unsecured obligation of AGL and ranks equal in right of payment with all of AGL’s other unsecured and unsubordinated indebtedness outstanding.

The 3.15 % Senior Notes are senior unsecured obligations of AGUS and rank equal in right of payment with all of AGUS’ other unsecured and unsubordinated indebtedness outstanding.

The guarantee is a senior unsecured obligation of AGL and ranks equal in right of payment with all of AGL’s other unsecured and unsubordinated indebtedness outstanding.

7 % Senior Notes.

4 unchanged sentences

On August 20, 2021, AGUS issued $ 400 million of 3.6 % Senior Notes due 2051 ( 3.6 % Senior Notes) for net proceeds of $ 395 million.

The net proceeds from the issuance were used for the redemption on September 27, 2021, of certain AGMH’s debt and a portion of AGUS’s debt maturing in 2024, as described below.

AGUS may redeem all or part of the 3.6 % Senior Notes at any time or from time to time prior to March 15, 2051 (the date that is six months prior to the maturity of the 3.6 % Senior Notes), at its option, at a redemption price equal to the greater of:

4 unchanged sentences

The 3.6 % Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by AGL.

The 3.6 % Senior Notes are senior unsecured obligations of AGUS and rank equal in right of payment with all of AGUS’s other unsecured and unsubordinated indebtedness outstanding.

The 3.6 % Senior Notes are senior unsecured obligations of AGUS and rank equal in right of payment with all of AGUS other unsecured and unsubordinated indebtedness outstanding.

The guarantee is a senior unsecured obligation of AGL and ranks equal in right of payment with all of AGL’s other unsecured and unsubordinated indebtedness outstanding.

Series A Enhanced Junior Subordinated Debentures.

On December 20, 2006, AGUS issued $ 150 million of Debentures due 2066.

The Debentures pay a floating rate of interest, reset quarterly, at a rate equal to three month Chicago Mercantile Exchange (CME) Term SOFR plus a margin equal to 2.64 %.

Series A Enhanced Junior Subordinated Debentures (AGUS Debentures).

On December 20, 2006, AGUS issued $ 150 million of AGUS Debentures due 2066.

The AGUS Debentures pay a floating rate of interest, reset quarterly, at a rate equal to three month Chicago Mercantile Exchange (CME) Term SOFR plus a margin equal to 2.64 %.

AGUS may select at one or more times to defer payment of interest for one or more consecutive periods for up to ten years .

1 unchanged sentence

AGUS may not defer interest past the maturity date.

The debentures are redeemable, in whole or in part, at their principal amount plus accrued and unpaid interest to the date of redemption.

The AGUS Debentures are redeemable, in whole or in part, at their principal amount plus accrued and unpaid interest to the date of redemption.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Debt Issued by AGMH

Junior Subordinated Debentures.

On November 22, 2006, AGMH issued $ 300 million face amount of Junior Subordinated Debentures with a scheduled maturity date of December 15, 2036 and a final repayment date of December 15, 2066.

Junior Subordinated Debentures (AGMH Debentures).

On November 22, 2006, AGMH issued $ 300 million face amount of AGMH Debentures with a scheduled maturity date of December 15, 2036 and a final repayment date of December 15, 2066.

The final repayment date of December 15, 2066 may be automatically extended up to four times in five-year increments provided certain conditions are met.

The debentures are redeemable, in whole or in part, at any time prior to December 15, 2036 at their principal amount plus accrued and unpaid interest to the date of redemption or, if greater, the make-whole redemption price.

Interest on the debentures will accrue from November 22, 2006 to December 15, 2036 at the annual rate of 6.4 %.

If any amount of the debentures remains outstanding after December 15, 2036, then the principal amount of the outstanding debentures will bear interest at a floating interest rate equal to one-month CME Term SOFR plus 2.33 % until repaid.

AGMH may elect at one or more times to defer payment of interest on the debentures for one or more consecutive interest periods that do not exceed ten years .

In connection with the completion of this offering, AGMH entered into a replacement capital covenant for the benefit of persons that buy, hold or sell a specified series of AGMH long-term indebtedness ranking senior to the debentures.

Under the covenant, the debentures will not be repaid, redeemed, repurchased or defeased by AGMH or any of its subsidiaries on or before the date that is 20 years prior to the final repayment date, except to the extent that AGMH has received proceeds from the sale of replacement capital securities.

The AGMH Debentures are redeemable, in whole or in part, at any time prior to December 15, 2036 at their principal amount plus accrued and unpaid interest to the date of redemption or, if greater, the make-whole redemption price.

Interest on the AGMH Debentures will accrue from November 22, 2006 to December 15, 2036 at the annual rate of 6.4 %.

If any amount of the AGMH Debentures remains outstanding after December 15, 2036, then the principal amount of the outstanding AGMH Debentures will bear interest at a floating interest rate equal to one-month CME Term SOFR plus 2.33 % until repaid.

AGMH may elect at one or more times to defer payment of interest on the AGMH Debentures for one or more consecutive interest periods that do not exceed ten years .

Under the covenant, the AGMH Debentures will not be repaid, redeemed, repurchased or defeased by AGMH or any of its subsidiaries on or before the date that is 20 years prior to the final repayment date, except to the extent that AGMH has received proceeds from the sale of replacement capital securities.

The proceeds from this offering were used to pay a dividend to the shareholders of AGMH.

Over the past several years AGUS purchased, and as of December 31, 2024 and 2023, AGUS holds approximately $ 154 million in principal of the AGMH Subordinated Debentures.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Over the past several years AGUS purchased and, as of December 31, 2025 and 2024, holds $ 154 million in principal of the AGMH Debentures.

Debt Maturity and Interest Expense

8 unchanged sentences

The Company’s interest expense was $ 89 million, $ 91 million and $ 90 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The Company’s interest paid was $ 85 million, $ 88 million and $ 77 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Committed Capital Securities

AG has entered into put agreements with eight separate custodial trusts allowing it to issue an aggregate of $ 400 million of non-cumulative redeemable perpetual preferred securities to the trusts in exchange for cash.

The arrangement entails eight custodial trusts (Woodbourne Capital Trust I, II, III and IV and Sutton Capital Trust I, II, III and IV), each of which issued $ 50 million face amount of “committed capital securities” and invested the proceeds of that issuance in eligible assets that would enable the trust to have the cash necessary to respond to AG’s exercise of a put option.

The arrangement entails eight custodial trusts (Woodbourne Capital Trust I, II, III and IV and Sutton Capital Trust I, II, III and IV), each of which issued $ 50 million face amount of CCS and invested the proceeds of that issuance in eligible assets that would enable the trust to have the cash necessary to respond to AG’s exercise of a put option.

The put option consists of a right that AG has, pursuant to separate put agreements that AG entered into with each of the trusts, to issue to each trust $ 50 million of non-cumulative redeemable perpetual preferred stock, in exchange for an equivalent amount of cash (i.e., an aggregate of $ 400 million).

2 unchanged sentences

None of the events that would give rise to a termination of the put agreements have occurred.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Federal Home Loan Bank Membership

In the fourth quarter of 2025, AG became a member of the Federal Home Loan Bank of New York (FHLBNY), thereby gaining access to collateralized FHLBNY borrowings as an additional source of liquidity.

The Board has authorized a maximum borrowing capacity of $ 300 million.

As of December 31, 2025, the Company had not borrowed any funds or pledged any collateral under the FHLBNY program.

Employee Benefit Plans

Accounting Policy

Share-based compensation expense is based on the grant date fair value using the grant date closing price or the Monte Carlo or Black-Scholes-Merton (Black-Scholes) pricing models.

The Company amortizes the fair value of share-based awards on a straight-line basis over the applicable service periods of the awards.

The fair value of each award under the Assured Guaranty Ltd.

Employee Stock Purchase Plan is estimated at the beginning of the offering period using the Black-Scholes option valuation model and is expensed over the period which the employee participates in the plan and pays for the shares.

Assured Guaranty Ltd.

9 unchanged sentences

The grant of full value awards are subject to a risk of forfeiture or other restrictions that will lapse upon the achievement of one or more goals relating to completion of service by the participant or achievement of performance or other objectives.

In addition to full value awards,

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

the Incentive Plan also provides for the grant of incentive stock options, non-qualified stock options and stock appreciation rights.

The Incentive Plan is administered by the Compensation Committee of AGL’s Board of Directors (the Board), except as otherwise determined by the Board.

In addition to full value awards, the Incentive Plan also provides for the grant of incentive stock options, non-qualified stock options and stock appreciation rights.

The Incentive Plan is administered by the Compensation Committee of AGL’s Board, except as otherwise determined by the Board.

The Board may amend or terminate the Incentive Plan.

The Company issues new shares to settle share-based awards.

Accounting Policy

Share-based compensation expense is based on the grant date fair value using the grant date closing price or the Monte Carlo or Black-Scholes-Merton (Black-Scholes) pricing models.

For retirement-eligible employees, the Company expenses the portion of the unvested time-based awards that fully vest upon retirement eligibility.

Except for the time-based awards to retirement-eligible employees, the Company amortizes the fair value of share-based awards on a straight-line basis over the requisite service periods of the awards, which are generally the vesting periods.

The fair value of each award under the Assured Guaranty Ltd.

Employee Stock Purchase Plan is estimated at the beginning of the offering period using the Black-Scholes option valuation model and are expensed over the period which the employee participates in the plan and pays for the shares.

Long-Term Incentive Plan

Restricted Share Units

5 unchanged sentences

Weighted Average Grant Date Fair Value Per Share

Nonvested at December 31, 2023 932,728 $ 54.16

Nonvested as of December 31, 2024 780,481 $ 64.03

Granted 275,767 91.53

1 unchanged sentence

Forfeited ( 5,830 ) 69.15

Nonvested at December 31, 2024 780,481 $ 64.03

Nonvested as of December 31, 2025 675,594 $ 79.17

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

As of December 31, 2025, the total unrecognized compensation cost related to outstanding non-vested restricted share units was $ 19 million, which the Company expects to recognize over the weighted average remaining service period of 2.1 years.

The total fair value of restricted share units vested during the years ended December 31, 2024, 2023 and 2022 was $ 16 million, $ 18 million and $ 12 million, respectively.

The total value of restricted share units vested during the years ended December 31, 2025, 2024 and 2023 was based on grant date fair value and was $ 21 million, $ 16 million and $ 18 million, respectively.

The weighted average grant-date fair value per share of restricted share units granted during the years ended December 31, 2025, 2024 and 2023 was $ 91.53 , $ 84.59 and $ 61.26 , respectively.

1 unchanged sentence

Each performance-based restricted share unit represents a contingent right to receive up to a certain number of the Company’s common shares.

Awards tied to core adjusted book value per share represent the right to receive up to two shares at the end of a three-year performance period, depending on the growth in core adjusted book value per share over the three-year performance period.

Awards tied to core adjusted book value (ABV) per share represent the right to receive up to two shares at the end of a three-year performance period, depending on the growth in core ABV per share over the three-year performance period.

Performance-based restricted share units tied to total shareholder return (TSR) relative to the TSR of the 55th percentile of the Russell Midcap Index - Financials (Index) represent the right to receive up to 2.5 shares at the end of a three-year performance period.

The shares related to awards tied to core adjusted book value per share are delivered on the vesting date and the shares related to awards tied to relative TSR are generally delivered on the fourth anniversary of the grant date.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

The shares related to awards tied to core ABV per share are delivered on the vesting date and the shares related to awards tied to relative TSR are generally delivered on the fourth anniversary of the grant date.

Performance-Based Restricted Share Unit Activity

2 unchanged sentences

Weighted Average Grant Date Fair Value Per Share

Nonvested at December 31, 2023 677,856 $ 64.62

Nonvested as of December 31, 2024 752,066 $ 72.39

Granted (1) 347,884 102.12

1 unchanged sentence

Forfeited — —

Nonvested at December 31, 2024 (3) 752,066 $ 72.39

Nonvested as of December 31, 2025 (3) 657,000 $ 91.61

____________________

(1) Includes 118,086 adjusted book value performance-based restricted share units and 177,130 TSR performance-based restricted share units that were granted prior to 2024 at a weighted average grant date fair value of $ 44.01 and $ 60.06 , respectively, but met performance hurdles and vested during 2024.

(1) Includes 73,867 ABV performance-based restricted share units and 83,987 TSR performance-based restricted share units that were granted prior to 2025 at a weighted average grant date fair value of $ 56.69 and $ 83.97 , respectively, but met performance hurdles and vested during 2025.

The weighted average grant date fair value per share excludes these shares.

8 unchanged sentences

Because the simulation is calculating the total rate of return for each company in the Index, the simulation assumes that all dividends for all companies are reinvested.

As a result, all dividends within the simulation are set to zero regardless of any actual (real world) dividends paid by any of the companies in the Index, so actual dividend data are not used as inputs.

As a result, all dividends within the simulation are set to zero regardless of any actual dividends paid by any of the companies in the Index, so actual dividend data are not used as inputs.

The following are significant assumptions used in determining the fair value of the performance-based restricted share units tied to relative TSR.

Years Ended December 31,

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Year Ended December 31,

2025 2024 2023

4 unchanged sentences

Grant-date fair value per share $ 112.58 $ 104.27 $ 80.80

For the 2024, 2023 and 2022 awards, the grant-date fair value of the performance-based restricted share units tied to core adjusted book value was based on the grant date closing price.

For the 2025, 2024 and 2023 awards, the grant-date fair value of the performance-based restricted share units tied to core ABV was based on the grant date closing price.

The weighted average grant-date fair values per share of all performance-based awards in 2025, 2024 and 2023 were $ 102.12 , $ 94.56 and $ 71.34 , respectively.

3 unchanged sentences

The shares are delivered on the vesting date.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Restricted Share Award Activity

1 unchanged sentence

Weighted Average Grant Date Fair Value Per Share

Nonvested at December 31, 2023 38,464 $ 52.26

Nonvested as of December 31, 2024 21,413 $ 77.54

Granted 22,002 90.18

1 unchanged sentence

Forfeited — —

Nonvested at December 31, 2024 21,413 $ 77.54

Nonvested as of December 31, 2025 22,002 $ 90.18

As of December 31, 2025, the total unrecognized compensation cost related to outstanding non-vested restricted share awards was $ 0.7 million, which the Company expects to recognize over the weighted average remaining service period of 0.3 years.

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Participants may purchase shares at a purchase price equal to 85 % of the lesser of the fair market value of the stock on the first day or the last day of the subscription period.

The Company has reserved for issuance and purchases under the ESPP 1,200,000 AGL common shares.

The Company has reserved for issuance and purchase 1,200,000 AGL common shares under the ESPP.

As of December 31, 2025, 303,536 common shares were available for grant under the ESPP.

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and (iv) the expected life is based on the term of the offering period.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

AGL Employee Stock Purchase Plan

14 unchanged sentences

Income tax benefit 7 5 5

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Defined Contribution Plan

9 unchanged sentences

The Company also maintains similar non-qualified plans for non-U.S.

The Company recognized defined contribution expenses of $ 18 million, $ 16 million and $ 20 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company recognized defined contribution plan expenses of $ 17 million, $ 18 million and $ 16 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Payable to Sound Point and AHP

As of December 31, 2024 and December 31, 2023, the Company had $ 3 million and $ 8 million payable for compensation to former employees of AssuredIM in accordance with the Sound Point Transaction and the AHP Transaction, respectively.

As of December 31, 2024, the Company had $ 3 million in compensation payable to former employees of AssuredIM in accordance with the Sound Point Transaction and the AHP Transaction.

AGL is a tax resident in the U.K.

although it remains a Bermuda-based company and its administrative and head office functions continue to be carried on in Bermuda.

Under Bermuda law, there was no Bermuda income, corporate or profits tax or withholding tax, capital gains tax or capital transfer tax payable by AGL or the Bermuda Subsidiaries (collectively, AG Re, AGRO and Cedar Personnel Ltd.) in 2024 and 2023.

although it remains a Bermuda-based company and its administrative and head office functions are carried on in Bermuda.

In July of 2023, the U.K.

government passed legislation to implement the Organization for Economic Co-Operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) Pillar Two income inclusion rule.

This includes a multinational top-up tax which applies to large multinational corporations for accounting periods beginning on or after December 31, 2023.

This applies to AGL and its subsidiaries, requiring a minimum effective rate of 15 % in all jurisdictions in which they operate.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

2024 and 2023.

AGL’s U.S., U.K.

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domestic corporation.

In July of 2023, the U.K.

government passed legislation to implement the Organization for Economic Co-Operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) Pillar Two income inclusion rule.

This includes a multinational top-up tax which will apply to large multinational corporations for accounting periods beginning on or after December 31, 2023.

This applies to AGL and its subsidiaries, requiring a minimum effective rate of 15% in all jurisdictions in which they operate.

On December 27, 2023, the Bermuda government enacted a corporate income tax at the rate of 15% which will apply to the Bermuda Subsidiaries for accounting periods starting on or after January 1, 2025.

On December 27, 2023, the Government of Bermuda enacted a corporate income tax at the rate of 15 % which applies to the Bermuda Subsidiaries for accounting periods starting on or after January 1, 2025.

The enactment of the corporate income tax regime required the Company to recognize Bermuda deferred taxes for the first time in the fourth quarter of 2023.

An economic transition adjustment (ETA) equal to the difference between the fair market value and the carrying value of assets and liabilities of each of the Company’s Bermuda insurance subsidiaries as of September 30, 2023 resulted in the establishment of a deferred tax asset and corresponding benefit of $ 189 million reported in the fourth quarter of 2023 consolidated statement of operations.

The ETA is expected to be utilized over 10 to 15 years, beginning in 2025.

On December 11, 2025, the Government of Bermuda amended the Corporate Income Tax Act of 2023 (the CIT Act) and in particular the computation of the ETA.

The Company recognized a deferred tax benefit of $ 34 million related to these changes.

The Company began utilizing the ETA deferred tax asset in 2025 and expects to continue to realize it over approximately 10 to 15 years, consistent with the expected reversal pattern of the underlying components.

As of December 31, 2025, the remaining ETA deferred tax asset was $ 207 million.

AGUS files a consolidated federal income tax return with all of its U.S.

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Deferred income taxes are provided for temporary differences between the financial statement carrying amounts and tax bases of assets and liabilities, using enacted rates in effect for the year in which the differences are expected to reverse.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Non-interest-bearing tax and loss bonds are purchased to prepay the tax benefit that results from deducting contingency reserves as provided under Code Section 832(e).

The Company records the purchase of tax and loss bonds in deferred taxes.

The Company recognizes tax benefits only if a tax position is “more likely than not” to prevail.

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Current tax liabilities ( 68 ) ( 13 )

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Components of Net Deferred Tax Assets (Liabilities)

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Deferred tax assets:

Loss and LAE reserve $ 31 $ 2

Net unrealized investment losses 25 54

1 unchanged sentence

Value of in-force business 73 45

Net operating loss

Net operating loss (NOL) 38 31

Depreciation 49 47

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Investments 69 127

Unrealized gains on credit derivatives, net 33 14

Unearned premium reserves, net 33 5

Total deferred tax liabilities 175 176

Net deferred tax assets (liabilities) $ 246 $ 262

As part of the acquisition of CIFG Holding Inc.

(CIFGH, and together with its subsidiaries, CIFG), the Company acquired $ 189 million of net operating losses (NOL).

As part of the acquisition of CIFG Holding Inc., the Company acquired $ 189 million of NOL.

The NOL has been limited under the Code Section 382 due to a change in control as a result of the acquisition.

4 unchanged sentences

Valuation Allowance

During 2022, the Company recorded a return to provision adjustment, which included the utilization of $ 19 million in foreign tax credits (FTC), thereby reducing the Company’s FTC from $ 24 million as of December 31, 2021 to $ 5 million as of December 31, 2022.

FTC were established under the 2017 Tax Cuts and Jobs Act (TCJA) for use against regular tax in future years, and would expire in 2027.

In analyzing the future realizability of FTC, the Company notes limitations on future foreign source income due to overall foreign losses as negative evidence.

As of December 31, 2022, the Company came to the

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

conclusion that, after reviewing positive and negative evidence, it is more likely than not that the FTC would not be utilized, and therefore, maintained a valuation allowance of $ 5 million with respect to this tax attribute.

During 2023, the Company recorded a return to provision adjustment, which included the utilization of $ 3 million in FTC, thereby reducing the Company’s FTC to $ 2 million.

During 2023, the Company recorded a return to provision adjustment, which included the utilization of $ 3 million in foreign tax credits (FTC), thereby reducing the Company’s FTC to $ 2 million.

As of December 31, 2023, the Company believed that the weight of the positive evidence outweighed the negative evidence regarding the realization of the Company’s FTC, resulting in the release of the corresponding $ 2 million valuation allowance and bringing it to zero .

4 unchanged sentences

The Company will continue to analyze the need for a valuation allowance on a quarterly basis.

Changes in market conditions since 2022, including rising interest rates, resulted in the recording of deferred tax assets related to net unrealized tax capital losses that remained as of December 31, 2024 and December 31, 2023.

Changes in market conditions, including rising interest rates, resulted in the recording of deferred tax assets related to net unrealized tax capital losses that remained as of December 31, 2025 and December 31, 2024.

When assessing recoverability of these deferred tax assets, the Company considers the ability and intent to hold the underlying securities to recovery in value, if necessary, as well as other factors as noted above.

As of December 31, 2025, based on all available evidence, including capital loss carryback capacity, the Company concluded that the deferred tax assets related to the unrealized tax capital losses on the available-for-sale securities portfolios are, more likely than not, expected to be realized.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Provision for Income Taxes

5 unchanged sentences

Current provision (benefit) for income taxes:

$ 34 $ 13 $ —

federal 78 70 76

state and local 9 17 ( 13 )

Foreign 13 — —

Total current 124 100 63

Deferred provision (benefit) for income taxes:

( 2 ) ( 3 ) 4

federal 19 3 31

Foreign ( 7 ) ( 187 ) ( 15 )

Other ( 22 ) ( 4 ) ( 191 )

Total deferred ( 5 ) ( 4 ) ( 156 )

5 unchanged sentences

• French subsidiary taxed at the French marginal corporate tax rate of 25 %;

• Bermuda Subsidiaries taxed at the Bermuda marginal corporate tax rate of 0 %, unless subject to U.S.

tax by election;

• Bermuda Subsidiaries taxed at the Bermuda marginal corporate tax rate of 15 %, starting January 1, 2025, and 0 % for 2024 and 2023, unless subject to U.S.

tax by election, and

subsidiaries taxed at the U.K.

3 unchanged sentences

Controlled foreign corporations (CFCs) apply the local marginal corporate tax rate.

In addition, the TCJA created a new requirement that a portion of the GILTI earned by CFCs must be included currently in the gross income of the CFCs’ U.S.

In addition, the Tax Cuts and Jobs Act of 2017 created a new requirement that a portion of the GILTI earned by CFCs must be included currently in the gross income of the CFCs’ U.S.

The following tables present pre-tax income and revenue by jurisdiction.

Pre-tax Income (Loss) by Tax Jurisdiction

Year Ended December 31,

2025 2024 2023

(in millions)

$ ( 10 ) $ ( 33 ) $ ( 25 )

Bermuda 111 90 79

France ( 8 ) ( 14 ) ( 8 )

Other ( 1 ) — —

Total $ 662 $ 488 $ 668

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

A reconciliation of the difference between the provision for income taxes and the expected tax provision at statutory rates in taxable jurisdictions is presented below.

Effective Tax Rate Reconciliation

As described in Note 1.

Business and Basis of Presentation, Recent Accounting Standards Adopted, the Company has elected to prospectively adopt the guidance in ASU 2023-09.

The following table is a reconciliation of the U.K.

national statutory tax rate to the Company’s effective rate for the year ended December 31, 2025 in accordance with ASU 2023-09:

Year Ended December 31, 2025

2024 2023 2022

(in millions) %

national statutory tax rate $ 165 25.0 %

Foreign tax effects

Statutory tax rate difference between U.S.

( 23 ) ( 3.5 )

NCI ( 8 ) ( 1.3 )

Other ( 3 ) ( 0.5 )

Statutory tax rate difference between Bermuda and U.K.

( 11 ) ( 1.7 )

Effects of Bermuda tax law change ( 35 ) ( 5.3 )

Effect of cross-border tax laws

Global minimum tax 33 5.0

Other adjustments 1 0.2

Effective tax rate $ 119 17.9 %

During the year ended December 31, 2025, amendments to the CIT Act, as described above, removed the recognition of deferred tax liabilities for purposes relevant to the Pillar Two framework resulted in AG Re and AGRO having a jurisdictional effective tax rate below 15 %.

As a result, the Company became subject to the OECD Pillar Two global minimum tax and recorded a top‑up tax of $ 33 million within income tax expense for the year.

A reconciliation of the difference between the provision for income taxes and the expected tax provision at statutory rates in taxable jurisdictions for the years ended December 31, 2024, and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 is presented below.

Year Ended December 31,

(dollars in millions)

Expected tax provision (benefit) $ 82 $ 122

1 unchanged sentence

Return to provision adjustment ( 1 ) ( 6 )

Noncontrolling interest ( 3 ) ( 5 ) ( 3 )

NCI ( 3 ) ( 5 )

State taxes, net of federal benefit 13 ( 10 )

6 unchanged sentences

Effective tax rate 19.7 % ( 13.9 ) %

The expected tax provision (benefit) is calculated as the sum of pre-tax income in each jurisdiction multiplied by the statutory tax rate of the jurisdiction by which it will be taxed.

Where there is a pre-tax loss in one jurisdiction and pre-tax income in another, the total combined expected tax rate may be higher or lower than any of the individual statutory rates.

The following tables present pre-tax income and revenue by jurisdiction.

Pre-tax Income (Loss) by Tax Jurisdiction

Year Ended December 31,

2024 2023 2022

(in millions)

$ 445 $ 622 $ 189

Bermuda 90 79 44

( 33 ) ( 25 ) ( 69 )

France ( 14 ) ( 8 ) ( 16 )

Total $ 488 $ 668 $ 148

Revenue by Tax Jurisdiction

Year Ended December 31,

2024 2023 2022

(in millions)

$ 720 $ 1,169 $ 661

Bermuda 130 165 84

France ( 1 ) 2 ( 8 )

Total $ 872 $ 1,373 $ 723

Pre-tax income by jurisdiction may be disproportionate to revenue by jurisdiction to the extent that insurance losses incurred are disproportionate.

The expected tax provision (benefit) for the years ended December 31, 2024, and 2023 is calculated as the sum of pre-tax income in each jurisdiction multiplied by the statutory tax rate of the jurisdiction by which it will be taxed.

Where there is a

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

As of December 31, 2024, AGUS had open tax years with the U.S.

IRS for 2018 forward and is currently under audit for the 2018 and 2019 tax years.

pre-tax loss in one jurisdiction and pre-tax income in another, the total combined expected tax rate may be higher or lower than any of the individual statutory rates.

Income Tax Payments

The following table presents income taxes paid, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025.

In applying this guidance, the Company’s policy is to include only cash payments made directly to taxing authorities in its income tax payment disclosures and, accordingly, does not consider purchases of non interest bearing U.S.

Mortgage Guaranty Tax and Loss Bonds to be prepaid income taxes.

Income Taxes Paid, Net of Refunds Received, by Jurisdiction

Year Ended December 31, 2025

(in millions)

The company paid $ 90 million and $ 4 million during the years ended December 31, 2024 and 2023, respectively.

During 2025, the IRS closed the audit of AGUS’s 2018 and 2019 tax years with no impact to previously accrued taxes and opened an audit of AGUS 2021 tax year.

As of December 31, 2025, AGUS had open tax years with the IRS for 2021 forward.

As of December 31, 2025, Assured Guaranty Overseas US Holdings Inc.

had open tax years with the IRS for 2021 forward and is not currently under audit with the IRS.

In September 2022, His Majesty’s Revenue & Customs (HMRC) completed a business risk review of Assured Guaranty that commenced in July 2022 and assigned a low-risk rating for corporate taxes in the U.K.

In December 2023, HMRC issued an inquiry into the Company’s 2021 U.K.

As of December 31, 2024, the Company’s U.K.

subsidiaries had open tax years with HMRC for 2021 forward.

had open tax years with the IRS for 2022 forward and is not currently under audit.

In December 2023, His Majesty’s Revenue & Customs (HMRC) issued an inquiry into the Company’s 2021 U.K.

In October 2025, HMRC issued an inquiry into the Company’s 2022 and 2023 U.K.

tax returns along with issuing inquires into AGUK, Assured Guaranty (UK) Services Limited and Assured Guaranty Finance Overseas Ltd.’s 2023 U.K.

As of December 31, 2025, the Company had open tax years with HMRC for 2021 forward;

AGUK, Assured Guaranty (UK) Services Limited and Assured Guaranty Finance Overseas Ltd.

had open tax years with HMRC for 2023 forward;

and the Company’s other U.K.

subsidiaries had open tax year with HMRC for 2024 forward.

The Company’s French subsidiary is not currently under examination and has open tax years of 2021 forward.

6 unchanged sentences

The discussion that follows describes the basis of accounting and differences to GAAP.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Insurance Regulatory Amounts Reported

8 unchanged sentences

____________________

(1) Effective August 1, 2024, AGM merged with and into AG, with AG as the surviving company.

Furthermore, in accordance with the National Association of Insurance Commissioners (NAIC) Annual Statement instructions, the prior year numbers have been restated to reflect the merger of AGM with and into AG.

(1) Policyholders’ surplus is net of contingency reserves of $ 1,511 million and $ 1,392 million as of December 31, 2025 and December 31, 2024, respectively.

3 unchanged sentences

Financial statements prepared in accordance with accounting practices prescribed or permitted by local insurance regulatory authorities differ in certain respects from GAAP.

AG prepares statutory financial statements in accordance with accounting practices prescribed or permitted by the NAIC and its respective insurance department.

Prescribed statutory accounting practices (SAP) are set forth in the NAIC Accounting Practices and Procedures Manual.

AG prepares statutory financial statements in accordance with accounting practices prescribed or permitted by the National Association of Insurance Commissioners and the Maryland Insurance Administration (MIA).

Prescribed statutory accounting practices (SAP) are set forth in the National Association of Insurance Commissioners Accounting Practices and Procedures Manual.

AG has no permitted accounting practices on a statutory basis.

GAAP differs in certain significant respects from AG’s SAP prescribed or permitted by insurance regulatory authorities.

The principal differences result from the SAP listed below.

GAAP differs in certain significant respects from AG’s SAP.

The principal differences are listed below.

• Upfront premiums are earned upon expiration of risk and installment premiums are earned on a pro-rata basis over the installment period, rather than in proportion to the amount of insurance protection provided under GAAP.

The timing of premium accelerations may also differ between SAP and GAAP.

Under GAAP, premiums are

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

accelerated only upon the legal defeasance of an insured obligation, whereas statutory premiums may be accelerated earlier if an insured obligation is economically defeased prior to legal defeasance.

Under GAAP, premiums are accelerated only upon the legal defeasance of an insured obligation, whereas statutory premiums may be accelerated earlier if an insured obligation is economically defeased prior to legal defeasance.

• Acquisition costs are charged to expense as incurred rather than expensed over the period that the related premiums are earned under GAAP.

10 unchanged sentences

Under GAAP, an allowance for credit losses is established, and can be reversed for subsequent increases in expected cash flows.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

• Insured obligations of VIEs, where the Company is deemed the primary beneficiary, are accounted for as insurance contracts.

12 unchanged sentences

As of December 31, 2025, AGUK’s eligible own funds were an estimated £ 461 million (or $ 622 million).

As of December 31, 2023, AGUK’s own funds were an estimated £ 528 million (or $ 672 million).

As of December 31, 2024, AGUK’s eligible own funds were an estimated £ 439 million (or $ 549 million).

AGE prepares its Solvency and Financial Condition Report and other required regulatory financial reports based on Autorité de Contrôle Prudentiel et de Résolution (ACPR) regulations and Solvency II.

As of December 31, 2024, AGE’s own

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

funds were an estimated € 35 million (or $ 36 million).

As of December 31, 2023, AGE’s own funds were an estimated € 44 million (or $ 49 million).

As of December 31, 2025, AGE’s eligible own funds were an estimated € 43 million (or $ 51 million).

As of December 31, 2024, AGE’s eligible own funds were an estimated € 35 million (or $ 36 million).

Dividend Restrictions and Capital Requirements

2 unchanged sentences

“Adjusted net investment income” means the sum of (x) AG’s net investment income during the 12-month period ending December 31 of the preceding year (excluding realized capital gains and pro rata distributions of its own securities), and (y) AG’s net investment income (excluding realized capital gains) from the three calendar years prior to the preceding calendar year that has not already been paid out as dividends.

The maximum amount available during 2025 for AG to distribute as ordinary dividends is approximately $ 287 million.

Such payments would be payable in the second half of 2025 because AG’s ordinary dividends were concentrated in the second half of 2024 following the August 1, 2024 merger of AGM with and into AG.

However, in order to enable AG to make payments over the course of the year, AG has put in place for 2025 a quarterly process with the MIA, pursuant to which AG will confirm that the MIA does not object to AG dividending $ 71.8 million (i.e., 25 %) of the $ 287 million amount in each calendar quarter of 2025.

Pursuant to this process, AG obtained the MIA’s non-objection to pay, and expects to pay, a $ 71.8 million dividend on March 7, 2025.

The maximum amount available during 2026 for AG to distribute as ordinary dividends is approximately $ 245 million of which approximately $ 29 million is available for distribution in the first quarter of 2026.

For AG Re, any distribution (including repurchase of shares) of any share capital, contributed surplus or other statutory capital that would reduce its total statutory capital by 15 % or more of its total statutory capital as set out in its previous year’s financial statements requires the prior approval of the Authority.

Separately, dividends are paid out of an insurer’s statutory surplus and cannot exceed that surplus.

Furthermore, annual dividends cannot exceed 25 % of total statutory capital and surplus as set out in its previous year’s financial statements, which is $ 272 million, without AG Re certifying to the Authority that it will continue to meet required margins.

Furthermore, annual dividends cannot exceed 25 % of total statutory capital

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

and surplus as set out in its previous year’s financial statements (being $ 292 million), without AG Re certifying to the Authority that it will continue to meet required margins.

Based on the foregoing limitations, in 2026 AG Re has the capacity to:

5 unchanged sentences

For AGRO, a subsidiary of AG Re, annual dividends cannot exceed $ 124 million, without AGRO certifying to the Authority that it will continue to meet required margins.

Based on the foregoing limitations, in 2025 AGRO has the capacity to:

The Insurance Act also prohibits AGRO, as a Class C licensed insurer writing long-term (life) business, from declaring or paying any dividends to any person other than a policyholder unless its approved actuary certifies that the proposed amount of the dividend would not exceed the excess of funds available to satisfy its long-term (life) business obligations.

Subject to such actuarial certification and based on the foregoing limitations, in 2026 AGRO has the capacity to:

(i) make capital distributions in an aggregate amount up to $ 21 million without the prior approval of the Authority;

7 unchanged sentences

insurance regulatory laws impose no statutory restrictions on a general insurer’s ability to declare a dividend, the Prudential Regulation Authority’s capital requirements may in practice act as a restriction on dividends for AGUK.

In 2024 and 2023, AGUK made cash distributions and plans to make further distributions of excess capital in the future.

AGUK made cash distributions in 2024 and 2023.

French company law prohibits AGE from declaring a dividend to its shareholders unless it has “profits and/or reserves available for distribution.” The determination of whether a company has profits available for distribution is based on its accumulated realized profits less its accumulated realized losses.

While French law imposes no statutory restrictions on an

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

insurer’s ability to declare a dividend, the ACPR’s capital requirements may, in practice, act as a restriction on dividends for AGE.

While French law imposes no statutory restrictions on an insurer’s ability to declare a dividend, the ACPR’s capital requirements may, in practice, act as a restriction on dividends for AGE.

Dividend Restrictions and Capital Requirements

18 unchanged sentences

(ii) entities for which investments in their equity securities would be required, absent the election of the FVO, to be accounted for by the equity method;

(iii) trusts for the benefit of employees, such as pension and profit sharing trusts that are managed by or under the trusteeship of the Company’s management;

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

for the benefit of employees, such as pension and profit sharing trusts that are managed by or under the trusteeship of the Company’s management;

(iv) the Company’s principal owners;

2 unchanged sentences

and (vii) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

Related party amounts and transactions disclosed in this note include transactions with “Related Persons” as defined in Item 404 of SEC’s Regulation S-K as well as “related parties” as defined in ASC 850.

Related party amounts and transactions disclosed in this note include transactions with “related parties” as defined in ASC 850.

Related Party Transactions

As of December 31, 2024 and December 31, 2023, each of Wellington Management Company, LLP (together with its affiliates, Wellington) and BlackRock Financial Management Inc.

During the fiscal years ended December 31, 2025 and December 31, 2024, each of Wellington Management Company, LLP (together with its affiliates, Wellington) and BlackRock Financial Management Inc.

(together with its affiliates, BlackRock) directly or indirectly owned more than 5 % of the Company’s common shares.

Both Wellington and BlackRock are Related Persons.

Wellington is one of the Company’s investment managers, and BlackRock was also one of the Company’s investment managers until September 2020.

Wellington is one of the Company’s investment managers.

BlackRock also provides investment reporting software to the Company.

The investment management fees and reporting software expense incurred from transactions with Wellington and BlackRock were approximately $ 1.8 million in 2024, $ 1.9 million in 2023 and $ 2.0 million in 2022.

The investment management fees and reporting software expense incurred from transactions with Wellington and BlackRock were $ 1.8 million in both 2025 and 2024 and $ 1.9 million in 2023.

The Company reported payables to Wellington and BlackRock in connection with these fees and transactions of less than $ 1 million as of both December 31, 2025 and December 31, 2024.

Antonio Ursano, Jr.

is a director on AGL’s Board and is also the managing partner and founder of Insurance Advisory Partners LLC (IAP), an insurance advisory firm that provides merger, acquisition, capital raising, and other advisory services to the insurance industry.

In 2024, prior to Mr.

Ursano’s nomination and election to AGL’s Board, IAP began providing strategic and financial advice to the Company in connection with its efforts to diversify earnings through life reinsurance business opportunities.

Under the engagement letter for such advice, the Company agreed to pay IAP as compensation for its services a quarterly retainer of $ 25 thousand for the duration of the agreement and, upon closing a life reinsurance transaction, a mutually agreed success fee.

In addition, the Company agreed to reimburse IAP for all reasonable, documented out-of-pocket expenses incurred in connection with its engagement, not to exceed $ 5 thousand in any one month without the prior written consent of the Company.

Over the course of 2025 and following the Company’s January 2026 acquisition of Warwick Company (UK) Limited, the Company paid IAP an aggregate of $ 1.9 million, consisting of a success fee, quarterly retainer payments and reimbursement of expenses.

The Company has terminated its engagement of IAP.

Throughout the notes to these consolidated financial statements, the Company describes several affiliated balances and transactions.

In Note 1, Business and Basis of Presentation, and Note 7, Investments and Cash, the Company includes a discussion of, and amounts related to, its various equity method investments, including an equity method ownership interest in Sound Point and several Sound Point managed funds.

Certain of the Sound Point (and prior to July 1, 2023, AssuredIM) managed funds in which the Company invests are reported as CIVs as described in Note 8, Financial Guaranty Variable Interest Entities and Consolidated Investment Vehicles.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Business and Basis of Presentation, and Note 7.

Investments and Cash, the Company includes a discussion of, and amounts related to, its various equity method investments, including an equity method ownership interest in Sound Point and several Sound Point managed funds.

Certain of the Sound Point (and prior to July 1, 2023, AssuredIM) managed funds in which the Company invests are reported as CIVs as described in Note 8.

Variable Interest Entities.

Prior to the Sound Point Transaction and AHP Transaction, the Company owned and consolidated AssuredIM and earned management and performance fees for its investment advisory and management services in respect of AssuredIM Funds.

Amounts earned in respect of such services are presented in Note 10, Asset Management Fees, along with the related receivables and payables.

Amounts contributed to employee retirement and savings plans, and amounts payable to Sound Point and AHP, are disclosed in Note 12, Employee Benefit Plans.

Amounts earned in respect of such services are presented in Note 10.

Asset Management Fees, along with the related receivables and payables.

Amounts contributed to employee retirement and savings plans, and amounts payable to Sound Point and AHP, are disclosed in Note 12.

Employee Benefit Plans.

The Company is party to various non-cancelable lease agreements, all of which are operating leases as of December 31, 2025.

1 unchanged sentence

The Company subleases certain properties that are not used in its operations.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Accounting Policy

The Company determines if an arrangement is a lease at inception.

For operating leases with an original term of more than 12 months, where the Company is the lessee, it recognizes a right-of-use (ROU) asset in “other assets” and a lease liability in “other liabilities” on the consolidated balance sheets.

For operating leases with an original term of more than 12 months where the Company is the lessee, the Company recognizes a right-of-use (ROU) asset in “other assets” and a lease liability in “other liabilities” on the consolidated balance sheets.

An ROU asset represents the Company’s right to use an underlying asset for the lease term, and a lease liability represents the Company’s obligation to make lease payments arising from the lease.

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If circumstances require an ROU asset to be tested for possible impairment and the carrying value of the ROU asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value.

Any impairment is reported in “other operating expenses” in the consolidated statement of operations.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Any impairment is reported in “other operating expenses” in the consolidated statements of operations.

Lease Assets and Liabilities

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(1) Includes an ROU asset impairment of $ 2 million in 2024 and $ 3 million in 2023.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Future Minimum Rental Payments

11 unchanged sentences

In addition, in the ordinary course of their respective businesses, certain of AGL’s insurance subsidiaries are involved in litigation with third parties to recover insurance losses paid in prior periods or prevent or reduce losses in the future.

For example, the Company is involved in a number of legal actions in the Federal District Court of Puerto Rico to enforce or defend its rights with respect to the obligations it insures of Puerto Rico and its related PREPA.

There remains one active proceeding related to PREPA, while there are a number of unresolved proceedings related to PREPA that remain stayed pending the

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Federal District Court of Puerto Rico’s determination on the FOMB PREPA Plan.

See Note 4, Expected Loss to be Paid (Recovered), Loss Estimation Process, Public Finance, Puerto Rico, for a description of such actions.

For example, the Company is involved in a number of legal actions in the Federal District Court of Puerto Rico to enforce or defend its rights with respect to the obligations of PREPA it insures.

There are two recently active proceedings related to PREPA, while there are a number of other unresolved proceedings related to PREPA that remain stayed pending the Federal District Court of Puerto Rico’s determination on a plan of adjustment and disclosure statement.

Expected Loss to be Paid (Recovered), Loss Estimation Process, Public Finance, Puerto Rico, for a description of such actions.

The impact, if any, of these and other proceedings on the amount of recoveries the Company receives and losses it pays in the future is uncertain, and the impact of any one or more of these proceedings during any quarter or year could be material to the Company’s results of operations in that particular quarter or year.

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Additionally, it discloses such amounts if material to the financial position of the Company.

For litigation and regulatory matters where a loss may be reasonably possible but not probable, or is probable but not reasonably estimable, no accrual is established, but the matter would be disclosed below if material.

The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

On November 28, 2011, Lehman Brothers International (Europe) (in administration) (LBIE) sued AG Financial Products Inc.

(AGFP), an affiliate of AG, which, in the past, had provided credit protection to counterparties under CDS.

Following a bench trial, on March 8, 2023, the Court rendered its decision and found in favor of AGFP.

Accordingly, in the first quarter of 2023, the Company reduced its previously recorded accrual of $ 20 million to zero , in connection with developments in litigation.

Following the exhaustion of LBIE’s appeals, the Company will recognize a gain in the first quarter of 2025 of approximately $ 103 million, which represents the full satisfaction of the judgment it was awarded and its claims for attorneys’ fees, expenses and interest in connection with this litigation.

Shareholders’ Equity

1 unchanged sentence

The Company records share repurchases as a reduction to “common shares” and “additional paid-in capital.” Once additional paid-in capital has been exhausted, share repurchases are recorded as a reduction to common shares and retained earnings.

Any excise taxes incurred related to share repurchases are charged to additional paid-in-capital or retained earnings, as appropriate.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Share Issuances

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The formula is applied repeatedly until there is no U.S.

Person whose controlled shares

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

constitute 9.5 % or more of the voting power of all issued and outstanding shares and who generally would be required to recognize income with respect to AGL under the Code if AGL were a CFC as defined in the Code and if the ownership threshold under the Code were 9.5 % (as defined in AGL’s Bye-Laws as a 9.5 % U.S.

Person whose controlled shares constitute 9.5 % or more of the voting power of all issued and outstanding shares and who generally would be required to recognize income with respect to AGL under the Code if AGL were a CFC as defined in the Code and if the ownership threshold under the Code were 9.5 % (as defined in AGL’s Bye-Laws as a 9.5 % U.S.

Shareholder).

11 unchanged sentences

Share Repurchases

On May 2, 2024, and November 8, 2024 AGL’s Board authorized the repurchase of an additional $ 300 million and $ 250 million, respectively, of the Company’s common shares.

As of February 27, 2025, the remaining amount the Company was authorized to purchase was approximately $ 276 million of its common shares.

On August 6, 2025 and November 5, 2025, the Board authorized the repurchase of an additional $ 300 million and $ 100 million, respectively, of the Company’s common shares.

As of February 25, 2026, the remaining amount the Company was authorized to purchase was $ 204 million of its common shares.

The Company expects to repurchase shares from time to time in the open market or in privately negotiated transactions.

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It does not have an expiration date.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Share Repurchases

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____________________

(1) Excludes commissions and excise taxes.

(1) Excludes commissions.

In November 2025, the IRS issued final rules on the stock repurchase excise tax from the Inflation Reduction Act of 2022 removing or scaling back several provisions from the 2024 proposal.

Accordingly, in the fourth quarter of 2025, the Company reversed its accrued excise tax balance of $ 9 million, which included $ 6 million relating to 2024.

Deferred Compensation

4 unchanged sentences

As of December 31, 2025 and 2024, there were 62,760 units and 68,535 units, respectively, in the AGS SERP.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Any determination to pay dividends is at the discretion of the Board, and depends upon the Company’s results of operations, cash flows from operating activities, its financial position, capital requirements, general business conditions, legal, tax, regulatory, rating agency and contractual restrictions on the payment of dividends, other potential uses for such funds and any other factors the Board deems relevant.

For more information concerning regulatory constraints that affect the Company’s ability to pay dividends, see Note 14, Insurance Company Regulatory Requirements.

For more information concerning regulatory constraints that affect the Company’s ability to pay dividends, see Note 14.

Insurance Company Regulatory Requirements.

On February 20, 2026, the Company declared a quarterly dividend of $ 0.38 per common share compared with $ 0.34 per common share paid in 2025, an increase of 12 %.

1 unchanged sentence

The following tables present the changes in each component of AOCI and the effect of reclassifications out of AOCI into the respective lines in the consolidated statements of operations.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Changes in Accumulated Other Comprehensive Income (Loss) by Component

10 unchanged sentences

Fair value gains (losses) on FG VIEs — — ( 3 ) — — ( 3 )

Interest expense — — — — 1 1

Total before tax ( 9 ) ( 28 ) ( 3 ) — — ( 40 )

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Balance, December 31, 2025 $ ( 48 ) $ ( 72 ) $ ( 17 ) $ ( 35 ) $ 4 $ ( 168 )

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Changes in Accumulated Other Comprehensive Income (Loss) by Component

10 unchanged sentences

Fair value gains (losses) on FG VIEs — — ( 3 ) — — ( 3 )

Fair value gains (losses) on CIVs — — — ( 6 ) — ( 6 )

Interest expense — — — — 1 1

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Balance, December 31, 2024 $ ( 235 ) $ ( 99 ) $ ( 18 ) $ ( 37 ) $ 4 $ ( 385 )

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Changes in Accumulated Other Comprehensive Income (Loss) by Component

10 unchanged sentences

Fair value gains (losses) on FG VIEs — — ( 3 ) — — ( 3 )

Fair value gains (losses) on CIVs — — — ( 6 ) — ( 6 )

Interest expense — — — — 1 1

Total before tax ( 1 ) ( 13 ) ( 3 ) ( 6 ) 1 ( 22 )

9 unchanged sentences

Awards and share units under the AGS SERP with non-forfeitable dividends are considered participating securities.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Basic EPS is computed by dividing net income (loss) available to common shareholders of Assured Guaranty by the weighted average number of common shares outstanding during the period.

3 unchanged sentences

or (2) the two-class method assuming nonvested shares are not converted into common shares.

Assured Guaranty Ltd.

Notes to Consolidated Financial Statements, Continued

Computation of Earnings Per Share

74 unchanged sentences

Short-term investments with maturities of over three months:

Maturities and paydowns — — 5

Net sales (purchases) of short-term investments with original maturities of less than three months 7 ( 29 ) ( 18 )

Investment in subsidiaries ( 176 ) — —

Net cash flows provided by (used in) investing activities ( 166 ) ( 26 ) ( 14 )

18 unchanged sentences

Assured Guaranty also participates in the asset management business.

See Note 1, Business and Basis of Presentation, for further information regarding the basis of presentation.

Business and Basis of Presentation.

Assured Guaranty Ltd.

3 unchanged sentences

Holding Companies’ debt.

See Note 11, Long-Term Debt and Credit Facilities, for additional information.

Long-Term Debt and Credit Facilities.

Credit Facility with Affiliate

11 unchanged sentences

government passed legislation to implement the OECD BEPS Pillar Two income inclusion rule, which includes a multinational top-up tax which will apply to large multinational corporations for accounting periods beginning on or after December 31, 2023.

It is expected this will apply to AGL, requiring a minimum effective rate of 15% in all jurisdictions in which it operates.

See Note 13, Income Taxes, for further information regarding AGL’s income taxes.

Beginning in 2025, this applies to AGL, requiring a minimum effective rate of 15 % in all jurisdictions in which it operates.

Income Taxes.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data