ASSURED GUARANTY LTD 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Report of Independent Registered Public Accounting Firm (PCAOB ID No. 238 ) 120 Consolidated Balance Sheets as of December 31, 2025 and 2024 122 Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 123 Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2025, 2024 and 2023 124 Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2025, 2024 and 2023 125 Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 126 Notes to Consolidated Financial Statements 129 1. Business and Basis of Presentation 129 2. Segment Information 132 3. Outstanding Exposure 138 4. Expected Loss to be Paid (Recovered) 146 5. Contracts Accounted for as Insurance 155 6. Contracts Accounted for as Credit Derivatives 164 7. Investments and Cash 166 8. Variable Interest Entities 174 9. Fair Value Measurement 179 10. Asset Management Fees 190 11. Long-Term Debt and Credit Facilities 191 12. Employee Benefit Plans 194 13. Income Taxes 197 14. Insurance Company Regulatory Requirements 202 15. Related Party Transactions 205 16. Leases 206 17. Contingencies 208 18. Shareholders’ Equity 208 19. Other Comprehensive Income 210 20. Earnings Per Share 212 21. Parent Company 214 119 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Assured Guaranty Ltd. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Assured Guaranty Ltd. and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations, of comprehensive income (loss), of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024 , and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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. 120 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. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Valuation of the Loss and Loss Adjustment Expense (LAE) Reserve and the Salvage and Subrogation Recoverable - Estimation of the Expected Loss to be Paid (Recovered) Related to Public Finance Obligations As described in Notes 4 and 5 to the consolidated financial statements, the loss and LAE reserve and the salvage and subrogation recoverable reported on the consolidated balance sheet relate only to direct and assumed reinsurance contracts that are accounted for as insurance, substantially all of which are financial guaranty insurance contracts. As of December 31, 2025, the loss and LAE reserve was $ 309 million and the salvage and subrogation recoverable was $ 449 million, for which a significant portion of such amounts relate to public finance obligations. A loss and LAE reserve for a financial guaranty insurance contract is recorded only to the extent, and for the amount, that expected loss to be paid plus contra-paid (total losses) exceed the deferred premium revenue, on a contract by contract basis. The expected loss to be paid (recovered) is equal to the present value of expected future cash outflows for loss and LAE payments, and net of inflows for expected salvage and subrogation, using current risk-free rates. If a transaction is in a net recovery position, this results in the recording of a salvage and subrogation recoverable. Expected cash outflows and inflows are probability weighted cash flows that reflect management's assumptions about the likelihood of all possible outcomes based on all information available to management. 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. These procedures included testing the effectiveness of controls 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. These procedures also included, among others, (i) testing management’s process for developing the estimate of the loss and LAE reserve and the salvage and subrogation recoverable, (ii) evaluating the appropriateness of the cash flow models used by management, (iii) testing the completeness and accuracy of the underlying data used in the cash flow models, and (iv) evaluating the reasonableness of the significant assumptions used by management related to internal credit ratings, timing of cash flows, recovery rates, and probability weightings. Evaluating management’s assumptions related to internal credit ratings, timing of cash flows, recovery rates, and probability weightings involved evaluating whether the assumptions used by management were reasonable, as considered applicable to the individual public finance obligation, considering (i) the current, past, or anticipated future performance of the obligor, and (ii) the consistency with external market and industry data. Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of the significant assumptions related to timing of cash flows, recovery rates, and probability weightings for certain public finance obligations. /s/ PricewaterhouseCoopers LLP New York, New York February 27, 2026 We have served as the Company’s auditor since 2003. 121 Assured Guaranty Ltd. Consolidated Balance Sheets (dollars in millions except share data) As of December 31, 2025 2024 Assets Investments: Fixed-maturity securities, available-for-sale, at fair value, net of allowance for credit loss of $ 54 and $ 60 (amortized cost of $ 6,572 and $ 6,827 ) $ 6,369 $ 6,369 Fixed-maturity securities, trading, at fair value 124 147 Short-term investments, at fair value 903 1,221 Other invested assets (includes $ 3 and $ 4 , at fair value) 1,091 926 Total investments 8,487 8,663 Cash 388 121 Premiums receivable, net of commissions payable, net of allowance for credit losses of $ 3 and $ – 1,572 1,551 Deferred acquisition costs 192 176 Salvage and subrogation recoverable 449 396 Financial guaranty variable interest entities’ assets (includes $ 172 and $ 147 , at fair value) 212 147 Assets of consolidated investment vehicles (includes $ 167 and $ 99 , at fair value) 175 101 Other assets (includes $ 174 and $ 131 , at fair value) 701 746 Total assets $ 12,176 $ 11,901 Liabilities Unearned premium reserve $ 3,625 $ 3,719 Loss and loss adjustment expense reserve 309 268 Long-term debt 1,704 1,699 Financial guaranty variable interest entities’ liabilities (includes $ 197 and $ 164 , at fair value, $ 182 and $ 155 with recourse, $ 16 and $ 9 without recourse) 198 164 Other liabilities (includes $ 21 and $ 34 at fair value) 551 498 Total liabilities 6,387 6,348 Commitments and contingencies (Notes 3, 4, 7, 17) Shareholders’ equity Common shares ($ 0.01 par value, 500,000,000 shares authorized; 45,184,791 and 50,505,320 shares issued and outstanding) — 1 Retained earnings 5,830 5,878 Accumulated other comprehensive income (loss), net of tax of $( 39 ) and $( 75 ) ( 168 ) ( 385 ) Deferred equity compensation 1 1 Total shareholders’ equity attributable to Assured Guaranty Ltd. 5,663 5,495 Non-redeemable noncontrolling interest (Note 8) 126 58 Total shareholders’ equity 5,789 5,553 Total liabilities and shareholders’ equity $ 12,176 $ 11,901 The accompanying notes are an integral part of these consolidated financial statements. 122 Assured Guaranty Ltd. Consolidated Statements of Operations (dollars in millions except share data) Year Ended December 31, 2025 2024 2023 Revenues Net earned premiums $ 380 $ 403 $ 344 Net investment income 359 340 365 Asset management fees — — 53 Net realized investment gains (losses) ( 40 ) 9 ( 14 ) Fair value gains (losses) on credit derivatives 121 24 114 Fair value gains (losses) on committed capital securities 20 ( 10 ) ( 35 ) Fair value gains (losses) on financial guaranty variable interest entities 6 ( 11 ) 8 Fair value gains (losses) on consolidated investment vehicles 79 69 88 Foreign exchange gains (losses) on remeasurement 96 ( 27 ) 53 Fair value gains (losses) on trading securities 13 52 74 Gain on sale of asset management subsidiaries — — 262 Other income (loss) 76 23 61 Total revenues 1,110 872 1,373 Expenses Loss and loss adjustment expenses (benefit) 56 ( 26 ) 162 Interest expense 89 91 90 Amortization of deferred acquisition costs 22 20 13 Employee compensation and benefit expenses 209 202 251 Other operating expenses 174 159 217 Total expenses 550 446 733 Income (loss) before income taxes and equity in earnings (losses) of investees 560 426 640 Equity in earnings (losses) of investees 102 62 28 Income (loss) before income taxes 662 488 668 Provision (benefit) for income taxes Current 124 100 63 Deferred ( 5 ) ( 4 ) ( 156 ) Total provision (benefit) for income taxes 119 96 ( 93 ) Net income (loss) 543 392 761 Less: Noncontrolling interest 40 16 22 Net income (loss) attributable to Assured Guaranty Ltd. $ 503 $ 376 $ 739 Earnings per share: Basic $ 10.39 $ 7.01 $ 12.54 Diluted $ 10.26 $ 6.87 $ 12.30 The accompanying notes are an integral part of these consolidated financial statements. 123 Assured Guaranty Ltd. Consolidated Statements of Comprehensive Income (Loss) (in millions) Year Ended December 31, 2025 2024 2023 Net income (loss) $ 543 $ 392 $ 761 Change in net unrealized gains (losses) on: Investments with no credit impairment, net of tax provision (benefit) of $ 30 , $( 10 ) and $ 14 187 ( 33 ) 141 Investments with credit impairment, net of tax provision (benefit) of $ 6 , $ 1 and $ 1 27 5 6 Change in net unrealized gains (losses) on investments 214 ( 28 ) 147 Change in instrument-specific credit risk on financial guaranty variable interest entities’ liabilities with recourse, net of tax provision (benefit) 1 2 3 Other, net of tax provision (benefit) 2 — 6 Other comprehensive income (loss) 217 ( 26 ) 156 Comprehensive income (loss) 760 366 917 Less: Comprehensive income (loss) attributable to noncontrolling interest 40 16 22 Comprehensive income (loss) attributable to Assured Guaranty Ltd. $ 720 $ 350 $ 895 The accompanying notes are an integral part of these consolidated financial statements. 124 Assured Guaranty Ltd. Consolidated Statements of Shareholders’ Equity (dollars in millions, except share data) Common Shares Outstanding Total Shareholders’ Equity Attributable to Assured Guaranty Ltd. Non-redeemable Noncontrolling Interest Total Shareholders’ Equity Common Shares Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Deferred Equity Compensation Total As of December 31, 2022 59,013,040 $ 1 $ 5,577 $ ( 515 ) $ 1 $ 5,064 $ 228 $ 5,292 Net income — — 739 — — 739 22 761 Dividends ($ 1.12 per share) — — ( 68 ) — — ( 68 ) — ( 68 ) Common shares repurchases ( 3,215,893 ) — ( 199 ) — — ( 199 ) — ( 199 ) Share-based compensation 420,158 — 21 — — 21 — 21 Reclassification to liabilities — — — — — — ( 16 ) ( 16 ) Contributions — — — — — — 20 20 Distributions — — — — — — ( 70 ) ( 70 ) 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 Net income — — 376 — — 376 16 392 Dividends ($ 1.24 per share) — — ( 68 ) — — ( 68 ) — ( 68 ) Common shares repurchases ( 6,180,774 ) — ( 508 ) — — ( 508 ) — ( 508 ) Share-based compensation 468,789 — 8 — — 8 — 8 Distributions — — — — — — ( 10 ) ( 10 ) Other comprehensive loss — — — ( 26 ) — ( 26 ) — ( 26 ) As of December 31, 2024 50,505,320 1 5,878 ( 385 ) 1 5,495 58 5,553 Net income — — 503 — — 503 40 543 Dividends ($ 1.36 per share) — — ( 69 ) — — ( 69 ) — ( 69 ) Consolidation — — — — — — 28 28 Common shares repurchases ( 5,819,627 ) ( 1 ) ( 493 ) — — ( 494 ) — ( 494 ) Share-based compensation 499,098 — 11 — — 11 — 11 Other comprehensive income — — — 217 — 217 — 217 As of December 31, 2025 45,184,791 $ — $ 5,830 $ ( 168 ) $ 1 $ 5,663 $ 126 $ 5,789 The accompanying notes are an integral part of these consolidated financial statements. 125 Assured Guaranty Ltd. Consolidated Statements of Cash Flows (in millions) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income (loss) $ 543 $ 392 $ 761 Adjustments to reconcile net income to net cash flows provided by operating activities: Non-cash interest and operating expenses 66 66 58 Net amortization of premium (discount) on investments ( 62 ) ( 23 ) ( 37 ) Provision (benefit) for deferred income taxes ( 5 ) ( 4 ) ( 156 ) Net realized investment losses (gains) 40 ( 9 ) 14 Equity in (earnings) losses of investees ( 102 ) ( 62 ) ( 28 ) Fair value losses (gains) on committed capital securities ( 20 ) 10 35 Fair value losses (gains) on trading securities ( 13 ) ( 52 ) ( 74 ) Gain on sale of asset management subsidiaries — — ( 262 ) Change in premiums receivable, net of premiums and commissions payable ( 18 ) ( 80 ) ( 157 ) Change in unearned premium reserve, net ( 96 ) 62 26 Change in loss and loss adjustment expense reserve and salvage and subrogation recoverable, net ( 10 ) ( 202 ) 35 Change in current income taxes 63 ( 6 ) 72 Change in credit derivative assets and liabilities, net ( 14 ) ( 21 ) ( 112 ) Distributions from equity method investments 56 47 7 Other ( 101 ) ( 19 ) ( 97 ) Cash flows from consolidated investment vehicles: Purchases of securities — ( 97 ) ( 340 ) Sales of securities — 41 675 Maturities and paydowns of securities — — 60 Proceeds from (purchases of) money market funds — — 66 Other changes in consolidated investment vehicles ( 68 ) 4 ( 85 ) Net cash flows provided by (used in) operating activities 259 47 461 (continued) The accompanying notes are an integral part of these consolidated financial statements. 126 Assured Guaranty Ltd. Consolidated Statements of Cash Flows, Continued (in millions) Year Ended December 31, 2025 2024 2023 Cash flows from investing activities: Fixed-maturity securities, available for sale: Purchases ( 1,581 ) ( 1,354 ) ( 540 ) Sales 624 649 862 Maturities and paydowns 1,274 853 746 Short-term investments with original maturities of over three months: Purchases ( 3 ) ( 1 ) ( 16 ) Sales — — 4 Maturities and paydowns — 5 36 Net sales (purchases) of short-term investments with original maturities of less than three months 326 437 ( 872 ) Sales of fixed-maturity securities, trading 8 233 — Maturities and paydowns of fixed-maturity securities, trading 28 21 63 Purchases of and contributions to other invested assets ( 160 ) ( 119 ) ( 198 ) Sales of and return of capital from other invested assets 44 41 29 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 ) Net cash flows provided by (used in) investing activities 641 780 286 Cash flows from financing activities: Dividends paid $ ( 68 ) $ ( 68 ) $ ( 67 ) Repurchases of common shares ( 500 ) ( 502 ) ( 199 ) Net paydowns of financial guaranty variable interest entities’ liabilities ( 16 ) ( 375 ) ( 149 ) Issuance of long-term debt, net of issuance costs — — 345 Redemptions and purchases of debt, including make-whole payment — — ( 330 ) Payments related to tax withholding for share-based compensation ( 34 ) ( 30 ) ( 20 ) Other 2 2 1 Cash flows from consolidated investment vehicles: Repayment of warehouse financing debt — — ( 166 ) Distributions to noncontrolling interest from consolidated investment vehicles — ( 10 ) ( 80 ) Other — — ( 5 ) Net cash flows provided by (used in) financing activities ( 616 ) ( 983 ) ( 670 ) Effect of foreign exchange rate changes 7 ( 2 ) 2 Increase (decrease) in cash and cash equivalents and restricted cash 291 ( 158 ) 79 Cash and cash equivalents and restricted cash at beginning of period 128 286 207 Cash and cash equivalents and restricted cash at end of period $ 419 $ 128 $ 286 (continued) The accompanying notes are an integral part of these consolidated financial statements. 127 Assured Guaranty Ltd. Consolidated Statements of Cash Flows, Continued (in millions) Year Ended December 31, 2025 2024 2023 Supplemental disclosure of non-cash activities: 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) Assets acquired — — 437 Assets transferred — — 240 Liabilities transferred — — 66 As of December 31, 2025 2024 2023 Reconciliation of cash and cash equivalents and restricted cash to the consolidated balance sheets: Cash $ 388 $ 121 $ 97 Restricted cash (included in other assets) 1 5 — Cash and cash equivalents of financial guaranty variable interest entities (see Note 8) 22 — 154 Cash and cash equivalents of consolidated investment vehicles (see Note 8) 8 2 35 Cash and cash equivalents and restricted cash at the end of period $ 419 $ 128 $ 286 The accompanying notes are an integral part of these consolidated financial statements. 128 Assured Guaranty Ltd. Notes to Consolidated Financial Statements 1. Business and Basis of Presentation Business Assured Guaranty Ltd. (AGL and, together with its subsidiaries, Assured Guaranty or the Company) is a Bermuda-based holding company that provides, through its wholly-owned operating subsidiaries, credit protection products to the United States (U.S.) and non-U.S. public finance (including infrastructure) and structured finance markets. Assured Guaranty also participates in the asset management business. Insurance 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, 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 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. The Company’s principal insurance subsidiaries are: • Assured Guaranty Inc. (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. (AG Re), domiciled in Bermuda, and its insurance subsidiary: • Assured Guaranty Re Overseas Ltd. (AGRO), domiciled in Bermuda. 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 129 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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. The Company has committed capital to investments managed by Sound Point. See Note 7. 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 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. 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.” The following table presents the calculation of the gain associated with the Sound Point Transaction and AHP Transaction in 2023. Gain on Sound Point Transaction and AHP Transaction (in millions) Fair value of ownership interest in Sound Point $ 425 Fair value of other consideration (1) 25 Total consideration 450 Less net asset carrying value of transferred AssuredIM subsidiaries (2) 188 Gain on sale of asset management subsidiaries (3) $ 262 ____________________ (1) Included $ 13 million of cash and a receivable reported in “other assets” of $ 12 million. (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). The Company recognized expenses of $ 46 million during 2023 associated with the Sound Point Transaction and AHP Transaction. U.S. Holding Companies 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. 130 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). In management’s opinion, all material adjustments necessary for a fair statement of the financial condition, results of operations and cash flows of the Company, including its consolidated variable interest entities (VIEs), are reflected in the periods presented and are of a normal, recurring nature. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Certain prior year balances have been reclassified to conform to the current year’s presentation. 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. Variable Interest Entities. Intercompany accounts and transactions between and among all consolidated entities have been eliminated. All amounts are reported in U.S. dollars, unless otherwise specified. Significant Accounting Policies The Company revalues foreign currency denominated assets, liabilities, revenue and expenses into U.S. dollars using the applicable exchange rates prescribed by GAAP. For subsidiaries where the functional currency is the U.S. dollar, gains and losses generated by the remeasurement of foreign currency transactions are reported in the consolidated statements of operations. For consolidated entities whose functional currency is not the U.S. dollar, amounts generated by translating foreign currency financial statements to the Company’s U.S. dollar reporting currency are reported in the consolidated statements of comprehensive income (loss). Other accounting policies are included in the following notes to the consolidated financial statements. Note Name Note Number Expected loss to be paid (recovered) Note 4 Contracts accounted for as insurance Note 5 Contracts accounted for as credit derivatives Note 6 Investments and cash Note 7 Variable interest entities Note 8 Fair value measurement Note 9 Asset management fees Note 10 Long-term debt and credit facilities Note 11 Employee benefit plans Note 12 Income taxes Note 13 Related parties Note 15 Leases Note 16 Contingencies Note 17 Shareholders’ equity Note 18 Earnings per share Note 20 Recent Accounting Standards Adopted 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. See Note 13. 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- 131 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 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 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. Early adoption is permitted. Prospective application is required, and retrospective application is permitted. 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. 2. Segment Information The Company reports its results of operations in two segments: Insurance and Asset Management. 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 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. Segment adjusted operating income is defined as “net income (loss) attributable to AGL,” adjusted for the following items, which primarily affect the Insurance segment and Corporate division: • 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 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. • Elimination of foreign exchange gains (losses) on remeasurement of net premium receivables and loss and loss adjustment expense (LAE) reserves that are recognized in net income. • 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. 132 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 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 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). See Note 7. 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. 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. The Corporate division primarily consists of: (i) interest expense and any losses on the extinguishment of the U.S. Holding Companies’ debt; (ii) other corporate operating expenses of AGL and the U.S. 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 and intersegment eliminations and, prior to July 1, 2023, the reclassification of reimbursable fund expenses. See Note 8. Variable Interest Entities. 133 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 the Other category. Segment Information Year Ended December 31, 2025 2024 2023 (4) Insurance (1) Asset Management Insurance Asset Management Insurance Asset Management (in millions) Third-party revenues $ 861 $ 24 $ 811 $ 8 $ 845 $ 49 Intersegment revenues 9 5 10 2 10 27 Segment revenues 870 29 821 10 855 76 Segment loss and LAE (benefit) ( 8 ) — ( 18 ) — 161 — Segment employee compensation and benefit expenses 182 — 170 — 154 59 Segment amortization of deferred acquisition costs (DAC) 22 — 20 — 13 — Other segment items (2) 125 17 117 6 107 19 Segment expenses 321 17 289 6 435 78 Segment equity in earnings (losses) of investees 63 14 102 2 82 5 Less: Segment provision (benefit) for income taxes 104 6 109 1 ( 119 ) — Segment adjusted operating income (loss) $ 508 $ 20 $ 525 $ 5 $ 621 $ 3 Selected components of segment adjusted operating income: Net investment income $ 358 $ — $ 339 $ — $ 370 $ — Non-cash compensation and operating expenses (3) 65 — 60 — 38 8 _____________________ (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. See Note 6. 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. 134 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Reconciliation of Segment Information to Consolidated Information Year Ended December 31, 2025 Less: Net Income (Loss) Attributable to AGL Revenues Expenses Equity in Earnings (Losses) of Investees Provision (Benefit) for Income Taxes Noncontrolling Interest (NCI) (in millions) Segments: Insurance $ 870 $ 321 $ 63 $ 104 $ — $ 508 Asset Management 29 17 14 6 — 20 Total segments 899 338 77 110 — 528 Corporate division 14 157 48 ( 6 ) — ( 89 ) Other 63 ( 8 ) ( 23 ) 2 40 6 Subtotal 976 487 102 106 40 445 Reconciling items: Realized gains (losses) on investments ( 40 ) — — — — ( 40 ) Non-credit impairment-related unrealized fair value gains (losses) on credit derivatives 69 63 — — — 6 Fair value gains (losses) on CCS 20 — — — — 20 Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves 85 — — — — 85 Tax effect — — — 13 — ( 13 ) Consolidated $ 1,110 $ 550 $ 102 $ 119 $ 40 $ 503 Reconciliation of Segment Information to Consolidated Information Year Ended December 31, 2024 Less: Net Income (Loss) Attributable to AGL Revenues Expenses Equity in Earnings (Losses) of Investees Provision (Benefit) for Income Taxes NCI (in millions) Segments: Insurance $ 821 $ 289 $ 102 $ 109 $ — $ 525 Asset Management 10 6 2 1 — 5 Total segments 831 295 104 110 — 530 Corporate division 17 169 5 ( 12 ) — ( 135 ) Other 38 ( 17 ) ( 47 ) ( 2 ) 16 ( 6 ) Subtotal 886 447 62 96 16 389 Reconciling items: Realized gains (losses) on investments 9 — — — — 9 Non-credit impairment-related unrealized fair value gains (losses) on credit derivatives 13 ( 1 ) — — — 14 Fair value gains (losses) on CCS ( 10 ) — — — — ( 10 ) Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves ( 26 ) — — — — ( 26 ) Tax effect — — — — — — Consolidated $ 872 $ 446 $ 62 $ 96 $ 16 $ 376 135 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Reconciliation of Segment Information to Consolidated Information Year Ended December 31, 2023 Less: Net Income (Loss) Attributable to AGL Revenues Expenses Equity in Earnings (Losses) of Investees Provision (Benefit) for Income Taxes (1) NCI (in millions) Segments: Insurance $ 855 $ 435 $ 82 $ ( 119 ) $ — $ 621 Asset Management 76 78 5 — — 3 Total segments 931 513 87 ( 119 ) — 624 Corporate division 275 216 — 14 — 45 Other 61 6 ( 59 ) ( 5 ) 22 ( 21 ) Subtotal 1,267 735 28 ( 110 ) 22 648 Reconciling items: Realized gains (losses) on investments ( 14 ) — — — — ( 14 ) Non-credit impairment-related unrealized fair value gains (losses) on credit derivatives 104 ( 2 ) — — — 106 Fair value gains (losses) on CCS ( 35 ) — — — — ( 35 ) Foreign exchange gains (losses) on remeasurement of premiums receivable and loss and LAE reserves 51 — — — — 51 Tax effect — — — 17 — ( 17 ) 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. Supplemental Information Year Ended December 31, 2025 Net Earned Premiums Net Investment Income Loss and LAE (Benefit) Amortization of DAC Other Expenses(1) (in millions) Segments: Insurance $ 383 $ 358 $ ( 8 ) $ 22 $ 307 Asset Management — — — — 17 Total segments 383 358 ( 8 ) 22 324 Corporate division — 13 — — 59 Other ( 3 ) ( 12 ) 1 — — Subtotal 380 359 ( 7 ) 22 383 Reconciling items: Credit derivative impairment (recoveries) (2) — — 63 — — Consolidated $ 380 $ 359 $ 56 $ 22 $ 383 _____________________ (1) Consists of “employee compensation and benefit expenses” and “other operating expenses.” (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. 136 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Supplemental Information Year Ended December 31, 2024 Net Earned Premiums Net Investment Income Loss and LAE (Benefit) Amortization of DAC Other Expenses(1) (in millions) Segments: Insurance $ 406 $ 339 $ ( 18 ) $ 20 $ 287 Asset Management — — — — 6 Total segments 406 339 ( 18 ) 20 293 Corporate division — 14 — — 68 Other ( 3 ) ( 13 ) ( 7 ) — — Subtotal 403 340 ( 25 ) 20 361 Reconciling items: Credit derivative impairment (recoveries) (2) — — ( 1 ) — — Consolidated $ 403 $ 340 $ ( 26 ) $ 20 $ 361 _____________________ (1) Consists of “employee compensation and benefit expenses” and “other operating expenses.” (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. Supplemental Information Year Ended December 31, 2023 Net Earned Premiums Net Investment Income Loss and LAE (Benefit) Amortization of DAC Other Expenses(1) (in millions) Segments: Insurance $ 347 $ 370 $ 161 $ 13 $ 261 Asset Management — — — — 77 Total segments 347 370 161 13 338 Corporate division — 8 — — 117 Other ( 3 ) ( 13 ) 3 — 13 Subtotal 344 365 164 13 468 Reconciling items: Credit derivative impairment (recoveries) (2) — — ( 2 ) — — Consolidated $ 344 $ 365 $ 162 $ 13 $ 468 _____________________ (1) Consists of “employee compensation and benefit expenses” and “other operating expenses.” (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, 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. 137 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Segment, Corporate Division and Other Revenues by Country of Domicile Year Ended December 31, Country of Domicile 2025 2024 2023 (in millions) U.S. $ 749 $ 685 $ 1,064 Bermuda 177 168 166 U.K. 48 32 36 Other 2 1 1 Total $ 976 $ 886 $ 1,267 3. Outstanding Exposure The Company sells credit protection primarily in financial guaranty insurance form. 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. The Company seeks to limit its exposure to losses by underwriting obligations that it views to be investment grade at inception, although on occasion it may underwrite new issuances that it views to be below-investment-grade (BIG), typically as part of its loss mitigation strategy for existing troubled exposures. 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, 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. Reinsurance may be used in order to reduce net exposure to certain insured transactions. Public finance obligations insured by the Company primarily consist of general obligation bonds supported by the taxing powers of U.S. state or municipal governmental authorities, as well as tax-supported bonds, revenue bonds and other obligations supported by covenants from state or municipal governmental authorities or other municipal obligors to impose and collect fees and charges for public services or specific infrastructure projects. The Company includes within public finance obligations those obligations backed by the cash flow from leases or other revenues from projects serving substantial public purposes, including utilities, toll roads, healthcare facilities and government office buildings as well as obligations issued by U.S. and non-U.S. sovereign and sub-sovereign issuers and governmental authorities. 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. 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 and other types of financial guaranties that are consistent with its risk profile and benefit from its underwriting experience. Significant Risk Management Activities The Portfolio Risk Management Committee, which includes members of senior management and senior risk and surveillance officers, is responsible for enterprise risk management for the Company’s insurance business and focuses on measuring and managing credit, market and liquidity risk for the Company’s insurance business. This committee establishes company-wide credit policy for the Company’s direct and assumed insurance business. 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 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. These committees review and may 138 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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. The Company also develops strategies to enforce its contractual rights and remedies and to mitigate its losses, engage in negotiation discussions with transaction participants and, when necessary, manage the Company’s litigation proceedings. Surveillance Categories The Company segregates its insured portfolio into investment grade and BIG surveillance categories to facilitate the appropriate allocation of resources to monitoring and loss mitigation efforts and to aid in establishing the appropriate cycle for periodic review of each exposure. BIG exposures include all exposures with internal credit ratings below BBB-. The Company’s internal credit ratings are based on internal assessments of the likelihood of default and loss severity in the event of default. Internal credit ratings are expressed on a ratings scale similar to that used by the rating agencies and generally reflect an approach similar to that employed by the rating agencies, except that the Company’s internal credit ratings focus on future performance rather than lifetime performance. The Company monitors its insured portfolio and refreshes its internal credit ratings on individual exposures in quarterly, semi-annual or annual cycles based on the Company’s view of the exposure’s credit quality, future loss potential, volatility and sector. More extensive monitoring and intervention are employed for all BIG surveillance categories, with internal credit ratings reviewed quarterly. Exposures identified as BIG are subjected to further review to determine (i) the probability of a future loss, (ii) the calculation of the expected future loss to be paid, and (iii) whether the Company has paid a claim for which it expects to be reimbursed within one year (liquidity claim) or a claim for which it does not expect to be reimbursed within one year. Ratings on exposures in sectors identified as under the most stress or with the most potential volatility are also reviewed every quarter, although the Company may also review a rating in response to developments impacting a credit when a ratings review is not scheduled. For assumed exposures, the Company may use the ceding company’s credit ratings of transactions where it is impractical for it to assign its own rating. The Company assigns each BIG exposure to one of the three BIG surveillance categories below, which generally represent the following: • BIG 1: Below-investment-grade exposures for which there are possible future losses, on a present value basis, and the aggregate probability weighting of scenarios with future losses is less than 50 %, regardless of whether the Company has or has not paid a liquidity claim. • BIG 2: Below-investment-grade exposures for which there are possible future losses, on a present value basis, and the aggregate probability weighting of scenarios with future losses is 50 % or more, but for which no claims (other than liquidity claims) have yet been paid. • BIG 3: 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 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. 139 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Financial Guaranty Exposure The Company measures its financial guaranty exposure in terms of: (i) gross and net par outstanding; and (ii) gross and net debt service. The Company typically guarantees the payment of debt service when due. Since most of these payments are due in the future, the Company generally uses gross and net par outstanding as a proxy for its financial guaranty exposure. Gross par outstanding generally represents the principal amount of the insured obligation at a point in time. Net par outstanding equals gross par outstanding net of any reinsurance. The Company includes in its par outstanding calculation the impact of any consumer price index inflator to the reporting date as well as, in the case of accreting (zero-coupon) obligations, accretion to the reporting date. Non-U.S. dollar denominated par outstanding is translated at the spot rate at the end of the reporting period. 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). 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 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. Net debt service outstanding equals gross debt service outstanding net of any reinsurance. Future debt service payments include the estimated impact of any consumer price index inflator after the reporting date, as well as, in the case of accreting (zero-coupon) obligations, accretion after the reporting date. The Company calculates its debt service outstanding as follows: • for insured obligations that are not supported by homogeneous pools of assets (which category includes most of the Company’s public finance transactions), as the total estimated contractual future debt service due through maturity, regardless of whether the obligations may be called and regardless of whether, in the case of obligations where principal payments are due when an underlying asset makes a principal payment, the Company believes the obligations will be repaid prior to contractual maturity; and • for insured obligations that are supported by homogeneous pools of assets that are contractually permitted to prepay principal (which category includes, for example, residential mortgage-backed securities (RMBS)), as the total estimated expected future debt service due on insured obligations through their respective expected terms, which reflects the Company’s expectations as to whether the obligations may be called and, in the case of obligations where principal payments are due when an underlying asset makes a principal payment, when the Company expects principal payments to be made prior to contractual maturity. The calculation of debt service requires the use of estimates, which the Company updates periodically, including estimates and assumptions for the expected remaining term of insured obligations supported by homogeneous pools of assets, updated interest rates for floating and variable rate insured obligations, behavior of consumer price indices for obligations with consumer price index inflators, foreign exchange rates and other assumptions based on the characteristics of each insured obligation. Debt service is a measure of the estimated maximum potential exposure to insured obligations before considering the Company’s various legal rights to the underlying collateral and other remedies available to it under its financial guaranty contract. Actual debt service may differ from estimated debt service due to refundings, terminations, negotiated restructurings, prepayments, changes in interest rates on variable rate insured obligations, consumer price index behavior differing from that projected, changes in foreign exchange rates on non-U.S. dollar denominated insured obligations and other factors. 140 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Financial Guaranty Portfolio Debt Service and Par Outstanding As of December 31, 2025 As of December 31, 2024 Gross Net Gross Net (in billions) Debt Service Public finance $ 428.5 $ 428.4 $ 403.8 $ 403.7 Structured finance 12.9 12.4 12.7 12.3 Total financial guaranty $ 441.4 $ 440.8 $ 416.5 $ 416.0 Par Outstanding Public finance $ 265.6 $ 265.6 $ 250.4 $ 250.4 Structured finance 12.0 11.5 11.6 11.2 Total financial guaranty $ 277.6 $ 277.1 $ 262.0 $ 261.6 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 As of December 31, 2025 Public Finance U.S. Public Finance Non-U.S. Structured Finance U.S. Structured Finance Non-U.S. Total Rating Category Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % (dollars in billions) AAA $ — — % $ 1.8 3.5 % $ 0.5 5.8 % $ 0.5 12.6 % $ 2.8 1.0 % AA 18.2 8.5 1.5 2.9 5.2 66.4 0.1 3.5 25.0 9.0 A 122.8 57.1 13.5 26.7 0.7 8.9 3.0 83.7 140.0 50.5 BBB 70.5 32.8 29.4 58.1 0.6 8.2 — 0.2 100.5 36.3 BIG 3.5 1.6 4.4 8.8 0.9 10.7 — — 8.8 3.2 Total net par outstanding $ 215.0 100.0 % $ 50.6 100.0 % $ 7.9 100.0 % $ 3.6 100.0 % $ 277.1 100.0 % Financial Guaranty Portfolio by Internal Rating As of December 31, 2024 Public Finance U.S. Public Finance Non-U.S. Structured Finance U.S. Structured Finance Non-U.S. Total Rating Category Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % Net Par Outstanding % (dollars in billions) AAA $ — — % $ 2.1 4.2 % $ 0.5 6.1 % $ 0.5 17.3 % $ 3.1 1.2 % AA 17.7 8.8 2.9 5.8 5.4 63.7 — 2.1 26.0 9.9 A 111.5 55.5 13.0 26.5 1.0 11.3 2.1 77.7 127.6 48.8 BBB 69.1 34.3 24.8 50.5 0.7 8.3 0.1 2.9 94.7 36.2 BIG 2.9 1.4 6.4 13.0 0.9 10.6 — — 10.2 3.9 Total net par outstanding $ 201.2 100.0 % $ 49.2 100.0 % $ 8.5 100.0 % $ 2.7 100.0 % $ 261.6 100.0 % 141 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued The following tables present net par outstanding by sector for the financial guaranty portfolio. Financial Guaranty Portfolio Net Par Outstanding by Sector As of December 31, Sector 2025 2024 (in billions) Public finance: U.S. public finance: General obligation $ 82.3 $ 78.2 Tax backed 36.1 33.3 Municipal utilities 31.4 30.0 Transportation 23.5 27.0 Healthcare 16.8 14.0 Infrastructure finance 15.1 9.9 Higher education 8.4 7.3 Renewable energy 0.2 0.2 Other public finance 1.2 1.3 Total U.S. public finance 215.0 201.2 Non-U.S. public finance: Regulated utilities 23.5 22.3 Infrastructure finance 16.0 15.0 Sovereign and sub-sovereign 8.3 9.2 Renewable energy 1.7 1.6 Pooled infrastructure 1.1 1.1 Total non-U.S. public finance 50.6 49.2 Total public finance 265.6 250.4 Structured finance: U.S. structured finance: Insurance reserve financings and securitizations 4.4 4.5 RMBS 1.4 1.5 Pooled corporate obligations 0.6 0.6 Financial products 0.4 0.5 Fund finance facilities 0.1 0.2 Other structured finance 1.0 1.2 Total U.S. structured finance 7.9 8.5 Non-U.S. structured finance: Fund finance facilities 1.6 1.4 Pooled corporate obligations 0.5 0.5 RMBS 0.2 0.2 Other structured finance 1.3 0.6 Total non-U.S. structured finance 3.6 2.7 Total structured finance 11.5 11.2 Total net par outstanding $ 277.1 $ 261.6 142 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Financial Guaranty Portfolio Expected Amortization of Net Par Outstanding As of December 31, 2025 Public Finance Structured Finance Total (in billions) 0 to 5 years $ 56.1 $ 6.7 $ 62.8 5 to 10 years 57.3 2.9 60.2 10 to 15 years 48.4 1.2 49.6 15 to 20 years 35.1 0.2 35.3 Over 20 years 68.7 0.5 69.2 Total net par outstanding $ 265.6 $ 11.5 $ 277.1 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. Financial Guaranty Portfolio Components of BIG Net Par Outstanding As of December 31, 2025 BIG Net Par Outstanding BIG 1 BIG 2 BIG 3 Total BIG (in billions) Public finance: U.S. public finance $ 2.48 $ 0.42 $ 0.58 $ 3.48 Non-U.S. public finance 1.09 3.35 — 4.44 Public finance 3.57 3.77 0.58 7.92 Structured finance: U.S. RMBS 0.17 0.03 0.57 0.77 Other structured finance — 0.01 0.06 0.07 Structured finance 0.17 0.04 0.63 0.84 Total $ 3.74 $ 3.81 $ 1.21 $ 8.76 Financial Guaranty Portfolio Components of BIG Net Par Outstanding As of December 31, 2024 BIG Net Par Outstanding BIG 1 BIG 2 BIG 3 Total BIG (in billions) Public finance: U.S. public finance $ 2.12 $ 0.14 $ 0.62 $ 2.88 Non-U.S. public finance 5.88 0.52 — 6.40 Public finance 8.00 0.66 0.62 9.28 Structured finance: U.S. RMBS 0.10 0.03 0.69 0.82 Other structured finance — 0.02 0.06 0.08 Structured finance 0.10 0.05 0.75 0.90 Total $ 8.10 $ 0.71 $ 1.37 $ 10.18 143 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Financial Guaranty Portfolio BIG Net Par Outstanding and Number of Risks As of December 31, 2025 Net Par Outstanding Number of Risks (2) Description Financial Guaranty Insurance (1) Credit Derivatives Total Financial Guaranty Insurance (1) Credit Derivatives Total (dollars in billions) BIG 1 $ 3.71 $ 0.03 $ 3.74 87 3 90 BIG 2 3.81 — 3.81 13 1 14 BIG 3 1.21 — 1.21 95 3 98 Total BIG $ 8.73 $ 0.03 $ 8.76 195 7 202 Financial Guaranty Portfolio BIG Net Par Outstanding and Number of Risks As of December 31, 2024 Net Par Outstanding Number of Risks (2) Description Financial Guaranty Insurance (1) Credit Derivatives Total Financial Guaranty Insurance (1) Credit Derivatives Total (dollars in billions) BIG 1 $ 8.07 $ 0.03 $ 8.10 98 3 101 BIG 2 0.71 — 0.71 12 1 13 BIG 3 1.37 — 1.37 97 3 100 Total BIG $ 10.15 $ 0.03 $ 10.18 207 7 214 _____________________ (1) Includes FG VIEs. (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 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. 144 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Financial Guaranty Portfolio Geographic Distribution of Net Par Outstanding As of December 31, 2025 Number of Risks Net Par Outstanding Percent of Total Net Par Outstanding (dollars in billions) U.S.: U.S. public finance: California 1,194 $ 36.6 13.2 % Texas 1,220 28.3 10.2 New York 846 21.0 7.6 Pennsylvania 538 18.8 6.8 Illinois 495 13.1 4.7 Florida 219 13.0 4.7 New Jersey 231 7.8 2.8 Louisiana 146 5.4 2.0 Michigan 237 5.0 1.8 Colorado 189 4.8 1.7 Other 2,142 61.2 22.1 Total U.S. public finance 7,457 215.0 77.6 U.S. structured finance (multiple states) 308 7.9 2.8 Total U.S. 7,765 222.9 80.4 Non-U.S.: United Kingdom 259 42.3 15.3 Australia 7 1.9 0.7 France 6 1.8 0.7 Spain 10 1.8 0.6 Canada 4 1.2 0.4 Other 50 5.2 1.9 Total non-U.S. 336 54.2 19.6 Total 8,101 $ 277.1 100.0 % Specialty Business The Company also guarantees specialty business with risk profiles similar to those of its structured finance exposures written in financial guaranty form. Specialty Business As of December 31, 2025 As of December 31, 2024 Gross Exposure Net Exposure Gross Exposure Net Exposure (in billions) Diversified real estate (1) $ 2.0 $ 2.0 $ 2.0 $ 2.0 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 (RVI) 0.2 0.1 0.2 0.1 ____________________ (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. 145 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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. Commitments 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 guaranteed amounts . 4. Expected Loss to be Paid (Recovered) Accounting Policy Net expected loss to be paid (recovered) is equal to the present value of expected future cash outflows for loss and LAE payments, net of: (i) inflows for expected salvage, subrogation and other recoveries; (ii) excess spread on underlying collateral, as applicable; and (iii) amounts ceded to reinsurers. Cash flows are discounted at current risk-free rates. The Company updates the discount rates each quarter and reflects the effect of such changes in economic loss development. Expected cash outflows and inflows are probability weighted cash flows that reflect management’s assumptions about the likelihood of all possible outcomes based on all information available to the Company. Those assumptions consider the relevant facts and circumstances and are consistent with the information tracked and monitored through the Company’s surveillance and risk management functions. 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 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 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 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. 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. This note provides information regarding expected loss to be paid (recovered), regardless of the accounting method. Loss Estimation Process The financial guaranties issued by the Company insure the credit performance of the guaranteed obligations over an extended period of time, in some cases over 30 years, and in most circumstances the Company has no right to cancel such financial guaranties. 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 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 146 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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. The Company does not use traditional actuarial approaches to determine its estimates of expected losses. The determination of expected loss to be paid (recovered) is an inherently subjective process involving numerous estimates, assumptions and judgments by management, using both internal and external data sources with regard to frequency and severity of loss, economic projections, governmental actions, legal developments, negotiations, recovery rates, delinquency and prepayment rates, timing of cash flows and other factors that affect credit performance. These estimates, assumptions and judgments, and the factors on which they are based, may change materially over a reporting period, and have a material effect on the Company’s financial statements. 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 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 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; changes in the issuer’s ability or willingness to raise taxes, decrease spending or receive federal assistance; new legislation; 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 and amount of pensions and other obligations owed to workers; developments in restructuring or settlement negotiations; and other political and economic factors. Changes in loss estimates may also be affected by the Company’s loss mitigation efforts and other variables. 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 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. RMBS have also been affected by changes in the amount of recoveries on first lien deferred principal balances and second lien charged-off loans. Actual losses will ultimately depend on future events, transaction performance or other factors that are difficult to predict. 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 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. The Company’s reserve committees estimate expected loss to be paid (recovered) by reviewing analyses that consider various scenarios with corresponding probabilities assigned to them. Depending upon the characteristics of the risk, the Company’s view of the potential size of any loss and the information available to the Company, that analysis may be based upon individually developed cash flow models, internal credit rating assessments, sector-driven loss severity assumptions and/or judgmental assessments. In the case of its assumed business, the Company may conduct its own analysis or use loss estimates provided by ceding insurers. Each quarter, the Company’s reserve committees review and refresh their loss projection assumptions, scenarios and the probabilities they assign to those scenarios based on developments during the period and their view of future performance. 147 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Net Expected Loss to be Paid (Recovered) and Net Economic Loss Development (Benefit) by Accounting Model Net Expected Loss to be Paid (Recovered) Net Economic Loss Development (Benefit) As of December 31, Year Ended December 31, Accounting Model 2025 2024 2025 2024 2023 (in millions) Insurance (see Note 5) $ 88 $ 90 $ 59 $ ( 1 ) $ 174 FG VIEs (see Note 8) 13 16 ( 5 ) ( 1 ) ( 11 ) Credit derivatives (see Note 6) — — ( 63 ) ( 1 ) 1 Total $ 101 $ 106 $ ( 9 ) $ ( 3 ) $ 164 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 for U.S. and non-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) Roll Forward Year Ended December 31, 2025 2024 2023 (in millions) Net expected loss to be paid (recovered), beginning of period $ 106 $ 505 $ 522 Economic loss development (benefit) due to: Accretion of discount 7 16 20 Changes in discount rates 7 4 3 Changes in timing and assumptions ( 23 ) ( 23 ) 141 Total economic loss development (benefit) (1) ( 9 ) ( 3 ) 164 Net (paid) recovered losses (1) (2) 4 ( 396 ) ( 181 ) Net expected loss to be paid (recovered), end of period $ 101 $ 106 $ 505 ____________________ (1) 2025 amounts include recoveries recognized in connection with the resolution of the LBIE litigation. See Note 6. 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. 148 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Net Expected Loss to be Paid (Recovered) Roll Forward by Sector Year Ended December 31, 2025 Sector Net Expected Loss to be Paid (Recovered) as of December 31, 2024 Net Economic Loss Development (Benefit) Net (Paid) Recovered Losses (1) Net Expected Loss to be Paid (Recovered) as of December 31, 2025 (in millions) Public finance: U.S. public finance $ 18 $ 64 $ ( 113 ) $ ( 31 ) Non-U.S. public finance 98 33 ( 5 ) 126 Public finance 116 97 ( 118 ) 95 Structured finance: U.S. RMBS ( 43 ) ( 43 ) 32 ( 54 ) Other structured finance (2) 33 ( 63 ) 90 60 Structured finance ( 10 ) ( 106 ) 122 6 Total $ 106 $ ( 9 ) $ 4 $ 101 Year Ended December 31, 2024 Sector Net Expected Loss to be Paid (Recovered) as of December 31, 2023 Net Economic Loss Development (Benefit) Net (Paid) Recovered Losses (1) Net Expected Loss to be Paid (Recovered) as of December 31, 2024 (in millions) Public finance: U.S. public finance $ 398 $ ( 9 ) $ ( 371 ) $ 18 Non-U.S. public finance 20 81 ( 3 ) 98 Public finance 418 72 ( 374 ) 116 Structured finance: U.S. RMBS 43 ( 75 ) ( 11 ) ( 43 ) Other structured finance 44 — ( 11 ) 33 Structured finance 87 ( 75 ) ( 22 ) ( 10 ) Total $ 505 $ ( 3 ) $ ( 396 ) $ 106 149 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Year Ended December 31, 2023 Sector Net Expected Loss to be Paid (Recovered) as of December 31, 2022 Net Economic Loss Development (Benefit) Net (Paid) Recovered Losses (1) Net Expected Loss to be Paid (Recovered) as of December 31, 2023 (in millions) Public finance: U.S. public finance $ 403 $ 201 $ ( 206 ) $ 398 Non-U.S. public finance 9 11 — 20 Public finance 412 212 ( 206 ) 418 Structured finance: U.S. RMBS 66 ( 56 ) 33 43 Other structured finance 44 8 ( 8 ) 44 Structured finance 110 ( 48 ) 25 87 Total $ 522 $ 164 $ ( 181 ) $ 505 ____________________ (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.” (2) 2025 amounts include recoveries recognized in connection with the resolution of the LBIE litigation. See Note 6. 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. Thames Water 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. U.K. Healthcare 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 150 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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. U.S. Healthcare 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 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. Puerto Rico 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, 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. The default of PREPA’s obligations has been the subject of restructuring negotiations, mediation and litigation since 2014. Puerto Rico Litigation Currently, there are numerous legal actions relating to defaults by PREPA on debt service payments and related matters and the Company is a party to a number of them. 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 (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 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. On March 22, 2023, the Federal District Court of Puerto Rico held that the PREPA bondholders had perfected liens only in revenues that had been deposited in the sinking fund established under the PREPA trust agreement and related funds over which the bond trustee had control but did not have a lien on future revenues until deposited in those funds. The Federal District Court of Puerto Rico also held, however, that PREPA bondholders do have recourse under the PREPA trust agreement in the form of an unsecured net revenue claim. At that time, the Federal District Court of Puerto Rico declined to value the unsecured net revenue claim or the method for its determination. The ultimate value of the claim, according to the Federal District Court of Puerto Rico, should be determined through a claim estimation proceeding. On June 26, 2023, the Federal District Court of Puerto Rico issued an opinion and order estimating the unsecured net revenue claim to be $ 2.4 billion as of July 3, 2017. 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. 151 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 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. 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 152 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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 As of December 31, 2025 and December 31, 2024, the Company had $ 76 million and $ 92 million, respectively, of remaining non-defaulting Puerto Rico net par outstanding related primarily to the Puerto Rico Municipal Finance Agency (MFA). The MFA exposures are secured by a lien on local tax revenues and remain current on debt service payments. U.S. RMBS Loss Projections 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 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 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. 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. 153 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Expected Loss to be Paid (Recovered) and Net Economic Loss Development (Benefit) U.S. RMBS Net Expected Loss to be Paid (Recovered) Economic Loss Development (Benefit) As of December 31, Year Ended December 31, 2025 2024 2025 2024 2023 (dollars in millions) First lien U.S. RMBS $ 90 $ 91 $ ( 3 ) $ ( 27 ) $ ( 7 ) Second lien U.S. RMBS ( 144 ) ( 134 ) ( 40 ) ( 48 ) ( 49 ) Total U.S. 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 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. In the Company’s least stressful scenario where 80 % of deferred principal balances are assumed to be recovered, the CDR plateau was six months shorter ( 30 months, effectively assuming that liquidation rates would improve) and the CDR recovery was more pronounced (including an initial ramp-down of the CDR over eight months ), expected loss to be paid would decrease from current projections by approximately $ 32 million for all first lien U.S. RMBS transactions. 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 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. RMBS Loss Projections Second lien U.S. RMBS transactions include both home equity lines of credit (HELOC) and closed-end second lien mortgages. The Company believes the most important driver of its projected second lien U.S. RMBS claims and 154 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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 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. 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. 5. 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. 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. Variable Interest Entities, for amounts related to consolidated FG VIEs. Premiums Accounting Policy Financial guaranty contracts that meet the scope exception under derivative accounting guidance are subject to industry specific accounting guidance for financial guaranty insurance. 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 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.” The amount of deferred premium revenue at contract inception is determined as follows: • For premiums received upfront on financial guaranty insurance contracts that were originally underwritten by the Company, deferred premium revenue is equal to the amount of cash received. Upfront premiums typically relate to public finance transactions. • For premiums received in installments on financial guaranty insurance contracts that were originally underwritten by the Company, deferred premium revenue is calculated as the present value (discounted at risk free rates) of either: (i) contractual premiums due; 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 155 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). The amount of deferred premium revenue may differ significantly from cash collections primarily due to fair value adjustments recorded in connection with a business combination. When the Company adjusts prepayment assumptions for expected premium collections for obligations backed by homogeneous pools of contractually prepayable assets, an adjustment is recorded to the deferred premium revenue, with a corresponding adjustment to premiums receivable. Premiums receivable are discounted at the risk-free rate at inception and such discount rate is updated only when changes to prepayment assumptions are made that change the expected date of final maturity. Accretion of the discount on premiums receivable is reported in “net earned premiums.” The Company recognizes deferred premium revenue as earned premium over the contractual period or expected period of the contract in proportion to the amount of insurance protection provided. As premium revenue is recognized, a corresponding decrease to the deferred premium revenue is recorded. The amount of insurance protection provided is a function of the insured par amount outstanding. 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, (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. For assumed reinsurance contracts, net earned premiums reported in the consolidated statements of operations are calculated based upon data received from ceding companies; however, some ceding companies report premium data between 30 and 90 days after the end of the reporting period. The Company estimates net earned premiums for the lag period. Differences between such estimates and actual amounts are recorded in the period in which the actual amounts are determined. When installment premiums are related to assumed reinsurance contracts, the Company assesses the credit quality and available liquidity of the ceding companies and the impact of any potential regulatory constraints to determine the collectability of such amounts. Ceded unearned premium reserve is recorded as an asset. Direct, assumed and ceded earned premiums are presented together as net earned premiums in the consolidated statements of operations. Any premiums related to FG VIEs are eliminated in consolidation. Insurance Contracts’ Premium Information Net Earned Premiums Year Ended December 31, 2025 2024 2023 (in millions) Financial guaranty insurance: Scheduled net earned premiums $ 308 $ 293 $ 285 Accelerations from refundings and terminations 30 71 29 Accretion of discount on net premiums receivable 37 31 26 Financial guaranty insurance net earned premiums 375 395 340 Specialty net earned premiums 5 8 4 Net earned premiums $ 380 $ 403 $ 344 156 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Gross Premium Receivable, Net of Commissions Payable on Assumed Business and Allowance for Credit Losses Roll Forward Year Ended December 31, 2025 2024 2023 (in millions) Beginning of year $ 1,551 $ 1,468 $ 1,298 Less: Specialty insurance premium receivable 1 1 1 Financial guaranty insurance premiums receivable 1,550 1,467 1,297 New business and supplemental premiums, net of commissions 298 467 353 Gross premiums received, net of commissions ( 342 ) ( 354 ) ( 261 ) Adjustments: Changes in the expected term and debt service assumptions ( 48 ) ( 32 ) 1 Accretion of discount, net of commissions on Assumed Business 33 26 26 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 Specialty insurance premium receivable 2 1 1 December 31, $ 1,572 $ 1,551 $ 1,468 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, new business and changes in ratings of the insured obligations and/or the Company’s insurance subsidiaries. 157 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Financial Guaranty Insurance Expected Future Premium Collections and Earnings As of December 31, 2025 Future Net Premiums to be Earned (2) Future Premiums to be Collected (1) Earnings of Deferred Premium Revenue Accretion of Discount Total (in millions) 2026 (January 1 - March 31) $ 72 $ 77 $ 10 $ 87 2026 (April 1 - June 30) 51 76 9 85 2026 (July 1 - September 30) 39 75 9 84 2026 (October 1 - December 31) 30 73 9 82 Subtotal 2026 192 301 37 338 2027 137 279 35 314 2028 130 264 33 297 2029 116 245 31 276 2030 100 225 29 254 2031-2035 417 888 124 1,012 2036-2040 329 579 89 668 2041-2045 249 384 58 442 2046-2050 187 247 32 279 2051-2055 105 119 13 132 After 2055 101 84 10 94 Total $ 2,063 $ 3,615 $ 491 $ 4,106 ____________________ (1) Net of assumed commissions payable. (2) Net of reinsurance. Selected Information for Financial Guaranty Insurance Policies with Premiums Paid in Installments As of December 31, 2025 2024 (dollars in millions) Premiums receivable, net of commissions payable $ 1,570 $ 1,550 Deferred premium revenue $ 1,831 $ 1,901 Weighted-average risk-free rate used to discount premiums 2.7 % 2.5 % Weighted-average period of premiums receivable (in years) 11.7 12.3 Policy Acquisition Costs Accounting Policy 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. The Company conducts time studies, which requires the use of judgment, to estimate the amount of costs to be deferred. DAC is generally amortized in proportion to net earned premiums. Amortization of deferred policy acquisition costs includes the accretion of discount on ceding commission receivable and payable. 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 expensed 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. 158 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Policy Acquisition Costs Roll Forward of DAC Year Ended December 31, 2025 2024 2023 (in millions) Beginning of year $ 176 $ 161 $ 147 Costs deferred during the period 38 35 27 Costs amortized during the period ( 22 ) ( 20 ) ( 13 ) December 31, $ 192 $ 176 $ 161 Losses and Recoveries Accounting Policies Loss and LAE Reserve 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 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. Under financial guaranty insurance accounting, the sum of unearned premium reserve and loss and LAE reserve represents the Company’s stand‑ready obligation. A loss and LAE reserve for a financial guaranty insurance contract is recorded only to the extent and for the amount that expected loss to be paid plus contra-paid (total losses) exceed the deferred premium revenue, on a contract-by-contract basis. As a result, the Company has expected loss to be paid that has not yet been expensed. Such amounts will be recognized in future periods as deferred premium revenue amortizes into income. When a claim or LAE payment is made on a contract, the Company first reduces any recorded loss and LAE reserve. 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 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 Expected loss to be paid is reduced when a claim payment (or estimated future claim payment) entitles the Company to cash flows associated with salvage and subrogation rights from the underlying collateral of, or other recoveries relating to, an insured exposure. 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 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; or (iii) the recording of a salvage asset with a benefit to the consolidated statements of operations if the transaction is in a net recovery position at the reporting date. The ceded component of salvage and subrogation recoverable is reported in “other liabilities.” Expected Loss to be Expensed Expected loss to be expensed represents past or expected future financial guaranty insurance net claim payments that have not yet been expensed. Such amounts will be expensed in future periods as deferred premium revenue amortizes into income. Expected loss to be expensed is the Company’s projection of incurred losses that will be recognized in future periods, excluding accretion of discount. 159 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Insurance Contracts’ Losses Reported in the Consolidated Financial Statements 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 reserve and salvage and subrogation recoverable, both net of reinsurance. Net Reserve (Salvage) by Sector As of December 31, Sector 2025 2024 (in millions) Public finance: U.S. public finance $ ( 66 ) $ ( 14 ) Non-U.S. public finance 18 5 Public finance ( 48 ) ( 9 ) Structured finance: U.S. RMBS ( 150 ) ( 151 ) Other structured finance 59 33 Structured finance ( 91 ) ( 118 ) Total $ ( 139 ) $ ( 127 ) The table below provides a reconciliation of net expected loss to be paid (recovered) for financial guaranty insurance contracts to net expected loss to be expensed. Expected loss to be paid (recovered) for financial guaranty insurance contracts differs from expected loss to be expensed due to: (i) the contra-paid, which represents the claim payments made and recoveries received that have not yet been recognized in the statements of operations; (ii) salvage and subrogation recoverable for transactions that are in a net recovery position where the Company has not yet received recoveries on claims previously paid (and therefore recognized in income but not yet received); and (iii) loss reserves that have already been established (and therefore expensed but not yet paid). Reconciliation of Net Expected Loss to be Paid (Recovered) to Net Expected Loss to be Expensed Financial Guaranty Insurance Contracts As of December 31, 2025 (in millions) Net expected loss to be paid (recovered) - financial guaranty insurance $ 87 Contra-paid, net 22 Salvage and subrogation recoverable, net 447 Loss and LAE reserve - financial guaranty insurance contracts, net of reinsurance ( 307 ) Net expected loss to be expensed (present value) $ 249 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, changes in foreign exchange rates and updates to loss estimates. This table excludes amounts related to FG VIEs, which are eliminated in consolidation. 160 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Net Expected Loss to be Expensed Financial Guaranty Insurance Contracts As of December 31, 2025 (in millions) 2026 (January 1 - March 31) $ 4 2026 (April 1 - June 30) 4 2026 (July 1 - September 30) 3 2026 (October 1 - December 31) 3 Subtotal 2026 14 2027 18 2028 18 2029 18 2030 17 2031-2035 69 2036-2040 28 2041-2045 22 2046-2050 26 2051-2055 16 After 2055 3 Net expected loss to be expensed (present value) 249 Future expected accretion 38 Total expected future loss and LAE $ 287 The following table presents the loss and LAE (benefit) reported in the consolidated statements of operations by sector for insurance contracts. Loss and LAE (Benefit) by Sector Year Ended December 31, Sector 2025 2024 2023 (in millions) Public finance: U.S. public finance $ 62 $ 12 $ 192 Non-U.S. public finance 20 4 — Public finance 82 16 192 Structured finance: U.S. RMBS ( 26 ) ( 43 ) ( 34 ) Other structured finance — 1 4 Structured finance ( 26 ) ( 42 ) ( 30 ) Loss and LAE (benefit) $ 56 $ ( 26 ) $ 162 161 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued The following tables provide information on financial guaranty insurance contracts categorized as BIG. Financial Guaranty Insurance BIG Transaction Loss Summary As of December 31, 2025 Gross Net Total BIG BIG 1 BIG 2 BIG 3 Total BIG (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 Outstanding exposure: Par $ 3.73 $ 3.81 $ 1.21 $ 8.75 $ 8.73 Interest 2.52 4.84 0.32 7.68 7.68 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 Potential recoveries (3) ( 445 ) ( 877 ) ( 1,110 ) ( 2,432 ) ( 2,422 ) Subtotal ( 273 ) 264 132 123 125 Discount 47 ( 77 ) ( 8 ) ( 38 ) ( 38 ) Expected losses to be paid (recovered) $ ( 226 ) $ 187 $ 124 $ 85 $ 87 Deferred premium revenue $ 164 $ 162 $ 103 $ 429 $ 429 Reserves (salvage) $ ( 255 ) $ 71 $ 43 $ ( 141 ) $ ( 140 ) 162 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Financial Guaranty Insurance BIG Transaction Loss Summary As of December 31, 2024 Gross Net Total BIG BIG 1 BIG 2 BIG 3 Total BIG (dollars in billions) Number of risks (1) 98 12 97 207 207 Remaining weighted average period (in years) 18.6 8.8 6.1 16.6 16.6 Outstanding exposure: Par $ 8.08 $ 0.70 $ 1.38 $ 10.16 $ 10.15 Interest 7.55 0.37 0.42 8.34 8.33 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 Potential recoveries (3) ( 4,201 ) ( 293 ) ( 1,132 ) ( 5,626 ) ( 5,616 ) Subtotal ( 185 ) 49 175 39 40 Discount 43 29 ( 23 ) 49 49 Expected losses to be paid (recovered) $ ( 142 ) $ 78 $ 152 $ 88 $ 89 Deferred premium revenue $ 333 $ 49 $ 116 $ 498 $ 498 Reserves (salvage) $ ( 226 ) $ 35 $ 62 $ ( 129 ) $ ( 128 ) __________________ (1) A risk represents the aggregate of the financial guaranty policies that share the same revenue source for purposes of making debt service payments. (2) Includes amounts related to FG VIEs. (3) Represents expected inflows from future payments by obligors pursuant to restructuring agreements, settlements, excess spread on any underlying collateral and other estimated recoveries. Potential recoveries also include recoveries on certain investment grade credits, related mainly to exposures that were previously BIG and for which claims have been paid in the past. Reinsurance The Company cedes portions of its gross insured financial guaranty exposure (Ceded Financial Guaranty Business) to third-party insurers. This Ceded Financial Guaranty Business represents $ 599 million, or approximately 0.1 %, of the Company’s total gross insured debt service of $ 441.4 billion, as of December 31, 2025. The Company also cedes $ 379 million of its $ 4.6 billion in gross insured specialty business exposure. The following table presents the components of premiums and losses reported in the consolidated statements of operations attributable to the Assumed and Ceded Businesses (both financial guaranty and specialty insurance). 163 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Components of Premiums Written, Premiums Earned and Loss and LAE (Benefit) Year Ended December 31, 2025 2024 2023 (in millions) Premiums Written: Direct $ 251 $ 436 $ 307 Assumed 5 4 50 Ceded ( 6 ) ( 6 ) ( 16 ) Net $ 250 $ 434 $ 341 Premiums Earned: Direct $ 356 $ 378 $ 319 Assumed 28 32 28 Ceded ( 4 ) ( 7 ) ( 3 ) Net $ 380 $ 403 $ 344 Loss and LAE (benefit): Direct (1) $ 46 $ ( 30 ) $ 157 Assumed 11 3 8 Ceded ( 1 ) 1 ( 3 ) Net $ 56 $ ( 26 ) $ 162 ____________________ (1) See Note 4. Expected Loss to be Paid (Recovered), for additional information on the economic loss development (benefit). 6. Contracts Accounted for as Credit Derivatives The Company’s credit derivatives primarily consist of insured CDS contracts. The Company does not enter into CDS contracts with the intent to trade these contracts and may not unilaterally terminate a CDS contract absent an event or default or termination event that entitles the Company to terminate the contract. The Company and its counterparties have negotiated the termination of certain contracts from time to time. Transactions are generally terminated for an amount that approximates the present value of future premiums or a negotiated amount, rather than fair value. The terms of the Company’s CDS contracts differ from more standardized credit derivative contracts sold by companies outside the financial guaranty industry. The non-standard terms generally include the absence of collateral support agreements or immediate settlement provisions, and the Company’s insured exposure benefits from relatively high attachment points or other protections. The Company’s credit derivatives are generally governed by International Swaps and Derivatives Association, Inc. documentation and have certain characteristics that differ from financial guaranty insurance contracts. For example, the Company’s control rights with respect to a reference obligation under a CDS may be more limited than when the Company issues a financial guaranty insurance contract. In addition, there are more circumstances under which the Company may be obligated to make payments. Similar to a financial guaranty insurance contract, the Company would be obligated to pay if the obligor failed to make a scheduled payment of principal or interest in full. In certain credit derivative transactions, the Company also specifically agreed to pay if the obligor were to become bankrupt or if the reference obligation were restructured. Furthermore, in certain credit derivative transactions, the Company may be required to make a payment due to an event that is unrelated to the performance of the obligation referenced in the credit derivative. If events of default or termination events specified in the credit derivative documentation were to occur, the non-defaulting or the non-affected party, which may be either the Company or the counterparty, depending upon the circumstances, may decide to terminate a credit derivative prior to maturity. In that case, the Company may be required to make a termination payment to its swap counterparty upon such termination. Absent such an event of default or termination event, the Company may not unilaterally terminate a credit derivative contract; however, the Company on occasion has mutually agreed to terminate certain CDS with related counterparties. 164 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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 statements 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. Credit Derivatives Net Par Outstanding and Fair Value The components of the Company’s credit derivative net par outstanding by sector are presented in the table below. The estimated remaining weighted average life of credit derivatives was 8.6 years and 8.4 years as of December 31, 2025 and December 31, 2024, respectively. Credit Derivatives (1) 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) U.S. public finance $ 1.0 $ 1.0 $ ( 2 ) $ ( 12 ) Non-U.S. public finance 1.6 2.0 ( 12 ) ( 15 ) U.S. structured finance 0.2 0.2 ( 1 ) ( 2 ) Non-U.S. structured finance 1.0 1.0 — — Total $ 3.8 $ 4.2 $ ( 15 ) $ ( 29 ) ____________________ (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 Year Ended December 31, 2025 2024 2023 (in millions) Realized gains (losses) and other settlements $ 108 $ 3 $ 2 Net unrealized gains (losses) 13 21 112 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. In addition, since each transaction has unique collateral and structural terms, the change in fair value of each transaction may vary considerably. The fair value of credit derivative contracts generally also reflects the Company’s own credit cost based on the price to purchase credit protection on AG. The Company determines its own credit risk primarily based on quoted CDS prices traded on AG at each balance sheet date. 165 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued CDS Spread on AG (in basis points) As of December 31, 2025 2024 2023 Five-year CDS spread 69 75 66 One-year CDS spread 23 25 23 Fair Value of Credit Derivative Assets (Liabilities) and Effect of AG Credit Spread As of December 31, 2025 2024 (in millions) Fair value of credit derivatives before effect of AG credit spread $ ( 40 ) $ ( 64 ) Plus: Effect of AG credit spread 25 35 Net fair value of credit derivatives $ ( 15 ) $ ( 29 ) The fair value of CDS contracts as of December 31, 2025, before considering the benefit applicable to AG’s credit spread, is a direct result of the relatively wider credit spreads under current market conditions, sometimes related to downgrades, compared with those at the time of underwriting for certain underlying credits with longer tenor. 7. Investments and Cash Accounting Policy All fixed-maturity securities are reported on a trade date-basis, measured at fair value and classified as either trading or available-for-sale. Changes in the fair value of trading fixed-maturity securities are reported as a component of net income, while unrealized gains and losses on available-for-sale fixed-maturity securities are reported in “accumulated other comprehensive income” (AOCI). Loss Mitigation Securities, which are a component of available-for-sale fixed-maturity securities, are accounted for based on their underlying investment type, excluding the effects of the Company’s insurance. Short-term investments, which are investments with a maturity of less than one year at the time of purchase, are carried at fair value and include amounts deposited in certain money market funds. Other invested assets primarily consist of equity method investments; 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 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, 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 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. 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 166 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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. For all other available-for-sale securities, a separate amount for accrued interest is reported in “other assets.” Credit Losses For an available-for-sale fixed-maturity security that has experienced a decline in fair value below its amortized cost due to credit related factors, an allowance is established for the difference between the estimated recoverable value and amortized cost with a corresponding charge to “net realized investment gains (losses)” in the consolidated statements of operations. The estimated recoverable value is the present value of cash flows expected to be collected. The allowance for credit losses is limited to the difference between amortized cost and fair value. Any difference between the security’s fair value and its amortized cost that is not associated with credit related factors is presented as a component of AOCI. When estimating future cash flows for fixed-maturity securities, management considers the historical performance of underlying assets and available market information as well as bond-specific considerations. In addition, the process of estimating future cash flows includes, but is not limited to, the following critical inputs which vary by security type: • the extent to which fair value is less than amortized cost; • credit ratings; • any adverse conditions specifically related to the security, industry, and/or geographic area; • changes in the financial condition of the issuer, or underlying loan obligors; • general economic and political factors; • remaining payment terms of the security; • prepayment speeds; • expected defaults; and • the value of any embedded credit enhancements. The assessment of whether a credit loss exists is performed each reporting period. The allowance for credit losses and the corresponding charge to net realized investment gains (losses) may be reversed if conditions change. However, the allowance for credit losses is never reduced below zero. When the Company determines that all or a portion of a fixed-maturity security is uncollectible, the uncollectible amortized cost amount is written off with a corresponding reduction to the allowance for credit losses. If cash flows that were previously written off are collected, the recovery is recognized in “net realized investment gains (losses).” An allowance for credit losses is established upon initial recognition for available-for-sale PCD securities. On the date of acquisition, the amortized cost of a PCD security is equal to its purchase price plus the allowance for credit losses, with no credit loss expense recognized in the consolidated statements of operations. After the date of acquisition, deterioration (or improvement) in credit will result in an increase (or decrease) to the allowance and an offsetting credit loss expense (or benefit). To measure this, the Company performs a discounted cash flow analysis. For PCD securities that are also beneficial interests, favorable or adverse changes in expected cash flows are recognized as a change in the allowance for credit losses. Changes in expected cash flows that are not captured through the allowance are reflected as a prospective adjustment to the security’s yield within “net investment income” in the consolidated statements of operations. The Company has elected to not measure credit losses on its accrued interest receivable and instead write off accrued interest when it is six months past due or on the date it is deemed uncollectible, if earlier. All write-offs of accrued interest are recorded as a reduction to “net investment income” in the consolidated statements of operations. 167 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). No allowance is established in these situations and any previously recorded allowance is reversed. The new cost basis is not adjusted for subsequent increases in estimated fair value. The Company monitors its equity method investments for indicators of other-than-temporary declines in fair value on an ongoing basis. If such a decline occurs, an impairment charge is recorded, measured as the difference between the carrying value and the estimated fair value. Investment Portfolio 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. 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 until July 1, 2038. 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. 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 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. Investment Portfolio Carrying Value As of December 31, 2025 2024 (in millions) Fixed-maturity securities, available-for-sale $ 6,369 $ 6,369 Fixed-maturity securities, trading 124 147 Short-term investments 903 1,221 Other invested assets: Equity method investments: Ownership interest in Sound Point 415 418 Funds and other investments 664 496 Other 12 12 Total (1) $ 8,487 $ 8,663 ____________________ (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 168 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 $ 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. Capital allocated to alternative investments was committed to several funds pursuing various strategies, including private healthcare investing, asset-based/specialty finance, CLOs and commercial real estate finance. 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. Available-for-Sale Fixed-Maturity Securities by Security Type As of December 31, 2025 Security Type Percent of Total (1) Amortized Cost Allowance for Credit Losses Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (dollars in millions) Obligations of state and political subdivisions 28 % $ 1,816 $ ( 13 ) $ 37 $ ( 71 ) $ 1,769 U.S. government and agencies 1 55 — 1 ( 4 ) 52 Corporate securities (2) 46 2,998 ( 6 ) 75 ( 115 ) 2,952 Mortgage-backed securities (3): RMBS 10 678 ( 26 ) 10 ( 47 ) 615 Commercial mortgage-backed securities (CMBS) 3 197 — 2 ( 1 ) 198 Asset-backed securities: CLOs 7 499 ( 9 ) 4 ( 38 ) 456 Other (4) 3 206 — 3 — 209 Non-U.S. government securities 2 123 — 3 ( 8 ) 118 Total available-for-sale fixed-maturity securities 100 % $ 6,572 $ ( 54 ) $ 135 $ ( 284 ) $ 6,369 169 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Available-for-Sale Fixed-Maturity Securities by Security Type As of December 31, 2024 Security Type Percent of Total (1) Amortized Cost Allowance for Credit Losses Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (dollars in millions) Obligations of state and political subdivisions 30 % $ 2,032 $ ( 14 ) $ 25 $ ( 103 ) $ 1,940 U.S. government and agencies 1 72 — 1 ( 6 ) 67 Corporate securities (2) 38 2,586 ( 7 ) 9 ( 206 ) 2,382 Mortgage-backed securities (3): RMBS 9 657 ( 21 ) 2 ( 71 ) 567 CMBS 3 189 — — ( 3 ) 186 Asset-backed securities: CLOs 9 615 ( 1 ) 6 ( 9 ) 611 Other (4) 9 593 ( 17 ) 1 ( 30 ) 547 Non-U.S. government securities 1 83 — — ( 14 ) 69 Total available-for-sale fixed-maturity securities 100 % $ 6,827 $ ( 60 ) $ 44 $ ( 442 ) $ 6,369 ____________________ (1) Percentages are based on amortized cost. (2) Corporate securities include securities issued by taxable universities and hospitals. (3) U.S. 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 for Available-for-Sale Fixed-Maturity Securities for Which a Credit Loss was Not Recorded As of December 31, 2025 Less than 12 months 12 months or more Total Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss (dollars in millions) Obligations of state and political subdivisions $ 79 $ ( 1 ) $ 837 $ ( 70 ) $ 916 $ ( 71 ) U.S. government and agencies 14 — 5 ( 4 ) 19 ( 4 ) Corporate securities 122 ( 1 ) 732 ( 87 ) 854 ( 88 ) Mortgage-backed securities: RMBS 11 — 114 ( 6 ) 125 ( 6 ) CMBS 41 — 57 ( 1 ) 98 ( 1 ) Asset-backed securities: CLOs 189 ( 9 ) 44 ( 5 ) 233 ( 14 ) Other 31 — 19 — 50 — Non-U.S. government securities 2 — 19 ( 8 ) 21 ( 8 ) Total $ 489 $ ( 11 ) $ 1,827 $ ( 181 ) $ 2,316 $ ( 192 ) Number of securities (1) 167 855 1,014 170 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Gross Unrealized Loss by Length of Time for Available-for-Sale Fixed-Maturity Securities for Which a Credit Loss was Not Recorded As of December 31, 2024 Less than 12 months 12 months or more Total Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss Fair Value Gross Unrealized Loss (dollars in millions) Obligations of state and political subdivisions $ 624 $ ( 7 ) $ 964 $ ( 96 ) $ 1,588 $ ( 103 ) U.S. government and agencies 5 — 28 ( 6 ) 33 ( 6 ) Corporate securities 762 ( 20 ) 1,046 ( 150 ) 1,808 ( 170 ) Mortgage-backed securities: RMBS 255 ( 4 ) 123 ( 10 ) 378 ( 14 ) CMBS 83 — 103 ( 3 ) 186 ( 3 ) Asset-backed securities: CLOs 151 ( 5 ) 107 ( 1 ) 258 ( 6 ) Other 60 ( 1 ) 16 — 76 ( 1 ) Non-U.S. government securities 35 ( 3 ) 30 ( 11 ) 65 ( 14 ) Total $ 1,975 $ ( 40 ) $ 2,417 $ ( 277 ) $ 4,392 $ ( 317 ) Number of securities (1) 569 1,065 1,591 ___________________ (1) The number of securities does not add across because lots consisting of the same securities have been purchased at different times and appear in both categories above (i.e., less than 12 months and 12 months or more). If a security appears in both categories, it is counted only once in the total column. The Company considered the credit quality, cash flows, interest rate movements, ability to hold a security to recovery and intent to sell a security in determining whether a security had a credit loss. 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, 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. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Distribution of Available-for-Sale Fixed-Maturity Securities by Contractual Maturity As of December 31, 2025 Amortized Cost Estimated Fair Value (in millions) Due within one year $ 202 $ 206 Due after one year through five years 1,465 1,482 Due after five years through 10 years 2,074 2,049 Due after 10 years 1,956 1,819 Mortgage-backed securities: RMBS 678 615 CMBS 197 198 Total $ 6,572 $ 6,369 171 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 The components of income derived from the investment portfolio are presented in the following tables. Income from Investments (1) Year Ended December 31, 2025 2024 2023 (in millions) Investment income: Fixed-maturity securities, available-for-sale (2) $ 310 $ 261 $ 294 Short-term investments 51 83 73 Other invested assets 3 1 3 Investment income 364 345 370 Investment expenses ( 5 ) ( 5 ) ( 5 ) Net investment income $ 359 $ 340 $ 365 Fair value gains (losses) on trading securities (3) $ 13 $ 52 $ 74 Equity in earnings (losses) of investees 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) 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 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. 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. The fair value of remaining CVIs as of 172 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. Equity in Earnings (Losses) of Investees As of December 31, 2025, the carrying value of the Company’s ownership interest in Sound Point was $ 415 million, and includes a basis difference related principally to goodwill and indefinite-lived intangible assets of $ 245 million, and finite-lived intangible assets of $ 25 million which had an average estimated term of 4.6 years. The table below presents summarized financial information for equity method investments that meet, in aggregate, the requirements for reporting summarized disclosures. Aggregate Equity Method Investments’ Summarized Balance Sheet Data As of December, 31 2025 2024 (in millions) Investments $ 3,326 $ 2,324 Assets of consolidated funds and CLOs 3,982 1,611 Other assets 751 754 Total assets $ 8,059 $ 4,689 Liabilities of consolidated funds and CLOs $ 3,866 $ 1,494 Other liabilities 1,054 526 Total liabilities $ 4,920 $ 2,020 Equity attributable to investees $ 3,087 $ 2,629 NCI 52 40 Total equity $ 3,139 $ 2,669 Aggregate Equity Method Investments’ Summarized Statement of Operations Data Year Ended December 31, 2025 2024 2023 (in millions) Fee income $ 197 $ 196 $ 57 Net gains (losses) on investments and investment income 678 400 129 Income of consolidated funds and CLOs 151 138 37 Other income 35 48 39 Total revenues $ 1,061 $ 782 $ 262 Expenses of consolidated funds and CLOs $ 115 $ 93 $ 25 Other expenses 368 279 108 Total expenses $ 483 $ 372 $ 133 Net income (loss) $ 578 $ 410 $ 129 Net income (loss) attributable to investees $ 578 $ 400 $ 127 173 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Realized Investment Gains (Losses) The table below presents the components of net realized investment gains (losses). Net Realized Investment Gains (Losses) Year Ended December 31, 2025 2024 2023 (in millions) Gross realized gains on sales of available-for-sale securities (1) $ 5 $ 3 $ 21 Gross realized losses on sales of available-for-sale securities ( 14 ) ( 12 ) ( 19 ) Net foreign currency gains (losses) — ( 2 ) ( 1 ) Change in the allowance for credit losses and intent to sell ( 29 ) 18 ( 14 ) Other net realized gains (losses) ( 2 ) 2 ( 1 ) Net realized investment gains (losses) $ ( 40 ) $ 9 $ ( 14 ) ____________________ (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. Roll Forward of Allowance for Credit Losses for Available-for-Sale Fixed-Maturity Securities Year Ended December 31, 2025 2024 2023 (in millions) Balance, beginning of period $ 60 $ 77 $ 65 Additions for securities for which credit losses were not previously recognized 13 4 — 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 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. 8. 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 (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. 174 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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. In determining whether it is the primary beneficiary, the Company considers all facts and circumstances, including an evaluation of economic interests in the VIE held directly and indirectly through related parties. The Company is the primary beneficiary of a VIE when it has both: (i) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance; and (ii) the obligation to absorb losses (or the right to receive benefits) from the entity that could potentially be significant to the VIE. 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 in the consolidated financial statements. FG VIEs 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 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 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 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 par and debt service outstanding in Note 3. Outstanding Exposure. 175 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued CIVs 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. 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. All CIVs are reported on a one-quarter lag. 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. Therefore, the Company has included these amounts in the total amount of cash and cash equivalents on the consolidated statements of cash flows. Cash flows of the CIVs attributable to such entities’ investment purchases and dispositions, as well as operating expenses of the investment vehicles, are presented as cash flows from operating activities in the consolidated statements of cash flows. 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. FG 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. In the case of excess spread, the financial assets contributed to VIEs generate interest income that is in excess of the interest payments on the debt issued by the VIE. 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 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 176 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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, 2025 2024 2023 Beginning of year 23 48 70 Consolidated 1 — — Deconsolidated (1) — ( 25 ) ( 22 ) December 31 24 23 48 ____________________ (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. Consolidated FG VIEs by Type of Collateral As of December 31, 2025 2024 (in millions) FG VIEs’ assets: U.S. RMBS (3) $ 142 $ 147 Other (includes $ 30 at fair value in 2025) (1) (2) 70 — Total FG VIEs’ assets $ 212 $ 147 FG VIEs’ liabilities with recourse: U.S. RMBS (3) $ 147 $ 155 Other, at fair value (2) 35 — Total FG VIEs’ liabilities with recourse $ 182 $ 155 FG VIEs’ liabilities without recourse: U.S. RMBS (3) $ 9 $ 9 Other (includes $ 6 at fair value in 2025) (2) 7 — Total FG VIEs’ liabilities without recourse $ 16 $ 9 ____________________ (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. (3) U.S. 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. 177 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Selected Information for FG VIEs’ Assets and Liabilities Measured under the FVO As of December 31, 2025 2024 (in millions) Excess of unpaid principal over fair value of: FG VIEs’ assets $ 252 $ 264 FG VIEs’ liabilities with recourse 31 38 FG VIEs’ liabilities without recourse 15 16 Unpaid principal balance for FG VIEs’ assets that were 90 days or more past due 20 27 Unpaid principal for FG VIEs’ liabilities with recourse (1) 178 193 ____________________ (1) FG VIEs’ liabilities with recourse will mature at various dates ranging from 2026 through 2038. CIVs CIVs consist of certain Sound Point funds for which the Company is the primary beneficiary or has a controlling interest. 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 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. The assets of the CIVs are not available to creditors of the Company, other than creditors of the applicable CIVs. 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 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. Non-Consolidated VIEs 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 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. 178 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 9. Fair Value Measurement Accounting Policy The Company carries a significant portion of its assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., exit or transfer price). The price represents the price available in the principal market for the asset or liability. If there is no principal market, then the price is based on a hypothetical market that maximizes the value received for an asset or minimizes the amount paid for a liability (i.e., the most advantageous market). Fair value is based on quoted market prices, where available. If listed prices or quotes are not available, fair value is based on either (i) internally developed models that primarily use, as inputs, market-based or independently sourced market parameters (including, but not limited to, yield curves, interest rates and debt prices) or (ii) discounted cash flows, using a third party’s proprietary pricing models. In addition to market information, when applicable, the models also incorporate transaction details, such as the instrument’s maturity, and contractual features that reduce the Company’s credit exposure (e.g., collateral rights). Valuation adjustments may be made to ensure that financial instruments are recorded at fair value. These adjustments include amounts to reflect counterparty credit quality, the Company’s creditworthiness and constraints on liquidity. As markets and products develop and the pricing transparency for certain products changes, the Company may refine its methodologies and assumptions. 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. The use of different methodologies or assumptions to determine fair value of certain financial instruments could result in a materially different estimate of fair value at the reporting date. The categorization within the fair value hierarchy is determined based on whether the inputs to valuation techniques used to measure fair value are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect Company estimates of market assumptions. The fair value hierarchy prioritizes model inputs into three broad levels, with Level 1 being the highest and Level 3 the lowest. The categorization, of an asset or liability, within the hierarchy is based on the lowest level of significant input to its valuation. Level 1—Quoted prices for identical instruments in active markets. The Company generally defines an active market as a market in which trading occurs at significant volumes. Active markets generally are more liquid and have a lower bid-ask spread than an inactive market. Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and observable inputs other than quoted prices, such as interest rates or yield curves and other inputs derived from, or corroborated by, observable market inputs. 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 unobservable. Level 3 financial instruments 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 a CIV during 2024. There were no other transfers from or into Level 3 during the periods presented. Carried at Fair Value Fixed-Maturity Securities 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 179 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. Additional valuation factors that can be taken into account are nominal spreads and liquidity adjustments. The pricing services evaluate each asset class based on relevant market and credit information, perceived market movements and sector news. In many cases, benchmark yields have proven to be more reliable indicators of the market for a security, as compared to reported trades for infrequently traded securities and distressed transactions. The extent of the use of each input is dependent on the asset class and the market conditions. The valuation of fixed-maturity securities is more subjective when markets are less liquid due to the lack of market-based inputs. As of December 31, 2025, the Company used models to price 148 securities. All Level 3 securities were priced with the assistance of independent third parties. The pricing is based on a discounted cash flow approach using the third party’s proprietary pricing models. The models use inputs such as projected prepayment speeds; severity assumptions; recovery lag assumptions; estimated default rates (determined based on an analysis of collateral attributes, historical collateral performance, borrower profiles and other features relevant to the evaluation of collateral credit quality); home price appreciation/depreciation rates based on macroeconomic forecasts; and recent trading activity. The yield used to discount the projected cash flows is determined by reviewing various attributes of the security including collateral type, weighted average life, sensitivity to losses, vintage and convexity, in conjunction with market data on comparable securities. Significant changes to any of these inputs could have materially changed the expected timing of cash flows within these securities, which could have significantly affected the fair value of the securities. Short-Term Investments Short-term investments that are traded in active markets are classified as Level 1 as their value is based on quoted market prices. Securities such as discount notes are classified as Level 2 because these securities are typically not actively traded. Due to their approaching maturity, the cost of discount notes approximates fair value. Other Assets 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). 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’s CDS spreads, the Company’s publicly traded debt and an estimation of the securities’ remaining term. The CCS are classified as Level 3. 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 NAV of the funds if a published daily value is not available (Level 2). The NAVs are based on observable information. The change in fair value of these assets is reported in “other operating expenses” in the consolidated statements of operations. Contracts Accounted for as Credit Derivatives There is no established market where financial guaranty insured credit derivatives are actively traded; therefore, management has determined that the exit market for the Company’s credit derivatives is a hypothetical one based on its entry market. Due to the lack of quoted prices and other observable inputs for its instruments or for similar instruments, the Company determines the fair value of its credit derivative contracts primarily through internally developed, proprietary models that use both observable and unobservable market data inputs, and such contracts are therefore classified as Level 3 in the fair value hierarchy. 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. 180 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. The fair value of the Company’s credit derivatives depends on a number of factors, including notional amount of the contract, expected term, credit spreads, changes in interest rates, the credit ratings of referenced entities, the Company’s own credit risk and remaining contractual cash flows. The expected remaining contractual premium cash flows are the most readily observable inputs since they are based on the credit derivatives’ contractual terms. Credit spreads capture the effect of recovery rates and performance of underlying assets of these contracts, among other factors. 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 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 credit derivative. 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. The Company’s own credit risk is factored into the determination of the current premium. Such credit risk is based on the quoted market price for credit protection bought on the Company as reflected by quoted market prices on CDS contracts referencing AG. 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 (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. The extent of the hedge depends on the types of instruments insured and current market conditions. In the Company’s valuation model, the current premium is not permitted to go below the minimum rate that the Company would charge to assume similar risks in the reporting period. This assumption can have the effect of limiting the amount of unrealized gains that are recognized on certain CDS contracts. 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 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; estimated default rates (determined on the basis of an analysis of collateral attributes such as: historical collateral performance, borrower profiles and other features relevant to the evaluation of collateral credit quality); yields implied by market prices for similar securities; and, as applicable, house price depreciation/appreciation rates based on macroeconomic forecasts. Significant changes to some of these inputs could have materially changed the fair value of the FG VIEs’ assets and the implied collateral losses within these transactions. 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 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. 181 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 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. In general, a longer time period until the Company’s expected loss payments typically leads to a decrease in the value of the Company’s insurance and a decrease in the fair value of the Company’s FG VIEs’ liabilities with recourse, while a shorter time period until the Company’s expected loss payments typically could lead to an increase in the value of the Company’s insurance and an increase in the fair value of the Company’s FG VIEs’ liabilities with recourse. Assets and Liabilities of CIVs Investments held by CIVs which are quoted on a national securities exchange are valued at their last reported sale price on the date of determination. Investments held by CIVs which are traded over-the-counter reflect third-party data and generally reflect the average of dealer offer and bid prices. The valuation methodology may include, but is not limited to: (i) performing price comparisons with similar investments; (ii) obtaining valuation-related information from issuers; (iii) calculating the present value of future cash flows; (iv) assessing other data related to the investment that may be an indication of value; (v) obtaining information provided by third parties; and/or (vi) evaluating information provided by the investment manager. 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 CIVs’ assets and liabilities. 182 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Amounts recorded at fair value in the Company’s financial statements are presented in the tables below. Fair Value Hierarchy of Financial Instruments Carried at Fair Value As of December 31, 2025 Fair Value Hierarchy Level 1 Level 2 Level 3 Total (in millions) Assets: Fixed-maturity securities, available-for-sale: Obligations of state and political subdivisions $ — $ 1,759 $ 10 $ 1,769 U.S. government and agencies — 52 — 52 Corporate securities — 2,784 168 2,952 Mortgage-backed securities: RMBS — 471 144 615 CMBS — 198 — 198 Asset-backed securities — 154 511 665 Non-U.S. government securities — 118 — 118 Total fixed-maturity securities, available-for-sale — 5,536 833 6,369 Fixed-maturity securities, trading — 120 4 124 Short-term investments 898 5 — 903 Other invested assets (1) — — 3 3 FG VIEs’ assets 15 7 150 172 Assets of CIVs, equity securities — — 167 167 Other assets 81 65 28 174 Total assets carried at fair value $ 994 $ 5,733 $ 1,185 $ 7,912 Liabilities: FG VIEs’ liabilities (2) $ — $ — $ 197 $ 197 Other liabilities — — 21 21 Total liabilities carried at fair value $ — $ — $ 218 $ 218 183 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Fair Value Hierarchy of Financial Instruments Carried at Fair Value As of December 31, 2024 Fair Value Hierarchy Level 1 Level 2 Level 3 Total (in millions) Assets: Fixed-maturity securities, available-for-sale: Obligations of state and political subdivisions $ — $ 1,930 $ 10 $ 1,940 U.S. government and agencies — 67 — 67 Corporate securities — 2,382 — 2,382 Mortgage-backed securities: RMBS — 422 145 567 CMBS — 186 — 186 Asset-backed securities — 127 1,031 1,158 Non-U.S. government securities — 69 — 69 Total fixed-maturity securities, available-for-sale — 5,183 1,186 6,369 Fixed-maturity securities, trading — 142 5 147 Short-term investments 1,218 3 — 1,221 Other invested assets (1) — — 4 4 FG VIEs’ assets — — 147 147 Assets of CIVs, equity securities — — 99 99 Other assets 65 59 7 131 Total assets carried at fair value $ 1,283 $ 5,387 $ 1,448 $ 8,118 Liabilities: FG VIEs’ liabilities (2) $ — $ — $ 164 $ 164 Other liabilities — — 34 34 Total liabilities carried at fair value $ — $ — $ 198 $ 198 ____________________ (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. See Note 8. Variable Interest Entities. 184 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Changes in Level 3 Fair Value Measurements The tables below present a roll forward of the Company’s Level 3 financial instruments carried at fair value on a recurring basis during the years ended December 31, 2025 and 2024. Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Year Ended December 31, 2025 Fixed-Maturity Securities, Available-for-Sale Obligations of State and Political Subdivisions Corporate RMBS Asset- Backed Securities Fixed-Maturity Securities, Trading FG VIEs’ Assets Assets of CIVs, Equity Securities Other (7) (in millions) Fair value as of December 31, 2024 $ 10 $ — $ 145 $ 1,031 $ 5 $ 147 $ 99 $ 5 Total pre-tax realized and unrealized gains (losses) recorded in: Net income (loss) 2 (1) 2 (1) 8 (1) 28 (1) 1 (10) 15 (2) 68 (4) 19 (3) Other comprehensive income (loss) — 19 15 ( 2 ) — — — — Purchases — 147 — 90 — — — — Sales — — — ( 12 ) — — — — Settlements ( 2 ) — ( 24 ) ( 624 ) ( 2 ) ( 20 ) — — Consolidations — — — — — 8 — — Fair value as of December 31, 2025 $ 10 $ 168 $ 144 $ 511 $ 4 $ 150 $ 167 $ 24 Change in unrealized gains (losses) related to financial instruments held as of December 31, 2025 included in: Earnings $ — $ 12 (2) $ 68 (4) $ 19 (3) OCI $ — $ 19 $ 14 $ ( 30 ) $ — Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Year Ended December 31, 2025 Credit Derivative Liability, net (5) FG VIEs’ Liabilities (8) (in millions) Fair value as of December 31, 2024 $ ( 29 ) $ ( 164 ) Total pre-tax realized and unrealized gains (losses) recorded in: Net income (loss) 121 (6) ( 9 ) (2) Other comprehensive income (loss) — 1 Settlements ( 107 ) 16 Fair value as of December 31, 2025 $ ( 15 ) $ ( 156 ) Change in unrealized gains (losses) related to financial instruments held as of December 31, 2025 included in: Earnings $ 13 (6) $ ( 9 ) (2) OCI $ 1 185 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 Fixed-Maturity Securities, Available-for-Sale Assets of CIVs Obligations of State and Political Subdivisions RMBS Asset- Backed Securities Fixed-Maturity Securities, Trading FG VIEs’ Assets Equity Securities Structured Products Other (7) (in millions) Fair value as of December 31, 2023 $ 6 $ 154 $ 803 $ — $ 174 $ 80 $ 189 $ 14 Total pre-tax realized and unrealized gains (losses) recorded in: Net income (loss) — 14 (1) 48 (1) — ( 3 ) (2) 29 (4) ( 16 ) (4) ( 10 ) (3) Other comprehensive income (loss) 4 2 1 — ( 1 ) — — 1 Purchases — — 63 — — — 102 — Sales — — — — — ( 10 ) ( 28 ) — Settlements — ( 25 ) ( 149 ) ( 3 ) ( 23 ) — — — Reclassifications (9) — — 245 8 — — ( 253 ) — Deconsolidations — — — — — ( 1 ) ( 2 ) — Transfers into Level 3 — — 20 — — 3 10 — Transfers out of Level 3 — — — — — ( 2 ) ( 2 ) — Fair value as of December 31, 2024 $ 10 $ 145 $ 1,031 $ 5 $ 147 $ 99 $ — $ 5 Change in unrealized gains (losses) related to financial instruments held as of December 31, 2024 included in: Earnings $ — $ ( 7 ) (2) $ 29 (4) $ — $ ( 10 ) (3) OCI $ 4 $ 2 $ ( 2 ) $ ( 1 ) $ 1 186 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) FG VIEs’ Liabilities (8) (in millions) Fair value as of December 31, 2023 $ ( 50 ) $ ( 554 ) Total pre-tax realized and unrealized gains (losses) recorded in: Net income (loss) 24 (6) 12 (2) Other comprehensive income (loss) — 3 Issuances ( 2 ) — Settlements ( 1 ) 375 Fair value as of December 31, 2024 $ ( 29 ) $ ( 164 ) Change in unrealized gains (losses) related to financial instruments held as of December 31, 2024 included in: Earnings $ 13 (6) $ 3 (2) OCI $ 3 __________________ (1) Included in “net realized investment gains (losses)” and “net investment income.” (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. Credit derivative assets (reported in “other assets”) and credit derivative liabilities (reported in “other liabilities”) are shown as either assets or liabilities in the consolidated balance sheets. (6) Reported in “fair value gains (losses) on credit derivatives.” (7) Includes CCS and other invested assets. (8) Includes FG VIEs’ liabilities with recourse and FG VIEs’ liabilities without recourse. (9) Represents securities transferred from one of the CIVs to the investment portfolio due to the distribution of assets of that CIV. See Note 8. Variable Interest Entities. (10) Reported in “fair value gains (losses) on trading securities.” 187 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Level 3 Fair Value Disclosures Quantitative Information About Level 3 Fair Value Inputs As of December 31, 2025 Financial Instrument Description Fair Value Assets (Liabilities) (in millions) Significant Unobservable Inputs Range Weighted Average (4) Investments (2): Fixed-maturity securities, available-for-sale (1): 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) 0.0 % - 21.3 % 4.1 % CDR 1.2 % - 18.6 % 5.6 % Loss severity 50.0 % - 125.0 % 79.2 % Yield 7.0 % - 9.9 % 8.3 % Asset-backed securities: CLOs 456 Discount margin 1.0 % - 2.9 % 1.7 % Yield 11.0 % - 26.5 % 19.0 % Others 55 Yield 9.1 % Fixed-maturity securities, trading (1) 4 Yield 0.1 % - 8.8 % 4.4 % FG VIEs’ assets (1) 150 CPR 0.2 % - 27.5 % 5.3 % CDR 1.2 % - 41.0 % 10.5 % Loss severity 45.0 % - 100.0 % 83.6 % Yield 6.0 % - 9.8 % 8.7 % Assets of CIVs - equity securities (3) 167 Discount rate 23.3 % Market multiple-price to book 1.00 x Market multiple-price to earnings 5.75 x Terminal growth rate 4.0 % Exit multiple-price to book 1.00 x Exit multiple-price to earnings 5.50 x Other assets (1) 22 Implied Yield 6.4 % - 6.9 % 6.6 % Term (years) 10 years Credit derivative liabilities, net (1) ( 15 ) Hedge cost (in basis points)( bps) 11.5 - 27.4 15.1 Bank profit (in bps) 66.0 - 261.9 124.7 Internal credit rating AAA - CCC A Discount rates of future expected premium cash flows 3.3 % - 4.5 % 4.3 % FG VIEs’ liabilities (1) ( 197 ) CPR 0.2 % - 27.5 % 5.3 % CDR 1.2 % - 41.0 % 10.5 % Loss severity 45.0 % - 100.0 % 83.6 % Yield 5.0 % - 9.8 % 6.5 % ____________________ (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 and “fixed-maturity securities trading,” for which it is calculated as a percentage of fair value. 188 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Quantitative Information About Level 3 Fair Value Inputs As of December 31, 2024 Financial Instrument Description Fair Value Assets (Liabilities) (in millions) Significant Unobservable Inputs Range Weighted Average (4) Investments (2): Fixed-maturity securities, available-for-sale (1): Obligations of state and political subdivisions $ 10 Yield 5.5 % - 22.0 % 7.5 % RMBS 145 CPR 1.8 % - 17.0 % 2.8 % CDR 1.8 % - 18.7 % 5.4 % Loss severity 50.0 % - 125.0 % 79.9 % Yield 7.7 % - 10.8 % 9.1 % Asset-backed securities: 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 % CDR 1.3 % - 41.0 % 10.7 % Loss severity 45.0 % - 100.0 % 83.2 % Yield 6.8 % - 10.8 % 9.3 % Assets of CIVs - equity securities (3) 99 Discount rate 24.3 % Market multiple-price to book 1.05 x Market multiple-price to earnings 5.25 x Terminal growth rate 4.0 % Exit multiple-price to book 1.05 x Exit multiple-price to earnings 5.50 x Other assets (1) 2 Implied Yield 6.5 % - 7.0 % 6.8 % Term (years) 10 years Credit derivative liabilities, net (1) ( 29 ) Hedge cost (in bps) 12.8 - 30.1 16.8 Bank profit (in bps) 73.2 - 275.9 139.3 Internal floor (in bps) 10.0 - 85.5 29.7 Internal credit rating AAA - CCC A Discount rates of future expected premium cash flows 3.9 % - 4.4 % 4.3 % FG VIEs’ liabilities (1) ( 164 ) CPR 2.2 % - 25.0 % 5.7 % CDR 1.3 % - 41.0 % 10.7 % Loss severity 45.0 % - 100.0 % 83.2 % Yield 5.5 % - 10.8 % 7.0 % ____________________ (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. (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. 189 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Not Carried at Fair Value Financial Guaranty Insurance Contracts Fair value is based on management’s estimate of the consideration that would be paid to, or received from, a similarly rated financial guaranty insurance company to acquire the Company’s in-force book of financial guaranty insurance business. It is based upon the ratio of current trends in premium pricing to risk-based expected loss for investment grade portions of the portfolio and stressed loss pricing for BIG transactions. The Company classified the fair value of financial guaranty insurance contracts as Level 3. Long-Term Debt Long-term debt issued by the U.S. Holding Companies is valued by broker-dealers using independent third-party pricing sources and standard market conventions and classified as Level 2 in the fair value hierarchy. 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. The carrying amount and estimated fair value of the Company’s financial instruments not carried at fair value are presented in the following table. Fair Value of Financial Instruments Not Carried at Fair Value As of December 31, 2025 As of December 31, 2024 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value (in millions) Assets (liabilities): Other assets (including other invested assets) $ 90 $ 91 $ 115 $ 116 Financial guaranty insurance contracts (1) ( 1,906 ) ( 1,485 ) ( 2,029 ) ( 1,136 ) Long-term debt ( 1,704 ) ( 1,610 ) ( 1,699 ) ( 1,579 ) Other liabilities ( 18 ) ( 18 ) ( 16 ) ( 16 ) ____________________ (1) Carrying amount includes the assets and liabilities related to financial guaranty insurance contract premiums, losses and salvage and subrogation and other recoverables net of reinsurance. 10. Asset Management Fees Accounting Policy All management, CLO and performance fees earned by the Company are accounted for as contracts with customers. The Company recognizes revenue when the contractual performance criteria are met and only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized would not occur when the uncertainty associated with the variable consideration is resolved. Performance fee contractual provisions are evaluated on an individual basis to determine the timing of revenue recognition. 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. 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.” 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. 190 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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. 11. Long-Term Debt and Credit Facilities Accounting Policy Long-term debt is recorded at principal amounts net of any: (i) unamortized original issue discount or premium; (ii) unamortized acquisition date fair value adjustments for AGMH 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 statements of operations. See Note 9. Fair Value Measurement – Other Assets – Committed Capital Securities, for a discussion of the fair value measurement of the CCS. Long-Term Debt The Company’s long-term debt outstanding consists of debt issued by the U.S. Holding Companies. All of the U.S. Holding Companies’ long-term debt is fully and unconditionally guaranteed by AGL; AGL’s guarantee of the junior subordinated debentures is on a junior subordinated basis. Principal and Carrying Amounts of Debt The principal and carrying values of the Company’s debt are presented in the table below. Principal and Carrying Amounts of Long-Term Debt As of December 31, 2025 As of December 31, 2024 Principal Carrying Value Principal Carrying Value (in millions) AGUS 6.125 % Senior Notes $ 350 $ 347 $ 350 $ 346 AGUS 3.15 % Senior Notes 500 497 500 496 AGUS 7 % Senior Notes 200 198 200 198 AGUS 3.6 % Senior Notes 400 396 400 396 AGUS Series A Enhanced Junior Subordinated Debentures 150 150 150 150 AGMH Junior Subordinated Debentures (1) 146 116 146 113 Total $ 1,746 $ 1,704 $ 1,746 $ 1,699 ____________________ (1) Carrying amounts are different than principal amounts primarily due to fair value adjustments at the date of the AGMH acquisition, which are accreted into interest expense over the remaining terms of these obligations. Net of AGMH’s long-term debt purchased by AGUS. Debt Issued by AGUS 6.125 % Senior Notes. 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’ 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: (i) the sum of the present values of the remaining scheduled payments of principal and interest on the 6.125 % Senior Notes being redeemed (excluding interest accrued to the redemption date) from the redemption date to August 15, 2028 discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a discount rate equal to the Treasury Rate plus 30 bps; 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 % 191 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’ 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. 3.15 % Senior Notes. On May 26, 2021, AGUS issued $ 500 million of 3.150 % Senior Notes due 2031 ( 3.15 % Senior Notes) for net proceeds of $ 494 million. The net proceeds from the issuance were used for the partial redemption of AGMH’s debt, with the balance being used for general corporate purposes, including share repurchases. AGUS may redeem all or part of the 3.15 % Senior Notes at any time or from time to time prior to March 15, 2031 (the date that is three months prior to the maturity of the 3.15 % Senior Notes), at its option, at a redemption price equal to the greater of: (i) 100 % of the principal amount of the 3.15 % Senior Notes being redeemed; or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed (excluding interest accrued to the redemption date) from the redemption date to March 15, 2031 discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a discount rate equal to the Treasury Rate plus 25 bps; plus, in each case, accrued and unpaid interest on the 3.15 % Senior Notes to be redeemed to, but excluding, the redemption date. AGUS may redeem all or part of the 3.15 % Senior Notes at any time or from time to time on and after March 15, 2031, at its option, at a redemption price equal to 100 % of the principal amount of the 3.15 % Senior Notes being redeemed, plus accrued and unpaid interest on the 3.15 % Senior Notes to be redeemed to, but excluding, the redemption date. 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’ 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. On May 18, 2004, AGUS issued $ 200 million of 7 % Senior Notes due 2034 ( 7 % Senior Notes) for net proceeds of $ 197 million. Although the coupon on the Senior Notes is 7 %, the effective rate is approximately 6.4 %, taking into account the effect of a cash flow hedge executed by the Company in March 2004. The notes are redeemable, in whole or in part, at their principal amount plus accrued and unpaid interest to the date of redemption or, if greater, the make-whole redemption price. 3.6 % Senior Notes. 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. 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: (i) 100 % of the principal amount of the 3.6 % Senior Notes being redeemed; or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes being redeemed (excluding interest accrued to the redemption date) from the redemption date to March 15, 2051 discounted to the date of redemption on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at a discount rate equal to the Treasury Rate plus 30 bps; plus, in each case, accrued and unpaid interest on the 3.6 % Senior Notes to be redeemed to, but excluding, the redemption date. AGUS may redeem all or part of the 3.6 % Senior Notes at any time or from time to time on and after March 15, 2051, at its option, at a redemption price equal to 100 % of the principal amount of the 3.6 % Senior Notes being redeemed, plus accrued and unpaid interest on the 3.6 % Senior Notes to be redeemed to, but excluding, the redemption date. 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 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 (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 . Any unpaid interest bears interest at the then applicable rate. AGUS may not defer interest past the maturity date. The AGUS Debentures are redeemable, in whole or in part, at their principal amount plus accrued and unpaid interest to the date of redemption. 192 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Debt Issued by AGMH 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 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 . 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 AGMH Debentures. 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, 2025 and 2024, holds $ 154 million in principal of the AGMH Debentures. Debt Maturity and Interest Expense Scheduled principal payments of the Company’s debt are as follows: Debt Maturity Schedule (1) As of December 31, 2025 Year Principal (in millions) 2028 $ 350 2031 500 2034 200 2051 400 2066 296 Total $ 1,746 ____________________ (1) Includes eliminations of AGMH’s debt purchased by AGUS. 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 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). When AG exercises its put option, the relevant trust(s) must liquidate the portfolio of high-quality, liquid assets that it currently maintains and use the liquidation proceeds to purchase AG preferred stock. The put agreements have no scheduled termination date or maturity, but may be terminated upon the occurrence of certain specified events. None of the events that would give rise to a termination of the put agreements have occurred. 193 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. 12. 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. Long-Term Incentive Plan The Company maintains the Assured Guaranty Ltd. 2024 Long-Term Incentive Plan (the Incentive Plan), which is the successor plan to the Assured Guaranty Ltd. 2004 Long-Term Incentive Plan (the Prior Plan). The number of AGL common shares that may be delivered under the Incentive Plan include (i) 1,750,000 shares; plus (ii) any shares that were granted under the Prior Plan that are forfeited, expire or are cancelled without delivery of shares or which result in the forfeiture of the shares back to the Company to the extent that such shares would have been added back to the reserve under the terms of the Prior Plan. As of December 31, 2025, 1,417,452 common shares were available to grant under the Incentive Plan. In the event of certain transactions affecting AGL’s common shares, the number or type of shares subject to the Incentive Plan, the number and type of shares subject to outstanding awards under the Incentive Plan, and the exercise price of awards under the Incentive Plan, may be adjusted. The Incentive Plan provides for the grant of full value awards, which may be granted in return for a participant's previously performed services, or in return for the participant surrendering other compensation that may be due, or may be contingent on the achievement of performance or other objectives during a specified period. 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, 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. Restricted Share Units Restricted share units are valued based on the closing price of the underlying shares at the date of grant. These restricted share units generally vest pro rata over a four-year period or all at once after a three-year period. The shares are delivered on the vesting date. Restricted Share Unit Activity Nonvested Share Units Number of Share Units Weighted Average Grant Date Fair Value Per Share Nonvested as of December 31, 2024 780,481 $ 64.03 Granted 275,767 91.53 Vested ( 374,824 ) 56.84 Forfeited ( 5,830 ) 69.15 Nonvested as of December 31, 2025 675,594 $ 79.17 194 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 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. Performance-Based Restricted Share Units 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 (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 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 Performance-Based Restricted Share Units Number of Performance-Based Share Units Weighted Average Grant Date Fair Value Per Share Nonvested as of December 31, 2024 752,066 $ 72.39 Granted (1) 347,884 102.12 Vested (2) ( 442,950 ) 58.94 Forfeited — — Nonvested as of December 31, 2025 (3) 657,000 $ 91.61 ____________________ (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. (2) Excludes 157,854 TSR performance-based restricted share units that vested during 2025 but were not delivered. (3) Excludes 63,004 performance-based restricted share units that have met performance hurdles and vest in February 2026. Includes 157,854 TSR performance-based restricted share units that vested during 2025 but will be delivered in 2026. As of December 31, 2025, the total unrecognized compensation cost related to outstanding non-vested performance-based share units was $ 24 million, which the Company expects to recognize over the weighted average remaining service period of 1.8 years. The total value of performance-based restricted share units vested during the years ended December 31, 2025, 2024 and 2023 was based on grant date fair value and was $ 26 million, $ 17 million and $ 11 million, respectively. For the 2025, 2024 and 2023 awards, the grant-date fair value of the performance-based restricted share units tied to relative TSR was calculated using a Monte Carlo simulation in order to determine the total return of the Company’s shares relative to the total return of financial companies in the Index. The inputs to the simulation include the beginning share price and historical share price volatility of each company in the Index as well as the historical correlation coefficient between the share price of each company in the Index and the Index itself. In addition, the simulation also uses the risk-free rate and a discount for liquidity. 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 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. 195 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Year Ended December 31, 2025 2024 2023 Expected term 3.00 years 3.00 years 3.00 years Expected volatility 19.62 % – 94.21 % 20.72 % – 87.00 % 29.22 % – 110.25 % Dividend yield 0.00 % 0.00 % 0.00 % Risk-free-rates 4.25 % 4.38 % 4.38 % Grant-date fair value per share $ 112.58 $ 104.27 $ 80.80 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. Restricted Share Awards Restricted share awards are valued based on the closing price of the underlying shares at the date of grant. The Company awards restricted share awards to non-executive directors, and vest after one year. The shares are delivered on the vesting date. Restricted Share Award Activity Nonvested Shares Number of Shares Weighted Average Grant Date Fair Value Per Share Nonvested as of December 31, 2024 21,413 $ 77.54 Granted 22,002 90.18 Vested ( 21,413 ) 77.54 Forfeited — — 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. The total fair value of shares vested during the years ended December 31, 2025, 2024 and 2023 was $ 1.7 million, $ 2.0 million and $ 2.2 million, respectively. The weighted average grant-date fair values per share of shares granted during the years ended December 31, 2025, 2024 and 2023 was $ 90.18 , $ 77.54 and $ 52.26 , respectively. Employee Stock Purchase Plan The Company established the AGL Employee Stock Purchase Plan (ESPP) in accordance with Internal Revenue Code of 1986 (the Code) Section 423, and participation is available to all eligible employees. Maximum annual purchases by participants are limited to the number of whole shares that can be purchased with an amount equal to 10 % of the participant's compensation or, if less, shares having a value of $ 25,000 . 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 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. The Company issues new shares to settle share-based awards. The fair value of each award under the ESPP is estimated using the following assumptions: (i) the expected dividend yield is based on the current expected annual dividend and share price on the grant date; (ii) the expected volatility is estimated at the date of grant based on the historical share price volatility, calculated on a daily basis; (iii) the risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant; and (iv) the expected life is based on the term of the offering period. 196 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued AGL Employee Stock Purchase Plan Year Ended December 31, 2025 2024 2023 (dollars in millions) Proceeds from purchase of shares by employees $ 2.3 $ 2.2 $ 2.2 Number of shares issued by the Company 30,954 33,348 47,204 Share-Based Compensation Expense The following table presents share-based compensation costs and the amount of such costs that are deferred as policy acquisition costs, pre-tax. Amortization of previously deferred share compensation costs is not shown in the table below. Share-Based Compensation Expense Summary Year Ended December 31, 2025 2024 2023 (in millions) Share‑based compensation expense $ 41 $ 34 $ 36 Share‑based compensation capitalized as DAC 3 2 3 Income tax benefit 7 5 5 Defined Contribution Plan The Company maintains a savings incentive plan, which is qualified under Section 401(a) of the Code for U.S. employees. Eligible participants may contribute a percentage of their eligible compensation subject to U.S. Internal Revenue Service (IRS) limitations. The Company’s matching contribution is an amount equal to 100 % of each participant’s contributions up to 7 % of such participant’s eligible compensation, subject to IRS limitations. Certain eligible participants may also contribute a percentage of eligible compensation over the IRS limitations to a nonqualified supplemental executive retirement plan. The Company's matching contribution in the nonqualified plan is an amount equal to 100 % of each participant’s contributions up to 6 % of participant’s eligible compensation above the IRS limitations for the qualified plan. The Company also makes core contributions of 7 % of the participant’s eligible compensation to the qualified plan, subject to IRS limitations, regardless of whether the employee otherwise contributes to the plan, and a core contribution of 6 % of the participant’s eligible compensation above the IRS limitations for the qualified plan to the nonqualified plan for eligible employees. Employees become fully vested in Company contributions to the qualified and nonqualified plans after one year of service, as defined in the plan (or upon reaching age 65 for the nonqualified plan, if earlier). Plan eligibility is immediate upon hire. The Company also maintains similar non-qualified plans for non-U.S. employees. 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, the Company had $ 3 million in compensation payable to former employees of AssuredIM in accordance with the Sound Point Transaction and the AHP Transaction. 13. Income Taxes AGL is a tax resident in the U.K. 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. 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 197 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 2024 and 2023. AGL’s U.S., U.K. and French subsidiaries are subject to income taxes imposed by U.S., U.K. and French authorities, respectively, and file applicable tax returns. In addition, AGRO, a Bermuda domiciled company, has elected under Section 953(d) of the IRS to be taxed as a U.S. domestic corporation. 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 statements of operations. 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. subsidiaries. Assured Guaranty Overseas US Holdings Inc. and its subsidiaries, AGRO and AG Intermediary Inc., file their own consolidated federal income tax return. Accounting Policy The provision for income taxes consists of an amount for taxes currently payable and an amount for deferred taxes. 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. 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. The Company elected to account for tax associated with Global Intangible Low-Taxed Income (GILTI) as a current-period expense when incurred. Deferred and current tax assets and liabilities are reported in “other assets” or ”other liabilities” on the consolidated balance sheets. Tax Assets (Liabilities) Deferred and Current Tax Assets (Liabilities) As of December 31, 2025 2024 (in millions) Deferred tax assets (liabilities) $ 246 $ 262 Current tax assets 2 10 Current tax liabilities ( 68 ) ( 13 ) 198 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Components of Net Deferred Tax Assets (Liabilities) As of December 31, 2025 2024 (in millions) Deferred tax assets: Loss and LAE reserve $ 31 $ 2 Net unrealized investment losses 25 54 Intangible assets 134 149 Value of in-force business 73 45 Net operating loss (NOL) 38 31 Depreciation 49 47 Deferred compensation 39 38 FG VIEs 2 49 Other 30 23 Total deferred tax assets 421 438 Deferred tax liabilities: Investments 69 127 Unrealized gains on credit derivatives, net 33 14 Unearned premium reserves, net 33 5 Other 40 30 Total deferred tax liabilities 175 176 Net deferred tax assets (liabilities) $ 246 $ 262 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. As of December 31, 2025, AG, a U.S. subsidiary, had gross deferred tax assets of approximately $ 19 million for federal NOL carryforwards which will begin to expire in 2033. In addition, as of December 31, 2025, the Company had gross deferred tax assets for certain non-U.S. NOL carryforwards of approximately $ 19 million, which do not expire. Valuation Allowance 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 . The Company came to the conclusion that it is more likely than not that the deferred tax assets will be fully realized after weighing all positive and negative evidence available as required under GAAP. The positive evidence that was considered included the cumulative income the Company has earned over the last three years , and the significant unearned premium income to be included in taxable income. The positive evidence outweighs any negative evidence that exists. As such, the Company believes that no valuation allowance is necessary in connection with the remaining deferred tax assets. The Company will continue to analyze the need for a valuation allowance on a quarterly basis. 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. 199 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Provision for Income Taxes The components of the provision (benefit) for income taxes were as follows: Current and Deferred Provision (Benefit) for Income Taxes Year Ended December 31, 2025 2024 2023 (in millions) Current provision (benefit) for income taxes: U.K. $ 34 $ 13 $ — Foreign: U.S. federal 78 70 76 U.S. state and local 9 17 ( 13 ) Other 3 — — Total current 124 100 63 Deferred provision (benefit) for income taxes: U.K. ( 2 ) ( 3 ) 4 Foreign: U.S. federal 19 3 31 Other ( 22 ) ( 4 ) ( 191 ) Total deferred ( 5 ) ( 4 ) ( 156 ) Total provision (benefit) for income taxes $ 119 $ 96 $ ( 93 ) The Company’s overall effective tax rate fluctuates based on the distribution of income across jurisdictions. The effective tax rates reflect the proportion of income recognized by each of the Company’s operating subsidiaries, with: • U.S. subsidiaries taxed at the U.S. marginal corporate income tax rate of 21 %; • French subsidiary taxed at the French marginal corporate tax rate of 25 %; • 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 • U.K. subsidiaries taxed at the U.K. marginal corporate tax rate of 25 % for periods starting April 1, 2023 and 19 % for periods ending on or before March 31, 2023. Effective January 1, 2024, the U.K. adopted a global minimum tax rate of 15 % under the OECD’s BEPS Pillar Two rules. Controlled foreign corporations (CFCs) apply the local marginal corporate tax rate. 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. shareholder. 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) U.K. $ ( 10 ) $ ( 33 ) $ ( 25 ) Foreign: U.S. 570 445 622 Bermuda 111 90 79 France ( 8 ) ( 14 ) ( 8 ) Other ( 1 ) — — Total $ 662 $ 488 $ 668 200 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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 Amount (in millions) % U.K. national statutory tax rate $ 165 25.0 % Foreign tax effects U.S. Statutory tax rate difference between U.S. and U.K. ( 23 ) ( 3.5 ) NCI ( 8 ) ( 1.3 ) Other ( 3 ) ( 0.5 ) Bermuda 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, 2024 2023 (dollars in millions) Expected tax provision (benefit) $ 82 $ 122 Tax-exempt interest ( 10 ) ( 15 ) Return to provision adjustment ( 1 ) ( 6 ) NCI ( 3 ) ( 5 ) State taxes, net of federal benefit 13 ( 10 ) Foreign taxes 5 11 Stock based compensation 1 2 Bermuda ETA ( 1 ) ( 189 ) Global minimum tax 13 — Other ( 3 ) ( 3 ) Total provision (benefit) for income taxes $ 96 $ ( 93 ) Effective tax rate 19.7 % ( 13.9 ) % 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 201 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 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) U.K. $ — Foreign: U.S. - federal 49 Other 2 Total $ 51 The company paid $ 90 million and $ 4 million during the years ended December 31, 2024 and 2023, respectively. Audits 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 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. tax returns. 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. tax returns. 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. Uncertain Tax Positions During the years ended December 31, 2025, 2024, and 2023, there were no unrecognized tax benefits. There were no accruals for the payment of interest and penalties related to income taxes as of each of December 31, 2025, 2024 and 2023. 14. Insurance Company Regulatory Requirements The following table summarizes the policyholder’s surplus and net income amounts reported to local regulatory bodies in the U.S. and Bermuda for insurance subsidiaries within the group. The discussion that follows describes the basis of accounting and differences to GAAP. 202 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Insurance Regulatory Amounts Reported U.S. and Bermuda Policyholders’ Surplus Net Income (Loss) As of December 31, Year Ended December 31, 2025 2024 2025 2024 2023 (in millions) AG (U.S. domiciled) (1) $ 3,249 $ 3,524 $ 238 $ 355 $ 289 Bermuda statutory companies: AG Re 1,170 1,087 125 98 95 AGRO 496 452 31 22 16 ____________________ (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. Basis of Regulatory Financial Reporting United States AG’s ability to pay dividends depends, among other things, upon its financial condition, results of operations, cash requirements, compliance with rating agency requirements and is also subject to restrictions contained in the insurance laws and related regulations of its state of domicile and other states. 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 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. 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 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. Ceding commission income is earned immediately except for amounts in excess of acquisition costs, which are deferred, rather than fully deferred under GAAP. • A contingency reserve is established according to applicable insurance laws, whereas no such reserve is required under GAAP. • Certain assets designated as “non-admitted assets” are charged directly to statutory surplus, rather than reflected as assets under GAAP. • Investments in subsidiaries are carried on the balance sheet on the equity basis, to the extent admissible, rather than consolidated with the parent under GAAP. • The amount of admitted deferred tax assets are subject to an adjusted surplus threshold and subject to a limitation calculated in accordance with SAP. Under GAAP, there is no non-admitted asset determination, rather a valuation allowance is recorded to reduce the deferred tax asset to an amount that is more likely than not to be realized. • Insured credit derivatives are accounted for as insurance contracts rather than accounted for as derivative contracts that are measured at fair value under GAAP. • Bonds are reported at either amortized cost or the lower of amortized cost or fair value, rather than classified as available-for-sale or trading securities and carried at fair value under GAAP. • The impairment model for fixed-maturity securities classified as available-for-sale under GAAP differs from the statutory impairment model. Under SAP, fixed-maturity securities that have been determined to be other-than-temporarily impaired are written down to fair value or the present value of cash flows. Under GAAP, an allowance for credit losses is established, and can be reversed for subsequent increases in expected cash flows. 203 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. Under GAAP, such VIEs are consolidated and any transactions with the Company are eliminated. • Acquisitions are accounted for as either statutory purchases or statutory mergers, rather than under the purchase method under GAAP. • Losses are discounted at pre-tax book yields and recorded when there is a significant credit deterioration on specific insured obligations and the obligations are in default or a default is probable. Under GAAP, expected losses are discounted at the risk-free rate at the end of each reporting period and are recorded only to the extent they exceed deferred premium revenue. • The present value of contractual or expected installment premiums and commissions are not recorded on the balance sheet as they are under GAAP. • The put options in CCS are not accounted for as derivatives as they are under GAAP. • Non-U.S. dollar denominated unearned premiums reserve is remeasured at current exchange rates rather than carried at historical rates under GAAP. Bermuda AG Re, a Bermuda regulated Class 3B insurer, and AGRO, a Bermuda regulated Class 3A and Class C insurer, prepare their statutory financial statements in conformity with the accounting principles set forth in the Insurance Act 1978, amendments thereto and related regulations. As of December 31, 2016, the Bermuda Monetary Authority (the Authority) requires insurers to prepare statutory financial statements in accordance with the particular accounting principles adopted by the insurer (which, in the case of AG Re and AGRO, are GAAP), subject to certain adjustments. The adjustments relate to certain assets designated as “non-admitted assets” which are charged directly to statutory surplus rather than reflected as assets as they are under GAAP. United Kingdom AGUK prepares its Solvency and Financial Condition Report based on Solvency UK Regulations. As of December 31, 2025, AGUK’s eligible own funds were an estimated £ 461 million (or $ 622 million). As of December 31, 2024, AGUK’s eligible own funds were an estimated £ 439 million (or $ 549 million). France 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, 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 United States Under Maryland’s insurance law, AG may, with prior notice to the Commissioner of its domiciliary regulator, the MIA, pay an ordinary dividend in an amount that, together with all dividends and distributions paid in the prior 12 months, does not exceed the lesser of 10 % of its policyholders’ surplus (as of the prior December 31) or 100 % of its adjusted net investment income during that period. “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 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. Bermuda 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 204 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: (i) make capital distributions in an aggregate amount up to $ 129 million without the prior approval of the Authority; and (ii) declare and pay dividends in an aggregate amount up to approximately $ 292 million as of December 31, 2025. Such dividend capacity is further limited by: (i) the actual amount of AG Re’s unencumbered assets, which amount changes from time to time due in part to collateral posting requirements and which was approximately $ 213 million as of December 31, 2025; and (ii) the amount of statutory surplus, which as of December 31, 2025 was $ 312 million. 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. 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; and (ii) declare and pay dividends in an aggregate amount up to approximately $ 124 million as of December 31, 2025. Such dividend capacity is further limited by: (i) the actual amount of AGRO’s unencumbered assets, which amount changes from time to time due in part to collateral posting requirements and which was approximately $ 435 million as of December 31, 2025; and (ii) the amount of statutory surplus, which as of December 31, 2025 was $ 359 million. United Kingdom U.K. company law prohibits AGUK from declaring a dividend to its shareholders unless it has “profits 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 the U.K. 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. AGUK made cash distributions in 2024 and 2023. France 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 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 Distributions from Insurance Subsidiaries Year Ended December 31, 2025 2024 2023 (in millions) Dividends paid by AG Re to AGL $ 80 $ 97 $ 53 Distributions from AGUK to its parent — 128 127 Dividends paid by AG to U.S. holding companies (1) 287 400 358 Stock redemptions by insurance subsidiaries 250 400 200 ___________________ (1) Effective as of August 1, 2024, AGM merged with and into AG, with AG as the surviving company. Prior to the merger, AG had been directly owned by AGUS. As a result of the merger, AG is directly owned by AGMH, a subsidiary of AGUS. 15. Related Party Transactions Accounting Policy The Company follows ASC 850, Related Party Transactions , for the identification and disclosure of related party transactions. Pursuant to ASC 850, related parties include: (i) the Company’s affiliates; (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 205 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; (v) the Company’s management; (vi) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; 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 parties” as defined in ASC 850. Related Party Transactions 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. 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 $ 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. Mr. 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. 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. 16. Leases The Company is party to various non-cancelable lease agreements, all of which are operating leases as of December 31, 2025. The majority of the Company’s leases relate to office space dedicated to the Company’s operations in various locations (primarily Hamilton, Bermuda, New York City, London, and Paris) with expiration dates ranging from 2026 to 2032. The Company subleases certain properties that are not used in its operations. 206 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, 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. At the inception of a lease, the total fixed payments under a lease agreement are discounted utilizing an incremental borrowing rate that represents the Company’s collateralized borrowing rate. The rate is determined based on the lease term as of the lease commencement date. Some of the Company’s leases include renewal options, which are not included in the lease terms unless the Company is reasonably certain it will exercise the option. The Company elected the practical expedient to account for all lease components and their associated non-lease components (i.e., common area maintenance, real estate taxes, building insurance, etc.) as a single lease component and include all fixed payments in the measurement of ROU assets and lease liabilities. Operating lease expense is recognized on a straight-line basis over the lease term. Costs related to variable lease and non-lease components for the Company’s leases are expensed in the period incurred. Sublease income is earned on a straight-line basis over the term of the lease. The Company assesses ROU assets for impairment when certain events occur or when there are changes in circumstances including potential alternative uses. 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 statements of operations. Lease Assets and Liabilities ROU Assets and Lease Liabilities As of December 31, 2025 2024 (dollars in millions) ROU assets $ 54 $ 60 Lease liabilities $ 75 $ 84 Weighted average discount rate 2.70 % 2.65 % Weighted average remaining lease term (in years) 6.2 7.1 Lease Expense and Other Information Year Ended December 31, 2025 2024 2023 (in millions) Operating lease costs (1) $ 11 $ 14 $ 20 Variable and short-term lease costs 3 2 2 Sublease income ( 1 ) ( 3 ) ( 7 ) Total lease costs $ 13 $ 13 $ 15 Cash paid for amounts included in the measurement of lease liabilities Operating cash outflows for operating leases $ 14 $ 16 $ 24 ____________________ (1) Includes an ROU asset impairment of $ 2 million in 2024 and $ 3 million in 2023. 207 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Future Minimum Rental Payments Operating Leases As of December 31, 2025 Year (in millions) 2026 $ 13 2027 13 2028 13 2029 13 2030 12 Thereafter 17 Total lease payments 81 Less: Imputed interest 6 Total lease liabilities $ 75 17. Contingencies Legal Proceedings Lawsuits arise in the ordinary course of the Company’s business. It is the opinion of the Company’s management, based upon the information available, that the expected outcome of litigation against the Company, individually or in the aggregate, will not have a material adverse effect on the Company’s financial position, although an adverse resolution of litigation against the Company in a fiscal quarter or year could have a material adverse effect on the Company’s results of operations or liquidity in that particular quarter or year. 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 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. See Note 4. 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. The Company also receives subpoenas and interrogatories from regulators from time to time. Accounting Policy The Company establishes accruals for litigation and regulatory matters to the extent it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. 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 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. 18. Shareholders’ Equity Accounting Policy 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. 208 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Share Issuances AGL has authorized share capital of $ 5 million divided into 500,000,000 shares with a par value $ 0.01 per share. Except as described below, AGL’s common shares have no preemptive rights or other rights to subscribe for additional common shares, no rights of redemption, conversion or exchange and no sinking fund rights. In the event of liquidation, dissolution or winding-up, the holders of AGL’s common shares are entitled to share equally, in proportion to the number of common shares held by such holder, in AGL’s assets, if any remain after the payment of all AGL’s debts and liabilities and the liquidation preference of any outstanding preferred shares. Under certain circumstances, AGL has the right to purchase all or a portion of the shares held by a shareholder at fair market value. All of the common shares are fully paid and non-assessable. Holders of AGL’s common shares are entitled to receive dividends as lawfully may be declared from time to time by the Board. In general, and except as provided below, shareholders have one vote for each common share held by them and are entitled to vote with respect to their fully paid shares at all meetings of shareholders. However, if, and so long as, the common shares (and other of AGL’s shares) of a shareholder are treated as “controlled shares” (as determined pursuant to section 958 of the Code) of any U.S. Person and such controlled shares constitute 9.5 % or more of the votes conferred by AGL’s issued and outstanding shares, the voting rights with respect to the controlled shares owned by such U.S. Person shall be limited, in the aggregate, to a voting power of less than 9.5 % of the voting power of all issued and outstanding shares, under a formula specified in AGL’s Bye-Laws. The formula is applied repeatedly until there is no 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). Subject to AGL’s Bye-Laws and Bermuda law, AGL’s Board has the power to issue any of AGL’s unissued shares as it determines, including the issuance of any shares or class of shares with preferred, deferred or other special rights. Under AGL’s Bye-Laws and subject to Bermuda law, if AGL’s Board determines that any ownership of AGL's shares may result in adverse tax, legal or regulatory consequences to the Company, any of the Company’s subsidiaries or any of AGL’s shareholders or indirect holders of shares or its affiliates (other than such as AGL’s Board considers de minimis), the Company has the option, but not the obligation, to require such shareholder to sell to AGL, or to a third party to whom AGL assigns the repurchase right, the minimum number of common shares necessary to avoid or cure any such adverse consequences at a price determined in the discretion of the Board to represent the shares’ fair market value (as defined in AGL’s Bye-Laws). In addition, AGL’s Board may determine that shares held carry different voting rights when it deems it appropriate to do so to: (i) avoid the existence of any 9.5 % U.S. Shareholder; and (ii) avoid adverse tax, legal or regulatory consequences to AGL or any of its subsidiaries or any direct or indirect holder of shares or its affiliates. “Controlled shares” includes, among other things, all shares of AGL that such U.S. Person is deemed to own directly, indirectly or constructively (within the meaning of Section 958 of the Code). Further, these provisions do not apply in the event one shareholder owns greater than 75 % of the voting power of all issued and outstanding shares. Under these provisions, certain shareholders may have their voting rights limited to less than one vote per share, while other shareholders may have voting rights in excess of one vote per share. Moreover, these provisions could have the effect of reducing the votes of certain shareholders who would not otherwise be subject to the 9.5 % limitation by virtue of their direct share ownership. AGL’s Bye-Laws provide that it will use its best efforts to notify shareholders of their voting interests prior to any vote to be taken by them. Share Repurchases 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. The timing, form and amount of the share repurchases under the program are at the discretion of management and will depend on a variety of factors, including funds available at the parent company, other potential uses for such funds, market conditions, the Company’s capital position, legal requirements and other factors. The repurchase program may be modified, extended or terminated by the Board at any time. It does not have an expiration date. 209 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Share Repurchases Year Number of Shares Repurchased Total Payments(1) (in millions) Average Price Paid Per Share 2023 3,215,893 $ 199 $ 61.95 2024 6,180,774 502 81.28 2025 5,819,627 500 85.92 2026 (through February 25, 2026 on a settlement date basis) 546,132 47 86.66 ____________________ (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 Certain executives of the Company elected to invest a portion of their AG US Group Services Inc. supplemental executive retirement plan (AGS SERP) accounts in the employer stock fund in the AGS SERP. Each unit in the employer stock fund represents the right to receive one AGL common share upon a distribution from the AGS SERP. Each unit equals the number of AGL common shares which could have been purchased with the value of the account deemed invested in the employer stock fund as of the date of such election. As of December 31, 2025 and 2024, there were 62,760 units and 68,535 units, respectively, in the AGS SERP. Dividends 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. 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 %. 19. Other Comprehensive Income 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. 210 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Changes in Accumulated Other Comprehensive Income (Loss) by Component Year Ended December 31, 2025 Net Unrealized Gains (Losses) on Investments with: ISCR on FG VIEs ’ Liabilities with Recourse Cumulative Translation Adjustment Cash Flow Hedge Total AOCI No Credit Impairment Credit Impairment (in millions) Balance, December 31, 2024 $ ( 235 ) $ ( 99 ) $ ( 18 ) $ ( 37 ) $ 4 $ ( 385 ) Other comprehensive income (loss) before reclassifications 178 4 ( 1 ) 2 — 183 Less: Amounts reclassified from AOCI to: Net realized investment gains (losses) ( 9 ) ( 28 ) — — — ( 37 ) Fair value gains (losses) on FG VIEs — — ( 3 ) — — ( 3 ) Total before tax ( 9 ) ( 28 ) ( 3 ) — — ( 40 ) Tax (provision) benefit — 5 1 — — 6 Total amount reclassified from AOCI, net of tax ( 9 ) ( 23 ) ( 2 ) — — ( 34 ) Other comprehensive income (loss) 187 27 1 2 — 217 Balance, December 31, 2025 $ ( 48 ) $ ( 72 ) $ ( 17 ) $ ( 35 ) $ 4 $ ( 168 ) Changes in Accumulated Other Comprehensive Income (Loss) by Component Year Ended December 31, 2024 Net Unrealized Gains (Losses) on Investments with: ISCR on FG VIEs ’ Liabilities with Recourse Cumulative Translation Adjustment Cash Flow Hedge Total AOCI No Credit Impairment Credit Impairment (in millions) Balance, December 31, 2023 $ ( 202 ) $ ( 104 ) $ ( 20 ) $ ( 38 ) $ 5 $ ( 359 ) Other comprehensive income (loss) before reclassifications ( 43 ) 20 — 1 — ( 22 ) Less: Amounts reclassified from AOCI to: Net realized investment gains (losses) ( 10 ) 18 — — — 8 Fair value gains (losses) on FG VIEs — — ( 3 ) — — ( 3 ) Interest expense — — — — 1 1 Total before tax ( 10 ) 18 ( 3 ) — 1 6 Tax (provision) benefit — ( 3 ) 1 — — ( 2 ) Total amount reclassified from AOCI, net of tax ( 10 ) 15 ( 2 ) — 1 4 Other comprehensive income (loss) ( 33 ) 5 2 1 ( 1 ) ( 26 ) Balance, December 31, 2024 $ ( 235 ) $ ( 99 ) $ ( 18 ) $ ( 37 ) $ 4 $ ( 385 ) 211 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Changes in Accumulated Other Comprehensive Income (Loss) by Component Year Ended December 31, 2023 Net Unrealized Gains (Losses) on Investments with: ISCR on FG VIEs ’ Liabilities with Recourse Cumulative Translation Adjustment Cash Flow Hedge Total AOCI No Credit Impairment Credit Impairment (in millions) Balance, December 31, 2022 $ ( 343 ) $ ( 110 ) $ ( 23 ) $ ( 45 ) $ 6 $ ( 515 ) Other comprehensive income (loss) before reclassifications 139 ( 5 ) — 2 — 136 Less: Amounts reclassified from AOCI to: Net realized investment gains (losses) ( 1 ) ( 13 ) — — — ( 14 ) 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 ) Tax (provision) benefit ( 1 ) 2 — 1 — 2 Total amount reclassified from AOCI, net of tax ( 2 ) ( 11 ) ( 3 ) ( 5 ) 1 ( 20 ) Other comprehensive income (loss) 141 6 3 7 ( 1 ) 156 Balance, December 31, 2023 $ ( 202 ) $ ( 104 ) $ ( 20 ) $ ( 38 ) $ 5 $ ( 359 ) 20. Earnings Per Share Accounting Policy The Company computes earnings per share (EPS) using the two-class method, which is an earnings allocation formula that determines EPS for: (i) each class of common shares (the Company has a single class of common shares); and (ii) participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. Awards and share units under the AGS SERP with non-forfeitable dividends are considered participating securities. 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. Diluted EPS adjusts basic EPS for the effects of restricted stock, restricted stock units, stock options and other potentially dilutive financial instruments (dilutive securities) only in the periods in which such effect is dilutive. The effect of the dilutive securities is reflected in diluted EPS by application of the more dilutive of: (1) the treasury stock method; or (2) the two-class method assuming nonvested shares are not converted into common shares. 212 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Computation of Earnings Per Share Year Ended December 31, 2025 2024 2023 (in millions, except per share amounts) Basic EPS: Net income (loss) attributable to AGL $ 503 $ 376 $ 739 Less: Distributed and undistributed income (loss) available to nonvested shareholders 4 3 6 Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic $ 499 $ 373 733 Basic shares 48.1 53.3 58.4 Basic EPS $ 10.39 $ 7.01 $ 12.54 Diluted EPS: Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic $ 499 $ 373 $ 733 Plus: Re-allocation of undistributed income (loss) available to nonvested shareholders of AGL and subsidiaries — — — Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, diluted $ 499 $ 373 $ 733 Basic shares 48.1 53.3 58.4 Dilutive securities: Restricted stock awards 0.6 1.0 1.2 Diluted shares 48.7 54.3 59.6 Diluted EPS $ 10.26 $ 6.87 $ 12.30 Potentially dilutive securities excluded from computation of EPS because of antidilutive effect 0.1 0.1 0.1 213 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued 21. Parent Company The following tables present the condensed financial statements of Assured Guaranty Ltd. Assured Guaranty Ltd. (Parent Company) Condensed Balance Sheets (in millions) As of December 31, 2025 2024 Assets Investments $ 57 $ 66 Investments in subsidiaries 5,557 5,237 Dividends receivable from subsidiaries — 150 Other assets (1) 70 69 Total assets $ 5,684 $ 5,522 Liabilities Other liabilities (1) $ 21 $ 27 Total liabilities $ 21 $ 27 Total shareholders’ equity attributable to AGL $ 5,663 $ 5,495 Total liabilities and shareholders’ equity $ 5,684 $ 5,522 ____________________ (1) Mainly consists of due from and due to affiliates. Assured Guaranty Ltd. (Parent Company) Condensed Statements of Operations and Comprehensive Income (in millions) Year Ended December 31, 2025 2024 2023 Revenues Net investment income $ 2 $ 2 $ 1 Net realized investment gains (losses) — — ( 1 ) Total revenues 2 2 — Expenses Other expenses (1) 43 42 45 Total expenses 43 42 45 Income (loss) before equity in earnings of subsidiaries ( 41 ) ( 40 ) ( 45 ) Equity in earnings of subsidiaries 544 416 784 Net income attributable to AGL 503 376 739 Other comprehensive income (loss) attributable to AGL 217 ( 26 ) 156 Comprehensive income (loss) attributable to AGL $ 720 $ 350 $ 895 ____________________ (1) Includes expense allocations from subsidiaries. 214 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Assured Guaranty Ltd. (Parent Company) Condensed Statements of Cash Flows (in millions) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income attributable to AGL $ 503 $ 376 $ 739 Adjustments to reconcile net income to net cash flows provided by operating activities: Equity in earnings of subsidiaries ( 544 ) ( 416 ) ( 784 ) Net realized investment losses (gains) — — 1 Cash dividends from subsidiaries 765 637 306 Other 42 28 36 Net cash flows provided by (used in) operating activities 766 625 298 Cash flows from investing activities: Fixed-maturity securities, available for sale: Sales 3 — — Maturities and paydowns — 3 — Short-term investments with maturities of over three months: Sales — — 4 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 ) Cash flows from financing activities: Dividends paid ( 68 ) ( 68 ) ( 67 ) Repurchases of common shares ( 500 ) ( 502 ) ( 199 ) Payments related to tax withholding for share-based compensation ( 34 ) ( 30 ) ( 20 ) Other 2 2 2 Net cash flows provided by (used in) financing activities ( 600 ) ( 598 ) ( 284 ) Increase (decrease) in cash and restricted cash — 1 — Cash and restricted cash at beginning of period 1 — — Cash and restricted cash at end of period $ 1 $ 1 $ — As of December 31, 2025 2024 2023 Reconciliation of cash and restricted cash to the balance sheets: Cash $ — $ — $ — Restricted cash (included in other assets) 1 1 — Cash and restricted cash at the end of period $ 1 $ 1 $ — Basis of Presentation These condensed financial statements of AGL should be read in conjunction with the Company’s consolidated financial statements and notes thereto. AGL is a Bermuda-based holding company that provides, through its wholly-owned operating subsidiaries, credit protection products to the U.S. and non-U.S. public finance (including infrastructure) and structured finance markets. Assured Guaranty also participates in the asset management business. See Note 1. Business and Basis of Presentation. 215 Assured Guaranty Ltd. Notes to Consolidated Financial Statements, Continued Guaranties of Obligations of Affiliates AGL fully and unconditionally guarantees all of the U.S. Holding Companies’ debt. See Note 11. Long-Term Debt and Credit Facilities. Credit Facility with Affiliate On October 25, 2013, AGL, as borrower, and AGUS, as lender, entered into a revolving credit facility pursuant to which AGL may, from time to time, borrow for general corporate purposes. Under the credit facility, AGUS committed to lend a principal amount not exceeding $ 225 million in the aggregate. In October 2023, the commitment was extended until October 25, 2033 (the loan commitment termination date). The unpaid principal amount of each loan will bear interest at a fixed rate equal to 100 % of the then applicable interest rate as determined under Section 1274(d) of the Code, and interest on all loans will be computed for the actual number of days elapsed on the basis of a year consisting of 360 days. Accrued interest on all loans will be paid on the last day of each June and December, and at maturity. AGL must repay the then unpaid principal amounts of the loans by the third anniversary of the loan commitment termination date. No amounts are currently outstanding under the credit facility. Income Taxes AGL is not subject to any income, withholding or capital gains taxes under current Bermuda law. In November 2013, AGL became 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. In July of 2023, the U.K. 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. Beginning in 2025, this applies to AGL, requiring a minimum effective rate of 15 % in all jurisdictions in which it operates. See Note 13. Income Taxes. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.