ASSURED GUARANTY LTD 10-Q

ITEM 1. FINANCIAL STATEMENTS Assured Guaranty Ltd. Condensed Consolidated Balance Sheets (Unaudited) (dollars in millions except share data) As of June 30, 2026 December 31, 2025 Assets Investments: Fixed-maturity securities, available-for-sale, at fair value, net of allowance for credit loss of $ 72 and $ 54 (amortized cost of $ 7,147 and $ 6,572 ) $ 6,817 $ 6,369 Fixed-maturity securities, trading, at fair value 131 124 Short-term investments, at fair value 792 903 Other invested assets (includes $ 3 and $ 3 , at fair value) 1,190 1,091 Total investments 8,930 8,487 Cash 310 388 Premiums receivable, net of commissions payable, net of allowance for credit losses of $ 7 and $ 3 1,523 1,572 Funds withheld, at fair value 296 — Deferred acquisition costs 201 192 Salvage and subrogation recoverable 428 449 Financial guaranty variable interest entities’ assets (includes $ 164 and $ 172 , at fair value) 198 212 Assets of consolidated investment vehicles (includes $ – and $ 167 , at fair value) — 175 Other assets (includes $ 187 and $ 174 , at fair value) 755 701 Total assets $ 12,641 $ 12,176 Liabilities Unearned premium reserve $ 3,600 $ 3,625 Loss and loss adjustment expense reserve 306 309 Future policy benefits for annuity reinsurance contracts 484 — Policyholder account balances for annuity reinsurance contracts 256 — Long-term debt 1,706 1,704 Financial guaranty variable interest entities’ liabilities (includes $ 147 and $ 197 , at fair value, $ 172 and $ 182 with recourse, $ 16 and $ 16 without recourse) 188 198 Other liabilities (includes $ 27 and $ 21 , at fair value) 519 551 Total liabilities 7,059 6,387 Commitments and contingencies (Notes 4, 5, 9 and 13) Shareholders’ equity Common shares ($ 0.01 par value, 500,000,000 shares authorized; 44,055,227 and 45,184,791 shares issued and outstanding) — — Retained earnings 5,809 5,830 Accumulated other comprehensive income (loss), net of tax of $( 55 ) and $( 39 ) ( 251 ) ( 168 ) Deferred equity compensation 1 1 Total shareholders’ equity attributable to Assured Guaranty Ltd. 5,559 5,663 Non-redeemable noncontrolling interest (Note 10) 23 126 Total shareholders’ equity 5,582 5,789 Total liabilities and shareholders’ equity $ 12,641 $ 12,176 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 Table of Contents Assured Guaranty Ltd. Condensed Consolidated Statements of Operations (Unaudited) (dollars in millions except share data) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues Net earned premiums $ 102 $ 89 $ 184 $ 180 Net investment income 98 89 190 176 Net realized investment gains (losses) ( 10 ) ( 6 ) ( 25 ) ( 22 ) Fair value gains (losses) on derivatives 5 1 7 105 Fair value gains (losses) on committed capital securities ( 7 ) ( 1 ) ( 1 ) 1 Gains (losses) on financial guaranty variable interest entities 2 2 ( 3 ) 3 Fair value gains (losses) on consolidated investment vehicles — 4 9 23 Foreign exchange gains (losses) on remeasurement ( 2 ) 79 ( 21 ) 116 Fair value gains (losses) on trading securities 7 2 13 3 Asset management revenues — 13 94 18 Other income (loss) — 9 9 23 Total revenues 195 281 456 626 Expenses Loss and loss adjustment expenses (benefit) 4 28 21 68 Benefit expense for annuity reinsurance contracts 8 — 15 — Interest expense 22 23 44 45 Amortization of deferred acquisition costs 5 5 10 10 Employee compensation and benefit expenses 57 50 120 110 Asset management expenses — 9 68 13 Other operating expenses 39 36 84 74 Total expenses 135 151 362 320 Income (loss) before income taxes and equity in earnings (losses) of investees 60 130 94 306 Equity in earnings (losses) of investees ( 11 ) 3 20 56 Income (loss) before income taxes 49 133 114 362 Less: Provision (benefit) for income taxes 9 27 ( 11 ) 71 Net income (loss) 40 106 125 291 Less: Noncontrolling interest 1 3 ( 2 ) 12 Net income (loss) attributable to Assured Guaranty Ltd. $ 39 $ 103 $ 127 $ 279 Earnings per share: Basic $ 0.88 $ 2.10 $ 2.82 $ 5.60 Diluted $ 0.88 $ 2.08 $ 2.80 $ 5.54 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 Table of Contents Assured Guaranty Ltd. Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (in millions) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income (loss) $ 40 $ 106 $ 125 $ 291 Change in net unrealized gains (losses) on: Investments with no credit impairment, net of tax provision (benefit) of $ 2 , $ 11 , $( 14 ) and $ 17 8 85 ( 76 ) 137 Investments with credit impairment, net of tax provision (benefit) of $ 7 , $( 1 ), $( 4 ) and $ 4 28 ( 1 ) ( 16 ) 20 Change in net unrealized gains (losses) on investments 36 84 ( 92 ) 157 Change in instrument-specific credit risk on financial guaranty variable interest entities’ liabilities with recourse, net of tax provision (benefit) 1 1 1 — Change in discount rates on future policy benefits for annuity reinsurance contracts, net of tax provision (benefit) of $( 2 ), $ — $ 2 and $ — ( 8 ) — 9 — Other, net of tax provision (benefit) — 2 ( 1 ) 1 Other comprehensive income (loss) 29 87 ( 83 ) 158 Comprehensive income (loss) 69 193 42 449 Less: Comprehensive income (loss) attributable to noncontrolling interest 1 3 ( 2 ) 12 Comprehensive income (loss) attributable to Assured Guaranty Ltd. $ 68 $ 190 $ 44 $ 437 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents Assured Guaranty Ltd. Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) (dollars in millions, except share data) For the Three Months Ended June 30, 2026 Total Shareholders’ Equity Attributable to Assured Guaranty Ltd. Common Shares Outstanding Common Shares Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Deferred Equity Compensation Total Non-redeemable Noncontrolling Interest Shareholders’ Equity As of March 31, 2026 44,591,054 $ — $ 5,821 $ ( 280 ) $ 1 $ 5,542 $ 22 $ 5,564 Net income — — 39 — — 39 1 40 Dividends ($ 0.38 per share) — — ( 17 ) — — ( 17 ) — ( 17 ) Common shares repurchases ( 553,564 ) — ( 45 ) — — ( 45 ) — ( 45 ) Share-based compensation 17,737 — 11 — — 11 — 11 Other comprehensive income — — — 29 — 29 — 29 As of June 30, 2026 44,055,227 $ — $ 5,809 $ ( 251 ) $ 1 $ 5,559 $ 23 $ 5,582 For the Three Months Ended June 30, 2025 Total Shareholders’ Equity Attributable to Assured Guaranty Ltd. Common Shares Outstanding Common Shares Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Deferred Equity Compensation Total Non-redeemable Noncontrolling Interest Shareholders’ Equity As of March 31, 2025 49,553,438 $ — $ 5,903 $ ( 314 ) $ 1 $ 5,590 $ 67 $ 5,657 Net income — — 103 — — 103 3 106 Dividends ($ 0.34 per share) — — ( 19 ) — — ( 19 ) — ( 19 ) Consolidation — — — — — — 26 26 Common shares repurchases ( 1,537,505 ) — ( 132 ) — — ( 132 ) — ( 132 ) Share-based compensation 93,506 — 4 — — 4 — 4 Other comprehensive income — — — 87 — 87 — 87 As of June 30, 2025 48,109,439 $ — $ 5,859 $ ( 227 ) $ 1 $ 5,633 $ 96 $ 5,729 4 Table of Contents Assured Guaranty Ltd. Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) (dollars in millions, except share data) For the Six Months Ended June 30, 2026 Total Shareholders’ Equity Attributable to Assured Guaranty Ltd. Common Shares Outstanding Common Shares Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Deferred Equity Compensation Total Non-redeemable Noncontrolling Interest Shareholders’ Equity As of December 31, 2025 45,184,791 $ — $ 5,830 $ ( 168 ) $ 1 $ 5,663 $ 126 $ 5,789 Net income — — 127 — — 127 ( 2 ) 125 Dividends ($ 0.76 per share) — — ( 35 ) — — ( 35 ) — ( 35 ) Common shares repurchases ( 1,435,545 ) — ( 120 ) — — ( 120 ) — ( 120 ) Share-based compensation 305,981 — 7 — — 7 — 7 Distributions — — — — — — ( 97 ) ( 97 ) Deconsolidation — — — — — — ( 4 ) ( 4 ) Other comprehensive loss — — — ( 83 ) — ( 83 ) — ( 83 ) As of June 30, 2026 44,055,227 $ — $ 5,809 $ ( 251 ) $ 1 $ 5,559 $ 23 $ 5,582 For the Six Months Ended June 30, 2025 Total Shareholders’ Equity Attributable to Assured Guaranty Ltd. Common Shares Outstanding Common Shares Par Value Retained Earnings Accumulated Other Comprehensive Income (Loss) Deferred Equity Compensation Total Non-redeemable Noncontrolling Interest Shareholders’ Equity As of December 31, 2024 50,505,320 $ 1 $ 5,878 $ ( 385 ) $ 1 $ 5,495 $ 58 $ 5,553 Net income — — 279 — — 279 12 291 Dividends ($ 0.68 per share) — — ( 37 ) — — ( 37 ) — ( 37 ) Consolidation — — — — — — 26 26 Common shares repurchases ( 2,872,733 ) ( 1 ) ( 251 ) — — ( 252 ) — ( 252 ) Share-based compensation 476,852 — ( 10 ) — — ( 10 ) — ( 10 ) Other comprehensive income — — — 158 — 158 — 158 As of June 30, 2025 48,109,439 $ — $ 5,859 $ ( 227 ) $ 1 $ 5,633 $ 96 $ 5,729 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents Assured Guaranty Ltd. Condensed Consolidated Statements of Cash Flows (Unaudited) (in millions) Six Months Ended June 30, 2026 2025 Net cash flows provided by (used in) operating activities $ 230 $ 165 Cash flows from investing activities: Fixed-maturity securities, available-for-sale: Purchases ( 826 ) ( 754 ) Sales 585 427 Maturities and paydowns 314 424 Short-term investments with original maturities of over three months: Purchases — ( 3 ) Sales 1 — Maturities and paydowns 2 — Net sales (purchases) of short-term investments with original maturities of less than three months 115 291 Sales of fixed-maturity securities, trading — 8 Maturities and paydowns of fixed-maturity securities, trading 6 5 Paydowns of financial guaranty variable interest entities’ assets 10 10 Purchases of and contributions to other invested assets ( 153 ) ( 73 ) Sales of and return of capital from other invested assets 57 23 Assured Life Reinsurance, Ltd. acquisition, net of cash acquired (see Note 2) ( 145 ) — Other ( 1 ) ( 7 ) Net cash flows provided by (used in) investing activities ( 35 ) 351 Cash flows from financing activities: Dividends paid ( 36 ) ( 36 ) Repurchases of common shares ( 120 ) ( 251 ) Net paydowns of financial guaranty variable interest entities’ liabilities ( 8 ) ( 8 ) Payments related to tax withholding for share-based compensation ( 20 ) ( 34 ) Other 1 2 Distributions to noncontrolling interest from consolidated investment vehicles ( 97 ) — Net cash flows provided by (used in) financing activities ( 280 ) ( 327 ) Effect of foreign exchange rate changes ( 3 ) 8 Increase (decrease) in cash and cash equivalents and restricted cash ( 88 ) 197 Cash and cash equivalents and restricted cash at beginning of period 419 128 Cash and cash equivalents and restricted cash at end of period $ 331 $ 325 (continued on next page) 6 Table of Contents Assured Guaranty Ltd. Condensed Consolidated Statements of Cash Flows (Unaudited) - (Continued) (in millions) Six Months Ended June 30, 2026 2025 Supplemental disclosure of non-cash activities: Receipt of fixed-maturity securities, available-for-sale $ — $ 7 As of June 30, 2026 June 30, 2025 Reconciliation of cash and cash equivalents and restricted cash to the condensed consolidated balance sheets: Cash $ 310 $ 301 Cash and cash equivalents of financial guaranty variable interest entities 20 23 Restricted cash (included in other assets) 1 1 Cash and cash equivalents and restricted cash at the end of period $ 331 $ 325 The accompanying notes are an integral part of these condensed consolidated financial statements. 7 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited) 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 annuity reinsurance and asset management businesses. Financial Guaranty Insurance Through its financial guaranty 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. Through certain of its financial guaranty insurance subsidiaries, 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 financial guaranty 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, 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. Annuity Reinsurance On January 21, 2026 (the Acquisition Date), the Company purchased all of the outstanding share capital in Warwick Company (UK) Limited (Warwick), which is the 100 % indirect owner of Assured Life Reinsurance Ltd. (Assured Life Re), formerly known as Warwick Re Limited. Assured Life Re is a Class E long-term (life) reinsurance company incorporated and registered in Bermuda. See Note 2. Assured Life Re Acquisition. Assured Life Re specializes in annuity reinsurance. As of the Acquisition Date, Assured Life Re had reinsured two blocks of business: U.K. bulk purchase annuities (pension risk transfers, PRT) denominated in pound sterling and U.S. multi-year guaranteed annuities (MYGA) denominated in U.S. dollars. PRT annuity obligations are generally benefit‑driven cash flows that are long-dated, inflation-linked liabilities. MYGA typically provide for guaranteed crediting rates over a specified term and include contractual features such as surrender charges, market value adjustments and limited withdrawal provisions. Asset Management The Company participates in the asset management business through its approximately 30 % 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). 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. 8 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Basis of Presentation The unaudited interim condensed 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. These unaudited interim condensed consolidated financial statements are as of June 30, 2026 and cover the three-month period ended June 30, 2026 (second quarter 2026), the three-month period ended June 30, 2025 (second quarter 2025) the six-month period ended June 30, 2026 (six months 2026) and the six-month period ended June 30, 2025 (six months 2025). Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but is not required for interim reporting purposes, has been condensed or omitted. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. Certain prior year balances have been reclassified to conform to the current period’s presentation. The unaudited interim condensed consolidated financial statements include the accounts of AGL, its direct and indirect subsidiaries, and its consolidated VIEs. See Note 10. 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. These unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission. Recent Accounting Standards Not Yet Adopted In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 Accounting Standards Codification (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. 9 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 2. Assured Life Re Acquisition On the Acquisition Date, the Company purchased all of the outstanding share capital in Warwick, which is the 100 % indirect owner of Assured Life Re, for a purchase price of $ 158 million, subject to certain post-closing adjustments (Assured Life Re Acquisition). The Assured Life Re Acquisition was accounted for under the acquisition method of accounting, which requires that the assets and liabilities acquired be recorded at fair value. The most significant of these determinations related to the valuation of its insurance liabilities. See Note 7. Annuity Reinsurance. The fair value of each block of business was measured using a discounted cash flow methodology based on assumptions that market participants would use in pricing the asset. The discount rate reflects the risk-free rate, an explicit risk margin, an adjustment for the Company’s non‑performance risk, and, with respect to the PRT block of business, an illiquidity premium. The comparison of the fair value of each of the PRT and MYGA blocks of business to their respective insurance liabilities and policyholder account balances resulted in a positive value of business acquired (VOBA) for the PRT block of business of $ 14 million, which is reported in “other assets” in the condensed consolidated balance sheets, and a negative VOBA for the MYGA block of business of $ 14 million, which is reported in “other liabilities” in the condensed consolidated balance sheets. The estimated weighed-average useful life is 10.3 years for the PRT block of business and 2.3 years for the MYGA block of business. The excess of the fair value of net assets acquired over the consideration transferred was recorded as a provisional bargain purchase gain in “other income” in the condensed consolidated statements of operations. The accounting for the acquisition is not final and is pending the finalization of the valuation of the net assets acquired and the calculation of the final purchase price. The Company believes the provisional bargain purchase gain was attributable to unique circumstances in connection with the sellers’ desire to exit Warwick. The following table shows the net effect of the Assured Life Re Acquisition on the Acquisition Date. Net Effect of Assured Life Re Acquisition (in millions) Cash purchase price $ 158 Assets purchased: Investments 631 Cash 13 Funds withheld 293 Other assets 35 Total assets 972 Liabilities assumed: Future policy benefits for annuity reinsurance contracts (including deferred profit liability) 504 Policyholder account balances for annuity reinsurance contracts 270 Other liabilities 34 Total liabilities 808 Net assets 164 Bargain purchase gain $ 6 Revenue and net income (loss) related to Assured Life Re from the Acquisition Date through June 30, 2026 included in the condensed consolidated statements of operations were approximately $ 11 million and $( 1 ) million for second quarter 2026 and $ 25 million and $ 1 million for six months 2026, respectively. The Company incurred $ 7 million of transaction costs primarily consisting of legal and advisory fees related to the Assured Life Re Acquisition. Of this amount, $ 4 million was 10 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued recognized as expenses in six months 2026 and reported in “other operating expenses” in the condensed consolidated statements of operations. Had the Assured Life Re Acquisition occurred on January 1, 2025, the unaudited pro forma revenue would be $ 194 million and $ 451 million for second quarter 2026 and six months 2026, respectively, and $ 268 million and $ 617 million for second quarter 2025 and six months 2025, respectively. The unaudited pro forma net income would be $ 40 million and $ 121 million for second quarter 2026 and six months 2026, respectively, and $ 90 million and $ 268 million for second quarter 2025 and six months 2025, respectively. The pro forma accounts include the estimated historical results of the Company and Assured Life Re and pro forma adjustments related to the differences in the accounting standards and policies between the Company and Assured Life Re, as well as the bargain purchase gain and acquisition-related expenses, together with the consequential tax effects. The unaudited pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined company had the companies actually been combined as of January 1, 2025, nor is it indicative of the results of operations in future periods. Statutory Information and Restrictions Assured Life Re prepares its statutory financial statements in conformity with the accounting principles set forth in Bermuda’s Insurance Act 1978, amendments thereto and related regulations (collectively, the Insurance Act). 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 Assured Life Re, 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. Under applicable law and regulations, Assured Life Re may declare and pay dividends during 2026, without prior approval of the Authority, in an aggregate amount equal to up to 25 % of its total statutory capital and surplus as of the prior year end (or $ 41 million). Any such dividends would also be subject to the limitations that they may not exceed Assured Life Re’s statutory surplus or its unencumbered assets. The Insurance Act also prohibits Assured Life Re 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 business obligations. As of June 30, 2026, Assured Life Re did not have a statutory surplus to pay dividends; its unencumbered assets were $ 27 million. In addition, Assured Life Re may make capital distributions during 2026 of up to $ 31 million in the aggregate without prior approval of the Authority. Given Assured Life Re’s focus on capital intensive growth initiatives, it does not expect to declare or pay any dividends or to make any capital distributions during 2026. 3. Segment Information Prior to the first quarter of 2026, the Company disclosed two reportable segments: Insurance and Asset Management. As a result of the expansion of the Company’s business into annuity reinsurance, the chief operating decision maker (CODM) began assessing the results of operations of the Company’s annuity reinsurance business separately and therefore a new operating segment, Annuity Reinsurance, was added in the first quarter of 2026. In addition, the Insurance segment was renamed the Financial Guaranty segment starting in the first quarter of 2026, which includes financial guaranty insurance and reinsurance and also specialty insurance and reinsurance on transactions with risk profiles similar to those of the Company’s structured finance exposures written in financial guaranty form. The Company separately reports the results of its Corporate division and the effects of consolidating financial guaranty VIEs (FG VIEs) and consolidated investment vehicles (CIVs). This presentation is consistent with the manner in which the Chief Executive Officer and President, who serves as the 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 of 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 (loss) is defined as “net income (loss) attributable to AGL,” adjusted for the following items: • Elimination of realized gains (losses) on investments, except for gains and losses on securities classified as trading. 11 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued • Elimination of non-credit impairment-related fair value gains (losses) on credit derivatives, which is the amount of fair value gains (losses) in excess of the present value of the expected estimated economic credit losses. • Elimination of changes in fair value of freestanding derivatives in the Annuity Reinsurance segment that economically hedge market movements in financial instruments and insurance liabilities (but are not in designated hedging relationships in accordance with GAAP). • Elimination of the changes in fair value of the embedded derivative in funds withheld related to realized and unrealized gains (losses) of the underlying investment portfolio. • Elimination of fair value gains (losses) on committed capital securities (CCS). • Elimination of foreign exchange gains (losses) on the remeasurement of assets and liabilities such as premiums receivables and insurance liabilities that are long-term in nature. • Income tax allocated to the adjustments above. In addition to the adjustments listed above, segment adjusted operating income (loss) differs from GAAP in other respects. The Financial Guaranty segment includes: (i) premiums and losses from the financial guaranty insurance policies issued by AG that guarantee FG VIE debt; (ii) the insurance subsidiaries’ share of earnings from all its investments in funds managed by Sound Point in “equity in earnings (losses) of investees;” and (iii) investment income on the FG VIE debt owned. 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”); (ii) certain investments in funds managed by Sound Point are, or were in prior periods, accounted for as CIVs (in the reconciliation tables below, the CIVs and related eliminations of the Financial Guaranty segment’s “equity in earnings (losses) of investees” associated with the Company’s ownership interest in CIVs are presented in “other”); and (iii) FG VIEs are consolidated by AG and the investment income on the FG VIE debt owned is eliminated (the reconciliation tables below present the FG VIEs and related eliminations in “other”). The Company does not report assets by reportable segment as the CODM does not assess performance or allocate resources based on assets. The Financial Guaranty segment primarily consists of the adjusted operating income (loss) of the Company’s financial guaranty insurance subsidiaries and AG Asset Strategies LLC (AGAS). See Note 9. Investments. The Annuity Reinsurance segment comprises the results of Assured Life Re and other subsidiaries acquired in the Assured Life Re Acquisition. 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 and expenses. The incentive fees are performance fees earned by the consolidated general partner of a fund managed by Sound Point. There were no Asset Management revenues and expenses recognized in second quarter 2026. The Asset Management segment recognized revenues of this general partnership of $ 15 million, $ 118 million and $ 21 million in second quarter 2025, six months 2026 and six months 2025, respectively. The Asset Management segment recognized expenses of this general partnership of $ 9 million, $ 68 million and $ 13 million in second quarter 2025, six months 2026 and six months 2025, respectively. For segment reporting, the Company includes intersegment revenues, which are eliminated in consolidation, but are included in the measure of Asset Management segment’s results. At the end of the first quarter of 2026, the Company deconsolidated this general partner and the corresponding CIV after the payout of carried interest from the sale of the underlying asset in a single-asset fund. See Note 10. Variable Interest Entities. 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) equity in earnings from certain alternative investments, including, beginning in the fourth quarter of 2025, a portion of the equity in earnings of Assured Healthcare Partners LLC managed funds that were transferred from AG to AGMH as a part of a stock redemption; and (iv) gains and losses associated with certain corporate development or other strategic initiatives. In addition, the Corporate division includes a bargain purchase gain recognized in connection with the Assured Life Re Acquisition in the first quarter of 2026. The Other category in the tables below primarily includes the effect of consolidating FG VIEs, CIVs and intersegment eliminations. See Note 10. Variable Interest Entities. 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. 12 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Segment Information Second Quarter 2026 2025 Financial Guaranty Annuity Reinsurance Asset Management Financial Guaranty Asset Management (in millions) Third-party revenues $ 197 $ 15 $ — $ 196 $ 13 Intersegment revenues 2 — — 3 2 Segment revenues 199 15 — 199 15 Segment loss and loss adjustment expense (LAE) (benefit) 5 — — 27 — Segment benefit expense for annuity reinsurance contracts — 8 — — — Segment employee compensation and benefit expenses 47 3 — 44 — Segment amortization of deferred acquisition costs (DAC) 5 — — 5 — Other segment items (2) 30 2 — 29 9 Segment expenses 87 13 — 105 9 Segment equity in earnings (losses) of investees ( 10 ) — ( 5 ) 2 ( 1 ) Less: Segment provision (benefit) for income taxes 17 — ( 1 ) 20 1 Segment adjusted operating income (loss) $ 85 $ 2 $ ( 4 ) $ 76 $ 4 Selected components of segment adjusted operating income: Net investment income $ 89 $ 11 $ — $ 89 $ — Non-cash compensation and operating expenses (3) 15 — — 14 — 13 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Six Months 2026 2025 Financial Guaranty Annuity Reinsurance Asset Management Financial Guaranty (1) Asset Management (in millions) Third-party revenues $ 377 $ 25 $ 94 $ 433 $ 18 Intersegment revenues 4 — 24 5 3 Segment revenues 381 25 118 438 21 Segment loss and LAE (benefit) 22 — — 4 — Segment benefit expense for annuity reinsurance contracts — 15 — — — Segment employee compensation and benefit expenses 101 5 — 96 — Segment amortization of DAC 10 — — 10 — Other segment items (2) 61 4 68 59 13 Segment expenses 194 24 68 169 13 Segment equity in earnings (losses) of investees ( 2 ) — 1 32 12 Less: Segment provision (benefit) for income taxes ( 2 ) ( 1 ) 11 57 4 Segment adjusted operating income (loss) $ 187 $ 2 $ 40 $ 244 $ 16 Selected components of segment adjusted operating income: Net investment income $ 177 $ 16 $ — $ 175 $ — Non-cash compensation and operating expenses (3) 36 1 — 32 — _____________________ (1) Six months 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. (2) Other segment items for the Financial Guaranty segment include professional services expenses, maintenance, depreciation expense, lease expense and certain overhead expenses; for the Asset Management segment these include expenses associated with incentive fees; and for the Annuity Reinsurance segment these include professional service fees and certain overhead expenses. (3) Amounts consist of depreciation, amortization and share-based compensation expenses. 14 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued The tables below present a reconciliation of significant components of segment information to the comparable consolidated amounts. Reconciliation of Segment Information to Consolidated Information Three Months Ended June 30, 2026 Equity in Earnings (Losses) of Investees Less: Net Income (Loss) Attributable to AGL Revenues Expenses Provision (Benefit) for Income Taxes Noncontrolling Interest (in millions) Segments: Financial Guaranty $ 199 $ 87 $ ( 10 ) $ 17 $ — $ 85 Annuity Reinsurance 15 13 — — — 2 Asset Management — — ( 5 ) ( 1 ) — ( 4 ) Total segments 214 100 ( 15 ) 16 — 83 Corporate division 3 38 4 ( 3 ) — ( 28 ) Other ( 2 ) ( 3 ) — — 1 — Subtotal 215 135 ( 11 ) 13 1 55 Reconciling items: Realized gains (losses) on investments ( 10 ) — — — — ( 10 ) Non-credit impairment-related fair value gains (losses) on credit derivatives ( 1 ) — — — — ( 1 ) Fair value gains (losses) of freestanding derivatives in the Annuity Reinsurance segment ( 1 ) — — — — ( 1 ) Realized and unrealized fair value gains (losses) of the embedded derivative in funds withheld — — — — — — Fair value gains (losses) on CCS ( 7 ) — — — — ( 7 ) Foreign exchange gains (losses) on remeasurement of certain assets and liabilities ( 1 ) — — — — ( 1 ) Tax effect — — — ( 4 ) — 4 Consolidated $ 195 $ 135 $ ( 11 ) $ 9 $ 1 $ 39 15 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Reconciliation of Segment Information to Consolidated Information Three Months Ended June 30, 2025 Equity in Earnings (Losses) of Investees Less: Net Income (Loss) Attributable to AGL Revenues Expenses Provision (Benefit) for Income Taxes Noncontrolling Interest (in millions) Segments: Financial Guaranty $ 199 $ 105 $ 2 $ 20 $ — $ 76 Asset Management 15 9 ( 1 ) 1 — 4 Total segments 214 114 1 21 — 80 Corporate division 4 39 3 ( 3 ) — ( 29 ) Other — ( 2 ) ( 1 ) ( 1 ) 3 ( 1 ) Subtotal 218 151 3 17 3 50 Reconciling items: Realized gains (losses) on investments ( 6 ) — — — — ( 6 ) Non-credit impairment-related fair value gains (losses) on credit derivatives ( 1 ) — — — — ( 1 ) Fair value gains (losses) on CCS ( 1 ) — — — — ( 1 ) Foreign exchange gains (losses) on remeasurement of certain assets and liabilities 71 — — — — 71 Tax effect — — — 10 — ( 10 ) Consolidated $ 281 $ 151 $ 3 $ 27 $ 3 $ 103 16 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Reconciliation of Segment Information to Consolidated Information Six Months Ended June 30, 2026 Equity in Earnings (Losses) of Investees Less: Net Income (Loss) Attributable to AGL Revenues Expenses Provision (Benefit) for Income Taxes Noncontrolling Interest (in millions) Segments: Financial Guaranty $ 381 $ 194 $ ( 2 ) $ ( 2 ) $ — $ 187 Annuity Reinsurance 25 24 — ( 1 ) — 2 Asset Management 118 68 1 11 — 40 Total segments 524 286 ( 1 ) 8 — 229 Corporate division 11 81 23 ( 4 ) — ( 43 ) Other ( 26 ) ( 5 ) ( 2 ) ( 5 ) ( 2 ) ( 16 ) Subtotal 509 362 20 ( 1 ) ( 2 ) 170 Reconciling items: Realized gains (losses) on investments ( 25 ) — — — — ( 25 ) Non-credit impairment-related fair value gains (losses) on credit derivatives ( 3 ) — — — — ( 3 ) Fair value gains (losses) of freestanding derivatives in the Annuity Reinsurance segment ( 3 ) — — — — ( 3 ) Realized and unrealized fair value gains (losses) of the embedded derivative in funds withheld ( 2 ) — — — — ( 2 ) Fair value gains (losses) on CCS ( 1 ) — — — — ( 1 ) Foreign exchange gains (losses) on remeasurement of certain assets and liabilities ( 19 ) — — — — ( 19 ) Tax effect — — — ( 10 ) — 10 Consolidated $ 456 $ 362 $ 20 $ ( 11 ) $ ( 2 ) $ 127 17 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Reconciliation of Segment Information to Consolidated Information Six Months Ended June 30, 2025 Equity in Earnings (Losses) of Investees Less: Net Income (Loss) Attributable to AGL Revenues Expenses Provision (Benefit) for Income Taxes Noncontrolling Interest (in millions) Segments: Financial Guaranty $ 438 $ 169 $ 32 $ 57 $ — $ 244 Asset Management 21 13 12 4 — 16 Total segments 459 182 44 61 — 260 Corporate division 8 79 19 ( 3 ) — ( 49 ) Other 16 ( 4 ) ( 7 ) — 12 1 Subtotal 483 257 56 58 12 212 Reconciling items: Realized gains (losses) on investments ( 22 ) — — — — ( 22 ) Non-credit impairment-related fair value gains (losses) on credit derivatives 60 63 — — — ( 3 ) Fair value gains (losses) on CCS 1 — — — — 1 Foreign exchange gains (losses) on remeasurement of certain assets and liabilities 104 — — — — 104 Tax effect — — — 13 — ( 13 ) Consolidated $ 626 $ 320 $ 56 $ 71 $ 12 $ 279 4. Outstanding Exposure The Company’s outstanding exposure presented in this note includes all financial guaranty contracts outstanding as of the dates presented, regardless of contractual form written (i.e., credit derivative form or traditional financial guaranty insurance) or applicable accounting model (i.e., financial guaranty insurance, credit derivatives or FG VIE). The presentation also includes specialty business with risk characteristics similar to those of the Company’s structured finance exposures written in financial guaranty form. 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 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 cash flows 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 10. Variable Interest Entities. Unless otherwise specified, 18 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued the outstanding par and debt service amounts presented in this note include outstanding exposures on these VIEs whether or not they are consolidated. Surveillance Categories The Company segregates its financial guaranty 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 5. 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. 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 19 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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 (CPI) 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 both June 30, 2026 and December 31, 2025, the Company excluded net par outstanding of $ 0.8 billion, 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 CPI 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 CPIs for obligations with CPI 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 floating and variable rate insured obligations, CPIs differing from projections, changes in foreign exchange rates on non-U.S. dollar denominated insured obligations and other factors. 20 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Financial Guaranty Portfolio Debt Service and Par Outstanding As of June 30, 2026 As of December 31, 2025 Gross Net Gross Net (in billions) Debt Service Public finance $ 433.0 $ 432.9 $ 428.5 $ 428.4 Structured finance 14.2 13.7 12.9 12.4 Total financial guaranty $ 447.2 $ 446.6 $ 441.4 $ 440.8 Par Outstanding Public finance $ 268.6 $ 268.5 $ 265.6 $ 265.6 Structured finance 13.4 12.9 12.0 11.5 Total financial guaranty $ 282.0 $ 281.4 $ 277.6 $ 277.1 Financial Guaranty Portfolio by Internal Rating As of June 30, 2026 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 $ — — % $ 1.4 2.9 % $ 0.5 4.8 % $ 0.3 8.0 % $ 2.2 0.8 % AA 18.6 8.5 1.4 2.8 5.7 66.6 1.2 27.3 26.9 9.5 A 128.4 58.5 11.5 23.5 1.2 14.7 2.8 64.5 143.9 51.2 BBB 69.0 31.5 30.5 62.1 0.4 4.5 — 0.2 99.9 35.5 BIG 3.4 1.5 4.3 8.7 0.8 9.4 — — 8.5 3.0 Total net par outstanding $ 219.4 100.0 % $ 49.1 100.0 % $ 8.6 100.0 % $ 4.3 100.0 % $ 281.4 100.0 % 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 % 21 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Financial Guaranty Portfolio Components of BIG Net Par Outstanding As of June 30, 2026 BIG Net Par Outstanding BIG 1 BIG 2 BIG 3 Total BIG (in billions) Public finance: U.S. public finance $ 1.22 $ 1.60 $ 0.58 $ 3.40 Non-U.S. public finance 1.00 3.29 — 4.29 Public finance 2.22 4.89 0.58 7.69 Structured finance: U.S. RMBS 0.17 0.03 0.54 0.74 Other structured finance — 0.02 0.05 0.07 Structured finance 0.17 0.05 0.59 0.81 Total $ 2.39 $ 4.94 $ 1.17 $ 8.50 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 BIG Net Par Outstanding and Number of Risks As of June 30, 2026 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 $ 2.36 $ 0.03 $ 2.39 83 3 86 BIG 2 4.94 — 4.94 15 1 16 BIG 3 1.17 — 1.17 93 3 96 Total BIG $ 8.47 $ 0.03 $ 8.50 191 7 198 22 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), 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 _____________________ (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. Specialty Business The Company also guarantees specialty business with risk characteristics similar to those of the Company’s structured finance exposures written in financial guaranty form. Specialty Business As of June 30, 2026 As of December 31, 2025 Gross Exposure Net Exposure Gross Exposure Net Exposure (in billions) Diversified real estate (1) $ 1.9 $ 1.9 $ 2.0 $ 2.0 Insurance reserve financings and securitizations 1.6 1.3 1.5 1.2 Pooled corporate obligations 1.0 1.0 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. All of the exposure in the table above was rated investment grade except for $ 5 million of gross and net exposure of RVI that was rated BIG as of December 31, 2025. Commitments In addition to the exposure disclosed above, the Company had outstanding commitments to provide financial guaranties of $ 0.8 billion of public finance gross par and $ 3.3 billion of structured finance gross par as of June 30, 2026. 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 . 5. Expected Loss to be Paid (Recovered) In order to effectively evaluate and manage the economics and liquidity of the entire insured portfolio regardless of contractual form written (i.e., credit derivative form or traditional financial guaranty insurance) or the applicable accounting model, management assigns ratings and calculates expected loss to be paid (recovered), on a contract-by-contract basis, in the same manner for all its insured exposures regardless of form or differing accounting models. The exposure reported in Note 4. 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) financial guaranty insurance, as described in Note 6. Contracts Accounted for as Financial Guaranty Insurance; (ii) credit derivatives, as described in Note 8. Derivatives, and Note 11. Fair Value Measurement; and (iii) FG VIE consolidation, as described in Note 10. Variable Interest Entities. The 23 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Company has paid claims 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. 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 9. Investments, and Note 11. 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. 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 principal and interest when those amounts are scheduled to be paid and generally cannot be required to pay on an accelerated basis, although in 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 24 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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. 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 Second Quarter Six Months Accounting Model June 30, 2026 December 31, 2025 2026 2025 2026 2025 (in millions) Financial guaranty insurance (see Note 6) $ 179 $ 88 $ 48 $ 38 $ 92 $ 86 FG VIEs (see Note 10) 13 13 — ( 1 ) — ( 1 ) Credit derivatives (see Note 8) — — — ( 1 ) — ( 64 ) Total $ 192 $ 101 $ 48 $ 36 $ 92 $ 21 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: financial guaranty insurance, credit derivative or FG VIE. The Company used risk-free rates for U.S. and non-U.S. currencies that ranged from 2.18 % to 5.67 % with a weighted average of 4.35 % as of June 30, 2026 and 1.93 % to 5.35 % with a weighted average of 3.92 % as of December 31, 2025. 25 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Net Expected Loss to be Paid (Recovered) Roll Forward Second Quarter Six Months 2026 2025 2026 2025 (in millions) Net expected loss to be paid (recovered), beginning of period $ 141 $ 150 $ 101 $ 106 Economic loss development (benefit) due to: Accretion of discount 2 2 4 3 Changes in discount rates ( 2 ) 1 ( 6 ) 6 Changes in timing and assumptions 48 33 94 12 Total economic loss development (benefit) (1) 48 36 92 21 Net (paid) recovered losses (1) 3 — ( 1 ) 59 Net expected loss to be paid (recovered), end of period $ 192 $ 186 $ 192 $ 186 ____________________ (1) Six months 2025 amounts include recoveries recognized in connection with the resolution of the LBIE litigation. Net Expected Loss to be Paid (Recovered) Roll Forward by Sector Second Quarter 2026 Sector Net Expected Loss to be Paid (Recovered) as of March 31, 2026 Net Economic Loss Development (Benefit) Net (Paid) Recovered Losses (1) Net Expected Loss to be Paid (Recovered) as of June 30, 2026 (in millions) Public finance: U.S. public finance $ 3 $ 44 $ ( 5 ) $ 42 Non-U.S. public finance 128 4 — 132 Public finance 131 48 ( 5 ) 174 Structured finance: U.S. RMBS ( 48 ) ( 1 ) 9 ( 40 ) Other structured finance 58 1 ( 1 ) 58 Structured finance 10 — 8 18 Total $ 141 $ 48 $ 3 $ 192 Second Quarter 2025 Sector Net Expected Loss to be Paid (Recovered) as of March 31, 2025 Net Economic Loss Development (Benefit) Net (Paid) Recovered Losses (1) Net Expected Loss to be Paid (Recovered) as of June 30, 2025 (in millions) Public finance: U.S. public finance $ 35 $ 24 $ ( 6 ) $ 53 Non-U.S. public finance 122 18 ( 1 ) 139 Public finance 157 42 ( 7 ) 192 Structured finance: U.S. RMBS ( 37 ) ( 6 ) 8 ( 35 ) Other structured finance 30 — ( 1 ) 29 Structured finance ( 7 ) ( 6 ) 7 ( 6 ) Total $ 150 $ 36 $ — $ 186 26 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Six Months 2026 Sector Net Expected Loss to be Paid (Recovered) as of December 31, 2025 Net Economic Loss Development (Benefit) Net (Paid) Recovered Losses (1) Net Expected Loss to be Paid (Recovered) as of June 30, 2026 (in millions) Public finance: U.S. public finance $ ( 31 ) $ 89 $ ( 16 ) $ 42 Non-U.S. public finance 126 6 — 132 Public finance 95 95 ( 16 ) 174 Structured finance: U.S. RMBS ( 54 ) ( 3 ) 17 ( 40 ) Other structured finance 60 — ( 2 ) 58 Structured finance 6 ( 3 ) 15 18 Total $ 101 $ 92 $ ( 1 ) $ 192 Six Months 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 June 30, 2025 (in millions) Public finance: U.S. public finance $ 18 $ 53 $ ( 18 ) $ 53 Non-U.S. public finance 98 42 ( 1 ) 139 Public finance 116 95 ( 19 ) 192 Structured finance: U.S. RMBS ( 43 ) ( 9 ) 17 ( 35 ) Other structured finance (2) 33 ( 65 ) 61 29 Structured finance ( 10 ) ( 74 ) 78 ( 6 ) Total $ 106 $ 21 $ 59 $ 186 ____________________ (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) Six months 2025 amounts include recoveries recognized in connection with the resolution of the LBIE litigation. Includes cash proceeds for recoveries related to amounts previously paid. The tables above include (i) net LAE paid (recovered) of $ 2 million, $ 5 million, $ 4 million and $( 56 ) million for second quarter 2026, second quarter 2025, six months 2026 and six months 2025, respectively, and (ii) net expected LAE to be paid of $ 9 million and $ 8 million as of June 30, 2026 and December 31, 2025, respectively. Public Finance The largest components of the public finance net expected losses to be paid (recovered) relate to certain insured U.S. transportation, global healthcare and U.K. regulated utility exposures, as well as to Puerto Rico Electric Power Authority (PREPA). The total net expected loss to be paid for public finance exposures is net of expected recoveries of $ 302 million and $ 311 million as of June 30, 2026 and December 31, 2025, respectively, for certain claims and LAE that have already been paid. In second quarter 2026, the economic loss development for public finance transactions was primarily attributable to Brightline Trains Florida LLC (Brightline). In six months 2026, the economic loss development for public finance transactions was primarily attributable to Brightline and PREPA, partially offset by improvements in certain healthcare exposures. 27 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Thames Water Utilities Finance PLC As of June 30, 2026, 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 departments 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. U.S. Transportation As of June 30, 2026, the Company had insured BIG net par of $ 1.1 billion related to Brightline, supporting the development and operation of a private high speed passenger rail system connecting Miami, Orlando and population centers in between. The Company insures a portion of the senior revenue bonds issued by Brightline, whose credit performance is dependent on ridership growth, fare revenues and available liquidity. Brightline’s revenues and ridership, while growing, have lagged the initial projections. The Company’s exposure benefits from a continuing senior lien on the assets of Brightline. European Renewable Energy and U.K. Student Accommodation Transactions As of June 30, 2026, the Company had insured net par of € 727 million (or $ 831 million) related to BIG European renewable energy transactions that are experiencing operational strain, and £ 291 million (or $ 385 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 certain National Health Service (NHS) Trusts and NHS Foundation Trusts. As of June 30, 2026, the Company had £ 484 million (or $ 643 million) of BIG net par outstanding related to NHS Trusts. Proceeds from the financings funded new and refurbished hospital buildings and facilities in the service area of the particular NHS Trust. Certain of the bond issuers and the Company 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 the nature and severity of any disputes in its internal ratings. 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 cuts to Medicaid funding that will go into effect later in 2026 and in 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 June 30, 2026 were $ 553 million and $ 630 million, respectively, compared with net par and net debt service outstanding as of December 31, 2025 of $ 553 million and $ 643 million, respectively. Defaulting Puerto Rico Exposure As of June 30, 2026, the Company’s only unresolved outstanding insured Puerto Rico exposure subject to a payment default was PREPA. As of June 30, 2026, the Company’s PREPA net par and debt service outstanding were $ 464 million and $ 526 million, respectively. As of December 31, 2025, the Company’s PREPA net par and debt service outstanding were $ 464 million and $ 537 million, respectively. The PREPA bonds are secured by a lien on the electric system’s stream of net revenues. The default of PREPA’s obligations has been the subject of restructuring negotiations, mediation and litigation since 2014. 28 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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 certain of its authorities and public corporations were resolved in 2022. The remaining proceedings relate to PREPA’s default, including several recently active proceedings and a number of proceedings that remain stayed by the U.S. District Court for the District of Puerto Rico (Federal District Court of Puerto Rico), pending ultimate determination on a plan of adjustment and disclosure statement to be subsequently submitted, as described below. PREPA – Recently Active Proceedings PREPA Litigation Stay and Motion for Relief from the Litigation Stay . In July 2024, the Federal District Court of Puerto Rico entered a global stay of all PREPA-related litigation. In February 2025, the Company and certain other PREPA bondholders moved for relief from that litigation stay. In March 2025, the Federal District Court of Puerto Rico granted relief from the litigation stay to permit discrete PREPA-related litigation to go forward in PREPA’s bankruptcy proceeding under Title III of PROMESA (Title III Proceeding). Bondholders’ Administrative Expense Claim . The Federal District Court of Puerto Rico permitted bondholders to file a motion asserting that they are entitled to compensation in the form of an administrative expense priority claim for PREPA’s consumption of net revenues during the pendency of the Title III Proceeding. The bondholders filed their administrative expense motion in April 2025. If the bondholders ultimately succeed in establishing an entitlement to an administrative expense priority claim, PREPA would be required under the U.S. Bankruptcy Code to pay such claim in full in cash prior to exiting bankruptcy. On March 16, 2026, the Federal District Court of Puerto Rico denied the bondholders’ administrative expense claim motion purely on legal grounds. The bondholders appealed the decision, and such appeals are currently pending before the U.S. Court of Appeals for the First Circuit (First Circuit). Equitable Accounting Counterclaim. On March 30, 2026, the Company and certain other bondholders sought relief from the Federal District Court of Puerto Rico’s litigation stay with respect to their counterclaim for an equitable accounting cause of action to recover net revenues that had been wrongfully diverted from debt service since the beginning of the Title III Proceeding. On April 13, 2026, the Federal District Court of Puerto Rico issued an order indicating it was inclined to lift the litigation stay to permit the bondholders to pursue such counterclaim. At the request of the Federal District Court of Puerto Rico, the parties submitted a report and discovery plan on April 18, 2026, which included competing proposals and schedules for litigating the counterclaim, including the scope and timing of relevant discovery. As of August 6, 2026, discovery for the equitable accounting cause of action is ongoing. At the July 2026 Omnibus Hearing, the Federal District Court of Puerto Rico flagged a number of key legal issues to be resolved during the summary judgment phase of the equitable accounting counterclaim litigation, with motions on these issues targeted for submission in late September 2026. Composition of the 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 and enjoined the terminations. On December 2, 2025, the U.S. administration filed a notice of appeal of the preliminary injunction to the First Circuit. The litigation was subsequently stayed pending the U.S. Supreme Court’s decision in Trump v. Cook , a case involving the President’s authority to remove a member of the Board of Governors of the Federal Reserve System. On June 29, 2026, the U.S. Supreme Court issued its decision in Trump v. Cook . The U.S. Supreme Court concluded that the attempted removal of a Federal Reserve Board member was ineffective because required pre-removal procedures were not followed. This decision has implications for the claims asserted by the former FOMB members regarding the procedural requirements applicable to their removals. The ultimate impact of the U.S. Supreme Court’s Trump v. Cook decision on the composition of the FOMB remains 29 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued uncertain as the U.S. administration may seek to remove FOMB members following procedures in accordance with the Trump v. Cook decision. Mediation and Stayed Proceedings On July 10, 2024, following the First Circuit’s determinations that bondholders have a claim against PREPA for the full principal amount of the bonds plus matured interest and that the claim is secured by PREPA’s net revenues, including future net revenues, the Federal District Court of Puerto Rico ordered the FOMB and bondholders to resume mediation and instituted a stay of all PREPA litigation, subsequently extending mediation and the litigation stay several times. The Federal District Court of Puerto Rico most recently extended the mediation through October 31, 2026, and the litigation stay indefinitely. 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 ultimate determination on a plan of adjustment and disclosure statement: • 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 unsecured lenders of PREPA against the Company, among other parties, including various PREPA bondholders and bond insurers, seeking, among other things, declarations that the unsecured lines of credit qualify as “Current Expenses” under the trust agreement, 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 restructuring support agreement executed in May 2019 null and void. • Adversary complaint filed in 2023 by the official committee of unsecured creditors, PREPA’s employee union, PREPA’s retirement system, and certain other unsecured creditors, against the FOMB, PREPA, Puerto Rico Fiscal Agency and Financial Advisory Authority, and the PREPA bond trustee. The 2023 complaint seeks, among other things, declarations that plaintiffs’ claims are “Current Expenses” under the trust agreement, and an order subordinating the PREPA bondholders’ lien and claim to the plaintiffs’ claims. Non-Defaulting Puerto Rico Exposure As of both June 30, 2026 and December 31, 2025, the Company had $ 76 million of remaining non-defaulting Puerto Rico net par outstanding related primarily to the Puerto Rico Municipal Finance Agency (MFA). The Company’s 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. 30 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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. 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) June 30, December 31, Second Quarter Six Months 2026 2025 2026 2025 2026 2025 (dollars in millions) First lien U.S. RMBS $ 92 $ 90 $ — $ ( 4 ) $ — $ ( 2 ) Second lien U.S. RMBS ( 132 ) ( 144 ) ( 1 ) ( 2 ) ( 3 ) ( 7 ) Total U.S. RMBS $ ( 40 ) $ ( 54 ) $ ( 1 ) $ ( 6 ) $ ( 3 ) $ ( 9 ) Impact of changes in discount rates $ — $ ( 2 ) $ — $ ( 1 ) Range of discount rates 3.62 % - 5.07 % 3.45 % - 4.97 % Weighted average discount rate 4.31 % 3.84 % First lien U.S. RMBS weighted average future recovery for deferred principal balances 50.0 % 50.0 % Second lien U.S. RMBS weighted average future recoveries on charged-off loans 60.0 % 60.0 % 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 partially 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 after being held constant for 42 months, expected loss to be paid would increase from current projections by approximately $ 31 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, loss severities experience stress for four years and the initial ramp-down of the CDR was assumed to occur over eight months after being held constant for 30 months, expected loss to be paid would decrease from current projections by approximately $ 30 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. 31 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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 drivers of its projected second lien U.S. RMBS claims and reimbursements are 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 $ 45 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 $ 45 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. 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. 6. Contracts Accounted for as Financial Guaranty Insurance The portfolio of outstanding exposures discussed in Note 4. Outstanding Exposure, and Note 5. Expected Loss to be Paid (Recovered), includes contracts that are accounted for as financial guaranty insurance contracts, credit derivatives and consolidated FG VIEs. Amounts presented in this note relate only to contracts accounted for as financial guaranty insurance, unless otherwise specified. See Note 8. Derivatives, for amounts related to CDS and Note 10. Variable Interest Entities, for amounts related to consolidated FG VIEs. Premiums Net Earned Premiums Second Quarter Six Months 2026 2025 2026 2025 (in millions) Financial guaranty insurance: Scheduled net earned premiums $ 80 $ 75 $ 156 $ 151 Accelerations from refundings, terminations and modifications 11 4 5 9 Accretion of discount on net premiums receivable 10 9 20 18 Financial guaranty insurance net earned premiums 101 88 181 178 Specialty net earned premiums 1 1 3 2 Net earned premiums $ 102 $ 89 $ 184 $ 180 32 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Gross Premium Receivable, Net of Commissions Payable on Assumed Business and Allowance for Credit Losses Roll Forward Six Months 2026 2025 (in millions) Beginning of year $ 1,572 $ 1,551 Less: Specialty insurance premium receivable 2 1 Financial guaranty insurance premiums receivable 1,570 1,550 New business and supplemental premiums, net of commissions 153 124 Gross premiums received, net of commissions ( 180 ) ( 154 ) Adjustments: Changes in the expected term and debt service assumptions ( 6 ) ( 7 ) Accretion of discount, net of commissions on assumed business 11 17 Foreign exchange gain (loss) on remeasurement ( 23 ) 101 Change in allowance for credit losses ( 4 ) ( 1 ) Financial guaranty insurance premium receivable 1,521 1,630 Specialty insurance premium receivable 2 1 As of June 30, $ 1,523 $ 1,631 Approximately 66 % and 68 % of gross premiums receivable, net of commissions payable, as of June 30, 2026 and December 31, 2025, 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 CPIs, changes in expected lives, new business and changes in ratings of the insured obligations and/or the Company’s financial guaranty insurance subsidiaries. 33 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Financial Guaranty Insurance Expected Future Premium Collections and Earnings As of June 30, 2026 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 (July 1 - September 30) $ 76 $ 81 $ 10 $ 91 2026 (October 1 - December 31) 46 80 10 90 Subtotal 2026 122 161 20 181 2027 144 297 37 334 2028 131 275 35 310 2029 116 253 33 286 2030 103 235 31 266 2031-2035 420 917 132 1,049 2036-2040 338 592 96 688 2041-2045 258 395 63 458 2046-2050 194 255 35 290 2051-2055 109 124 15 139 After 2055 102 88 10 98 Total $ 2,037 $ 3,592 $ 507 $ 4,099 ____________________ (1) Net of assumed commissions payable. The future premiums to be collected are not adjusted for the allowance for credit losses. (2) Net of reinsurance. Selected Information for Financial Guaranty Insurance Policies with Premiums Paid in Installments As of June 30, 2026 December 31, 2025 (dollars in millions) Premiums receivable, net of commissions payable $ 1,521 $ 1,570 Deferred premium revenue $ 1,801 $ 1,831 Weighted-average risk-free rate used to discount premiums 2.8 % 2.7 % Weighted-average period of premiums receivable (in years) 11.8 11.7 Financial Guaranty Insurance Contracts’ Losses Reported in the Condensed Consolidated Financial Statements Loss and LAE reserve and salvage and subrogation recoverable for financial guaranty insurance obligations are discounted at risk-free rates that ranged from 2.18 % to 5.67 % with a weighted average of 4.36 % as of June 30, 2026 and 1.93 % to 5.35 % with a weighted average of 3.93 % as of December 31, 2025. 34 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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 Sector June 30, 2026 December 31, 2025 (in millions) Public finance: U.S. public finance $ ( 73 ) $ ( 66 ) Non-U.S. public finance 28 18 Public finance ( 45 ) ( 48 ) Structured finance: U.S. RMBS ( 133 ) ( 150 ) Other structured finance 58 59 Structured finance ( 75 ) ( 91 ) Total $ ( 120 ) $ ( 139 ) 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 June 30, 2026 (in millions) Net expected loss to be paid (recovered) - Financial guaranty insurance $ 179 Contra-paid, net 22 Salvage and subrogation recoverable, net 425 Loss and LAE reserve - Financial guaranty insurance contracts, net of reinsurance ( 305 ) Net expected loss to be expensed (present value) $ 321 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, changes in ratings of insured obligations and updates to loss estimates. This table excludes amounts related to FG VIEs, which are eliminated in consolidation. 35 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Net Expected Loss to be Expensed Financial Guaranty Insurance Contracts As of June 30, 2026 (in millions) 2026 (July 1 - September 30) $ 4 2026 (October 1 - December 31) 4 Subtotal 2026 8 2027 19 2028 21 2029 22 2030 21 2031-2035 88 2036-2040 50 2041-2045 39 2046-2050 34 2051-2055 16 After 2055 3 Net expected loss to be expensed (present value) 321 Future expected accretion ( 39 ) Total expected future loss and LAE $ 282 The following table presents the loss and LAE (benefit) reported in the condensed consolidated statements of operations by sector for financial guaranty insurance contracts. Loss and LAE (Benefit) by Sector Second Quarter Six Months Sector 2026 2025 2026 2025 (in millions) Public finance: U.S. public finance $ ( 3 ) $ 15 $ 9 $ 51 Non-U.S. public finance 4 14 11 20 Public finance 1 29 20 71 Structured finance: U.S. RMBS 2 — 1 — Other structured finance 1 ( 1 ) — ( 3 ) Structured finance 3 ( 1 ) 1 ( 3 ) Loss and LAE (benefit) $ 4 $ 28 $ 21 $ 68 36 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued The following tables provide information on financial guaranty insurance contracts categorized as BIG. Financial Guaranty Insurance BIG Transaction Loss Summary As of June 30, 2026 Gross Net Total BIG BIG 1 BIG 2 (4) BIG 3 Total BIG (dollars in billions) Number of risks (1) 83 15 93 191 191 Remaining weighted-average period (in years) 10.7 23.3 5.0 18.5 18.6 Outstanding exposure: Par $ 2.37 $ 4.93 $ 1.18 $ 8.48 $ 8.47 Interest 1.11 6.10 0.28 7.49 7.49 Total (2) $ 3.48 $ 11.03 $ 1.46 $ 15.97 $ 15.96 Gross Net Total BIG BIG 1 BIG 2 (4) BIG 3 Total BIG (in millions) Expected cash outflows (inflows) $ 114 $ 2,261 $ 1,216 $ 3,591 $ 3,583 Potential recoveries (3) ( 381 ) ( 1,988 ) ( 1,084 ) ( 3,453 ) ( 3,443 ) Subtotal ( 267 ) 273 132 138 140 Discount 48 ( 1 ) ( 8 ) 39 39 Expected losses to be paid (recovered) $ ( 219 ) $ 272 $ 124 $ 177 $ 179 Deferred premium revenue $ 59 $ 251 $ 96 $ 406 $ 406 Reserves (salvage) $ ( 242 ) $ 73 $ 47 $ ( 122 ) $ ( 120 ) 37 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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 ) ____________________ (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 primarily to exposures that were previously BIG and for which claims have been paid in the past. (4) The increases in BIG 2 exposure, expected losses to be paid and deferred premium revenue in 2026 relate primarily to Brightline. 7. Annuity Reinsurance Accounting Policies The Company’s annuity reinsurance agreements consist of two contracts, a PRT contract and a MYGA contract, acquired as part of the Assured Life Re Acquisition that are both accounted for under ASC 944, Financial Services – Insurance . The PRT block of business is accounted for as a long-duration limited-payment insurance contract and the MYGA block of business is accounted for as an investment-type contract. PRT On the Acquisition Date, the Company recorded (i) the invested assets and derivatives supporting the PRT block of business at fair value and designated the invested assets as available-for-sale (See Note 8. Derivatives, and Note 9. Investments for additional information); (ii) a liability for future policy benefits (LFPB) and a deferred profit liability (DPL) that are reported together in the condensed consolidated balance sheets in the line item “future policy benefits for annuity reinsurance contracts;” and (iii) a VOBA asset representing the difference between the fair value of the PRT obligation and the sum of the insurance liabilities described in (ii) above. 38 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Gross premiums are recognized as revenue when due from policyholders. As PRT agreements are single-premium reinsurance contracts, the premium on the PRT contract was collected prior to the Acquisition Date, and no future premiums are due. The LFPB is calculated using the net premium ratio approach and represents the present value of estimated future benefits and related expenses less the present value of estimated future net premiums for the PRT block of business. The principal assumptions used in the measurement of these insurance liabilities include longevity, investment returns, inflation, discount rate and other factors. Each reporting period, the LFPB is updated to reflect actual experience to date. Changes to the LFPB to reflect actual experience, along with actual claims paid, are reported in “benefit expense for annuity reinsurance contracts” in the condensed consolidated statement of operations. The DPL represents the excess of gross premiums over the LFPB at the Acquisition Date. The DPL is amortized over the lifetime of the contract and accrues interest on the unamortized balance. The amortization of the DPL is reported in “benefit expense for annuity reinsurance contracts” in the condensed consolidated statement of operations. On an annual basis, or more often if circumstances warrant, the Company conducts a comprehensive review of its assumptions based on experience, industry benchmarking and other factors, as applicable. Updates to assumptions are applied on a retrospective basis, and the change in reserves resulting from updates to assumptions is reported in “benefit expense for annuity reinsurance contracts” in the condensed consolidated statements of operations. The discount rate used to measure the LFPB is based on the yield of upper-medium grade (low-credit-risk) fixed-income instruments which is interpreted as a single-A corporate yield, constructed from the U.K. gilt curve plus an observed credit spread. The discount rate used to recognize interest accretion on the LFPB is locked in at the initial measurement of the reinsurance contract (the locked in discount rate). Each reporting period thereafter, the LFPB is remeasured using the current discount rate. The difference between the LFPB calculated using the current discount rate and the LFPB calculated using the locked in discount rate is recorded in “other comprehensive income (loss)” (OCI). MYGA On the Acquisition Date, in respect of the MYGA agreement, the Company recorded (i) funds withheld at fair value; (ii) a liability representing the account value of the assumed block of business (i.e., the policyholder account balances); (iii) a VOBA liability representing the excess of fair value of the MYGA obligation over the account value; and (iv) other payables representing pending settlement amounts due to the ceding company. The MYGA block of business is an investment-type contract accounted for under the deposit method. Deposits related to investment-type contracts are reported as deposits in “policyholder account balances for annuity reinsurance contracts” on the condensed consolidated balance sheets. Expenses consist primarily of the interest credited to policyholder deposits and are reported in “benefit expense for annuity reinsurance contracts” on the condensed consolidated statements of operations. Funds withheld represents a receivable for assets contractually withheld and legally owned by the ceding company. Funds withheld contain an embedded derivative related to the Company’s right to receive the total return on the assets supporting the funds withheld coinsurance arrangement which is measured at the fair value of the underlying assets in the condensed consolidated balance sheets. The change in the fair value of this embedded derivative is based on the unrealized gains and losses of the underlying assets and reported as a component of “fair value gains (losses) on derivatives” in the condensed consolidated statements of operations. See Note 8. Derivatives. Policyholder account balances for annuity reinsurance contracts represent the assumed contract values that have accrued to the benefit of the policyholders as of the balance sheet date and are equal to deposits plus interest credited less withdrawals and other charges assessed against the account balance, as applicable. Future Policy Benefits for Annuity Reinsurance Contracts The following table presents the components of “future policy benefits for annuity reinsurance contracts” on the condensed consolidated balance sheet. 39 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Future Policy Benefits for Annuity Reinsurance Contracts As of June 30, 2026 (in millions) LFPB (1) $ 450 DPL 34 Future policy benefits for annuity reinsurance contracts $ 484 ____________________ (1) See the roll forward of LFPB table below for further information. Roll Forward of LFPB Six Months 2026 (dollars in millions) Present value of expected future policy benefits Assured Life Re Acquisition, January 21, 2026 $ 470 Effect of changes in cash flow assumptions ( 1 ) Effect of actual variances from expected experience 1 Adjusted balance as of January 21, 2026 470 Interest accrual 9 Benefit payments ( 12 ) Foreign exchange remeasurement ( 6 ) Ending balance at original discount rate 461 Effect of changes in discount rate assumptions ( 11 ) Balance, end of period $ 450 Weighted-average liability duration (in years) (1) 10.0 Weighted-average original discount rate 5.9 % Weighted-average current discount rate 6.1 % Expected future benefit payments, undiscounted $ 987 Expected future benefit payments, discounted $ 450 ____________________ (1) The weighted average duration represents average cohort-level duration, weighted by the reserves amount, derived from the discounted expected future benefit cash flows. The interest expense included in “benefit expense for annuity reinsurance contracts” in the condensed consolidated statements of operations was $ 6 million and $ 10 million for second quarter 2026 and six months 2026, respectively. Policyholder Account Balances for Annuity Reinsurance Contracts The following table presents the balances and the rollforward of “policyholder account balances for annuity reinsurance contracts”, which consists of MYGA, on the condensed consolidated balance sheet. 40 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Roll Forward of Policyholder Account Balances for Annuity Reinsurance Contracts Six Months 2026 (dollars in millions) Balance, beginning of year $ — Assured Life Re Acquisition, January 21, 2026 270 Policy charges — Surrenders and withdrawals ( 20 ) Benefit payments — Interest credited 6 Balance, end of period $ 256 Weighted-average crediting rate 5.6 % Net amount at risk $ — Cash surrender value $ 238 The following table presents policyholder account balances for annuity reinsurance contracts by range of guaranteed minimum crediting rates offered at inception. The Company is currently not accepting renewals on the MYGA book of business. As of June 30, 2026 Range of Guaranteed Minimum Crediting Rate At Guaranteed Minimum (in millions) 4.00 % - 5.00 % $ 13 5.00 % - 6.00 % 243 Total $ 256 8. Derivatives 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 41 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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. The components of the Company’s credit derivative net par outstanding and net fair value asset (liability) by sector are presented in the table below. The estimated remaining weighted average life of credit derivatives was 8.6 years as of both June 30, 2026 and December 31, 2025. Credit Derivatives (1) Net Par Outstanding Net Fair Value Asset (Liability) As of June 30, 2026 As of December 31, 2025 As of June 30, 2026 As of December 31, 2025 (in billions) (in millions) U.S. public finance $ 1.0 $ 1.0 $ ( 2 ) $ ( 2 ) Non-U.S. public finance 1.3 1.6 ( 11 ) ( 12 ) U.S. structured finance 0.1 0.2 ( 1 ) ( 1 ) Non-U.S. structured finance 1.2 1.0 — — Total credit derivatives $ 3.6 $ 3.8 $ ( 14 ) $ ( 15 ) ____________________ (1) See Note 5. Expected Loss to be Paid (Recovered), for expected loss to be paid on credit derivatives. 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. CDS Spread on AG (in basis points) As of June 30, 2026 As of December 31, 2025 As of June 30, 2025 As of December 31, 2024 Five-year CDS spread 73 69 74 75 One-year CDS spread 25 23 25 25 Fair Value of Credit Derivative Assets (Liabilities) and Effect of AG Credit Spread As of June 30, 2026 December 31, 2025 (in millions) Fair value of credit derivatives before effect of AG credit spread $ ( 38 ) $ ( 40 ) Plus: Effect of AG credit spread 24 25 Net fair value of credit derivatives $ ( 14 ) $ ( 15 ) The fair value of CDS contracts as of June 30, 2026, 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. Annuity Reinsurance Derivatives Accounting Policy The Company purchases swaps and forward contracts to manage foreign currency, interest rate and inflation exposure in its annuity reinsurance business. These derivative instruments are subject to a master netting arrangement, which creates a right of offset for amounts due to and due from a counterparty that is enforceable in the event of a default or bankruptcy. These derivatives are measured at fair value and reported on a gross basis in “other assets” or “other liabilities” on the condensed 42 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued consolidated balance sheets, with changes in fair value reported in “fair value gains (losses) on derivatives” in the condensed consolidated statements of operations. The Company also evaluates its reinsurance contract terms to identify embedded derivatives. If (i) the embedded derivative is not clearly and closely related to the economic characteristics of the host reinsurance contract, (ii) the reinsurance contract is not subject to recurring fair value measurement, and (iii) a separate instrument with the same terms would qualify as a derivative, then the embedded derivative is bifurcated and measured at fair value. The Company identified an embedded derivative whereby the Company has a right to receive the total return on the assets supporting the funds withheld coinsurance arrangement related to the MYGA block of business. The fair value of this embedded derivative is included in “funds withheld” on the condensed consolidated balance sheets and the change in its fair value, which is based on the unrealized gains and losses of the underlying assets, is reported in “fair value gains (losses) on derivatives” in the condensed consolidated statements of operations. See Note 7. Annuity Reinsurance. The following table presents the notional amounts and the net fair value asset (liability) of the freestanding derivatives. Freestanding Derivatives (1) As of June 30, 2026 Notional Net Fair Value Asset (Liability) (in billions) (in millions) Cross-currency swaps $ 0.1 $ ( 1 ) Interest rate swaps — ( 2 ) Inflation swaps 0.2 ( 2 ) Total freestanding derivatives $ 0.3 $ ( 5 ) ____________________ (1) Excludes the embedded derivative in funds withheld. Effect of Changes in Fair Value of Derivatives on Condensed Consolidated Statements of Operations Fair Value Gains (Losses) on Derivatives Second Quarter Six Months 2026 2025 2026 2025 (in millions) Fair value gains (losses) on credit derivatives: Realized gains (losses) and other settlements (1) $ 1 $ — $ 3 $ 105 Net unrealized gains (losses) 1 1 — — Fair value gains (losses) on credit derivatives 2 1 3 105 Fair value gains (losses) on annuity reinsurance derivatives: Cross-currency swaps 2 — ( 4 ) — Interest rate swaps — — ( 1 ) — Inflation swaps ( 3 ) — 2 — Funds withheld - embedded derivative 4 — 7 — Fair value gains (losses) on derivatives $ 5 $ 1 $ 7 $ 105 ____________________ (1) Six months 2025 results include $ 103 million gain recognized in connection with the LBIE litigation, which represents the full satisfaction of the judgment the Company was awarded and its claims for attorneys’ fees, expenses and interest. 43 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 9. Investments The largest component of the investment portfolio is fixed-maturity securities, the majority of which are investment grade and managed by external investment 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. Pursuant to a letter agreement effective July 1, 2023 (Letter Agreement), AG engaged Sound Point to be its sole alternative credit manager and transitioned to Sound Point the management of certain existing alternative investments and related commitments. Under the Letter Agreement, AG, including through its investment subsidiary, AGAS, agreed, subject to the terms and conditions of the Letter Agreement, to invest in funds, other vehicles and separately managed accounts managed by Sound Point. When aggregated with the alternative investments and commitments transitioned from the Company and any reinvestments (collectively, Sound Point Investments), together with investments made by other Assured Guaranty affiliates, the total amount of such investments is expected to be $ 1 billion. AG has invested with Sound Point across multiple strategies in order to seek to enhance investment returns and anticipates continuing to invest with Sound Point pursuant to 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, at which point the Letter Agreement may be terminated without cause. In addition, AG has agreed to reinvest all gains and dividends from Sound Point Investments until July 1, 2025, and fifty percent of such gains and dividends thereafter until July 1, 2033. Beginning July 1, 2028, AG may elect to reduce the amounts invested or required to be reinvested in certain Sound Point Investments under the Letter Agreement, subject to corresponding adjustments 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 June 30, 2026 December 31, 2025 (in millions) Fixed-maturity securities, available-for-sale $ 6,817 $ 6,369 Fixed-maturity securities, trading 131 124 Short-term investments 792 903 Other invested assets: Equity method investments: Ownership interest in Sound Point 398 415 Funds and other investments 676 664 Other (1) 116 12 Total (2) $ 8,930 $ 8,487 ____________________ (1) The June 30, 2026 balance consists primarily of loans issued by a U.K. regulated utility and a U.S. infrastructure project to which the Company has insured exposure. (2) In the investment portfolio, the aggregate carrying value of Sound Point managed investments was $ 548 million and $ 628 million as of June 30, 2026 and December 31, 2025, respectively, excluding the Company’s ownership interest in Sound Point and, as of December 31, 2025, certain investments in funds that were accounted for as CIVs. As of June 30, 2026 and December 31, 2025, based on fair value, 7.4 % and 8.6 %, respectively, of available-for-sale fixed-maturity securities were either rated BIG or not rated, primarily consisting of collateralized loan obligation (CLO) equity tranches, liquidity bonds issued by a U.K. regulated utility and Loss Mitigation Securities. As of June 30, 2026 and December 31, 2025, the carrying value of CLO equity tranches was $ 182 million and $ 228 million, respectively. As of June 30, 2026 and December 31, 2025, the carrying value of liquidity bonds issued by a U.K. regulated utility to which the Company has insured exposure was $ 160 million and $ 168 million, respectively. As of June 30, 2026 and December 31, 2025, the carrying value of Loss Mitigation Securities was $ 151 million and $ 140 million, respectively. Fixed-maturity securities classified as trading securities primarily include Puerto Rico contingent value instruments (CVIs) and are not rated. In 2022, as a result of the resolution of certain defaulting Puerto Rico exposures, the Company 44 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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 June 30, 2026 and December 31, 2025 was $ 127 million and $ 114 million, respectively. The Company may sell any CVIs it continues to hold. The investment portfolio includes $ 928 million in alternative investments primarily consisting of (i) $ 182 million of CLO equity securities classified as available-for-sale fixed-maturity securities, and (ii) $ 681 million of investments across various asset classes that are reported in other invested assets. The Company’s alternative investment commitments as of June 30, 2026 include $ 480 million in unfunded commitments which together with its $ 928 million in funded commitments total $ 1.4 billion. Alternative investment commitments of $ 1.4 billion include the $ 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, commercial real estate finance, CLOs and other strategies. Since the Assured Life Re Acquisition Date, the investment portfolio includes available-for-sale fixed-maturity securities and short-term investments supporting the PRT block of business that are held in a consolidated VIE. See Note 10. Variable Interest Entities. Accrued investment income, which is reported in “other assets,” was $ 77 million and $ 70 million as of June 30, 2026 and December 31, 2025, respectively. Available-for-Sale Fixed-Maturity Securities by Security Type As of June 30, 2026 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 21 % $ 1,523 $ ( 13 ) $ 30 $ ( 71 ) $ 1,469 U.S. government and agencies 1 49 — 1 ( 5 ) 45 Corporate securities (2) 50 3,556 ( 7 ) 35 ( 145 ) 3,439 Mortgage-backed securities (3): RMBS 11 781 ( 28 ) 6 ( 33 ) 726 Commercial mortgage-backed securities (CMBS) 4 284 — 1 ( 3 ) 282 Asset-backed securities: CLOs 7 485 ( 24 ) 3 ( 63 ) 401 Other (4) 3 238 — 3 ( 1 ) 240 Non-U.S. government securities 3 231 — 1 ( 17 ) 215 Total available-for-sale fixed-maturity securities 100 % $ 7,147 $ ( 72 ) $ 80 $ ( 338 ) $ 6,817 45 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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 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 ____________________ (1) Percentages are based on amortized cost. (2) Corporate securities include taxable securities issued by universities and hospitals. (3) U.S. government-agency obligations represented 71 % and 75 % of mortgage-backed securities as of June 30, 2026 and December 31, 2025, respectively, based on fair value. (4) This category includes an investment in an affiliated entity with amortized cost of $ 59 million and $ 53 million as of June 30, 2026 and December 31, 2025, respectively, and fair value of $ 62 million and $ 54 million as of June 30, 2026 and December 31, 2025, 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 June 30, 2026 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 $ 285 $ ( 3 ) $ 499 $ ( 68 ) $ 784 $ ( 71 ) U.S. government and agencies 24 — 5 ( 5 ) 29 ( 5 ) Corporate securities 1,411 ( 29 ) 558 ( 87 ) 1,969 ( 116 ) Mortgage-backed securities: RMBS 179 ( 1 ) 91 ( 6 ) 270 ( 7 ) CMBS 146 ( 2 ) 48 ( 1 ) 194 ( 3 ) Asset-backed securities: CLOs 81 ( 3 ) 20 — 101 ( 3 ) Other 68 ( 1 ) 9 — 77 ( 1 ) Non-U.S. government securities 164 ( 9 ) 19 ( 8 ) 183 ( 17 ) Total $ 2,358 $ ( 48 ) $ 1,249 $ ( 175 ) $ 3,607 $ ( 223 ) Number of securities (1) 725 646 1,349 46 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), 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, 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 ___________________ (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 when determining whether a security had a credit loss. The Company has determined that the unrealized losses recorded as of June 30, 2026 and December 31, 2025 were primarily related to higher interest rates and spread compression rather than credit quality. As of June 30, 2026, 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 June 30, 2026, of the securities in an unrealized loss position for which an allowance for credit loss was not recorded, 274 securities had unrealized losses in excess of 10% of their carrying value, whereas as of December 31, 2025, 253 securities had unrealized losses in excess of 10% of their carrying value. The total unrealized loss for these securities was $ 147 million as of both June 30, 2026 and December 31, 2025. The amortized cost and estimated fair value of available-for-sale fixed-maturity securities by contractual maturity as of June 30, 2026 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 June 30, 2026 Amortized Cost Estimated Fair Value (in millions) Due within one year $ 178 $ 182 Due after one year through five years 1,371 1,354 Due after five years through 10 years 2,169 2,091 Due after 10 years 2,364 2,182 Mortgage-backed securities: RMBS 781 726 CMBS 284 282 Total $ 7,147 $ 6,817 47 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), 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 $ 73 million and $ 77 million as of June 30, 2026 and December 31, 2025, respectively. The total collateral funded into a reinsurance trust or a similar account by certain AGL subsidiaries or otherwise restricted for the benefit of other AGL subsidiaries in accordance with statutory and regulatory requirements had a fair value of $ 796 million and $ 813 million as of June 30, 2026 and December 31, 2025, respectively. Fixed-maturity securities of $ 583 million, short-term investments of $ 3 million and cash of $ 7 million are held in a consolidated VIE supporting the PRT block of business. See Note 10. Variable Interest Entities. The use of the VIE’s assets is restricted based on the terms of the PRT reinsurance agreement. Total above includes $ 7 million of fixed-maturity securities that were pledged as collateral for derivatives. Income from Investments The components of income derived from the investment portfolio are presented in the following tables. Income from Investments Second Quarter Six Months 2026 2025 2026 2025 (in millions) Investment income: Fixed-maturity securities, available-for-sale (1) $ 91 $ 77 $ 176 $ 151 Short-term investments 8 12 16 25 Other invested assets 1 1 2 2 Investment income 100 90 194 178 Investment expenses ( 2 ) ( 1 ) ( 4 ) ( 2 ) Net investment income $ 98 $ 89 $ 190 $ 176 Fair value gains (losses) on trading securities (2) $ 7 $ 2 $ 13 $ 3 Equity in earnings (losses) of investees: Ownership interest in Sound Point $ ( 5 ) $ ( 1 ) $ 1 $ 12 Funds and other investments ( 6 ) 4 19 44 Equity in earnings (losses) of investees $ ( 11 ) $ 3 $ 20 $ 56 ____________________ (1) Amounts include $ 3 million, $ 7 million, $ 6 million and $ 14 million of investment income on Loss Mitigation Securities for second quarter 2026, second quarter 2025, six months 2026 and six months 2025, respectively. (2) Fair value gains on trading securities pertaining to securities still held as of June 30, 2026 were $ 7 million for second quarter 2026 and $ 12 million for six months 2026. Fair value gains on trading securities pertaining to securities still held as of June 30, 2025 were $ 2 million for second quarter 2025 and $ 3 million for six months 2025. Realized Investment Gains (Losses) The table below presents the components of net realized investment gains (losses). Realized gains and losses on sales of investments are determined using the specific identification method. 48 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Net Realized Investment Gains (Losses) Second Quarter Six Months 2026 2025 2026 2025 (in millions) Gross realized gains on sales of available-for-sale securities $ 3 $ 1 $ 5 $ 4 Gross realized losses on sales of available-for-sale securities ( 5 ) ( 1 ) ( 7 ) ( 9 ) Net foreign currency gains (losses) — — 1 ( 1 ) Change in the allowance for credit losses and intent to sell (1) ( 9 ) ( 3 ) ( 25 ) ( 13 ) Other net realized gains (losses) 1 ( 3 ) 1 ( 3 ) Net realized investment gains (losses) $ ( 10 ) $ ( 6 ) $ ( 25 ) $ ( 22 ) ____________________ (1) The change in the allowance for credit losses for second quarter 2026, second quarter 2025 and six months 2026 was primarily related to CLO equity tranches. The change in the allowance for credit losses for six months 2025 was primarily related to Loss Mitigation Securities. The proceeds from sales of fixed-maturity securities classified as available-for-sale were $ 492 million in second quarter 2026, $ 211 million in second quarter 2025, $ 585 million in six months 2026 and $ 427 million in six months 2025. 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 Second Quarter Six Months 2026 2025 2026 2025 (in millions) Balance, beginning of period $ 63 $ 45 $ 54 $ 60 Additions for securities for which credit losses were not previously recognized 1 3 12 3 Additions (reductions) for securities for which credit losses were previously recognized 8 ( 1 ) 13 9 Write-offs charged against the allowance — — ( 7 ) ( 25 ) Balance, end of period $ 72 $ 47 $ 72 $ 47 The Company purchased one Loss Mitigation Security with credit deterioration during second quarter 2026 and six months 2026. The Company did not purchase any other securities with credit deterioration during the periods presented. The majority of securities with credit losses relate to RMBS, CLOs and obligations of state and political subdivisions. 10. Variable Interest Entities 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 49 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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 per 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 the failure of a servicer or collateral manager 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 generally 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 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. The Company elected the fair value option (FVO) for all assets and liabilities of its consolidated FG VIEs, except for one FG VIE that was consolidated during the fourth quarter of 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 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 “gains (losses) on financial guaranty variable interest entities” in the condensed 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 (loss).” Interest income and interest expense are derived from the trustee reports and also included in “gains (losses) on financial guaranty variable interest entities.” As of June 30, 2026 and December 31, 2025, the Company consolidated 23 and 24 FG VIEs, respectively. 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 5. Expected Loss to be Paid (Recovered). 50 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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 June 30, 2026 December 31, 2025 (in millions) FG VIEs’ assets: U.S. RMBS (1) $ 134 $ 142 Other (includes $ 30 and $ 30 at fair value) (2) 64 70 Total FG VIEs’ assets $ 198 $ 212 FG VIEs’ liabilities with recourse: U.S. RMBS (1) $ 138 $ 147 Other (includes $ – and $ 35 at fair value) 34 35 Total FG VIEs’ liabilities with recourse $ 172 $ 182 FG VIEs’ liabilities without recourse: U.S. RMBS (1) $ 9 $ 9 Other (includes $ – and $ 6 at fair value) 7 7 Total FG VIEs’ liabilities without recourse $ 16 $ 16 ____________________ (1) U.S. RMBS assets and liabilities are measured at fair value under the FVO. (2) Includes a contract asset related to a services agreement of approximately $ 34 million and $ 40 million as of June 30, 2026 and December 31, 2025, respectively, accounted for in accordance with ASC 606, Revenue from Contracts with Customers , as well as debt and equity investments, and cash and cash equivalents. The inception-to-date change in fair value of the FG VIEs’ liabilities with recourse measured at fair value under the FVO attributable to the ISCR is calculated by holding all current period assumptions constant for each security and isolating the effect of the change in the Company’s CDS spread from the most recent date of consolidation to the current period. In general, if the Company’s CDS spread tightens, more value will be assigned to the Company’s credit; however, if the Company’s CDS spread widens, less value is assigned to the Company’s credit. Selected Information for FG VIEs’ Assets and Liabilities Measured under the FVO As of June 30, 2026 December 31, 2025 (in millions) Excess of unpaid principal over fair value of: FG VIEs’ assets $ 250 $ 252 FG VIEs’ liabilities with recourse 33 31 FG VIEs’ liabilities without recourse 15 15 Unpaid principal balance for FG VIEs’ assets that were 90 days or more past due 20 20 Unpaid principal for FG VIEs’ liabilities with recourse (1) 171 178 ____________________ (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. 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 51 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued CIVs is not available for corporate liquidity needs, except to the extent of the Company’s investment in the funds, subject to redemption provisions. During six months 2026, the Company deconsolidated a CIV related to its investments with Sound Point affiliated entities and recognized a gain on deconsolidation of $ 2 million, which was reported in “fair value gains (losses) on consolidated investment vehicles.” As of June 30, 2026, the Company did not consolidate any CIVs. As of December 31, 2025, the Company consolidated one CIV with assets of $ 175 million. Noncontrolling Interest in FG VIEs and CIVs Noncontrolling interest (NCI) represents the portion of the consolidated FG VIEs and CIVs 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. Annuity Reinsurance VIEs The assets related to the PRT block of business are held in a sub-fund of an Irish collective asset-management vehicle which meets the definition of a VIE (the PRT VIE). The Company has determined that it is the PRT VIE’s primary beneficiary and, therefore, consolidates the entity in its condensed consolidated financial statements. In instances where the Company consolidates a VIE that was established as part of an assumed annuity reinsurance contract, the Company classifies the assets of that VIE in the financial statement line items that most accurately reflect their nature as opposed to a one-line-item presentation for the VIE’s assets. As of June 30, 2026, the assets of the PRT VIE consisted of available-for-sale fixed-maturity securities of $ 583 million, short-term investments of $ 3 million, cash of $ 7 million, accrued interest of $ 9 million reported in “other assets,” and a net derivative liability of $ 6 million reported in “other assets” and “other liabilities.” Non-Consolidated VIEs As described in Note 4. Outstanding Exposure, the Company monitors all policies in the insured portfolio. Of the approximately 16 thousand policies monitored as of June 30, 2026, approximately 15 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 both June 30, 2026 and December 31, 2025, the Company identified 53 policies 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 June 30, 2026, the Company’s maximum exposure to losses relating to these VIEs was $ 827 million, which is limited to the carrying value of the investment vehicles. 11. Fair Value Measurement 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 52 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued assumptions. During six months 2026, no changes were made to the Company’s valuation models that had (or are expected to have) a material impact on the Company’s condensed consolidated balance sheets, statements of operations and 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 was a transfer of fixed-maturity trading securities to Level 3 during six months 2026 as observable inputs were no longer available to the Company. 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 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 June 30, 2026, the Company used models to price 146 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 53 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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. Derivatives 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. 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 creditworthiness 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 June 30, 2026 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 since 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. 54 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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 both June 30, 2026 and December 31, 2025. Annuity Reinsurance Derivatives The Company’s freestanding derivatives include cross-currency swaps, interest rate swaps, inflation swaps and currency forwards and are classified as Level 2. These derivative valuations are determined by third-party pricing services using pricing models with inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. Funds withheld are carried at fair value as they include an embedded derivative representing a total return swap. Funds withheld are measured at fair value based on the fair value of investments held by the cedant. Funds withheld is classified as Level 3. While most of the underlying investments of the funds withheld portfolio are Level 2, certain of the underlying investments are classified as Level 3 as they require certain significant inputs which are not observable. 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 materially change 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 the assets and liabilities of the FG VIEs are generally determined with the assistance of an independent third party and based on a discounted cash flow approach. The third-party pricing service utilizes an internal model to determine an appropriate yield at which to discount the cash flows of the security by factoring in collateral types, weighted-average lives and other structural attributes specific to the security being priced. The expected yield is further calibrated by utilizing algorithms designed to aggregate market color, received by the independent third party, on comparable bonds. The models used to price the FG VIEs’ liabilities 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 55 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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. 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 condensed consolidated statements of operations. Other Assets 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 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 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. The fair value of CCS, which is reported in “other assets” in the condensed 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. The change in fair value of the CCS is reported in “fair value gains (losses) on committed capital securities” in the condensed 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 net asset value (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 condensed consolidated statements of operations. 56 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Amounts recorded at fair value in the Company’s condensed consolidated financial statements are presented in the tables below. Fair Value Hierarchy of Financial Instruments Carried at Fair Value As of June 30, 2026 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 $ — $ 1,459 $ 10 $ 1,469 U.S. government and agencies — 45 — 45 Corporate securities — 3,279 160 3,439 Mortgage-backed securities: RMBS — 571 155 726 CMBS — 282 — 282 Asset-backed securities — 178 463 641 Non-U.S. government securities — 215 — 215 Total fixed-maturity securities, available-for-sale — 6,029 788 6,817 Fixed-maturity securities, trading — 127 4 131 Short-term investments 792 — — 792 Other invested assets (1) — — 3 3 Funds withheld — — 296 296 FG VIEs’ assets — 21 143 164 Other assets 89 71 27 187 Total assets carried at fair value $ 881 $ 6,248 $ 1,261 $ 8,390 Liabilities: FG VIEs’ liabilities (2) $ — $ — $ 147 $ 147 Other liabilities — 6 21 27 Total liabilities carried at fair value $ — $ 6 $ 168 $ 174 57 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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 ___________________ (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 of December 31, 2025. See Note 10. Variable Interest Entities. 58 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), 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 second quarter 2026, second quarter 2025, six months 2026 and six months 2025. Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Second Quarter 2026 Fixed-Maturity Securities, Available-for-Sale Obligations of State and Political Subdivisions Corporate RMBS Asset- Backed Securities Fixed-Maturity Securities, Trading Funds Withheld FG VIEs’ Assets Other (7) (in millions) Fair value as of March 31, 2026 $ 10 $ 162 $ 140 $ 429 $ 8 $ 296 $ 146 $ 30 Total pre-tax realized and unrealized gains (losses) recorded in: Net income (loss) — 1 (1) 2 (1) 2 (1) — 4 (6) 3 (2) ( 8 ) (3) Other comprehensive income (loss) — ( 3 ) 17 20 — — — — Purchases — — 2 48 — — — — Settlements — — ( 6 ) ( 36 ) ( 4 ) ( 4 ) ( 6 ) — Deconsolidations — — — — — — — — Fair value as of June 30, 2026 $ 10 $ 160 $ 155 $ 463 $ 4 $ 296 $ 143 $ 22 Change in unrealized gains (losses) related to financial instruments held as of June 30, 2026 included in: Earnings $ ( 1 ) (9) $ 4 (6) $ 2 (2) $ ( 8 ) (3) OCI $ — $ ( 3 ) $ 17 $ 20 $ — Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Second Quarter 2026 Credit Derivative Liability, net (5) FG VIEs’ Liabilities (8) (in millions) Fair value as of March 31, 2026 $ ( 16 ) $ ( 152 ) Total pre-tax realized and unrealized gains (losses) recorded in: Net income (loss) 2 (6) ( 2 ) (2) Other comprehensive income (loss) — 2 Settlements — 5 Fair value as of June 30, 2026 $ ( 14 ) $ ( 147 ) Change in unrealized gains (losses) related to financial instruments held as of June 30, 2026 included in: Earnings $ 1 (6) $ ( 1 ) (2) OCI $ 2 59 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Second Quarter 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 Other (7) (in millions) Fair value as of March 31, 2025 $ 10 $ 5 $ 144 $ 983 $ 5 $ 145 $ 118 $ 6 Total pre-tax realized and unrealized gains (losses) recorded in: Net income (loss) 2 (1) — 1 (1) 11 (1) — 4 (2) 3 (4) ( 1 ) (3) Other comprehensive income (loss) — 10 4 10 — — — — Purchases — 69 — — — — — — Sales — — — ( 3 ) — — — — Settlements ( 2 ) — ( 7 ) ( 24 ) ( 1 ) ( 5 ) — — Consolidations — — — — — 9 — — Fair value as of June 30, 2025 $ 10 $ 84 $ 142 $ 977 $ 4 $ 153 $ 121 $ 5 Change in unrealized gains (losses) related to financial instruments held as of June 30, 2025 included in: Earnings $ — $ 3 (2) $ 3 (4) $ ( 1 ) (3) OCI $ — $ 10 $ 4 $ 10 $ — Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Second Quarter 2025 Credit Derivative Liability, net (5) FG VIEs’ Liabilities (8) (in millions) Fair value as of March 31, 2025 $ ( 30 ) $ ( 163 ) Total pre-tax realized and unrealized gains (losses) recorded in: Net income (loss) 1 (6) ( 3 ) (2) Other comprehensive income (loss) — 1 Settlements — 4 Fair value as of June 30, 2025 $ ( 29 ) $ ( 161 ) Change in unrealized gains (losses) related to financial instruments held as of June 30, 2025 included in: Earnings $ 1 (6) $ ( 2 ) (2) OCI $ 1 60 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Six Months 2026 Fixed-Maturity Securities, Available-for-Sale Obligations of State and Political Subdivisions Corporate RMBS Asset- Backed Securities Fixed-Maturity Securities, Trading Funds Withheld FG VIEs’ Assets Assets of CIVs Other (7) (in millions) Fair value as of December 31, 2025 $ 10 $ 168 $ 144 $ 511 $ 4 $ — $ 150 $ 167 $ 24 Assured Life Re Acquisition — — — — — 293 — — — Total pre-tax realized and unrealized gains (losses) recorded in: Net income (loss) — 2 (1) 4 (1) ( 2 ) (1) — 7 (6) 3 (2) 4 (4) ( 2 ) (3) Other comprehensive income (loss) — ( 10 ) 16 ( 26 ) — — — — — Purchases — — 2 62 — — — — — Settlements — — ( 11 ) ( 82 ) ( 5 ) ( 4 ) ( 10 ) ( 165 ) — Deconsolidations — — — — — — — ( 6 ) — Transfers into Level 3 — — — — 5 — — — — Fair value as of June 30, 2026 $ 10 $ 160 $ 155 $ 463 $ 4 $ 296 $ 143 $ — $ 22 Change in unrealized gains (losses) related to financial instruments held as of June 30, 2026 included in: Earnings $ ( 1 ) (9) $ 7 (6) $ 2 (2) $ — $ ( 2 ) (3) OCI $ — $ ( 10 ) $ 16 $ ( 26 ) $ — Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Six Months 2026 Credit Derivative Liability, net (5) FG VIEs’ Liabilities (8) (in millions) Fair value as of December 31, 2025 $ ( 15 ) $ ( 156 ) Total pre-tax realized and unrealized gains (losses) recorded in: Net income (loss) 3 (6) ( 1 ) (2) Other comprehensive income (loss) — 2 Settlements ( 2 ) 8 Fair value as of June 30, 2026 $ ( 14 ) $ ( 147 ) Change in unrealized gains (losses) related to financial instruments held as of June 30, 2026 included in: Earnings $ — $ — OCI $ 2 61 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Six Months 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 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) — 4 (1) 18 (1) — 7 (2) 22 (4) 1 (3) Other comprehensive income (loss) — 10 6 11 — — — ( 1 ) Purchases — 74 — — — — — — Sales — — — ( 12 ) — — — — Settlements ( 2 ) — ( 13 ) ( 71 ) ( 1 ) ( 10 ) — — Consolidations — — — — — 9 — — Fair value as of June 30, 2025 $ 10 $ 84 $ 142 $ 977 $ 4 $ 153 $ 121 $ 5 Change in unrealized gains (losses) related to financial instruments held as of June 30, 2025 included in: Earnings $ — $ 5 (2) $ 22 (4) $ 1 (3) OCI $ — $ 10 $ 6 $ 11 $ ( 1 ) Roll Forward of Level 3 Assets (Liabilities) at Fair Value on a Recurring Basis Six Months 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) 105 (6) ( 5 ) (2) Other comprehensive income (loss) — — Settlements ( 105 ) 8 Fair value as of June 30, 2025 $ ( 29 ) $ ( 161 ) Change in unrealized gains (losses) related to financial instruments held as of June 30, 2025 included in: Earnings $ — $ ( 4 ) (2) OCI $ — ____________________ (1) Included in “net realized investment gains (losses)” or “net investment income.” (2) Reported in “gains (losses) on financial guaranty variable interest entities.” (3) Reported in “fair value gains (losses) on committed capital securities,” “net investment income” or “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 condensed consolidated balance sheets. (6) Reported in “fair value gains (losses) on derivatives.” (7) Includes CCS and other invested assets. (8) Includes FG VIEs’ liabilities with recourse and FG VIEs’ liabilities without recourse. (9) Reported in “fair value gains (losses) on trading securities.” 62 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Level 3 Fair Value Disclosures Quantitative Information About Level 3 Fair Value Inputs As of June 30, 2026 Financial Instrument Description Fair Value Assets (Liabilities) (in millions) Significant Unobservable Inputs Range Weighted Average (3) Investments (2): Fixed-maturity securities, available-for-sale (1): Obligations of state and political subdivisions $ 10 Yield 4.8 % - 15.0 % 7.1 % Corporate 160 Yield 6.0 % - 9.0 % 6.2 % RMBS 155 Conditional prepayment rate (CPR) 0.0 % - 19.5 % 4.7 % CDR 1.3 % - 18.5 % 5.6 % Loss severity 40.0 % - 125.0 % 66.1 % Yield 7.3 % - 10.4 % 8.0 % Asset-backed securities: CLOs 401 Discount margin 0.4 % - 2.9 % 1.5 % Yield 12.2 % - 32.5 % 20.8 % Others 62 Yield 8.7 % Fixed-maturity securities, trading (1) 4 Yield 3.7 % - 18.0 % 15.2 % Funds withheld 296 Discount margin 2.1 % - 5.9 % 4.4 % FG VIEs’ assets (1) 143 CPR 0.3 % - 25.2 % 5.9 % CDR 1.2 % - 41.0 % 10.6 % Loss severity 45.0 % - 100.0 % 83.8 % Yield 6.4 % - 9.4 % 7.3 % Other assets (1) 20 Implied Yield 6.4 % - 6.9 % 6.7 % Term (years) 10 years Credit derivative liabilities, net (1) ( 14 ) Hedge cost (in basis points) (bps) 11.9 - 29.3 15.9 Bank profit (in bps) 63.3 - 241.9 126.4 Internal credit rating AAA - CCC A+ Discount rates of future expected premium cash flows 3.9 % - 4.4 % 4.3 % FG VIEs’ liabilities (1) ( 147 ) CPR 0.3 % - 25.2 % 5.9 % CDR 1.2 % - 41.0 % 10.6 % Loss severity 45.0 % - 100.0 % 83.8 % Yield 5.4 % - 8.9 % 6.9 % ___________________ (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) Weighted average is calculated as a percentage of current par outstanding for all categories except for “fixed-maturity securities, trading,” and “funds withheld” for which it is calculated as a percentage of fair value. 63 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 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 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 (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 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. 64 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), 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 contracts. 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. Policyholder Account Balances for Annuity Reinsurance Contracts The fair value of policyholder account balances for annuity reinsurance contracts associated with investment-type contracts not accounted for at fair value is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined using current risk-free interest rates, adding a spread to reflect the Company’s non-performance risk and subtracting a risk margin to reflect uncertainty inherent in the projected cash flows. The Company classified the fair value of policyholder account balances for annuity reinsurance 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 June 30, 2026 As of December 31, 2025 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value (in millions) Assets (liabilities): Other assets (including other invested assets) (1) $ 200 $ 207 $ 90 $ 91 Financial guaranty insurance contracts (2) ( 1,949 ) ( 1,824 ) ( 1,906 ) ( 1,485 ) Policyholder account balances for annuity reinsurance contracts ( 256 ) ( 266 ) — — Long-term debt ( 1,706 ) ( 1,592 ) ( 1,704 ) ( 1,610 ) FG VIEs’ liabilities ( 40 ) ( 39 ) — — Other liabilities (1) ( 20 ) ( 20 ) ( 18 ) ( 18 ) ____________________ (1) The Company’s other assets and other liabilities primarily consist of accrued interest and receivables for securities sold and payables for securities purchased, for which the carrying value approximates fair value. Other assets as of June 30, 2026 also include loans issued by a U.K. regulated utility and a U.S. infrastructure project to which the Company has insured exposure. Valuations for these loans were based on either observed market pricing of comparable securities or a discounted cash flow analysis using market-derived spread assumptions. The Company classified the fair value of loans as Level 3 in the fair value hierarchy. (2) 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. 65 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 12. Income Taxes Overview 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. AGL’s subsidiaries are subject to income taxes imposed by the local tax authorities in the jurisdictions in which they operate and file applicable tax returns. In addition, AGRO, a Bermuda-domiciled company, has elected under Internal Revenue Code Section 953(d) to be taxed as a U.S. domestic corporation. Assured Life Re, another Bermuda-domiciled company, plans to elect under Internal Revenue Code Section 953(d) to be taxed as a U.S. domestic corporation beginning with the 2026 tax year. As a result of this election, the Company started accruing and recording U.S. federal income taxes related to Assured Life Re in the first quarter of 2026. In July 2023, the U.K. government passed legislation to implement the Organization for Economic Co-Operation and Development’s Base Erosion and Profit Shifting 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. On December 27, 2023, the Government of Bermuda enacted a corporate income tax at the rate of 15 % which applies to the Bermuda Subsidiaries (collectively, AG Re, AGRO, Assured Life Re and Cedar Personnel Ltd.) for accounting periods starting on or after January 1, 2025. On July 4, 2025, the U.S. Congress passed budget reconciliation bill H.R. 1 referred to as the One Big Beautiful Bill Act (OBBBA). The OBBBA includes significant provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company does not expect it to have a material impact on its financial condition or results of operation. The U.K. Finance Act 2026, enacted on March 18, 2026, clarified that certain pre-regime deferred taxes are not considered covered taxes for purposes of the Pillar Two global minimum tax framework, with the amendments effective for accounting periods ending on or after July 21, 2025. As a result of this enactment, the Company revised its 2025 global minimum tax calculation to exclude certain Bermuda pre-regime deferred tax assets and liabilities arising from the introduction of Bermuda’s corporate income tax on January 1, 2025, and recorded a discrete tax benefit of $ 33 million in six months 2026. 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. Assured Life Re will file its own federal income tax return. Provision for Income Taxes The Company’s provision for income taxes for interim financial periods is not based on an estimated annual effective rate due in part to the variability in loss reserves, fair value of its derivatives and foreign exchange gains and losses which prevent the Company from projecting a reliable estimated annual effective tax rate and pre-tax income for the full year 2026. A discrete calculation of the provision is calculated for each interim period. 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 %, unless subject to U.S. tax by election, and • U.K. subsidiaries taxed at the U.K. marginal corporate tax rate of 25 %. The Company’s effective tax rate was 18.0 %, 20.9 %, ( 9.9 )% and 19.7 % for second quarter 2026, second quarter 2025, six months 2026 and six months 2025, respectively. The effective tax rate for six months 2026 is different from the expected tax provision (benefit) primarily due to tax law changes to the Pillar Two global minimum tax for 2025 recorded in the first 66 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued quarter of 2026 of $ 33 million, a tax benefit recognized upon Assured Life Re’s change in tax status effective for the 2026 tax year, as well as a tax benefit for U.S. tax-exempt interest in each period. Audits During 2025, the Internal Revenue Service (IRS) closed the audit of AGUS’ 2018 and 2019 tax years with no impact to previously accrued taxes and opened an audit of AGUS’ 2021 tax year. As of June 30, 2026, AGUS had open tax years with the IRS for 2021 forward. As of June 30, 2026, 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. In March 2026, HMRC closed the audit of the Company’s 2021, 2022 and 2023 inquiries with no impact to previously accrued taxes. As of June 30, 2026, the Company had open tax years with HMRC for 2024 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 years with HMRC for 2024 forward. The Company’s French subsidiary is not currently under examination and has open tax years of 2021 forward. 13. 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 several recently active proceedings related to PREPA, while other unresolved proceedings remain stayed pending the Federal District Court of Puerto Rico’s determination on a plan of adjustment and disclosure statement. See Note 5. 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. 67 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 14. Shareholders’ Equity Other Comprehensive Income The following tables present the changes in each component of accumulated other comprehensive income (AOCI) and the effect of reclassifications out of AOCI into the respective lines in the condensed consolidated statements of operations. Changes in Accumulated Other Comprehensive Income (Loss) by Component Second Quarter 2026 Net Unrealized Gains (Losses) on Investments with: ISCR on FG VIEs’ Liabilities with Recourse Change in Discount Rates on the LFPB Cumulative Translation Adjustment Cash Flow Hedge Total AOCI No Credit Impairment Credit Impairment (in millions) Balance, March 31, 2026 $ ( 132 ) $ ( 116 ) $ ( 17 ) $ 17 $ ( 36 ) $ 4 $ ( 280 ) Other comprehensive income (loss) before reclassifications 2 27 — ( 8 ) — — 21 Less: Amounts reclassified from AOCI to: Net realized investment gains (losses) ( 8 ) ( 2 ) — — — — ( 10 ) Gains (losses) on FG VIEs — — ( 1 ) — — — ( 1 ) Total before tax ( 8 ) ( 2 ) ( 1 ) — — — ( 11 ) Tax (provision) benefit 2 1 — — — — 3 Total amount reclassified from AOCI, net of tax ( 6 ) ( 1 ) ( 1 ) — — — ( 8 ) Other comprehensive income (loss) 8 28 1 ( 8 ) — — 29 Balance, June 30, 2026 $ ( 124 ) $ ( 88 ) $ ( 16 ) $ 9 $ ( 36 ) $ 4 $ ( 251 ) Changes in Accumulated Other Comprehensive Income (Loss) by Component Second Quarter 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, March 31, 2025 $ ( 183 ) $ ( 78 ) $ ( 19 ) $ ( 38 ) $ 4 $ ( 314 ) Other comprehensive income (loss) before reclassifications 85 ( 3 ) — 2 — 84 Less: Amounts reclassified from AOCI to: Net realized investment gains (losses) — ( 3 ) — — — ( 3 ) Fair value gains (losses) on FG VIEs — — ( 1 ) — — ( 1 ) Total before tax — ( 3 ) ( 1 ) — — ( 4 ) Tax (provision) benefit — 1 — — — 1 Total amount reclassified from AOCI, net of tax — ( 2 ) ( 1 ) — — ( 3 ) Other comprehensive income (loss) 85 ( 1 ) 1 2 — 87 Balance, June 30, 2025 $ ( 98 ) $ ( 79 ) $ ( 18 ) $ ( 36 ) $ 4 $ ( 227 ) 68 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Changes in Accumulated Other Comprehensive Income (Loss) by Component Six Months 2026 Net Unrealized Gains (Losses) on Investments with: ISCR on FG VIEs’ Liabilities with Recourse Change in Discount Rates on the LFPB Cumulative Translation Adjustment Cash Flow Hedge Total AOCI No Credit Impairment Credit Impairment (in millions) Balance, December 31, 2025 $ ( 48 ) $ ( 72 ) $ ( 17 ) $ — $ ( 35 ) $ 4 $ ( 168 ) Other comprehensive income (loss) before reclassifications ( 81 ) ( 30 ) — 9 ( 1 ) — ( 103 ) Less: Amounts reclassified from AOCI to: Net realized investment gains (losses) ( 7 ) ( 18 ) — — — — ( 25 ) Gains (losses) on FG VIEs — — ( 1 ) — — — ( 1 ) Total before tax ( 7 ) ( 18 ) ( 1 ) — — — ( 26 ) Tax (provision) benefit 2 4 — — — — 6 Total amount reclassified from AOCI, net of tax ( 5 ) ( 14 ) ( 1 ) — — — ( 20 ) Other comprehensive income (loss) ( 76 ) ( 16 ) 1 9 ( 1 ) — ( 83 ) Balance, June 30, 2026 $ ( 124 ) $ ( 88 ) $ ( 16 ) $ 9 $ ( 36 ) $ 4 $ ( 251 ) Changes in Accumulated Other Comprehensive Income (Loss) by Component Six Months 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 131 10 ( 1 ) 1 — 141 Less: Amounts reclassified from AOCI to: Net realized investment gains (losses) ( 6 ) ( 13 ) — — — ( 19 ) Fair value gains (losses) on FG VIEs — — ( 1 ) — — ( 1 ) Total before tax ( 6 ) ( 13 ) ( 1 ) — — ( 20 ) Tax (provision) benefit — 3 — — — 3 Total amount reclassified from AOCI, net of tax ( 6 ) ( 10 ) ( 1 ) — — ( 17 ) Other comprehensive income (loss) 137 20 — 1 — 158 Balance, June 30, 2025 $ ( 98 ) $ ( 79 ) $ ( 18 ) $ ( 36 ) $ 4 $ ( 227 ) Share Repurchases The following table presents information regarding AGL’s repurchases of its common shares during the period from January 1, 2025 through August 5, 2026. 69 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued Share Repurchases Period Number of Shares Repurchased Total Payments (1) (in millions) Average Price Paid Per Share (1) 2025 (January 1 - March 31) 1,335,228 $ 120 $ 89.72 2025 (April 1 - June 30) 1,537,505 131 85.03 2025 (July 1 - September 30) 1,423,121 118 83.06 2025 (October 1 - December 31) 1,523,773 131 86.16 Total 2025 5,819,627 $ 500 $ 85.92 2026 (January 1 - March 31) 881,981 75 85.58 2026 (April 1 - June 30) 553,564 45 80.68 2026 (July 1 - August 5) 123,333 10 83.78 Total 2026 1,558,878 $ 130 $ 83.70 ____________________ (1) Excludes commissions. As of August 5, 2026, AGL was authorized to repurchase an additional $ 121 million of its common shares. The Board of Directors may modify, suspend or terminate the repurchase program at any time, and the program does not have a stated expiration date. As part of its overall capital management strategy, the Company evaluates on a quarterly basis planned uses of available capital, which may include growth opportunities in its financial guaranty insurance and annuity reinsurance businesses, maintaining a capital cushion to support its existing business and share repurchases. The timing, form and amount of any future share repurchases will be determined at the Company’s discretion and will depend on various factors, including alternative uses for capital, the Company’s regulatory capital position, rating agency capital considerations, availability of cash at the parent company, market conditions and legal and regulatory requirements. Any such share repurchases may be made from time to time through open-market purchases or privately negotiated transactions, and there can be no assurance of the amount of share repurchases that will occur in the future. 70 Table of Contents Assured Guaranty Ltd. Notes to Condensed Consolidated Financial Statements (Unaudited), Continued 15. Earnings Per Share Computation of Earnings Per Share Second Quarter Six Months 2026 2025 2026 2025 (in millions, except per share amounts) Basic Earnings Per Share (EPS): Net income (loss) attributable to AGL $ 39 $ 103 $ 127 $ 279 Less: Distributed and undistributed income (loss) available to nonvested shareholders — — 1 2 Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic $ 39 $ 103 $ 126 $ 277 Basic shares 44.3 48.9 44.6 49.5 Basic EPS $ 0.88 $ 2.10 $ 2.82 $ 5.60 Diluted EPS: Distributed and undistributed income (loss) available to common shareholders of AGL and subsidiaries, basic $ 39 $ 103 $ 126 $ 277 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 $ 39 $ 103 $ 126 $ 277 Basic shares 44.3 48.9 44.6 49.5 Dilutive securities: Restricted stock awards 0.3 0.5 0.4 0.6 Diluted shares 44.6 49.4 45.0 50.1 Diluted EPS $ 0.88 $ 2.08 $ 2.80 $ 5.54 Potentially dilutive securities excluded from computation of EPS because of antidilutive effect 0.1 0.2 0.2 0.1 71 Table of Contents