Assured Guaranty Ltd. · NYSE:AGO
Assured Guaranty — Q4 2024 Earnings Presentation
69 slides from Assured Guaranty's earnings presentation, Feb 28, 2025
Slide 1: Equity Investor Presentation
Equity Investor Presentation December 31, 2024
Slide 2: Forward-Looking Statements and Safe Harbor Disclosure
Forward-Looking Statements and Safe Harbor Disclosure • This presentation contains information that includes or is based upon forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking statements give the expectations or forecasts of future
Slide 3: Conventions and Non-GAAP Financial Measures
Conventions and Non-GAAP Financial Measures • Unless otherwise noted, the following conventions are used in this presentation: – Ratings on Assured Guaranty’s insured portfolio are Assured Guaranty’s internal ratings. ▪ Internal credit ratings are expressed on a ratings scale similar to that used by
Slide 4: Table of Contents
Table of Contents • Quarterly and year-to-date highlights • Assured Guaranty overview – Strength of Business Model – AGM merger into AG – Financial strength ratings – Track record of creating shareholder value – Dividend limitation calculations – Simplified corporate structure • Underlying value – H
Slide 5: Highlights
ASSURED GUARANTY Highlights
Slide 6: Fourth Quarter 2024 Highlights
Fourth Quarter 2024 Highlights Financial Results • Earned $66 million of adjusted operating income1 (or $1.27 per share) – This fourth quarter 2024 result includes a loss expense of $29 million (after adjusting for a $2 million VIE benefit) • Increased shareholders’ equity attributable to AGL, adjus
Slide 7: Full Year 2024 Highlights
Full Year 2024 Highlights Financial Results • Earned $389 million of adjusted operating income1 (or $7.10 per share) – This is the second largest amount of adjusted operating income1 per share since the Company’s initial public offering Insurance • Insured $32 billion of new business par, the larges
Slide 8: New Insurance Business Production
New Insurance Business Production Gross Par Written ($ in millions) • Assured Guaranty insured $32 billion of aggregate par in 2024 $31,829 – This aggregate amount of par is the largest amount $28,960 in a decade $26,656 $23,265 $22,047 – U.S. public finance insured the second largest amount of par
Slide 9: Assured Guaranty Overview
ASSURED GUARANTY Assured Guaranty Overview
Slide 10: Financial Guaranty Business Model
Assured Guaranty Overview Financial Guaranty Business Model • What do we insure? – We insure financial obligations in three main sectors ▪ U.S. public finance and infrastructure transactions ▪ Non-U.S. public finance and infrastructure transactions ▪ U.S. and non-U.S. structured finance transactions
Slide 11: Financial Guaranty Business Model (Continued)
Assured Guaranty Overview Financial Guaranty Business Model (Continued) • How do we invest our investment portfolio? – Our portfolio predominately consists of highly rated, fixed maturity and short-term investments, and cash – We also have a strategy to invest a portion of our investment portfolio i
Slide 12: Overview and Ratings
Assured Guaranty Overview Overview and Ratings Assured Guaranty Ltd. • Assured Guaranty is the leading financial guaranty franchise, with nearly four decades ($ in billions) Dec. 31, 2024 of experience in the municipal and structured finance markets Insured net par outstanding $261.6 • We participat
Slide 13: Resilience and Enduring Financial Strength
Assured Guaranty Overview Resilience and Enduring Financial Strength Assured Guaranty maintained over $10 billion of claims-paying resources1 over 16 years while paying nearly $15 billion to insured investors From January 1, 2008 through $16 As of Dec. 31 of each year December 31, 2024: ($ in billio
Slide 14: Insurance Subsidiaries' Claims-Paying Resources
Assured Guaranty Overview Insurance Subsidiaries’ Claims-Paying Resources As of December 31, 2024 ($ in millions) AG AG Re1 Eliminations2 Total Claims-paying resources Policyholders' surplus $ 3,524 $ 746 $ 59 $ 4,329 Contingency reserve 1,392 — — 1,392 Qualified statutory capital 4,916 746 59 5,721
Slide 15: AGM Merger Into AG
Assured Guaranty Overview AGM Merger Into AG • Assured Guaranty Municipal Corp. (AGM) merged with and into Assured Guaranty Inc. (AG), effective August 1, 2024 • Some of the benefits of the merger include: – Created a larger, combined company to guarantee all the obligations in both the AGM and AG i
Slide 16: Assured Guaranty Ltd. Corporate Structure (Pre-Merger)
Assured Guaranty Overview Assured Guaranty Ltd. Corporate Structure (Pre-Merger) Assured Guaranty Ltd. Hamilton, Bermuda Publicly Traded Holding Company (NYSE: AGO) A (stable outlook) / Baa1 (stable outlook) issuer credit ratings Assured Guaranty US Holdings Inc. (AGUS) U.S. Holding Company S&P: A (
Slide 17: Assured Guaranty Ltd. Corporate Structure (Current)
Assured Guaranty Overview Assured Guaranty Ltd. Corporate Structure (Current) Assured Guaranty Ltd. Hamilton, Bermuda Publicly Traded Holding Company (NYSE: AGO) A (stable outlook) / Baa1 (stable outlook) issuer credit ratings Assured Guaranty US Holdings Inc. (AGUS) Assured Guaranty Re Ltd. (AG Re)
Slide 18: Financial Strength Ratings
Assured Guaranty Overview Financial Strength Ratings Financial Strength Ratings1 S&P KBRA Moody's AA AA+ A1 AG Stable Outlook Stable Outlook Stable Outlook (May 2024) (October 2024) (July 2024) Recent Updates • In August 2024, S&P issued a press release indicating no change to the AA (stable outlook
Slide 19: Adjusted Operating Income
Assured Guaranty Overview Adjusted Operating Income • In 2024, adjusted operating income1 per share was $7.10, the second largest per share amount since the initial public offering – Adjusted operating income1 per share was $1.27 in the fourth quarter of 2024 – In 2023, adjusted operating income1,2
Slide 20: Track Record of Creating Shareholder Value
Assured Guaranty Overview Track Record of Creating Shareholder Value • We have returned excess capital to shareholders by repurchasing our common shares and distributing dividends – Since 2013, when we started our capital management strategy of repurchasing our common shares, through February 27, 20
Slide 21: Expected 2025 Dividend Limitation Calculations
Assured Guaranty Overview Expected 2025 Dividend Limitation Calculations Assured Guaranty Inc. (AG) Assured Guaranty Re Ltd. (AG Re) (Domiciled in Maryland) (Domiciled in Bermuda) • Cannot exceed the lesser of: • Cannot exceed 25% of prior year total statutory capital and (i) 10% of prior year’s pol
Slide 22: Simplified Corporate Structure With Expected Dividend Capacity
Assured Guaranty Overview Simplified Corporate Structure With Expected Dividend Capacity1 Shareholders • Total investment portfolio and cash of $66 million2 Assured Guaranty Ltd. • Annual net expenses of $43 million (Head Office – Bermuda; Tax Residence – U.K.) • Annual dividend distribution of $68
Slide 23: Underlying Value
ASSURED (GUARANTY
Slide 24: Historical Growth
Underlying Value Historical Growth Adjusted Book Value1 per Share2 $170.12 $155.92 $141.98 55.37 $130.67 49.38 GR ) $114.87 (10 % CA 48.06 se 41.94 n crea : 59 4% i 36.38 V alue B ook Adj. $114.75 $41.90 $106.54 $35.66 $88.73 $93.92 $29.54 $78.49 $24.51 $26.06 16.53 12.13 7.18 8.17 6.43 $18.88 $21.3
Slide 25: High-Quality Investment Portfolio
Underlying Value High-Quality Investment Portfolio Total Invested Assets and Cash1,2 U.S. government & As of December 31, 2024 agencies 3 AAA 1% 24% Other invested assets 6% Sound Point 5% • Predominately consists of highly rated, fixed maturity and short-term investments, Fixed maturity AA and cash
Slide 26: Total Assets and Cash
Underlying Value Total Assets and Cash • Total invested assets and cash has declined modestly Total Invested Assets and Cash 1 ($ in billions) $12 $11 $10 $9 $8 $7 $6 $5 $4 $3 $2 $1 $0 6 9 8 1 0 3 2 5 4 7 0 9 2 1 4 3 -1 -0 -1 -1 -2 -1 -2 -1 -2 -1 -1 -1 -1 -2 -1 -2 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q
Slide 27: Net Investment Income and Operating Expenses
Underlying Value Net Investment Income1 and Operating Expenses • Net investment income1 excludes the following (see table below): – Earnings on alternative investments2 accounted for under the equity method – Changes in fair value of alternative investments accounted for as CIVs – Changes in fair va
Slide 28: New Business Activity
ASSURED GUARANTY New Business Activity
Slide 29: Insurance: U.S. Public Finance
New Business Activity Insurance: U.S. Public Finance • Assured Guaranty’s U.S. public finance new business production was strong in 2024 – U.S. public finance insured $24 billion of total par that closed in 2024 – U.S. public finance PVP1 that closed in 2024 was $270 million, 27% higher than PVP1 in
Slide 30: Insurance: Non-U.S. Public Finance
New Business Activity Insurance: Non-U.S. Public Finance Non-U.S. Public Finance PVP1 ($ in millions) • In 2024, business activity was primarily attributable to secondary market guarantees of $82 $79 $83 several regulated utilities and airport $68 $67 transactions • In 2023, business activity was pr
Slide 31: Insurance: Global Structured Finance
New Business Activity Insurance: Global Structured Finance Global Structured Finance PVP1 • In 2024, new business PVP primarily consisted ($ in millions) of pooled corporate transactions, insurance securitizations, subscription finance $109 transactions and a portfolio of diversified real estate $65
Slide 32: Asset Management and Alternative Investments
Asset Management and Alternative Investments
Slide 33: Asset Management and Alternative Investments Highlights
Asset Management and Alternative Investments Highlights • In July 2023, Assured Guaranty contributed most of its asset management business, other than that conducted by Assured Healthcare Partners, LLC (AHP), to Sound Point in exchange for approximately 30% of the combined Sound Point entity, and so
Slide 34: Financial Results
ASSURED (GUARANTY Financial Results M4
Slide 35: Fourth Quarter 2024 Results
Fourth Quarter 2024 Results Select Financial Items Select GAAP Results ($ in millions, except per share data and percentages) Three Months Ended December 31, % Change vs. 4Q-23 2024 2023 Net income (loss) attributable to AGL $18 $376 (95)% Net income (loss) attributable to AGL per diluted share $0.3
Slide 36: Full Year 2024 Results
Full Year 2024 Results Select Financial Items Select GAAP Results ($ in millions, except per share data and percentages) Year Ended December 31, % Change vs. FY23 2024 2023 Net income (loss) attributable to AGL $376 $739 (49)% Net income (loss) attributable to AGL per diluted share $6.87 $12.30 (44)
Slide 37: Fourth Quarter 2024 Results: Supplemental Information
Fourth Quarter 2024 Results Supplemental Information Select Income Components ($ in millions) Three Months Ended December 31, 2024 Employee Net Income (Loss) Asset Compensation, Benefit Attributable to Net Earned Net Investment Management Loss Expense Expenses and Other Assured Guaranty Premiums Inc
Slide 38: Full Year 2024 Results: Supplemental Information
Full Year 2024 Results Supplemental Information Select Income Components ($ in millions) Year Ended December 31, 2024 Employee Net Income (Loss) Asset Compensation, Benefit Attributable to Net Earned Net Investment Management Loss Expense Expenses and Other Assured Guaranty Premiums Income Fees (Ben
Slide 39: Insurance Loss Measures
Insurance Loss Measures Loss and LAE reported on the GAAP Consolidated Statement of Operations: • Represents loss and loss adjustment expenses (LAE) for contracts accounted for as insurance and not those accounted for as credit derivatives, those accounted for as FG VIEs or other GAAP accounting gui
Slide 40: Expected Loss and LAE to Be Paid (Quarter)
Expected Loss and LAE to Be Paid Three Months Ended December 31, 2024 ($ in millions) Rollforward of Net Expected Loss and LAE to be Paid1 for the Three Months Ended December 31, 2024 Net Expected Loss Net Economic Loss Net Expected Loss to be Paid Development Net (Paid) to be Paid (Recovered) as of
Slide 41: Expected Loss and LAE to Be Paid (Year)
Expected Loss and LAE to Be Paid Year Ended December 31, 2024 ($ in millions) Rollforward of Net Expected Loss and LAE to be Paid1 for the Year Ended December 31, 2024 Net Expected Loss Net Economic Loss Net Expected Loss to be Paid Development Net (Paid) to be Paid (Recovered) as of (Benefit) Durin
Slide 42: Insured Portfolio
Assured Guaranty Insured Portfolio Eiffage CEVM / Foster + Partners / Jean-Pierre Lescourret
Slide 43: Net Par Outstanding by Sector
Assured Guaranty Insured Portfolio Net Par Outstanding by Sector as of December 31, 2024 Portfolio Diversification by Sector Non-U.S. Structured Finance U.S. 1% Public Finance 77% U.S. Structured Finance 3% Non-U.S. Public Finance 19% $261.6 billion1,2 Global U.S. Public Finance Portfolio Non-U.S. P
Slide 44: Net Par Outstanding by Ratings
Assured Guaranty Insured Portfolio Net Par Outstanding by Ratings as of December 31, 2024 Portfolio Diversification by Rating BIG AAA 4% 1% AA 10% BBB 36% A 49% $261.6 billion1 Global. U.S. Public Finance Portfolio Non-U.S. Public Finance Portfolio Structured Finance Portfolio BIG AAA BIG AAA BIG AA
Slide 45: Net Par Outstanding Amortization
Assured Guaranty Insured Portfolio Net Par Outstanding Amortization • Since year-end 2018, the net par outstanding of the insured portfolio has stabilized significantly – Since year-end 2022, net par outstanding increased by $29 billion, with increased par outstanding in all three asset classes: U.S
Slide 46: Puerto Rico Update
Assured Guaranty Insured Portfolio Puerto Rico Update • The Company has divested the majority of the consideration it received as a result of the resolution of the Company’s exposure to insured Puerto Rico credits experiencing payment default other than PREPA (2022 Puerto Rico Resolutions) – On Dece
Slide 47: Puerto Rico Exposure
Assured Guaranty Insured Portfolio Puerto Rico Exposure Exposure to Puerto Rico As of December 31, 2024 ($ in millions) Net Par Outstanding Total Net Par Gross Par AG AG Re Outstanding Outstanding Defaulted Puerto Rico Exposures Puerto Rico Electric Power Authority (PREPA) $378 $154 $532 $540 Total
Slide 48: CLO Exposures
Assured Guaranty CLO Exposures Exposure in Three Distinct Areas Non-CLO Exposure 1. $825 million of insured exposure $260.7 • Ten transactions Insured Portfolio • All of the exposure is investment grade Net Par Outstanding As of Dec. 31, 2024 • Average credit enhancement is approximately 38% ($ in b
Slide 49: BIG Surveillance Category
Assured Guaranty Insured Portfolio BIG Surveillance Category The Company assigns each BIG exposure to one of the three BIG surveillance categories based on loss modeling1 and scenario probability weighting: BIG Surveillance Category 1: Exposures for which there are possible future losses, on a prese
Slide 50: Net Par Outstanding by BIG Surveillance Category
Assured Guaranty Insured Portfolio Net Par Outstanding by BIG Surveillance Category1 Financial Guaranty Insurance and Credit Derivatives Surveillance Categories As of December 31, 2024 Net Par Percent of Percent of ($ millions) Outstanding BIG Par Total Par • Approximately $8.1 billion (3.1% of tota
Slide 51: Total BIG Exposure
Assured Guaranty Insured Portfolio Total BIG Exposure • Exposure with an internal BIG rating is $10.2 billion – This amount decreased by $468 million in the fourth quarter of 2024 – Approximately $8.1 billion of this exposure are currently categorized as BIG Surveillance Category 1, which are exposu
Slide 52: BIG and BIG Exposure
Assured Guaranty Insured Portfolio BIG 2 and BIG 3 Exposure • Transactions rated BIG 2 and BIG 3 represent approximately 20% of all BIG transactions (0.8% of total net par outstanding) – The par amount of BIG 2 and BIG 3 decreased by approximately 30% in 2024 – BIG Surveillance Category 2 and Catego
Slide 53: BIG Exposures Greater Than $250 Million
Assured Guaranty Insured Portfolio BIG Exposures > $250 Million BIG Exposures Greater Than $250 Million As of December 31, 2024 ($ in millions) Net Par Internal Type1 Name or Description Outstanding Rating2 PF Southern Water Services Limited $2,611 BB PF Thames Water Utilities Finance Plc 2,133 B PF
Slide 54: Appendix
ASSURED (GUARANTY
Slide 55: Explanation of Non-GAAP Financial Measures
Appendix Explanation of Non-GAAP Financial Measures The Company discloses both: (i) financial measures determined in accordance with GAAP; and (ii) financial measures not determined in accordance with GAAP (non-GAAP financial measures). Financial measures identified as non-GAAP should not be conside
Slide 56: Explanation of Non-GAAP Financial Measures (Cont'd)
Appendix Explanation of Non-GAAP Financial Measures (Cont’d) The following paragraphs define each non-GAAP financial measure disclosed by the Company and describe why it is useful. To the extent there is a directly comparable GAAP financial measure, a reconciliation of the non-GAAP financial measure
Slide 57: Explanation of Non-GAAP Financial Measures (Cont'd)
Appendix Explanation of Non-GAAP Financial Measures (Cont’d) Adjusted Operating Shareholders’ Equity and Adjusted Book Value: Management believes that adjusted operating shareholders’ equity is a useful measure because it excludes the fair value adjustments on investments, credit derivatives and CCS
Slide 58: Explanation of Non-GAAP Financial Measures (Cont'd)
Appendix Explanation of Non-GAAP Financial Measures (Cont’d) Adjusted Operating Return on Equity (Adjusted Operating ROE): Adjusted Operating ROE represents adjusted operating income for a specified period divided by the average of adjusted operating shareholders’ equity at the beginning and the end
Slide 59: Reconciliation of Gross Written Premiums to PVP
Appendix AGL Consolidated Reconciliation of Gross Written Premiums (GWP) to PVP1 Three Months Ended Reconciliation of GWP to PVP1 December 31, Year Ended December 31, (dollars in millions) 2024 2023 2023 2022 2021 2020 2019 2018 2017 Total GWP $186 $136 $357 $360 $377 $454 $677 $612 $307 2 Less: Ins
Slide 60: Reconciliation of Net Income to Adjusted Operating Income
Appendix Reconciliation of Net Income (Loss) Attributable to AGL to Adjusted Operating Income1 Three Months Ended Year Ended Adjusted Operating Income1 Reconciliation December 31, December 31, (dollars in millions, except per share amounts) 2024 2023 2024 2023 Per Per Diluted Per Diluted Diluted Per
Slide 61: Adjusted Operating Income Reconciliation (2012-2023)
Appendix Reconciliation of Net Income (Loss) Attributable to AGL to Adjusted Operating Income1 (2012-2023) Adjusted Operating Income1 Reconciliation Year Ended December 31, (dollars in millions, except per share amounts) 2023 2022 2021 2020 2019 2018 Total Per Share Total Per Share Total Per Share T
Slide 62: Adjusted Operating Income Reconciliation (2004-2011)
Appendix Reconciliation of Net Income (Loss) Attributable to AGL to Adjusted Operating Income1 (2004-2011) Adjusted Operating Income1 Reconciliation Year Ended December 31, (dollars in millions, except per share amounts) 2011 2010 2009 2008 2007 2006 Total Per Share Total Per Share Total Per Share T
Slide 63: Reconciliation of Shareholders' Equity to Adjusted Book Value
Appendix Reconciliation of AGL Shareholders’ Equity to Adjusted Book Value1 Adjusted book value1 reconciliation As of (dollars in millions, except per share amounts) Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Sept 30, 2023 Dec 31, 2022 Per Per Per Per Total Share Total Share Total Share Total Per Share
Slide 64: Adjusted Book Value Reconciliation (2017-2021)
Appendix Reconciliation of AGL Shareholders’ Equity to Adjusted Book Value1 (2017-2021) Adjusted book value1 reconciliation As of December 31, (dollars in millions, except per share amounts) 2021 2020 2019 2018 2017 Per Per Per Per Per Total Share Total Share Total Share Total Share Total Share Reco
Slide 65: Adjusted Book Value Reconciliation (2012-2016)
Appendix Reconciliation of AGL Shareholders’ Equity to Adjusted Book Value1 (2012-2016) Adjusted book value1 reconciliation As of December 31, (dollars in millions, except per share amounts) 2016 2015 2014 2013 2012 Per Per Per Per Per Total Share Total Share Total Share Total Share Total Share Reco
Slide 66: Adjusted Book Value Reconciliation (2007-2011)
Appendix Reconciliation of AGL Shareholders’ Equity to Adjusted Book Value1 (2007-2011) Adjusted book value1 reconciliation As of December 31, (dollars in millions, except per share amounts) 2011 2010 2009 2008 2007 Per Per Per Per Per Total Share Total Share Total Share Total Share Total Share Reco
Slide 67: Adjusted Book Value Reconciliation (2004-2006)
Appendix Reconciliation of AGL Shareholders’ Equity to Adjusted Book Value1 (2004-2006) Adjusted book value1 reconciliation As of December 31, (dollars in millions, except per share amounts) 2006 2005 2004 2004 Q2 Per Per Per Per Total Share Total Share Total Share Total Share Reconciliation of shar
Slide 68: Reconciliation of GAAP ROE to Adjusted Operating ROE
Appendix Reconciliation of AGL GAAP ROE1 to Adjusted Operating ROE1,2 ROE Reconciliation (dollars in millions) Three Months Ended Year Ended December 31, December 31, 2024 2023 2024 2023 Net income (loss) attributable to AGL $18 $376 $376 $739 2 Adjusted operating income 66 338 389 648 Average share
Slide 69: Contacts
Assured Guaranty Contacts: Robert Tucker Senior Managing Director Investor Relations and Corporate Communications Direct: 212.339.0861 rtucker@agltd.com Andre Thomas Managing Director Equity Investor Relations Direct: 212.339.3551 athomas@agltd.com Glenn Alterman Vice President Investor Relations Di