Fourth Quarter 2024
- GAAP Highlights: Net income attributable to Assured
Guaranty Ltd. was $18 million, or $0.35 per share(1), for fourth
quarter 2024. Shareholders’ equity attributable to AGL per share
was $108.80 as of December 31, 2024.
- Non-GAAP Highlights: Adjusted operating income(2) was
$66 million, or $1.27 per share, for fourth quarter 2024. Adjusted
operating shareholders’ equity(2) per share and adjusted book value
(ABV)(2) per share were $114.75 and $170.12, respectively, as of
December 31, 2024.
- New Business: Gross written premiums (GWP) were $186
million for fourth quarter 2024. Present value of new business
production (PVP)(2) was $121 million for fourth quarter 2024.
- Return of Capital to Shareholders: Fourth quarter 2024
capital returned to shareholders was $107 million, consisting of
the repurchase of 1.1 million shares for $91 million, and dividends
of $16 million.
Full Year (FY) 2024
- GAAP Highlights: Net income attributable to AGL was $376
million, or $6.87 per share, for FY 2024.
- Non-GAAP Highlights: Adjusted operating income was $389
million, or $7.10 per share, for FY 2024.
- New Business: GWP were $440 million and PVP was $402
million for FY 2024.
- Return of Capital to Shareholders: FY 2024 capital
returned to shareholders was $570 million, consisting of the
repurchase of 6.2 million shares for $502 million, and dividends of
$68 million.
Assured Guaranty Ltd. (NYSE: AGO) (AGL and, together with its
consolidated entities, Assured Guaranty or the Company) announced
today its financial results for the three-month period ended
December 31, 2024 (fourth quarter 2024) and the year ended December
31, 2024 (FY 2024).
“Assured Guaranty generated strong results in 2024,” said
Dominic Frederico, President and CEO. “We reached record year-end
highs for shareholders’ equity per share, at $108.80, adjusted
operating shareholders’ equity per share, at $114.75, and adjusted
book value per share, at $170.12, while we continued to build value
for Assured Guaranty’s shareholders and policyholders. Our share
price rose by 20% during the year, as it did in 2023.
“We benefited from strong production across U.S. public finance,
non-U.S. public finance and global structured finance businesses,
resulting in $440 million of GWP and $402 million of PVP, led by
the strongest U.S. public finance production in four years.
“In our capital management program, we repurchased 11% of the
common shares that were outstanding on December 31, 2023, and met
our 2024 target of repurchasing $500 million of our shares.”
(1)
All per share information for net income
and adjusted operating income is based on diluted shares.
(2)
Please see “Explanation of Non-GAAP
Financial Measures.”
Summary Financial
Results
(in millions, except per share
amounts)
Quarter Ended
Year Ended
December 31,
December 31,
2024
2023
2024
2023
GAAP (1)
Net income (loss) attributable to
AGL
$
18
$
376
$
376
$
739
Net income (loss) attributable to
AGL
per diluted share
$
0.35
$
6.40
$
6.87
$
12.30
Weighted average diluted shares
51.9
58.3
54.3
59.6
Non-GAAP
Adjusted operating income (loss) (2)
$
66
$
338
$
389
$
648
Adjusted operating income per diluted
share (2)
$
1.27
$
5.75
$
7.10
$
10.78
Weighted average diluted shares
51.9
58.3
54.3
59.6
Gain (loss) related to FG VIE and CIV
consolidation(3) included in adjusted operating income
$
2
$
9
$
(6
)
$
(21
)
Gain (loss) related to FG VIE and CIV
consolidation included in adjusted operating income per share
$
0.04
$
0.15
$
(0.12
)
$
(0.35
)
Components of total adjusted operating
income (loss)
Insurance segment
$
98
$
339
$
525
$
621
Asset Management segment
—
6
5
3
Corporate division
(34
)
(16
)
(135
)
45
Other
2
9
(6
)
(21
)
Adjusted operating income (loss)
$
66
$
338
$
389
$
648
As of
December 31, 2024
December 31, 2023
Amount
Per Share
Amount
Per Share
Shareholders’ equity attributable to
AGL
$
5,495
$
108.80
$
5,713
$
101.63
Adjusted operating shareholders’ equity
(2)
5,795
114.75
5,990
106.54
ABV (2)
8,592
170.12
8,765
155.92
Common Shares Outstanding
50.5
56.2
________________________________________________
(1)
Generally accepted accounting
principles in the United States of America.
(2)
Please see “Explanation of Non-GAAP
Financial Measures” at the end of this press release.
(3)
The effect of consolidating financial
guaranty (FG) variable interest entities (VIEs) and consolidated
investment vehicles (CIVs).
On a per share basis, shareholders’ equity attributable to AGL
increased 7.1% in 2024 primarily due to net income and the
accretive effect of share repurchases, partially offset by
dividends. On a per share basis, adjusted operating shareholders’
equity increased 7.7% in 2024, and ABV increased 9.1%, primarily
due to adjusted operating income and the accretive effect of share
repurchases, partially offset by dividends. In the case of ABV per
share, GWP also contributed to the increase in 2024. See “Common
Share Repurchases” on page 9.
Fourth Quarter 2024
Net income attributable to AGL in fourth quarter 2024 decreased
compared with the three-month period ended December 31, 2023
(fourth quarter 2023), which included a $208 million benefit due to
tax law changes: $189 million associated with Bermuda tax law
changes, and $19 million related to New York State tax law changes.
Additional factors that contributed to the decrease in net income
attributable to AGL were foreign exchange remeasurement losses of
$70 million in fourth quarter 2024 compared with gains of $44
million in fourth quarter 2023, and lower fair value gains on
trading securities of $32 million.
Insurance Segment
The Insurance segment primarily consists of (i) the Company’s
insurance subsidiaries that provide credit protection products to
the United States (U.S.) and non-U.S. public finance (including
infrastructure) and structured finance markets, excluding the
effect of VIE consolidations, and (ii) Assured Guaranty Inc.’s (AG,
formerly Assured Guaranty Corp.) investment subsidiary.
Insurance Segment New Business Production
Insurance Segment
New Business
Production
(in millions)
Quarter Ended December
31,
2024
2023
GWP
PVP (1)
Gross Par Written (2)
GWP
PVP (1)
Gross Par Written (2)
Public finance - U.S.
$
77
$
77
$
8,419
$
82
$
83
$
6,712
Public finance - non-U.S.
102
23
436
42
45
874
Structured finance - U.S.
1
1
231
11
26
785
Structured finance - non-U.S.
6
20
2,140
1
1
304
Total
$
186
$
121
$
11,226
$
136
$
155
$
8,675
________________________________________________
(1)
PVP, a non-GAAP financial
measure, measures the value of the Insurance segment’s new business
production for all contracts regardless of form or GAAP accounting
model. See “Explanation of Non-GAAP Financial Measures” at the end
of this press release. PVP is based on “close date,” when the
transaction settles. PVP was discounted at 5.0% and 4.0% in fourth
quarter 2024 and fourth quarter 2023, respectively.
(2)
Gross Par Written is based on
“close date,” when the transactions settles.
Total U.S. public finance GWP and PVP both declined in fourth
quarter 2024 compared with fourth quarter 2023. GWP and PVP are
affected by the mix of business, as well as market credit spreads,
which were tighter in fourth quarter 2024 compared with fourth
quarter 2023. The Company’s direct par written represented 61% of
the total U.S. primary municipal market insured par sold in fourth
quarter 2024, compared with 59% in fourth quarter 2023. The
Company’s penetration of all municipal issuance was 6.1% in fourth
quarter 2024, compared with 5.7% in fourth quarter 2023.
Non-U.S. public finance GWP increased while PVP decreased in
fourth quarter 2024 compared with fourth quarter 2023. GWP in
fourth quarter 2024 includes a change in the present value of
future premiums on a large existing transaction, which was not a
result of new business production and therefore excluded from PVP.
New non-U.S. public finance business closed in fourth quarter 2024
included guarantees of transactions in the regulated utility and
infrastructure sectors.
Structured finance GWP and PVP decreased in fourth quarter 2024
compared with fourth quarter 2023. In fourth quarter 2024,
structured finance GWP and PVP primarily included guaranties of a
portfolio of diversified real estate and subscription finance
facilities.
Business activity in the non-U.S. public finance and structured
finance markets often has long lead times and therefore may vary
from period to period.
Insurance Segment Adjusted Operating Income
Insurance segment adjusted operating income was $98 million in
fourth quarter 2024, compared with $339 million in fourth quarter
2023, which included a $189 million benefit as a result of Bermuda
tax law changes. Additional factors that contributed to the
decrease in the Insurance segment adjusted operating income in
fourth quarter 2024 compared with fourth quarter 2023 were
primarily lower fair value gains on trading securities and higher
loss expense, partially offset by an increase in net earned
premiums.
Insurance Segment
Results
(in millions)
Quarter Ended
December 31,
2024
2023
Segment revenues
Net earned premiums and credit derivative
revenues
$
107
$
86
Net investment income
93
97
Fair value gains (losses) on trading
securities
—
32
Foreign exchange gains (losses) on
remeasurement and other income (loss)
(1
)
18
Total segment revenues
199
233
Segment expenses
Loss expense (benefit)
31
7
Amortization of deferred acquisition costs
(DAC)
6
3
Employee compensation and benefit
expenses
42
42
Other operating expenses
27
29
Total segment expenses
106
81
Equity in earnings (losses) of
investees
19
22
Segment adjusted operating income
(loss) before income taxes
112
174
Less: Provision (benefit) for income
taxes
14
(165
)
Segment adjusted operating income
(loss)
$
98
$
339
The components of Insurance segment’s premiums, losses and
income from the investment portfolio are presented below.
Insurance Segment Net Earned Premiums and Credit Derivative
Revenues
Insurance Segment
Net Earned Premiums and Credit
Derivative Revenues
(in millions)
Quarter Ended
December 31,
2024
2023
Scheduled net earned premiums and credit
derivative revenues
$
90
$
83
Accelerations
17
3
Total
$
107
$
86
Insurance Segment Loss Expense (Benefit) and Roll Forward of
Expected Losses
Loss expense is a function of net economic loss development
(benefit) and the amortization of deferred premium revenue. The
difference between loss expense and economic development in a given
period is the amount of deferred premium revenue absorbing expected
losses to be paid.
Insurance Segment
Loss Expense (Benefit)
(in millions)
Quarter Ended
December 31,
2024
2023
Public finance
$
32
$
7
U.S. residential mortgage-backed
securities (RMBS)
(2
)
(1
)
Other structured finance
1
1
Total
$
31
$
7
The table below presents the roll forward of net expected losses
for fourth quarter 2024.
Roll Forward of Net Expected
Loss to be Paid (Recovered)(1)
(in millions)
Net Expected Loss to be Paid
(Recovered) as of September 30, 2024
Net Economic Loss Development
(Benefit)
Net (Paid) Recovered
Losses
Net Expected Loss to be Paid
(Recovered) as of December 31, 2024
Public finance
$
319
$
23
$
(226
)
$
116
U.S. RMBS
(46
)
(6
)
9
(43
)
Other structured finance
33
—
—
33
Total
$
306
$
17
$
(217
)
$
106
________________________________________________
(1)
Net economic loss development
(benefit) represents the change in net expected loss to be paid
(recovered) attributable to the effects of changes in the economic
performance of insured transactions, changes in assumptions based
on observed market trends, changes in discount rates, accretion of
discount and the economic effects of loss mitigation efforts, each
net of reinsurance. Net economic loss development (benefit) is the
principal measure that the Company uses to evaluate the loss
experience in its insured portfolio. Expected loss to be paid
(recovered) includes all transactions insured by the Company,
regardless of the accounting model prescribed under GAAP and
without consideration of deferred premium revenue.
The net economic loss development in fourth quarter 2024 of $17
million was mainly attributable to healthcare and United Kingdom
(U.K.) regulated utility exposures. The effect of changes in
risk-free rates used to discount expected losses was a loss of $3
million. In fourth quarter 2024, substantially all of the net paid
losses in public finance related to the satisfaction of all of the
Company’s remaining direct liabilities in trusts established as
part of the resolution of Puerto Rico Highway and Transportation
Authority obligations.
Insurance Segment Income from Investment Portfolio
Insurance Segment
Income from Investment
Portfolio
(in millions)
Quarter Ended
December 31,
2024
2023
Net investment income
$
93
$
97
Fair value gains (losses) on trading
securities (1)
—
32
Equity in earnings (losses) of investees
(2)
19
22
Total
$
112
$
151
________________________________________________
(1)
Primarily includes contingent
value instruments (CVIs) issued by Puerto Rico. As of December 31,
2024 the fair value of CVIs was $123 million, compared with $318
million as of December 31, 2023.
(2)
Equity in earnings (losses) of
investees primarily relates to funds managed by Sound Point Capital
Management, LP and certain of its investment management affiliates
(Sound Point) and Assured Healthcare Partners LLC (AHP), and
certain other managers. Investments in funds are reported on a
one-quarter lag.
Net investment income, which represents interest income on
available-for-sale fixed-maturity securities and short-term
investments, decreased to $93 million in fourth quarter 2024 from
$97 million in fourth quarter 2023, primarily due to accelerated
accretion on certain loss mitigation securities in fourth quarter
2023, that did not recur in fourth quarter 2024. This decrease was
partially offset by an increase in net investment income from a
portfolio of CLO equity tranches. Beginning in fourth quarter 2024,
CLO equity tranche investments are primarily held in the
available-for-sale fixed-maturity securities portfolio, with
changes in fair value reported in other comprehensive income, and
net interest income reported in net income. The Company had
previously held the CLO equity tranches in a Sound Point managed
fund with changes in net asset value reported in “equity in
earnings (losses) of investees” in the Insurance segment.
CLO equity tranches, regardless of how they are classified, are
considered a component of the alternative investment strategy.
Income from most other alternative investments is reported in
“equity in earnings (losses) of investees,” and generally
represents the change in net asset value. As of December 31, 2024,
based on fair value, the Company had $884 million in alternative
investments across a variety of asset classes: $760 million in the
Insurance segment consisting primarily of Sound Point and AHP
funds, and the remainder in the Corporate division. The
inception-to-date annualized internal rate of return for all
alternative investments was approximately 13%.
Equity in earnings (losses) of investees may be more volatile
than net investment income on available-for-sale fixed-maturity
securities and short-term investments. To the extent that the
amounts invested in alternative fund investments increase and
available-for-sale fixed-maturity securities decrease, net
investment income may decrease and mark-to-market volatility
related to equity in earnings (losses) of investees may
increase.
Asset Management Segment
Since July 2023, the Company participates in the asset
management business through its ownership interest in Sound Point.
Asset management adjusted operating income primarily consists of
the Company’s ownership interest in Sound Point, including the
amortization of intangible assets, as well as certain ongoing
performance fees. Sound Point’s results are reported on a
one-quarter lag and are included in “equity in earnings (losses) of
investees.”
Corporate Division
The Corporate division primarily consists of interest expense on
the debt of Assured Guaranty US Holdings Inc. and Assured Guaranty
Municipal Holdings Inc. (AGMH), as well as other operating expenses
attributed to holding company activities. Adjusted operating loss
for the Corporate division was $34 million in fourth quarter 2024
compared with $16 million in fourth quarter 2023. The increase in
the net loss attributable to the Corporate division is primarily
due to two non-recurring benefits in fourth quarter 2023: a $19
million tax benefit attributable to a change in New York State tax
law, and a $7 million adjustment to the pre-tax gain on the Sound
Point transaction.
The Corporate division also includes equity in earnings (losses)
of investees related to certain alternative investments, which
Assured Guaranty Inc. transferred to AGMH as part of the share
redemption that occurred on August 5, 2024. Equity in earnings of
investees was $5 million in fourth quarter 2024.
Reconciliation to GAAP
The following table presents a reconciliation of net income
(loss) attributable to AGL to adjusted operating income (loss).
Reconciliation of Net Income
(Loss) Attributable to AGL to
Adjusted Operating Income
(Loss)
(in millions, except per share
amounts)
Quarter Ended
December 31,
2024
2023
Total
Per Diluted Share
Total
Per Diluted Share
Net income (loss) attributable to
AGL
$
18
$
0.35
$
376
$
6.40
Less pre-tax adjustments:
Realized gains (losses) on investments
7
0.13
6
0.11
Non-credit impairment-related unrealized
fair value gains (losses) on credit derivatives
3
0.05
(3
)
(0.06
)
Fair value gains (losses) on committed
capital securities (CCS)
2
0.03
—
—
Foreign exchange gains (losses) on
remeasurement of premiums receivable and loss and loss adjustment
expense (LAE) reserves
(68
)
(1.29
)
42
0.71
Total pre-tax adjustments
(56
)
(1.08
)
45
0.76
Less tax effect on pre-tax adjustments
8
0.16
(7
)
(0.11
)
Adjusted operating income (loss)
$
66
$
1.27
$
338
$
5.75
Gain (loss) related to FG VIE and CIV
consolidation included in adjusted operating income
$
2
$
0.04
$
9
$
0.15
Foreign exchange gains (losses) primarily relate to
remeasurement of premiums receivable and are mainly due to changes
in the exchange rates relative to the U.S. dollar of the pound
sterling and, to a lesser extent, the euro.
Full Year 2024
Net income attributable to AGL in FY 2024 decreased to $376
million from $739 million in FY 2023, which included several large
non-recurring benefits: a $175 million after-tax gain (net of
expenses) associated with the Sound Point and AHP transactions and
a $208 million benefit related to Bermuda and New York State tax
law changes. Additional factors contributing to the decrease in net
income attributable to AGL primarily included: a $90 million
reduction in fair value gains on credit derivatives and an $80
million decline in foreign exchange remeasurement gains, which were
offset by a decrease in loss expense (which was a benefit in FY
2024 of $26 million compared with a loss of $162 million in FY
2023), and a $59 million increase in net earned premiums.
Adjusted operating income in FY 2024 was $389 million, compared
with $648 million in FY 2023, which included the benefits mentioned
above for the Sound Point and AHP transactions and the tax law
changes. Offsetting the decrease in adjusted operating income due
to non-recurring items in FY 2023, was a benefit in loss expense in
FY 2024 compared with the loss expense in FY 2023, and increased
net earned premiums.
Insurance Segment
New Business
Production
(in millions)
Year Ended December
31,
2024
2023
GWP
PVP (1)
Gross Par Written
GWP
PVP (1)
Gross Par Written
Public finance - U.S.
$
259
$
270
$
23,758
$
211
$
212
$
22,464
Public finance - non-U.S.
136
67
2,673
82
83
1,544
Structured finance - U.S.
20
25
1,476
59
68
1,886
Structured finance - non-U.S.
25
40
3,922
5
41
3,066
Total
$
440
$
402
$
31,829
$
357
$
404
$
28,960
________________________________________________
(1)
PVP was discounted at 5.0% and 4.0% in
2024 and 2023, respectively.
U.S. public finance GWP and PVP in FY 2024 were higher than GWP
and PVP in FY 2023, primarily due to a large transportation revenue
transaction written in 2024. The Company’s direct par written
represented 58% of the total U.S. primary municipal market insured
par sold in FY 2024, compared with 61% in FY 2023. The Company’s
penetration of all municipal issuance was 4.8% in FY 2024 compared
with 5.4% in FY 2023.
Non-U.S. public finance GWP increased while PVP decreased in FY
2024 compared with FY 2023. GWP in FY 2024 includes a change in the
present value of future premiums on a large existing transaction,
which was not a result of new business production and therefore
excluded from PVP. New business in FY 2024 primarily included
secondary market guaranties of several U.K. regulated utility and
airport transactions, as well as new and renewed liquidity
guarantees in the infrastructure sector.
In FY 2024, structured finance GWP and PVP decreased compared
with FY 2023. Structured finance GWP and PVP in FY 2024 were
primarily attributable to an insurance securitization, a bank
balance sheet relief transaction, a guaranty of a portfolio of
diversified real estate and subscription finance transactions.
Reconciliation to GAAP
The following table presents a reconciliation of net income
(loss) attributable to AGL to adjusted operating income (loss).
Reconciliation of Net Income
(Loss) Attributable to AGL to
Adjusted Operating Income
(Loss)
(in millions, except per share
amounts)
Year Ended
December 31,
2024
2023
Total
Per Diluted Share
Total
Per Diluted Share
Net income (loss) attributable to
AGL
$
376
$
6.87
$
739
$
12.30
Less pre-tax adjustments:
Realized gains (losses) on investments
9
0.16
(14
)
(0.23
)
Non-credit impairment-related unrealized
fair value gains (losses) on credit derivatives
14
0.27
106
1.75
Fair value gains (losses) on CCS
(10
)
(0.19
)
(35
)
(0.57
)
Foreign exchange gains (losses) on
remeasurement of premiums receivable and loss and LAE reserves
(26
)
(0.47
)
51
0.84
Total pre-tax adjustments
(13
)
(0.23
)
108
1.79
Less tax effect on pre-tax adjustments
—
—
(17
)
(0.27
)
Adjusted operating income (loss)
$
389
$
7.10
$
648
$
10.78
Gain (loss) related to FG VIE and CIV
consolidation included in adjusted operating income
$
(6
)
$
(0.12
)
$
(21
)
$
(0.35
)
Non-credit impairment-related unrealized fair value gains on
credit derivatives in FY 2024 were generated primarily due to the
termination of certain structured finance policies and generally
lower collateral asset spreads. Non-credit impairment-related
unrealized fair value gains on credit derivatives in FY 2023 were
generated primarily as a result of generally lower collateral asset
spreads.
Fair value losses on CCS in FY 2024 and FY 2023 were primarily
due to a tightening in market spreads. Fair value gains (losses) of
CCS are heavily affected by, and in part fluctuate with, changes in
market spreads and interest rates, credit spreads and other market
factors and are not expected to result in an economic gain or
loss.
Foreign exchange gains (losses) in FY 2024 and FY 2023 primarily
relate to remeasurement of premiums receivable and are mainly due
to changes in exchange rates relative to the U.S. dollar of the
pound sterling and, to a lesser extent, the euro.
Common Share Repurchases
On November 8, 2024, AGL’s Board of Directors authorized the
repurchase of an additional $250 million of the Company’s common
shares. From the beginning of the repurchase program in 2013
through February 27, 2025, the Company has repurchased a total of
151 million common shares for $5.4 billion, representing
approximately 78% of the total shares outstanding as of January 1,
2013. As of February 27, 2025, the Company was authorized to
purchase approximately $276 million of its common shares. These
repurchases can be made from time to time in the open market or in
privately negotiated transactions.
Summary of Share
Repurchases
(in millions, except per share
amounts)
Amount (1)
Number of Shares
Average Price Per
Share
2024 (January 1 - March 31)
$
129
1.54
$
84.07
2024 (April 1 - June 30)
151
1.93
78.50
2024 (July 1 - September 30)
131
1.66
78.87
2024 (October 1 - December 31)
91
1.05
86.11
Total 2024
$
502
6.18
81.28
2025 (January 1 - February 27)
$
76
0.83
$
91.53 ________________________________________________
(1)
Excludes commissions and excise
taxes.
The timing, form and amount of the share repurchases under the
program are at the discretion of management and will depend on a
variety of factors, including funds available at the parent
company, other potential uses for such funds, market conditions,
the Company’s capital position, legal requirements and other
factors. The repurchase program may be modified, extended or
terminated by the Board of Directors at any time. It does not have
an expiration date.
Subsequent Event
Following the exhaustion of LBIE’s appeals, the Company will
recognize a gain in the first quarter of 2025 of approximately $103
million, which represents the full satisfaction of the judgment it
was awarded and its claims for attorneys’ fees, expenses and
interest in connection with this litigation.
Financial Statements
Consolidated Statements of
Operations (unaudited)
(in millions)
Quarter Ended
Year Ended
December 31,
December 31,
2024
2023
2024
2023
Revenues
Net earned premiums
$
103
$
83
$
403
$
344
Net investment income
93
95
340
365
Asset management fees
—
—
—
53
Net realized investment gains (losses)
7
6
9
(14
)
Fair value gains (losses) on credit
derivatives
5
(1
)
24
114
Fair value gains (losses) on CCS
2
—
(10
)
(35
)
Fair value gains (losses) on FG VIEs
—
10
(11
)
8
Fair value gains (losses) on CIVs
15
28
69
88
Foreign exchange gains (losses) on
remeasurement
(70
)
44
(27
)
53
Fair value gains (losses) on trading
securities
—
32
52
74
Gain on sale of asset management
subsidiaries
—
7
—
262
Other income (loss)
1
23
23
61
Total revenues
156
327
872
1,373
Expenses
Loss and LAE (benefit)
28
3
(26
)
162
Interest expense
23
23
91
90
Amortization of DAC
6
3
20
13
Employee compensation and benefit
expenses
49
52
202
251
Other operating expenses
35
47
159
217
Total expenses
141
128
446
733
Income (loss) before income taxes and
equity in earnings (losses) of investees
15
199
426
640
Equity in earnings (losses) of
investees
15
3
62
28
Income (loss) before income
taxes
30
202
488
668
Less: Provision (benefit) for income
taxes
8
(177
)
96
(93
)
Net income (loss)
22
379
392
761
Less: Noncontrolling interests
4
3
16
22
Net income (loss) attributable to
AGL
$
18
$
376
$
376
$
739
Consolidated Balance Sheets
(unaudited)
(in millions)
As of
December 31, 2024
December 31, 2023
Assets
Investments:
Fixed-maturity securities,
available-for-sale, at fair value
$
6,369
$
6,307
Fixed-maturity securities, trading, at
fair value
147
318
Short-term investments, at fair value
1,221
1,661
Other invested assets
926
829
Total investments
8,663
9,115
Cash
121
97
Premiums receivable, net of commissions
payable
1,551
1,468
DAC
176
161
Salvage and subrogation recoverable
396
298
FG VIEs’ assets
147
328
Assets of CIVs
101
366
Other assets
746
706
Total assets
$
11,901
$
12,539
Liabilities
Unearned premium reserve
$
3,719
$
3,658
Loss and LAE reserve
268
376
Long-term debt
1,699
1,694
FG VIEs’ liabilities, at fair value
164
554
Other liabilities
498
492
Total liabilities
6,348
6,774
Shareholders’ equity
Common shares
1
1
Retained earnings
5,878
6,070
Accumulated other comprehensive income
(loss)
(385
)
(359
)
Deferred equity compensation
1
1
Total shareholders’ equity attributable
to AGL
5,495
5,713
Nonredeemable noncontrolling interests
58
52
Total shareholders’ equity
5,553
5,765
Total liabilities and shareholders’
equity
$
11,901
$
12,539
Explanation of Non-GAAP Financial Measures
The Company discloses both: (i) financial measures determined in
accordance with GAAP; and (ii) financial measures not determined in
accordance with GAAP (non-GAAP financial measures). Financial
measures identified as non-GAAP should not be considered
substitutes for GAAP financial measures. The primary limitation of
non-GAAP financial measures is the potential lack of comparability
to financial measures of other companies, whose definitions of
non-GAAP financial measures may differ from those of the
Company.
The Company believes its presentation of non-GAAP financial
measures provides information that is necessary for analysts to
calculate their estimates of Assured Guaranty’s financial results
in their research reports on Assured Guaranty and for investors,
analysts and the financial news media to evaluate Assured
Guaranty’s financial results.
GAAP requires the Company to consolidate entities where it is
deemed to be the primary beneficiary which include FG VIEs, which
the Company does not own and where its exposure is limited to its
obligation under the financial guaranty insurance contract, and
CIVs in which certain subsidiaries invest.
The Company discloses the effect of FG VIE and CIV consolidation
that is embedded in each non-GAAP financial measure, as applicable.
The Company believes this information may also be useful to
analysts and investors evaluating Assured Guaranty’s financial
results. In the case of both the consolidated FG VIEs and the CIVs,
the economic effect on the Company of each of the consolidated FG
VIEs and CIVs is reflected primarily in the results of the
Insurance segment.
Management of the Company and AGL’s Board of Directors use
non-GAAP financial measures further adjusted to remove the effect
of FG VIE and CIV consolidation (which the Company refers to as its
core financial measures), as well as GAAP financial measures and
other factors, to evaluate the Company’s results of operations,
financial condition and progress towards long-term goals. The
Company uses core financial measures in its decision-making process
for and in its calculation of certain components of management
compensation. The financial measures that the Company uses to help
determine compensation are: (1) adjusted operating income, further
adjusted to remove the effect of FG VIE and CIV consolidation; (2)
adjusted operating shareholders’ equity, further adjusted to remove
the effect of FG VIE and CIV consolidation; (3) adjusted book value
per share, further adjusted to remove the effect of FG VIE and CIV
consolidation; and (4) PVP.
Management believes that many investors, analysts and financial
news reporters use adjusted operating shareholders’ equity and/or
adjusted book value, each further adjusted to remove the effect of
FG VIE and CIV consolidation, as the principal financial measures
for valuing AGL’s current share price or projected share price and
also as the basis of their decision to recommend, buy or sell AGL’s
common shares.
Adjusted operating income, further adjusted for the effect of FG
VIE and CIV consolidation, enables investors and analysts to
evaluate the Company’s financial results in comparison with the
consensus analyst estimates distributed publicly by financial
databases.
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 and the most
directly comparable GAAP financial measure is presented below.
Adjusted Operating Income
Management believes that adjusted operating income is a useful
measure because it clarifies the understanding of the operating
results of the Company. Adjusted operating income is defined as net
income (loss) attributable to AGL, as reported under GAAP, adjusted
for the following:
1) Elimination of realized gains (losses) on
the Company’s investments that are recognized in net income (loss)
attributable to AGL, except for gains and losses on securities
classified as trading. The timing of realized gains and losses,
which depends largely on market credit cycles, can vary
considerably across periods. The timing of sales is largely subject
to the Company’s discretion and influenced by market opportunities,
as well as the Company’s tax and capital profile.
2) Elimination of non-credit
impairment-related unrealized fair value gains (losses) on credit
derivatives that are recognized in net income (loss) attributable
to AGL, which is the amount of unrealized fair value gains (losses)
in excess of the present value of the expected estimated economic
credit losses, and non-economic payments. Such fair value
adjustments are heavily affected by, and in part fluctuate with,
changes in market interest rates, the Company’s credit spreads, and
other market factors and are not expected to result in an economic
gain or loss.
3) Elimination of fair value gains (losses)
on the Company’s CCS that are recognized in net income (loss)
attributable to AGL. Such amounts are affected by changes in market
interest rates, the Company’s credit spreads, price indications on
the Company’s publicly traded debt and other market factors and are
not expected to result in an economic gain or loss.
4) Elimination of foreign exchange gains
(losses) on remeasurement of net premium receivables and loss and
LAE reserves that are recognized in net income (loss) attributable
to AGL. Long-dated receivables and loss and LAE reserves represent
the present value of future contractual or expected cash flows.
Therefore, the current period’s foreign exchange remeasurement
gains (losses) are not necessarily indicative of the total foreign
exchange gains (losses) that the Company will ultimately
recognize.
5) The tax effects related to the above
adjustments, which are determined by applying the statutory tax
rate in each of the jurisdictions that generate these
adjustments.
See “Reconciliation to GAAP” above for a reconciliation of net
income (loss) attributable to AGL to adjusted operating income
(loss).
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 that are not expected to
result in economic gain or loss.
Adjusted operating shareholders’ equity is defined as
shareholders’ equity attributable to AGL, as reported under GAAP,
adjusted for the following:
1) Elimination of non-credit
impairment-related unrealized fair value gains (losses) on credit
derivatives, which is the amount of unrealized fair value gains
(losses) in excess of the present value of the expected estimated
economic credit losses, and non-economic payments. Such fair value
adjustments are heavily affected by, and in part fluctuate with,
changes in market interest rates, credit spreads and other market
factors and are not expected to result in an economic gain or
loss.
2) Elimination of fair value gains (losses)
on the Company’s CCS. Such amounts are affected by changes in
market interest rates, the Company’s credit spreads, price
indications on the Company’s publicly traded debt and other market
factors and are not expected to result in an economic gain or
loss.
3) Elimination of unrealized gains (losses)
on the Company’s investments that are recorded as a component of
accumulated other comprehensive income (AOCI). The AOCI component
of the fair value adjustment on the investment portfolio is not
deemed economic because the Company generally holds these
investments to maturity and therefore would not recognize an
economic gain or loss.
4) The tax effects related to the above
adjustments, which are determined by applying the statutory tax
rate in each of the jurisdictions that generate these
adjustments.
Management uses adjusted book value, further adjusted to remove
the effect of FG VIE and CIV consolidation, to measure the
intrinsic value of the Company, excluding franchise value. Adjusted
book value per share, further adjusted for FG VIE and CIV
consolidation (core adjusted book value), is one of the key
financial measures used in determining the amount of certain
long-term compensation elements to management and employees and
used by rating agencies and investors. Management believes that
adjusted book value is a useful measure because it enables an
evaluation of the Company’s in-force premiums and revenues net of
expected losses. Adjusted book value is adjusted operating
shareholders’ equity, as defined above, further adjusted for the
following:
1) Elimination of deferred acquisition costs,
net. These amounts represent net deferred expenses that have
already been paid or accrued and will be expensed in future
accounting periods.
2) Addition of the net present value of
estimated net future revenue. See below.
3) Addition of the deferred premium revenue
on financial guaranty contracts in excess of expected loss to be
expensed, net of reinsurance. This amount represents the present
value of the expected future net earned premiums, net of the
present value of expected losses to be expensed, which are not
reflected in GAAP equity.
4) The tax effects related to the above
adjustments, which are determined by applying the statutory tax
rate in each of the jurisdictions that generate these
adjustments.
The unearned premiums and revenues included in adjusted book
value will be earned in future periods, but actual earnings may
differ materially from the estimated amounts used in determining
current adjusted book value due to changes in foreign exchange
rates, prepayment speeds, terminations, credit defaults and other
factors.
Reconciliation of
Shareholders’ Equity Attributable to AGL to
Adjusted Operating
Shareholders’ Equity and ABV
(in millions, except per share
amounts)
As of
December 31, 2024
December 31, 2023
Total
Per Share
Total
Per Share
Shareholders’ equity attributable to
AGL
$
5,495
$
108.80
$
5,713
$
101.63
Less pre-tax adjustments:
Non-credit impairment-related unrealized
fair value gains (losses) on credit derivatives
49
0.96
34
0.61
Fair value gains (losses) on CCS
2
0.05
13
0.22
Unrealized gain (loss) on investment
portfolio
(397
)
(7.86
)
(361
)
(6.40
)
Less taxes
46
0.90
37
0.66
Adjusted operating shareholders’
equity
5,795
114.75
5,990
106.54
Pre-tax adjustments:
Less: DAC
176
3.47
161
2.87
Plus: Net present value of estimated net
future revenue
202
3.99
199
3.54
Plus: Net deferred premium revenue on
financial guaranty contracts in excess of expected loss to be
expensed
3,473
68.75
3,436
61.12
Plus taxes
(702
)
(13.90
)
(699
)
(12.41
)
ABV
$
8,592
$
170.12
$
8,765
$
155.92
Gain (loss) related to FG VIE and CIV
consolidation included in:
Adjusted operating shareholders’
equity
$
—
$
0.01
$
5
$
0.07
ABV
(6
)
(0.13
)
—
—
Shares outstanding at the end of the
period
50.5
56.2
Net Present Value of Estimated Net Future Revenue
Management believes that this amount is a useful measure because
it enables an evaluation of the present value of estimated net
future revenue for non-financial guaranty insurance contracts. This
amount represents the net present value of estimated future revenue
from these contracts (other than credit derivatives with net
expected losses), net of reinsurance, ceding commissions and
premium taxes.
Future installment premiums are discounted at the approximate
average pre-tax book yield of fixed-maturity securities purchased
during the prior calendar year, other than Loss Mitigation
Securities. The discount rate is recalculated annually and updated
as necessary. Net present value of estimated future revenue for an
obligation may change from period to period due to a change in the
discount rate or due to a change in estimated net future revenue
for the obligation, which may change due to changes in foreign
exchange rates, prepayment speeds, terminations, credit defaults or
other factors that affect par outstanding or the ultimate maturity
of an obligation. There is no corresponding GAAP financial
measure.
PVP or Present Value of New Business Production
Management believes that PVP is a useful measure because it
enables the evaluation of the value of new business production in
the Insurance segment by taking into account the value of estimated
future installment premiums on all new contracts underwritten in a
reporting period as well as additional installment premiums and
fees on existing contracts (which may result from supplements or
fees or from the issuer not calling an insured obligation the
Company projected would be called), regardless of form, which
management believes GAAP gross written premiums and changes in fair
value of credit derivatives do not adequately measure. PVP in
respect of contracts written in a specified period is defined as
gross upfront and installment premiums received and the present
value of gross estimated future installment premiums.
Future installment premiums are discounted at the approximate
average pre-tax book yield of fixed-maturity securities purchased
during the prior calendar year, other than certain fixed-maturity
securities such as Loss Mitigation Securities. The discount rate is
recalculated annually and updated as necessary. Under GAAP,
financial guaranty installment premiums are discounted at a
risk-free rate. Additionally, under GAAP, management records future
installment premiums on financial guaranty insurance contracts
covering non-homogeneous pools of assets based on the contractual
term of the transaction, whereas for PVP purposes, management
records an estimate of the future installment premiums the Company
expects to receive, which may be based upon a shorter period of
time than the contractual term of the transaction.
Actual installment premiums may differ from those estimated in
the Company’s PVP calculation due to factors including, but not
limited to, changes in foreign exchange rates, prepayment speeds,
terminations, credit defaults, or other factors that affect par
outstanding or the ultimate maturity of an obligation.
Reconciliation of GWP to
PVP
(in millions)
Quarter Ended December 31,
2024
Public Finance
Structured Finance
U.S.
Non-U.S.
U.S.
Non-U.S.
Total
GWP
$
77
$
102
$
1
$
6
$
186
Less: Installment GWP and other GAAP
adjustments (1)
44
101
1
6
152
Upfront GWP
33
1
—
—
34
Plus: Installment premiums and other
(2)
44
22
1
20
87
PVP
$
77
$
23
$
1
$
20
$
121
Quarter Ended December 31,
2023
Public Finance
Structured Finance
U.S.
Non-U.S.
U.S.
Non-U.S.
Total
GWP
$
82
$
42
$
11
$
1
$
136
Less: Installment GWP and other GAAP
adjustments(1)
54
37
11
1
103
Upfront GWP
28
5
—
—
33
Plus: Installment premiums and other
(2)
55
40
26
1
122
PVP
$
83
$
45
$
26
$
1
$
155
Year Ended December 31,
2024
Public Finance
Structured Finance
U.S.
Non-U.S.
U.S.
Non-U.S.
Total
GWP
$
259
$
136
$
20
$
25
$
440
Less: Installment GWP and other GAAP
adjustments(1)
143
115
17
25
300
Upfront GWP
116
21
3
—
140
Plus: Installment premiums and other
(2)
154
46
22
40
262
PVP
$
270
$
67
$
25
$
40
$
402
Year Ended December 31,
2023
Public Finance
Structured Finance
U.S.
Non-U.S.
U.S.
Non-U.S.
Total
GWP
$
211
$
82
$
59
$
5
$
357
Less: Installment GWP and other GAAP
adjustments(1)
109
74
59
5
247
Upfront GWP
102
8
—
—
110
Plus: Installment premiums and other
(2)
110
75
68
41
294
PVP
$
212
$
83
$
68
$
41
$
404
________________________________________________
(1)
Includes the present value of new
business on installment policies discounted at the prescribed GAAP
discount rates, and GWP adjustments on existing installment
policies due to changes in assumptions and other GAAP
adjustments.
(2)
Includes the present value of
future premiums and fees on new business paid in installments
discounted at the approximate average pre-tax book yield of
fixed-maturity securities purchased during the prior calendar year,
other than certain fixed-maturity securities such as Loss
Mitigation Securities. Includes the present value of future
premiums and fees associated with other business written by the
Company that, under GAAP, are accounted for under ASC 460,
Guarantees.
Conference Call and Webcast Information
The Company will host a conference call for investors at 8:00
a.m. Eastern Time (9:00 a.m. Atlantic Time) on Friday, February 28,
2025. The conference call will be available via live webcast in the
Investor Information section of the Company’s website at
AssuredGuaranty.com or by dialing 1-833-470-1428 (in the U.S.) or
1-404-975-4839 (International); the access code is 680063.
A replay of the conference call will be available approximately
three hours after the call ends. The webcast replay will be
available for 90 days in the Investor Information section of the
Company’s website at AssuredGuaranty.com, and the telephone replay
will be available for 30 days by dialing 1-866-813-9403 (in the
U.S.) or 1-929-458-6194 (International); the access code is
810694.
Please refer to Assured Guaranty’s December 31, 2024 Financial
Supplement, which is posted on the Company’s website at
assuredguaranty.com/agldata, for more information on the Company’s
financial guaranty portfolio, investment portfolio and other items.
In addition, the Company is posting at
assuredguaranty.com/presentations its “December 31, 2024 Equity
Investor Presentation.”
The Company plans to post by early next week on its website at
assuredguaranty.com/agldata the following:
- “Public Finance Transactions in 4Q 2024,” which lists the U.S.
public finance new issues insured by the Company in fourth quarter
2024, and
- “Structured Finance Transactions at December 31, 2024,” which
lists the Company’s structured finance exposure as of that
date.
In addition, the Company will post on its website, when
available, Assured Guaranty Inc.’s financial supplement and its
“Fixed Income Presentation” for the current quarter. Those
documents will be furnished to the Securities and Exchange
Commission in a Current Report on Form 8-K.
Assured Guaranty Ltd. is a publicly traded (NYSE: AGO),
Bermuda-based holding company. Through its subsidiaries, Assured
Guaranty provides credit enhancement products to the U.S. and
non-U.S. public finance, infrastructure and structured finance
markets. Assured Guaranty also participates in the asset management
business through its ownership interest in Sound Point Capital
Management, LP and certain of its investment management affiliates.
More information on Assured Guaranty Ltd. and its subsidiaries can
be found at AssuredGuaranty.com.
Cautionary Statement Regarding Forward-Looking
Statements
Any forward-looking statements made in this press release
reflect the Company’s current views with respect to future events
and financial performance and are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Such statements involve risks and uncertainties that may cause
actual results to differ materially from those set forth in these
statements. Among factors that could cause actual results to differ
materially are:
(i) significant changes in inflation, interest rates, the
world’s credit markets or segments thereof, credit spreads, foreign
exchange rates or general economic conditions, including the
possibility of a recession or stagflation; (ii) geopolitical risk,
terrorism and political violence risk, including those arising out
of Russia’s invasion of Ukraine and intentional or accidental
escalation between The North Atlantic Treaty Organization (NATO)
and Russia, conflict in the Middle East and confrontation over
Iran’s nuclear program, the polarized political environment in the
United States (U.S.), and U.S. – China strategic competition; (iii)
cybersecurity risk and the impacts of artificial intelligence,
machine learning and other technological advances, including
potentially increasing the risks of malicious cyber attacks,
dissemination of misinformation, and disruption of markets,
including the markets in which the Company participates; (iv) the
possibility of a U.S. government shutdown, payment defaults on the
debt of the U.S. government or instruments issued, insured or
guaranteed by related institutions, agencies or instrumentalities,
and downgrades to their credit ratings; (v) developments in the
world’s financial and capital markets, including stresses in the
financial condition of banking institutions in the U.S. and the
possibility that increasing participation of unregulated financial
institutions in these markets results in losses or lower valuations
of assets, reduced liquidity and credit and/or contraction of these
markets, that adversely affect repayment rates of insured obligors,
Assured Guaranty’s insurance loss or recovery experience, or
investments of Assured Guaranty; (vi) reduction in the amount of
available insurance opportunities and/or in the demand for Assured
Guaranty’s insurance; (vii) the possibility that budget or pension
shortfalls, difficulties in obtaining additional financing or other
factors will result in credit losses or liquidity claims on
obligations of state, territorial and local governments, their
related authorities, public corporations and other obligors that
Assured Guaranty insures or reinsures; (viii) insured losses,
including losses with respect to related legal proceedings, in
excess of those expected by Assured Guaranty or the failure of
Assured Guaranty to realize loss recoveries that are assumed in its
expected loss estimates for insurance exposures, including
below-investment-grade (BIG) healthcare, U.K. regulated utilities,
European renewable energy, and Puerto Rico Electric Power Authority
(PREPA) exposures; (ix) the impact of Assured Guaranty satisfying
its obligations under insurance policies with respect to legacy
insured Puerto Rico bonds; (x) the possibility that underwriting
insurance in new jurisdictions and/or covering new sectors or
classes of business does not result in the benefits anticipated or
subjects Assured Guaranty to negative consequences; (xi) increased
competition, including from new entrants into the financial
guaranty industry, nonpayment insurance and other forms of capital
saving or risk syndication available to banks and insurers; (xii)
the possibility that investments made by Assured Guaranty for its
investment portfolio, including alternative investments, do not
result in the benefits anticipated or subject Assured Guaranty to
reduced liquidity at a time it requires liquidity, or to other
negative or unanticipated consequences; (xiii) the impacts of
Assured Guaranty’s transaction with Sound Point Capital Management,
LP (Sound Point, LP) and certain of its investment management
affiliates (together with Sound Point, LP, Sound Point) on Assured
Guaranty and its relationships with its shareholders, regulators,
rating agencies and the obligors it insures and on Assured
Guaranty’s Asset Management segment results; (xiv) the possibility
that mergers, acquisitions, divestitures and other strategic
transactions made by Assured Guaranty, including the transactions
with Sound Point and/or Assured Healthcare Partners LLC (AHP)
and/or merger of Assured Guaranty Municipal Corp. (AGM) with and
into Assured Guaranty Inc. (AG, formerly Assured Guaranty Corp.),
do not result in the benefits anticipated or subject Assured
Guaranty to negative consequences; (xv) the inability to control
the business, management or policies of entities in which Assured
Guaranty holds a minority interest; (xvi) the impact of market
volatility on the fair value of Assured Guaranty’s assets and
liabilities subject to mark-to-market, including certain of its
investments, contracts accounted for as derivatives, its committed
capital securities, its consolidated investment vehicles (CIVs) and
consolidated variable interest entities (VIEs); (xvii) rating
agency action, including a ratings downgrade, a change in outlook,
the placement of ratings on watch for downgrade, or a change in
rating criteria, at any time, of AGL or any of its insurance
subsidiaries, and/or of any securities AGL or any of its
subsidiaries have issued, and/or of transactions that AGL’s
insurance subsidiaries have insured; (xviii) the inability of
Assured Guaranty to access external sources of capital on
acceptable terms; (xix) changes in applicable accounting policies
or practices; (xx) changes in applicable laws or regulations,
including insurance, bankruptcy and tax laws, or other governmental
actions; (xxi) the possibility that legal or regulatory decisions
or determinations subject Assured Guaranty or obligations that it
insures or reinsures to negative consequences; (xxii) difficulties
with the execution of Assured Guaranty’s business strategy; (xxiii)
loss of key personnel; (xxiv) public health crises, including
pandemics and endemics, and the governmental and private actions
taken in response to such events; (xxv) natural or man-made
catastrophes; (xxvi) the impact of climate change on Assured
Guaranty’s business and regulatory actions taken related to such
risk; (xxvii) other risk factors identified in AGL’s filings with
the U.S. Securities and Exchange Commission (SEC); (xxviii) other
risks and uncertainties that have not been identified at this time;
and (xxix) management’s response to these factors.
Readers are cautioned not to place undue reliance on these
forward-looking statements. These forward-looking statements are
made as of February 27, 2025, and Assured Guaranty undertakes no
obligation to update or review any forward-looking statement,
whether as a result of new information, future developments or
otherwise, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250226802905/en/
Robert Tucker Senior Managing Director, Investor Relations and
Corporate Communications 212-339-0861 rtucker@agltd.com
Ashweeta Durani Director, Media Relations 212-408-6042
adurani@agltd.com
Assured Guaranty Municipal (NYSE:AGO)
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부터 2월(2) 2025 으로 3월(3) 2025
Assured Guaranty Municipal (NYSE:AGO)
과거 데이터 주식 차트
부터 3월(3) 2024 으로 3월(3) 2025
