Economic Indicators - The U.S. unemployment rate as of August 2025 was 4.3%, up from 4.1% at the beginning of the year[393]. - The annual GDP growth rate for Q2 2025 was 3.8%, following a decline of 0.6% in Q1 2025[393]. - The inflation rate in the U.S. for the 12-month period ending September 2025 was 3.0%, compared to 2.4% for the same period in 2024[394]. - The U.K. inflation rate for the 12 months through September 2025 was 4.1%, up from 2.6% in the previous year[394]. - The Federal Open Market Committee (FOMC) lowered the federal funds rate from a target range of 5.25%-5.50% to 3.75%-4.00% between September 2024 and October 2025[395]. - The Bank of England's base rate was lowered to 4.00% as of November 6, 2025, in response to easing inflationary pressures[397]. Company Performance - Net income attributable to AGL for Q3 2025 was $105 million, down from $171 million in Q3 2024, primarily due to foreign exchange losses of $23 million compared to gains of $55 million in the prior year[432][437]. - Adjusted operating income for Q3 2025 was $124 million, a decrease from $130 million in Q3 2024, mainly due to lower benefits in loss expense for the U.S. RMBS sector[443]. - For the nine months ended September 30, 2025, net income attributable to AGL was $384 million, compared to $358 million in the same period of 2024, driven by a fair value gain on credit derivatives of $103 million[438]. - As of September 30, 2025, shareholders' equity attributable to AGL was $5,658 million, up from $5,495 million at the end of 2024[433]. - Total revenues for Q3 2025 were $207 million, down from $269 million in Q3 2024, with net earned premiums at $94 million compared to $97 million[436]. Share Repurchase and Investments - The Company has repurchased 155 million common shares for $5.8 billion since 2013, representing 80% of the total shares outstanding at the beginning of the repurchase program[424]. - The Company has agreed to invest an aggregate amount of $1.5 billion in alternative investments, including $1 billion in Sound Point managed investments[422]. - Cumulative share repurchases since 2013 amounted to $5,782 million, with an estimated accretive effect of approximately $65.18 per share in shareholders' equity attributable to AGL[427][428]. - The company redeemed $250 million of its common stock in Q3 2025, receiving $213 million in cash and $37 million in alternative investments[428]. Market Activity - New municipal bonds issued totaled $430.0 billion in the nine months ended September 30, 2025, compared to $375.1 billion in the same period of 2024[407]. - The total insured amount for new municipal bonds was $34.2 billion in the nine months ended September 30, 2025, an increase from $28.9 billion in the same period of 2024[407]. - The bond insurance market penetration based on par was 7.9% for the nine months ended September 30, 2025, compared to 7.7% for the same period in 2024[407]. - U.S. public finance GWP in Q3 2025 increased to $77 million from $35 million in Q3 2024, representing a 120% growth[471]. - Total GWP for Q3 2025 was $75 million, up from $61 million in Q3 2024, marking a 23% increase[471]. Financial Metrics - The effective tax rate for Q3 2025 was 15.4%, compared to 19.9% in Q3 2024, reflecting the tax jurisdictions of the company's subsidiaries[436][439]. - The overall pre-tax book yield of available-for-sale fixed-maturity securities and short-term investments was 4.80% as of September 30, 2025, compared to 4.10% a year earlier[488]. - The total net par outstanding for the financial guaranty portfolio increased to $274,875 million as of September 30, 2025, up from $261,552 million as of December 31, 2024, representing a growth of 5.03%[577]. - The total U.S. public finance exposure reached $212,091 million as of September 30, 2025, compared to $201,175 million at the end of 2024, marking an increase of 5.93%[577]. Risk Factors - Assured Guaranty is exposed to risks from geopolitical tensions, including the conflict arising from Russia's invasion of Ukraine[381]. - The company anticipates that a recession may increase the likelihood of defaults among obligors whose obligations it guarantees[392]. - The company identified no material direct exposure to Ukraine or Russia, with direct insurance exposure to Eastern Europe limited to $210 million in net par outstanding[450]. Operational Changes - The company opened new offices in Australia and Singapore in 2024 to expand its financial guaranty business geographically[409]. - The company is actively monitoring market volatility, which may create new business opportunities despite potential risks[392]. - The company has ongoing strategic transactions with Sound Point Capital Management and Assured Healthcare Partners, which may impact future performance[381]. Loss and Expense Management - The insurance segment's adjusted operating income for nine months 2025 was $389 million, compared to $427 million in nine months 2024, reflecting a decrease in performance[460]. - The company reported a loss and LAE of $38 million in nine months 2025, compared to a benefit of $54 million in nine months 2024[446]. - The economic loss development for U.S. public finance exposures was $51 million for the nine months ended September 30, 2025, mainly attributable to PREPA and certain healthcare exposures[505]. - The total net expected loss to be paid (recovered) for public finance was $103 million as of September 30, 2025, compared to $319 million as of September 30, 2024[500].

Financial Performance - Adjusted operating income reached $336 million, a 17% increase per share compared to the same period in 2024[15] - The company earned $124 million of adjusted operating income in the third quarter, a 6% increase on a per share basis above the third quarter 2024 amount[11] - The alternative investment portfolio generated $112 million of pre-tax adjusted operating income[15] New Business and Capital Management - $25 billion of new business par was insured, the highest amount in the first nine months in a decade[15] - $9 billion of new business par was insured in the third quarter, the largest third-quarter amount in a decade[11, 18] - $194 million of PVP was generated[15, 18] - Over 4 million shares were repurchased at a cost of $369 million, representing nearly 9% of shares outstanding on December 31, 2024[15] Portfolio and Resources - The total investment portfolio plus cash stands at $89 billion[28, 64] - Claims-paying resources are $101 billion, resulting in a net par outstanding to claims-paying resources ratio of 27:1[28] - Net par outstanding is $2749 billion, with U S public finance accounting for $2121 billion, non-U S public finance for $513 billion, and global structured finance for $115 billion[28]

Financial Performance - Net income attributable to Assured Guaranty Ltd. for Q3 2025 was $105 million, a decrease of 38.6% from $171 million in Q3 2024[6]. - Adjusted operating income for Q3 2025 was $124 million, compared to $130 million in Q3 2024, reflecting a decline of 4.6%[6]. - The diluted earnings per share (EPS) for Q3 2025 was $2.18, a decrease of 31.24% from $3.17 in Q3 2024[6]. - The company’s return on equity (ROE) for Q3 2025 was 7.4%, down from 12.1% in Q3 2024[6]. - Total capital returned to common shareholders was $134 million in Q3 2025, compared to $147 million in Q3 2024, a decline of 8.84%[6]. - For the three months ended September 30, 2025, net income attributable to AGL was $105 million, down 38.56% from $171 million in the prior year[15]. - Adjusted operating income for the three months ended September 30, 2025, was $124 million, a decrease of 4.62% from $130 million in the same period of 2024[19]. - Basic earnings per share for the three months ended September 30, 2025, were $2.20, compared to $3.23 for the same period in 2024, a decline of 31.93%[15]. - Adjusted operating income for the nine months ended September 30, 2025, was $336 million, compared to $389 million in 2024, reflecting a decrease of 13.6%[148]. Revenue and Premiums - Gross written premiums (GWP) increased to $75 million in Q3 2025, up 22.95% from $61 million in Q3 2024[6]. - For the nine months ended September 30, 2025, total revenues reached $833 million, up 16.38% from $716 million in the same period of 2024[15]. - For the three months ended September 30, 2025, total revenues were $207 million, compared to $206 million in the previous year, reflecting a marginal increase of 0.49%[26]. - Net earned premiums for the insurance segment were $95 million, with total expenses amounting to $92 million, resulting in a net income of $105 million[26]. - Total gross written premiums (GWP) for the nine months ended September 30, 2025, reached $195 million, compared to $254 million in the same period of 2024[63]. Assets and Equity - The company reported total assets of $12,101 million as of September 30, 2025, an increase from $11,901 million as of December 31, 2024[17]. - As of September 30, 2025, shareholders' equity attributable to AGL increased to $5,658 million from $5,495 million as of December 31, 2024, representing a growth of 2.97%[11]. - The company’s long-term debt remained stable at $1,702 million as of September 30, 2025, compared to $1,699 million at the end of 2024[17]. - Shareholders' equity attributable to AGL per share increased to $121.13, compared to $108.80 in 2024, representing a growth of 11.5%[144]. - Adjusted operating shareholders' equity per share increased to $123.10 from $114.75 year-over-year[152]. Investment Performance - The company reported a fair value gain of $17 million on CIVs for the three months ended September 30, 2025[26]. - The company recorded unrealized losses on the investment portfolio amounting to $(159) million for the three months ended September 30, 2025[25]. - The total net investment income for the three months ended September 30, 2025, was $94 million, compared to $82 million for the same period in 2024, representing a 14.6% increase[50]. - The total net investment income for the nine months ended September 30, 2025, was $270 million, an increase from $247 million in the same period of 2024, reflecting a growth of 9.3%[53]. - The annualized investment income based on amortized cost and pre-tax book yields was reported at $369 million[38]. Claims and Losses - Total claims-paying resources were reported at $10,138 million, slightly down from $10,211 million as of December 31, 2024[11]. - The financial guaranty insurance segment reported a net expected loss of $186 million for the three months ended September 30, 2025, reflecting ongoing challenges in the market[79]. - The total expected net loss to be paid as of September 30, 2025, is $104 million, with significant recoveries noted in both public and structured finance sectors[80]. - The company anticipates a total of $97,393 million in net expected loss amortization from 2025 to 2029, indicating a robust outlook for future financial stability[76]. Risk Management and Capitalization - The capital ratio was reported at 79:1, indicating strong financial stability relative to net debt service outstanding[61]. - The net exposure to qualified statutory capital ratio stood at 50:1, demonstrating effective risk management practices[61]. - Below Investment Grade (BIG) exposures totaled $11,378 million as of September 30, 2025, an increase of 11.7% compared to $10,182 million at the end of 2024[111]. - The company anticipates continued market expansion and strategic initiatives to enhance its portfolio and mitigate risks associated with below investment grade exposures[111]. Non-GAAP Measures - The Company presents both GAAP and non-GAAP financial measures, with non-GAAP measures providing necessary information for analysts and investors to evaluate financial results[182]. - Adjusted operating income is defined as net income attributable to AGL, adjusted for realized gains/losses, non-credit impairment-related unrealized gains/losses, and foreign exchange gains/losses[190][193]. - The Company emphasizes that non-GAAP measures should not be considered substitutes for GAAP measures due to potential lack of comparability[181].

Core Insights - Royce Small-Cap Trust, a closed-end diversified management investment company, aims for long-term capital growth by investing primarily in small-cap and micro-cap companies [10][14]. Performance Summary - As of September 30, 2025, the Net Asset Value (NAV) is $17.86, while the market price is $16.13 [1]. - The average annual total return for the Fund as of September 30, 2025, is as follows: - One-Month: NAV 1.10%, MKT 2.22% - Year to Date: NAV 11.38%, MKT 8.17% - One-Year: NAV 12.03%, MKT 12.01% - Three-Year: NAV 18.90%, MKT 17.90% - Five-Year: NAV 12.70%, MKT 14.14% - Ten-Year: NAV 11.84%, MKT 12.55% [2]. Portfolio Diagnostics - The Fund's average market capitalization is $3.3835 billion, with a weighted average Price-to-Earnings (P/E) ratio of 18.7x and a weighted average Price-to-Book (P/B) ratio of 2.3x [5]. - The total net assets of the Fund amount to $2.15 billion [5]. Portfolio Composition - The top ten positions in the portfolio and their respective percentages of net assets include: - IES Holdings: 2.3% - Assured Guaranty: 1.4% - E-L Financial: 1.1% - APi Group: 1.1% - SEI Investments: 1.0% - Brady Corporation Cl. A: 1.0% - International General Insurance Holdings: 1.0% - Arcosa: 1.0% - Dorman Products: 1.0% - Alamos Gold Cl. A: 0.9% [10]. - The top five sectors by percentage of net assets are: - Industrials: 25.1% - Financials: 21.0% - Information Technology: 13.8% - Consumer Discretionary: 10.7% - Health Care: 9.2% [10]. Additional Information - The Fund's adviser has over 50 years of experience in small- and micro-cap investments [9]. - Daily NAVs for Royce Small-Cap Trust are accessible on their website and through various financial services [11].

Core Viewpoint - Assured Guaranty Ltd. will release its financial results for the third quarter ended September 30, 2025, on November 6, 2025, after 4:00 p.m. Eastern Time [1] Financial Results Announcement - The financial results press release will be available in the Investor Information section of the Company's website [1] - The release will include the Financial Supplement for September 30, 2025 [1]

Core Insights - The Royce Small-Cap Trust aims for long-term capital growth by investing at least 65% of its assets in small-cap and micro-cap equity securities [9] Performance Summary - As of August 31, 2025, the Fund's NAV was $17.98 and the market price was $16.06 [1] - Average annual total returns as of August 31, 2025: - One-Month: NAV 5.39%, MKT 5.80% - Year to Date: NAV 10.17%, MKT 5.81% - One-Year: NAV 11.28%, MKT 12.63% - Three-Year: NAV 14.23%, MKT 10.66% - Five-Year: NAV 11.76%, MKT 12.50% - Ten-Year: NAV 11.18%, MKT 11.82% [2] Portfolio Composition - The Fund has a net asset value of $2.15 billion and an average market capitalization of $3.357 billion [4] - The weighted average P/E ratio is 18.6x and the weighted average P/B ratio is 2.2x [4] - Top five sectors by net assets: - Industrials: 25.0% - Financials: 21.6% - Information Technology: 13.5% - Consumer Discretionary: 10.4% - Health Care: 9.0% [8] Investment Strategy - The Fund primarily invests in small-cap and micro-cap companies, which may involve higher risks compared to larger-cap companies [3] - The Fund's adviser has over 50 years of experience in small- and micro-cap investments [7]

Core Insights - The Royce Small-Cap Trust aims for long-term capital growth by investing at least 65% of its assets in equity securities of small- and micro-cap companies [8] Performance Summary - As of July 31, 2025, the Net Asset Value (NAV) is $17.06, while the market price is $15.18 [1] - The average annual total return for the NAV over the past five years is 11.24%, and for the market, it is 11.98% [1] - Year-to-date return for NAV is 4.53%, compared to a mere 0.02% for the market [1] Portfolio Diagnostics - The average market capitalization of the portfolio is $3.2075 billion [3] - The weighted average Price-to-Earnings (P/E) ratio is 18.5x, and the weighted average Price-to-Book (P/B) ratio is 2.1x [3] - The total net assets of the fund amount to $2.04 billion [3] Portfolio Composition - The top ten positions account for a significant portion of net assets, with IES Holdings at 2.1% and Assured Guaranty at 1.4% [7] - The largest sectors by net assets include Industrials (25.4%), Financials (22.5%), and Information Technology (14.4%) [7] Recent Developments - Royce Small-Cap Trust is a closed-end diversified management investment company listed on the New York Stock Exchange under the symbol RVT [8] - The fund has an average weekly trading volume of approximately 1,343,647 shares [6]

Financial Data and Key Metrics Changes - Adjusted book value per share reached a record high of $176.95, and adjusted operating shareholders' equity per share also reached a record high of $120.11 at the end of Q2 2025 [6] - Adjusted operating income for Q2 2025 was $50 million or $1.1 per share, compared to $80 million or $1.44 per share in Q2 2024 [22][25] - Net earned premiums and net investment income increased, contributing to the earnings power of core earnings [22] Business Line Data and Key Metrics Changes - The company insured $14.1 billion of new issued par sold in the primary market, a 30% increase compared to the same period last year [13] - In the secondary market, the company wrote nearly $900 million of policies in the first half of 2025, with over $500 million in Q2 alone, representing a 150% increase compared to the total amount insured in all of 2024 [8][13] - The insurance segment contributed $76 million to adjusted operating income, while the asset management segment contributed $4 million [27] Market Data and Key Metrics Changes - US municipal issuance was 17% ahead of last year's record pace through June 30, 2025 [7] - The total market volume reached $278 billion by June 30, 2025, with forecasts suggesting that municipal issuance in 2025 could surpass $500 billion [20] Company Strategy and Development Direction - The company aims to maintain its leadership position in US municipal bond insurance while expanding and diversifying its global infrastructure and structured finance reach [12] - A share repurchase program with a target of $500 million for the year is in place, with $296 million already repurchased as of August 6, 2025 [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory in both US and non-US markets, citing a strong competitive position and excellent capital and earnings [11] - The company is well-positioned for the second half of the year, with many attractive opportunities in global infrastructure and structured finance [20] Other Important Information - The company received affirmations of its financial strength ratings from S&P Global Ratings and KBRA, both with stable outlooks [11] - A $250 million stock redemption by the US insurance subsidiary was approved, expected to be executed in 2025 [30] Q&A Session Summary Question: Impact of lower interest rates on AGO's opportunities - Management noted that a lower interest rate environment could depress premium volume but may also lead to more issuers in the market, balancing the impact [33][34][39] Question: Increase in big exposures and loss expenses - Management explained that the increase in loss expenses is due to additional reserves on certain UK regulated utility and US municipal revenue exposures, emphasizing their strong surveillance team [40][68] Question: Future of Puerto Rico Oversight Board and restructuring - Management expressed optimism that changes in the Puerto Rico Oversight Board could lead to improvements in restructuring processes, viewing it as a potential positive development [52][54] Question: Performance of contingent value instruments - The company holds approximately $117 million in contingent value securities, which have performed well, and expects continued improvement [58][60]

PART I Financial Information This section presents the company's unaudited condensed consolidated financial statements, management's analysis, market risk disclosures, and internal controls [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Assured Guaranty Ltd.'s unaudited condensed consolidated financial statements and detailed notes for Q2 2025 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides the company's condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024 Condensed Consolidated Balance Sheet Highlights (Unaudited) | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Total Investments | $8,569 | $8,663 | | Total Assets | $12,095 | $11,901 | | Total Liabilities | $6,366 | $6,348 | | Total Shareholders' Equity | $5,729 | $5,553 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024 Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $281M | $202M | $626M | $447M | | Total Expenses | $151M | $113M | $320M | $238M | | Net Income (Loss) | $106M | $81M | $291M | $194M | | Net Income (Loss) Attributable to AGL | $103M | $78M | $279M | $187M | | Diluted EPS | $2.08 | $1.41 | $5.54 | $3.31 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section details the condensed consolidated statements of comprehensive income for the three and six months ended June 30, 2025 and 2024 Comprehensive Income (Loss) Highlights (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $106M | $81M | $291M | $194M | | Other Comprehensive Income (Loss) | $87M | $(5)M | $158M | $(33)M | | Comprehensive Income (Loss) Attributable to AGL | $190M | $73M | $437M | $154M | [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) This section outlines the changes in condensed consolidated shareholders' equity for the periods presented - For the six months ended June 30, 2025, total shareholders' equity attributable to Assured Guaranty Ltd. increased from **$5,495 million** to **$5,633 million**. The increase was primarily driven by net income of **$279 million** and other comprehensive income of **$158 million**, partially offset by common share repurchases of **$252 million** and dividends of **$37 million**[25](index=25&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the condensed consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 Condensed Consolidated Cash Flow Summary (Unaudited) | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $165 | $(16) | | Net cash provided by (used in) investing activities | $351 | $340 | | Net cash provided by (used in) financing activities | $(327) | $(500) | | Increase (decrease) in cash | $197 | $(177) | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed notes explaining the accounting policies and significant financial information presented in the statements - The company operates in two main segments: Insurance, which provides credit protection products for public finance and structured finance markets, and Asset Management, primarily through an ownership interest in Sound Point Capital Management, LP[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) - Total financial guaranty net par outstanding increased to **$272.8 billion** as of June 30, 2025, from **$261.6 billion** at year-end 2024. Below-investment-grade (BIG) exposure constituted **3.8%** of the total net par outstanding[89](index=89&type=chunk)[90](index=90&type=chunk) - Net expected loss to be paid increased to **$186 million** as of June 30, 2025, from **$106 million** at year-end 2024. The increase in the first six months of 2025 was driven by higher expected losses in public finance, particularly U.K. regulated utilities, PREPA, and healthcare, partially offset by a significant recovery from the LBIE litigation[118](index=118&type=chunk)[127](index=127&type=chunk)[130](index=130&type=chunk) - The company repurchased **2.9 million** common shares for **$252 million** in the first six months of 2025. As of August 6, 2025, an additional **$300 million** was authorized for repurchases, leaving a total authorization of approximately **$356 million**[25](index=25&type=chunk)[366](index=366&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=67&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, economic environment, business strategies, and non-GAAP reconciliations [Overview](index=68&type=section&id=Overview) This section provides a high-level summary of the company's business segments and the prevailing economic environment - The company operates through two primary segments: Insurance (credit protection for public and structured finance) and Asset Management (via an ownership interest in Sound Point)[381](index=381&type=chunk)[382](index=382&type=chunk) - Management highlights key economic factors impacting the business, including global tariff uncertainty, inflation rates in the U.S. (**2.7%**) and U.K. (**4.1%**), and the Federal Reserve holding the federal funds rate at **4.25%-4.50%**. These factors can influence obligor default rates, new business opportunities, and investment portfolio values[384](index=384&type=chunk)[386](index=386&type=chunk)[387](index=387&type=chunk) [Key Business Strategies](index=70&type=section&id=Key%20Business%20Strategies) This section outlines the company's strategic priorities across its insurance, asset management, alternative investments, and capital management activities - The company is pursuing four key business strategies: **Insurance** (grow portfolio, mitigate losses), **Asset Management** (fee-based earnings via Sound Point), **Alternative Investments** (diversify, enhance returns, **$1.5 billion** commitment including **$1 billion** in Sound Point funds), and **Capital Management** (share repurchases, **154 million** shares for **$5.7 billion** from 2013 through August 6, 2025)[393](index=393&type=chunk)[394](index=394&type=chunk)[412](index=412&type=chunk)[413](index=413&type=chunk)[415](index=415&type=chunk) [Executive Summary](index=73&type=section&id=Executive%20Summary) This section provides a concise overview of the company's financial performance and key metrics for the reporting period Financial Performance Summary | Metric | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | **GAAP** | | | | Net Income Attributable to AGL | $279M | $187M | | Diluted EPS | $5.54 | $3.31 | | **Non-GAAP** | | | | Adjusted Operating Income | $212M | $193M | | Adjusted Operating Income per Diluted Share | $4.21 | $3.41 | Shareholders' Equity Per Share Summary | Metric (per share) | As of June 30, 2025 | As of Dec 31, 2024 | | :--- | :--- | :--- | | Shareholders' Equity Attributable to AGL | $117.10 | $108.80 | | Adjusted Operating Shareholders' Equity (Non-GAAP) | $120.11 | $114.75 | | Adjusted Book Value (ABV) (Non-GAAP) | $176.95 | $170.12 | - The increase in net income for the first six months of 2025 compared to 2024 was primarily driven by foreign exchange gains of **$116 million** and a **$103 million** gain from the resolution of the LBIE litigation. This was partially offset by higher loss expenses and lower fair value gains on trading securities[428](index=428&type=chunk)[436](index=436&type=chunk) [Results of Operations by Segment](index=79&type=section&id=Results%20of%20Operations%20by%20Segment) This section analyzes the financial performance and key operational metrics for the company's Insurance, Asset Management, and Corporate segments Insurance Segment: New Business Production (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Gross Written Premiums (GWP) | $120M | $193M | | Present Value of New Business Production (PVP) | $103M | $218M | | Gross Par Written | $15,398M | $13,166M | - The Insurance segment's adjusted operating income decreased to **$244 million** in the first six months of 2025 from **$265 million** in the same period of 2024. The decrease was driven by higher loss expenses in public finance and lower earned premiums from refundings[434](index=434&type=chunk)[448](index=448&type=chunk) - The Asset Management segment's adjusted operating income increased to **$16 million** in the first six months of 2025 from **$1 million** in 2024, primarily reflecting the performance of the company's investment in Sound Point[508](index=508&type=chunk)[509](index=509&type=chunk) - The Corporate division's adjusted operating loss narrowed to **$(49) million** in the first six months of 2025 from **$(72) million** in 2024, mainly due to lower allocated operating expenses and positive equity earnings from alternative investments transferred to the holding company[509](index=509&type=chunk)[510](index=510&type=chunk)[511](index=511&type=chunk) [Non-GAAP Financial Measures](index=92&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and reconciles the company's non-GAAP financial measures, including Adjusted Operating Income and Adjusted Book Value - The company uses several non-GAAP measures, including Adjusted Operating Income, Adjusted Operating Shareholders' Equity, and Adjusted Book Value (ABV), to evaluate performance. These measures exclude items like unrealized gains/losses on investments and derivatives, which management believes are not indicative of core operating results[534](index=534&type=chunk)[535](index=535&type=chunk)[542](index=542&type=chunk)[543](index=543&type=chunk) Reconciliation of Net Income to Adjusted Operating Income (Six Months Ended June 30) | Metric (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net income attributable to AGL | $279 | $187 | | Total pre-tax adjustments | $80 | $(6) | | Tax effect on adjustments | $(13) | $0 | | **Adjusted operating income** | **$212** | **$193** | Reconciliation of Shareholders' Equity to ABV (as of June 30, 2025) | Metric (in millions) | Amount | | :--- | :--- | | Shareholders' equity attributable to AGL | $5,633 | | Adjustments for unrealized gains/losses, etc. | $145 | | **Adjusted operating shareholders' equity** | **$5,778** | | Adjustments for DAC, future revenue, etc. | $2,735 | | **Adjusted Book Value (ABV)** | **$8,513** | [Insured Portfolio](index=97&type=section&id=Insured%20Portfolio) This section provides an overview of the company's insured portfolio, detailing net par outstanding by sector and key exposures Financial Guaranty Net Par Outstanding by Sector | Sector | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | Total U.S. Public Finance | $208,716 | $201,175 | | Total Non-U.S. Public Finance | $53,132 | $49,200 | | Total Structured Finance | $10,930 | $11,177 | | **Total Net Par Outstanding** | **$272,778** | **$261,552** | - As of June 30, 2025, the company's only remaining unresolved insured Puerto Rico exposure in payment default was PREPA, with **$532 million** in net par outstanding[566](index=566&type=chunk) [Liquidity and Capital Resources](index=99&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity sources, capital management strategies, and investment portfolio characteristics - The liquidity of the holding companies (AGL and U.S. Holding Companies) is primarily dependent on dividends and distributions from operating subsidiaries. Key uses of funds include debt service, shareholder dividends, and share repurchases[571](index=571&type=chunk) - In July 2025, the Maryland Insurance Administration (MIA) approved AG's redemption of **$250 million** of its common stock from its parent, AGMH, expected to be completed in Q3 2025[604](index=604&type=chunk) - The company's investment portfolio is managed to support high ratings, manage risk, and maintain liquidity. As of June 30, 2025, the available-for-sale fixed-maturity securities portfolio had a duration of **4.7 years**, with **86.6%** rated BBB or higher[606](index=606&type=chunk)[611](index=611&type=chunk)[613](index=613&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=110&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that there have been no material changes to its market risk exposures since the end of the previous fiscal year, December 31, 2024 - There were no material changes to the market risks to which the Company is exposed since December 31, 2024[639](index=639&type=chunk) [Controls and Procedures](index=110&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025. No material changes were identified in the company's internal control over financial reporting during the second quarter of 2025 - The President and Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[641](index=641&type=chunk) - No changes in internal control over financial reporting occurred during the second quarter of 2025 that have materially affected, or are reasonably likely to materially affect, the company's internal controls[642](index=642&type=chunk) PART II Other Information This section provides additional information on legal proceedings, risk factors, and equity security transactions [Legal Proceedings](index=111&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to the detailed disclosures on legal proceedings provided in Notes 4 and 11 of the financial statements, particularly highlighting ongoing litigation related to the company's insured exposure to PREPA (Puerto Rico Electric Power Authority) - The company is subject to various legal proceedings, with specific details provided in Note 4 and Note 11 of the financial statements, including ongoing litigation concerning PREPA[643](index=643&type=chunk) [Risk Factors](index=111&type=section&id=Item%201A.%20Risk%20Factors) The company reports no material changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes to the risk factors disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[644](index=644&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=111&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details the company's repurchases of its own common shares during the second quarter of 2025. A total of 1,537,505 shares were repurchased under the publicly announced program at an average price of approximately $85.22 per share. It also notes a new $300 million repurchase authorization by the Board on August 6, 2025 Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | April 2025 | 489,406 | $83.27 | | May 2025 | 510,316 | $87.14 | | June 2025 | 599,579 | $85.17 | | **Total Q2** | **1,599,301** | **$85.22** | - On August 6, 2025, the Board authorized an additional **$300 million** for share repurchases. As of that date, the total remaining authorization was approximately **$356 million**[648](index=648&type=chunk)

Financial Highlights - Adjusted operating income was $50 million, or $1.01 per share, for the second quarter of 2025[9] - The company insured $10 billion of new business par in the second quarter of 2025, the largest second-quarter amount in a decade[9] - The company generated $64 million of new business production (PVP) in the second quarter of 2025[9] - Pretax adjusted operating income from asset management was $5 million in the second quarter of 2025[9] - Pretax adjusted operating income from the alternative investment portfolio was $16 million in the second quarter of 2025[9] - Capital returned to shareholders in the second quarter of 2025 was $150 million, including share repurchases of $131 million (1.5 million shares) and dividends of $19 million[9] - Adjusted operating income was $212 million, or $4.21 per share, in the first half of 2025, a 23% increase compared to the first half of 2024[11] - The company insured $15 billion of new business par in the first half of 2025, the largest amount of first-half par insured in a decade[15] - The company generated $103 million of PVP in the first half of 2025[15] - The company repurchased nearly 3 million shares at a total cost of $251 million in the first half of 2025, representing nearly 6% of shares outstanding on December 31, 2024[15]