UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended March 31, 2004
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
transition Period from to
Commission File No. 001-32141
ASSURED GUARANTY LTD.
(Exact name of registrant as specified in its charter)
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Bermuda |
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Not Applicable |
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(State or other jurisdiction of incorporation) |
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(I.R.S. employer identification no.) |
30 Woodbourne Avenue
Hamilton HM 08
Bermuda
(address of principal executive office)
(441) 296-4004
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES o NO ý
Indicate by check mark whether registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
YES o NO ý
The number of registrant’s Common Shares ($0.01 value) outstanding as of May 15, 2004 was 75,969,792.
ASSURED GUARANTY LTD.
INDEX TO FORM 10-Q
Assured Guaranty Ltd.
(in thousands of U.S. dollars)
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March 31, |
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December 31, |
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(unaudited) |
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Assets |
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Fixed maturity securities, at fair value (amortized cost: $1,930,399 in 2004 and $1,937,743 in 2003) |
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$ |
2,065,948 |
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$ |
2,052,217 |
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Short-term investments, at cost which approximates fair value |
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154,355 |
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137,517 |
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Total investments |
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2,220,303 |
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2,189,734 |
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Cash and cash equivalents |
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36,254 |
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32,365 |
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Accrued investment income |
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24,302 |
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23,758 |
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Deferred acquisition costs |
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186,267 |
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178,673 |
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Prepaid reinsurance premiums |
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17,012 |
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10,974 |
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Reinsurance recoverable on ceded losses |
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106,131 |
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122,124 |
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Due from affiliate |
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— |
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115,000 |
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Premiums receivable |
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35,133 |
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63,997 |
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Value of reinsurance business assumed |
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11,915 |
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14,226 |
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Goodwill |
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85,417 |
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87,062 |
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Other assets |
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26,490 |
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19,954 |
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Total assets |
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$ |
2,749,224 |
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$ |
2,857,867 |
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Liabilities and shareholder’s equity |
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Liabilities |
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Unearned premium reserves |
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$ |
537,930 |
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$ |
625,429 |
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Reserve for losses and loss adjustment expenses |
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431,297 |
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522,593 |
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Profit commissions payable |
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56,805 |
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71,237 |
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Deferred income taxes |
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73,865 |
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55,637 |
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Unrealized losses on derivative financial instruments |
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1,209 |
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8,558 |
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Funds held by Company under reinsurance contracts |
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9,289 |
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9,635 |
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Long-term debt |
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75,000 |
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75,000 |
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Other liabilities |
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53,756 |
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52,154 |
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Total liabilities |
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1,239,151 |
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1,420,243 |
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Commitments and contingencies |
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Shareholder’s equity |
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Common stock |
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16,403 |
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16,403 |
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Additional paid-in capital |
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961,852 |
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955,490 |
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Unearned stock grant compensation |
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(4,505 |
) |
(5,479 |
) |
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Retained earnings |
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436,918 |
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390,025 |
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Accumulated other comprehensive income |
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99,405 |
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81,185 |
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Total shareholder’s equity |
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1,510,073 |
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1,437,624 |
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Total liabilities and shareholder’s equity |
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$ |
2,749,224 |
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$ |
2,857,867 |
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The accompanying notes are an integral part of these combined financial statements.
1
Assured Guaranty Ltd.
Combined Statements of Operations and Comprehensive Income
(in thousands of U.S. dollars except per share amounts)
(Unaudited)
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Three
Months Ended |
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2004 |
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2003 |
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Revenues |
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Gross written premiums |
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$ |
(1,544 |
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$ |
112,735 |
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Ceded premiums |
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5,327 |
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8,662 |
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Net written premiums |
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(6,871 |
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104,073 |
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(Increase)/decrease in net unearned premium reserves |
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93,538 |
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(40,485 |
) |
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Net earned premiums |
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86,667 |
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63,588 |
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Net investment income |
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24,385 |
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24,101 |
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Net realized investment gains |
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1,182 |
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1,903 |
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Unrealized gains (losses) on derivative financial instruments |
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7,349 |
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(1,110 |
) |
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Other income |
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532 |
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557 |
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Total revenues |
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120,115 |
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89,039 |
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Expenses |
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Loss and loss adjustment expenses |
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23,668 |
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23,188 |
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Profit commissions expense |
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5,486 |
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2,969 |
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Acquisition costs |
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13,108 |
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11,843 |
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Other operating expenses |
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12,621 |
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11,635 |
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Goodwill impairment |
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1,645 |
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— |
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Interest expense |
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