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Segment Information
9 Months Ended
Sep. 30, 2011
Segment Information [Abstract] 
Segment Information

(10) Segment Information

Ambac has two reportable segments, as follows: (1) Financial Guarantee, which provided financial guarantees (including credit derivatives) for public finance, structured finance and other obligations; and (2) Financial Services, which provided investment agreements, funding conduits, interest rate and currency swaps, principally to clients of the financial guarantee business, which includes municipalities and other public entities, health care organizations, investor-owned utilities and asset-backed issuers. Ambac's reportable segments were strategic business units that offer different products and services. They are managed separately because each business required different marketing strategies, personnel skill sets and technology.

Ambac Assurance guarantees the swap and investment agreement obligations of its Financial Services affiliates. Additionally, Ambac Assurance provides loans to the Financial Services businesses. Inter-segment revenues include the premiums and investment income earned under those agreements. Such premiums are determined as if they were premiums paid by third parties, that is, at current market prices.

 

Information provided below for "Corporate and Other" primarily relates to (i) investment advisory, consulting and research services to the structured credit markets from RangeMark in 2010, and (ii) corporate activities, including interest income on the investment portfolio and debt to equity exchanges prior to the filing for Bankruptcy in November 2010. Corporate and other revenue from unaffiliated customers consists primarily of income from investments. The following table is a summary of financial information by reportable segment as of and for the three and nine months ended September 30, 2011 and 2010:

 

$00,000,000 $00,000,000 $00,000,000 $00,000,000 $00,000,000

Three months ended September 30,

    Financial
Guarantee		     Financial
Services		     Corporate
and Other		     Inter-
segment
Eliminations		     Consolidated  

2011:

           

Revenues:

           

Unaffiliated customers

    $ 232,845      $ (207,190 )    $ 62      $ —        $ 25,717   

Inter-segment

      1,088        (1,022 )      2,883        (2,949 )      —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

    $ 233,933      $ (208,212 )    $   2,945      $ (2,949 )    $ 25,717   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes:

           

Unaffiliated customers

    $ 221,612      $ (211,852 )    $ (1,739 )    $ —        $ 8,021   

Inter-segment

      (3,660 )      (465 )      3,955        170        —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total income before reorganization items and income taxes

    $ 217,952      $ (212,317 )    $ 2,216      $ 170      $ 8,021   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

    $ 26,349,572      $ 1,220,087      $ 56,923      $ —        $ 27,626,582   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

2010:

           

Revenues:

           

Unaffiliated customers

    $ 431,042      $ (69,479 )    $ (407 )    $ —        $ 361,156   

Inter-segment

      (91,284 )      91,372        —          (88 )      —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

    $ 339,758      $ 21,893      $ (407 )    $ (88 )    $ 361,156   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes:

           

Unaffiliated customers

    $ 196,954      $ (76,890 )    $ (43,980 )    $ —        $ 76,084   

Inter-segment

      (91,536 )      92,926        (1,390 )      —          —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total income before income taxes

    $ 105,418      $ 16,036      $ (45,370 )    $ —        $ 76,084   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

    $ 29,521,319      $   1,741,540      $ 65,380      $ —        $ 31,328,239   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

$00,000,000 $00,000,000 $00,000,000 $00,000,000 $00,000,000

Nine months ended September 30,

    Financial
Guarantee		     Financial
Services		     Corporate
and Other		     Inter-
segment
Eliminations		     Consolidated  

2011:

           

Revenues:

           

Unaffiliated customers

    $ 610,945      $ (233,961 )    $ 211      $ —        $ 377,195   

Inter-segment

      25,174        (24,963 )      2,883        (3,094 )      —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

    $ 636,119      $ (258,924 )    $ 3,094      $ (3,094 )    $ 377,195   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes:

           

Unaffiliated customers

    $ (628,260 )    $ (248,159 )    $ (3,057 )    $ —        $ (879,476 ) 

Inter-segment

      17,971        (22,619 )      4,648        —          —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total income before reorganization items and income taxes

    $ (610,289 )    $ (270,778 )    $ (1,591 )    $ —        $ (879,476 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

    $ 26,349,572      $ 1,220,087      $ 56,923      $ —        $ 27,626,582   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

2010:

           

Revenues:

           

Unaffiliated customers

    $ 362,106      $ (130,666 )    $ 11,747      $ —        $ 243,187   

Inter-segment

      (277,380 )      277,659        2,808        (3,087 )      —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

    $ 84,726      $ 146,993      $ 14,555      $ (3,087 )    $ 243,187   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Income before income taxes:

           

Unaffiliated customers

    $ (400,773 )    $ (154,619 )    $ (116,175 )    $ —        $ (671,567 ) 

Inter-segment

      (285,153 )      282,091        3,062        —          —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total income before income taxes

    $ (685,926 )    $ 127,472      $ (113,113 )    $ —        $ (671,567 ) 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

    $ 29,521,319      $ 1,741,540      $ 65,380      $ —        $ 31,328,239   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

The following table summarizes gross premiums written, net premiums earned and the net change in fair value of credit derivatives included in the Financial Guarantee segment by location of risk for the three and nine months ended September 30, 2011 and 2010:

 

$0000,0000 $0000,0000 $0000,0000 $0000,0000 $0000,0000 $0000,0000
     Three Months Ended September 30, 2011     Three Months Ended September 30, 2010  
     Gross
Premiums
Written		      Net Premiums
Earned		      Net Change in
Fair Value of
Credit
Derivatives		     Gross
Premiums
Written		     Net
Premiums
Earned		      Net Change
in Fair Value
of Credit
Derivatives		  

United States

    $ 26,998       $ 82,291       $ 3,223      $ 43,435      $ 102,145       $ 13,530   

United Kingdom

      187,895         12,220         (602 )      20,005        32,176         169   

Other international

      27,680         7,544         1,884        (10,240 )      8,764         (4,287 ) 
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

     

 

 

  

Total

    $   242,573       $   102,055       $ 4,505      $ 53,200      $ 143,085       $ 9,412   
  

 

 

     

 

 

     

 

 

    

 

 

    

 

 

     

 

 

  

 

$0000,0000 $0000,0000 $0000,0000 $0000,0000 $0000,0000 $0000,0000
     Nine Months Ended September 30, 2011      Nine Months Ended September 30, 2010  
     Gross
Premiums
Written		     Net Premiums
Earned		      Net Change in
Fair Value of
Credit
Derivatives		      Gross
Premiums
Written		     Net
Premiums
Earned		      Net Change
in Fair Value
of Credit
Derivatives		  

United States

    $ (328,181 )    $ 232,420       $ 13,741       $ (70,108 )    $ 316,383       $ (66,365 ) 

United Kingdom

      198,778        35,006         251         (9,085 )      65,344         14,921   

Other international

      3,691        25,699         5,897         (58,742 )      53,594         95,898   
  

 

 

    

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  

Total

    $ (125,712 )    $ 293,125       $ 19,889       $ (137,935 )    $ 435,321       $ 44,454