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Segment Information
 12 Months Ended
Dec. 31, 2011
Segment Information [Abstract]  
Segment Information

18        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) corporate activities, including interest income on the investment portfolio and debt to equity exchanges prior to the filing for Bankruptcy in November 2010, and (ii) investment advisory, consulting and research services to the structured credit markets from RangeMark in 2010. Corporate and other revenue from unaffiliated customers consists primarily of income from investments. Corporate and Other intersegment revenue relates to payments under the Mediation Agreement between Ambac Financial Group and Ambac Assurance. For additional information on the Mediation Agreement, please refer to Note 1. The following table is a summary of financial information by reportable segment as of and for the years ended December 31, 2011 and 2010:

 

                                         
     Financial
Guarantee		     Financial
Services		     Corporate
and Other		     Intersegment
Eliminations		     Total
Consolidated		  

2011:

                                         

Revenues:

                                         

Unaffiliated customers

    $ 546,525      ($ 251,044 )    $ 283      $ —        $ 295,764   

Intersegment

      26,481        (26,205 )      7,386        (7,662 )      —     
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

    $ 573,006      ($ 277,249 )    $ 7,669      ($ 7,662 )    $ 295,764   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Pre-tax loss from continuing operations:

                                         

Unaffiliated customers

    ($ 1,558,768 )    ($ 269,580 )    ($ 54,601 )    $ —        ($ 1,882,949 ) 

Intersegment

      13,041        (23,397 )      10,356        —          —     
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Pre-tax loss from continuing operations

    ($ 1,545,727 )    ($ 292,977 )    ($ 44,245 )    $ —        ($ 1,882,949 ) 
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

    $ 25,935,817      $ 1,133,438      $ 44,440      $ —        $ 27,113,695   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

2010:

                                         

Revenues:

                                         

Unaffiliated customers

    $ 439,225      ($ 16,936 )    $ 11,846      $ —        $ 434,135   

Intersegment

      (133,761 )      134,133        4,821        (5,193 )      —     
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total revenues

    $ 305,464      $ 117,197      $ 16,667      ($ 5,193 )    $ 434,135   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Pre-tax loss from continuing operations:

                                         

Unaffiliated customers

    ($ 540,767 )    ($ 47,520 )    ($ 164,714 )    $ —        ($ 753,001 ) 

Intersegment

      (142,205 )      140,009        4,209        (2,013 )      —     
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Pre-tax loss from continuing operations

    ($ 682,972 )    $ 92,489      ($ 160,505 )    ($ 2,013 )    ($ 753,001 ) 
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total assets

    $ 27,463,423      $ 1,508,770      $ 74,920      $ —        $ 29,047,113   
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Included in the table above are revenues from unaffiliated customers in 2011 relating to net investment income of $326,157 for Financial Guarantee, $28,340 for Financial Services and $293 for Corporate and Other, compared to 2010 with $324,042, 34,129 and $393 for Financial Guarantee, Financial Services and Corporate and Other, respectively. Included in the line item pre-tax loss from continuing operations—unaffiliated customers for 2011 is interest expense, of which $119,997 is for Financial Guarantee, $8,095 for Financial Services and $0 for Corporate and Other, compared to 2010 with $62,207, $16,844 and $102,278 for Financial Guarantee, Financial Services and Corporate and Other, respectively. Interest expense for Financial Guarantee relates to the interest accrued on surplus notes, Financial Services relates to the interest on investment agreements and Corporate and Other, interest related to the debentures prior to Ambac Financial Group filing for bankruptcy.

 

The following tables summarize 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 years ended December 31, 2011 and 2010:

 

                         
     Gross
Premiums
Written		     Net
Premiums
Earned		      Net change in
fair value of
credit
derivatives		  

2011

                          

United States

    ($ 382,347 )    $ 320,149       $ 34,174   

United Kingdom

      198,047        52,770         1,120   

Other international

      5,347        33,051         12,738   
    

 

 

    

 

 

     

 

 

  

Total

    ($ 178,953 )    $ 405,970       $ 48,032   
    

 

 

    

 

 

     

 

 

  

2010

                          

United States

    ($ 362,902 )    $ 409,370       ($ 60,609 ) 

United Kingdom

      (18,003 )      72,472         16,301   

Other international

      (95,187 )      64,133         104,491   
    

 

 

    

 

 

     

 

 

  

Total

    ($ 476,092 )    $ 545,975       $ 60,183