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Segment Information | 9 Months Ended
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Sep. 30, 2016
Segment Reporting [Abstract] |
Segment Information | 12. SEGMENT INFORMATION Ambac has two reportable business segments, as follows: (i) Financial Guarantee, which provides financial guarantees (including credit derivatives) for public finance, structured finance and international obligations; and (ii) Financial Services, which provides investment agreements, funding conduits, interest rate swaps, principally to clients of the financial guarantee business. Ambac’s reportable business segments are 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 subsidiaries. Additionally, Ambac Assurance provides loans to the Financial Services businesses. Inter-segment revenues include the premiums and investment income earned under those agreements. Information provided below for unaffiliated “Corporate and Other” primarily relates to investment income on Ambac's investment portfolio. Equity in net income of investees accounted for by the equity method relates to the Owner Trust Certificate received when Ambac deposited its Segregated Account junior surplus note into a Trust (see Note 1. Background and Business Description in the Notes to Consolidated Financial Statements included Part II, Item 8 in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2015 for further information relating to the sale by Ambac of a junior surplus note issued to it by the Segregated Account). Inter-segment for "Corporate and Other" relates to amounts received by Ambac under the Mediation Agreement dated September 21, 2011, as more fully described in Note 1. Background and Business Description in the Notes to Consolidated Financial Statements included Part II, Item 8 in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2015. The following table is a summary of financial information by reportable business segment for the affected periods:
|  | Financial Guarantee |  | Financial Services |  | Corporate and Other |  | Inter-segment Eliminations |  | Consolidated
Three Months Ended September 30, 2016: |  |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |
Unaffiliated customers (1) |  | $ | 156,236 |  |  | $ | (14,286 | ) |  | $ | 1,888 |  |  | $ | — |  |  | $ | 143,838 |
Equity in net income of investees accounted for by equity method |  | — |  |  | — |  |  | 1,190 |  |  | — |  |  | 1,190 |
Inter-segment |  | 375 |  |  | (308 | ) |  | 229 |  |  | (296 | ) |  | — |
Total revenues before expenses and reorganization items |  | 156,611 |  |  | (14,594 | ) |  | 3,307 |  |  | (296 | ) |  | 145,028 |
Pre-tax income: |  |  |  |  |  |  |  |  |  |
Unaffiliated customers (1)(2)(3) |  | 131,162 |  |  | (14,912 | ) |  | (720 | ) |  | — |  |  | 115,530 |
Equity in net income of investees accounted for by equity method |  | — |  |  | — |  |  | 1,190 |  |  | — |  |  | 1,190 |
Inter-segment |  | (690 | ) |  | (435 | ) |  | 1,125 |  |  | — |  |  | — |
Pre-tax income |  | 130,472 |  |  | (15,347 | ) |  | 1,595 |  |  | — |  |  | 116,720 |
Total assets as of September 30, 2016 |  | 23,264,567 |  |  | 396,509 |  |  | 350,613 |  |  | 3,940 |  |  | 24,015,629 |
Net investment income |  | 87,350 |  |  | 195 |  |  | 3,372 |  |  | — |  |  | 90,917 |
Insurance intangible amortization |  | 44,553 |  |  | — |  |  | — |  |  | — |  |  | 44,553 |
Interest expense |  | 31,352 |  |  | 141 |  |  | — |  |  | — |  |  | 31,493 |
Three Months Ended September 30, 2015: |  |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |
Unaffiliated customers (1) |  | $ | 152,024 |  |  | $ | (66,997 | ) |  | $ | 1,538 |  |  | $ | — |  |  | $ | 86,565 |
Equity in net income of investees accounted for by equity method |  | — |  |  | — |  |  | 1,125 |  |  | — |  |  | 1,125 |
Inter-segment |  | 24 |  |  | (204 | ) |  | 252 |  |  | (72 | ) |  | — |
Total revenues before expenses and reorganization items |  | 152,048 |  |  | (67,201 | ) |  | 2,915 |  |  | (72 | ) |  | 87,690 |
Pre-tax income (loss): |  |  |  |  |  |
Unaffiliated customers (1) (2) (3) |  | (320,414 | ) |  | (67,655 | ) |  | (1,249 | ) |  | — |  |  | (389,318 | )
Equity in net income of investees accounted for by equity method |  | — |  |  | — |  |  | 1,125 |  |  | — |  |  | 1,125 |
Inter-segment |  | (763 | ) |  | 425 |  |  | 1,302 |  |  | (964 | ) |  | — |
Pre-tax income (loss) |  | (321,177 | ) |  | (67,230 | ) |  | 1,178 |  |  | (964 | ) |  | (388,193 | )
Total assets as of September 30, 2015 |  | 23,610,582 |  |  | 363,118 |  |  | 289,238 |  |  | 3,981 |  |  | 24,266,919 |
Net investment income |  | 61,292 |  |  | 139 |  |  | 2,764 |  |  | — |  |  | 64,195 |
Insurance intangible amortization |  | 39,680 |  |  | — |  |  | — |  |  | — |  |  | 39,680 |
Interest expense |  | 29,738 |  |  | 161 |  |  | — |  |  | — |  |  | 29,899 |
Goodwill impairment |  | 514,511 |  |  | — |  |  | — |  |  | — |  |  | 514,511 |
(1) | Included in both revenues from unaffiliated customers and in pre-tax income from unaffiliated customers is net investment income.
(2) | Included in pre-tax income from unaffiliated customers is interest expense.
(3) | Included in pre-tax income from unaffiliated customers is the amortization of insurance intangible asset and impairment of goodwill. Such assets were established upon the adoption of Fresh Start on April 30, 2013.
|  | Financial Guarantee |  | Financial Services |  | Corporate and Other |  | Inter-segment Eliminations |  | Consolidated
Nine Months Ended September 30, 2016: |  |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |
Unaffiliated customers (1) |  | $ | 393,557 |  |  | $ | (133,613 | ) |  | $ | 5,247 |  |  | $ | — |  |  | $ | 265,191 |
Equity in net income of investees accounted for by equity method |  | — |  |  | — |  |  | 3,471 |  |  | — |  |  | 3,471 |
Inter-segment |  | 1,214 |  |  | (1,039 | ) |  | 615 |  |  | (790 | ) |  | — |
Total revenues before expenses and reorganization items |  | 394,771 |  |  | (134,652 | ) |  | 9,333 |  |  | (790 | ) |  | 268,662 |
Pre-tax income: |  |  |  |  |  |  |  |  |  |
Unaffiliated customers (1)(2)(3) |  | 328,906 |  |  | (135,529 | ) |  | (5,763 | ) |  | — |  |  | 187,614 |
Equity in net income of investees accounted for by equity method |  | — |  |  | — |  |  | 3,471 |  |  | — |  |  | 3,471 |
Inter-segment |  | (1,896 | ) |  | (1,401 | ) |  | 3,297 |  |  | — |  |  | — |
Pre-tax income |  | 327,010 |  |  | (136,930 | ) |  | 1,005 |  |  | — |  |  | 191,085 |
Total assets as of September 30, 2016 |  | 23,264,567 |  |  | 396,509 |  |  | 350,613 |  |  | 3,940 |  |  | 24,015,629 |
Net investment income |  | 212,595 |  |  | 596 |  |  | 9,305 |  |  | — |  |  | 222,496 |
Insurance intangible amortization |  | 134,456 |  |  | — |  |  | — |  |  | — |  |  | 134,456 |
Interest expense |  | 92,193 |  |  | 439 |  |  | — |  |  | — |  |  | 92,632 |
Nine Months Ended September 30, 2015: |  |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |  |
Unaffiliated customers (1) |  | $ | 521,340 |  |  | $ | (53,566 | ) |  | $ | 2,951 |  |  | $ | — |  |  | $ | 470,725 |
Equity in net income of investees accounted for by equity method |  | — |  |  | — |  |  | 3,208 |  |  | — |  |  | 3,208 |
Inter-segment |  | 286 |  |  | (565 | ) |  | 388 |  |  | (109 | ) |  | — |
Total revenues before expenses and reorganization items |  | 521,626 |  |  | (54,131 | ) |  | 6,547 |  |  | (109 | ) |  | 473,933 |
Pre-tax income: |  |  |  |  |  |
Unaffiliated customers (1) (2) (3) |  | 172,271 |  |  | (55,861 | ) |  | (5,136 | ) |  | — |  |  | 111,274 |
Equity in net income of investees accounted for by equity method |  | — |  |  | — |  |  | 3,208 |  |  | — |  |  | 3,208 |
Inter-segment |  | (2,087 | ) |  | (139 | ) |  | 3,027 |  |  | (801 | ) |  | — |
Pre-tax income |  | 170,184 |  |  | (56,000 | ) |  | 1,099 |  |  | (801 | ) |  | 114,482 |
Total assets as of September 30, 2015 |  | 23,610,582 |  |  | 363,118 |  |  | 289,238 |  |  | 3,981 |  |  | 24,266,919 |
Net investment income |  | 195,270 |  |  | 401 |  |  | 6,260 |  |  | — |  |  | 201,931 |
Insurance intangible amortization |  | 115,200 |  |  | — |  |  | — |  |  | — |  |  | 115,200 |
Interest expense |  | 85,165 |  |  | 815 |  |  | — |  |  | — |  |  | 85,980 |
Goodwill impairment |  | 514,511 |  |  | — |  |  | — |  |  | — |  |  | 514,511 |
(1) | Included in both revenues from unaffiliated customers and in pre-tax income from unaffiliated customers is net investment income.
(2) | Included in pre-tax income from unaffiliated customers is interest expense.
(3) | Included in pre-tax income from unaffiliated customers is the amortization of insurance intangible asset and impairment of goodwill. Such assets were established upon the adoption of Fresh Start on April 30, 2013.
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 affected periods:
|  | Three Months Ended September 30, 2016 |  | Three Months Ended September 30, 2015
|  | 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 |  | $ | (7,555 | ) |  | $ | 45,257 |  |  | $ | 520 |  |  | $ | (2,386 | ) |  | $ | 60,402 |  |  | $ | 30,604 |
United Kingdom |  | (598 | ) |  | 6,018 |  |  | — |  |  | 260 |  |  | 8,081 |  |  | — |
Other international |  | (2,390 | ) |  | 1,943 |  |  | 1,213 |  |  | (6,584 | ) |  | 3,052 |  |  | 6,348 |
Total |  | $ | (10,543 | ) |  | $ | 53,218 |  |  | $ | 1,733 |  |  | $ | (8,710 | ) |  | $ | 71,535 |  |  | $ | 36,952 |
|  | Nine Months Ended September 30, 2016 |  | Nine Months Ended September 30, 2015
|  | 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 |  | $ | (25,988 | ) |  | $ | 126,003 |  |  | $ | 1,613 |  |  | $ | (5,172 | ) |  | $ | 163,094 |  |  | $ | 39,286 |
United Kingdom |  | 14,157 |  |  | 19,111 |  |  | — |  |  | 7,295 |  |  | 23,659 |  |  | — |
Other international |  | (27,533 | ) |  | 2,306 |  |  | 16,941 |  |  | (20,963 | ) |  | 11,379 |  |  | 5,460 |
Total |  | $ | (39,364 | ) |  | $ | 147,420 |  |  | $ | 18,554 |  |  | $ | (18,840 | ) |  | $ | 198,132 |  |  | $ | 44,746 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8906-108599 + Details
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