XML 28 R17.htm IDEA: XBRL DOCUMENT
v3.7.0.1

Income Taxes | 3 Months Ended
--- | ---
Mar. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | 10. INCOME TAXES Ambac files a consolidated Federal income tax return with its subsidiaries. Ambac and its subsidiaries also file separate or combined income tax returns in various states, local and foreign jurisdictions. The following are the major jurisdictions in which Ambac and its subsidiaries operate and the earliest tax years subject to examination:
Jurisdiction | Tax Year
United States | 2010
New York State | 2013
New York City | 2013
United Kingdom | 2014
Italy | 2013
As of March 31, 2017 Ambac had loss carryforwards totaling $4,057,680 This includes carryforwards of $72,074 relating to U.S. capital losses and an ordinary U.S. federal net operating tax carryforward of approximately $3,985,606, which, if not utilized, will begin expiring in 2029, and will fully expire in 2033. Ambac's capital losses will begin expiring in 2017 and fully expire in 2018. The tax effects of temporary differences that give rise to significant portions of the deferred tax liabilities and deferred tax assets at March 31, 2017 and December 31, 2016 are presented below:
| March 31, 2017 |  | December 31, 2016
Deferred tax liabilities: |  |  |
Insurance intangible | $ | 325,906 |  |  | $ | 336,728 |
Variable interest entities | 46,022 |  |  | 46,343 |
Investments | 52,647 |  |  | 38,656 |
Unearned premiums and credit fees | 66,739 |  |  | 68,682 |
Unremitted foreign earnings | 57,565 |  |  | 30,699 |
Other | 4,413 |  |  | 4,276 |
Total deferred tax liabilities | 553,292 |  |  | 525,384 |
Deferred tax assets: |  |  |
Net operating loss and capital carryforward | 1,420,188 |  |  | 1,409,565 |
Loss reserves | 271,552 |  |  | 224,553 |
AMT Credits | 31,533 |  |  | 31,532 |
Other | 16,267 |  |  | 16,726 |
Sub total deferred tax assets | 1,739,540 |  |  | 1,682,376 |
Valuation allowance | 1,187,994 |  |  | 1,158,712 |
Total deferred tax assets | 551,546 |  |  | 523,664 |
Net deferred tax (liability) | $ | (1,746 | ) |  | $ | (1,720 | )
In accordance with the Income Tax Topic of the ASC, a valuation allowance is recognized if, based on the weight of available evidence, it is more-likely-than-not that some, or all, of the deferred tax asset will not be realized. As a result of the risks and uncertainties associated with future operating results, management believes it is more likely than not that the Company will not generate sufficient taxable income to recover the deferred tax operating asset and therefore has a full valuation allowance. U.S. and foreign components of pre-tax income were as follows:
| Three Months Ended March 31,
| 2017 |  | 2016
U.S. | $ | (191,873 | ) |  | $ | 27,500 |
Foreign | 86,012 |  |  | (14,646 | )
Total | $ | (105,860 | ) |  | $ | 12,854 |
The components of the provision for income taxes were as follows:
| Three Months Ended March 31,
| 2017 |  | 2016
Current taxes |  |  |
U. S. federal | $ | — |  |  | $ | — |
U.S. state and local | 320 |  |  | 7 |
Foreign | 19,261 |  |  | 3,432 |
Current taxes | 19,581 |  |  | 3,439 |
Deferred taxes |  |  |
Deferred taxes | — |  |  | — |
Provision for income taxes | $ | 19,581 |  |  | $ | 3,439 |
NOL Usage Pursuant to the Amended TSA (as defined in Note 1. Background and Business Description to the Consolidated Financial Statements included in Part II, Item 8 in the Company's Annual Report on Form 10-K for the year ended December 31, 2016), to the extent Ambac Assurance generates taxable income after September 30, 2011, which is offset with "Allocated NOLs" of $3,650,000, it is obligated to make payments (“Tolling Payments”), subject to certain credits, to Ambac in accordance with the following NOL usage table, where the “Applicable Percentage” is applied to the aggregate amount of federal income tax liability that would have been paid if the Allocated NOLs were not available. NOL Usage Table
NOL Usage Tier | Allocated NOLs |  | Applicable Percentage
A | The first | $479,000 |  | 15%
B | The next | $1,057,000 | after Tier A | 40%
C | The next | $1,057,000 | after Tier B | 10%
D | The next | $1,057,000 | after Tier C | 15%
Any post determination date NOLs generated by Ambac Assurance are utilized prior to any Allocated NOLs for which Tolling Payments will be due. Ambac Assurance has utilized all of its current post determination date NOLs generated from September 30, 2011 through December 31, 2016 , generating cumulative taxable income of $1,086,124. Of the bankruptcy related credits available to offset the first $5,000 of payments due under each of the NOL usage Tiers A, B, and C, Ambac Assurance has fully utilized the combined $10,000 of Tier A and Tier B credits. For the two years ended December 31, 2016, Ambac Assurance utilized all of the $479,000 Tier A NOL and $607,124 of the $1,057,000 Tier B NOL resulting in cumulative Tolling Payments, net of applicable credits, of $100,145, of which $71,454 was paid to Ambac in 2016 and $28,691 which is to be paid no later than June 2, 2017. For the three months ended March 31, 2017, Ambac Assurance generated a new post determination date NOL of $32,084, which must be utilized before further tolling payments are accrued. Beginning on the fifth anniversary date subsequent to Ambac's May 1, 2013 emergence from bankruptcy, and subject to Ambac's consent, not to be unreasonably withheld, to the extent Ambac Assurance generates post-determination date income in excess of the $3,650,000 Allocated NOLs, Ambac Assurance may utilize Ambac's then remaining NOLs in exchange for a payment of 25% of the federal income tax liability that Ambac Assurance would have paid had Ambac's NOLs not been available. After Ambac fully utilizes its Allocated NOLs it may utilize Ambac Assurance's then remaining Allocated NOLs in exchange for a payment of 50% of the federal income tax liability that Ambac would have paid had Ambac Assurance's NOL not been available. As of March 31, 2017, the remaining balance of the $3,985,606 NOL allocated to Ambac Assurance was $2,595,960. As of March 31, 2017 Ambac's NOL was $1,389,646.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration