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Segment Information
 3 Months Ended
Mar. 31, 2017
Segment Reporting [Abstract]  
Segment Information
12. SEGMENT INFORMATION
Ambac currently 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 and interest rate swaps, principally to clients of the financial guarantee business. The last remaining investment agreement matured in March 2017. Ambac’s reportable business segments were strategic business units that offered different products and services.
Ambac Assurance guarantees the swap obligations of its Financial Services subsidiaries. Additionally, Ambac Assurance provides loans to the Financial Services businesses.
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 3. Special Purpose Entities, Including Variable Interest Entities in the Notes to Consolidated Financial Statements included Part II, Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 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 due to 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 for the year ended December 31, 2016.
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 March 31, 2017:
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
Unaffiliated customers (1)
 
$
131,850

 
$
(1,706
)
 
$
(5,114
)
 
$
—

 
$
125,030

Equity in net income of investees accounted for by equity method
 
—

 
—

 
1,198

 
—

 
1,198

Inter-segment
 
908

 
(836
)
 
330

 
(402
)
 
—

Total revenues
 
132,758

 
(2,542
)
 
(3,586
)
 
(402
)
 
126,228

Pre-tax income:
 
 
 
 
 
 
 
 
 
 
Unaffiliated customers (1)(2)(3)
 
(97,337
)
 
(2,252
)
 
(7,469
)
 
—

 
(107,058
)
Equity in net income of investees accounted for by equity method
 
—

 
—

 
1,198

 
—

 
1,198

Inter-segment
 
(223
)
 
(938
)
 
1,161

 
—

 
—

Pre-tax income
 
(97,560
)
 
(3,190
)
 
(5,110
)
 
—

 
(105,860
)
Total assets as of March 31, 2017
 
22,388,190

 
139,637

 
389,580

 
(153,847
)
 
22,763,560

Net investment income
 
78,342

 
154

 
3,063

 
—

 
81,559

Insurance intangible amortization
 
37,525

 
—

 
—

 
—

 
37,525

Interest expense
 
31,394

 
178

 
—

 
—

 
31,572

 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31, 2016:
 
 
 
 
 
 
 
 
 
 
Revenues:
 
 
 
 
 
 
 
 
 
 
Unaffiliated customers (1)
 
$
97,374

 
$
(83,214
)
 
$
1,610

 
$
—

 
$
15,770

Equity in net income of investees accounted for by equity method
 
—

 
—

 
1,132

 
—

 
1,132

Inter-segment
 
(772
)
 
(338
)
 
1,148

 
(38
)
 
—

Total revenues
 
96,602

 
(83,552
)
 
3,890

 
(38
)
 
16,902

Pre-tax income (loss):
 
 
 
 
 
 
Unaffiliated customers (1) (2) (3)
 
98,417

 
(83,847
)
 
(2,848
)
 
—

 
11,722

Equity in net income of investees accounted for by equity method
 
—

 
—

 
1,132

 
—

 
1,132

Inter-segment
 
(1,623
)
 
(454
)
 
2,077

 
—

 
—

Pre-tax income (loss)
 
96,794

 
(84,301
)
 
361

 
—

 
12,854

Total assets as of March 31, 2016
 
23,045,239

 
390,661

 
276,885

 
5,806

 
23,718,591

Net investment income
 
57,713

 
203

 
2,905

 
—

 
60,821

Insurance intangible amortization
 
50,890

 
—

 
—

 
—

 
50,890

Interest expense
 
30,284

 
146

 
—

 
—

 
30,430

(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 arising from financial guarantee contracts that were set to fair value upon adoption of Fresh Start.
 
 
 
 
 
 
 
 
 
 
 
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 March 31, 2017
 
Three Months Ended March 31, 2016
 
 
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
 
$
(2,679
)
 
$
40,621

 
$
201

 
$
(13,759
)
 
$
46,115

 
$
855

United Kingdom
 
10,727

 
5,263

 
—

 
9,352

 
6,388

 
—

Other international
 
(2,464
)
 
1,729

 
851

 
(20,373
)
 
297

 
12,011

Total
 
$
5,584

 
$
47,613

 
$
1,052

 
$
(24,780
)
 
$
52,800

 
$
12,866