Income Taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

13.    INCOME TAXES

AFG files a consolidated Federal income tax return with its subsidiaries. AFG 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	2017
United Kingdom	2018
Italy	2017

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 U.S. federal, state and/or local taxable income to recover its deferred tax operating assets and therefore maintains a full valuation allowance.

Consolidated Pretax Income (Loss)

U.S. and foreign components of pre-tax income (loss) were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
U.S.	$	10	$	(27)	$	10	$	(10)
Foreign	(4)		10		—		12
Total	$	6	$	(18)	$	9	$	1

Provision (Benefit) for Income Taxes

The components of the provision for income taxes were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Current taxes
U. S. federal	$	—	$	—	$	—	$	—
U.S. state and local	—		—		—		2
Foreign	1		2		2		5
Total Current taxes	1		2		2		7
Deferred taxes
Foreign	—		9		(1)		6
Total Deferred taxes	—		9		(1)		6
Provision for income taxes	$	1	$	11	$	1	$	13