SEC Schedule, Article 12-04, Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure

AMBAC FINANCIAL GROUP, INC. AND SUBSIDIARIES

Condensed Financial Information

Of Registrant (Parent Company Only)

Condensed Balance Sheets

($ in millions, except share data) December 31,	2023		2022
Assets:
Fixed maturity securities, at fair value (amortized cost of $14 and $13)	$	14	$	12
Short-term investments, at fair value (amortized cost of $156 and $175)	156		175
Other investments	18		16
Total investments (net of allowance for credit losses of $0 and $0)	188		203
Cash	—		3
Investment in subsidiaries	1,150		1,029
Investment income due and accrued	1		1
Other assets	24		19
Total assets	$	1,365	$	1,255
Liabilities and Stockholders' Equity:
Liabilities:
Current taxes	$	—	$	1
Accounts payable and other liabilities	3		3
Total liabilities	4		3
Stockholders’ equity:
Preferred stock, par value $0.01 per share; 20,000,000 shares authorized shares; issued and outstanding shares—none	—		—
Common stock, par value $0.01 per share; 130,000,000 shares authorized; issued shares: 46,659,144 and 46,658,990	—		—
Additional paid-in capital	292		274
Accumulated other comprehensive income (loss)	(160)		(253)
Retained earnings	1,246		1,245
Treasury stock, shares at cost: 1,463,774 and 1,685,233	(17)		(15)
Total Ambac Financial Group, Inc. stockholders’ equity	1,362		1,252
Total liabilities and stockholders’ equity	$	1,365	$	1,255

The condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto and the following notes.

See the Report of Independent Registered Public Accounting Firm.

SCHEDULE II

AMBAC FINANCIAL GROUP, INC. AND SUBSIDIARIES

Condensed Financial Information

Of Registrant (Parent Company Only)

Condensed Statement of Comprehensive Income

($ in millions) Year Ended December 31,	2023		2022		2021
Revenues:
Investment income	$	9	$	10	$	10
Other income	—		—		—
Net gains on derivative contracts	—		1		—
Net investment gains (losses), including impairments	—		(14)		(5)
Total revenues	9		(2)		5
Expenses:
General and administrative expenses	22		17		19
Total expenses	22		17		19
Income (loss) before income taxes and net income (loss) of subsidiaries	(13)		(20)		(14)
Federal income tax provision (benefit)	(1)		—		2
Income (loss) before net income (loss) of subsidiaries	(11)		(19)		(16)
Net income (loss) of subsidiaries	15		542		(1)
Net income (loss)	$	4	$	522	$	(17)
Other comprehensive income (loss), after tax:
Net income (loss)	$	4	$	522	$	(17)
Unrealized gains (losses) on securities, net of income tax provision (benefit) of $2, $(6) and $(2)	51		(225)		(12)
Gains (losses) on foreign currency translation, net of income tax provision (benefit) of $—, $— and $—	40		(85)		(8)
Credit risk changes of fair value option liabilities, net of income tax provision (benefit) of $—, $— and $—	—		—		(1)
Changes to postretirement benefit, net of income tax provision (benefit) of $—, $— and $—	2		(1)		(1)
Total other comprehensive income (loss)	93		(310)		(21)
Total comprehensive income (loss) attributable to Ambac Financial Group, Inc.	$	96	$	212	$	(38)

The condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto and the following notes.

See the Report of Independent Registered Public Accounting Firm.

SCHEDULE II

AMBAC FINANCIAL GROUP, INC. AND SUBSIDIARIES

Condensed Financial Information

Of Registrant (Parent Company Only)

Condensed Statement of Stockholders' Equity

($ in millions)	Total		Preferred Stock		Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Common Stock Held in Treasury, at Cost
Balance at January 1, 2021	$	1,080	$	—	$	—	$	242	$	79	$	759	$	(1)
Total comprehensive income (loss)	(38)		—		—		—		(21)		(17)		—
Adjustment to initially apply ASU 2016-13	—		—		—		—		—		—		—
Stock-based compensation	14		—		—		14		—		—		—
Cost of shares (acquired) issued under equity plan	(6)		—		—		—		—		(4)		(2)
Balance at December 31, 2021	1,038		—		—		257		58		726		(3)
Total comprehensive income (loss)	211		—		—		—		(310)		521		—
Stock-based compensation	17		—		—		17		—		—		—
Cost of shares (acquired) issued under equity plan	(4)		—		—		—		—		(5)		2
Cost of shares repurchased	(14)		—		—		—		—		—		(14)
Changes to redeemable noncontrolling interest	3		—		—		—		—		3		—
Purchase of Ambac Assurance auction market preferred shares	1		—		—		—		—		1		—
Balance at December 31, 2022	1,252		—		—		274		(253)		1,245		(15)
Total comprehensive income (loss)	96		—		—		—		93		4		—
Stock-based compensation	17		—		—		17		—		—		—
Cost of shares (acquired) issued under equity plan	(5)		—		—		—		—		(8)		3
Cost of shares repurchased	(5)		—		—		—		—		—		(5)
Change in redeemable noncontrolling interest	5		—		—		—		—		5		—
Balance at December 31, 2023	$	1,362	$	—	$	—	$	292	$	(160)	$	1,246	$	(17)

The condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto and the following notes.

See the Report of Independent Registered Public Accounting Firm.

SCHEDULE II

AMBAC FINANCIAL GROUP, INC. AND SUBSIDIARIES

Condensed Financial Information

Of Registrant (Parent Company Only)

Condensed Statements of Cash Flow

($ in millions) Year Ended December 31,	2023		2022		2021
Cash flows from operating activities:
Net income (loss)	$	4	$	522	$	(17)
Adjustments to reconcile net income loss to net cash used in operating activities:
Net (income) loss of subsidiaries	(15)		(542)		1
Amortization of bond premium and discount	—		(7)		(9)
Net investment gains (losses), including impairments	—		14		5
Increase (decrease) in current income taxes payable	(2)		(1)		1
Share-based compensation	9		12		14
(Increase) decrease in other assets and liabilities	(5)		41		(5)
Distributions received from majority owned subsidiary	8		6		6
Other, net	2		1		(6)
Net cash provided by (used in) operating activities	2		46		(10)
Cash flows from investing activities:
Proceeds from sales and matured bonds	—		68		33
Purchases of bonds	(1)		(1)		(34)
Change in short-term investments	20		(51)		105
Change in other investments	(3)		(4)		(8)
Net cash provided by (used in) investing activities	16		12		95
Cash flows from financing activities:
Capital contribution to subsidiaries	(16)		(42)		(92)
Cost of shares acquired	(5)		(14)		—
Net cash (used in) financing activities	(21)		(57)		(92)
Net cash flow	(2)		1		(6)
Cash at beginning of period	3		1		7
Cash at end of period	$	—	$	3	$	1
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$	—	$	—	$	—

The condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto and the following notes.