SEGMENT INFORMATION

Ambac has two reportable segments, as follows: (i) Financial Guarantee, which provides financial guarantees (including credit derivatives) for public finance, structured finance and other obligations; and (ii) Financial Services, which provides investment agreements, funding conduits, interest rate and currency swaps, principally to clients of the financial guarantee business. Ambac’s reportable segments were 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 affiliates. Additionally, Ambac Assurance provides loans to the Financial Services businesses. Inter-segment revenues include the premiums and investment income earned under those agreements. Such premiums are determined as if they were premiums paid by third parties, that is, at current market prices.

Information provided below for “Corporate and Other” primarily relates to (i) amounts received by Ambac under the Mediation Agreement dated September 21, 2011 (as more fully described in Note 1 to the Consolidated Financial Statements in Part II, Item 8 of Ambac’s 2013 Form 10-K); and (ii) other corporate activities, including interest income on the investment portfolio, including accrual of interest on the junior surplus notes issued by the Segregated Account. Corporate and Other intersegment revenue relates to receipts under the Mediation Agreement. The following table is a summary of financial information by reportable segment for the affected periods:



Successor Ambac - Period from April 1 through June 30, 2014	Financial Guarantee			Financial Services			Corporate and Other			Inter-segment Eliminations			Consolidated
Revenues:
Unaffiliated customers ⁽¹⁾	$	104,703		$	(47,411	)	$	41		$	—		$	57,333
Inter-segment	325			(607		)	8,836			(8,554		)	—
Total revenues	$	105,028		$	(48,018	)	$	8,877		$	(8,554	)	$	57,333
Pre-tax income (loss) from continuing operations:
Unaffiliated customers ^{(1) (2) (3)}	$	(160,685	)	$	(48,454	)	$	(1,273	)	$	—		$	(210,412	)
Inter-segment	(9,397		)	(415		)	9,812			—			—
Pre-tax income (loss) from continuing operations	$	(170,082	)	$	(48,869	)	$	8,539		$	—		$	(210,412	)
Total assets as of June 30, 2014	$	27,319,461		$	365,874		$	38,018		$	—		$	27,723,353
Net investment income	$	79,633		$	419		$	41		$	—		$	80,093
Insurance intangible amortization	$	36,256		$	—		$	—		$	—		$	36,256
Interest expense	$	31,514		$	439		$	—		$	—		$	31,953
Reorganization items ⁽⁴⁾	$	—		$	—		$	186		$	—		$	186



Successor Ambac - Period from May 1 through June 30, 2013	Financial Guarantee			Financial Services			Corporate and Other			Inter-segment Eliminations			Consolidated
Revenues:
Unaffiliated customers ⁽¹⁾	$	159,905		$	82,490		$	20		$	—		$	242,415
Inter-segment	399			(374		)	5,425			(5,450		)	—
Total revenues	$	160,304		$	82,116		$	5,445		$	(5,450	)	$	242,415
Pre-tax income (loss) from continuing operations:
Unaffiliated customers ^{(1) (2)}	$	124,890		$	81,692		$	(787	)	$	—		$	205,795
Inter-segment	(5,497		)	(523		)	6,020			—			—
Pre-tax income (loss) from continuing operations	$	119,393		$	81,169		$	5,233		$	—		$	205,795
Total assets as of June 30, 2013	$	26,934,044		$	486,346		$	54,977		$	—		$	27,475,367
Net investment income	$	26,015		$	158		$	23		$	—		$	26,196
Insurance intangible amortization	$	24,952		$	—		$	—		$	—		$	24,952
Interest expense	$	20,776		$	368		$	—		$	—		$	21,144
Reorganization items ⁽⁴⁾	$	—		$	—		$	424		$	—		$	424



Predecessor Ambac - Period from April 1 through April 30, 2013	Financial Guarantee			Financial Services			Corporate and Other			Inter-segment Eliminations			Consolidated
Revenues:
Unaffiliated customers ⁽¹⁾	$	382,772		$	(33,266	)	$	10		$	—		$	349,516
Inter-segment	214			(198		)	197,055			(197,071		)	—
Total revenues	$	382,986		$	(33,464	)	$	197,065		$	(197,071	)	$	349,516
Pre-tax income (loss) from continuing operations:
Unaffiliated customers ^{(1) (2)}	$	1,583,465		$	(35,614	)	$	1,517,273		$	—		$	3,065,124
Inter-segment	(197,115		)	(252		)	197,367			—			—
Pre-tax income (loss) from continuing operations	$	1,386,350		$	(35,866	)	$	1,714,640		$	—		$	3,065,124
Total assets as of April 30, 2013	$	28,287,321		$	536,711		$	29,403		$	—		$	28,853,435
Net investment income	$	31,855		$	361		$	10		$	—		$	32,226
Interest expense	$	7,542		$	318		$	—		$	—		$	7,860
Reorganization items ⁽⁴⁾	$	(1,231,550	)	$	1,505		$	(1,517,194	)	$	—		$	(2,747,239	)



Successor Ambac - Period from January 1 through June 30, 2014	Financial Guarantee			Financial Services			Corporate and Other			Inter-segment Eliminations			Consolidated
Revenues:
Unaffiliated customers ⁽¹⁾	$	267,256		$	(100,849	)	$	64		$	—		$	166,471
Inter-segment	700			(682		)	17,471			(17,489		)	—
Total revenues	$	267,956		$	(101,531	)	$	17,535		$	(17,489	)	$	166,471
Pre-tax income (loss) from continuing operations:
Unaffiliated customers ^{(1) (2)}	$	55,576		$	(102,983	)	$	(3,707	)	$	—		$	(51,114	)
Inter-segment	(18,554		)	(869		)	19,423			—			—
Pre-tax income (loss) from continuing operations	$	37,022		$	(103,852	)	$	15,716		$	—		$	(51,114	)
Total assets as of June 30, 2014	$	27,319,461		$	365,874		$	38,018		$	—		$	27,723,353
Net investment income	$	150,017		$	813		$	64		$	—		$	150,894
Insurance intangible amortization	$	67,970		$	—		$	—		$	—		$	67,970
Interest expense	$	63,395		$	886		$	—		$	—		$	64,281
Reorganization items ⁽⁴⁾	$	—		$	—		$	209		$	—		$	209



Predecessor Ambac - Period from January 1 through April 30, 2013	Financial Guarantee			Financial Services			Corporate and Other			Inter-segment Eliminations			Consolidated
Revenues:
Unaffiliated customers ⁽¹⁾	$	633,010		$	7,339		$	39		$	—		$	640,388
Inter-segment	940			(882		)	197,055			(197,113		)	—
Total revenues	$	633,950		$	6,457		$	197,094		$	(197,113	)	$	640,388
Pre-tax income (loss) from continuing operations:
Unaffiliated customers ^{(1) (2)}	$	1,830,165		$	3,233		$	1,514,635		$	—		$	3,348,033
Inter-segment	(197,187		)	(1,101		)	198,288			—			—
Pre-tax income (loss) from continuing operations	$	1,632,978		$	2,132		$	1,712,923		$	—		$	3,348,033
Total assets as of April 30, 2013	$	28,287,321		$	536,711		$	29,403		$	—		$	28,853,435
Net investment income	$	115,129		$	1,572		$	39		$	—		$	116,740
Interest expense	$	29,718		$	1,307		$	—		$	—		$	31,025
Reorganization items ⁽⁴⁾	$	(1,231,550	)	$	1,505		$	(1,515,135	)	$	—		$	(2,745,180	)


(1)	Included in both revenues from unaffiliated customers and in pre-tax income (loss) from continuing operations from unaffiliated customers is net investment income.


(2)	Included in pre-tax income (loss) from continuing operations from unaffiliated customers is interest expense.


(3)	Included in pre-tax income (loss) from continuing operations from unaffiliated customers is amortization of intangible asset arising from financial guarantee contracts that were set to fair value upon adoption of Fresh Start.


(4)	Refer to "Note 2: Reorganization Under Chapter 11," for a further discussion of Reorganization items.

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:



	Successor Ambac															Predecessor Ambac
	Period from April 1 through June 30, 2014								Period from May 1 through June 30, 2013							Period from April 1 through April 30, 2013
	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		Gross Premiums Written			Net Premiums Earned		Net Change In Fair Value Of Credit Derivatives
United States	$	(28,211	)	$	39,833	$	(559	)	$	(24,493	)	$	46,340	$	14,948	$	(7,386	)	$	23,537	$	(47,664	)
United Kingdom	3,003			20,808		—			(1,917		)	8,840		2,113		2,167			4,317		(3,686		)
Other international	(20,278		)	4,372		(660		)	(7,671		)	2,859		34,159		(5,376		)	1,890		(21,821		)
Total	$	(45,486	)	$	65,013	$	(1,219	)	$	(34,081	)	$	58,039	$	51,220	$	(10,595	)	$	29,744	$	(73,171	)



	Successor Ambac														Predecessor Ambac
	Period from January 1 through June 30, 2014							Period from May 1 through June 30, 2013							Period from January 1 through April 30, 2013
	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		Gross Premiums Written			Net Premiums Earned		Net Change in Fair Value of Credit Derivatives
United States	$	(28,909	)	$	96,591	$	6,022	$	(24,493	)	$	46,340	$	14,948	$	(16,102	)	$	104,594	$	(31,134	)
United Kingdom	(3,163		)	41,443		—		(1,917		)	8,840		2,113		10,673			18,071		(5,861		)
Other international	(19,180		)	9,526		141		(7,671		)	2,859		34,159		(8,696		)	7,335		(23,389		)
Total	$	(51,252	)	$	147,560	$	6,163	$	(34,081	)	$	58,039	$	51,220	$	(14,125	)	$	130,000	$	(60,384	)