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 prior to Ambac's sale on August 28, 2014 (see Note 1 for further information relating to the sale of Junior Surplus Notes by Ambac). 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 July 1 through September 30, 2014	Financial Guarantee			Financial Services			Corporate and Other			Inter-segment Eliminations			Consolidated
Revenues:
Unaffiliated customers ⁽¹⁾	$	170,335		$	(15,445	)	$	78		$	—		$	154,968
Equity in net income of investees accounted for by equity method	—			—			371			—			371
Inter-segment	237			(219		)	5,838			(5,856		)	—
Total revenues	170,572			(15,664		)	6,287			(5,856		)	155,339
Pre-tax income (loss) from continuing operations:
Unaffiliated customers ^(1)(2)(3)	101,975			(16,304		)	(1,269		)	—			84,402
Equity in net income of investees accounted for by equity method	—			—			371			—			371
Inter-segment	(6,441		)	(281		)	6,722			—			—
Pre-tax income (loss) from continuing operations	95,534			(16,585		)	5,824			—			84,773
Total assets as of September 30, 2014	25,922,462			373,200			295,123			—			26,590,785
Net investment income	82,978			154			449			—			83,581
Insurance intangible amortization	41,908			—			—			—			41,908
Interest expense	31,491			350			—			—			31,841
Reorganization items ⁽⁴⁾	$	—		$	—		$	2		$	—		$	2



Successor Ambac - Period from July 1 through September 30, 2013	Financial Guarantee			Financial Services			Corporate and Other			Inter-segment Eliminations			Consolidated
Revenues:
Unaffiliated customers ⁽¹⁾	$	157,382		$	14,144		$	126		$	—		$	171,652
Inter-segment	512			(472		)	8,259			(8,299		)	—
Total revenues	157,894			13,672			8,385			(8,299		)	171,652
Pre-tax income (loss) from continuing operations:
Unaffiliated customers ^(1)(2)(3)	219,006			12,812			(217		)	—			231,601
Inter-segment	(8,664		)	(623		)	9,287			—			—
Pre-tax income (loss) from continuing operations	210,342			12,189			9,070			—			231,601
Total assets as of September 30, 2013	28,117,113			477,111			39,414			—			28,633,638
Net investment income	51,637			474			15			—			52,126
Insurance intangible amortization	37,473			—			—			—			37,473
Interest expense	31,281			536			—			—			31,817
Reorganization items ⁽⁴⁾	$	—		$	—		$	4		$	—		$	4



Successor Ambac - Period from January 1 through September 30, 2014	Financial Guarantee			Financial Services			Corporate and Other			Inter-segment Eliminations			Consolidated
Revenues:
Unaffiliated customers ⁽¹⁾	$	437,591		$	(116,294	)	$	142		$	—		$	321,439
Equity in net income of investees accounted for by equity method	—			—			371			—			371
Inter-segment	937			(901		)	23,309			(23,345		)	—
Total revenues	438,528			(117,195		)	23,822			(23,345		)	321,810
Pre-tax income (loss) from continuing operations:
Unaffiliated customers ^(1)(2)(3)	157,551			(119,287		)	(4,976		)	—			33,288
Equity in net income of investees accounted for by equity method	—			—			371			—			371
Inter-segment	(24,995		)	(1,150		)	26,145			—			—
Pre-tax income (loss) from continuing operations	132,556			(120,437		)	21,540			—			33,659
Total assets as of September 30, 2014	25,922,462			373,200			295,123			—			26,590,785
Net investment income	232,995			967			513			—			234,475
Insurance intangible amortization	109,878			—			—			—			109,878
Interest expense	94,886			1,236			—			—			96,122
Reorganization items ⁽⁴⁾	$	—		$	—		$	211		$	—		$	211



Successor Ambac - Period from May 1 through September 30, 2013	Financial Guarantee			Financial Services			Corporate and Other			Inter-segment Eliminations			Consolidated
Revenues:
Unaffiliated customers ⁽¹⁾	$	317,287		$	96,634		$	146		$	—		$	414,067
Inter-segment	911			(846		)	13,684			(13,749		)	—
Total revenues	318,198			95,788			13,830			(13,749		)	414,067
Pre-tax income (loss) from continuing operations:
Unaffiliated customers ^{(1) (2) (3)}	343,896			94,504			(1,004		)	—			437,396
Inter-segment	(14,161		)	(1,146		)	15,307			—			—
Pre-tax income (loss) from continuing operations	329,735			93,358			14,303			—			437,396
Total assets as of September 30, 2013	28,117,113			477,111			39,414			—			28,633,638
Net investment income	77,652			632			38			—			78,322
Insurance intangible amortization	62,425			—			—			—			62,425
Interest expense	52,057			904			—			—			52,961
Reorganization items ⁽⁴⁾	$	—		$	—		$	428		$	—		$	428



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:



	Period from July 1 through September 30, 2014							Period from July 1 through September 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
United States	$	(15,355	)	$	44,882	$	262	$	(25,030	)	$	50,234	$	21,911
United Kingdom	1,482			14,309		—		(2,789		)	15,273		948
Other international	173			5,640		7,154		(6,561		)	5,442		8,335
Total	$	(13,700	)	$	64,831	$	7,416	$	(34,380	)	$	70,949	$	31,194



	Successor Ambac														Predecessor Ambac
	Period from January 1 through September 30, 2014							Period from May 1 through September 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	$	(44,266	)	$	141,472	$	6,283	$	(49,523	)	$	96,574	$	36,860	$	(16,102	)	$	104,594	$	(31,134	)
United Kingdom	(1,681		)	55,752		—		(4,706		)	24,113		3,061		10,673			18,071		(5,861		)
Other international	(19,005		)	15,167		7,296		(14,232		)	8,301		42,493		(8,696		)	7,335		(23,389		)
Total	$	(64,952	)	$	212,391	$	13,579	$	(68,461	)	$	128,988	$	82,414	$	(14,125	)	$	130,000	$	(60,384	)