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

12 Months Ended

Dec. 31, 2022

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,	2022		2021
Assets:
Fixed maturity securities, at fair value (amortized cost of $13 and $130)	$	12	$	119
Short-term investments, at fair value (amortized cost of $175 and $124)	175		124
Other investments	16		11
Total investments (net of allowance for credit losses of $0 and $3)	203		254
Cash	3		1
Investment in subsidiaries	1,029		769
Investment income due and accrued	1		1
Other assets	19		17
Total assets	$	1,255	$	1,041
Liabilities and Stockholders' Equity:
Liabilities:
Current taxes	$	1	$	1
Accounts payable and other liabilities	3		2
Total liabilities	3		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: 46,658,990 and 46,477,068	—		—
Additional paid-in capital	274		257
Accumulated other comprehensive income (loss)	(253)		58
Retained earnings	1,245		726
Treasury stock, shares at cost: 1,685,233 and 172,929	(15)		(3)
Total Ambac Financial Group, Inc. stockholders’ equity	1,252		1,038
Total liabilities and stockholders’ equity	$	1,255	$	1,041

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,	2022		2021		2020
Revenues:
Investment income	$	10	$	10	$	13
Other income	—		—		—
Net gains on derivative contracts	1		—		—
Net investment gains (losses), including impairments	(14)		(5)		(1)
Total revenues	(2)		5		12
Expenses:
General and administrative expenses	17		19		19
Total expenses	17		19		19
Income (loss) before income taxes and equity in undistributed net gain (loss) of subsidiaries	(20)		(14)		(7)
Federal income tax provision (benefit)	—		2		—
Income (loss) before net income (loss) of subsidiaries	(19)		(16)		(7)
Net gain (loss) of subsidiaries	542		(1)		(430)
Net income (loss)	$	522	$	(17)	$	(437)
Other comprehensive income (loss), after tax:
Net income (loss)	$	522	$	(17)	$	(437)
Unrealized gains (losses) on securities, net of income tax provision (benefit) of $(6), $(2) and $1	(225)		(12)		15
Gains (losses) on foreign currency translation, net of income tax provision (benefit) of $—, $— and $—	(85)		(8)		23
Credit risk changes of fair value option liabilities, net of income tax provision (benefit) of $—, $— and $—	—		(1)		1
Changes to postretirement benefit, net of income tax provision (benefit) of $—, $— and $—	(1)		(1)		(3)
Total other comprehensive income (loss)	(310)		(21)		37
Total comprehensive income (loss) attributable to Ambac Financial Group, Inc.	$	212	$	(38)	$	(400)

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		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Preferred Stock		Common Stock		Additional Paid-in Capital		Common Stock Held in Treasury, at Cost
Balance at January 1, 2020	$	1,477	$	1,203	$	42	$	—	$	—	$	232	$	—
Total comprehensive income (loss)	(400)		(437)		37		—		—		—		—
Adjustment to initially apply ASU 2016-13	(4)		(4)		—		—		—		—		—
Stock-based compensation	11		—		—		—		—		11		—
Cost of shares (acquired) issued under equity plan	(3)		(2)		—		—		—		—		(1)
Balance at December 31, 2020	1,080		759		79		—		—		242		(1)
Total comprehensive income (loss)	(38)		(17)		(21)		—		—		—		—
Stock-based compensation	14		—		—		—		—		14		—
Cost of shares (acquired) issued under equity plan	(6)		(4)		—		—		—		—		(2)
Changes to redeemable noncontrolling interest	(12)		(12)		—		—		—		—		—
Balance at December 31, 2021	1,038		726		58		—		—		257		(3)
Total comprehensive income (loss)	211		521		(310)		—		—		—		—
Stock-based compensation	17		—		—		—		—		17		—
Cost of shares (acquired) issued under equity plan	(4)		(5)		—		—		—		—		2
Cost of shares repurchased	(14)		—		—		—		—		—		(14)
Change in redeemable noncontrolling interest	3		3		—		—		—		—		—
Purchase of Ambac Assurance auction market preferred shares	1		1		—		—		—		—		—
Balance at December 31, 2022	$	1,252	$	1,245	$	(253)	$	—	$	—	$	274	$	(15)

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,	2022		2021		2020
Cash flows from operating activities:
Net income (loss)	$	522	$	(17)	$	(437)
Adjustments to reconcile net income loss to net cash used in operating activities:
Net (income) loss of subsidiaries	(542)		1		423
Amortization of bond premium and discount	(7)		(9)		(6)
Net investment gains (losses), including impairments	14		5		1
Increase (decrease) in current income taxes payable	(1)		1		30
Share-based compensation	12		14		11
(Increase) decrease in other assets and liabilities	41		(5)		(1)
Distributions received from majority owned subsidiary	6		6		—
Other, net	1		(6)		(10)
Net cash provided by (used in) operating activities	46		(10)		11
Cash flows from investing activities:
Proceeds from sales and matured bonds	68		33		46
Purchases of bonds	(1)		(34)		(45)
Change in short-term investments	(51)		105		89
Change in other investments	(4)		(8)		—
Acquisitions, net of cash acquired	—		—		(74)
Net cash provided by (used in) investing activities	12		95		16
Cash flows from financing activities:
Capital contribution to subsidiaries	(42)		(92)		(29)
Cost of shares acquired	(14)		—		—
Net cash (used in) financing activities	(57)		(92)		(29)
Net cash flow	1		(6)		(2)
Cash at beginning of period	1		7		9
Cash at end of period	$	3	$	1	$	7
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.