Income Taxes

9 Months Ended

Sep. 30, 2023

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	2018
United Kingdom	2019
Italy	2018

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 September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
U.S.	$	59	$	329	$	(7)	$	338
Foreign	8		14		34		13
Total	$	68	$	342	$	28	$	352

Provision (Benefit) for Income Taxes

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Current taxes
U. S. federal	$	—	$	—	$	1	$	—
U.S. state and local	—		—		—		—
Foreign	4		4		6		6
Total Current taxes	4		4		8		6
Deferred taxes
U.S.federal	(2)		—		(2)		—
Foreign	(1)		(2)		1		(2)
Total Deferred taxes	(3)		(2)		(1)		(2)
Provision for income taxes	$	1	$	2	$	7	$	4