Ambac Financial Group, Inc. Announces Fourth
April 08, 2010 05:34 PM Eastern Daylight Time
NEW YORK--(EON: Enhanced Online News)--Ambac Financial Group, Inc. (NYSE: ABK) (Ambac) today
announced fourth quarter 2009 net income of $558.1 million, or net income of $1.93 per diluted share. This
compares to a fourth quarter 2008 net loss of $2,340.8 million, or net loss of $8.14 per share. The fourth quarter
2009 results reflect a tax benefit recorded during the period, reduced loss and loss expenses recorded relative to
fourth quarter 2008, and unrealized mark-to-market gains in the credit derivatives portfolio. In 2008, Ambac’s
fourth quarter results reflected a significant negative net change in fair value of credit derivatives, higher loss and loss
adjustment expenses and a large increase in the deferred tax asset valuation allowance.
Net change in fair value of credit derivatives was positive $133.2 million, driven primarily by price improvement in
certain reference obligations, partially offset by a narrowing of Ambac’s short-term credit spreads (ASC Topic 820
adjustment) during the quarter.
Net loss and loss expenses incurred amounted to $385.4 million for the current quarter, primarily related to
deterioration in the first-lien residential mortgage-backed securities (RMBS) portfolio, partially offset by reserve
reductions in non-consumer asset-backed securities transactions.
In the financial services segment, the results for the derivative products business improved by $105.8 million
compared to the fourth quarter 2008.
A tax benefit of $472.0 million was recorded primarily as a result of legislation that passed during the quarter that
allows Ambac to carry back 2008 and 2009 operating losses as far back as 2003. Ambac Assurance Corporation
(AAC), Ambac’s principal operating subsidiary, received the tax refund amounting to $443.9 million in February
Net Premiums Earned
Net premiums earned for the fourth quarter of 2009