Ambac(US:AMBC)2023-05-08 16:00Financial Performance - Net income attributable to common stockholders was a loss of $33 million, compared to a profit of $2 million in the same quarter last year[11]. - The company reported a basic net income (loss) per share of $(0.73), compared to $0.04 in the prior year[11]. - For the three months ended March 31, 2023, net income attributable to common stockholders was $(33) million, resulting in a basic and diluted earnings per share of $(0.73)[154]. - The company reported a pretax loss of $29 million for the three months ended March 31, 2023, compared to a pretax income of $3 million in the same period of 2022[180]. - Total revenues and other income fell to $58 million, down from $119 million, a decrease of 51.3%[11]. - The company reported a total pre-tax loss of $(29) million for the three months ended March 31, 2023, with a U.S. component loss of $(48) million and a foreign component income of $19 million[159]. - Total expenses for Q1 2023 were $86 million, compared to $116 million in Q1 2022, reflecting a reduction in operational costs[38]. - The company reported unrealized losses on available-for-sale securities of $(71) million for the period, with total comprehensive income (loss) of $(127) million[150]. Assets and Liabilities - Total assets increased to $8,219 million, up from $7,973 million year-over-year, representing a growth of 3.1%[9]. - Total liabilities increased to $6,892 million from $6,647 million, reflecting a rise of 3.7%[9]. - Total stockholders' equity increased slightly to $1,307 million from $1,305 million, a growth of 0.2%[9]. - As of March 31, 2023, total financial assets amounted to $7,056 million, an increase from $6,726 million as of December 31, 2022[68]. - The total financial liabilities decreased to $5,531 million from $5,418 million, indicating a reduction of about 2.1%[68]. - The total fair value of financial liabilities was reported at $5,717 million, compared to $5,586 million in the previous quarter, indicating an increase of about 2.3%[68]. Cash Flow - Net cash provided by operating activities increased to $77 million in Q1 2023 from $9 million in Q1 2022[15]. - Net cash provided by investing activities rose significantly to $441 million in Q1 2023, compared to $136 million in Q1 2022[15]. - Net cash used in financing activities was $(276) million in Q1 2023, up from $(52) million in Q1 2022[15]. - Cash, cash equivalents, and restricted cash at the end of the period increased to $304 million as of March 31, 2023, from $116 million a year earlier[15]. Investment Income - Net investment income rose significantly to $34 million compared to $5 million in the previous year, marking a 580% increase[11]. - Total net investment income increased to $34 million for the three months ended March 31, 2023, compared to $5 million in the same period of 2022, representing a significant growth[49]. - Net investment gains, including impairments, resulted in a loss of $4 million for Q1 2023, compared to a gain of $10 million in Q1 2022[51]. - The legacy financial guarantee segment significantly contributed to net investment income, while other segments' results were not significant[207]. Premiums and Insurance - Net premiums earned decreased to $14 million from $15 million, a decline of 6.7% year-over-year[11]. - Total net premiums earned for the three months ended March 31, 2023, were $18 million, compared to $14 million for the same period in 2022, representing a 28.6% increase[86]. - The total public finance premium receivables increased from $140 million in 2022 to $146 million in 2023, a rise of 4.3%[90]. - The total international premium receivables increased from $90 million in 2022 to $74 million in 2023, reflecting a decrease of 17.8%[90]. - The company has not written any new financial guaranty insurance policies since 2008, leading to an increasingly concentrated legacy portfolio[197]. Risk Management and Strategy - The company aims to grow its Specialty Property and Casualty Insurance business to generate underwriting profits and attractive returns on capital[19]. - Ambac plans to build an Insurance Distribution business through acquisitions and product expansion supported by centralized technology[19]. - The execution of Ambac's strategy may be affected by a new capital framework being developed by the Office of the Commissioner of Insurance (OCI)[22]. - The company is focused on actively managing and de-risking its insured portfolio while pursuing recovery of previously paid losses[19]. Market Conditions and Economic Impact - The ongoing conflict between Russia and Ukraine is creating substantial uncertainty in the global economy, impacting foreign currency transactions[188]. - The declines in fair value across asset classes as of March 31, 2023, were attributed to increasing interest rates and market spreads[46]. Litigation and Regulatory Matters - The company is involved in ongoing litigation, which may have material impacts on its financial position, although it believes it has substantial defenses[165]. - The company maintains a full valuation allowance against its deferred tax assets, believing it is more likely than not that it will not generate sufficient taxable income to recover these assets[158].