0000874501FALSE00008745012024-09-172024-09-17

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 17, 2024
Ambac Financial Group, Inc.
(Exact name of Registrant as specified in its charter)

Delaware1-1077713-3621676
(State of incorporation)(Commission
file number)		(I.R.S. employer
identification no.)
One World Trade CenterNew YorkNY10007
(Address of principal executive offices)
(212)
658-7470
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, par value $0.01 per shareAMBCNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to
Section 13(a) of the Exchange Act.
☐


Explanatory Note
On August 1, 2024, Ambac Financial Group, Inc. (the “Company”) completed its previously announced acquisition of Beat Capital Partners Limited (“Beat”) pursuant to a share purchase agreement (the “Beat Purchase Agreement”) by and among the Company, Cirrata V LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of the Company (the “Purchaser”), certain sellers set forth therein (the “Sellers”) and Beat, pursuant to which, and upon the terms and subject to the conditions set forth therein, effective July 31, 2024, the Purchaser purchased from the Sellers approximately 60% of the entire issued share capital of Beat for total consideration of approximately $278 million, of which approximately $249 million was paid in cash and the remainder of which was satisfied through the issuance of 2,216,023 shares of Company Common Stock (the “Beat Transaction”). The Company made available the following information.
Item 9.01. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired.
The unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2024 and 2023, prepared in accordance with accounting principles, standards and practices generally accepted in the United Kingdom, together with a reconciliation to U.S. GAAP, and the notes related thereto, are filed as Exhibit 99.1 to this report and incorporated herein by reference.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined financial information of the Company, which give effect to the Beat Transaction and the previously announced disposition of 100% of the common stock of Ambac Assurance Corporation, include the unaudited pro forma condensed combined balance sheet as of June 30, 2024 and the unaudited pro forma condensed combined statements of operations for the year ended December 31, 2023 and the six months ended June 30, 2024 and the notes related thereto, are filed as Exhibit 99.2 to this report and incorporated herein by reference.
(d) Exhibits.    The following exhibit is filed as part of this Current Report on Form 8-K:
EXHIBIT INDEX
Exhibit
NumberExhibit Description
99.1
99.2
101.INS
XBRL Instance Document - the instance document does not appear in the interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH
XBRL Taxonomy Extension Schema Document.
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB
XBRL Taxonomy Extension Label Linkbase Document.
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document.
104
Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags or embedded within the Inline XBRL document

2

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Ambac Financial Group, Inc.
(Registrant)
Dated:September 17, 2024By:
/s/ William J. White
William J. White
First Vice President, Secretary and Assistant General Counsel
3
Exhibit 99.1
Company registration number 10198821 (England and Wales)










BEAT CAPITAL PARTNERS LIMITED
UNAUDITED INTERIM REPORT AND CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023



COMPANY INFORMATION

Directors    N Anand
M Cannan
J P Cavanagh
C Leblanc
E Lieskovska
A J T Milligan
R Smith
D Trick

Secretaries    K Baker
H Marsden
S Naher

Company number    10198821

Registered office    5th Floor 6 Bevis Marks
    London
EC3A 7BA

Auditor    Ernst & Young LLP
25 Churchill Place Canary Wharf London
E14 5EY

Bankers    Barclays Bank PLC One
Churchill Place London
E14 5HP

Solicitors    RPC
Tower Bridge House St Katharine's Way London
E1W 1AA


CONTENTS
Page
Directors responsibilities statement
Group statement of comprehensive income
Group statement of financial position3-4
Group statement of changes in equity
Group statement of cash flows
Notes to the financial statements7-15



DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023
The directors are responsible for preparing the Interim Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and company, and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:
•select suitable accounting policies and then apply them consistently;
•make judgements and accounting estimates that are reasonable and prudent;
•state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
•prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
1

BEAT CAPITAL PARTNERS LIMITED
UNAUDITED GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023

Continuing
Discontinued
30 June
Continuing
Discontinued
30 June
operations
operations
2024
operations
operations
2023
Notes
£'000
£'000
£'000
£'000
£'000
£'000
Turnover

26,355 426,359 24,689 264 24,953 
Administrative expenses
(20,568)(70)(20,638)(15,503)(717)(16,220)
Operating profit/(loss)

5,787 (66)5,721 9,186 (453)8,733 
Interest receivable and similar income

502 —502 419 2 421 
Interest payable and similar expenses

(32)—(32)(111)— (111)
Exchange (losses)/gains
(118)—(118)(1,525)— (1,525)
Profit/(loss) on disposal of operations
— —— — — — 
Profit/(loss) before taxation
6,139 (66)6,073 7,969 (451)7,518 
Tax on profit

(2,103)—(2,103)(2,080)— (2,080)
Profit after taxation
4,035 (66)3,970 5,890 (451)5,438 
Other comprehensive income
(286)41(245)147 73 221 
Total comprehensive income for the year
3,750 (25)3,725 6,037 (378)5,659 
Profit for the financial year is attributable to:
- Owners of the parent company
2,565 3,585 
- Non-controlling interests
1,160 2,074 
3,725 5,659 

    
2



BEAT CAPITAL PARTNERS LIMITED
UNAUDITED GROUP STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024 AND AS AT 31 DECEMBER 2023

Q2 2024
Q4 2023
Notes
£'000£'000£'000£'000
Fixed assets
Intangible assets
42,8802,565
Tangible assets
114169
Investments7575
3,0692,809
Current assets
Debtors4,425519
Prepayments and accrued income
32,53331,549
Investments(471)177
Cash and cash equivalents
31,56733,802
68,05466,047
Creditors: amounts falling due within one year
Taxation and social security
464349
Other creditors
5,2726,335
Deferred income
40,28737,601
Accruals3,7743,501
49,79747,786
Net current assets
18,25718,261
Total assets less current liabilities
21,32621,070
Provisions
Deferred tax (asset)/liability
(95)(21)
9521
Net assets
21,42121,091
Capital and reserves
Called up share capital    
22
Share premium account
1,2451,245
Profit and loss reserves
20,17416,244
Equity attributable to owners of the parent company
20,03417,491
Non-controlling interests
1,3873,600
21,42121,091
3


UNAUDITED GROUP STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 30 JUNE 2024 AND AS AT 31 DECEMBER 2023

The financial statements were approved by the board of directors and authorised for issue on 4 September 2024 and are signed on its behalf by:



J P Cavanagh
Director

Company registration number 10198821 (England and Wales)
4

BEAT CAPITAL PARTNERS LIMITED
UNAUDITED GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023

Share capital
Share premium
account
Profit and loss reserves
Total controlling
interest
Non-controlling
interest
Total
Notes£'000£'000£'000£'000£'000£'000
Balance at 1 January 20232 1,223 18,515 19,739 2,848 22,587 
Period ended 30 June 2023:
Profit for the period— — 3,585 3,585 2,074 5,660 
Issue of share capital— 31 — 31 38 68 
Dividends— — — — (2,772)(2,772)
Effect of changes in non-controlling interests in existing subsidiaries— — 534 534 (534)— 
Balance at 30 June 20232 

1, 25
22,634 23,890 1,651 25,541 
Balance at 1 January 2024
Period ended 30 June 2024:
2 1,245 16,245 17,492 3,600 21,092 
Profit for the period— — 1,805 1,805 1,920 3,725 
Dividends— — — — (3,414)(3,414)
Effect of changes in non-controlling interests in existing subsidiaries737 737 (737)— 
Subsidiary share buyback— — — — (30)(30)
Issue of share capital— — — — 49 49 
Balance at 30 June 20242 1,245 18,787 20,034 1,387 21,421 
5


BEAT CAPITAL PARTNERS LIMITED
UNAUDITED GROUP STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023


6 months 30 June 2024

6 months 30 June 2023
Notes£'000
£'000
£'000£'000
Cash flows from operating activities
Cash (absorbed by)/generated from operations
7(7,392)(7,772)
Investing activities
Purchase of intangible assets
(424)(936)
Purchase of tangible fixed assets
— — 
Interest received
503 420 
Dividends received
8,397 8,721 
Investment return
(35)(288)
Net cash generated from/(used in) investing activities
8,441 7,917 
Financing activities
Proceeds from issue of shares
35 260 
Interest paid
(18)(110)
Dividends paid to non-controlling interests
(3,414)(2,772)
Net cash used in financing activities
(3,397)(2,622)
Net (decrease)/increase in cash and cash equivalents
(2,348)(2,477)
Cash and cash equivalents at beginning of period
33,802 40,054 
Effect of foreign exchange rates
113 (2,218)
Cash and cash equivalents at end of year
31,567 35,359 
6
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023
1Accounting policies
Company information
Beat Capital Partners Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is 5th Floor 6 Bevis Marks, London, EC3A 7BA.
The group consists of Beat Capital Partners Limited and all of its subsidiaries.
1.1Basis of preparation
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”), The Financial Reporting Standard for interim reporting (“FRS 104”) and the requirements of the Companies Act 2006. The 2022 financial statements were prepared in accordance with FRS103 Insurance Contracts and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the Company and Group. Monetary amounts in these financial statements are rounded to the nearest £'000.
The Group financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The condensed consolidated financial statements should be read in conjunction with Beat Capital Partners Limited 2023 consolidated financial statements. The accounting policies are the same as those applied in the consolidated financial statements.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
▪Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
▪Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues: Interest income/ expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
▪Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
1.2Basis of consolidation
The consolidated group financial statements consist of the financial statements of the parent company Beat Capital Partners Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 30 June 2024. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

7
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023
1    Accounting policies    (Continued)
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group statement of financial position at cost plus post- acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
The same accounting policies and methods of computation have been followed in the interim financial statements as compared with the annual financial statements for the year ended 31 December 2023.
1.3Going concern
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
The Company and the Group have adequate resource to continue trading for the foreseeable future and the directors intend for it to do so. The Company has a bank overdraft facility of up to £4m to support liquidity, a facility with its shareholder of £6m to further support working capital and future investment. There has been no loan covenant breaches. Accordingly, the directors continue to adopt the going concern basis for accounting in preparing the Group Financial Statements.
1.4Discontinued operations
The group classifies operations as discontinued when a sale transaction has been agreed or in run-off for that operation and is a separate major line of business. The results arising from discontinued operations are included in the group consolidated statement of profit or loss and the split of discontinued operations from continuing operations is shown in the group consolidated statement of profit or loss. All other notes to the financial statements include amounts for continuing operations unless indicated otherwise.
8
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023
2Judgements and key sources of estimation uncertainty
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Profit commission
The Group provides for profit commission receivable based on the financial performance of the related lines of business. The Group re-assesses the amount of profit commission receivable, on all underwriting years of account that have been open during the financial period, at each balance sheet date.

3Revenue
Turnover analysed by type
6 months 2024
£'000
6 months 2023
£'000
Profit commission
— — 
Commissions receivable
21,603 21,597 
Other income
4,756 3,356 
26,359 24,953 
9
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023
4    Intangible fixed assets
GroupSoftware
Cost
£'000
At 31 December 2023
2,820 
Additions425 
At 30 June 2024
3,245 
Amortisation and impairment
At 1 January 2024
255 
Amortisation charged for the period
110 
At 30 June 2024
365 
Carrying amount
At 31 December 2023
2,565 
At 30 June 2024
2,880 

10
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023
5     Related party transactions
Beat Capital Partners Limited, is registered in England and Wales at 5th Floor, 6 Bevis Marks, London, EC3A 7BA, United Kingdom. It is the ultimate parent company of the Group of companies as at 30 June 2024 and there is no controlling party over the Company. All transactions between group companies have taken place at arm’s length.
Transactions with Directors
Certain directors of the Company are also directors of other group companies. In all cases, transactions between the Company and other entities within the group are carried out on normal arm’s length commercial terms.
J Cavanagh, T Milligan and P Rayner are Lloyd’s Names and participate on Syndicate 4242 which the Group underwrite (re)insurance business on behalf of.
J Cavanagh is a non-Executive director of Hampden Capital Plc. They provide services to members of Syndicate 4242. All business is conducted on normal arm’s length commercial terms.
T Milligan and P Rayner are de minimis shareholders of Previse, a partner of Peterborough Agency Limited that the Company wholly owns. All business is conducted on normal arm’s length commercial terms.
P Rayner is a director of Cadenza Re Limited. They are an associated company of Beat Capital Partners Limited.
B Schnitzer and P Rayner are shareholders in, and B Schnitzer is a director of, Paraline Group Ltd which is a shareholder in the Company.
Transactions with Related Parties
On 28 March 2024 Beat Capital Partners Limited paid interest of £18k to Buffalo BCC Bidco Limited, a shareholder of the Company.
6    Cash (absorbed by)/generated from group operations

Q2 2024Q2 2023
£'000£'000
Total comprehensive income for the period3,725 5,660 
Adjustments for:
Corporation tax charge
2,103 2,080 
Finance costs
18 110 
Investment income
231 (694)
Other comprehensive income
245 (221)
Interest receivable(503)(420)
Amortisation and impairment of intangible assets
110 40 
Commissions receivable in transit via restricted cash295 243 
Introduction of client money funds— 1,337 
Depreciation and impairment of tangible fixed assets
54 46 
Corporation tax paid
(3,052)(1,947)
Share of Lloyd’s member cash movement— 1,301 
Parent company dividends received
(8,397)(8,721)
Movements in working capital:
(Increase)/decrease in debtors
(4,134)(1,560)
Increase/(decrease) in creditors
1,913 (5,026)
________________
Cash (absorbed by)/generated from operations
(7,392)(7,772)
11
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023
7    Discontinued Operations
The group has discontinued operations relating to Three areas, transactions relating to Beat CCM Nine Limited, Peterborough Agency Limited and Marcato Marine Insurance Services LLC. The results included in the group statement of comprehensive income above are shown by entity below:

Period ended 30 June 2023Peterborough Agency LimitedMarcato Marine Insurance Services LLCBeat CCM Nine LimitedTotal
£’000£’000£’000£’000
Turnover164100-264
Admin expenses(45)(672)-(717)
Profit/(loss) before taxation121(572)-(451)
Tax on profit/loss----
Profit/(loss) after taxation121(573)-(451)
Other comprehensive income-74-73
Total comprehensive income121(499)-(378)
Period ended 30 June 2024Peterborough Agency LimitedMarcato Marine Insurance Services LLCBeat CCM Nine LimitedTotal
£’000£’000£’000£’000
Turnover4--4
Admin expenses(21)(49)-(70)
Profit/(loss) before taxation(17)(49)-(66)
Tax on profit/loss----
Profit/(loss) after taxation(17)(49)-(66)
Other comprehensive income-41-41
Total comprehensive income(17)(8)-(25)

8     Summary of significant differences between UK GAAP and US GAAP
The condensed consolidated financial statements of the Group have been prepared in accordance with generally accepted accounting practice in the United Kingdom (UK GAAP), which differ in certain significant respects from generally accepted accounting principles in the United States (US GAAP). A description of the differences and their effects on total comprehensive income and shareholders’ equity are set out below:
Description of differences between UK GAAP and US GAAP
a.Profit commission
This adjustment converts revenue from UK GAAP to US GAAP. Under UK GAAP, revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. Under US GAAP, revenue is recognised when or as performance obligations are satisfied by transferring of the service to the insureds, as the customer. Control either transfers over time or at a point in time, which affects when revenue is recorded. The difference in the timing of revenue recognition results in a £1,681k increase and £2,856k increase to accrued commissions for the six month periods ended 30 June 2024 and 30 June 2023 respectively, and an increase of £7,179k increase and £7,975k to consolidated shareholders’ equity for the six month periods ended 30 June 2024 and 30 June 2023, and affected the following line items in the financial statements:

20242023
£'000£'000
Net income: increase/(decrease)1,681 2,856 
Admin expenses - salaries1,681 2,856 
Shareholders' equity: increase/(decrease)7,179 7,975 
Creditors: Amounts falling due within one year7,179 7,975 
12
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023
8     Summary of significant differences between UK GAAP and US GAAP    (continued)
b.Bonus accrual
Under UK GAAP, the Group recognises bonuses once they are determined as the group operates a fully discretionary bonus scheme. Therefore, outside of non-discretionary bonuses, the bonus is recognised in April each year after the service year it relates to. Under US GAAP, bonuses are generally accrued throughout the year in the year of service. Bonuses have been adjusted for the six month periods ended 30 June 2024 and 30 June 2023 amounting to £1,310k and £231k for the six month periods ended 30 June 2024 and 30 June 2023 respectively. The following line items were adjusted for in the financial statements:
20242023
£'000£'000
Net income: increase/(decrease)1,310 231 
Admin expenses - salaries1,310 231 
Shareholders' equity: increase/(decrease)1,303 1,303 
Creditors: Amounts falling due within one year1,303 1,303 

c.    Leases
Under UK GAAP, a lessee classifies a lease as either finance or operating. Finance leases are capitalised as assets, with the concurrent recognition of an obligation. Operating leases are treated as annual rental expenses on a straight-line basis taking into consideration rent free periods. The Group only has operating leases and was not required to capitalise lease balances.
Under US GAAP, a lessee classifies a lease as either finance or operating. All leases were classified as operating leases under US GAAP. A lease liability and right of use asset are recognised on the balance sheet. The lease liability is measured at the present value of lease payments that are not paid at commencement and discounted using the interest rate implicit in the lease, if that rate can be readily determined, otherwise using the incremental borrowing rate. The right-of-use asset is recognised on the balance sheet and is measured as the initial amount of the lease liability, plus any lease payments and initial direct costs incurred, minus any lease incentives received. Operating leases are typically expensed on a straight-line basis. The difference in the models resulted in a decrease of profit of £40k to consolidated shareholder’s equity in both six month periods ended 30 June 2023 and 2024. The following line items in the financial statements were adjusted:
20242023
£'000£'000
Net income: increase/(decrease)— — 
Admin expenses - rent— — 
Shareholders' equity: increase/(decrease)
Tangible fixed assets - right of use asset474 874 
Creditors: Amounts falling due within one year(514)(914)
(40)(40)

13
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023
8    Summary of significant differences between UK GAAP and US GAAP    (continued)
d.    Income taxes
The tax effects of the adjustments described above is calculated as an adjustment to consolidated total comprehensive income and shareholder’s equity.
e.    Non-controlling interests
Non-controlling interests (NCI) is adjusted for each of the above listed significant adjustments.
Significant adjustments to consolidated total comprehensive income
The significant adjustments to total comprehensive income for the six month periods ended 30 June 2024 and 2023 which would be required if US GAAP had been applied, instead of UK GAAP in the consolidated financial statements are set out below.
20242023
£'000£'000
Total comprehensive income according to the consolidated
income statement prepared under UK GAAP3,725 5,660 
US GAAP adjustments - increase/(decrease) due to:
Profit Commissiona1,681 2,856 
Bonus Accrualb1,310 231 
Leasesc— — 
Taxd(968)(962)
2,023 2,125 
Total comprehensive income in accordance with U.S. GAAP5,748 7,785 
Non-controlling interest - US GAAP adjustmentse130 495 
Profit for the financial year is attributable to:
-Owners of the parent company4,459 5,216 
-Non-0controlling interests1,289 2,569 
5,748 7,785 

14
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIODS ENDED 30 JUNE 2024 AND 30 JUNE 2023
8    Summary of significant differences between UK GAAP and US GAAP    (continued)
Significant adjustments to consolidated shareholders equity
The significant adjustments to shareholders equity for the periods ended 30 June 2024 and 2023 which would be required if US GAAP had been applied, instead of UK GAAP in the consolidated financial statements are set out below.
20242023
£'000£'000
Shareholders equity according to the consolidated statement— — 
of financial position prepared under UK GAAP21,421 25,539 
US GAAP adjustments - increase/(decrease) due to:
Profit Commissiona7,179 7,975 
Bonus Accrualb1,303 1,303 
Leasesc(40)(40)
Income taxesd(1,475)(1,344)
6,968 7,894 
Shareholders equity in accordance with U.S. GAAP28,389 33,433 
Non-controlling interests (NCI) - US GAAP adjustmentse130 495 
Equity attributable to owners of the parent company26,871 31,286 
Non-controlling interests1,517 2,147 
28,389 33,433 
Significant adjustments to consolidated statement of cash flows
No significant adjustments were required to the consolidated statement of cash flow if US GAAP had been applied instead of UK GAAP, with the exception of interest paid being classified as a financing activity under UK GAAP and as operating activity under US GAAP, amounting to £18k and £110k for the six month periods ended 30 June 2024 and 2023 respectively.
15

Exhibit 99.2

PRELIMINARY UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following preliminary unaudited pro forma combined financial information gives effect to the following transactions by Ambac Financial Group, Inc (“Ambac”), collectively the “Transactions”: 
•Ambac’s disposition of 100% of the common stock of Ambac Assurance Corporation (“AAC”) under the terms of a Stock Purchase Agreement dated June 4, 2024, with American Acorn Corporation (“Buyer”), a Delaware corporation owned by funds managed by Oaktree Capital Management, L.P., pursuant to which, subject to the conditions set forth therein, Ambac will sell all the issued and outstanding shares of common stock, par value $2.50 per share, of AAC to Buyer for aggregate consideration of $420 million in cash (the “AAC Transaction”). At the closing of the AAC Transaction, Ambac will issue to Buyer or its designee a warrant (the “Warrant”) exercisable for a number of shares of common stock, par value $0.01, of Ambac representing 9.9% of the fully diluted shares of Ambac’s common stock as of March 31, 2024, pro forma for the issuance of the Warrant (the “Warrant Shares”). The Warrant will have an exercise price per share of $18.50 with a six and a half-year term from the date of issuance and will be immediately exercisable.
•Ambac’s acquisition of 60% of Beat Capital Partners Limited and subsidiaries (“Beat”), effective July 31, 2024, for total consideration as of the closing date, of approximately $278 million, of which approximately $249 million was paid in cash and the remainder of which was satisfied through the issuance of 2,216,023 shares of common stock, par value $0.01 per share, of Ambac (“Ambac Common Stock”) to certain Sellers (the “Beat Transaction”).
The Transactions have been accounted for in the preliminary unaudited pro forma combined statement of operations (the “pro forma statement of operations”) for the six months ended June 30, 2024, and the year ended December 31, 2023, as if they had been completed on January 1, 2023. The preliminary unaudited pro forma combined balance sheet as of June 30, 2024, gives effect to the Transactions as if they occurred on June 30, 2024.
The following preliminary unaudited pro forma combined financial statements and related notes as of and for the six months ended June 30, 2024, and for the year ended December 31, 2023, have been derived from, and should be read in conjunction with, (i) the historical audited consolidated financial statements of Ambac and accompanying notes included in Ambac’s Annual Report on Form 10-K for the year ended December 31, 2023, (ii) the historical unaudited consolidated financial statements of Ambac and related notes included in Ambac’s Quarterly Report on Form 10-Q for the six months ended June 30, 2024, (iii) the historical audited combined financial statements of Beat and related notes for the year ended December 31, 2023, and (iv) the historical unaudited combined financial statements of Beat for the six months ended June 30, 2024.
In accordance with Article 11 of Regulation S-X, the preliminary unaudited pro forma combined financial statements were prepared for illustrative and informational purposes only and are not intended to represent what our results of operations or financial position would have been had the Transactions occurred on the dates noted above, nor what they will be for any future periods. The pro forma adjustments are based on available information and certain assumptions that management believes are factually supportable. In the opinion of our management, all adjustments necessary to present fairly the preliminary unaudited pro forma combined financial statements have been made. The preliminary unaudited pro forma combined financial statements do not include the realization of any cost savings from operating efficiencies or synergies that might result from the Transactions. Additionally, we anticipate that certain nonrecurring charges will be incurred in connection with the Transactions, the substantial majority of which consist of fees paid to investment bankers, legal counsel and other professional advisors. Any such charge could affect the future results of the post-acquisition company in the period in which such charges are incurred; however, these costs are not expected to be incurred in any period beyond twelve months from the closing date of the Transactions. Accordingly, the preliminary unaudited pro forma combined statement of operations for the year ended December 31, 2023, reflects the effects of these non-recurring charges, which are not included in the historical statements of operations of Ambac, AAC or Beat for the year ended December 31, 2023. 
In connection with the Beat Transaction, the preliminary unaudited pro forma combined financial statements have been prepared using the acquisition method of accounting for business combinations under generally accepted accounting principles in the United State of America (“US GAAP”), in accordance with Accounting Standards Codifications (ASC) 805, Business
1

Combinations. Under the acquisition method of accounting, the purchase price is allocated to the underlying tangible and intangible assets acquired, liabilities assumed and noncontrolling interests based upon their estimated fair values as of the acquisition date, with any excess purchase price allocated to goodwill. Ambac has made a preliminary allocation of the purchase price as of the assumed acquisition date of June 30, 2024, using information currently available. We estimated the fair value of Beat’s assets, liabilities and noncontrolling interests based on reviews of Beat’s historical audited financial statements, discussions with Beat management and other due diligence procedures. The assumptions and estimates used to determine the preliminary purchase price allocation and fair value adjustments are described in the notes accompanying the preliminary unaudited pro forma combined financial statements. The final determination of the fair value of Beat’s assets, liabilities and noncontrolling interests will be based on the actual net tangible and intangible assets, liabilities and noncontrolling interests of Beat that existed as of the closing date of the acquisition (July 31, 2024). As a result, the unaudited pro forma purchase price adjustments related to the acquisition are preliminary and subject to further adjustments as additional information becomes available and as additional analyses are performed. The final valuation may be materially different than the estimated values assumed in the preliminary unaudited pro forma combined financial statements.
The preliminary unaudited pro forma combined financial statements contain certain reclassification adjustments to conform the historical Beat financial statement presentation to our financial statement presentation. For purposes of the preliminary unaudited pro forma combined financial statements presented below; it is assumed that we will fund the cash consideration with cash on hand and proceeds from the AAC Transaction.
In connection with Ambac’s disposition of 100% of AAC’s common stock, the preliminary unaudited pro forma combined financial statements have been prepared using the guidance in ASC 810, Consolidations. Under ASC 810, a parent shall deconsolidate a subsidiary as of the date the parent ceases to have a controlling financial interest in the subsidiary by recognizing a gain or loss in net income measured as the difference between the fair value of any consideration received and the carrying amount of the subsidiary’s assets and liabilities at the date of sale. Components of the gain/loss calculation are described in further detail in Note 1 to the preliminary unaudited pro forma combined financial statements. AAC has historically been managed and operated in the normal course with other Ambac businesses and has been identified as the Legacy Financial Guarantee Segment in Ambac’s SEC filings. Therefore, the accompanying adjustments to the combined financial statements have been derived from the accounting records of Ambac and are in accordance with US GAAP.
The indebtedness incurred to finance the Beat Transaction is included in the preliminary unaudited pro forma combined financial statements reflecting terms and rates Ambac has agreed to with the funding bank. 
2

Ambac Financial Group, Inc. and Subsidiaries
Preliminary Unaudited Pro Forma Combined Balance Sheet
June 30, 2024
(Dollars in Millions, except share data) 
Historical
Ambac
Consolidated		Historical
Beat Business
As
Reclassified		Deconsolidated
Accounting
Adjustments
relating to
AAC		Acquisition
Accounting
Adjustments
relating to
Beat		Other
Accounting
Adjustments		NoteProforma
Ambac
Consolidated
Assets
 
Investments:
 
Fixed maturity securities - available for sale, at fair value
 $1,703 $— $(1,567)$— $— $136 
Fixed maturity securities - pledged as collateral, at fair value
 25 — (25)— — — 
Fixed maturity securities - trading, at fair value
 31 — (31)— — — 
Short-term investments, at fair value
 314 — (105)— — 209 
Other investments
 558 — (526)— — 32 
Total investments
 2,632 — (2,254)— — 377 
Cash and cash equivalents
 35 40 410 (249)(27)4B209 
Premium receivables
 317 — (232)— — 85 
Reinsurance recoverable on paid and unpaid losses
 277 — (26)— — 251 
Deferred ceded premium
 232 — (85)— — 147 
Deferred acquisition costs
 12 — — — — 12 
Subrogation recoverable
 128 — (128)— — — 
Intangible assets, less accumulated amortization
 285 — (226)275 — 334 
Goodwill
 70 — — 274 — 344 
Other assets
 163 59 (105)— 16 4C133 
Variable interest entity - Fixed maturity securities, at fair value
 2,101 — (2,101)— — — 
Variable interest entity - Restricted cash
 62 — (62)— — — 
Variable interest entity - Loans, at fair value
 1,567 — (1,567)— — — 
Variable interest entity - Derivative and other assets
 303 — (303)— — — 
Total assets
 $8,184 $99 $(6,679)$301 $(11)$1,894 
Liabilities and Stockholders’ Equity
 
Liabilities:
 
Unearned premiums
 $445 $— $(247)$— $— $198 
Losses and loss adjustment expense reserves
 890 — (604)— — 286 
Ceded premiums payable
 140 — (58)— — 82 
Deferred program fees and reinsurance commissions
 7 — — — — 7 
Long-term debt
 515 — (515)— — — 
Accrued interest payable
 500 — (500)— — — 
Other liabilities
 203 63 (137)— 20 4C149 
Variable interest entity - Long-term debt
 2,853 — (2,853)— — — 
Variable interest entity - Derivative liabilities
 1,136 — (1,136)— — — 
Variable interest entity - Other liabilities
 59 — (59)— — — 
Total liabilities
 6,748 63 (6,109)— 20 721 
3

Historical
Ambac
Consolidated		Historical
Beat Business
As
Reclassified		Deconsolidated
Accounting
Adjustments
relating to
AAC		Acquisition
Accounting
Adjustments
relating to
Beat		Other
Accounting
Adjustments		NoteProforma
Ambac
Consolidated
Redeemable noncontrolling interest
17 — — 186 — 203 
Stockholders’ equity:
Preferred stock
— — — — — — 
Common stock
— — — — — — 
Additional paid-in capital
295 — 16 29 340 
Accumulated other comprehensive income (loss)
(175)— 168 — — (7)
Retained earnings
1,265 — (703)— (30)4B/4C532 
Parent company net investment
— 34 — (34)— — 
Treasury stock, shares at cost
(17)— — — — (17)
Total Ambac Financial Group, Inc. stockholders’ equity
1,368 34 (519)(5)(30)848 
Nonredeemable noncontrolling interest
51 2 (51)119 — 121 
Total stockholders’ equity
1,419 36 (570)115 (30)969 
Total liabilities, redeemable noncontrolling interest and stockholders’ equity
$8,184 $99 $(6,679)$301 $(11)$1,894 
4

Ambac Financial Group, Inc. and Subsidiaries
Preliminary Unaudited Pro Forma Combined Statement of Operations
Year Ended December 31, 2023
(Dollars in Millions, except share data)
Historical
Ambac
Consolidated		Historical
Beat Business
As
Reclassified		Deconsolidated
Accounting
Adjustments
relating to
AAC		Other
Accounting
Adjustments		NoteProforma
Ambac
Consolidated
Revenues
  
Net premiums earned
  $78 $— $(26)$— $52 
Commission income
  51 50 — — 101 
Program fees
  8 — — — 8 
Net investment income
  140 1 (127)6 4A21 
Net investment gains (losses), including impairments
  (22)— 23 — 1 
Net gains (losses) on derivative contracts
  (1)— 1 — — 
Other income
  11 8 (11)— 8 
Income (loss) on variable interest entities
  3 — (3)— — 
Total revenues
  269 59 (144)6 190 
Expenses
  
Losses and loss adjustment expenses (benefit)
  (33)— 69 — 36 
Amortization of deferred acquisition costs, net
  11 — — — 11 
Commission expense
  29 — — — 29 
General and administrative expenses
  156 43 (108)28 4B/4C119 
Intangible amortization
  29 — (25)28 4D32 
Interest expense
  64 — (64)3 4B3 
Loss on Disposal
  — — 663 21 4B/4C684 
Total expenses
  257 43 536 80 915 
Pre-tax income (loss)
  12 16 (680)(73)(724)
Provision (benefit) for income taxes
  7 5 (8)— 4 
Net income (loss)
  5 11 (672)(73)(728)
Less: net (gain) loss attributable to noncontrolling interest
  (1)(5)— — (6)
Net income (loss) attributable to common stockholders
  $4 $6 $(672)$(73)$(734)
Weighted average number of common shares outstanding:
  
Basic
  45,636,649 2,216,023 47,852,672 
Diluted
  46,540,706 2,216,023 47,852,672 
Net income (loss) per share attributable to common stockholders:
  
Basic
  $0.18 $(15.24)
Diluted
  $0.18 $(15.24)
5

Ambac Financial Group, Inc. and Subsidiaries
Preliminary Unaudited Pro Forma Combined Statement of Operations
Six Months Ended June 30, 2024
(Dollars in Millions, except share data)
Historical
Ambac
Consolidated		Historical
Beat Business
As
Reclassified		Deconsolidated
Accounting
Adjustments
relating to
AAC		Other
Accounting
Adjustments		NoteProforma
Ambac
Consolidated
Revenues
   
Net premiums earned
$66 $— $(13)$— $53 
Commission income
31 29 — — 60 
Program fees
6 — — — 6 
Net investment income
78 1 (70)3 4A11 
Net investment gains (losses), including impairments
4 — — — 4 
Net gains (losses) on derivative contracts
2 — (2)— — 
Other income
18 5 (19)— 4 
Income (loss) on variable interest entities
2 — (2)— — 
Total revenues
207 34 (107)3 138 
Expenses
Losses and loss adjustment expenses (benefit)
16 — 26 — 42 
Amortization of deferred acquisition costs, net
10 — — — 10 
Commission expense
18 — — — 18 
General and administrative expenses
83 23 (44)(16)4B/4C45 
Intangible amortization
21 — (18)14 4D16 
Interest expense
32 — (32)— — 
Total expenses
180 23 (69)(3)132 
Pre-tax income (loss)
27 11 (38)6 6 
Provision (benefit) for income taxes
7 4 (7)4 
Net income (loss)
20 7 (31)6 2 
Less: net (gain) loss attributable to noncontrolling interest
(1)(2)— — (3)
Net income (loss) attributable to common stockholders
$19 $6 $(31)$6 $— 
Weighted average number of common shares outstanding:
Basic
46,019,145 2,216,023 48,235,168 
Diluted
46,568,862 2,216,023 48,235,168 
Net income (loss) per share attributable to common stockholders:
Basic
$0.42 $0.00 
Diluted
$0.41 $0.00 
6
NOTES TO PRELIMINARY UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(Dollar amounts in Millions, Except Share Amounts) 

1.    BASIS OF PRESENTATION
The preliminary unaudited pro forma combined financial statements have been derived from the historical consolidated financial statements of Ambac Financial Group, Inc (“Ambac”), Ambac Assurance Corporation (“AAC”) and Beat Capital Partners Limited (“Beat”) in accordance with generally accepted accounting principles in the United State of America (“US GAAP”) and are presented in U.S. dollars. As discussed in Note 5, certain of Beat’s historical amounts have been reclassified to conform to Ambac’s financial statement presentation, and pro forma adjustments have been made to reflect the Transactions and additional accounting adjustments.
The AAC Transaction (as defined below) is being accounted for as a deconsolidation of a subsidiary under ASC 810 Consolidations, which requires an entity to derecognize assets as of the date the parent ceases to have a controlling financial interest in that subsidiary. At the date of deconsolidation, the entity shall recognize a gain or loss in net income attributable to the parent, measured as the difference between (a) the aggregate of the (i) fair value of any consideration received; (ii) fair value of any retained noncontrolling investment in the former subsidiary at the date the subsidiary is deconsolidated; and (iii) carrying amount of any noncontrolling interest in the former subsidiary (including any accumulated other comprehensive income attributable to the noncontrolling interest) at the date the subsidiary is deconsolidated and (b) the carrying amount of the former subsidiary’s assets and liabilities.
The Beat Transaction (as defined below) is being accounted for as a business combination using the acquisition method of accounting under US GAAP, in accordance with the provisions of ASC 805, Business Combinations which requires assets acquired and liabilities assumed to be recorded at their acquisition date fair value. ASC 820, Fair Value Measurements, defines the term “fair value” as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Fair value measurements can be highly subjective, and it is possible the application of reasonable judgement could develop different assumptions resulting in a range of alternative estimates using the same facts and circumstances.
Ambac has not completed the detailed valuation studies necessary to determine the fair value of Beat’s assets acquired, the liabilities assumed, interests of noncontrolling shareholders and the related allocations of purchase price. Therefore, the allocation of the purchase price as reflected in the preliminary unaudited pro forma combined financial statements is based upon management’s preliminary estimates of the fair value of the assets acquired and liabilities assumed. We estimated the fair value of Beat’s assets and liabilities based on reviews of Beat’s historical audited financial statements, discussions with Beat management and other due diligence procedures. The final determination of the fair value of Beat’s assets and liabilities will be based on the actual net tangible and intangible assets, liabilities and noncontrolling interests of Beat that existed as of the closing date of the acquisition. As a result, the pro forma purchase price adjustments related to the acquisition are preliminary and subject to further adjustments as additional information becomes available and as additional analyses are performed. The final valuation may be materially different than the estimated values assumed in the preliminary unaudited pro forma combined financial statements.
The AAC Transaction and Beat Transaction (the “Transactions”) and the related transaction accounting adjustments are described in the accompanying notes to the preliminary unaudited pro forma combined financial statements. In accordance with Article 11 of Regulation S-X, the preliminary unaudited pro forma combined financial statements were prepared for illustrative and informational purposes only and are not intended to represent what our results of operations or financial position would have been had the Transactions occurred on the dates noted above, nor what they will be for any future periods. The pro forma adjustments are based on available information and certain assumptions that management believes are factually supportable. In the opinion of our management, all adjustments necessary to present fairly the preliminary unaudited pro forma combined financial statements have been made. The preliminary unaudited pro forma combined financial statements do not include the realization of any cost savings from operating efficiencies or synergies that might result from the Transactions. Additionally, we anticipate that certain nonrecurring charges will be incurred in connection with the Transactions, the substantial majority of which consist of fees paid to investment bankers, legal counsel and other professional advisors. Any such charge could affect the future results of Ambac in the period in which such charges are incurred; however, these costs are not expected to be incurred in any period beyond twelve months from the closing date of the Transactions. Accordingly, the preliminary unaudited pro forma combined statement of operations for the year ended December 31, 2023, reflects the effects of these non-recurring charges, which were not included in the historical statements of operations of Ambac, AAC and Beat for the year ended December 31, 2023.
7
NOTES TO PRELIMINARY UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(Dollar amounts in Millions, Except Share Amounts) 
All amounts presented within these notes to the preliminary unaudited pro forma combined financial statements are in millions, except per share data and as otherwise expressly stated herein.
2    PRELIMINARY DECONSOLIDATION ACCOUNTING FOR AAC
On June 4, 2024, Ambac entered into a stock purchase agreement with American Acorn Corporation (“Buyer”), a Delaware corporation owned by funds managed by Oaktree Capital Management, L.P., pursuant to which and subject to the conditions set forth therein, Ambac will sell all of the issued and outstanding shares of common stock of AAC, a wholly-owned subsidiary of Ambac, to Buyer for aggregate consideration of $420 in cash (the “AAC Transaction”). Buyer will acquire complete common equity ownership of AAC and its wholly-owned subsidiary, Ambac Assurance UK Limited. In connection with and pursuant to the stock purchase agreement, Ambac has agreed to issue to Buyer a warrant exercisable for a number of shares of common stock, par value $0.01, of Ambac representing 9.9% of the fully diluted shares of Ambac’s common stock as of March 31, 2024, pro forma for the issuance of the Warrant. The Warrant will have an exercise price per share of $18.50 with a six and a half-year term from the date of issuance and will be immediately exercisable. Payment of the exercise price may be settled, at Ambac’s option, by way of a cash exercise or by net share settlement.
The AAC Transaction is subject to approval by Ambac shareholders and the Office of the Commissioner of Insurance of Wisconsin. There can be no assurance the AAC Transaction will close as expected or at all.
A loss on the AAC Transaction recorded in the preliminary unaudited pro forma combined statement of operations for the year ended December 31, 2023, is as follows: 
Fair value of consideration received (cash less estimated fair value of warrants issued)
$404 
Carrying value of noncontrolling interests
51 
$455 
Less: Carrying amount of AAC’s net assets (1)
880 
Less: Transaction expenses
17 
(442)
Reclassifications of Accumulated Other Comprehensive Income to earnings
(242)
Total gain (loss) on disposal
$(684)
(1)    Adjusted by the impact of AAC operating leases that are being assumed by Ambac in connection with the AAC Transaction; refer to Note 4.C. for further details.
The impact of the sale of AAC on Total stockholders’ equity on the preliminary unaudited proforma combined balance sheet is $555.
The gain (loss) on the AAC Transaction is based upon financial information as included in the preliminary unaudited pro forma combined financial statements and changes to the financial position of AAC through to the closing date of the sale will impact these amounts. There can be no assurance that such changes will not be material. 
8
NOTES TO PRELIMINARY UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(Dollar amounts in Millions, Except Share Amounts) 
3.    PRELIMINARY PURCHASE PRICE ALLOCATION FOR BEAT ACQUISITION
Effective July 31, 2024, the Company completed a transaction pursuant to a share purchase agreement (the “Beat Purchase Agreement”), by and among the Company, Cirrata V LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of Ambac (the “Purchaser”), certain sellers set forth therein (the “Sellers”) and Beat, pursuant to which, and upon the terms and subject to the conditions set forth therein effective July 31, 2024, the Purchaser purchased from the Sellers approximately 60% of the entire issued share capital of Beat, for total consideration of approximately $278, of which approximately $249 was paid in cash and the remainder of which was satisfied through the issuance of Ambac Common Stock to certain Sellers (the “Beat Transaction”). Beat’s management team and Bain Capital Credit LP (“Bain” and, together with certain members of Beat’s management team, the “Rollover Shareholders”) each retained approximately 20% of Beat’s issued share capital immediately after closing. To reduce its exposure to appreciation of the British Pound Sterling (“GBP”) relative to the U.S. Dollar (“USD”), Ambac entered into a foreign exchange futures contract under which it agreed to purchase an amount of GBP sufficient to cover the cash portion of the purchase price of Beat along with estimated GBP denominated expenses at an exchange rate of 1.2662. We used this exchange rate to calculate the USD cash consideration in these preliminary unaudited pro forma combined financial statements, which may differ from the final financial statement presentation.
Ambac funded the cash portion of the consideration with a combination of available cash, $62 of funding from AAC and $150 of new indebtedness (the “Credit Facility”) maturing in 364 days funded by a global bank with an interest rate that approximates 10%. Funding received from AAC and the Credit Facility are required to be repaid upon closing of the sale of AAC. For purposes of this pro forma, both the acquisition of Beat and the sale of AAC are assumed to have occurred simultaneously and accordingly, such debt and related interest expenses are not included in the pro forma balance sheet or statement of operations, respectively. If the AAC sale does not occur within 364 days of funding of the Credit Facility or if the sale does not occur, Ambac will need to refinance such short-term debt with longer-term debt.
The preliminary purchase price allocation of Beat is subject to change due to several factors, including, but not limited to: 
•Changes in the estimated fair value of identifiable intangible assets, primarily from distribution relationships. Distribution relationships are important because of the propensity of these parties to generate predictable, recurring future revenue for Beat. Such changes can result from our additional valuation analysis on relationship retention, changes in discount rates and other factors.
•Changes in the estimated fair value of noncontrolling interests held by Rollover Shareholders, which are subject to changes to ownership via put and call options, and the existing noncontrolling interests of Beat’s subsidiaries.
The table below represents a preliminary allocation of the estimated consideration to Beat’s identifiable and intangible assets to be acquired and liabilities to be assumed at June 30, 2024: 
Total Consideration for Beat Acquisition
  $278 
Cash and Cash Equivalents
  40 
Intangible Assets
  275 
Other Assets
  59 
Total Assets
  374 
Total Liabilities
  63 
Noncontrolling interests
  307 
Net Assets acquired
  4 
Preliminary allocation to goodwill
  $274 
 
4.    PRO FORMA ADJUSTMENTS AND ASSUMPTIONS
A.    The unaudited combined pro forma statement of operations assumes the AAC and Beat transactions were completed on January 1, 2023. Accordingly, this adjustment represents the investment income on such funds as if they were received / paid on January 1, 2023, at an effective yield of 5%.
B.    Represents estimated costs related to the Transactions that include investment bankers, legal counsel and other professional fees. These costs are estimated at $17 for the AAC Transaction (included in the Loss on Disposal on the
9
NOTES TO PRELIMINARY UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(Dollar amounts in Millions, Except Share Amounts) 
preliminary unaudited pro forma combined statement of operations) and $28 for the Beat Transaction ($25 included in general and administrative expenses and $3 included in interest expense on the preliminary unaudited pro forma combined statement of operations) and will not affect the combined statement of operations beyond 12 months after the closing date. During 2024, Ambac incurred total costs relating to the Transactions of $18 and accordingly operating expenses on the unaudited combined pro forma statement of operations for the six months ended June 30, 2024, has been reduced to eliminate these expenses considering they have been expensed in the unaudited combined pro forma statement of operations for the year ended December 31, 2023. The net estimated cost of $27 is reflected as an adjustment to cash and retained earnings within stockholders’ equity on the preliminary unaudited pro forma combined balance sheet.
C.    In connection with the AAC Transaction and prior to closing, Ambac will be assuming two operating leases from AAC. This adjustment on the preliminary unaudited pro forma combined balance sheet represents the net of the Right of Use Asset ($16) and Lease Liability ($20) balances on June 30, 2024, with the net impact of $3 reflected in retained earnings within stockholders’ equity. The adjustment to the unaudited pro forma combined statement of operations for 2023 relates to (i) the net impact of the Right of Use Asset and Lease Liability of $3 (included in loss on disposal) and (ii) expenses related to these operating leases (included in general and administrative expenses). The adjustment to the unaudited pro forma combined statement of operations for 2024 relate to expenses for these operating leases.
D.    As noted above in Note 3 Preliminary Purchase Price Allocation, the fair value of Beat’s identifiable intangible assets are estimated to be $277. This adjustment represents the amortization of this asset with an estimated amortization period of 10 years.
5.    ADJUSTMENTS FROM UK GAAP TO US GAAP FOR BEAT ACQUISITION
The historical financial statements of Beat are prepared in accordance with UK GAAP and are adjusted to: (i) reconcile the financial statements to US GAAP, (ii) reflect reclassifications of Beat’s financial statements to conform to our financial statement presentation and (iii) translate the financial statements to U.S. dollars based on the historical exchange rates below. 
 GBP / USD
June 30, 2024 exchange rate
 1.26390
Year ended December 31, 2023, average exchange rate
 1.24364
Six months ended June 30, 2024 average exchange rate
 1.26527
 
As a result of the significant impact of the Balance Sheet from the proposed sale of AAC, Ambac will consider a more expanded presentation of other assets and other liabilities in future fillings. 
10
NOTES TO PRELIMINARY UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(Dollar amounts in Millions, Except Share Amounts) 
(a)    The amounts below represent results as of June 30, 2024:
  Beat (in GBP, in
UK GAAP)		 
US GAAP
Adjustments(1)
 Reclassifications Historical Beat
Business as
Reclassified
(in GBP)		 Historical Beat
Business as
Reclassified
(in USD)
ASSETS
  
Cash and Cash Equivalents
 £32  £—  £—  £32  $40 
Debtors
 4  (1)(4)—  — 
Prepayments and accrued income
 33  7  (40)—  — 
Fixed Assets
 3  —  (3)—  — 
Other Assets
 —  —  46  47  59 
Total Assets
 £71  £7  £—  £78  $99 
LIABILITIES AND CAPITAL
  
Other Creditors
 £5  £—  £(5)£—  $— 
Deferred Income
 40  —  (40)—  — 
Accruals
 4  (2)(2)—  — 
Taxation and Social Security
 —  1  (2)—  — 
Other Liabilities
 — 1 49 50 63 
Total Liabilities
 50  —  —  50  63 
Shareholders Equity
 20  7  —  27  34 
Non-redeemable NCI
 1  —  —  1  2 
Total Capital
 21  7  —  28  36 
Total Liabilities, NCI & Capital
 £71  £7  £—  £78  $99 
(1)    Reflects adjustments to reconcile UK GAAP per the footnotes to the financial statements of Beat, including (a) profit-sharing commissions, (b) bonus accruals, (c) leases and (d) the income tax impact of these adjustments.
(b)    The amounts below represent results for the year ended December 31, 2023: 
  Beat (in GBP, in
UK GAAP)		 
US GAAP
Adjustments(1)
 Reclassifications Historical Beat
Business as
Reclassified
(in GBP)		 Historical Beat
Business as
Reclassified
(in USD)
Revenues
 
Turnover
 £47  £—  £(47)£—  $— 
Commission income
 —  —  40  40  50 
Net investment income
 1  —  —  1  1 
Exchange (losses) gains
 (1)—  1  —  — 
Other comprehensive income
 1  —  (1)—  — 
Other income
 —  —  6  7  8 
Total revenues
 47  1  —  48  59 
Expenses
 
General and administrative expenses
 33  1  —  34  43 
Interest expense
 —  —  —  —  — 
Total expenses
 33  1  —  35  43 
Pre-tax income (loss)
 14  — —  13  16 
Provision (benefit) for income taxes
 4  —  —  4  5 
Net income (loss)
 10  — —  9  11 
Less: net (gain) loss attributable to noncontrolling interest
 (4)—  —  (4)(5)
Net income (loss) attributable to common stockholders
 £5  £—  £—  £5  $6 
(1)    Reflects adjustments to reconcile UK GAAP to US GAAP per the footnotes to the financial statements of Beat, including (a) profit-sharing commissions, (b) bonus accruals, (c) leases and (d) the income tax impact of these adjustments. 
11
NOTES TO PRELIMINARY UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(Dollar amounts in Millions, Except Share Amounts) 
(c)    The amounts below represent results for the six months ended of June 30, 2024: 
  Beat (in GBP, in
UK GAAP)		 
US GAAP
Adjustments(1)
 Reclassifications Historical Beat
(in GBP, in US
GAAP) as
Reclassified		 Historical Beat
Business as
Reclassified
(in USD)
Revenues
 
Turnover
 £26  £2  £(28)£—  $— 
Commission income
 —  —  23  23  29 
Net investment income
 1  —  —  1  1 
Exchange (losses) gains
 —  —  —  —  — 
Other comprehensive income
 —  —  —  —  — 
Other income
 —  (1)4  4  5 
Total revenues
 26  1  —  27  34 
Expenses
 
General and administrative expenses
 21  (2)—  19  23 
Interest expense
 —  —  —  —  — 
Total expenses
 21  (2)—  19  23 
Pre-tax income (loss)
 6  3 (1)—  9  11 
Provision (benefit) for income taxes
 2  1 —  3  4 
Net income (loss)
 4  2 (1)—  6  7 
Less: net (gain) loss attributable to noncontrolling interest
 (1)—  —  (1)(2)
Net income (loss) attributable to common stockholders
 £3  £2  £—  £4  $6 
(1)    Reflects adjustments to reconcile UK GAAP to US GAAP per the footnotes to the financial statements of Beat, including (a) profit-sharing commissions, (b) bonus accruals, (c) leases and (d) the income tax impact of these adjustments.
12
v3.24.3
Cover Document
Sep. 17, 2024
Entity Information [Line Items]  
Entity Central Index Key 0000874501
Entity Emerging Growth Company false
Title of 12(b) Security Common stock, par value $0.01 per share
Written Communications false
City Area Code (212)
Entity Address, Address Line One One World Trade Center
Entity Address, City or Town New York
Entity Address, State or Province NY
Entity Incorporation, State or Country Code DE
Entity Registrant Name Ambac Financial Group, Inc.
Document Period End Date Sep. 17, 2024
Document Type 8-K
Entity File Number 1-10777
Entity Tax Identification Number 13-3621676
Entity Address, Postal Zip Code 10007
Local Phone Number 658-7470
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Trading Symbol AMBC
Security Exchange Name NYSE
Amendment Flag false
Ambac Financial (NYSE:AMBC)
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