UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

(AMENDMENT NO. 1)

ANNUAL REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Ambac Financial Group, Inc.

(Exact name of Registrant as specified in its charter)

(212) 668-0340

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes    x     No    ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2)  Yes    x     No    ¨

The aggregate market value of voting stock held by non-affiliates of the Registrant as of the close of business on June 30, 2002 was $7,021,552,722 (based upon the closing price of the Registrant’s shares of the New York Stock Exchange on that date, which was $67.20). For purposes of this information, the outstanding shares of Common Stock which were owned by all directors and executive officers of the Registrant were deemed to be shares of Common Stock held by affiliates.

As of March 11, 2003, 106,069,280 shares of Common Stock, par value $0.01 per share, (net of 182,191 treasury shares) were outstanding.

Documents Incorporated By Reference

Portions of the Registrant’s Annual Report to Stockholders for the year ended December 31, 2002 are incorporated by reference into Parts II and IV hereof. Portions of the Registrant’s Proxy Statement dated March 28, 2003 in connection with the Annual Meeting of Stockholders scheduled to be held on May 6, 2003 are incorporated by reference into Part III hereof.

EXPLANATORY NOTE

This Amendment No. 1 on Form 10-K/A (“Amendment”) is being filed to amend the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2002, as filed on March 28, 2003 (the “Original Report on Form 10-K”), by correcting two printer’s typographical errors contained in the consolidated financial statements of Ambac Assurance Corporation which are filed as Exhibit 99.01 to the Original Report on Form 10-K.

Specifically, this amendment corrects the following printer’s typographical errors:

This Amendment does not reflect events occurring after the filing of the Original Report on Form 10-K, and does not modify or update the disclosures therein in any way other than as described above.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

INDEX TO EXHIBITS