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Schedule II - Condensed Financial Information Of Registrant (Parent Company Only) (Debtor-In-Possession) | 12 Months Ended
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Dec. 31, 2011
Schedule II - Condensed Financial Information Of Registrant (Parent Company Only) [Abstract] |
Schedule II - Condensed Financial Information Of Registrant (Parent Company Only) | AMBAC FINANCIAL GROUP, INC. DEBTOR-IN-POSSESSION SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) Condensed Balance Sheets December 31, 2011 and 2010 (Dollar Amounts in Thousands Except Share Data)
|  | 2011 |  |  | 2010 |
ASSETS |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |
Short-term investments, at cost (approximates fair value) |  | $ | 34,899 |  |  | $ | 63,417 |
Cash |  |  | 496 |  |  |  | 74 |
Restricted cash |  |  | 2,500 |  |  |  | 2,500 |
Investments in non-debtor subsidiaries |  |  | (2,132,119 | ) |  |  | (378,566 | )
Other assets |  |  | 6,481 |  |  |  | 10,522 |
Total assets |  | $ | (2,087,743 | ) |  | $ | (302,053 | )
LIABILITIES AND STOCKHOLDERS' EQUITY |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |
Liabilities subject to compromise |  | $ | 1,707,456 |  |  | $ | 1,696,888 |
Current taxes |  |  | 1,900 |  |  |  | — |
Accounts payable and other liabilities |  |  | 15,876 |  |  |  | 9,595 |
Total liabilities |  |  | 1,725,232 |  |  |  | 1,706,483 |
Stockholders' equity: |  |  |  |  |  |  |  |
Preferred stock, par value $0.01 per share; authorized shares—4,000,000; issued and outstanding shares—none |  |  | — |  |  |  | — |
Common stock, par value $0.01 per share; authorized shares—650,000,000 at December 31, 2011 and 2010; issued and outstanding shares—308,016,764 at December 31, 2011 and 2010 |  |  | 3,080 |  |  |  | 3,080 |
Additional paid-in capital |  |  | 2,172,027 |  |  |  | 2,187,485 |
Accumulated other comprehensive income |  |  | 463,259 |  |  |  | 291,774 |
Accumulated deficit |  |  | (6,039,922 | ) |  |  | (4,042,335 | )
Common stock held in treasury at cost, 5,587,953 shares at December 31, 2011 and 5,893,054 shares at December 31, 2010 |  |  | (411,419 | ) |  |  | (448,540 | )
Total stockholders' deficit |  |  | (3,812,975 | ) |  |  | (2,008,536 | )
Total liabilities and stockholders' deficit |  | $ | (2,087,743 | ) |  | $ | (302,053 | )
AMBAC FINANCIAL GROUP, INC. DEBTOR-IN-POSSESSION SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) Condensed Statements of Operations For the Years Ended December 31, 2011 and 2010 (Dollar Amounts in Thousands)
|  | 2011 |  |  | 2010 |
Revenues: |  |  |  |  |  |  |  |
Dividend income |  | $ | — |  |  | $ | 2,013 |
Interest and other income |  |  | 7,669 |  |  |  | 404 |
Net realized gains |  |  | — |  |  |  | 10,172 |
Total revenues |  |  | 7,669 |  |  |  | 12,589 |
Expenses: |  |  |  |  |  |  |  |
Interest expense |  |  | — |  |  |  | 102,280 |
Operating expenses |  |  | 5,023 |  |  |  | 33,723 |
Total expenses |  |  | 5,023 |  |  |  | 136,003 |
Loss before reorganization items, income taxes and equity in undistributed net loss of non-debtor subsidiaries |  |  | 2,646 |  |  |  | (123,414 | )
Reorganization items |  |  | 49,861 |  |  |  | 31,980 |
Loss before income taxes and equity in undistributed net loss of non-debtor subsidiaries |  |  | (47,215 | ) |  |  | (155,394 | )
Federal income tax expense (benefit) |  |  | 3,900 |  |  |  | (118,831 | )
Net loss before equity in undistributed net loss of non-debtor subsidiaries |  |  | (51,115 | ) |  |  | (36,563 | )
Equity in undistributed net loss of non-debtor subsidiaries |  |  | (1,909,316 | ) |  |  | (716,636 | )
Net loss |  | $ | (1,960,431 | ) |  | $ | (753,199 | )
AMBAC FINANCIAL GROUP, INC. DEBTOR-IN-POSSESSION SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) Condensed Statements of Stockholders' Equity For the Years Ended December 31, 2011 and 2010 (Dollar Amounts in Thousands)
|  | Total |  |  |  |  |  | Ambac Financial Group, Inc. |
|  | Comprehensive Income |  |  | Retained Earnings |  |  | Accumulated Other Comprehensive Income |  |  | Preferred Stock |  |  | Common Stock |  |  | Paid-in Capital |  |  | Common Stock Held in Treasury, at Cost |
Balance at January 1, 2010 |  | ($ | 2,287,785 | ) |  | $ | — |  |  | ($ | 3,878,015 | ) |  | ($ | 24,827 | ) |  | $ | — |  |  | $ | 2,944 |  |  | $ | 2,172,656 |  |  | ($ | 560,543 | )
Comprehensive loss: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  |  | (753,199 | ) |  |  | (753,199 | ) |  |  | (753,199 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other comprehensive loss: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized gains on performing securities, net of deferred income taxes of $10,495(1) |  |  | 332,251 |  |  |  | 332,251 |  |  |  |  |  |  |  | 332,251 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gain on derivative hedges, net of deferred income taxes of $755 |  |  | 1,403 |  |  |  | 1,403 |  |  |  |  |  |  |  | 1,403 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gain on foreign currency translation, net of deferred income taxes of $1,528 |  |  | (18,336 | ) |  |  | (18,336 | ) |  |  |  |  |  |  | (18,336 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization of post retirement benefits, net of deferred income taxes of $0 |  |  | (1,721 | ) |  |  | (1,721 | ) |  |  |  |  |  |  | (1,721 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other comprehensive gain |  |  | 313,597 |  |  |  | 313,597 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total comprehensive loss |  |  | (439,602 | ) |  |  | (439,602 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Adjustment to initially apply new consolidation accounting guidance for VIEs |  |  | 705,046 |  |  |  |  |  |  |  | 702,042 |  |  |  | 3,004 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dividends declared—subsidiary shares to noncontrolling interest |  |  | (817 | ) |  |  |  |  |  |  | (817 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Issuance of stock |  |  | 9,618 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 136 |  |  |  | 9,482 |  |  |  |  |
Stock-based compensation |  |  | (106,999 | ) |  |  |  |  |  |  | (112,346 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,347 |  |  |  |  |
Cost of shares acquired |  |  | (342 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (342 | )
Shares issued under equity plans |  |  | 112,345 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 112,345 |
Balance at December 31, 2010 |  | ($ | 2,008,536 | ) |  |  |  |  |  | ($ | 4,042,335 | ) |  | $ | 291,774 |  |  | $ | — |  |  | $ | 3,080 |  |  | $ | 2,187,485 |  |  | ($ | 448,540 | )
Balance at January 1, 2011 |  | ($ | 2,008,536 | ) |  | $ | — |  |  | ($ | 4,042,335 | ) |  | $ | 291,774 |  |  | $ | — |  |  | $ | 3,080 |  |  | $ | 2,187,485 |  |  | ($ | 448,540 | )
Comprehensive loss: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  |  | (1,960,431 | ) |  |  | (1,960,431 | ) |  |  | (1,960,431 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other comprehensive loss: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unrealized gains on performing securities, net of deferred income taxes of $0(1) |  |  | 169,251 |  |  |  | 169,251 |  |  |  |  |  |  |  | 169,251 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gain on foreign currency translation, net of deferred income taxes of $0 |  |  | 1,481 |  |  |  | 1,481 |  |  |  |  |  |  |  | 1,481 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization of post retirement benefits, net of deferred income taxes of $0 |  |  | 753 |  |  |  | 753 |  |  |  |  |  |  |  | 753 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other comprehensive gain |  |  | 171,485 |  |  |  | 171,485 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total comprehensive loss |  |  | (1,788,946 | ) |  |  | (1,788,946 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock-based compensation |  |  | (52,614 | ) |  |  |  |  |  |  | (37,156 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (15,458 | ) |  |  |  |
Cost of shares acquired |  |  | (35 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (35 | )
Shares issued under equity plans |  |  | 37,156 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 37,156 |
Balance at December 31, 2011 |  | ($ | 3,812,975 | ) |  |  |  |  |  | ($ | 6,039,922 | ) |  | $ | 463,259 |  |  | $ | — |  |  | $ | 3,080 |  |  | $ | 2,172,027 |  |  | ($ | 411,419 | )
(1) | Disclosure of reclassification amount:
|  | 2011 |  |  | 2010 |
Unrealized holding gains arising during period |  | $ | 120,637 |  |  | $ | 397,082 |
Less: reclassification adjustment for net gains |  |  | (48,614 | ) |  |  | 64,831 |
Net unrealized gains on securities |  | $ | 169,251 |  |  | $ | 332,251 |
AMBAC FINANCIAL GROUP, INC. DEBTOR-IN-POSSESSION SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) Condensed Statements of Cash Flows For the Years Ended December 31, 2011 and 2010 (Dollar Amounts in Thousands)
|  | 2011 |  |  | 2010 |
Cash flows from operating activities: |  |  |  |  |  |  |  |
Net loss |  | $ | (1,960,431 | ) |  | $ | (753,199 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |  |  |  |
Equity in undistributed net loss of non-debtor subsidiaries |  |  | 1,909,316 |  |  |  | 716,636 |
Reorganization items |  |  | 49,861 |  |  |  | 31,980 |
Restricted cash |  |  | — |  |  |  | 2,500 |
Net realized gains |  |  | — |  |  |  | (10,172 | )
Increase in current income taxes payable/receivable |  |  | 1,900 |  |  |  | 29,268 |
Decrease in deferred income taxes payable/receivable |  |  | — |  |  |  | (147,047 | )
Decrease / (Increase) in other assets |  |  | 4,041 |  |  |  | (2,755 | )
Other, net |  |  | (32,783 | ) |  |  | 22,782 |
Net cash used in operating activities |  |  | (28,096 | ) |  |  | (110,007 | )
Cash flows from investing activities: |  |  |  |  |  |  |  |
Proceeds from matured bonds |  |  | — |  |  |  | 1,985 |
Change in short-term investments |  |  | 28,518 |  |  |  | 70,909 |
Return of capital and dividends from non-debtor subsidiary |  |  | — |  |  |  | 36,500 |
Other, net |  |  | — |  |  |  | 521 |
Net cash provided by investing activities |  |  | 28,518 |  |  |  | 109,915 |
Net cash flow |  |  | 422 |  |  |  | (92 | )
Cash at January 1 |  |  | 74 |  |  |  | 166 |
Cash at December 31 |  | $ | 496 |  |  | $ | 74 |
Supplemental disclosure of cash flow information: |  |  |  |  |  |  |  |
Cash paid during the year for: |  |  |  |  |  |  |  |
Interest expense on debt |  | $ | — |  |  | $ | 61,568 |
Cash receipts and payments related to reorganization items: |  |  |  |  |  |  |  |
Professional fees paid for services rendered in connection with the Chapter 11 proceeding |  | $ | 31,253 |  |  | $ | — |
Supplemental disclosure of noncash financing activities: |  |  |  |  |  |  |  |
In 2010, the company issued common stock upon the extinguishment of $20,311 in long-term debt. |  |  |  |  |  |  |  |
AMBAC FINANCIAL GROUP, INC. DEBTOR-IN-POSSESSION SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) Note to Condensed Financial Information The condensed financial information of Ambac Financial Group, Inc. for the years ended December 31, 2011 and 2010 should be read in conjunction with the consolidated financial statements of Ambac Financial Group, Inc. and Subsidiaries and the notes thereto. Investments in subsidiaries are accounted for using the equity method of accounting. On November 8, 2010 (the "Petition Date"), Ambac filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code ("Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of New York ("Bankruptcy Court"). Ambac has continued to operate in the ordinary course of business as "debtor-in-possession" under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. The Company, as debtor and debtor-in-possession, filed a Plan of Reorganization on July 6, 2011, a First Amended Plan of Reorganization on September 21, 2011, a Second Amended Plan of Reorganization on September 30, 2011, a Third Amended Plan of Reorganization on February 24, 2012, a Fourth Amended Plan of Reorganization on March 9, 2012, and a Fifth Amended Plan of Reorganization on March 12, 2012 (such Fifth Amended Plan of Reorganization, as it may be further amended, the "Reorganization Plan"). The Reorganization Plan also reflects a resolution of certain issues (the "Amended Plan Settlement") among the Company, the statutory committee of creditors appointed by the United States Trustee on November 17, 2010 (the "Creditors' Committee"), Ambac Assurance Corporation ("Ambac Assurance" or "AAC"), the Segregated Account of Ambac Assurance Corporation and the Wisconsin Office of the Commissioner of Insurance (as regulator of Ambac Assurance and as Rehabilitator of the Segregated Account) related to (i) the U.S. federal net operating loss carryforwards of the consolidated tax group of which the Company is the parent and Ambac Assurance is a member, (ii) certain tax refunds received in respect thereof and (iii) the sharing of expenses between the Company and Ambac Assurance. The terms of the Amended Plan Settlement are memorialized in that certain Mediation Agreement dated September 21, 2011 among such parties. Entities operating in bankruptcy and expecting to reorganize under Chapter 11 of the Bankruptcy Code are subject to the additional accounting and financial reporting guidance in ASC Topic 852 "Reorganizations". While ASC Topic 852 provides specific guidance for certain matters, other portions of US GAAP continue to apply so long as the guidance does not conflict with ASC Topic 852. This accounting literature provides guidance for periods subsequent to a Chapter 11 filing, among other things, the presentation of liabilities that are and are not subject to compromise by the Bankruptcy Court proceedings, as well as the treatment of interest expense and presentation of costs associated with the proceedings. In accordance with ASC Topic 852, debt discounts or premiums as well as debt issuance costs should be viewed as valuation adjustments of the related debt. When the debt has become an allowed claim and the allowed claim differs from the carrying amount of the debt, the recorded amount should be adjusted to the expected amount of the allowable claim. We have reduced to zero the book value of premiums and discounts as well as debt issuance cost associated with unsecured debts that are subject to compromise in 2010. See below for Reorganization Items. For the purpose of presenting an entity's financial condition during a Chapter 11 reorganization, the financial statements for periods including and after filing the Chapter 11 petition shall distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. All of the Debtor's pre-petition debt is now in default due to the bankruptcy filing. As described below, the accompanying financial statements present the Debtor's pre-petition debt within Liabilities subject to compromise. In accordance with ASC Topic 852, following the Petition Date, we discontinued recording interest expense on debt classified as Liabilities subject to compromise, which amounted to $126,524 in 2011 and $16,431 in 2010. The stated contractual interest on debt classified as Liabilities subject to compromise amounted to $110,093 and $113,552 for the years ended December 31, 2011 and 2010, respectively. AMBAC FINANCIAL GROUP, INC. DEBTOR-IN-POSSESSION SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) Note to Condensed Financial Information Liabilities Subject to Compromise As required by ASC Topic 852, the amount of the Liabilities subject to compromise represents our estimate of known or potential pre-petition claims to be addressed in connection with the bankruptcy. Such claims are subject to future adjustments. Adjustments may result from, among other things, negotiations with creditors, rejection of executory contracts and unexpired leases and orders of the Bankruptcy Court. The Liabilities subject to compromise in the Condensed Balance Sheets consists of the following at December 31, 2011 and 2010:
|  | 2011 |  |  | 2010 |
Accrued interest payable |  | $ | 68,123 |  |  | $ | 68,091 |
Accounts payable |  |  | 17,109 |  |  |  | 4,951 |
Senior unsecured notes |  |  | 1,222,189 |  |  |  | 1,222,189 |
Directly-issued Subordinated capital securities |  |  | 400,000 |  |  |  | 400,000 |
Payable to non-debtor subsidiaries |  |  | 35 |  |  |  | 1,657 |
Debtor's Liabilities subject to compromise |  | $ | 1,707,456 |  |  | $ | 1,696,888 |
Reorganization Items Professional advisory fees and other costs directly associated with our reorganization are reported separately as reorganization items pursuant to ASC Topic 852. Reorganization items also include adjustments to reflect the carrying value of certain pre-petition liabilities at their estimated allowable claim amounts. The debt valuation adjustments represent one-time charges. The reorganization items in the Condensed Statements of Operations for years ended December 31, 2011 and 2010 consisted of the following items:
|  | 2011 |  |  | 2010 |
U.S. Trustee fees |  | $ | 44 |  |  | $ | — |
Professional fees |  |  | 35,778 |  |  |  | 5,536 |
Office lease settlement |  |  | 14,007 |  |  |  | — |
Debt valuation adjustments |  |  | 32 |  |  |  | 26,444 |
Total reorganization items |  | $ | 49,861 |  |  | $ | 31,980 |

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- Definition The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Article 9 -Section 06 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Article 7 -Section 05 -Paragraph c Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Paragraph c -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 3 -Subparagraph (SX 210.12-04) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e24072-122690 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Accounting Research Bulletin (ARB) -Number 51 -Paragraph 24 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Article 12 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=6921628&loc=d3e5283-111683 + Details
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