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SCHEDULE II - Condensed Financial Information of Registrant (Parent Company Only) | 12 Months Ended
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Dec. 31, 2012
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, 2012 and 2011 (Dollar Amounts in Thousands Except Share Data)
|  | 2012 |  |  | 2011 |
ASSETS |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |
Short-term investments, at cost (approximates fair value) |  | $ | 30,316 |  |  | $ | 34,899 |
Cash |  |  | 41 |  |  |  | 496 |
Restricted cash |  |  | — |  |  |  | 2,500 |
Investments in non-debtor subsidiaries |  |  | (2,220,724 | ) |  |  | (2,132,119 | )
Other assets |  |  | 6,452 |  |  |  | 6,481 |
Total assets |  | $ | (2,183,915 | ) |  | $ | (2,087,743 | )
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |
Liabilities subject to compromise |  | $ | 1,704,939 |  |  | $ | 1,707,456 |
Current taxes |  |  | 1,900 |  |  |  | 1,900 |
Accounts payable and other liabilities |  |  | 16,773 |  |  |  | 15,876 |
Total liabilities |  |  | 1,723,612 |  |  |  | 1,725,232 |
Stockholders’ deficit: |  |  |  |  |  |  |  |
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, 2012 and 2011; issued and outstanding shares—308,016,764 at December 31, 2012 and 2011 |  |  | 3,080 |  |  |  | 3,080 |
Additional paid-in capital |  |  | 2,172,027 |  |  |  | 2,172,027 |
Accumulated other comprehensive income |  |  | 625,385 |  |  |  | 463,259 |
Accumulated deficit |  |  | (6,297,264 | ) |  |  | (6,039,922 | )
Common stock held in treasury at cost, 5,580,657 shares at December 31, 2012 and 5,587,953 shares at December 31, 2011 |  |  | (410,755 | ) |  |  | (411,419 | )
Total Ambac Financial Group, Inc. stockholders’ deficit |  |  | (3,907,527 | ) |  |  | (3,812,975 | )
Total liabilities and stockholders’ deficit |  | $ | (2,183,915 | ) |  | $ | (2,087,743 | )
AMBAC FINANCIAL GROUP, INC. DEBTOR-IN-POSSESSION SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) Condensed Statements of Total Comprehensive Income For the Years Ended December 31, 2012 and 2011 (Dollar Amounts in Thousands)
|  | 2012 |  |  | 2011 |
Revenues: |  |  |  |  |  |  |  |
Interest and other income |  | $ | 979 |  |  | $ | 7,669 |
Total revenues |  |  | 979 |  |  |  | 7,669 |
Expenses: |  |  |  |  |  |  |  |
Operating expenses |  |  | (151 | ) |  |  | 5,023 |
Total expenses |  |  | (151 | ) |  |  | 5,023 |
Loss before reorganization items, income taxes and equity in undistributed net loss of non-debtor subsidiaries |  |  | 1,130 |  |  |  | 2,646 |
Reorganization items |  |  | 7,215 |  |  |  | 49,861 |
Loss before income taxes and equity in undistributed net loss of non-debtor subsidiaries |  |  | (6,085 | ) |  |  | (47,215 | )
Federal income tax expense (benefit) |  |  | (136 | ) |  |  | 3,900 |
Net loss before equity in undistributed net loss of non-debtor subsidiaries |  |  | (5,949 | ) |  |  | (51,115 | )
Equity in undistributed net loss of non-debtor subsidiaries |  |  | (250,729 | ) |  |  | (1,909,316 | )
Net loss |  | $ | (256,678 | ) |  | $ | (1,960,431 | )
Other comprehensive income, after tax: |  |  |  |  |  |  |  |
Net loss |  | $ | (256,678 | ) |  | $ | (1,960,431 | )
Unrealized gains on securities, net of deferred income taxes of $0 |  |  | 221,150 |  |  |  | 120,637 |
Less: reclassification adjustment for net gain (loss) included in net (loss) |  |  | 54,898 |  |  |  | (48,614 | )
(Loss) gain on foreign currency translation, net of deferred income taxes of $0 |  |  | (334 | ) |  |  | 1,481 |
Amortization of postretirement benefit, net of tax |  |  | (3,792 | ) |  |  | 753 |
Total other comprehensive income, net of tax |  |  | 162,126 |  |  |  | 171,485 |
Total comprehensive loss attributable to Ambac Financial Group, Inc. |  | $ | (94,552 | ) |  | $ | (1,788,946 | )
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, 2012 and 2011 (Dollar Amounts in Thousands)
|  |  |  |  | Ambac Financial Group, Inc. |
|  | Total |  |  | Accumulated Deficit |  |  | Accumulated Other Comprehensive Income |  |  | Preferred Stock |  |  | Common Stock |  |  | Paid-in Capital |  |  | Common Stock Held in Treasury, at Cost |
Balance at January 1, 2011 |  | ($ | 2,008,536 | ) |  | ($ | 4,042,335 | ) |  | $ | 291,774 |  |  | $ | — |  |  | $ | 3,080 |  |  | $ | 2,187,485 |  |  | ($ | 448,540 | )
Total comprehensive loss |  |  | (1,788,946 | ) |  |  | (1,960,431 | ) |  |  | 171,485 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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 | )
|  |  |  |  | Ambac Financial Group, Inc. |
|  | Total |  |  | Accumulated Deficit |  |  | Accumulated Other Comprehensive Income |  |  | Preferred Stock |  |  | Common Stock |  |  | Paid-in Capital |  |  | Common Stock Held in Treasury, at Cost |
Balance at January 1, 2012 |  | ($ | 3,812,975 | ) |  | ($ | 6,039,922 | ) |  | $ | 463,259 |  |  | $ | — |  |  | $ | 3,080 |  |  | $ | 2,172,027 |  |  | ($ | 411,419 | )
Total comprehensive loss |  |  | (94,552 | ) |  |  | (256,678 | ) |  |  | 162,126 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock-based compensation |  |  | (664 | ) |  |  | (664 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shares issued under equity plans |  |  | 664 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 664 |
Balance at December 31, 2012 |  | ($ | 3,907,527 | ) |  | ($ | 6,297,264 | ) |  | $ | 625,385 |  |  | $ | — |  |  | $ | 3,080 |  |  | $ | 2,172,027 |  |  | ($ | 410,755 | )
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, 2012 and 2011 (Dollar Amounts in Thousands)
|  | 2012 |  |  | 2011 |
Cash flows from operating activities: |  |  |  |  |  |  |  |
Net loss |  | $ | (256,678 | ) |  | $ | (1,960,431 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |  |  |  |
Equity in undistributed net loss of non-debtor subsidiaries |  |  | 250,729 |  |  |  | 1,909,316 |
Reorganization items |  |  | 7,215 |  |  |  | 49,861 |
Increase in current income taxes payable/receivable |  |  | — |  |  |  | 1,900 |
Decrease in other assets |  |  | 30 |  |  |  | 4,041 |
Other, net |  |  | (6,333 | ) |  |  | (32,783 | )
Net cash used in operating activities |  |  | (5,037 | ) |  |  | (28,096 | )
Cash flows from investing activities: |  |  |  |  |  |  |  |
Change in short-term investments |  |  | 4,583 |  |  |  | 28,518 |
Net cash provided by investing activities |  |  | 4,583 |  |  |  | 28,518 |
Net cash flow |  |  | (454 | ) |  |  | 422 |
Cash at January 1 |  |  | 496 |  |  |  | 74 |
Cash at December 31 |  | $ | 42 |  |  | $ | 496 |
AMBAC FINANCIAL GROUP, INC. DEBTOR-IN-POSSESSION SCHEDULE II—CONDENSED FINANCIAL INFORMATION OF REGISTRANT (PARENT COMPANY ONLY) Note to Condensed Financial Information (Dollar Amounts in Thousands) The condensed financial information of Ambac Financial Group, Inc. (“Ambac” or the “Company”) for the years ended December 31, 2012 and 2011 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 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 (the “Segregated Account”) and the Wisconsin Office of the Commissioner of Insurance (as regulator of Ambac Assurance and as rehabilitator of the Segregated Account (the “Rehabilitator”), “OCI”) related to (i) the U.S. federal net operating loss carryforwards (“NOLs”) 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 (the “Mediation Agreement”). Pursuant to the Amended Plan Settlement, (i) the Company, Ambac Assurance and certain affiliates entered into an amended and restated tax sharing agreement (the “Amended TSA”), (ii) the Company, Ambac Assurance and certain affiliates entered into an expense sharing and cost allocation agreement (the “Cost Allocation Agreement”) and (iii) the Company, Ambac Assurance, the Segregated Account and OCI entered into an amendment (the “Cooperation Agreement Amendment”), of the Cooperation Agreement, dated as of March 24, 2010, by and between the Segregated Account and Ambac Assurance. The Amended TSA replaces, supersedes and nullifies in its entirety the existing tax sharing agreement among the Company and its affiliates. The Amended TSA addresses certain issues including, but not limited to, the allocation and use of NOLs by the Company, Ambac Assurance and their respective subsidiaries. The Cost Allocation Agreement provides for the sharing of certain expenses between Ambac and Ambac Assurance, including costs of Ambac relating to being a public company. Additionally, Ambac Assurance will reimburse Ambac for reasonable operating expenses incurred, subject to an annual cap. The cap amount is $5,000 for the first five years (through March 2017), and, with the approval of the Rehabilitator, $4,000 for each year thereafter. The Mediation Agreement also provides for sharing by the Company and Ambac Assurance of the expenses incurred since November 1, 2010 in connection with the litigation with the United States Internal Revenue Service (“IRS”) described in Note 15 to the Consolidated Financial Statements of Ambac. The Cooperation Agreement Amendment provides for the Rehabilitator to have certain rights with respect to the tax positions taken by the Company as well as the loss reserves, investments and operating actions of Ambac Assurance. Pursuant to the Mediation Agreement, Ambac Assurance transferred $30,000 to an escrow account on March 15, 2012. The Mediation Agreement provides that such amount shall be released from escrow to the Company on the “Plan Settlement Closing Date,” which is defined in the Mediation Agreement as a date that shall occur no later than ten business days following the date on which each of the following conditions has been satisfied or waived by each of the parties to the Amended Plan Settlement: (i) entry of a final, non-appealable order by the court overseeing the rehabilitation of the Segregated Account (the “Rehabilitation Court”) approving the transactions contemplated by the Mediation Agreement; (ii) entry of a final, nonappealable Confirmation Order by the Bankruptcy Court; (iii) resolution of the matters that are the subject of the adversary proceeding initiated by Ambac in the Bankruptcy Court against the IRS captioned Ambac Financial Group, Inc. vs. United States of America, Case No. 10-04210 (the “IRS Dispute”) without (A) any member of the Ambac Assurance Subgroup (as defined below) having to make a payment to the IRS of more than $100,000 and (B) a reduction of the NOLs allocated to the Ambac Assurance Subgroup pursuant to the Amended TSA by more than 10%; and (iv) a determination that neither an Ownership Change (as defined below) with respect to Ambac Assurance nor a Deconsolidation Event (as defined below) occurred during the 2010 taxable year. With respect to such conditions: (i) the Rehabilitation Court entered an order approving the transactions contemplated by the Mediation Agreement on November 10, 2011; that order was appealed and on March 1, 2013, the Wisconsin Court of Appeals entered an order dismissing this appeal for lack of standing; however, appellants may appeal that order to the Wisconsin Supreme Court so the order of the Rehabilitation Court is not yet final; (ii) the Confirmation Order entered by the Bankruptcy Court has become final and non-appealable; (iii) it is anticipated that the condition relating to the resolution of the IRS Dispute will be satisfied upon consummation of the IRS Settlement (as defined in Note 15 to the Consolidated Financial Statements of Ambac), which itself is subject to conditions as described in Note 15 to the Consolidated Financial Statements of Ambac; and (iv) it is anticipated that the condition relating to the absence of an Ownership Change and a Deconsolidation Event during the 2010 taxable year will be satisfied upon consummation of the IRS Settlement (as defined in Note 15 to the Consolidated Financial Statements of Ambac), which itself is subject to conditions as described in Note 15 to the Consolidated Financial Statements of Ambac. The Mediation Agreement further provides that the Segregated Account shall issue $350,000 of junior surplus notes to the Company on the Plan Settlement Closing Date. As used herein, “Ambac Assurance Subgroup” means Ambac Assurance and any direct or indirect subsidiary of Ambac Assurance that would be treated as an includable corporation of an affiliated group of corporations under the Internal Revenue Code if Ambac Assurance were the common parent of such affiliated group, and “Deconsolidation Event” means any event that results in neither Ambac Assurance nor any entity that succeeds to the tax attributes of Ambac Assurance being characterized as an includible corporation with the affiliated group of corporations of which Ambac (or any successor thereto) is the common parent, all within the meaning of the Internal Revenue Code. The Amended Plan Settlement, Mediation Agreement, Amended TSA, Cost Allocation Agreement and Cooperation Agreement Amendment collectively memorialize the settlement of certain claims among the Company and Ambac Assurance, OCI and the Segregated Account, and contain broad releases of the Company, Ambac Assurance, the Segregated Account, OCI, the board of directors and board committees of the Company and Ambac Assurance, all current and former individual directors, officers, or employees of the Company and Ambac Assurance, the Creditors’ Committee and the individual members thereof, and certain other parties. Consummation and effectiveness of the Reorganization Plan is subject to the satisfaction or waiver of the following outstanding conditions: (i) the Bankruptcy Court shall have approved any supplement filed with respect to the Reorganization Plan; (ii) new organizational documents of Ambac shall have been effected; (iii) Ambac shall have executed and delivered all documents necessary to effectuate the issuance of the common stock and warrants pursuant to the Reorganization Plan; (iv) all authorizations, consents and regulatory approvals required, if any, in connection with the consummation of the Reorganization Plan shall have been obtained; (v) the terms of the IRS Settlement (as defined in Note 15 to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K) shall have been approved by the United States, and all conditions to the effectiveness of the IRS Settlement shall have been satisfied; (vi) the IRS Settlement and all transaction documents relating thereto shall have been executed by the parties thereto; (vii) the Bankruptcy Court shall have entered an order pursuant to Bankruptcy Rule 9019 approving the IRS Settlement; and (viii) all other actions, documents, certificates and agreements necessary to implement the Reorganization Plan shall have been effected or executed and delivered to the required parties and, to the extent required, filed with applicable governmental units in accordance with applicable laws. There can be no assurance about whether or when these outstanding conditions will be met. Furthermore, the Reorganization Plan may not be consummated unless the Rehabilitation Court has approved the transactions contemplated in the Mediation Agreement. The Rehabilitation Court entered an order approving such transactions on November 10, 2011; such order has been appealed and on March 1, 2013, the Wisconsin Court of Appeals entered an order dismissing this appeal for lack of standing; however, appellants may appeal that order to the Wisconsin Supreme Court so the order of the Rehabilitation Court is not yet final. Moreover, as discussed above, the Mediation Agreement provides that the $30,000 transferred by Ambac Assurance to an escrow account on March 15, 2012 may not be released from escrow to Ambac, and the $350,000 junior surplus note to be issued to Ambac by the Segregated Account pursuant to the Mediation Agreement may not be issued, until such order becomes final and non-appealable, unless such requirement is waived by the parties to the Mediation Agreement. There can be no assurance that the order entered by the Rehabilitation Court will remain in effect. If such order is vacated or overturned, Ambac may not receive the above-described cash grant or junior surplus note from Ambac Assurance or the Segregated Account, respectively. On September 27, 2012, the Bankruptcy Court entered an order (the “Trading Order”), amending and restating an order entered on November 30, 2010, establishing procedures for certain transfers or acquisitions of equity interests in and claims (including debt securities) against the Company to maximize the possibility that the “ownership change” as defined under Section 382 of the Internal Revenue Code of 1986, as amended (an “Ownership Change”) that will occur upon consummation of the Reorganization Plan will qualify for the special exception to the limitations under Section 382(a) for Ownership Changes occurring as a result of a bankruptcy plan of reorganization (the “Section 382(l)(5) Plan Exception”). Ambac’s ability to use its NOLs could be substantially limited if there were an Ownership Change that does not qualify for the Section 382(l)(5) Plan Exception. In general, an Ownership Change would occur if shareholders owning 5% or more of Ambac’s stock increased their percentage ownership (by value) in Ambac by 50% or more, as measured generally over a rolling three-year period beginning with the last Ownership Change. These provisions can be triggered by new issuances of stock (including to creditors under the Reorganization Plan), merger and acquisition activity or normal market trading. The Trading Order generally restricts investors from acquiring Ambac stock if after any such acquisition a holder would beneficially own at least 13,500,000 shares of Ambac stock. The Trading Order also generally restricts investors from transferring or acquiring claims (including debt securities) if after any such transfer or acquisition a holder would beneficially own claims that could result in such holder receiving stock in reorganized Ambac pursuant to the terms of the Reorganization Plan with a value equal to or greater than 4.5% of the value of the stock of reorganized Ambac. A holder would reach that threshold with ownership of $56,930 of senior debt securities or any combination of debt securities and other claims that would result in such holder receiving stock in reorganized Ambac pursuant to the terms of the Reorganization Plan with a value equal to or greater than 4.5% of the value of the stock of reorganized Ambac (the “Threshold Amount”). On January 6, 2012, the Bankruptcy Court entered an order (the “Claims Acquisition Notice Order”) that requires any entity proposing to acquire claims in a transaction following which such entity would beneficially own claims that, pursuant to the Reorganization Plan, would entitle such entity to receive stock in reorganized Ambac in excess of the Threshold Amount, to serve notice of such proposed transaction upon Ambac and its counsel at least fifteen (15) business days prior to the consummation thereof. Following receipt of such notice Ambac may object to the proposed acquisition in the Bankruptcy Court. If such an objection is filed, the acquisition described in the notice shall not be effective unless approved by a final and nonappealable order of the Bankruptcy Court. Pursuant to the Trading Order and the Claims Acquisition Notice Order, Ambac may obtain one or more orders from the Bankruptcy Court to enforce these restrictions by requiring investors to sell their stock or claims so that their holdings comply with the limitations imposed by such orders. The Trading Order also contains equity forfeiture provisions that will limit stock distributions to be made upon effectiveness of the Reorganization Plan to any claimholder that fails to adhere to the Trading Order or the Claims Acquisition Notice Order and the restrictions prescribed therein. The Bankruptcy Court will retain jurisdiction to enforce the Trading Order after Ambac emerges from its Chapter 11 proceeding. Furthermore, the Certificate of Incorporation of the Company that will take effect upon emergence contains similar provisions restricting stock transfers to mitigate the possibility of an Ownership Change. On October 25, 2012, the Company received an IRS private letter ruling confirming that, based on the procedures and limitations imposed by the Trading Order (including the equity forfeiture provisions) and on the other facts and representations set forth therein, the Ownership Change that will occur upon consummation of the Reorganization Plan qualifies for the Section 382(l)(5) Plan .Exception. 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. 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 Ambac’s pre-petition debt is now in default due to the bankruptcy filing. As described below, the accompanying financial statements present Ambac’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 $211,896 in 2012 and $126,524 in 2011. The stated contractual interest on debt classified as Liabilities subject to compromise amounted to $85,372 and $110,093 for the years ended December 31, 2012 and 2011, respectively. 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, 2012 and 2011:
|  | 2012 |  |  | 2011 |
Debt obligations and accrued interest payable |  | $ | 1,690,312 |  |  | $ | 1,690,312 |
Other |  |  | 14,592 |  |  |  | 17,109 |
Payable to non-debtor subsidiaries |  |  | 35 |  |  |  | 35 |
Debtor’s Liabilities subject to compromise |  | $ | 1,704,939 |  |  | $ | 1,707,456 |
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 reorganization items in the Condensed Statements of Total Comprehensive Income for years ended December 31, 2012 and 2011 consisted of the following items:
|  | 2012 |  |  | 2011 |
U.S. Trustee fees |  | $ | 50 |  |  | $ | 44 |
Professional fees |  |  | 7,165 |  |  |  | 35,778 |
Office lease settlement |  |  | — |  |  |  | 14,007 |
Debt valuation adjustments |  |  | — |  |  |  | 32 |
Total reorganization items |  | $ | 7,215 |  |  | $ | 49,861 |

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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 -Section 04 -Paragraph c -Article 5 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Article 12 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 06 -Article 9 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 05 -Paragraph c -Article 7 Reference 5: 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=7656940&loc=d3e5283-111683 Reference 6: 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 7: 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. + Details
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