Schedule I - Condensed Financial Information of Registrant Institutional Financial Markets, Inc. (Parent Company)

12 Months Ended

Dec. 31, 2012

Schedule I - Condensed Financial Information of Registrant Institutional Financial Markets, Inc. (Parent Company)

SCHEDULE I

INSTITUTIONAL FINANCIAL MARKETS, INC.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

INSTITUTIONAL FINANCIAL MARKETS, INC. (PARENT COMPANY)

Balance Sheet

(Dollars in Thousands)


	December 31, 2012			December 31, 2011
Assets
Cash	$	140		$	—
Investment in IFMI, LLC		89,292			100,505
Net prepaid federal income taxes		28			274

Total assets	$	89,460		$	100,779

Liabilities
Accrued interest and other liabilities	$	301		$	631
Deferred income taxes		6,674			7,500
Debt		25,505			35,676

Total liabilities		32,480			43,807

Stockholders’ Equity
Preferred Stock:
Series A Voting Convertible Preferred Stock		—			—
Series B Voting Non-Convertible Preferred Stock		—			5
Series C Junior Participating Preferred Stock		—			—
Series D Voting Non-Convertible Preferred Stock		5			—
Common Stock		11			10
Additional paid-in capital		64,829			63,032
Accumulated deficit		(7,370	)		(5,121	)
Accumulated other comprehensive loss		(495	)		(626	)
Treasury stock		—			(328	)

Total stockholders’ equity		56,980			56,972

Total liabilities and stockholders’ equity	$	89,460		$	100,779

See accompanying notes to condensed financial statements.

INSTITUTIONAL FINANCIAL MARKETS, INC.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

INSTITUTIONAL FINANCIAL MARKETS, INC. (PARENT COMPANY)

Statement of Operations

(Dollars in Thousands)


	Year Ended December 31, 2012			Year Ended December 31, 2011			Year Ended December 31, 2010
Revenues
Equity in undistributed earnings / (loss) from IFMI, LLC	$	2,666		$	(5,480	)	$	12,417

Total revenues		2,666			(5,480	)		12,417

Operating income / (loss)		2,666			(5,480	)		12,417

Non operating expense
Interest expense		(4,397	)		(5,617	)		(5,330	)

Income / (loss) before income taxes		(1,731	)		(11,097	)		7,087
Income tax (benefit) / expense		(763	)		(1,709	)		(508	)

Net income / (loss)	$	(968	)	$	(9,388	)	$	7,595

See accompanying notes to condensed financial statements.

INSTITUTIONAL FINANCIAL MARKETS, INC.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

INSTITUTIONAL FINANCIAL MARKETS, INC. (PARENT COMPANY)

Statement of Cash Flows

(Dollars in Thousands)


	Year Ended December 31, 2012			Year Ended December 31, 2011			Year Ended December 31, 2010
Operating activities
Net income / (loss)	$	(968	)	$	(9,388	)	$	7,595
Adjustments to reconcile net income / (loss) to net cash used in operating activities:
Equity in undistributed earnings / (loss) of IFMI, LLC		(2,666	)		5,480			(12,417	)
Distributions from IFMI, LLC		15,943			8,346			13,233
Gain on repurchase from debt		(3	)		(33	)		(923	)
Amortization of discount of debt		189			429			88
Change in current federal income receivable		246			12			(286	)
Increase / (decrease) in accounts payable and other liabilities		(330	)		9			(84	)
Change in deferred income taxes		(826	)		(1,708	)		(509	)

Net cash provided by operating activities		11,585			3,147			6,697

Financing activities
Repurchase of debt		(10,357	)		(984	)		(5,544	)
Cash used to net share settle equity awards		(135	)		(48	)		(110	)
Dividends paid to stockholders		(953	)		(2,115	)		(1,043	)

Net cash used in financing activities		(11,445	)		(3,147	)		(6,697	)

Net increase (decrease) in cash and cash equivalents		140			—			—
Cash and cash equivalents, beginning of period		—			—			—

Cash and cash equivalents, end of period	$	140		$	—		$	—

See accompanying notes to condensed financial statements.

INSTITUTIONAL FINANCIAL MARKETS, INC.

CONDENSED FINANCIAL INFORMATION OF REGISTRANT

INSTITUTIONAL FINANCIAL MARKETS, INC. (PARENT COMPANY)

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Dollars in Thousands)

The accompanying condensed financial statements should be read in conjunction with the consolidated financial statements and related notes of Institutional Financial Markets, Inc. Certain prior period amounts have been reclassified to conform to the current period presentation.

The Company received cash distributions from IFMI, LLC of $15,943, $8,346, and $13,233 for the years ended December 31, 2012, 2011, and 2010, respectively.

- 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.

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