GAMCO Investors, Inc. Reports Record Fourth Quarter and Full Year Results

·	Assets under Management Rise to a Record $47.0 Billion

·	Fourth Quarter Earnings Per Share Up 93% to $1.29 per share

·	Full Year Earnings Per Share Up 59% to $4.54 per share

Rye, New York, February x, 2014 – GAMCO Investors, Inc. ("GAMCO") (NYSE: GBL) today reported its 2013 fourth quarter results including revenues of $122.7 million, net income of $33.3 million and earnings per diluted share of $1.29. On a comparable basis, revenues were $99.3 million, net income was $17.6 million, and earnings per diluted share were $0.67 in the fourth quarter of 2012.  For the full year 2013 revenues increased 15.5% to $397.6 million versus $344.3 million, net income surged to $116.9 million, or $4.54 per diluted share, an increase of 54.7% from earnings of $75.5 million or $2.86 for the full year 2012.

Assets under Management ("AUM") rose to a record $47.0 billion, up 8.1% from $43.5 billion at September 30, 2013 and up 29.1% from $36.4 billion at December 31, 2012.

 

Financial Highlights		Fourth Quarter				Full Year
($'s in 000's except AUM and per share data)		2012		2013		2012		2013
AUM - end of period (in millions)		$      36,405		$      47,010		$      36,405		$      47,010
AUM - average (in millions)		36,278		45,523		36,048		41,749
Revenues		99,277		122,714		344,281		397,562
Operating income before management fee (a)		27,902		51,547		124,148		161,241
Operating margin before management fee		28.1%		42.0%		36.1%		40.6%
Other income/(expense), net		3,740		6,148		6,186		41,139
Income before income taxes		28,479		53,321		117,316		183,551
Effective tax rate		38.0%		37.0%		35.6%		36.1%
Net income		17,594		33,317		75,539		116,853
Net income per share		$          0.67		$          1.29	(b)	$          2.86	(c)	$          4.54	(b)
Shares outstanding at December 31		25,746		26,086		25,746		26,086
(a) See GAAP to non-GAAP reconciliation on page 12.
(b) After a $0.12 per fully diluted share charge and $0.24 per fully diluted share charge for the fourth quarter and full year 2013,
respectively, for our shareholder-designated charitable contribution program.
(c) After a $0.08 per fully diluted share charge for the full year ended December 31, 2012 related to the extinguishment of debt
from the Dutch Auction of the 0% Subordinated Debentures.

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Assets Under Management

Total firm AUM increased to a record $47.0 billion at December 31, 2013, up $3.5 billion from the third quarter and $10.6 billion higher than the fourth quarter of 2012.  Our fourth quarter 2013 net inflows were $271 million, reduced by $189 million of net open- and closed-end fund distributions. Market appreciation totaled $3.4 billion.

AUM in our open-end funds increased $1.5 billion during the quarter to $18.8 billion at December 31, 2013.  Net inflows into our open-end funds totaled $351 million, reflecting an annualized organic growth rate of 8.1%, reduced by net distributions of $51 million.  Market appreciation added $1.2 billion.  AUM in our open-end equity funds totaled $17.1 billion, 9.6% ahead of the previous quarter end AUM and 36.6% higher than the year earlier period.

Our closed-end funds had AUM of $6.9 billion on December 31, 2013, 10.4% higher than the $6.3 billion on December 31, 2012 and 3.3% above the $6.7 billion on September 30, 2013.  For 2013, market appreciation was $991 million and was partially offset by distributions from all closed-end funds, net of reinvestments, which reduced AUM by $484 million.

Institutional and private wealth management AUM increased 9.1% from the September 2013 quarter end to $20.3 billion and was 35.3% higher than the comparable 2012 year end.

Our investment partnerships' AUM increased to $811 million on December 31, 2013 from $805 million on September 30, 2013.

Firm wide, net inflows during the full year of 2013 were $1.6 billion, market appreciation totaled $9.6 billion and net open- and closed-end fund distributions were $625 million.  This compares with net outflows of $1.0 billion, market appreciation of $4.0 billion and net open- and closed-end fund distributions of $596 million for the full year of 2012.

Revenues

-	Revenues for the fourth quarter of 2013 were $122.7 million, up 23.6% from $99.3 million in the prior year.

-

Investment advisory and incentive fees were $106.2 million in the fourth quarter of 2013, an increase of $20.5 million or 23.9% from the comparable 2012 quarter.  Revenues were generally driven by growth in average AUM in our open- and closed-end funds and higher billable assets in our institutional and private wealth management accounts as well as a $3.5 million increase in incentive fees.

-	Average AUM in the open-end equity funds were $16.3 billion, an increase of 30.4% from $12.5 billion in the comparable 2012 quarter.

-	Average AUM in the institutional and private wealth management accounts were $19.6 billion, 33.1% higher than the prior year quarter.

 

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-	Incentive fees earned during the 2013 quarter totaled $21.3 million versus $17.8 million in the fourth quarter of 2012.

-	Revenues from the distribution of our open-end funds and other income were $14.5 million for the fourth quarter 2013, an increase of $3.4 million, or 31.3%, from the prior year quarter of $11.1 million.

-	Our institutional research services revenues were $2.0 million in the fourth quarter 2013 versus $2.5 million in the prior year period.

Operating Income – Fourth Quarter

Operating income before management fee was $51.5 million in the fourth quarter 2013 versus $27.9 million in the fourth quarter 2012.  Included in the 2012 quarter was a $10.1 million non-cash charge resulting from the acceleration of RSAs.  Operating margin before management fee improved to 42.0% versus 28.1% (or 38.3% excluding the non-cash charge) in the fourth quarter of 2012.    Management believes evaluating operating income before management fee is an important measure in analyzing the Company's operating results.  Further information regarding Non-GAAP measures is included in Notes on Non-GAAP Financial Measures and Table VII included elsewhere herein.

Operating income, which is net of management fee expense, was $47.2 million in the fourth quarter of 2013 versus $24.7 million in the prior year period, an increase of $22.5 million.  The operating margin was 38.4% in the fourth quarter of 2013 versus 24.9% in the comparable prior year period.  The improvement in operating margin was due to leveraging of fixed costs partially offset by higher management fee expense.  Excluding the non-cash charge, net of management fee, operating income and operating margin in the fourth quarter of 2012 were $33.8 million and 34.1%, respectively. Management fee expense, which is incentive based and entirely variable, is based on pre-tax income and was impacted by the significant increase in quarter over quarter investment income.

Other income (expense)

Other income/(expense), net, was $6.2 million, or $0.12 per diluted share, in the 2013 quarter versus $3.7 million, or $0.07 per diluted share, in the fourth quarter of 2012.  Gains from investments in mutual funds, alternative products and proprietary accounts were $11.4 million in the 2013 quarter versus gains of $5.5 million in the fourth quarter of 2012.  Dividend and interest income totaled $2.1 million, up from $1.7 million in the prior year period.  Interest expense was $2.1 million in the 2013 fourth quarter; $1.4 million lower than the prior year quarter due to the fourth quarter 2012 repurchase of $64.1 million (face value) of 0% subordinated debentures through a tender offer as well as the payment of the $99 million 5.5% senior notes which came due May 15, 2013.  In addition, the fourth quarter 2013 had a charge of $5.3 million, or $0.12 per diluted share, for our 2014 Shareholder Designated Charitable Contribution program.

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Income Taxes

The effective tax rate for the quarter ended December 31, 2013 was 37.0% compared to the 2012 quarter effective tax rate of 38.0%.

Business and Investment Highlights

-	GAMCO was ranked #232 in Pensions & Investments annual release of the largest 500 money managers, which includes both equity and fixed income managers, world-wide on December 31, 2012.

-

GAMCO Investors, Inc. held a Special Meeting of Shareholders on November 20, 2013 where the shareholders approved a change in the Company's state of incorporation from New York to Delaware and approved an amendment to the Company's 2002 Stock Award & Incentive Plan to increase by two million the number of Class A shares reserved for issuance.

-

On November 7, 2013, GAMCO announced that its Board of Directors approved a $0.25 per share donation under its Shareholder Designated Charitable Contribution Program on behalf of all registered Class A and Class B shareholders as of March 31, 2014.  GAMCO created its Shareholder Designated Contribution Program in April 2013.

-

On November 4-5 2013, G.research (formerly Gabelli & Company) hosted its 37th Annual Automotive Aftermarket Symposium in Las Vegas, Nevada.  This two day conference showcased a full spectrum of leading automotive companies, including aftermarket parts retailers, original equipment and aftermarket parts suppliers, publicly traded dealership groups and medium & heavy duty truck manufacturers.  The conference featured more than twenty companies introduced by a team of G.research analysts led by Brian Sponheimer.

-	G.research hosted its 19th Annual Aircraft Supplier conference on November 19, 2013 in New York City.  This research focused meeting featured presentations from leading aerospace and defense industry managements with an emphasis on sequestration dynamics, new technologies and company fundamentals.

Balance Sheet – $578.7 million of Cash and Investments at Quarter End

We ended the quarter with cash and investments of $578.7 million, debt of $111.9 million ($113.8 million face value) and equity attributable to GAMCO shareholders of $457.3 million.  We have $400 million available on our universal shelf registration which allows us the flexibility to issue any combination of senior and subordinated debt securities, convertible debt securities and common and preferred equity.  Together with earnings from operations, the shelf provides us with flexibility to do acquisitions, lift-outs, seed new investment strategies, and co-invest as well as fund shareholder compensation including share repurchase, and dividends.

 

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Shareholder Compensation

During the year ended December 31, 2013, we returned $33.5 million of our earnings to shareholders through dividends and stock repurchases.  We repurchased 229,228 shares at an average price of $64.41 per share through our stock buyback program, for a total investment of $14.8 million. We returned $18.7 million through cash dividends.

On February 4, 2014, GAMCO's Board of Directors declared a regular quarterly dividend of $0.06 per share payable on March 25, 2014 to its Class A and Class B shareholders of record on March 11, 2014.

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NOTES ON NON-GAAP FINANCIAL MEASURES

 

		4th Quarter								Full Year
		2012				2013				2012				2013
Operating income before management fee		$	27,902			$	51,547			$	124,148			$	161,241
Management fee expense			(2,802	)			(3,774	)			(12,427	)			(14,743	)
Tax expense			(9,529	)			(17,697	)			(39,732	)			(52,825	)
Noncontrolling interest expense			120				99				363				(745	)
Operating income (after management fee and taxes)			15,691				30,175				72,352				92,928
Per fully diluted share		$	0.60			$	1.17			$	2.74			$	3.61
Other income/(expense), net		$	3,740			$	6,148			$	6,186			$	41,139
Management fee (expense)/benefit			(361	)			(600	)			(591	)			(4,086	)
Tax (expense)/benefit			(1,283	)			(2,055	)			(1,989	)			(13,361	)
Noncontrolling interest (expense)/benefit			(193	)			(351	)			(419	)			233
Other income/(expense), net (after management fee and taxes)		$	1,903			$	3,142			$	3,187			$	23,925
Per fully diluted share		$	0.07			$	0.12			$	0.12			$	0.93
Net income per fully diluted share		$	0.67			$	1.29			$	2.86			$	4.54
Diluted weighted average shares outstanding			26,305				25,733				26,436				25,712

 

 

		4th Quarter				YTD
(in thousands, except per share data)		2013				2013
Shareholder-designated charitable contribution program		$	5,313			$	10,626
Management fee and tax benefit			2,291				4,582
Net expense		$	3,022			$	6,044
Shareholder-designated charitable contribution program charge per share		$	0.12			$	0.24
Diluted weighted average shares outstanding			25,733				25,712

 

 

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		4th Quarter				Full Year
(in thousands, except per share data)		2012				2012
RSA amortization expense		$	10,097			$	10,097
Management fee expense			1,010				1,010
Operating income impact		$	9,087			$	9,087

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

The financial results set forth in this press release are preliminary. Our disclosure and analysis in this press release, which do not present historical information, contain "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995.  Forward-looking statements convey our current expectations or forecasts of future events. You can identify these statements because they do not relate strictly to historical or current facts. They use words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning. They also appear in any discussion of future operating or financial performance. In particular, these include statements relating to future actions, future performance of our products, expenses, the outcome of any legal proceedings, and financial results.  Although we believe that we are basing our expectations and beliefs on reasonable assumptions within the bounds of what we currently know about our business and operations, the economy and other conditions, there can be no assurance that our actual results will not differ materially from what we expect or believe.  Therefore, you should proceed with caution in relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance.

Forward-looking statements involve a number of known and unknown risks, uncertainties and other important factors, some of which are listed below, that are difficult to predict and could cause actual results and outcomes to differ materially from any future results or outcomes expressed or implied by such forward-looking statements.  Some of the factors that could cause our actual results to differ from our expectations or beliefs include a decline in the securities markets that adversely affect our assets under management, negative performance of our products, the failure to perform as required under our investment management agreements, a general downturn in the economy that negatively impacts our operations. We also direct your attention to the more specific discussions of these and other risks, uncertainties and other important factors  contained in our Form 10-K and other public filings.  Other factors that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations whether as a result of new information, future developments or otherwise, except as may be required by law.

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The Company reported Assets Under Management as follows (in millions):
Table I: Fund Flows - 4th Quarter 2013
														Fund
						Market								distributions,
		September 30,				appreciation/				Net cash				net of				December 31,
		2013				(depreciation)				flows				reinvestments				2013
Equities:
Open-end Funds		$	15,581			$	1,218			$	330			$	(51	)		$	17,078
Closed-end Funds			6,721				364				(2	)			(138	)			6,945
Institutional & PWM - direct			15,026				1,498				(38	)			-				16,486
Institutional & PWM - sub-advisory			3,503				328				(34	)			-				3,797
Investment Partnerships			805				11				(5	)			-				811
SICAV (a)			94				2				-				-				96
Total Equities			41,730				3,421				251				(189	)			45,213
Fixed Income:
Money-Market Fund			1,714				-				21				-				1,735
Institutional & PWM			63				-				(1	)			-				62
Total Fixed Income			1,777				-				20				-				1,797
Total Assets Under Management		$	43,507			$	3,421			$	271			$	(189	)		$	47,010

 

The Company reported Assets Under Management as follows (in millions):
Table II: Fund Flows - Full Year 2013
														Fund
						Market								distributions,
		December 31,				appreciation/				Net cash				net of				December 31,
		2012				(depreciation)				flows				reinvestments				2013
Equities:
Open-end Funds		$	12,502			$	3,271			$	1,446			$	(141	)		$	17,078
Closed-end Funds			6,288				991				150				(484	)			6,945
Institutional & PWM - direct			12,030				4,287				169				-				16,486
Institutional & PWM - sub-advisory			2,924				1,007				(134	)			-				3,797
Investment Partnerships			801				41				(31	)			-				811
SICAV (a)			119				6				(29	)			-				96
Total Equities			34,664				9,603				1,571				(625	)			45,213
Fixed Income:
Money-Market Fund			1,681				-				54				-				1,735
Institutional & PWM			60				-				2				-				62
Total Fixed Income			1,741				-				56				-				1,797
Total Assets Under Management		$	36,405			$	9,603			$	1,627			$	(625	)		$	47,010

 

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Table III: Assets Under Management
		December 31,				December 31,				%
		2012				2013				Inc.(Dec.)
Equities:
Open-end Funds		$	12,502			$	17,078				36.6	%
Closed-end Funds			6,288				6,945				10.4
Institutional & PWM - direct			12,030				16,486				37.0
Institutional & PWM - sub-advisory			2,924				3,797				29.9
Investment Partnerships			801				811				1.2
SICAV (a)			119				96				(19.3	)
Total Equities			34,664				45,213				30.4
Fixed Income:
Money-Market Fund			1,681				1,735				3.2
Institutional & PWM			60				62				3.3
Total Fixed Income			1,741				1,797				3.2
Total Assets Under Management		$	36,405			$	47,010				29.1	%

 

Table IV: Assets Under Management by Quarter
																					%D
			12/12				3/13				6/13				9/13				12/13			12/12				9/13
Equities:
Open-end Funds		$	12,502			$	13,813			$	14,188			$	15,581			$	17,078			36.6	%			9.6	%
Closed-end Funds			6,288				6,557				6,409				6,721				6,945			10.4				3.3
Institutional & PWM - direct			12,030				13,690				14,069				15,026				16,486			37.0				9.7
Institutional & PWM - sub-advisory			2,924				3,299				3,185				3,503				3,797			29.9				8.4
Investment Partnerships			801				796				778				805				811			1.2				0.7
SICAV (a)			119				113				93				94				96			(19.3	)			2.1
Total Equities			34,664				38,268				38,722				41,730				45,213			30.4				8.3
Fixed Income:
Money-Market Fund			1,681				1,758				1,689				1,714				1,735			3.2				1.2
Institutional & PWM			60				64				67				63				62			3.3				(1.6	)
Total Fixed Income			1,741				1,822				1,756				1,777				1,797			3.2				1.1
Total Assets Under Management		$	36,405			$	40,090			$	40,478			$	43,507			$	47,010			29.1	%			8.1	%
(a) Includes $104 million, $99 million, $90 million, $92 million and $94 million of proprietary seed capital at December 31, 2012,
March 31, 2013, June 30, 2013, September 30, 2013 and December 31, 2013, respectively.

 

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Table V
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
		For the Quarter Ended December 31,
											% Inc.
		2012					2013				(Dec.)
Investment advisory and incentive fees		$	85,697				$	106,170				23.9	%
Distribution fees and other income			11,080					14,544				31.3
Institutional research services			2,500					2,000				(20.0	)
Total revenues			99,277					122,714				23.6
Compensation costs			50,383		(a)			50,656				0.5
Distribution costs			10,267					13,286				29.4
Other operating expenses			10,725					7,225				(32.6	)
Total expenses			71,375					71,167				(0.3	)
Operating income before management fee			27,902					51,547				84.7
Investment income			7,220					14,385
Extinguishment of debt			-					(861	)
Interest expense			(3,480	)				(2,063	)
Shareholder-designated contribution			-					(5,313	)
Other income, net			3,740					6,148
Income before management fee and income taxes			31,642					57,695				82.3
Management fee expense			3,163					4,374
Income before income taxes			28,479					53,321				87.2
Income tax expense			10,812					19,752
Net income			17,667					33,569				90.0
Net income attributable to noncontrolling interests			73					252
Net income attributable to GAMCO Investors, Inc.		$	17,594				$	33,317				89.4
Net income per share attributable to GAMCO Investors, Inc.:
Basic		$	0.67				$	1.30				94.0
Diluted		$	0.67				$	1.29				92.5
Weighted average shares outstanding:
Basic			26,208					25,567				(2.4	)
Diluted			26,305					25,733				(2.2	)
Actual shares outstanding (b)			25,746					26,086				1.3	%
Notes:
(a) Includes $10.1 million in expenses from the acceleration of RSAs.
(b) Includes 0 and 566,950 of RSAs, respectively.
See GAAP to non-GAAP reconciliation on page 12.

 

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Table VI
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
		For the Year Ended December 31,
											% Inc.
		2012					2013				(Dec.)
Investment advisory and incentive fees		$	288,480				$	336,658				16.7	%
Distribution fees and other income			44,848					51,964				15.9
Institutional research services			10,953					8,940				(18.4	)
Total revenues			344,281					397,562				15.5
Compensation costs			150,806		(a)			163,870				8.7
Distribution costs			40,842					48,936				19.8
Other operating expenses			28,485					23,515				(17.4	)
Total expenses			220,133					236,321				7.4
Operating income before management fee			124,148					161,241				29.9
Investment income			28,392					63,274
Extinguishment of debt			(6,307	)				(998	)
Interest expense			(15,899	)				(10,511	)
Shareholder-designated contribution			-					(10,626	)
Other income, net			6,186					41,139
Income before management fee and income taxes			130,334					202,380				55.3
Management fee expense			13,018					18,829
Income before income taxes			117,316					183,551				56.5
Income tax expense			41,721					66,186
Net income			75,595					117,365				55.3
Net income attributable to noncontrolling interests			56					512
Net income attributable to GAMCO Investors, Inc.		$	75,539				$	116,853				54.7
Net income per share attributable to GAMCO Investors, Inc.:
Basic		$	2.87				$	4.56				58.9
Diluted		$	2.86				$	4.54				58.7
Weighted average shares outstanding:
Basic			26,283					25,653				(2.4	)
Diluted			26,436					25,712				(2.7	)
Actual shares outstanding (b)			25,746					26,086				1.3	%
Notes:
(a) Includes $10.1 million in expenses from the acceleration of RSAs.
(b) Includes 0 and 566,950 of RSAs, respectively.
See GAAP to non-GAAP reconciliation on page 12.

 

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Table VII
GAMCO INVESTORS, INC.
UNAUDITED QUARTERLY CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
		2012										2013
		1st		2nd		3rd		4th				1st		2nd		3rd		4th
		Quarter		Quarter		Quarter		Quarter		Full Year		Quarter		Quarter		Quarter		Quarter		Full Year
Income Statement Data:
Revenues		$  81,749		$  81,024		$  82,231		$  99,277		$344,281		$  86,181		$  92,290		$  96,377		$122,714		$397,562
Expenses		50,553		48,042		50,163		71,375	(a)	220,133		51,474		55,660		58,020		71,167		236,321
Operating income before
management fee		31,196		32,982		32,068		27,902		124,148		34,707		36,630		38,357		51,547		161,241
Investment income/(loss)		15,114		(2,389)		2,140	(b)	7,220		22,085		13,636		14,648		20,468		13,524		62,276
Interest expense		(4,404)		(4,429)		(3,586)		(3,480)		(15,899)		(3,488)		(2,796)		(2,164)		(2,063)		(10,511)
Shareholder-designated contribution		-		-		-		-		-		(5,000)		-		(313)		(5,313)		(10,626)
Other income/(expense), net		10,710		(6,818)		(1,446)		3,740		6,186		5,148		11,852		17,991		6,148		41,139
Income before management
fee and income taxes		41,906		26,164		30,622		31,642		130,334		39,855		48,482		56,348		57,695		202,380
Management fee expense		4,184		2,615		3,056		3,163		13,018		3,980		4,846		5,629		4,374		18,829
Income before income taxes		37,722		23,549		27,566		28,479		117,316		35,875		43,636		50,719		53,321		183,551
Income tax expense		13,756		8,686		8,467		10,812		41,721		13,195		15,724		17,515		19,752		66,186
Net income		23,966		14,863		19,099		17,667		75,595		22,680		27,912		33,204		33,569		117,365
Net income/(loss) attributable
to noncontrolling interests		130		(242)		95		73		56		135		19		106		252		512
Net income attributable to
GAMCO Investors, Inc.		$  23,836		$  15,105		$  19,004		$  17,594		$  75,539		$  22,545		$  27,893		$  33,098		$  33,317		$116,853
Net income per share
attributable to GAMCO
Investors, Inc.:
Basic		$      0.90		$      0.58		$      0.72		$      0.67		$      2.87		$      0.88		$      1.09		$      1.29		$      1.30		$      4.56
Diluted		$      0.90		$      0.57		$      0.72		$      0.67		$      2.86		$      0.88		$      1.09		$      1.29		$      1.29		$      4.54
Weighted average shares outstanding:
Basic		26,415		26,258		26,250		26,208		26,283		25,742		25,679		25,625		25,567		25,653
Diluted		26,533		26,426		26,439		26,305		26,436		25,758		25,689		25,700		25,733		25,712
Reconciliation of non-GAAP
financial measures to GAAP:
Operating income before
management fee		$  31,196		$  32,982		$  32,068		$  27,902		$124,148		$  34,707		$  36,630		$  38,357		$  51,547		$161,241
Deduct: management fee expense		4,184		2,615		3,056		3,163		13,018		3,980		4,846		5,629		4,374		18,829
Operating income		$  27,012		$  30,367		$  29,012		$  24,739		$111,130		$  30,727		$  31,784		$  32,728		$  47,173		$142,412
Operating margin before
management fee		38.2%		40.7%		39.0%		28.1%		36.1%		40.3%		39.7%		39.8%		42.0%		40.6%
Operating margin after
management fee		33.0%		37.5%		35.3%		24.9%		32.3%		35.7%		34.4%		34.0%		38.4%		35.8%
(a) Includes $10.1 million in expenses from the acceleration of RSAs.
(b) Includes $6.3 million loss on extinguishment of $64.6 million (face value) of 0% Subordinated Debentures.

 

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Table VIII
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per share data)
		December 31,				December 31,
		2012				2013
ASSETS
Cash and cash equivalents		$	190,608			$	210,451
Investments (a)			378,263				371,262
Receivable from brokers			50,655				49,461
Other receivables			52,600				60,390
Income tax receivable			1,014				445
Other assets			17,589				17,477
Total assets		$	690,729			$	709,486
LIABILITIES AND EQUITY
Payable to brokers		$	14,346			$	10,765
Income taxes payable and deferred tax liabilities			25,394				39,846
Compensation payable			10,535				34,663
Securities sold short, not yet purchased			3,136				6,178
Accrued expenses and other liabilities			32,656				39,190
Sub-total			86,067				130,642
5.5% Senior notes (repaid May 15, 2013)			99,000				-
5.875% Senior notes (due June 1, 2021)			100,000				100,000
0% Subordinated Debentures (due December 31, 2015) (b)			17,366				11,911
Total debt			216,366				111,911
Total liabilities			302,433				242,553
Redeemable noncontrolling interests			17,362				6,751
GAMCO Investors, Inc.'s stockholders' equity			367,608				457,331
Noncontrolling interests			3,326				2,851
Total equity			370,934				460,182
Total liabilities and equity		$	690,729			$	709,486
(a) Includes investments in sponsored registered investment companies of $61.9 million and $44.0 million, respectively.
(b) The 0% Subordinated Debentures due December 31, 2015 have a face value of $21.7 million and $13.8 million, respectively.