GBL Gamco Investors Inc

GAMCO Investors, Inc. (GAMCO) (NYSE: GBL) today announced first quarter 2012 earnings of $23.8 million or $0.90 per fully diluted share versus $17.6 million or $0.65 per fully diluted share in the first quarter 2011.

Revenues were $81.7 million in the first quarter of 2012, up $4.8 million, or 6.3%, from $76.9 million in the prior year quarter. Incentive fees for the first quarter of 2012 were $2.5 million vs. $2.2 million in the first quarter of 2011. Revenues, excluding incentive fees, rose $4.5 million. Operating income before management fee was $31.2 million, a 30.7% increase from $23.9 million in the prior year period. We note, however, that the initial quarter of 2011 was impacted by $5.6 million, or $0.12 per diluted share, of one-time costs directly related to the launch of a new closed-end fund.

                      Financial Highlights First Quarter ($'s in 000's except AUM and per share data)   2012     2011  

%

  AUM (in millions) $ 36,680 $ 35,391 3.6 % Revenues 81,749 76,905 6.3 Operating income: before management fee 31,196 23,873 30.7 after management fee 27,012 20,760 30.1 Operating margin: before management fee 38.2 % 31.0 % after management fee 33.0 % 27.0 % Other income, net 10,710 7,809 37.1 Net income attributable to GAMCO 23,836 17,643 35.1 Net income attributable to GAMCO per share $ 0.90 $ 0.65 38.5 % Shares outstanding at March 31 26,633 27,062  

Shareholders’ book value was $421.1 million or $15.81 per share at March 31, 2012. We ended the quarter with cash and investments of approximately $746.2 million and $264.3 million (face value of $285.3 million) of debt.

Assets under Management – Up 7.6% from December 31, 2011 and 3.6% from March 31, 2011

AUM were a record $36.7 billion as of March 31, 2012, an increase of 3.6% from AUM of $35.4 billion at March 31, 2011 and 7.6% above the December 31, 2011 AUM of $34.1 billion. Highlights are as follows:

• Our open-end equity funds’ AUM were $13.0 billion on March 31, 2012, 5.2% higher than the $12.3 billion on March 31, 2011 and 5.9% above the $12.3 billion on December 31, 2011. Net cash flows out of our open-end equity funds were $135 million during the first quarter of 2012.
• Our closed-end funds had AUM of $6.1 billion on March 31, 2012, lower by 1.7% from $6.2 billion on March 31, 2011 but increasing 4.6% from the $5.8 billion on December 31, 2011. Net additions to AUM from at-the-market offerings totaled $40 million in the first quarter of 2012, while distributions, net of reinvestments, lowered AUM by $108 million.
• Our institutional and private wealth management business ended the quarter with $15.0 billion in AUM, rising 2.0% from the $14.7 billion on March 31, 2011 and 11.1% higher than the December 31, 2011 level of $13.5 billion. Net cash flows, which encompasses new and closed accounts as well as additional investments or withdrawals from existing accounts, totaled $367 million in the first quarter of 2012.
• Our investment partnerships’ AUM were $594 million on March 31, 2012 versus $547 million on March 31, 2011 and $605 million on December 31, 2011. Net cash outflows in the first quarter of 2012 were $26 million.
• The GAMCO International SICAV, our Luxembourg based UCITS fund which has two sub-funds, the GAMCO Strategic Value and the GAMCO Merger Arbitrage, was initially seeded with $100 million of proprietary money. At March 31, 2012, AUM was $118 million, combining $11 million in net cash inflows with $2 million in market appreciation to climb 12.4% from $105 million at December 31, 2011.
• AUM in The Gabelli U.S. Treasury Money Market Fund, our 100% U.S. Treasury money market fund, which is ranked #1 by Lipper based on total return among 70 U.S. Treasury Money Market Funds for the twelve month period ended March 31, 2012, were $1.9 billion at March 31, 2012, increasing 21.4% from the $1.6 billion at March 31, 2011 and 5.4% higher from the $1.8 billion at December 31, 2011. We continue to provide financial support to our money market fund through fee waivers and expense reimbursements during this unusually low interest rate environment. 1
• In addition to management fees, we earn incentive fees for certain institutional client assets, assets attributable to preferred issues for our closed-end funds, our GDL Fund (NYSE: GDL) and investment partnership assets. As of March 31, 2012, assets with incentive based fees were $3.7 billion, 2.6% lower than the $3.8 billion on March 31, 2011 but 2.8% above the $3.6 billion on December 31, 2011. The majority of these assets have calendar year-end measurement periods; therefore, our incentive fees are primarily recognized in the fourth quarter when the uncertainty is removed at the end of the annual measurement period.

For the First Quarter

Revenues

Investment advisory and incentive fees for the first quarter ended March 31, 2012 were $67.8 million, an increase of 7.7% from the $62.9 million reported in the 2011 period:

• Open-end fund revenues were $31.5 million versus $28.4 million in the first quarter 2011, an increase of 10.9%. Average AUM for open-end equity funds rose 9.6% from the prior year quarter as average AUM for all open-end funds were 11.3% higher at $14.8 billion in the 2012 quarter versus $13.3 billion in the prior year quarter.

• Our closed-end fund revenues rose 5.1% to $12.3 million from $11.7 million in the first quarter 2011. Average closed-end fund AUM, excluding certain closed-end fund preferred share assets that generate annual performance based fees, rose 4.4% from the prior year quarter. Asset growth was driven by market performance and $40 million from at-the-market offerings of the GAMCO Global Gold, Natural Resources & Income Trust by Gabelli (NYSE: GGN), less distributions, net of reinvestments, from all closed-end funds of $108 million.

• Institutional and private wealth management account revenues, which are generally based upon beginning of quarter AUM, increased 3.7% to $22.7 million in the first quarter 2012 from $21.9 million in first quarter 2011. The increase was directly related to higher incentive fees and higher AUM. During the first quarter 2012, we earned $2.5 million in incentive fees, an increase of $0.3 million from the first quarter 2011 amount of $2.2 million.

• Investment partnership revenues for first quarter 2012 were $1.2 million, an increase of 44.4% from $0.9 million in the first quarter 2011.

Our institutional research services generated revenues of $2.3 million in the first quarter 2012, versus $3.6 million in the first quarter 2011 principally due to lower trading volume.

Revenues from the distribution of our open-end funds and other income were $11.6 million for the first quarter 2012, an increase of $1.3 million or 12.4% from the prior year quarter of $10.3 million and were largely driven by higher average AUM in open-end equity funds.

Operating Income and Margin

Operating income, which is net of management fee expense, increased $6.2 million, or 30.1%, to $27.0 million in the 2012 first quarter versus $20.8 million in the prior year period. The year over year increase in operating income primarily results from $5.6 million, or $0.12 per diluted share, of one-time costs directly related to the launch of a new closed-end fund during the first quarter of 2011 as well as a reduction in non-compensation operating expenses partially offset by an increase in management fee expense and mutual fund distribution costs. Operating margin was 33.0% in the 2012 first quarter versus 27.0% in the prior year period (33.5% excluding the one-time costs previously discussed). Operating income before management fee was $31.2 million in the first quarter 2012, versus $23.9 million in the first quarter 2011. For the first quarter 2012, the operating margin before management fee was 38.2% versus 31.0% in the first quarter of 2011 (38.3% excluding the one-time costs previously discussed). 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 V included elsewhere herein.

Other Income / (Expense)

Other income/(expense), net, was $10.7 million ($0.23 per diluted share net of management fee and tax expense) in the first quarter of 2012 versus $7.8 million ($0.13 per diluted share, net of management fee and tax expense) in the first quarter of 2011. Mark to market gains, largely unrealized, from investments in our mutual funds as well as proprietary capital in our alternative products were $15.1 million versus $10.7 million in the 2011 first quarter. Interest expense was $4.4 million in the 2012 first quarter, $1.5 million higher than the prior year quarter due to an increase in total debt outstanding.

Income Taxes

The effective tax rate for the quarter ended March 31, 2012 was 36.5% compared to the 2011 quarter effective tax rate of 36.0% and full year 2011 effective tax rate of 36.9%.

Business and Investment Highlights

• We rebranded the Gabelli Woodland Small Cap Fund to the Gabelli Focus Five Fund, a concentrated fund that will seek to invest up to 50% of the fund in five companies. The Focus Five Fund is based on the strategy of Gabelli & Company’s research report, The Focus Five, published quarterly since January 2006.
• The Gabelli Dividend & Income Trust, a non-diversified, closed-end fund with $2.0 billion in net assets, expanded its investment team with the addition of Jeff Jonas, CFA. Mr. Jonas joins Mario J. Gabelli, Barbara G. Marcin, Robert D. Leininger, Kevin V. Dreyer and Christopher J. Marangi.
• During the first quarter of 2012, Gabelli & Company, Inc. hosted several conferences, including our 23rd annual Pump, Valve & Motor Symposium and our 4th annual Movie & TV Broadcasting Conference.
• Available on the “In the News” and “On the Air” segments of our website are recent interviews with Portfolio Managers including Mario Gabelli, Howard Ward and Caesar Bryan among others as they address world markets, industries and specific stocks. Also available is Howard Ward’s “Top Ten Reason to Own Stocks” (in six languages). Complete articles and interviews are on the Gabelli website at www.gabelli.com/inthenews.html.

During the quarter, GAMCO obtained several new institutional mandates and one new European based subadvisory relationship.

We have signed a letter of intent with a major London based investment firm to act as investment manager to a new Luxembourg domiciled SICAV with UCITS status and employing an investment strategy which is expected to be similar to the Gabelli Merger Arbitrage Fund.

Other Financial Highlights

Statement of Financial Condition

We ended the quarter with approximately $746.2 million in cash and investments versus $674.8 million at December 31, 2011 and $604.9 million at March 31, 2011. This included approximately $99.0 million in available for sale securities at March 31, 2012 of which $62.3 million was in Company sponsored registered investment companies.

We continue to have the flexibility of issuing any combination of senior and subordinated debt securities, convertible debt securities and common and preferred securities under our shelf of up to a total amount of $300 million, which we plan to renew before its expiration in July 2012.

Shareholders’ book value was $421.1 million or $15.81 per share on March 31, 2012 compared to $404.0 million or $15.10 per share on December 31, 2011 and $398.9 million or $14.74 per share on March 31, 2011.

Shareholder Compensation

Dividends

On February 7, 2012, our Board of Directors approved a quarterly dividend of $0.04 per share payable on March 27, 2012 to its Class A and Class B shareholders of record on March 13, 2012.

During 2012, we paid $1.1 million, or $0.04 per share, in dividends, and since our IPO we have paid cumulative dividends of $345.1 million, or $13.46 per share.

GAMCO announced on May 1, 2012 that its Board of Directors approved a special dividend of $0.25 per share to all of its Class A and Class B shareholders in addition to its quarterly dividend of $0.04 per share payable on June 26, 2012 to its Class A and Class B shareholders of record on June 12, 2012. The Board continues to examine its future dividend policy.

Share Repurchase and Stockholders’ Equity

In 2012 to date, we repurchased 224,733 shares at an average price of $44.35 per share for an investment of $10.0 million. Since our IPO, we have repurchased a total of 7.6 million shares at an average price of $40.74 per share for an investment of $308.3 million. There currently remain 348,634 shares available to be repurchased under our existing buyback plan.

Since our IPO of six million shares at a price of $17.50 per share in 1999, we have returned, through dividends and stock repurchases, $653 million to our shareholders.

Fully diluted shares outstanding for the first quarter 2012 were 26.6 million, 1.6% lower than 27.0 million in the first quarter 2011. Diluted shares outstanding were lower in the first quarter 2012 due to shares purchased under our Stock Repurchase Program.

During the first quarter of 2012, the compensation committee of the Board approved the granting of 105,300 RSAs to staff members. At March 31, 2012, we had 375,000 RSAs outstanding.

NOTES ON NON-GAAP FINANCIAL MEASURES

A. Stockholders’ book value per share:

(in millions, except per share data)         3/31/2012         12/31/2011         3/31/2011     Stockholders' book value $ 421.08 $ 403.97 $ 398.85 Shares outstanding   26.63   26.75   27.06 Stockholders' book value per share $ 15.81 $ 15.10 $ 14.74 B.   Operating income before management fee expense is used by management to evaluate its business operations. We believe this measure is useful in illustrating the operating results of GAMCO Investors, Inc. (the “Company”) as management fee expense is based on pre-tax income before management fee expense, which includes non-operating items including investment gains and losses from the Company’s proprietary investment portfolio and interest expense. The reconciliation of operating income before management fee expense to operating income is provided in Table V.   C. Operating income before management fee expense per share and other income, net per share are used by management for purposes of evaluating its business operations. We believe this measure is useful in comparing the operating and non-operating results of the Company for the purposes of understanding the composition of net income per fully diluted share. The reconciliation of operating income before management fee expense per share and other income, net per share to net income per fully diluted share, is provided below.         1st Quarter       2012           2011   Operating income before management fee $ 31,196 $ 23,873 Management fee expense (3,113 ) (2,332 ) Tax expense (10,241 ) (7,757 ) Noncontrolling interest (expense)/income   (221 )   257   Operating income (after management fee and taxes)   17,621     14,041   Per fully diluted share $ 0.67   $ 0.52     Other income, net $ 10,710 $ 7,809 Management fee expense (1,071 ) (781 ) Tax expense (3,515 ) (2,531 ) Noncontrolling interest expense   91     (895 ) Other income, net (after management fee and taxes) $ 6,215   $ 3,602   Per fully diluted share $ 0.23   $ 0.13     Net income per fully diluted share $ 0.90   $ 0.65   Diluted weighted average shares outstanding   26,533     27,008     D.   Launch of new closed-end fund expense, net of management fee and tax benefit, per diluted share:       First (in thousands, except per share data) Quarter 2011 Launch of new closed-end fund expense $ 5,562 Management fee and tax benefit 2,359 Net loss $ 3,203   Launch of new closed-end fund expense per share $ 0.12 Diluted weighted average shares outstanding 27,008 E.  

Notes on Fund Performance Statistics:

 

The Gabelli U.S. Treasury Money Market Fund (Fund) ranked #1 out of 70 funds for the one-year period ended March 31, 2012, #2 out of 62 funds for the five-year period and #2 out of 47 funds for the ten-year period. The rankings are based on total return over the length of the period. Past performance is not indicative of future results. Investment returns and yield will fluctuate. Income will be subject to federal income tax. An investment in the Fund is not guaranteed nor insured by the Federal Deposit Insurance Corporation or any government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. During the respective periods, the Adviser has waived certain fees and reimbursed expenses. Without such reimbursements or waivers, return and rankings would have been lower.

 

Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. The prospectus, which contains more information about this and other matters, should be read carefully before investing. You can obtain a prospectus by calling G.distributors, LLC at 1-800-GABELLI (1-800-422-3554), or by visiting http://www.gabelli.com. Distributed by G.distributors, LLC One Corporate Center, Rye, NY 10580

 

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

Our disclosure and analysis in this press release contain some forward-looking statements. Forward-looking statements give 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, there can be no assurance that our actual results will not differ materially from what we expect or believe. Some of the factors that could cause our actual results to differ from our expectations or beliefs include, without limitation: the adverse effect from a decline in the securities markets; a decline in the performance of our products; a general downturn in the economy; changes in government policy or regulation; changes in our ability to attract or retain key employees; and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations. We also direct your attention to any more specific discussions of risk contained in our Form 10-K and other public filings. We are providing these statements as permitted by the Private Litigation Reform Act of 1995. We do not undertake to update publicly any forward-looking statements if we subsequently learn that we are unlikely to achieve our expectations or if we receive any additional information relating to the subject matters of our forward-looking statements.

                                  The Company reported Assets Under Management as follows (in millions):   Table I: Fund Flows - 1st Quarter 2012 Closed-end Fund Market distributions, December 31, appreciation/ Net cash net of March 31, 2011 (depreciation) flows reinvestments 2012 Equities: Open-end Funds $ 12,273 $ 858 $ (135 ) $ - $ 12,996 Closed-end Funds 5,799 336 40 (108 ) 6,067 Institutional & PWM - direct 10,853 883 295 - 12,031 Institutional & PWM - sub-advisory 2,600 252 72 - 2,924 Investment Partnerships 605 15 (26 ) - 594 SICAV (a)   105   2   11     -     118 Total Equities   32,235   2,346   257     (108 )   34,730 Fixed Income: Money-Market Fund 1,824 - 98 - 1,922 Institutional & PWM   26   -   -     -     26 Total Fixed Income   1,850   -   98     -     1,948 Total Assets Under Management $ 34,085 $ 2,346 $ 355   $ (108 ) $ 36,678                         Table II: Assets Under Management March 31, March 31, % 2011 2012 Inc.(Dec.) Equities: Open-end Funds $ 12,348 $ 12,996 5.2 % Closed-end Funds 6,170 6,067 (1.7 ) Institutional & PWM - direct 11,780 12,031 2.1 Institutional & PWM - sub-advisory 2,937 2,924 (0.4 ) Investment Partnerships 547 594 8.6 SICAV (a)   -   118 n/m Total Equities   33,782   34,730 2.8 Fixed Income: Money-Market Fund 1,583 1,922 21.4 Institutional & PWM   26   26 - Total Fixed Income   1,609   1,948 21.1 Total Assets Under Management $ 35,391 $ 36,678 3.6 %                                         Table III: Assets Under Management by Quarter       % Increase/ (decrease) from 3/11 6/11 9/11 12/11 3/12 3/11 12/11 Equities: Open-end Funds $ 12,348 $ 12,912 $ 11,469 $ 12,273 $ 12,996 5.2% 5.9% Closed-end Funds 6,170 6,259 5,355 5,799 6,067 (1.7) 4.6 Institutional & PWM - direct 11,780 11,735 9,644 10,853 12,031 2.1 10.9 Institutional & PWM - sub-advisory 2,937 2,953 2,326 2,600 2,924 (0.4) 12.5 Investment Partnerships 547 609 627 605 594 8.6 (1.8) SICAV (a) - - - 105 118 n/m 12.4 Total Equities 33,782 34,468 29,421 32,235 34,730 2.8 7.7 Fixed Income: Money-Market Fund 1,583 1,643 1,895 1,824 1,922 21.4 5.4 Institutional & PWM 26 26 26 26 26 - - Total Fixed Income 1,609 1,669 1,921 1,850 1,948 21.1 5.3 Total Assets Under Management $ 35,391 $ 36,137 $ 31,342 $ 34,085 $ 36,678 3.6% 7.6% (a) Includes $100 million and $102 million of proprietary seed capital at December 31, 2011 and March 31, 2012, respectively.                   Table IV   GAMCO INVESTORS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data)   For the Three Months Ended March 31, % Inc.   2012     2011   (Dec.)   Investment advisory and incentive fees $ 67,783 $ 62,911 7.7 % Distribution fees and other income 11,623 10,345 12.4 Institutional research services   2,343     3,649   (35.8 ) Total revenues 81,749 76,905 6.3   Compensation costs 34,554 33,417 3.4 Distribution costs 10,177 13,429 (24.2 ) Other operating expenses   5,822     6,186   (5.9 ) Total expenses 50,553 53,032 (a) (4.7 )   Operating income before management fee 31,196 23,873 30.7   Investment income 15,114 10,676 41.6 Interest expense   (4,404 )   (2,867 ) 53.6 Other income, net   10,710     7,809   37.1   Income before management fee and income taxes 41,906 31,682 32.3 Management fee expense   4,184     3,113   34.4 Income before income taxes 37,722 28,569 32.0 Income tax expense   13,756     10,288   33.7 Net income 23,966 18,281 31.1 Net income attributable to noncontrolling interests   130     638   (79.6 ) Net income attributable to GAMCO Investors, Inc. $ 23,836   $ 17,643   35.1   Net income attributable to GAMCO Investors, Inc. per share: Basic $ 0.90   $ 0.66   36.4   Diluted $ 0.90   $ 0.65   38.5   Weighted average shares outstanding: Basic   26,415     26,901   (1.8 )   Diluted   26,533     27,008   (1.8 %)   Actual shares outstanding (b)   26,633     27,062   (1.6 %) Notes: (a) Includes $0.4 million in compensation, $4.7 million in distribution costs and $0.5 million in other operating expenses directly related to the launch of a new closed-end fund. (b) Includes 375,000 and 293,800 of RSAs, respectively. See GAAP to non-GAAP reconciliation on page 11.                                   Table V GAMCO INVESTORS, INC. UNAUDITED QUARTERLY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data)   2012 2011 1st 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Quarter Full Year Income Statement Data:   Revenues $ 81,749 $ 76,905 $ 85,081 $ 80,151 $ 84,991 $327,128   Expenses 50,553 53,032 (a) 50,958 48,103 49,471 201,564   Operating income before management fee 31,196 23,873 34,123 32,048 35,520 125,564   Investment income/(loss) 15,114 10,676 5,530 (14,329) 10,268 12,145 Interest expense (4,404) (2,867) (3,403) (4,418) (4,309) (14,997) Other income/(expense), net 10,710 7,809 2,127 (18,747) 5,959 (2,852)   Income before management fee and income taxes 41,906 31,682 36,250 13,301 41,479 122,712 Management fee expense 4,184 3,113 3,626 1,387 4,144 12,270 Income before income taxes 37,722 28,569 32,624 11,914 37,335 110,442 Income tax expense 13,756 10,288 11,945 4,745 13,789 40,767 Net income 23,966 18,281 20,679 7,169 23,546 69,675 Net income/(loss) attributable to noncontrolling interests 130 638 32 (530) (147) (7) Net income attributable to GAMCO Investors, Inc. $ 23,836 $ 17,643 $ 20,647 $ 7,699 $ 23,693 $ 69,682   Net income attributable to GAMCO Investors, Inc. per share: Basic $ 0.90 $ 0.66 $ 0.77 $ 0.29 $ 0.89 $ 2.62   Diluted $ 0.90 $ 0.65 $ 0.77 $ 0.29 $ 0.89 $ 2.61   Weighted average shares outstanding: Basic 26,415 26,901 26,665 26,496 26,488 26,636   Diluted 26,533 27,008 26,733 26,576 26,584 26,724 Reconciliation of non-GAAP financial measures to GAAP: Operating income before management fee $ 31,196 $ 23,873 $ 34,123 $ 32,048 $ 35,520 $125,564 Deduct: management fee expense 4,184 3,113 3,626 1,387 4,144 12,270 Operating income $ 27,012 $ 20,760 $ 30,497 $ 30,661 $ 31,376 $113,294   Operating margin before management fee 38.2% 31.0% 40.1% 40.0% 41.8% 38.4% Operating margin after management fee 33.0% 27.0% 35.8% 38.3% 36.9% 34.6% (a) Includes $5.6 million in expenses directly related to the launch of a new closed-end fund.                       Table VI GAMCO INVESTORS, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Dollars in thousands, except per share data)   March 31, December 31, March 31, 2012 2011 2011   ASSETS   Cash and cash equivalents $ 324,630 $ 276,340 $ 164,671 Investments (a) 421,597 398,440 440,200 Receivable from brokers 29,298 20,913 43,308 Other receivables 33,943 43,424 32,535 Income tax receivable 39 39 - Other assets   16,918   17,593   16,789   Total assets $ 826,425 $ 756,749 $ 697,503   LIABILITIES AND EQUITY   Payable to brokers $ 22,366 $ 10,770 $ 7,998 Income taxes payable and deferred tax liabilities 24,782 15,296 25,035 Compensation payable 28,834 17,695 22,883 Securities sold short, not yet purchased 9,657 5,488 15,550 Accrued expenses and other liabilities   35,125   30,899   34,968 Sub-total 120,764 80,148 106,434   5.5% Senior notes (due May 15, 2013) 99,000 99,000 99,000 5.875% Senior notes (due June 1, 2021) 100,000 100,000 - Zero coupon subordinated debentures (due December 31, 2015) (b)   65,300   64,119   60,697 Total debt   264,300   263,119   159,697 Total liabilities 385,064 343,267 266,131   Redeemable noncontrolling interests 16,828 6,071 28,884   GAMCO Investors, Inc.'s stockholders' equity 421,084 403,972 398,850 Noncontrolling interests   3,449   3,439   3,638 Total equity   424,533   407,411   402,488   Total liabilities and equity $ 826,425 $ 756,749 $ 697,503 (a) Includes investments in sponsored registered investment companies of $62.3 million, $59.2 million and $65.9 million, respectively. (b) The zero coupon subordinated debentures due December 31, 2015 have a face value of $86.3 million at March 31, 2012 and December 31, 2011 and $86.4 million at March 31, 2011.                             GABELLI/GAMCO FUNDS Gabelli/GAMCO Funds Lipper Rankings as of March 31, 2012

1 Yr 3/31/11-3/31/12

     

3 Yrs - 3/31/09-3/31/12

      5 Yrs - 3/31/07-3/31/12 10 Yrs - 3/31/02-3/31/12 Percentile       Rank / Percentile       Rank / Percentile       Rank / Percentile Rank / Fund Name       Lipper Category       Rank       Total Funds       Rank       Total Funds       Rank       Total Funds       Rank       Total Funds

Gabelli Asset; AAA

      Multi-Cap Core Funds       57       406/715       17       103/620       13       68/540       11       30/291 Gabelli Value Fund; A       Multi-Cap Core Funds       60       426/715       4       21/620       29       152/540       27       78/291 Gabelli SRI; AAA       Global Small/Mid-Cap Funds       96       78/81       68       49/72       -       -       -       - Gabelli Eq:Eq Inc; AAA       Equity Income Funds       67       195/294       22       55/251       25       53/214       9       9/109 GAMCO Growth; AAA       Large-Cap Core Funds       48       483/1,045       43       395/937       27       215/819       86       444/519 Gabelli Eq:SC Gro; AAA       Small-Cap Core Funds       54       361/680       70       428/618       14       68/501       11       31/296 Gabelli Focus Five Fund;AAA       Small-Cap Core Funds       93       633/680       70       430/618       49       244/501       -       - GAMCO Gl:Oppty; AAA       Global Large-Cap Growth       82       84/102       45       39/87       53       39/73       20       9/45 GAMCO Gl:Growth; AAA       Global Large-Cap Growth       28       28/102       11       9/87       26       19/73       46       21/45 GAMCO Gold; AAA       Precious Metal Funds       11       8/74       54       32/59       46       23/50       53       19/35 GAMCO Intl Gro; AAA       International Large-Cap Growth       16       36/226       7       14/214       30       53/180       37       42/113

Gabelli Dividend Growth Fund; AAA

      Large-Cap Core Funds       69       721/,045       68       630/937       59       482/819       22       112/519 Gabelli Inv:ABC; AAA       Specialty Diversified Equity Funds       23       11/48       57       18/31       39       10/25       10       1/9 GAMCO Mathers; AAA       Specialty Diversified Equity Funds       70       34/48       72       23/31       70       18/25       50       5/9 Comstock Cap Val; A       Specialty Diversified Equity Funds       86       42/48       88       28/31       89       23/25       70       7/9 GAMCO Gl:Telecom; AAA       Telecommunications Funds       70       27/38       69       24/34       56       15/26       22       4/18 GAMCO Gl:Vertumnus; AAA       Convertible Securities Funds       97       62/63       93       50/53       95       37/38       91       29/31 Gabelli Utilities; AAA       Utility Funds       75       55/73       36       24/67       20       12/61       52       22/42 787:Gabelli Merg&Acq A       Mid-Cap Core Funds       31       95/309       98       263/268       78       180/231       88       138/157 Gabelli Capital Asset Fund       Distributed through Insurance Channel       58       171/295       5       14/282       19       46/247       12       18/146 % of funds in top half               30.0%               45.0%               63.2%               66.7%         Data presented reflects past performance, which is no guarantee of future results. Strong rankings are not indicative of positive fund performance. Absolute performance for some funds was negative for certain periods. Other share classes are available which may have different performance characteristics.   Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on global collective investments including mutual funds, retirement funds, hedge funds, fund fees and expenses to the asset management and media communities. Lipper ranks the performance of mutual funds within a classification of funds that have similar investment objectives. Rankings are historical with capital gains and dividends reinvested and do not include the effect of loads. If an expense waiver was in effect, it may have had a material effect on the total return or yield for the period.   Relative long-term investment performance remained strong with approximately 30%, 45%, 63% and 67% of firmwide mutual funds in the top half of their Lipper categories on a one-, three-, five-, and ten-year total-return basis, respectively, as of March 31, 2012.   Investors should carefully consider the investment objective, risks, charges, and expenses of each fund before investing. Each fund's prospectus contains information about these and other matters and should be read carefully before investing. Each fund’s share price will fluctuate with changes in the market value of the fund’s portfolio securities. Stocks are subject to market, economic and business risks that cause their prices to fluctuate. When you sell fund shares, they may be worth less than what you paid for them. Consequently, you can lose money by investing in a fund. You can obtain a prospectus by calling 800-GABELLI (422-3554), online at www.gabelli.com, or from your financial advisor. Distributed by G.distributors, LLC., One Corporate Center, Rye New York, 10580. Other share classes are available that have different performance characteristics.   The inception date for the Gabelli SRI Green Fund was June 1, 2007. The inception date for the Gabelli Focus Five Fund was December 31, 2002.

1 Please see important disclosures regarding investment performance on page 8.