Edgar Filing: GAMCO INVESTORS, INC. ET AL

form10q033113.htm

SECURITIES & EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___ to ___

Commission File No. 001-14761

GAMCO INVESTORS, INC.
(Exact name of Registrant as specified in its charter)

New York			13-4007862
(State of other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

One Corporate Center, Rye, NY			10580-1422
(Address of principle executive offices)			(Zip Code)

(914) 921-3700
Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yesx Noo Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer", "accelerated filer", and "smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨		Accelerated filer x

Non-accelerated filer o		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

Indicate the number of shares outstanding of each of the Registrant’s classes of Common Stock, as of the latest practical date.

Class		Outstanding at April 30, 2013
Class A Common Stock, .001 par value		6,138,795
Class B Common Stock, .001 par value		19,564,174

INDEX

GAMCO INVESTORS, INC. AND SUBSIDIARIES


PART I.	FINANCIAL INFORMATION


Item 1.	Unaudited Condensed Consolidated Financial Statements

	Condensed Consolidated Statements of Income:
	- Three months ended March 31, 2013 and 2012

	Condensed Consolidated Statements of Comprehensive Income:
	- Three months ended March 31, 2013 and 2012

	Condensed Consolidated Statements of Financial Condition:
	- March 31, 2013
	- December 31, 2012
	- March 31, 2012

	Condensed Consolidated Statements of Equity:

	- Three months ended March 31, 2013 and 2012

	Condensed Consolidated Statements of Cash Flows:
	- Three months ended March 31, 2013 and 2012

	Notes to Unaudited Condensed Consolidated Financial Statements

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 3.	Quantitative and Qualitative Disclosures About Market Risk (Included in Item 2)

Item 4.	Controls and Procedures

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

Item 6.	Exhibits

SIGNATURES

GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(Dollars in thousands, except per share data)


	Three Months Ended
	March 31,
	2013			2012
Revenues
Investment advisory and incentive fees	$	72,607		$	67,783
Distribution fees and other income		11,353			11,623
Institutional research services		2,221			2,343
Total revenues		86,181			81,749
Expenses
Compensation		35,652			34,554
Management fee		3,980			4,184
Distribution costs		11,010			10,177
Other operating expenses		4,812			5,822
Total expenses		55,454			54,737

Operating income		30,727			27,012
Other income (expense)
Net gain from investments		12,291			13,878
Interest and dividend income		1,345			1,236
Interest expense		(3,488	)		(4,404	)
Shareholder-designated contribution		(5,000	)		-
Total other income, net		5,148			10,710
Income before income taxes		35,875			37,722
Income tax provision		13,195			13,756
Net income		22,680			23,966
Net income attributable to noncontrolling interests		135			130
Net income attributable to GAMCO Investors, Inc.'s shareholders	$	22,545		$	23,836

Net income attributable to GAMCO Investors, Inc.'s shareholders
per share:
Basic	$	0.88		$	0.90

Diluted	$	0.88		$	0.90

Weighted average shares outstanding:
Basic		25,742			26,415

Diluted		25,758			26,533

Dividends declared:	$	0.05		$	0.04


See accompanying notes.

GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
UNAUDITED
(Dollars in thousands, except per share data)


	Three Months Ended
	March 31,
	2013			2012

Net income	$	22,680		$	23,966
Other comprehensive income, net of tax:
Foreign currency translation		(49	)		(17	)
Net unrealized gains on securities available for sale (a)		6,040			3,457
Other comprehensive income		5,991			3,440

Comprehensive income		28,671			27,406
Less: Comprehensive income attributable to noncontrolling interests		(135	)		(130	)

Comprehensive income attributable to GAMCO Investors, Inc.	$	28,536		$	27,276

(a) Net of income tax expense of $3,547 and $2,031 for 2013 and 2012, respectively.

See accompanying notes.

GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
UNAUDITED
(Dollars in thousands, except per share data)

	March 31,			December 31,			March 31,
	2013			2012			2012
ASSETS
Cash and cash equivalents	$	273,353		$	190,608		$	324,630
Investments in securities		229,286			218,843			257,607
Investments in sponsored registered investment companies		64,294			61,872			62,305
Investments in partnerships		94,260			97,549			101,685
Receivable from brokers		44,583			50,655			29,298
Investment advisory fees receivable		29,624			42,429			27,193
Income tax receivable		917			1,018			39
Other assets		24,312			27,759			23,668
Total assets	$	760,629		$	690,733		$	826,425

LIABILITIES AND EQUITY
Payable to brokers	$	15,059		$	14,346		$	22,366
Income taxes payable and deferred tax liabilities		34,292			25,398			24,782
Capital lease obligation		4,914			4,949			5,043
Compensation payable		34,676			10,535			28,834
Securities sold, not yet purchased		6,377			3,136			9,657
Mandatorily redeemable noncontrolling interests		1,343			1,342			1,390
Accrued expenses and other liabilities		34,537			26,365			28,692
Sub-total		131,198			86,071			120,764

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			100,000
Zero coupon subordinated debentures, Face value: $21.7 million at March 31, 2013 and
December 31, 2012 and $86.3 million at March 31, 2012 (due December 31, 2015)		17,688			17,366			65,300
Total liabilities		347,886			302,437			385,064

Redeemable noncontrolling interests		16,414			17,362			16,828
Commitments and contingencies (Note J)
Equity
GAMCO Investors, Inc. stockholders' equity
Preferred stock, $.001 par value; 10,000,000 shares authorized;
none issued and outstanding
Class A Common Stock, $0.001 par value; 100,000,000 shares authorized;
14,265,769, 14,203,146 and 13,760,697 issued, respectively; 6,147,532,
6,121,585 and 6,592,716 outstanding, respectively		13			13			13
Class B Common Stock, $0.001 par value; 100,000,000 shares authorized;
24,000,000 shares issued; 19,564,174, 19,624,174 and 20,040,746 shares
outstanding, respectively		20			20			20
Additional paid-in capital		280,196			280,089			265,280
Retained earnings		429,553			408,295			431,963
Accumulated other comprehensive income		32,291			26,300			25,960
Treasury stock, at cost (8,118,237, 8,081,561 and 7,167,981 shares, respectively)		(349,074	)		(347,109	)		(302,152	)
Total GAMCO Investors, Inc. stockholders' equity		392,999			367,608			421,084
Noncontrolling interests		3,330			3,326			3,449
Total equity		396,329			370,934			424,533

Total liabilities and equity	$	760,629		$	690,733		$	826,425

See accompanying notes.

GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
UNAUDITED
(In thousands)

For the three months ended March 31, 2013
			GAMCO Investors, Inc. stockholders
										Accumulated
					Additional					Other									Redeemable
	Noncontrolling		Common		Paid-in		Retained			Comprehensive			Treasury						Noncontrolling
	Interests		Stock		Capital		Earnings			Income			Stock			Total			Interests
Balance at December 31, 2012	$	3,326	$	33	$	280,089	$	408,295		$	26,300		$	(347,109	)	$	370,934		$	17,362
Redemptions of redeemable
noncontrolling interests		-		-		-		-			-			-			-			(2,298	)
Contributions from redeemable
noncontrolling interests		-		-		-		-			-			-			-			1,219
Net income (loss)		4		-		-		22,545			-			-			22,549			131
Net unrealized gains on
securities available for sale,
net of income tax ($3,823)		-		-		-		-			6,511			-			6,511			-
Amounts reclassified from
accumulated other
comprehensive income,
net of income tax benefit ($276)		-		-		-		-			(471	)		-			(471	)		-
Foreign currency translation		-		-		-		-			(49	)		-			(49	)		-
Dividends declared ($0.05 per
share)		-		-		-		(1,287	)		-			-			(1,287	)		-
Stock based compensation
expense		-		-		15		-			-			-			15			-
Exercise of stock options
including tax benefit		-		-		92		-			-			-			92			-
Purchase of treasury stock		-		-		-		-			-			(1,965	)		(1,965	)		-
Balance at March 31, 2013	$	3,330	$	33	$	280,196	$	429,553		$	32,291		$	(349,074	)	$	396,329		$	16,414

See accompanying notes.

GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
UNAUDITED
(In thousands)

For the three months ended March 31, 2012
			GAMCO Investors, Inc. stockholders
										Accumulated
					Additional					Other									Redeemable
	Noncontrolling		Common		Paid-in		Retained			Comprehensive			Treasury						Noncontrolling
	Interests		Stock		Capital		Earnings			Income			Stock			Total			Interests
Balance at December 31, 2011	$	3,439	$	33	$	264,409	$	409,191		$	22,520		$	(292,181	)	$	407,411		$	6,071
Redemptions of redeemable
noncontrolling interests		-		-		-		-			-			-			-			(3	)
Contributions from redeemable
noncontrolling interests		-		-		-		-			-			-			-			10,640
Net income		10		-		-		23,836			-			-			23,846			120
Net unrealized gains on
securities available for sale,
net of income tax ($2,031)		-		-		-		-			3,457			-			3,457			-
Foreign currency translation		-		-		-		-			(17	)		-			(17	)		-
Dividends declared
($0.04 per share)		-		-		-		(1,064	)		-			-			(1,064	)		-
Stock based compensation
expense		-		-		871		-			-			-			871			-
Purchase of treasury stock		-		-		-		-			-			(9,971	)		(9,971	)		-
Balance at March 31, 2012	$	3,449	$	33	$	265,280	$	431,963		$	25,960		$	(302,152	)	$	424,533		$	16,828

See accompanying notes.

GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(In thousands)

	Three Months Ended
	March 31,
	2013			2012
Operating activities
Net income	$	22,680		$	23,966
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net gains from partnerships		795			(3,351	)
Depreciation and amortization		202			180
Stock based compensation expense		15			871
Deferred income taxes		1,471			1,515
Tax benefit from exercise of stock options		16			-
Foreign currency translation gain/(loss)		(49	)		(17	)
Fair value of donated securities		148			83
Gains on sales of available for sale securities		(597	)		(279	)
Accretion of zero coupon debentures		323			1,180
Loss on extinguishment of debt		-			1
(Increase) decrease in assets:
Investments in trading securities		(5,538	)		(13,604	)
Investments in partnerships:
Contributions to partnerships		(3,492	)		(23,293	)
Distributions from partnerships		5,987			25,852
Receivable from brokers		6,071			(8,385	)
Investment advisory fees receivable		12,804			4,963
Income tax receivable and deferred tax assets		97			-
Other assets		3,227			5,023
Increase (decrease) in liabilities:
Payable to brokers		713			11,596
Income taxes payable and deferred tax liabilities		3,881			5,940
Compensation payable		24,141			11,139
Mandatorily redeemable noncontrolling interests		1			4
Accrued expenses and other liabilities		8,136			4,227
Total adjustments		58,352			23,645
Net cash provided by operating activities	$	81,032		$	47,611

GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED (continued)
(In thousands)

	Three Months Ended
	March 31,
	2013			2012
Investing activities
Purchases of available for sale securities	$	(4	)	$	(4	)
Proceeds from sales of available for sale securities		5,343			525
Return of capital on available for sale securities		611			571
Net cash provided by investing activities		5,950			1,092

Financing activities
Contributions from redeemable noncontrolling interests		1,219			10,640
Redemptions of redeemable noncontrolling interests		(2,298	)		(3	)
Proceeds from exercise of stock options		76			-
Dividends paid		(1,287	)		(1,070	)
Purchase of treasury stock		(1,965	)		(9,971	)
Net cash used in financing activities		(4,255	)		(404	)
Effect of exchange rates on cash and cash equivalents		18			(9	)
Net increase in cash and cash equivalents		82,745			48,290
Cash and cash equivalents at beginning of period		190,608			276,340
Cash and cash equivalents at end of period	$	273,353		$	324,630
Supplemental disclosures of cash flow information:
Cash paid for interest	$	285		$	322
Cash paid for taxes	$	7,272		$	6,038

Non-cash activity:
- For the three months ended March 31, 2013 and March 31, 2012, the Company accrued dividends on restricted
stock awards of $0 and $13, respectively.
See accompanying notes.

GAMCO INVESTORS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2013

(Unaudited)

A. Significant Accounting Policies

Basis of Presentation

Unless we have indicated otherwise, or the context otherwise requires, references in this report to “GAMCO Investors, Inc.,” “GAMCO,” “the Company,” “GBL,” “we,” “us” and “our” or similar terms are to GAMCO Investors, Inc., its predecessors and its subsidiaries.

The unaudited interim condensed consolidated financial statements of GAMCO included herein have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP in the United States for complete financial statements. In the opinion of management, the unaudited interim condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of financial position, results of operations and cash flows of GAMCO for the interim periods presented and are not necessarily indicative of a full year’s results.

The condensed consolidated financial statements include the accounts of GAMCO and its subsidiaries. Intercompany accounts and transactions are eliminated.

These condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2012 from which the accompanying condensed consolidated financial statements were derived.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported on the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Recent Accounting Developments

In December 2011, the Financial Accounting Standards Board (“FASB”) issued guidance which creates new disclosure requirements about the nature of an entity’s right of offset and related arrangements associated with its financial instruments and derivative instruments. In January 2013, the FASB issued guidance which clarifies the scope of the disclosure requirements. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The new disclosures are designed to make financial statements that are prepared under U.S. GAAP more comparable to those prepared under International Financial Reporting Standards. The Company adopted this guidance on January 1, 2013 and now presents the disclosures required by this guidance in Note B.

In July 2012, the FASB issued guidance allowing companies to first perform a qualitative assessment to determine whether it is more likely than not that an indefinite-lived intangible asset is impaired. If a company determines, on the basis of qualitative factors, that the fair value of such asset is not more likely than not impaired, it would not need to calculate the fair value of such asset. However, if a company concludes otherwise, it must calculate the fair value of the asset, compare the value with its carrying amount and record an impairment charge, if any. To perform the qualitative assessment, a company must identify and evaluate events and circumstances that could affect the significant inputs used to determine the fair value of an indefinite-lived intangible asset. This guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. The Company adopted this guidance on January 1, 2013 without a material impact to the financial statements.

In February 2013, the FASB issued guidance which adds new disclosure requirements for items reclassified out of accumulated other comprehensive income (“AOCI”). The guidance is intended to help entities improve the transparency of changes in other comprehensive income (“OCI”) and items reclassified out of AOCI in their financial statements. It does not amend any existing requirements for reporting net income or OCI in the financial statements. The guidance requires entities to disclose additional information about reclassification adjustments, including changes in AOCI balances by component and significant items reclassified out of AOCI. The guidance requires an entity to present information about significant items reclassified out of AOCI by component either on the face of the statement where net income is presented or as a separate disclosure in the notes to the financial statements. The guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2012. The Company adopted this guidance on January 1, 2013 and now presents the disclosures required by this guidance in Note B.

B. Investment in Securities

Investments in securities at March 31, 2013, December 31, 2012 and March 31, 2012 consisted of the following:

	March 31, 2013				December 31, 2012				March 31, 2012
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	(In thousands)
Trading securities:
Government obligations	$	49,970	$	49,990	$	42,973	$	42,989	$	48,624	$	48,630
Common stocks		119,918		139,503		125,697		138,478		156,206		170,224
Mutual funds		1,073		1,655		1,072		1,484		1,086		1,495
Other investments		315		1,179		328		630		601		571
Total trading securities		171,276		192,327		170,070		183,581		206,517		220,920

Available for sale securities:
Common stocks		14,312		35,225		14,822		33,560		16,158		34,578
Mutual funds		1,014		1,734		1,105		1,702		1,362		2,109
Total available for sale securities		15,326		36,959		15,927		35,262		17,520		36,687

Total investments in securities	$	186,602	$	229,286	$	185,997	$	218,843	$	224,037	$	257,607

Securities sold, not yet purchased at March 31, 2013, December 31, 2012 and March 31, 2012 consisted of the following:

	March 31, 2013				December 31, 2012				March 31, 2012
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Trading securities:	(In thousands)
Common stocks	$	5,163	$	5,650	$	2,593	$	2,867	$	9,016	$	9,553
Other		86		727		184		269		21		104
Total securities sold, not yet purchased	$	5,249	$	6,377	$	2,777	$	3,136	$	9,037	$	9,657

Investments in sponsored registered investment companies at March 31, 2013, December 31, 2012 and March 31, 2012 consisted of the following:

	March 31, 2013				December 31, 2012				March 31, 2012
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	(In thousands)
Trading securities:
Mutual funds	$	19	$	17	$	19	$	20	$	15	$	17
Total trading securities		19		17		19		20		15		17

Available for sale securities:
Closed-end funds		31,014		60,895		35,868		58,511		36,546		58,721
Mutual funds		2,047		3,382		2,055		3,341		2,204		3,567
Total available for sale securities		33,061		64,277		37,923		61,852		38,750		62,288

Total investments in sponsored
registered investment companies	$	33,080	$	64,294	$	37,942	$	61,872	$	38,765	$	62,305

Management determines the appropriate classification of debt and equity securities at the time of purchase and reevaluates such designation as of each balance sheet date. Investments in United States Treasury Bills and Notes with maturities of greater than three months at the time of purchase are classified as investments in securities, and those with maturities of three months or less at the time of purchase are classified as cash equivalents. A substantial portion of investments in securities is held for resale in anticipation of short-term market movements and therefore is classified as trading securities. Trading securities are stated at fair value, with any unrealized gains or losses reported in current period earnings. Available for sale (“AFS”) investments are stated at fair value, with any unrealized gains or losses, net of taxes, reported as a component of equity except for losses deemed to be other than temporary which are recorded as unrealized losses in the condensed consolidated statements of income.

The following table identifies all reclassifications out of accumulated other comprehensive income for the three months ended March 31, 2013 (in thousands):

Amount			Affected Line Item in	Reason for
Reclassified			in the Statements	Reclassification
from AOCI			Of Income	from AOCI

$	597		Net gain from investments	Realized gain / (loss) on sale of securities
	150		Other operating expenses	Donation of securities
$	747		Income before income taxes
	(276	)	Income tax provision
$	471		Net income

The Company recognizes all derivatives as either assets or liabilities measured at fair value and includes them in either investments in securities or securities sold, not yet purchased on the condensed consolidated statements of financial condition. From time to time, the Company and/or the partnerships and offshore funds that the Company consolidates will enter into hedging transactions to manage their exposure to foreign currencies and equity prices related to their proprietary investments. For the three months ended March 31, 2013 and 2012, the Company had transactions in equity derivatives which resulted in net gains of $281,000 and net losses of $29,000, respectively. At March 31, 2013, December 31, 2012 and March 31, 2012, we held derivative contracts on 222,000 equity shares, 1.2 million equity shares and 1.0 million equity shares, respectively, and the fair value was $61,000, $(121,000) and $105,000, respectively; these are included in investments in securities in the condensed consolidated statements of financial condition. These transactions are not designated as hedges for accounting purposes, and therefore changes in fair values of these derivatives are included in net gain/(loss) from investments in the condensed consolidated statements of income.

The Company is a party to enforceable master netting arrangements for swaps entered into as part of the investment strategy of the Company’s proprietary portfolio. They are typically not used as hedging instruments. These swaps, while settled on a net basis with the counterparties, major U.S. financial institutions, are shown gross in assets and liabilities on the consolidated statements of financial position. The swaps have a firm contract end date and are closed out and settled when each contract expires.

							Gross Amounts Not Offset in the
							Statements of Financial Position
	Gross		Gross Amounts		Net Amounts of
	Amounts of		Offset in the		Assets Presented
	Recognized		Statements of		in the Statements		Financial			Cash Collateral
	Assets		Financial Position		of Financial Position		Instruments			Received		Net Amount
Swaps:	(In thousands)
March 31, 2013	$	788	$	-	$	788	$	(703	)	$	-	$	85
December 31, 2012		148		-		148		(132	)		-		16
March 31, 2012	$	-	$	-	$	-	$	-		$	-	$	-

							Gross Amounts Not Offset in the
							Statements of Financial Position
	Gross		Gross Amounts		Net Amounts of
	Amounts of		Offset in the		Liabilities Presented
	Recognized		Statements of		in the Statements		Financial			Cash Collateral
	Liabilities		Financial Position		of Financial Position		Instruments			Received		Net Amount
Swaps:	(In thousands)
March 31, 2013	$	703	$	-	$	703	$	(703	)	$	-	$	-
December 31, 2012		132		-		132		(132	)		-		-
March 31, 2012	$	-	$	-	$	-	$	-		$	-	$	-

The following is a summary of the cost, gross unrealized gains, gross unrealized losses and fair value of available for sale investments as of March 31, 2013, December 31, 2012 and March 31, 2012:

	March 31, 2013
			Gross		Gross
			Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
Common stocks	$	14,312	$	20,913	$	-		$	35,225
Closed-end Funds		31,014		29,884		(3	)		60,895
Mutual funds		3,061		2,055		-			5,116
Total available for sale securities	$	48,387	$	52,852	$	(3	)	$	101,236

	December 31, 2012
			Gross		Gross
			Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
Common stocks	$	14,822	$	18,738	$	-		$	33,560
Closed-end Funds		35,868		22,645		(2	)		58,511
Mutual funds		3,160		1,883		-			5,043
Total available for sale securities	$	53,850	$	43,266	$	(2	)	$	97,114

	March 31, 2012
			Gross		Gross
			Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(In thousands)
Common stocks	$	16,158	$	18,420	$	-		$	34,578
Closed-end Funds		36,546		22,189		(14	)		58,721
Mutual funds		3,566		2,110		-			5,676
Total available for sale securities	$	56,270	$	42,719	$	(14	)	$	98,975

Unrealized changes in fair value, net of taxes, for the three months ended March 31, 2013 and March 31, 2012 of $6.0 million and $3.5 million in gains, respectively, have been included in other comprehensive income, a component of equity, at March 31, 2013 and March 31, 2012. Return of capital on available for sale securities was $0.6 million and $0.6 million for the three months ended March 31, 2013 and March 31, 2012, respectively. Proceeds from sales of investments available for sale were approximately $5.3 million and $0.5 million for the three months ended March 31, 2013 and March 31, 2012, respectively. For the three months ended March 31, 2013 and March 31, 2012, gross gains on the sale of investments available for sale amounted to $0.6 million and $0.3 million, respectively, and were reclassified from other comprehensive income into net gain from investments in the condensed consolidated statements of income. There were no losses on the sale of investments available for sale for the three months ended March 31, 2013 or March 31, 2012. The basis on which the cost of a security sold is determined is specific identification.

Investments classified as available for sale that are in an unrealized loss position for which other-than-temporary impairment has not been recognized consisted of the following:

	March 31, 2013							December 31, 2012							March 31, 2012
			Unrealized							Unrealized							Unrealized
	Cost		Losses			Fair Value		Cost		Losses			Fair Value		Cost		Losses			Fair Value
(in thousands)
Mutual Funds	$	216	$	(3	)	$	213	$	73	$	(2	)	$	71	$	97	$	(14	)	$	83

At December 31, 2012 and March 31, 2012, there was one holding in a loss position which was not deemed to be other-than-temporarily impaired due to the length of time that it had been in a loss position and because it passed scrutiny in our evaluation of issuer-specific and industry-specific considerations. In this specific instance, the investment at December 31, 2012 and March 31, 2012 was a closed-end fund with diversified holdings across multiple companies and across multiple industries. The one holding was impaired for one and ten consecutive months at December 31, 2012 and March 31, 2012, respectively. The value of this holding at both December 31, 2012 and March 31, 2012 was $0.1 million.

At March 31, 2013, there were two holdings in loss positions which were not deemed to be other-than-temporarily impaired due to the length of time that they had been in a loss position and because they passed scrutiny in our evaluation of issuer-specific and industry-specific considerations. In this specific instance, the investments at March 31, 2013 were closed-end funds with diversified holdings across multiple companies and across multiple industries. Both holdings were impaired for two consecutive months at March 31, 2013. The value of these holding at March 31, 2013 was $0.2 million.

For the three months ended March 31, 2013 and 2012, there were no losses on available for sale securities deemed to be other than temporary.

C. Fair Value

The following tables present information about the Company’s assets and liabilities by major categories measured at fair value on a recurring basis as of March 31, 2013, December 31, 2012 and March 31, 2012 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:

Assets and Liabilities Measured at Fair Value on a Recurring Basis as of March 31, 2013 (in thousands)

	Quoted Prices in Active		Significant Other		Significant		Balance as of
	Markets for Identical		Observable		Unobservable		March 31,
Assets	Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)		2013
Cash equivalents	$	272,653	$	-	$	-	$	272,653
Investments in partnerships		-		23,772		-		23,772
Investments in securities:
AFS - Common stocks		35,225		-		-		35,225
AFS - Mutual funds		1,734		-		-		1,734
Trading - Gov't obligations		49,990		-		-		49,990
Trading - Common stocks		138,829		7		667		139,503
Trading - Mutual funds		1,655		-		-		1,655
Trading - Other		92		788		299		1,179
Total investments in securities		227,525		795		966		229,286
Investments in sponsored registered investment companies:
AFS - Closed-end Funds		60,895		-		-		60,895
AFS - Mutual Funds		3,382		-		-		3,382
Trading - Mutual funds		17		-		-		17
Total investments in sponsored
registered investment companies		64,294		-		-		64,294
Total investments		291,819		24,567		966		317,352
Total assets at fair value	$	564,472	$	24,567	$	966	$	590,005
Liabilities
Trading - Common stocks	$	5,650	$	-	$	-	$	5,650
Trading - Other		-		727		-		727
Securities sold, not yet purchased	$	5,650	$	727	$	-	$	6,377