Edgar Filing: GAMCO INVESTORS, INC. ET AL

SECURITIES & EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2014

o 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)

Delaware		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  No 

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).

Yes No

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 

Non-accelerated filer 		Smaller reporting company 

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

Yes  No 

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, 2014
Class A Common Stock, .001 par value		6,610,015
Class B Common Stock, .001 par value		19,345,820

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, 2014 and 2013

	Condensed Consolidated Statements of Comprehensive Income:
	- Three months ended March 31, 2014 and 2013

	Condensed Consolidated Statements of Financial Condition:
	- March 31, 2014
	- December 31, 2013
	- March 31, 2013

	Condensed Consolidated Statements of Equity:
	- Three months ended March 31, 2014 and 2013

	Condensed Consolidated Statements of Cash Flows:
	- Three months ended March 31, 2014 and 2013

	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,
	2014			2013
Revenues
Investment advisory and incentive fees	$	87,797		$	72,607
Distribution fees and other income		14,873			11,353
Institutional research services		1,807			2,221
Total revenues		104,477			86,181
Expenses
Compensation		43,897			35,652
Management fee		4,728			3,980
Distribution costs		13,963			11,010
Other operating expenses		5,390			4,812
Total expenses		67,978			55,454

Operating income		36,499			30,727
Other income (expense)
Net gain from investments		6,944			12,291
Interest and dividend income		1,141			1,345
Interest expense		(1,992	)		(3,488	)
Shareholder-designated contribution		-			(5,000	)
Total other income, net		6,093			5,148
Income before income taxes		42,592			35,875
Income tax provision		14,616			13,195
Net income		27,976			22,680
Net income attributable to noncontrolling interests		22			135
Net income attributable to GAMCO Investors, Inc.'s shareholders	$	27,954		$	22,545

Net income attributable to GAMCO Investors, Inc.'s shareholders per share:
Basic	$	1.10		$	0.88

Diluted	$	1.09		$	0.88

Weighted average shares outstanding:
Basic		25,481			25,742

Diluted		25,684			25,758

Dividends declared:	$	0.06		$	0.05

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,
	2014			2013

Net income	$	27,976		$	22,680
Other comprehensive income, net of tax:
Foreign currency translation		8			(49	)
Net unrealized gains/(losses) on securities available for sale (a)		(2,697	)		6,040
Other comprehensive income / (loss)		(2,689	)		5,991

Comprehensive income		25,287			28,671
Less: Comprehensive income/(loss) attributable to noncontrolling interests		(22	)		(135	)

Comprehensive income attributable to GAMCO Investors, Inc.	$	25,265		$	28,536

(a) Net of income tax expense or (benefit) of ($1,584) and $3,547 for 2014 and 2013, 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,
	2014			2013			2013
ASSETS
Cash and cash equivalents	$	243,142		$	210,451		$	273,353
Investments in securities		234,414			231,228			229,286
Investments in sponsored registered investment companies		42,433			44,042			64,294
Investments in partnerships		105,849			95,992			94,260
Receivable from brokers		54,084			49,461			44,583
Investment advisory fees receivable		33,035			51,506			29,624
Income tax receivable		445			445			917
Other assets		26,418			26,360			24,312
Total assets	$	739,820		$	709,485		$	760,629

LIABILITIES AND EQUITY
Payable to brokers	$	11,370		$	10,765		$	15,059
Income taxes payable and deferred tax liabilities		41,427			39,846			34,292
Capital lease obligation		5,307			5,323			4,914
Compensation payable		41,447			34,663			34,676
Securities sold, not yet purchased		10,788			6,178			6,377
Mandatorily redeemable noncontrolling interests		1,337			1,355			1,343
Accrued expenses and other liabilities		30,658			32,511			34,537
Sub-total		142,334			130,641			131,198

5.5% Senior notes (repaid May 15, 2013)		-			0			99,000
5.875% Senior notes (due June 1, 2021)		100,000			100,000			100,000
Zero coupon subordinated debentures, Face value: $13.8 million at March 31, 2014 and
December 31, 2013 and $21.7 million at March 31, 2013 (due December 31, 2015)		12,098			11,911			17,688
Total liabilities		254,432			242,552			347,886

Redeemable noncontrolling interests		8,464			6,751			16,414
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;
15,071,087, 15,012,719 and 14,265,769 issued, respectively; 6,639,106,
6,701,930 and 6,147,532 outstanding, respectively		14			14			13
Class B Common Stock, $0.001 par value; 100,000,000 shares authorized;
24,000,000 shares issued; 19,345,706, 19,384,174 and 19,564,174 shares
outstanding, respectively		19			19			20
Additional paid-in capital		285,215			282,496			280,196
Retained earnings		532,839			506,441			429,553
Accumulated other comprehensive income		27,550			30,239			32,291
Treasury stock, at cost (8,431,981, 8,310,789 and 8,118,237 shares, respectively)		(371,525	)		(361,878	)		(349,074	)
Total GAMCO Investors, Inc. stockholders' equity		474,112			457,331			392,999
Noncontrolling interests		2,812			2,851			3,330
Total equity		476,924			460,182			396,329

Total liabilities and equity	$	739,820		$	709,485		$	760,629

See accompanying notes.

GAMCO INVESTORS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

UNAUDITED

(In thousands)

For the three months ended March 31, 2014

				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, 2013	$	2,851		$	33	$	282,496	$	506,441		$	30,239		$	(361,878	)	$	460,182		$	6,751
Redemptions of
noncontrolling interests		-			-		-		-			-			-			-			-
Contributions from
noncontrolling
interests		-			-		-		-			-			-			-			1,652
Net income (loss)		(39	)		-		-		27,954			-			-			27,915			61
Net unrealized gains on
securities available for sale,
net of income tax ($175)		-			-		-		-			297			-			297			-
Amounts reclassified from
accumulated other
comprehensive income,
net of income tax benefit ($1,759)		-			-		-		-			(2,994	)		-			(2,994	)		-
Foreign currency translation		-			-		-		-			8			-			8			-
Dividends declared ($0.06 per
share)		-			-		-		(1,556	)		-			-			(1,556	)		-
Stock based compensation
expense		-			-		1,700		-			-			-			1,700			-
Exercise of stock options
including tax benefit ($173)		-			-		1,019		-			-			-			1,019			-
Purchase of treasury stock		-			-		-		-			-			(9,647	)		(9,647	)		-
Balance at March 31, 2014	$	2,812		$	33	$	285,215	$	532,839		$	27,550		$	(371,525	)	$	476,924		$	8,464

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 noncontrolling
interests		-		-		-		-			-			-			-			(2,298	)
Contributions from
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			-
Amount reclassed 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 CASH FLOWS

UNAUDITED

(In thousands)

	Three Months Ended
	March 31,
	2014			2013
Operating activities
Net income	$	27,976		$	22,680
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net gains from partnerships		(426	)		795
Depreciation and amortization		169			202
Stock based compensation expense		1,700			15
Deferred income taxes		(1,318	)		1,471
Tax benefit from exercise of stock options		173			16
Foreign currency translation gain/(loss)		8			(49	)
Cost basis of donated securities		1,267			148
Gains on sales of available for sale securities		(1,612	)		(597	)
Accretion of zero coupon debentures		223			323
Loss on extinguishment of debt		5			-
(Increase) decrease in assets:
Investments in trading securities		(324	)		(5,538	)
Investments in partnerships:
Contributions to partnerships		(9,448	)		(3,492	)
Distributions from partnerships		17			5,987
Receivable from brokers		(4,623	)		6,071
Investment advisory fees receivable		18,471			12,804
Income tax receivable and deferred tax assets		-			97
Other assets		(222	)		3,227
Increase (decrease) in liabilities:
Payable to brokers		606			713
Income taxes payable and deferred tax liabilities		4,482			3,881
Compensation payable		6,783			24,141
Mandatorily redeemable noncontrolling interests		(18	)		1
Accrued expenses and other liabilities		(1,898	)		8,136
Total adjustments		14,015			58,352
Net cash provided by operating activities	$	41,991		$	81,032

GAMCO INVESTORS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

UNAUDITED (continued)

(In thousands)

	Three Months Ended
	March 31,
	2014			2013
Investing activities
Purchases of available for sale securities	$	(4,782	)	$	(4	)
Proceeds from sales of available for sale securities		3,880			5,343
Return of capital on available for sale securities		323			611
Net cash (used in) provided by investing activities		(579	)		5,950

Financing activities
Contributions from redeemable noncontrolling interests		1,652			1,219
Redemptions of redeemable noncontrolling interests		-			(2,298	)
Proceeds from exercise of stock options		846			76
Repurchase of zero coupon subordinated debentures		(41	)		-
Dividends paid		(1,528	)		(1,287	)
Purchase of treasury stock		(9,647	)		(1,965	)
Net cash used in financing activities		(8,718	)		(4,255	)
Effect of exchange rates on cash and cash equivalents		(3	)		18
Net increase in cash and cash equivalents		32,691			82,745
Cash and cash equivalents at beginning of period		210,451			190,608
Cash and cash equivalents at end of period	$	243,142		$	273,353
Supplemental disclosures of cash flow information:
Cash paid for interest	$	294		$	285
Cash paid for taxes	$	10,662		$	7,272

Non-cash activity:
- For the three months ended March 31, 2014 and March 31, 2013, the Company accrued dividends on restricted stock awards of $28 and $0, respectively.

See accompanying notes.

GAMCO INVESTORS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2014

(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, 2013 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

We have considered all newly issued accounting guidance that is applicable to our operations and the preparation of our condensed consolidated statements, including that which we have not yet adopted. We do not believe that any such guidance has or will have a material effect on our financial position or results of operations.

B. Investment in Securities

Investments in securities at March 31, 2014, December 31, 2013 and March 31, 2013 consisted of the following:

	March 31, 2014				December 31, 2013				March 31, 2013
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	(In thousands)
Trading securities:
Government obligations	$	25,989	$	25,999	$	37,986	$	37,994	$	49,970	$	49,990
Common stocks		113,508		141,276		96,225		124,634		119,918		139,503
Mutual funds		21,131		23,404		21,074		23,285		1,073		1,655
Other investments		544		749		287		582		315		1,179
Total trading securities		161,172		191,428		155,572		186,495		171,276		192,327

Available for sale securities:
Common stocks		15,003		41,538		13,389		43,046		14,312		35,225
Mutual funds		700		1,448		843		1,687		1,014		1,734
Total available for sale securities		15,703		42,986		14,232		44,733		15,326		36,959

Total investments in securities	$	176,875	$	234,414	$	169,804	$	231,228	$	186,602	$	229,286

Securities sold, not yet purchased at March 31, 2014, December 31, 2013 and March 31, 2013 consisted of the following:

	March 31, 2014				December 31, 2013				March 31, 2013
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
Trading securities:	(In thousands)
Common stocks	$	8,837	$	10,469	$	5,319	$	6,023	$	5,163	$	5,650
Other investments		85		319		-		155		86		727
Total securities sold, not yet purchased	$	8,922	$	10,788	$	5,319	$	6,178	$	5,249	$	6,377

Investments in sponsored registered investment companies at March 31, 2014, December 31, 2013 and March 31, 2013 consisted of the following:

	March 31, 2014				December 31, 2013				March 31, 2013
	Cost		Fair Value		Cost		Fair Value		Cost		Fair Value
	(In thousands)
Trading securities:
Mutual funds	$	19	$	12	$	19	$	10	$	19	$	17
Total trading securities		19		12		19		10		19		17

Available for sale securities:
Closed-end funds		22,565		38,980		23,100		40,624		31,014		60,895
Mutual funds		1,939		3,441		1,951		3,408		2,047		3,382
Total available for sale securities		24,504		42,421		25,051		44,032		33,061		64,277

Total investments in sponsored
registered investment companies	$	24,523	$	42,433	$	25,070	$	44,042	$	33,080	$	64,294

Management determines the appropriate classification of debt and equity securities at the time of purchase and reevaluates such designation as of the date of each statement of financial condition. 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 realized 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, 2014 and 2013 (in thousands):

Amount								Affected Line Item	Reason for
Reclassified								in the Statements	Reclassification
from AOCI								Of Income	from AOCI
Three months ended March 31,
2014				2013
	$	1,612			$	597		Net gain from investments	Realized gain / (loss) on sale of AFS securities
		3,141				150		Other operating expenses	Realized gain / (loss) on donation of AFS securities
		4,753				747		Income before income taxes
		(1,759	)			(276	)	Income tax provision
	$	2,994			$	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, 2014 and 2013, the Company had transactions in equity derivatives which resulted in net losses of $190,000 and net gains of $281,000, respectively. At March 31, 2014, December 31, 2013 and March 31, 2013, we held derivative contracts on 1.9 million equity shares, 1.3 million equity shares and 222,000 equity shares, respectively, and the fair value was ($107,000), $120,000 and $61,000, 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 condensed consolidated statements of financial condition. 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 Condition
	Gross		Gross Amounts		Net Amounts of
	Amounts of		Offset in the		Assets Presented
	Recognized		Statements of		in the Statements of		Financial			Cash Collateral
	Assets		Financial Condition		Financial Condition		Instruments			Received		Net Amount
Swaps:	(in thousands)
March 31, 2014	$	198	$	-	$	198	$	(198	)	$	-	$	-
December 31, 2013		275		-		275		(155	)		-		120
March 31, 2013	$	788	$	-	$	788	$	(703	)	$	-	$	85

							Gross Amounts Not Offset in the
							Statements of Financial Condition
	Gross		Gross Amounts		Net Amounts of
	Amounts of		Offset in the		Liabilities Presented
	Recognized		Statements of		in the Statements of		Financial			Cash Collateral
	Liabilities		Financial Condition		Financial Condition		Instruments			Pledged		Net Amount
Swaps:	(in thousands)
March 31, 2014	$	277	$	-	$	277	$	(198	)	$	-	$	79
December 31, 2013		155		-		155		(155	)		-		-
March 31, 2013	$	703	$	-	$	703	$	(703	)	$	-	$	-

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, 2014, December 31, 2013 and March 31, 2013:

	March 31, 2014
			Gross		Gross
			Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
	(In thousands)
Common stocks	$	15,003	$	26,535	$	-		$	41,538
Closed-end Funds		22,565		16,477		(62	)		38,980
Mutual funds		2,639		2,250		-			4,889
Total available for sale securities	$	40,207	$	45,262	$	(62	)	$	85,407

	December 31, 2013
			Gross		Gross
			Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
	(In thousands)
Common stocks	$	13,389	$	29,657	$	-		$	43,046
Closed-end Funds		23,100		17,654		(130	)		40,624
Mutual funds		2,794		2,325		(24	)		5,095
Total available for sale securities	$	39,283	$	49,636	$	(154	)	$	88,765

	March 31, 2013
			Gross		Gross
			Unrealized		Unrealized
	Cost		Gains		Losses			Fair 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

Unrealized changes in fair value, net of taxes, for the three months ended March 31, 2014 and March 31, 2013 of ($2.7) million in losses and $6.0 million in gains, respectively, have been included in other comprehensive income, a component of equity, at March 31, 2014 and March 31, 2013. Return of capital on available for sale securities was $0.3 million and $0.6 million for the three months ended March 31, 2014 and March 31, 2013, respectively. Proceeds from sales of investments available for sale were approximately $3.9 million and $5.3 million for the three months ended March 31, 2014 and March 31, 2013, respectively. For the three months ended March 31, 2014 and March 31, 2013, gross gains on the sale of investments available for sale amounted to $1.6 million and $0.6 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, 2014 or March 31, 2013. 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, 2014							December 31, 2013							March 31, 2013
			Unrealized							Unrealized							Unrealized
	Cost		Losses			Fair Value		Cost		Losses			Fair Value		Cost		Losses			Fair Value
(in thousands)
Cosed-end funds	$	828	$	(62	)	$	766	$	912	$	(130	)	$	782	$	-	$	-		$	-
Mutual Funds		-		-			-		303		(24	)		279		216		(3	)		213
Total	$	828	$	(62	)	$	766	$	1,215	$	(154	)	$	1,061	$	216	$	(3	)	$	213

At March 31, 2014, 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 these specific instances, the investments at March 31, 2014 were closed-end funds with diversified holdings across multiple companies and across multiple industries. One holding was impaired for seven months and one holding was impaired for ten months at March 31, 2014. The value of these holdings at March 31, 2014 was $0.8 million.

At December 31, 2013 there was four 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 investments at December 31, 2013 were open-end funds and closed-end funds with diversified holdings across multiple companies and across multiple industries. One holding was impaired for one month, one for two months, one for four months and one for seven month at December 31, 2013 . The value of these holdings at December 31, 2013 was $1.1 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 holdings at March 31, 2013 was $0.2 million.

For the three months ended March 31, 2014 and 2013, 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, 2014, December 31, 2013 and March 31, 2013 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, 2014 (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)		2014
Cash equivalents	$	242,917	$	-	$	-	$	242,917
Investments in partnerships		-		24,080		-		24,080
Investments in securities:
AFS - Common stocks		41,538		-		-		41,538
AFS - Mutual funds		1,448		-		-		1,448
Trading - Gov't obligations		25,999		-		-		25,999
Trading - Common stocks		140,575		1		700		141,276
Trading - Mutual funds		23,404		-		-		23,404
Trading - Other		253		212		284		749
Total investments in securities		233,217		213		984		234,414
Investments in sponsored registered investment companies:
AFS - Closed-end Funds		38,980		-		-		38,980
AFS - Mutual Funds		3,441		-		-		3,441
Trading - Mutual funds		12		-		-		12
Total investments in sponsored
registered investment companies		42,433		-		-		42,433
Total investments		275,650		24,293		984		300,927
Total assets at fair value	$	518,567	$	24,293	$	984	$	543,844
Liabilities
Trading - Common stocks	$	10,469	$	-	$	-	$	10,469
Trading - Other		-		319		-		319
Securities sold, not yet purchased	$	10,469	$	319	$	-	$	10,788

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

	Quoted Prices in Active		Significant Other		Significant		Balance as of
	Markets for Identical		Observable		Unobservable		December 31,
Assets	Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)		2013
Cash equivalents	$	209,913	$	-	$	-	$	209,913
Investments in partnerships		-		25,253		-		25,253
Investments in securities:
AFS - Common stocks		43,046		-		-		43,046
AFS - Mutual funds		1,687		-		-		1,687
Trading - Gov't obligations		37,994		-		-		37,994
Trading - Common stocks		123,927		7		700		124,634
Trading - Mutual funds		23,285		-		-		23,285
Trading - Other		23		275		284		582
Total investments in securities		229,962		282		984		231,228
Investments in sponsored registered investment companies:
AFS - Closed-end Funds		40,624		-		-		40,624
AFS - Mutual Funds		3,408		-		-		3,408
Trading - Mutual funds		10		-		-		10
Total investments in sponsored
registered investment companies		44,042		-		-		44,042
Total investments		274,004		25,535		984		300,523
Total assets at fair value	$	483,917	$	25,535	$	984	$	510,436
Liabilities
Trading - Common stocks	$	6,023	$	-	$	-	$	6,023
Trading - Other		-		155		-		155
Securities sold, not yet purchased	$	6,023	$	155	$	-	$	6,178

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		-		-