GAMCO INVESTORS, INC. ET AL - FORM 8-K - EX-99.1 - EXHIBIT 99.1, DATED NOVEMBER 2, 2012

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8-K - FORM 8-K, DATED NOVEMBER 2, 2012 - GAMCO INVESTORS, INC. ET AL	form8k110212.htm

One Corporate Center GAMCO Investors, Inc

Rye, NY 10580-1422

Fax (914) 921-5392

www.gabelli.com

For Immediate Release:	Contact:	Robert S. Zuccaro
		Executive Vice President and Chief Financial Officer
		(914) 921-5088

		For further information please visit
		www.gabelli.com

GAMCO Investors, Inc. Reports Third Quarter Results

Record Level AUM at $37 billion

Earnings higher at $0.72 per fully diluted share versus $0.29 per fully diluted share

Rye, New York, November 2, 2012 – GAMCO Investors, Inc. (GAMCO) (NYSE: GBL) announced third quarter 2012 earnings of $19.0 million or $0.72 per fully diluted share versus $7.7 million or $0.29 per fully diluted share in the third quarter 2011. Third quarter 2012 earnings include a charge of $2.1 million or $0.08 per diluted share, (net of management fee and tax benefit), for the Dutch Auction of the 0% coupon notes (extinguishment of debt).

Revenues in the third quarter of 2012 were $82.2 million, including incentive fees of $0.8 million, up $2.0 million, or 2.6%, from $80.2 million, including $1.0 million in incentive fees, in the prior year quarter. Operating income before management fee was $32.1 million, a 0.1% increase from the $32.0 million in the prior year period as operating margin before management fee fell slightly to 39.0% from 40.0%.

For the nine months ended September 30, 2012, earnings were $57.9 million or $2.19 per fully diluted share versus $46.0 million or $1.72 per fully diluted share in 2011. The first nine months of 2011 had $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	Third Quarter									Year-to-date
($'s in 000's except AUM and per share data)	2012				2011			% D			2012			2011		% D

AUM (in millions)	$	36,945			$	31,342		17.9	%	$	36,945		$	31,342		17.9	%
Revenues		82,231				80,151		2.6			245,004			242,137		1.2
Operating income:
before management fee		32,068				32,048		0.1			96,246			90,044		6.9
after management fee		29,012				30,661		(5.4	)		86,391			81,918		5.5
Operating margin:
before management fee		39.0	%			40.0	%				39.3	%		37.2	%
after management fee		35.3	%			38.3	%				35.3	%		33.8	%
Extinguishment of debt		(6,305	)			-		n/m			(6,307	)		-		n/m
Other income/(expense), net		(1,446	)	(a)		(18,747	)	n/m			2,446			(8,811	)	n/m
Net income attributable to GAMCO		19,004				7,699		146.8			57,945			45,989		26.0
Net income attributable to GAMCO per share	$	0.72			$	0.29		148.3	%	$	2.19		$	1.72		27.3	%
Shares outstanding at September 30		26,606				26,773					26,606			26,773

(a) After charge of $6,305 relating to extinguishment of debt.

Shareholders’ book value was $440.0 million or $16.54 per share at September 30, 2012. We ended the quarter with cash and investments of approximately $690.9 million and $216.1 million ($220.8 million face value) of debt.

Assets under Management

AUM at September 30, 2012 were a record $36.9 billion, an increase of 17.9% from AUM of $31.3 billion at September 30, 2011 and 3.6% above the June 30, 2012 AUM of $35.7 billion. During the third quarter of 2012, we had net outflows of $356 million versus net inflows of $111 million in the second quarter of 2012 and $899 million of inflows in the third quarter of 2011. Highlights are as follows:

Our open-end equity funds’ AUM were $12.8 billion on September 30, 2012, 11.2% above the $11.5 billion on September 30, 2011 and 2.1% higher than the $12.5 billion on June 30, 2012. Net outflows for our open-end equity funds were $366 million during the third quarter of 2012 versus net outflows of $194 million for the second quarter of 2012 and net inflows of $347 million during the third quarter of 2011.

Our closed-end funds had AUM of $6.4 billion on September 30, 2012, 18.9% higher than the $5.4 billion on September 30, 2011 and 8.6% higher than the $5.9 billion on June 30, 2012. In the third quarter of 2012, net additions to AUM from at-the-market offerings and preferred share offerings were $260 million. Distributions from all closed-end funds, net of reinvestments, reduced AUM by $114 million.

Our institutional and private wealth management business ended the quarter with a record $15.2 billion in AUM, rising 26.7% from $12.0 billion on September 30, 2011 and 4.8% above the June 30, 2012 level of $14.5 billion. Net flows, encompassing new and closed accounts as well as additional investments or withdrawals, totaled $101 million of outflows in the third quarter of 2012.

-	Our investment partnerships’ AUM increased to $785 million on September 30, 2012 from $627 million on September 30, 2011 and $781 million on June 30, 2012. Net cash outflows in the third quarter of 2012 were $2 million.

-	The GAMCO International SICAV, our Luxembourg based UCITS fund which has two sub-funds, the GAMCO Strategic Value and the GAMCO Merger Arbitrage, totaled $121 million in AUM at September 30, 2012 as compared to $126 million at June 30, 2012.

-	AUM in The Gabelli U.S. Treasury Money Market Fund (“GUSTO”), our 100% U.S. Treasury money market fund, were $1.8 billion at September 30, 2012 as compared to the $1.9 billion at both September 30, 2011 and June 30, 2012.

In addition to management fees, we earn incentive fees for certain institutional client assets, assets attributable to certain preferred issues for our closed-end funds, our GDL Fund (NYSE: GDL) and investment partnership assets. As of September 30, 2012, assets with incentive based fees were $3.9 billion, 14.7% higher than the $3.4 billion on September 30, 2011 and unchanged from the $3.9 billion on June 30, 2012. 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 Third quarter

Revenues

Investment advisory and incentive fees for the third quarter ended September 30, 2012 were $67.8 million, an increase of 3.9% from the $65.2 million reported in the 2011 period:

Open-end fund revenues were $31.2 million versus $30.4 million in the third quarter 2011, an increase of 2.6%. Average AUM for open-end equity funds rose 2.5% from the prior year quarter and average AUM for all open-end funds were 2.9% higher at $14.4 billion in the 2012 quarter versus $14.0 billion in the prior year quarter.

Our closed-end fund revenues increased 9.2% to $13.1 million from $12.0 million in the third quarter 2011. Average closed-end fund AUM, excluding certain closed-end fund preferred share assets that generate annual performance based fees, increased 3.9% from the prior year quarter. During the third quarter of 2012, results benefitted from $0.5 million in incentive fees from a partial redemption of certain preferred issues which are realized if the cost of capital is met. There were no such fees earned during the 2011 quarter.

Institutional and private wealth management account revenues, excluding incentive fees, which are generally based upon beginning of quarter AUM, increased 3.8% to $21.6 million in the third quarter 2012 from $20.8 million in third quarter 2011. During the third quarter 2012, we earned $0.3 million in incentive fees, a decrease of $0.7 million from the $1.0 million recognized in the third quarter 2011.

-	Investment partnership gross fee income for the third quarter 2012 was $1.6 million, an increase of 45.5% from $1.1 million in the third quarter 2011.

Revenues from the distribution of our open-end funds and other income were $11.1 million for the third quarter 2012, a decrease of $0.4 million or 3.0% from the prior year quarter of $11.5 million, which was largely the result of lower levels of sales of load shares of mutual funds.

Our institutional research services generated revenues of $3.3 million in the third quarter 2012 and were largely unchanged from the $3.4 million in the prior year period.

Operating Income and Margin

Operating income, which is net of management fee expense, was $29.0 million in the 2012 third quarter versus $30.7 million in the prior year period, a decline of $1.7 million, or 5.5%. The year over year decrease in operating income results from higher management fee expense primarily the result of the $17.3 million increase in other income (expense), net. Operating income before management fee was $32.1 million in the third quarter 2012, versus $32.0 million in the third quarter 2011. For the third quarter 2012, the operating margin before management fee was 39.0% versus 40.0% in the third quarter of 2011. After management fee the operating margin was 35.3% in the 2012 third quarter versus 38.3% in the prior year period. Management believes evaluating operating income before management fee is an important measure in analyzing the Company’s operating results. Further information regarding Non-GAAP measures is included in Notes on Non-GAAP Financial Measures and Table VII included elsewhere herein.

Other Income / (Expense)

Other income/(expense), net, was ($0.03) per diluted share, a $0.33 per diluted share positive improvement from the ($0.36) per diluted share, net of management fee and tax benefit in the third quarter of 2011. This year’s results include a charge of $6.3 million related to purchases of $64.6 million (face value) of the Company’s 0% Subordinated Debentures due 2015 (“Subordinated Debentures”). Additionally, mark to market gains, largely unrealized, from proprietary investments in our mutual funds, in our alternative products and proprietary accounts, were $8.4 million versus mark to market losses of $14.3 million in the 2011 third quarter. Interest expense was $3.6 million in the 2012 third quarter, $0.8 million lower than the prior year quarter following the debt repurchase.

Income Taxes

The effective tax rate for the quarter ended September 30, 2012 was 30.7% compared to the 2011 quarter effective tax rate of 39.8% and full year 2011 effective tax rate of 36.9%. The third quarter 2012 rate included a benefit of 5.1% resulting from the difference between the tax and book basis of Subordinated Debentures repurchased, including the tender offer completed in July 2012. In addition, the third quarter 2011 rate was affected by the change in the mix of operating income and investment losses which increased the effective state tax rate for the period.

For the Nine months

Revenues

Investment advisory and incentive fees for the nine months ended September 30, 2012 were $202.8 million, an increase of 2.7% from the $197.4 million reported in the 2011 period:

Open-end fund revenues were $93.3 million versus $89.6 million in the first nine months of 2011, an increase of 4.1%. Average AUM for open-end equity funds rose 3.7% from the prior year nine months. Average AUM for all open-end funds were 5.1% higher at $14.5 billion in the 2012 period versus $13.8 billion in the prior year nine months.

-	Our closed-end fund revenues increased 2.2% to $37.2 million from $36.4 million in the nine months ended September 30, 2011.

The institutional and private wealth management business generated revenues, excluding incentive fees, of $64.1 million, up 3.4%, in the first nine months of 2012 from the $62.0 million realized in the first nine months of 2011. We realized $3.9 million in incentive fees during this period versus $6.6 million in the prior year period.

-	Investment partnership revenues for the nine months ended September 30, 2012 were $4.3 million, an increase of 48.3% from $2.9 million in the prior year period.

Reflecting higher average AUM in our open-end funds, revenues from the distribution of our open-end funds and other income were $33.8 million for the nine months ended September 30, 2012, an increase of $0.4 million or 1.0% from the prior year period of $33.4 million.

Our institutional research services generated revenues of $8.5 million in the first nine months of 2012, versus $11.3 million in the prior year period.

Operating Income and Margin

Operating income, net of management fee expense, increased $4.5 million, or 5.5%, to $86.4 million for the first nine months of 2012 versus $81.9 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 nine months of 2011 as well as lower non-compensation operating expenses. Operating margin was 35.3% in the first nine months of 2012 versus 33.8% in the prior year period (35.9% excluding one-time costs). Operating income before management fee was $96.2 million in the nine months ended September 30, 2012, versus $90.0 million in 2011. Operating margin before management fee was 39.3% in the 2012 period versus 37.2% in the 2011 period (39.5% excluding one-time costs). Management believes evaluating operating income before management fee is an important measure in analyzing the Company’s operating results. Further information regarding Non-GAAP measures is included in Notes on Non-GAAP Financial Measures and Table VII included elsewhere herein.

Other Income / (Expense)

Other income/(expense), net, was $2.4 million or $0.05 per diluted share net of management fee and tax expense in the first nine months of 2012 versus an expense of $8.8 million or $0.21 per diluted share, net of management fee and tax benefit in the first nine months of 2011. Included in the 2012 results are $6.3 million in charges related to total purchases of $64.6 million (face value) of the Subordinated Debentures. Interest expense was $12.4 million in the 2012 period, $1.7 million higher than the prior year period due to an increase in average debt outstanding of $40.8 million, due to the issuance of $100 million of 5.875% Senior Debentures due 2021 in May 2011 and less the purchase of approximately $64.6 million (face value) of Subordinated Debentures during the third quarter of 2012.

Income Taxes

The effective tax rate for the nine months ended September 30, 2012 was 34.8% compared to the nine months ended September 30, 2011 and full year 2011 effective tax rate of 36.9%. The 2012 nine month rate included a benefit of 1.6% resulting from the difference between the tax and book basis of Subordinated Debentures repurchased, including the tender offer completed in July 2012.

Business and Investment Highlights

-	On July 9, 2012, GAMCO concluded the tender offer (the “Offer”) to purchase the entire principal amount (“face value”) of its Subordinated Debentures, purchasing $64.1 million of the $86.3 million face value outstanding at $870 per $1,000 principal amount, for a total outlay of $55.8 million.

During July 2012, the Gabelli Equity Trust Inc. (NYSE: GAB) completed a rights offering in which the fund issued 2,816,524 shares of Series G Cumulative Preferred Stock totaling $70,413,100. In the offering, the fund’s existing 6.20% Series F Cumulative Preferred Stock shareholders received one transferrable right (the “Right”) for each share of Series F Preferred held on the record date. Holders of the Right were entitled to purchase one share of Series G Preferred by submitting one Right plus $25.00, which could be satisfied by surrendering Series F Preferred stock, cash or a combination. 702,193 shares of Series F Preferred shares, or approximately $17.6 million, were surrendered by subscribing shareholders to acquire Series G Preferred.

-	In September 2012, the Gabelli Equity Trust Inc. completed an offering of 4.2 million of 5.0% Series H Cumulative Preferred Stock valued at $105 million. The Series H Preferred is a perpetual preferred rated “AAA” by Standard & Poor’s Rating Services and is non-callable for five years.

-	Institutional Investor Magazine’s July/August issue lists GAMCO as #117 in its America’s Top 300 Money Managers ranking for AUM as of December 31, 2011.

On August 29, 2012, Gabelli Securities, Inc. announced the addition of Daniel R. Lee to its board of directors. Mr. Lee has served in a number of senior executive positions over the course of his long and distinguished career. He is currently Chairman and Chief Executive Officer of Creative Casinos, LLC, a casino developer and operator of gaming casinos.

Daniel M. Miller was elected Chairman of Gabelli & Company, Inc. where he will assist the incoming president in building the institutional sales and research business. Mr. Miller led a major growth initiative that included significant enhancements to the professional staff who contribute the highly regarded research team which has ranked near the top of the Wall Street Journal’s “Best of the Street” survey in each of the past three years.

Effective October 1, 2012, Jeffrey J. Jonas, CFA was named to the investment team of The Gabelli Asset Fund. Mr. Jonas joins portfolio manager Mario J. Gabelli, manager of the fund since its inception on March 3, 1986, and associate portfolio managers, Kevin V. Dreyer, and Christopher J. Marangi as it continues to expand its investment team.

In September, Gabelli & Company, Inc., our Institutional Research services subsidiary, held its 18th Annual Aircraft Supplier Conference featuring management presentations from several leading aerospace and defense companies, with an emphasis on industry dynamics, new technologies, and company fundamentals.

During October Gabelli & Company, Inc. hosted its 36th Annual Automotive Aftermarket Symposium in Las Vegas, Nevada. The two day conference showcased a full spectrum of leading automotive companies, including aftermarket parts retailers, original equipment and aftermarket parts suppliers, publicly traded dealership groups, and medium and heavy duty truck manufacturers. Available on the “In the News” and “On the Air” segments of our website are recent interviews with Portfolio Managers including Mario Gabelli, Barbara Marcin, Howard Ward and Caesar Bryan among others as they address world markets, industries and specific stocks. Complete articles and interviews are on the Gabelli website at www.gabelli.com/inthenews.html.

Other Financial Highlights

Statement of Financial Condition

We ended the quarter with approximately $690.9 million in cash and investments versus $735.8 million at June 30, 2012 and $704.3 million at September 30, 2011. This included approximately $98.1 million in available for sale securities at September 30, 2012 of which $64.2 million was in our sponsored registered investment companies.

With the renewal of our universal shelf registration in May 2012, we continue to have the flexibility of issuing any combination of senior and subordinated debt securities, convertible debt securities and common and preferred securities of up to a total amount of $400 million.

Shareholders’ book value was $440.0 million or $16.54 per share on September 30, 2012 compared to $404.0 million or $15.10 per share on December 31, 2011 and $404.0 million or $15.09 per share on September 30, 2011.

Shareholder Compensation

Dividends

On August 7, 2012 GAMCO’s Board of Directors approved a 25% increase to our quarterly dividend to $0.05 per share from $0.04 per share in addition to a special dividend of $0.25 per share to all of its Class A and Class B shareholders.

During 2012, we paid $16.8 million, or $0.63 per share, in dividends, and since our IPO, we have paid cumulative dividends of $360.8 million, or $14.05 per share.

Share Repurchase

Through September 30, 2012, we repurchased 275,528 shares at an average price of $44.94 per share for an investment of $12.4 million. Since our IPO, we have repurchased a total of 7.6 million shares at an average price of $40.78 per share for an investment of $310.7 million. There currently remain 297,839 shares available to be repurchased under our existing buyback plan.

Since our NYSE IPO of six million shares of GBL at a price of $17.50 per share in 1999, we have returned $672 million to our shareholders through dividends and stock repurchases.

Fully diluted shares outstanding for the third quarter 2012 were 26.4 million, 0.5% lower than 26.6 million in the third quarter 2011. Diluted shares outstanding were lower in the third quarter 2012 due to shares purchased under our Stock Repurchase Program.

At September 30, 2012, we had 371,500 RSAs outstanding.

NOTES ON NON-GAAP FINANCIAL MEASURES

A. Stockholders’ book value per share:

(in millions, except per share data)	9/30/2012		12/31/2011		9/30/2011
Stockholders' book value	$	440.01	$	403.97	$	404.00
Shares outstanding		26.61		26.75		26.77
Stockholders' book value per share	$	16.54	$	15.10	$	15.09

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 VII.

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.

	3rd Quarter						YTD September
	2012			2011			2012			2011
Operating income before management fee	$	32,068		$	32,048		$	96,246		$	90,044
Management fee expense		(3,201	)		(3,262	)		(9,610	)		(9,007	)
Tax expense		(8,867	)		(11,465	)		(30,143	)		(29,904	)
Noncontrolling interest (expense)/income		(189	)		125			242			577
Operating income (after management fee and taxes)		19,811			17,446			56,735			51,710
Per fully diluted share	$	0.75		$	0.65		$	2.14		$	1.93

Other income, net	$	(1,446	)	$	(18,747	)	$	2,446		$	(8,811	)
Management fee expense		145			1,875			(245	)		881
Tax expense		400			6,720			(766	)		2,926
Noncontrolling interest expense		94			405			(225	)		(717	)
Other income, net (after management fee and taxes)	$	(807	)	$	(9,747	)	$	1,210		$	(5,721	)
Per fully diluted share	$	(0.03	)	$	(0.36	)	$	0.05		$	(0.21	)

Net income per fully diluted share	$	0.72		$	0.29		$	2.19		$	1.72
Diluted weighted average shares outstanding		26,439			26,576			26,480			26,772

D.	Launch of new closed-end fund expense, net of management fee and tax benefit, per diluted share:

	YTD September
(in thousands, except per share data)	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		26,772

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 - 3rd Quarter 2012
								Closed-end Fund
			Market					distributions,
	June 30,		appreciation/		Net cash			net of			September 30,
	2012		(depreciation)		flows			reinvestments			2012
Equities:
Open-end Funds	$	12,496	$	628	$	(366	)	$	-		$	12,758
Closed-end Funds		5,860		359		260			(114	)		6,365
Institutional & PWM - direct		11,655		602		(68	)		-			12,189
Institutional & PWM - sub-advisory		2,788		157		(33	)		-			2,912
Investment Partnerships		781		6		(2	)		-			785
SICAV (a)		126		1		(6	)		-			121
Total Equities		33,706		1,753		(215	)		(114	)		35,130
Fixed Income:
Money-Market Fund		1,893		-		(141	)		-			1,752
Institutional & PWM		63		-		-			-			63
Total Fixed Income		1,956		-		(141	)		-			1,815
Total Assets Under Management	$	35,662	$	1,753	$	(356	)	$	(114	)	$	36,945

The Company reported Assets Under Management as follows (in millions):

Table II: Fund Flows - Nine months ended September 30, 2012
								Closed-end Fund
			Market					distributions,
	December 31,		appreciation/		Net cash			net of			September 30,
	2011		(depreciation)		flows			reinvestments			2012
Equities:
Open-end Funds	$	12,273	$	1,180	$	(695	)	$	-		$	12,758
Closed-end Funds		5,799		492		405			(331	)		6,365
Institutional & PWM - direct		10,853		1,142		194			-			12,189
Institutional & PWM - sub-advisory		2,600		249		63			-			2,912
Investment Partnerships		605		16		164			-			785
SICAV (a)		105		2		14			-			121
Total Equities		32,235		3,081		145			(331	)		35,130
Fixed Income:
Money-Market Fund		1,824		-		(72	)		-			1,752
Institutional & PWM		26		-		37			-			63
Total Fixed Income		1,850		-		(35	)		-			1,815
Total Assets Under Management	$	34,085	$	3,081	$	110		$	(331	)	$	36,945

Table III: Assets Under Management
	September 30,		September 30,		%
	2011		2012		Inc.(Dec.)
Equities:
Open-end Funds	$	11,469	$	12,758		11.2	%
Closed-end Funds		5,355		6,365		18.9
Institutional & PWM - direct		9,644		12,189		26.4
Institutional & PWM - sub-advisory		2,326		2,912		25.2
Investment Partnerships		627		785		25.2
SICAV (a)		-		121		n/m
Total Equities		29,421		35,130		19.4
Fixed Income:
Money-Market Fund		1,895		1,752		(7.5	)
Institutional & PWM		26		63		142.3
Total Fixed Income		1,921		1,815		(5.5	)
Total Assets Under Management	$	31,342	$	36,945		17.9	%

Table IV: Assets Under Management by Quarter
											% Increase/
											(decrease) from
		9/11		12/11		3/12		6/12		9/12		9/11		6/12
Equities:
Open-end Funds	$	11,469	$	12,273	$	12,996	$	12,496	$	12,758		11.2	%	2.1	%
Closed-end Funds		5,355		5,799		6,067		5,860		6,365		18.9		8.6
Institutional & PWM - direct		9,644		10,853		12,031		11,655		12,189		26.4		4.6
Institutional & PWM - sub-advisory		2,326		2,600		2,924		2,788		2,912		25.2		4.4
Investment Partnerships		627		605		594		781		785		25.2		0.5
SICAV (a)		-		105		118		126		121		n/m		(4.0	)
Total Equities		29,421		32,235		34,730		33,706		35,130		19.4		4.2
Fixed Income:
Money-Market Fund		1,895		1,824		1,922		1,893		1,752		(7.5	)	(7.4	)
Institutional & PWM		26		26		26		63		63		142.3		-
Total Fixed Income		1,921		1,850		1,948		1,956		1,815		(5.5	)	(7.2	)
Total Assets Under Management	$	31,342	$	34,085	$	36,678	$	35,662	$	36,945		17.9	%	3.6	%

(a) Includes $100 million, $102 million, $101 million and $102 million of proprietary seed capital at December 31, 2011, March 31, 2012, June 30, 2012 and September 30, 2012, respectively.

Table V

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

	For the Three Months Ended September 30,
							% Inc.
	2012			2011			(Dec.)

Investment advisory and incentive fees	$	67,790		$	65,244			3.9	%
Distribution fees and other income		11,139			11,486			(3.0	)
Institutional research services		3,302			3,421			(3.5	)
Total revenues		82,231			80,151			2.6

Compensation costs		32,948			32,010			2.9
Distribution costs		10,386			11,091			(6.4	)
Other operating expenses		6,829			5,002			36.5
Total expenses		50,163			48,103			4.3

Operating income before management fee		32,068			32,048			0.1

Investment income/(loss)		8,445			(14,329	)
Extinguishment of debt		(6,305	)		-
Interest expense		(3,586	)		(4,418	)
Other income/(expense), net		(1,446	)		(18,747	)

Income before management fee and income taxes		30,622			13,301			130.2
Management fee expense		3,056			1,387
Income before income taxes		27,566			11,914			131.4
Income tax expense		8,467			4,745
Net income		19,099			7,169			166.4
Net income/(loss) attributable to noncontrolling interests		95			(530	)
Net income attributable to GAMCO Investors, Inc.	$	19,004		$	7,699			146.8

Net income per share attributable to GAMCO Investors, Inc.:
Basic	$	0.72		$	0.29			148.3

Diluted	$	0.72		$	0.29			148.3

Weighted average shares outstanding:
Basic		26,250			26,496			(0.9	)

Diluted		26,439			26,576			(0.5	)

Actual shares outstanding (a)		26,606			26,773			(0.6	%)

Notes:
(a) Includes 371,500 and 285,100 of RSAs, respectively.
See GAAP to non-GAAP reconciliation on page 15.

Table VI

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

	For the Nine Months Ended September 30,
								% Inc.
	2012			2011				(Dec.)

Investment advisory and incentive fees	$	202,783		$	197,407				2.7	%
Distribution fees and other income		33,768			33,419				1.0
Institutional research services		8,453			11,311				(25.3	)
Total revenues		245,004			242,137				1.2

Compensation costs		100,423			99,792				0.6
Distribution costs		30,575			34,108				(10.4	)
Other operating expenses		17,760			18,193				(2.4	)
Total expenses		148,758			152,093		(a)		(2.2	)

Operating income before management fee		96,246			90,044				6.9

Investment income		21,172			1,877
Extinguishment of debt		(6,307	)		-
Interest expense		(12,419	)		(10,688	)
Other income/(expense), net		2,446			(8,811	)

Income before management fee and income taxes		98,692			81,233				21.5
Management fee expense		9,855			8,126
Income before income taxes		88,837			73,107				21.5
Income tax expense		30,909			26,978
Net income		57,928			46,129				25.6
Net income/(loss) attributable to noncontrolling interests		(17	)		140
Net income attributable to GAMCO Investors, Inc.	$	57,945		$	45,989				26.0

Net income per share attributable to GAMCO Investors, Inc.:
Basic	$	2.20		$	1.72				27.9

Diluted	$	2.19		$	1.72				27.3

Weighted average shares outstanding:
Basic		26,309			26,686				(1.4	)

Diluted		26,480			26,772				(1.1	)

Actual shares outstanding (b)		26,606			26,773				(0.6	%)

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 371,500 and 285,100 of RSAs, respectively.
See GAAP to non-GAAP reconciliation on page 15.

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

	2012													2011
	1st			2nd			3rd				YTD			1st				2nd			3rd			YTD			4th
	Quarter			Quarter			Quarter				2012			Quarter				Quarter			Quarter			2011			Quarter			Full Year
Income Statement Data:

Revenues	$	81,749		$	81,024		$	82,231			$	245,004		$	76,905			$	85,081		$	80,151		$	242,137		$	84,991		$	327,128

Expenses		50,553			48,042			50,163				148,758			53,032		(a)		50,958			48,103			152,093			49,471			201,564

Operating income before
management fee		31,196			32,982			32,068				96,246			23,873				34,123			32,048			90,044			35,520			125,564

Investment income/(loss)		15,114			(2,389	)		2,140		(b)		14,865			10,676				5,530			(14,329	)		1,877			10,268			12,145
Interest expense		(4,404	)		(4,429	)		(3,586	)			(12,419	)		(2,867	)			(3,403	)		(4,418	)		(10,688	)		(4,309	)		(14,997	)
Other income/(expense), net		10,710			(6,818	)		(1,446	)			2,446			7,809				2,127			(18,747	)		(8,811	)		5,959			(2,852	)

Income before management
fee and income taxes		41,906			26,164			30,622				98,692			31,682				36,250			13,301			81,233			41,479			122,712
Management fee expense		4,184			2,615			3,056				9,855			3,113				3,626			1,387			8,126			4,144			12,270
Income before income taxes		37,722			23,549			27,566				88,837			28,569				32,624			11,914			73,107			37,335			110,442
Income tax expense		13,756			8,686			8,467				30,909			10,288				11,945			4,745			26,978			13,789			40,767
Net income		23,966			14,863			19,099				57,928			18,281				20,679			7,169			46,129			23,546			69,675
Net income/(loss) attributable
to noncontrolling interests		130			(242	)		95				(17	)		638				32			(530	)		140			(147	)		(7	)
Net income attributable to
GAMCO Investors, Inc.	$	23,836		$	15,105		$	19,004			$	57,945		$	17,643			$	20,647		$	7,699		$	45,989		$	23,693		$	69,682

Net income per share
attributable to GAMCO
Investors, Inc.:
Basic	$	0.90		$	0.58		$	0.72			$	2.20		$	0.66			$	0.77		$	0.29		$	1.72		$	0.89		$	2.62

Diluted	$	0.90		$	0.57		$	0.72			$	2.19		$	0.65			$	0.77		$	0.29		$	1.72		$	0.89		$	2.61

Weighted average shares outstanding:
Basic		26,415			26,258			26,250				26,309			26,901				26,665			26,496			26,686			26,488			26,636

Diluted		26,533			26,426			26,439				26,480			27,008				26,733			26,576			26,772			26,584			26,724
Reconciliation of non-GAAP
financial measures to GAAP:
Operating income before
management fee	$	31,196		$	32,982		$	32,068			$	96,246		$	23,873			$	34,123		$	32,048		$	90,044		$	35,520		$	125,564
Deduct: management fee expense		4,184			2,615			3,056				9,855			3,113				3,626			1,387			8,126			4,144			12,270
Operating income	$	27,012		$	30,367		$	29,012			$	86,391		$	20,760			$	30,497		$	30,661		$	81,918		$	31,376		$	113,294

Operating margin before
management fee		38.2	%		40.7	%		39.0	%			39.3	%		31.0	%			40.1	%		40.0	%		37.2	%		41.8	%		38.4	%
Operating margin after
management fee		33.0	%		37.5	%		35.3	%			35.3	%		27.0	%			35.8	%		38.3	%		33.8	%		36.9	%		34.6	%

(a) Includes $5.6 million in expenses directly related to the launch of a new closed-end fund.
(b) Includes $6.3 million loss on extinguishment of $64.6 million (face value) of 0% Subordinated Debentures.

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

	September 30,		December 31,		September 30,
	2012		2011		2011

ASSETS

Cash and cash equivalents	$	288,685	$	276,340	$	335,656
Investments (a)		402,272		398,440		368,609
Receivable from brokers		55,159		20,913		67,064
Other receivables		36,205		43,424		31,831
Income tax receivable		1,018		39		227
Other assets		15,232		17,593		17,503

Total assets	$	798,571	$	756,749	$	820,890

LIABILITIES AND EQUITY

Payable to brokers	$	28,039	$	10,770	$	15,590
Income taxes payable and deferred tax liabilities		16,445		15,296		21,235
Compensation payable		33,998		17,695		31,559
Securities sold short, not yet purchased		3,856		5,488		6,743
Accrued expenses and other liabilities		36,513		30,899		38,040
Sub-total		118,851		80,148		113,167

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
0% Subordinated Debentures (due December 31, 2015) (b)		17,118		64,119		62,973
Total debt		216,118		263,119		261,973
Total liabilities		334,969		343,267		375,140

Redeemable noncontrolling interests		20,228		6,071		38,050

GAMCO Investors, Inc.'s stockholders' equity		440,013		403,972		404,000
Noncontrolling interests		3,361		3,439		3,700
Total equity		443,374		407,411		407,700

Total liabilities and equity	$	798,571	$	756,749	$	820,890

(a) Includes investments in sponsored registered investment companies of $64.2 million, $59.2 million and $55.6 million, respectively.
(b) The 0% Subordinated Debentures due December 31, 2015 have a face value of $21.8 million at September 30, 2012,
$86.3 million at December 31, 2011 and $86.4 million at September 30, 2011.

GABELLI/GAMCO FUNDS		Gabelli/GAMCO Funds Lipper Rankings as of September 30, 2012
		1 Yr - 9/30/11-9/30/12		3 Yrs - 9/30/09-9/30/12		5 Yrs - 9/30/07-9/30/12		10 Yrs - 9/30/02-9/30/12
		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	51	406/806	16	106/686	13	74/594	11	36/344
Gabelli Value Fund; A	Multi-Cap Core Funds	32	256/806	3	14/686	17	101/594	19	65/344
Gabelli SRI; AAA	Global Small/Mid-Cap Funds	84	87/103	60	53/88	8	5/70	-	-
Gabelli Eq:Eq Inc; AAA	Equity Income Funds	75	222/297	63	155/246	34	71/213	15	16/106
GAMCO Growth; AAA	Large-Cap Growth Funds	13	89/717	81	526/650	77	427/560	56	209/373
Gabelli Eq:SC Gro; AAA	Small-Cap Core Funds	75	528/712	44	272/621	12	63/535	11	35/324
Gabelli Focus Five Fund; AAA	Small-Cap Core Funds	7	45/712	47	292/621	39	204/535	-	-
GAMCO Gl:Oppty; AAA	Global Multi-Cap Growth	51	109/213	47	68/146	24	17/71	20	7/35
GAMCO Gl:Growth; AAA	Global Large-Cap Growth	6	4/78	16	11/70	33	20/61	27	12/44
Gabelli Gold; AAA	Precious Metal Funds	15	11/73	35	21/59	32	17/53	45	16/35
GAMCO Intl Gro; AAA	International Large-Cap Growth	56	121/216	6	11/204	17	26/160	43	49/115
Gabelli Dividend Growth Fund; AAA	Large-Cap Value Funds	65	293/456	57	231/410	19	66/347	2	3/225
Gabelli Inv:ABC; AAA	Specialty Diversified Equity Funds	57	27/47	52	16/30	41	11/26	23	2/8
GAMCO Mathers; AAA	Specialty Diversified Equity Funds	84	40/47	75	23/30	75	20/26	34	3/8
Comstock Cap Val; A	Specialty Diversified Equity Funds	96	46/47	91	28/30	89	24/26	78	7/8
GAMCO Gl:Telecom; AAA	Telecommunications Funds	66	25/37	74	25/33	50	13/25	34	6/17
GAMCO Gl:Vertumnus; AAA	Convertible Securities Funds	98	71/72	88	48/54	96	41/42	91	29/31
Gabelli Utilities; AAA	Utility Funds	50	37/73	75	51/67	15	9/62	63	27/42
787:Gabelli Merg&Acq; A	Mid-Cap Core Funds	100	373/375	97	318/330	65	179/278	98	181/184
Gabelli Capital Asset Fund	Distributed through Insurance Channel	17	48/290	5	14/279	19	51/262	10	15/143
% of funds in top half		35.0%		45.0%		75.0%		72.2%

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 35%, 45%, 75% and 72% 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 September 30, 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.

GAMCO INVESTORS, INC. ET AL - FORM 8-K - EX-99.1 - EXHIBIT 99.1, DATED NOVEMBER 2, 2012 - November 2, 2012

Attached files

GAMCO INVESTORS, INC. ET AL Reports