Attached files
file | filename |
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EX-32.2 - EXHIBIT 32.2, DATED NOVEMBER 4, 2015 - GAMCO INVESTORS, INC. ET AL | ex32_2093015.htm |
EX-32.1 - EXHIBIT 32.1, DATED NOVEMBER 4, 2015 - GAMCO INVESTORS, INC. ET AL | ex32_1093015.htm |
EX-31.1 - EXHIBIT 31.1, DATED NOVEMBER 4, 2015 - GAMCO INVESTORS, INC. ET AL | ex31_1093015.htm |
EX-31.2 - EXHIBIT 31.2, DATED NOVEMBER 4, 2015 - GAMCO INVESTORS, INC. ET AL | ex31_2093015.htm |
EX-31.3 - EXHIBIT 31.3, DATED NOVEMBER 4, 2015 - GAMCO INVESTORS, INC. ET AL | ex31_3093015.htm |
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 September 30, 2015
or
☐ 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 October 31, 2015
|
|
Class A Common Stock, .001 par value
|
(Including 556,100 restricted stock awards)
|
6,247,452
|
Class B Common Stock, .001 par value
|
|
19,196,792
|
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, 2015 and 2014
|
|||
- Nine months ended September 30, 2015 and 2014
|
|||
|
|
||
Condensed Consolidated Statements of Comprehensive Income:
|
|||
- Three months ended March 31, 2015 and 2014
|
|||
- Nine months ended September 30, 2015 and 2014
|
|||
|
Condensed Consolidated Statements of Financial Condition:
|
||
|
- September 30, 2015
|
||
|
- December 31, 2014
|
||
|
- September 30, 2014
|
||
|
|
||
|
Condensed Consolidated Statements of Equity:
|
||
|
- Nine months ended September 30, 2015 and 2014
|
||
|
|
||
|
Condensed Consolidated Statements of Cash Flows:
|
||
|
- Nine months ended September 30, 2015 and 2014
|
||
|
|
||
|
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
|
|
2
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
UNAUDITED
(Dollars in thousands, except per share data)
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Revenues
|
||||||||||||||||
Investment advisory and incentive fees
|
$
|
82,182
|
$
|
92,591
|
$
|
257,563
|
$
|
270,544
|
||||||||
Distribution fees and other income
|
12,301
|
15,727
|
39,402
|
46,367
|
||||||||||||
Institutional research services
|
2,063
|
2,540
|
6,130
|
6,720
|
||||||||||||
Total revenues
|
96,546
|
110,858
|
303,095
|
323,631
|
||||||||||||
Expenses
|
||||||||||||||||
Compensation
|
39,731
|
43,316
|
127,627
|
131,258
|
||||||||||||
Management fee
|
2,682
|
3,756
|
11,360
|
13,628
|
||||||||||||
Distribution costs
|
12,344
|
15,101
|
39,747
|
44,087
|
||||||||||||
Other operating expenses
|
5,593
|
5,099
|
19,271
|
17,036
|
||||||||||||
Total expenses
|
60,350
|
67,272
|
198,005
|
206,009
|
||||||||||||
|
||||||||||||||||
Operating income
|
36,196
|
43,586
|
105,090
|
117,622
|
||||||||||||
Other income (expense)
|
||||||||||||||||
Net gain/(loss) from investments
|
(11,467
|
)
|
(9,086
|
)
|
(614
|
)
|
7,468
|
|||||||||
Interest and dividend income
|
884
|
1,084
|
3,227
|
3,557
|
||||||||||||
Interest expense
|
(1,917
|
)
|
(1,987
|
)
|
(5,899
|
)
|
(6,000
|
)
|
||||||||
Total other income/(expense), net
|
(12,500
|
)
|
(9,989
|
)
|
(3,286
|
)
|
5,025
|
|||||||||
Income before income taxes
|
23,696
|
33,597
|
101,804
|
122,647
|
||||||||||||
Income tax provision
|
9,245
|
13,045
|
38,547
|
44,796
|
||||||||||||
Net income
|
14,451
|
20,552
|
63,257
|
77,851
|
||||||||||||
Net loss attributable to noncontrolling interests
|
(518
|
)
|
(3,113
|
)
|
(589
|
)
|
(2,718
|
)
|
||||||||
Net income attributable to GAMCO Investors, Inc.'s shareholders
|
$
|
14,969
|
$
|
23,665
|
$
|
63,846
|
$
|
80,569
|
||||||||
|
||||||||||||||||
Net income attributable to GAMCO Investors, Inc.'s shareholders per share:
|
||||||||||||||||
Basic
|
$
|
0.60
|
$
|
0.94
|
$
|
2.55
|
$
|
3.17
|
||||||||
|
||||||||||||||||
Diluted
|
$
|
0.59
|
$
|
0.93
|
$
|
2.52
|
$
|
3.15
|
||||||||
|
||||||||||||||||
Weighted average shares outstanding:
|
||||||||||||||||
Basic
|
24,947
|
25,296
|
25,047
|
25,385
|
||||||||||||
|
||||||||||||||||
Diluted
|
25,241
|
25,517
|
25,337
|
25,595
|
||||||||||||
|
||||||||||||||||
Dividends declared:
|
$
|
0.07
|
$
|
0.06
|
$
|
0.21
|
$
|
0.18
|
See accompanying notes.
3
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
UNAUDITED
(Dollars in thousands, except per share data)
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Net income
|
$
|
14,451
|
$
|
20,552
|
$
|
63,257
|
$
|
77,851
|
||||||||
Other comprehensive income/(loss), net of tax:
|
||||||||||||||||
Foreign currency translation
|
(35
|
)
|
(45
|
)
|
(22
|
)
|
(15
|
)
|
||||||||
Net unrealized losses on securities available for sale (a)
|
(6,696
|
)
|
(2,407
|
)
|
(7,417
|
)
|
(6,832
|
)
|
||||||||
Other comprehensive income / (loss)
|
(6,731
|
)
|
(2,452
|
)
|
(7,439
|
)
|
(6,847
|
)
|
||||||||
Comprehensive income
|
7,720
|
18,100
|
55,818
|
71,004
|
||||||||||||
Less: Comprehensive loss attributable to noncontrolling interests
|
(518
|
) |
(3,113
|
) |
(589
|
) |
(2,718
|
) | ||||||||
Comprehensive income attributable to GAMCO Investors, Inc.
|
$
|
8,238
|
$
|
21,213
|
$
|
56,407
|
$
|
73,722
|
(a) Net of income tax benefit of ($3,932), ($1,414), ($4,356) and ($4,013),respectively.
See accompanying notes.
4
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
UNAUDITED
(Dollars in thousands, except per share data)
|
September 30,
|
December 31,
|
September 30,
|
|||||||||
2015
|
2014
|
2014
|
||||||||||
ASSETS
|
||||||||||||
Cash and cash equivalents
|
$
|
425,616
|
$
|
298,224
|
$
|
358,421
|
||||||
Investments in securities
|
126,917
|
259,537
|
254,630
|
|||||||||
Investments in sponsored registered investment companies
|
115,046
|
39,537
|
39,520
|
|||||||||
Investments in partnerships
|
101,025
|
107,637
|
107,434
|
|||||||||
Receivable from brokers
|
52,918
|
76,079
|
79,885
|
|||||||||
Investment advisory fees receivable
|
28,629
|
41,872
|
31,155
|
|||||||||
Income tax receivable
|
2,409
|
2,477
|
2,433
|
|||||||||
Other assets
|
20,109
|
41,067
|
25,282
|
|||||||||
Total assets
|
$
|
872,669
|
$
|
866,430
|
$
|
898,760
|
||||||
|
||||||||||||
LIABILITIES AND EQUITY
|
||||||||||||
Payable to brokers
|
$
|
49,074
|
$
|
43,409
|
$
|
46,790
|
||||||
Income taxes payable and deferred tax liabilities
|
10,529
|
27,939
|
27,412
|
|||||||||
Capital lease obligation
|
5,191
|
5,253
|
5,272
|
|||||||||
Compensation payable
|
88,747
|
39,983
|
93,535
|
|||||||||
Securities sold, not yet purchased
|
5,577
|
10,595
|
14,180
|
|||||||||
Mandatorily redeemable noncontrolling interests
|
1,257
|
1,302
|
1,304
|
|||||||||
Accrued expenses and other liabilities
|
34,246
|
29,657
|
31,007
|
|||||||||
Sub-total
|
194,621
|
158,138
|
219,500
|
|||||||||
|
||||||||||||
5.875% Senior notes (due June 1, 2021)
|
100,000
|
100,000
|
100,000
|
|||||||||
Zero coupon subordinated debentures, Face value: $6.9 million at September 30, 2015, $13.1
|
||||||||||||
million at December 31, 2014 and $13.1 million at September 30, 2014 (due December 31, 2015)
|
6,750
|
12,163
|
11,941
|
|||||||||
Total liabilities
|
301,371
|
270,301
|
331,441
|
|||||||||
|
||||||||||||
Redeemable noncontrolling interests
|
6,018
|
68,334
|
56,086
|
|||||||||
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;
|
||||||||||||
15,387,701, 15,341,433 and 15,230,433 issued, respectively; 6,340,992,
|
||||||||||||
6,616,212 and 6,599,982 outstanding, respectively
|
14
|
14
|
14
|
|||||||||
Class B Common Stock, $0.001 par value; 100,000,000 shares authorized;
|
||||||||||||
24,000,000 shares issued; 19,196,792, 19,239,260 and 19,279,260 shares
|
||||||||||||
outstanding, respectively
|
19
|
19
|
19
|
|||||||||
Additional paid-in capital
|
299,769
|
291,681
|
289,664
|
|||||||||
Retained earnings
|
661,415
|
602,950
|
582,357
|
|||||||||
Accumulated other comprehensive income
|
17,575
|
25,014
|
23,392
|
|||||||||
Treasury stock, at cost (9,046,709, 8,725,221 and 8,630,451 shares, respectively)
|
(416,147
|
)
|
(394,617
|
)
|
(386,952
|
)
|
||||||
Total GAMCO Investors, Inc. stockholders' equity
|
562,645
|
525,061
|
508,494
|
|||||||||
Noncontrolling interests
|
2,635
|
2,734
|
2,739
|
|||||||||
Total equity
|
565,280
|
527,795
|
511,233
|
|||||||||
|
||||||||||||
Total liabilities and equity
|
$
|
872,669
|
$
|
866,430
|
$
|
898,760
|
See accompanying notes.
5
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
UNAUDITED
(In thousands)
For the Nine months ended September 30, 2015
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, 2014
|
$
|
2,734
|
$
|
33
|
$
|
291,681
|
$
|
602,950
|
$
|
25,014
|
$
|
(394,617
|
)
|
$
|
527,795
|
$
|
68,334
|
|||||||||||||||
Redemptions of redeemable
|
||||||||||||||||||||||||||||||||
noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(602
|
)
|
|||||||||||||||||||||||
Contributions from redeemable
|
||||||||||||||||||||||||||||||||
noncontrolling
|
||||||||||||||||||||||||||||||||
interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,036
|
||||||||||||||||||||||||
Consolidation of a consolidated
|
||||||||||||||||||||||||||||||||
feeder fund and a partnership
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
996
|
||||||||||||||||||||||||
Deconsolidation of offshore
|
||||||||||||||||||||||||||||||||
fund
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(63,256
|
)
|
|||||||||||||||||||||||
Net income (loss)
|
(99
|
)
|
-
|
-
|
63,846
|
-
|
-
|
63,747
|
(490
|
)
|
||||||||||||||||||||||
Net unrealized losses on
|
||||||||||||||||||||||||||||||||
securities available for sale,
|
||||||||||||||||||||||||||||||||
net of income tax benefit ($4,341)
|
-
|
-
|
-
|
-
|
(7,392
|
)
|
-
|
(7,392
|
)
|
-
|
||||||||||||||||||||||
Amounts reclassified from
|
||||||||||||||||||||||||||||||||
accumulated other
|
||||||||||||||||||||||||||||||||
comprehensive income,
|
||||||||||||||||||||||||||||||||
net of income tax benefit ($15)
|
-
|
-
|
-
|
-
|
(25
|
)
|
-
|
(25
|
)
|
-
|
||||||||||||||||||||||
Foreign currency translation
|
-
|
-
|
-
|
-
|
(22
|
)
|
-
|
(22
|
)
|
-
|
||||||||||||||||||||||
Dividends declared ($0.21 per
|
||||||||||||||||||||||||||||||||
share)
|
-
|
-
|
-
|
(5,381
|
)
|
-
|
-
|
(5,381
|
)
|
-
|
||||||||||||||||||||||
Stock based compensation
|
||||||||||||||||||||||||||||||||
expense
|
-
|
-
|
6,819
|
-
|
-
|
-
|
6,819
|
-
|
||||||||||||||||||||||||
Exercise of stock options
|
||||||||||||||||||||||||||||||||
including tax benefit ($102)
|
-
|
-
|
1,269
|
-
|
-
|
-
|
1,269
|
-
|
||||||||||||||||||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
-
|
-
|
(21,530
|
)
|
(21,530
|
)
|
-
|
||||||||||||||||||||||
Balance at September 30, 2015
|
$
|
2,635
|
$
|
33
|
$
|
299,769
|
$
|
661,415
|
$
|
17,575
|
$
|
(416,147
|
)
|
$
|
565,280
|
$
|
6,018
|
See accompanying notes.
6
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
UNAUDITED
(In thousands)
For the NIne months ended September 30, 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 redeemable
|
||||||||||||||||||||||||||||||||
noncontrollin interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,666
|
)
|
|||||||||||||||||||||||
Contributions from redeemable
|
||||||||||||||||||||||||||||||||
noncontrolling
|
||||||||||||||||||||||||||||||||
interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
53,607
|
||||||||||||||||||||||||
Net income (loss)
|
(112
|
)
|
-
|
-
|
80,569
|
-
|
-
|
80,457
|
(2,606
|
)
|
||||||||||||||||||||||
Net unrealized losses on
|
||||||||||||||||||||||||||||||||
securities available for sale,
|
||||||||||||||||||||||||||||||||
net of income tax ($1,393)
|
-
|
-
|
-
|
-
|
(2,371
|
)
|
-
|
(2,371
|
)
|
-
|
||||||||||||||||||||||
Amount reclassed from
|
||||||||||||||||||||||||||||||||
accumulated other
|
||||||||||||||||||||||||||||||||
comprehensive income,
|
||||||||||||||||||||||||||||||||
net of income tax benefit ($2,620)
|
-
|
-
|
-
|
-
|
(4,461
|
)
|
-
|
(4,461
|
)
|
-
|
||||||||||||||||||||||
Foreign currency translation
|
-
|
-
|
-
|
-
|
(15
|
)
|
-
|
(15
|
)
|
-
|
||||||||||||||||||||||
Dividends declared ($0.18 per
|
||||||||||||||||||||||||||||||||
share)
|
-
|
-
|
-
|
(4,653
|
)
|
-
|
-
|
(4,653
|
)
|
-
|
||||||||||||||||||||||
Stock based compensation
|
||||||||||||||||||||||||||||||||
expense
|
-
|
-
|
5,182
|
-
|
-
|
-
|
5,182
|
-
|
||||||||||||||||||||||||
Exercise of stock options
|
||||||||||||||||||||||||||||||||
including tax benefit ($349)
|
-
|
-
|
1,986
|
-
|
-
|
-
|
1,986
|
-
|
||||||||||||||||||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
-
|
-
|
(25,074
|
)
|
(25,074
|
)
|
-
|
||||||||||||||||||||||
Balance at September 30, 2014
|
$
|
2,739
|
$
|
33
|
$
|
289,664
|
$
|
582,357
|
$
|
23,392
|
$
|
(386,952
|
)
|
$
|
511,233
|
$
|
56,086
|
See accompanying notes.
7
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(In thousands)
|
Nine Months Ended
|
|||||||
September 30,
|
||||||||
|
2015
|
2014
|
||||||
Operating activities
|
||||||||
Net income
|
$
|
63,257
|
$
|
77,851
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Equity in net gains from partnerships
|
(681
|
)
|
(572
|
)
|
||||
Depreciation and amortization
|
475
|
507
|
||||||
Stock based compensation expense
|
6,819
|
5,182
|
||||||
Deferred income taxes
|
(8,033
|
)
|
(3,472
|
)
|
||||
Tax benefit from exercise of stock options
|
102
|
349
|
||||||
Foreign currency translation gain/(loss)
|
(22
|
)
|
(15
|
)
|
||||
Other-than-temporary loss on available for sale securities
|
150
|
69
|
||||||
Cost basis of donated securities
|
104
|
1,502
|
||||||
Gains on sales of available for sale securities
|
(30
|
)
|
(3,511
|
)
|
||||
Accretion of zero coupon debentures
|
502
|
661
|
||||||
Loss on extinguishment of debt
|
310
|
84
|
||||||
(Increase) decrease in assets:
|
||||||||
Investments in trading securities
|
29,096
|
(22,376
|
)
|
|||||
Investments in partnerships:
|
||||||||
Contributions to partnerships
|
(15,170
|
)
|
(15,698
|
)
|
||||
Distributions from partnerships
|
22,800
|
4,828
|
||||||
Receivable from brokers
|
(24,745
|
)
|
(30,424
|
)
|
||||
Investment advisory fees receivable
|
13,046
|
20,351
|
||||||
Income tax receivable and deferred tax assets
|
68
|
(1,988
|
)
|
|||||
Other assets
|
20,402
|
563
|
||||||
Increase (decrease) in liabilities:
|
||||||||
Payable to brokers
|
42,930
|
36,026
|
||||||
Income taxes payable and deferred tax liabilities
|
(5,019
|
)
|
(4,950
|
)
|
||||
Compensation payable
|
48,768
|
58,873
|
||||||
Mandatorily redeemable noncontrolling interests
|
(45
|
)
|
(51
|
)
|
||||
Accrued expenses and other liabilities
|
5,092
|
(1,639
|
)
|
|||||
Total adjustments
|
136,919
|
44,299
|
||||||
Net cash provided by operating activities
|
$
|
200,176
|
$
|
122,150
|
8
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED (continued)
(In thousands)
|
Nine Months Ended
|
|||||||
September 30,
|
||||||||
|
2015
|
2014
|
||||||
Investing activities
|
||||||||
Purchases of available for sale securities
|
$
|
(43,030
|
)
|
$
|
(6,252
|
)
|
||
Proceeds from sales of available for sale securities
|
1,064
|
8,018
|
||||||
Return of capital on available for sale securities
|
554
|
827
|
||||||
Net cash (used in) provided by investing activities
|
(41,412
|
)
|
2,593
|
|||||
|
||||||||
Financing activities
|
||||||||
Contributions from redeemable noncontrolling interests
|
1,036
|
53,607
|
||||||
Redemptions of redeemable noncontrolling interests
|
(602
|
)
|
(1,666
|
)
|
||||
Redemptions of noncontrolling interests
|
-
|
-
|
||||||
Proceeds from exercise of stock options
|
1,169
|
1,637
|
||||||
Dividends paid
|
(5,252
|
)
|
(4,567
|
)
|
||||
Repurchase of zero coupon subordinated debentures
|
(6,224
|
)
|
(715
|
)
|
||||
Purchase of treasury stock
|
(21,530
|
)
|
(25,074
|
)
|
||||
Net cash (used in) provided by financing activities
|
(31,403
|
)
|
23,222
|
|||||
Effect of exchange rates on cash and cash equivalents
|
8
|
5
|
||||||
Net increase in cash and cash equivalents
|
127,369
|
147,970
|
||||||
Cash and cash equivalents at beginning of period
|
298,224
|
210,451
|
||||||
Increase in cash from consolidation
|
10
|
-
|
||||||
Increase in cash from deconsolidation
|
13
|
-
|
||||||
Cash and cash equivalents at end of period
|
$
|
425,616
|
$
|
358,421
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
3,897
|
$
|
3,847
|
||||
Cash paid for taxes
|
$
|
49,590
|
$
|
52,956
|
||||
|
||||||||
Non-cash activity:
|
||||||||
- For the nine months ended September 30, 2015 and September 30, 2014, the Company accrued dividends on restricted stock awards of $129 and $86, respectively.
- On January 1, 2015, GAMCO Investors, Inc. was no longer deemed to have control over a certain offshore fund and a certain consolidated feeder fund which resulted in the deconsolidation of that offshore fund and consolidated feeder fund and an increase of approximately $13 of cash and cash equivalents, a decrease of approximately $63,280 of net assets and a decrease of $63,267 of noncontrolling interests.
- On April 1, 2015, GAMCO Investors, Inc. was deemed to have control over a certain offshore fund and a certain partnership which resulted in the consolidation of that one offshore fund and one partnership and an increase of approximately $10 of cash and cash equivalents, an increase of approximately $986 of other net assets and an increase of approximately $996 of redeemable noncontrolling interest.
|
See accompanying notes.
9
GAMCO INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
(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 interim condensed consolidated financial statements include the accounts of GAMCO and its subsidiaries. Intercompany accounts and transactions are eliminated.
These interim 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, 2014 from which the accompanying condensed consolidated financial statements were derived.
Use of Estimates
The preparation of the interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported on the interim condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Recent Accounting Developments
In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, "Revenue from Contracts with Customers," which supersedes the revenue recognition requirements in the Accounting Standards Codification ("Codification") Topic 605, Revenue Recognition, and most industry-specific guidance throughout the industry topics of the Codification. The core principle of the new ASU No. 2014-09 is for companies to recognize revenue from the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard provides a five-step approach to be applied to all contracts with customers and also requires expanded disclosures about revenue recognition. The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods and is to be retrospectively applied. Early adoption is not permitted. The Company is currently evaluating this guidance and the impact it will have on its consolidated financial statements.
In June 2014, the FASB issued an accounting update clarifying that entities should treat performance targets that could be met after the requisite service period of a share-based payment award as performance conditions that affect vesting. Therefore, an entity would not record compensation expense (measured as of the grant date) for an award where transfer to the employee is contingent upon satisfaction of the performance target until it becomes probable that the performance target will be met. The guidance is effective for the Company beginning January 1, 2016. Early adoption is permitted. This guidance is not expected to have a material impact on the Company's consolidated financial statements.
In February 2015, the FASB issued an accounting update amending the consolidation requirements under GAAP. This guidance is effective for the Company beginning January 1, 2016. Early adoption is permitted. The Company is continuing to analyze the impact, if any, that this update may have on its consolidated financial statements.
10
In May 2015, the FASB issued new guidance amending the current disclosure requirements for investments in certain entities that calculate net asset value per share. The guidance requires investments for which fair value is measured using the net asset value per share practical expedient be removed from the fair value hierarchy. Instead, those investment amounts shall be provided as a separate item to permit reconciliation of the fair value of investments included in the fair value hierarchy to the line items presented in the statement of financial condition. This new guidance will be effective for the Company's first quarter of 2016. The Company is currently evaluating the potential impact on its consolidated financial statements and related disclosures.
B. Investment in Securities
Investments in securities at September 30, 2015, December 31, 2014 and September 30, 2014 consisted of the following:
|
September 30, 2015
|
December 31, 2014
|
September 30, 2014
|
|||||||||||||||||||||
|
Cost
|
Fair Value
|
Cost
|
Fair Value
|
Cost
|
Fair Value
|
||||||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||
Trading securities:
|
||||||||||||||||||||||||
Government obligations
|
$
|
-
|
$
|
-
|
$
|
18,994
|
$
|
18,996
|
$
|
20,995
|
$
|
20,999
|
||||||||||||
Common stocks
|
78,025
|
87,745
|
170,977
|
195,029
|
167,714
|
190,939
|
||||||||||||||||||
Mutual funds
|
2,504
|
3,180
|
2,432
|
3,498
|
2,416
|
3,373
|
||||||||||||||||||
Other investments
|
505
|
723
|
743
|
1,704
|
753
|
1,550
|
||||||||||||||||||
Total trading securities
|
81,034
|
91,648
|
193,146
|
219,227
|
191,878
|
216,861
|
||||||||||||||||||
|
||||||||||||||||||||||||
Available for sale securities:
|
||||||||||||||||||||||||
Common stocks
|
13,561
|
34,095
|
13,637
|
38,942
|
14,228
|
36,380
|
||||||||||||||||||
Mutual funds
|
627
|
1,174
|
681
|
1,368
|
681
|
1,389
|
||||||||||||||||||
Total available for sale securities
|
14,188
|
35,269
|
14,318
|
40,310
|
14,909
|
37,769
|
||||||||||||||||||
|
||||||||||||||||||||||||
Total investments in securities
|
$
|
95,222
|
$
|
126,917
|
$
|
207,464
|
$
|
259,537
|
$
|
206,787
|
$
|
254,630
|
Securities sold, not yet purchased at September 30, 2015, December 31, 2014 and September 30, 2014 consisted of the following:
|
September 30, 2015
|
December 31, 2014
|
September 30, 2014
|
|||||||||||||||||||||
|
Proceeds
|
Fair Value
|
Proceeds
|
Fair Value
|
Proceeds
|
Fair Value
|
||||||||||||||||||
Trading securities:
|
(In thousands)
|
|||||||||||||||||||||||
Common stocks
|
$
|
6,123
|
$
|
5,482
|
$
|
9,835
|
$
|
9,960
|
$
|
11,699
|
$
|
13,514
|
||||||||||||
Other investments
|
8
|
95
|
1
|
635
|
71
|
666
|
||||||||||||||||||
Total securities sold, not yet purchased
|
$
|
6,131
|
$
|
5,577
|
$
|
9,836
|
$
|
10,595
|
$
|
11,770
|
$
|
14,180
|
Investments in sponsored registered investment companies at September 30, 2015, December 31,2014 and September 30, 2014 consisted of the following:
|
September 30, 2015
|
December 31, 2014
|
September 30, 2014
|
|||||||||||||||||||||
|
Cost
|
Fair Value
|
Cost
|
Fair Value
|
Cost
|
Fair Value
|
||||||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||
Trading securities:
|
||||||||||||||||||||||||
Mutual funds
|
$
|
40,097
|
$
|
41,820
|
$
|
1
|
$
|
1
|
$
|
1
|
$
|
1
|
||||||||||||
Total trading securities
|
40,097
|
41,820
|
1
|
1
|
1
|
1
|
||||||||||||||||||
|
||||||||||||||||||||||||
Available for sale securities:
|
||||||||||||||||||||||||
Closed-end funds
|
63,068
|
70,349
|
21,962
|
36,323
|
21,819
|
36,142
|
||||||||||||||||||
Mutual funds
|
1,883
|
2,877
|
1,898
|
3,213
|
1,922
|
3,377
|
||||||||||||||||||
Total available for sale securities
|
64,951
|
73,226
|
23,860
|
39,536
|
23,741
|
39,519
|
||||||||||||||||||
|
||||||||||||||||||||||||
Total investments in sponsored
|
||||||||||||||||||||||||
registered investment companies
|
$
|
105,048
|
$
|
115,046
|
$
|
23,861
|
$
|
39,537
|
$
|
23,742
|
$
|
39,520
|
11
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 consolidated 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. The portion of investments in securities held for resale in anticipation of short-term market movements are 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 ("OTT") 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 ("AOCI") into income for the three and nine months ended September 30, 2015 and 2014 (in thousands):
Amount
|
Affected Line Items
|
Reason for
|
|||||||
Reclassified
|
in the Statements
|
Reclassification
|
|||||||
from AOCI
|
Of Income
|
from AOCI
|
|||||||
Three months ended September 30,
|
|
|
|||||||
2015
|
2014
|
||||||||
$
|
-
|
$
|
348
|
Net gain/(loss) from investments
|
Realized gain on sale of AFS securities
|
||||
45
|
-
|
Other operating expenses/net gain from investments
|
Realized gain on donation of AFS securities
|
||||||
(150
|
)
|
-
|
Net gain/(loss) from investments
|
OTT impairment of AFS securities
|
|||||
(105
|
)
|
348
|
Income before income taxes
|
|
|||||
39
|
(129
|
)
|
Income tax provision
|
|
|||||
$
|
(66
|
)
|
$
|
219
|
Net income
|
|
|||
Amount
|
Affected Line Items
|
Reason for
|
|||||||
Reclassified
|
in the Statements
|
Reclassification
|
|||||||
from AOCI
|
Of Income
|
from AOCI
|
|||||||
Nine months ended September 30,
|
|||||||||
2015
|
2014
|
||||||||
$
|
30
|
$
|
3,511
|
Net gain/(loss) from investments
|
Realized gain on sale of AFS securities
|
||||
80
|
3,639
|
Other operating expenses/net gain from investments
|
Realized gain on donation of AFS securities
|
||||||
(150
|
)
|
(69
|
)
|
Net gain/(loss) from investments
|
OTT impairment of AFS securities
|
||||
(40
|
)
|
7,081
|
Income before income taxes
|
||||||
15
|
(2,620
|
)
|
Income tax provision
|
||||||
$
|
(25
|
)
|
$
|
4,461
|
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. At September 30, 2015, December 31, 2014 and September 30, 2014, we held derivative contracts on 170,000 equity shares, 3.8 million equity shares and 2.3 million equity shares, respectively, that are included in investments in securities or securities sold, not yet purchased on the condensed consolidated statements of financial condition. We had two, one and one foreign exchange contracts outstanding at September 30, 2015, December 31, 2014 and September 30, 2014, respectively, that are included in receivable from brokers or payable to brokers on the condensed consolidated statements of financial condition. Aside from one foreign exchange contract, 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 on the condensed consolidated statements of income. The one foreign exchange contract that is designated as a hedge was for a short of British Pounds to hedge the long investment that we have in our London Stock Exchange listed Gabelli Value Plus+ Trust Ltd. closed-end fund which is denominated in British Pounds. As the underlying investment that is being hedged is an available for sale security, the portion of the change in value of the closed-end fund that is currency related is recorded in net gain/(loss) from investments on the condensed consolidated statements of income and not in accumulated comprehensive income.
12
The following tables identify the fair values and gains and losses of all derivatives held by the Company (in thousands):
|
|
Asset Derivatives Fair Value
|
|
Liability Derivatives Fair Value
|
||||||||||||||||||||||
Balance Sheet Location
|
September 30, 2015
|
December 31, 2014
|
September 30, 2014
|
Balance Sheet Location
|
September 30, 2015
|
December 31, 2014
|
September 30, 2014
|
|||||||||||||||||||
Derivatives designated as hedging instruments under
|
|
|||||||||||||||||||||||||
FASB ASC 815-20 | ||||||||||||||||||||||||||
Foreign exchange contracts
|
Receivable from brokers
|
$
|
-
|
$
|
-
|
$
|
-
|
Payable to brokers
|
$
|
36,354
|
$
|
-
|
$
|
-
|
||||||||||||
Sub total
|
|
$
|
-
|
$
|
-
|
$
|
-
|
|
$
|
36,354
|
$
|
-
|
$
|
-
|
||||||||||||
Derivatives Not Designated As Hedging Instruments Under Fasb Asc 815-20
|
|
|||||||||||||||||||||||||
Investments in | Securities sold, | |||||||||||||||||||||||||
Equity contracts
|
securities
|
$
|
143
|
$
|
896
|
$
|
800
|
not yet purchased
|
$
|
95
|
$
|
635
|
$
|
666
|
||||||||||||
Foreign exchange contracts
|
Receivable from brokers
|
-
|
-
|
-
|
Payable to brokers
|
5,172
|
5,470
|
6,343
|
||||||||||||||||||
Sub total
|
|
$
|
143
|
$
|
896
|
$
|
800
|
|
$
|
5,267
|
$
|
6,105
|
$
|
7,009
|
||||||||||||
Total derivatives
|
|
$
|
143
|
$
|
896
|
$
|
800
|
|
$
|
41,621
|
$
|
6,105
|
$
|
7,009
|
Type of Derivative
|
Income Statement Location
|
Three Months ended September 30,
|
Nine Months ended September 30,
|
||||||||||||||
|
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
Foreign exchange contracts
|
Net gain/(loss) from investments
|
$
|
1,985
|
$
|
482
|
$
|
1,885
|
$
|
541
|
||||||||
Equity contracts
|
Net gain/(loss) from investments
|
27
|
758
|
199
|
591
|
||||||||||||
Total
|
|
$
|
2,012
|
$
|
1,240
|
$
|
2,084
|
$
|
1,132
|
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)
|
|||||||||||||||||||||||
September 30, 2015
|
$
|
143
|
$
|
-
|
$
|
143
|
$
|
(89
|
)
|
$
|
-
|
$
|
54
|
|||||||||||
December 31, 2014
|
896
|
-
|
896
|
(634
|
)
|
-
|
262
|
|||||||||||||||||
September 30, 2014
|
$
|
800
|
$
|
-
|
$
|
800
|
$
|
(657
|
)
|
$
|
-
|
$
|
143
|
|||||||||||
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)
|
|||||||||||||||||||||||
September 30, 2015
|
$
|
89
|
$
|
-
|
$
|
89
|
$
|
(89
|
)
|
$
|
-
|
$
|
-
|
|||||||||||
December 31, 2014
|
634
|
-
|
634
|
(634
|
)
|
-
|
-
|
|||||||||||||||||
September 30, 2014
|
$
|
657
|
$
|
-
|
$
|
657
|
$
|
(657
|
)
|
$
|
-
|
$
|
-
|
13
The following is a summary of the cost, gross unrealized gains, gross unrealized losses and fair value of available for sale investments as of September 30, 2015, December 31, 2014 and September 30, 2014:
|
September 30, 2015
|
|||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Unrealized
|
Unrealized
|
|||||||||||||||
|
Cost
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
Common stocks
|
$
|
13,561
|
$
|
20,534
|
$
|
-
|
$
|
34,095
|
||||||||
Closed-end Funds
|
63,068
|
10,128
|
(2,847
|
)
|
70,349
|
|||||||||||
Mutual funds
|
2,510
|
1,620
|
(79
|
)
|
4,051
|
|||||||||||
Total available for sale securities
|
$
|
79,139
|
$
|
32,282
|
$
|
(2,926
|
)
|
$
|
108,495
|
|
December 31, 2014
|
|||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Unrealized
|
Unrealized
|
|||||||||||||||
|
Cost
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
Common stocks
|
$
|
13,637
|
$
|
25,305
|
$
|
-
|
$
|
38,942
|
||||||||
Closed-end Funds
|
21,962
|
14,398
|
(37
|
)
|
36,323
|
|||||||||||
Mutual funds
|
2,579
|
2,030
|
(28
|
)
|
4,581
|
|||||||||||
Total available for sale securities
|
$
|
38,178
|
$
|
41,733
|
$
|
(65
|
)
|
$
|
79,846
|
|
September 30, 2014
|
|||||||||||||||
Gross
|
Gross
|
|||||||||||||||
Unrealized
|
Unrealized
|
|||||||||||||||
|
Cost
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
Common stocks
|
$
|
14,228
|
$
|
22,152
|
$
|
-
|
$
|
36,380
|
||||||||
Closed-end Funds
|
21,819
|
14,325
|
(2
|
)
|
36,142
|
|||||||||||
Mutual funds
|
2,603
|
2,163
|
-
|
4,766
|
||||||||||||
Total available for sale securities
|
$
|
38,650
|
$
|
38,640
|
$
|
(2
|
)
|
$
|
77,288
|
Changes in net unrealized losses, net of taxes, for the three months ended September 30, 2015 and September 30, 2014 of ($6.7) million in losses and ($2.4) million in losses, respectively, have been included in other comprehensive income, a component of equity, at September 30, 2015 and September 30, 2014. Return of capital on available for sale securities was $0.3 million and $0.3 million for the three months ended September 30, 2015 and September 30, 2014, respectively. During the three months ended September 30, 2015, there were no proceeds from the sales of investments available for sale and no gross gains on the sale of investments available for sale. Proceeds from sales of investments available for sale were approximately $1.5 million for the three months ended September 30, 2014. For the three months ended September 30, 2014, gross gains on the sale of investments available for sale amounted to $0.3 million 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 September 30, 2015 or September 30, 2014. Changes in net unrealized losses, net of taxes, for the nine months ended September 30, 2015 and September 30, 2014 of $(7.4) million in losses and $(6.8) million in losses, respectively, have been included in other comprehensive income, a component of equity, at September 30, 2015 and September 30, 2014. Return of capital on available for sale securities was $0.6 million and $0.8 million for the nine months ended September 30, 2015 and September 30, 2014, respectively. Proceeds from sales of investments available for sale were approximately $1.1 million and $8.0 million for the nine months ended September 30, 2015 and September 30, 2014, respectively. For the nine months ended September 30, 2015 and September 30, 2014, gross gains on the sale of investments available for sale amounted to $30,000 and $3.5 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 nine months ended September 30, 2015 or September 30, 2014. The basis on which the cost of a security sold is determined using specific identification.
14
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:
|
September 30, 2015
|
December 31, 2014
|
September 30, 2014
|
|||||||||||||||||||||||||||||||||
Unrealized
|
Unrealized
|
Unrealized
|
||||||||||||||||||||||||||||||||||
|
Cost
|
Losses
|
Fair Value
|
Cost
|
Losses
|
Fair Value
|
Cost
|
Losses
|
Fair Value
|
|||||||||||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||||||||||||||
Cosed-end funds
|
$
|
40,537
|
$
|
(2,847
|
)
|
$
|
37,690
|
$
|
812
|
$
|
(37
|
)
|
$
|
775
|
$
|
79
|
$
|
(2
|
)
|
$
|
77
|
|||||||||||||||
Mutual Funds
|
303
|
(79
|
)
|
224
|
303
|
(28
|
)
|
275
|
-
|
-
|
-
|
|||||||||||||||||||||||||
Total available for sale securities
|
$
|
40,840
|
$
|
(2,926
|
)
|
$
|
37,914
|
$
|
1,115
|
$
|
(65
|
)
|
$
|
1,050
|
$
|
79
|
$
|
(2
|
)
|
$
|
77
|
At September 30, 2015, there were four 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 September 30, 2015 were mutual funds and closed-end funds with diversified holdings across multiple companies and across multiple industries. One holding was impaired for two months, one holding was impaired for three months, one holding was impaired for seven months and one holding was impaired for eight months at September 30, 2015. The value of these holdings at September 30, 2015 was $37.9 million.
At December 31, 2014, there were four 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 December 31, 2014 were mutual funds and closed-end funds with diversified holdings across multiple companies and across multiple industries. One holding was impaired for one month, one for three months and two for four months at December 31, 2014. The value of these holdings at December 31, 2014 was $1.1 million.
At September 30, 2014, 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 September 30, 2014 was a closed-end fund with diversified holdings across multiple companies and across multiple industries. The one holding was impaired for one month at September 30, 2014. The value of this holding at September 30, 2014 was $0.1 million.
For the three months ended September 30, 2015 there were $150,000 of losses on available for sale securities deemed to be other than temporary and a loss has been recorded in net gain from investments. There were no losses recognized on AFS securities for the three months ended September 30, 2014. For the nine months ended September 30, 2015 and September 30, 2014, there were $150,000 and $69,000, respectively, of losses on available for sale securities deemed to be other than temporary and a loss has been recorded in net gain from investments.
15
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 September 30, 2015, December 31, 2014 and September 30, 2014 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 September 30, 2015 (in thousands)
Quoted Prices in Active
|
Significant Other
|
Significant
|
Balance as of
|
|||||||||||||