Original GBL Prospectus - Gabelli

Commission revenues for the nine months ended September 30, 1998 were $6.2 million, an increase of
$0.6 million, or 10%, from commission revenues of $5.6 million in the same period a year earlier. The increase
principally resulted from increased agency trading activity for accounts managed by aÇliated companies.
Commission revenues derived from transactions on behalf of the Mutual Funds and Separate Accounts clients
totaled $4.9 million, or approximately 79% of total commission revenues for the Ñrst nine months of 1998.
Distribution fees and other income increased more than 92% to $9.8 million for the nine months ended
September 30, 1998 from $5.1 million in the Ñrst nine months of 1997. Increased 12b-1 fees, resulting from
the growth in assets under management and restructuring of the Mutual Funds' 12b-1 plans as compensation
plans, accounted for $4.1 million, or 88%, of the total increase in distribution fees and other income during the
Ñrst nine months of 1998 as compared to the same period a year earlier.
Total expenses for the Ñrst nine months of 1998 were $68.3 million, an increase of $13.8 million, or 25%,
from $54.5 million in the comparable period of 1997. Total expenses as a percentage of total revenues declined
to 67% from 73% as Ñxed expenses were spread over a larger revenue base. Compensation costs, which are
largely variable in nature and increase or decrease as revenues grow or decline, rose approximately $8.6
million, or 26%, to $41.7 million for the nine months ended September 30, 1998 from $33.1 million for the
nine months ended September 30, 1997. Management fee expense, which is totally variable and increases or
decreases as operating proÑts grow or decline, was $8.5 million for the nine months ended September 30, 1998,
an increase of $1.1 million, or 15%, from $7.4 million for the nine months ended September 30, 1997. Other
operating expenses, which include general operating expenses, as well as marketing, promotion and distribution
costs, were $18.1 million for the nine months ended September 30, 1998, an increase of approximately
$4.2 million, or 30%, from $13.9 million for the comparable period in 1997. Mutual fund administration and
distribution expenses accounted for more than $3.7 million, or 90%, of this increase and are directly related to
GFI's growth of assets under management.
Net gain from investments, which is derived from GFI's proprietary investment portfolio, was approximately
$13.5 million for the nine months ended September 30, 1998 compared to a net gain of $6.8 million for
the nine months ended September 30, 1997. This increase reÖects a net gain of approximately $17.4 million
from the sale of certain Personal Communications Services (""PCS'') licenses as well as lower losses from
hedging activities, which losses declined to $0.6 million in 1998 from a loss of $7.6 million in 1997. These
gains were partially reduced by market related losses from certain other public and private investments.
Interest and dividend income, net of interest expense, declined to $1.9 million for the Ñrst nine months of 1998
compared to $2.0 million in the same 1997 period. In connection with the Formation Transactions, GFI will
retain most of the proprietary investment portfolio (which includes GFI's remaining PCS licenses and hedging
activities). The net gain (loss) from the proprietary investment portfolio to be retained by GFI was ($4.7)
million and $4.2 million for the nine months ended September 30, 1998 and 1997, respectively.
Income taxes increased to $3.0 million for the nine months ended September 30, 1998 from $2.4 million
for the nine months ended September 30, 1997 in line with the increase in income before income taxes and
minority interest.
Minority interest increased to $1.0 million for the nine months ended September 30, 1998 up from
$0.8 million in the comparable 1997 period. This increase is reÖective of additional income attributable to the
minority interests of GFI's 76.6%-owned subsidiary, GSI, and GFI's 40.9% economic interest in Gabelli
Advisers, Inc.
Operating Results for Year Ended December 31, 1997 as Compared to Year Ended December 31, 1996
Total revenues for GFI in 1997 increased to $105.3 million compared to $98.2 million in 1996, an
increase of approximately $7.1 million or 7%. The largest component of revenues, investment advisory and
incentive fees, increased $5.4 million, or 6%, to $89.7 million, as total assets under management increased by
$3.8 billion or 40% to $13.3 billion from $9.5 billion at the end of 1996. The improvements in revenues
occurred as assets under management in the Mutual Funds for 1997 increased approximately $1.9 billion, or
46% to $6.1 billion at December 31, 1997 from $4.2 billion on December 31, 1996. In addition, assets under
management in the Separate Accounts grew approximately 35% to $7.0 billion at December 31, 1997 from
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