FORM 10-K/A GAMCO Investors, Inc. - Gabelli

As a result of the first material weakness, the Company restated its consolidated statement of financial condition as of December 31, 2005. In the consolidated statement of
financial condition, the assets and liabilities (primarily short positions and margin) associated with these proprietary investments were reported on a net basis, rather than reported on
a gross basis. The effects of the restatement on the December 31, 2005 consolidated statement of financial position are as follows: Cash and cash equivalents, investments in
securities, receivable from brokers and other assets increased by $2.5 million, $20.4 million, $1.3 million and $0.1 million, respectively, and investments in partnerships and affiliates
decreased by $17.1 million for a net increase in total assets of $7.2 million. Accrued expenses and other liabilities, payable to brokers, and securities sold, not yet purchased
increased by $0.1 million, $3.9 million and $3.2 million, respectively, for a total increase in liabilities of $7.2 million.
In the second material weakness relating to the evaluation of and accounting for certain non-routine transactions in accordance with U.S. generally accepted accounting principles,
the Company’s control deficiencies over accrual of compensation expense for investment partnerships compensation were contemplated in the determination of the material
weakness evaluation. As a result of the second material weakness, the Company filed Form 10-K/A of GAMCO Investors, Inc. which constituted Amendment No. 1 to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2006 to restate the Financial Statements and amend Management’s Discussion and Analysis of
Financial Condition and Results of Operations (Including Quantitative and Qualitative Disclosure about Market Risk) in Part I, Items 1 and 2, respectively, to reflect the reversal of
certain previously-accrued expenses for investment partnerships compensation.
Material Weakness
The impact of the restatement as a result of the first material weakness (reporting of certain proprietary investment accounts) was as follows:
000’s 12/31/2005 3/31/2006 6/30/2006 9/30/2006
Assets:
-Reported (a) (b) $ 720,938 $ 735,191 $ 725,474 $ 755,019
-Gross 728,138 743,271 740,286 778,035
-Difference 7,200 8,080 14,812 23,016
Operating Liabilities:
-Reported (a) 57,946 71,783 71,002 83,217
-Gross 65,146 79,863 85,814 106,233
-Difference 7,200 8,080 14,812 23,016
Total Liabilities:
-Reported (a) (b) 290,255 304,091 303,309 315,525
-Gross 297,455 312,171 318,121 338,541
-Difference 7,200 8,080 14,812 23,016
Equity:
-Reported (a) (b) 424,502 411,046 402,442 419,179
-Gross 424,502 411,046 402,442 419,179
-Difference $ - $ - $ - $ -
(a) Non-GAAP measure.
(b) Restated as described in explanatory note of this report on Form 10-K/A.
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