FORM 10-K/A GAMCO Investors, Inc. - Gabelli
FORM 10-K/A GAMCO Investors, Inc. - Gabelli
FORM 10-K/A GAMCO Investors, Inc. - Gabelli
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<strong>Gabelli</strong> Direct, <strong>Inc</strong>. (“<strong>Gabelli</strong> Direct”), a wholly-owned subsidiary of GSI, and <strong>Gabelli</strong> Fixed <strong>Inc</strong>ome Distributors, <strong>Inc</strong>. (“Fixed <strong>Inc</strong>ome Distributors”), a wholly-owned subsidiary of<br />
Fixed <strong>Inc</strong>ome LLC, were voluntarily deregistered as broker-dealers with the SEC and as members of the NASD in October 2006 and January 2007, respectively.<br />
Cash and Cash Equivalents<br />
Cash equivalents primarily consist of affiliated money market mutual funds which are highly liquid. At December 31, 2005 and 2006, approximately $2.5 million and $2.1 million,<br />
respectively, of cash and cash equivalents was held as part of the collateral to secure a $51.3 million letter of credit originally issued on August 14, 2002, in favor of the holder of<br />
the 6% convertible note, and these amounts are disclosed as restricted cash on the consolidated statements of financial condition. The $51.3 million letter of credit is due to expire<br />
on May 22, 2007.<br />
Securities Transactions and Commissions Revenue and Clearing Charges<br />
Investments in securities are accounted for as either “trading securities” or “available for sale” and are stated at quoted market values. Securities that are not readily marketable are<br />
stated at their estimated fair values as determined by our management. The resulting unrealized gains and losses for trading securities are included in net gain from investments, and<br />
the unrealized gains and losses for available for sale securities, net of management fees and tax, are reported as a separate component of stockholders’ equity. Securities<br />
transactions and any related gains and losses are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost<br />
basis. Commissions revenue and related clearing charges are recorded on a trade date basis.<br />
At December 31, 2005 and 2006, approximately $52.2 million and $52.1 million, respectively, of investments in securities were held as collateral to secure a $51.3 million letter of<br />
credit originally issued on August 14, 2002 in favor of the holder of the 6% convertible note, and these amounts are disclosed as restricted investments in securities on the<br />
consolidated statements of financial condition. The $51.3 million letter of credit is due to expire on May 22, 2007.<br />
Securities sold, but not yet purchased are recorded at trade date, and are stated at quoted market values and represent obligations of GBL to purchase the securities at prevailing<br />
market prices. Therefore, the future satisfaction of such obligations may be for an amount greater or less than the amounts recorded on the consolidated statements of financial<br />
condition. The ultimate gains or losses recognized are dependent upon the prices at which these securities are purchased to settle the obligations under the sales commitments.<br />
Investments in Partnerships and Affiliates<br />
Investments in partnerships and affiliates, whose underlying assets consist mainly of marketable securities, are accounted for as consolidated subsidiaries or equity investments in<br />
accordance with FIN 46R and EITF 04-5 effective as January 1, 2006. Please refer to Note C included herein. Prior to January 1, 2006, Investments in Partnerships and Affiliates<br />
were accounted for using the equity method under which our share of net earnings or losses of these partnerships and affiliated entities was reflected in income as earned, capital<br />
contributions were recorded when paid, and distributions received were reductions of the investments. Investments in partnerships and affiliates for which market values were not<br />
readily available were stated at their estimated fair values as determined by our management. Depending on the terms of the investment, the Company may be restricted as to the<br />
timing and amounts of withdrawals.<br />
Receivables from and Payables to Brokers<br />
Receivables from and payables to brokers consist of amounts arising primarily from the purchases and sales of securities.<br />
Revenue Recognition<br />
Advisory fees from the open-end mutual funds, closed-end funds and sub-advisory accounts are computed daily or weekly based on average net assets and amounts receivable are<br />
included in investment advisory fees receivable in the consolidated statements of financial condition. Advisory fees from Separate Accounts are generally computed quarterly based<br />
on account values as of the end of the preceding quarter and accrued monthly and amounts receivable are included in investment advisory fees receivable in the consolidated<br />
statements of financial condition. Management fees from Investment Partnerships are computed either monthly or quarterly and accrued monthly, and amounts receivable are<br />
included in other receivables from affiliates in the consolidated statements of financial condition.<br />
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