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

In February 2007, the FASB issued FAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – Including an Amendment of FASB Statement No.
115,” (“Statement 159”), which provides companies with an option to report selected financial assets and liabilities at fair value. The standard’s objective is to reduce both the
complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. Statement 159 also establishes
presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and
liabilities. This statement is effective as of the beginning of an entity’s first fiscal year beginning after November 15, 2007. Early adoption is permitted as of the beginning of the
previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of Statement 157. The Company plans
to adopt this statement on January 1, 2008. The impact of adopting Statement 159 is expected to be immaterial to the Company’s consolidated financial statements.
B. Investments in Securities
Investments in securities at December 31, 2005 and 2006 consisted of the following:
2005 (a) 2006
Cost
Market
Value Cost
Market
Value
(In thousands)
Trading securities:
U.S. Government obligations $ 185,392 $ 187,606 $ 161,578 $ 164,532
Corporate bonds 23,638 22,741 57,786 59,522
Common stocks 79,982 86,068 98,383 106,175
Mutual funds 40,964 41,530 72,695 71,413
Preferred stocks 1,716 1,911 3,511 3,605
Other investments 480 315 526 383
Total trading securities 332,172 340,171 394,479 405,630
Available for sale securities:
Common stocks 20,028 21,435 21,979 29,081
Mutual funds 59,125 59,798 60,422 72,884
Total available for sale securities 79,153 81,233 82,401 101,965
Total investments in securities $ 411,325 $ 421,404 $ 476,880 $ 507,595
(a) Restated as described in note A in item 8 of this report on Form 10-K.
The aggregate fair value of available for sale securities at December 31, 2005 and 2006 was $81.2 million and $102.0 million, respectively. The total unrealized gains for securities
with net unrealized gains was $3.1 million and $19.6 million at December 31, 2005 and 2006, respectively, while the total unrealized losses for securities with net unrealized losses
was $1.0 million and $0.1 million, respectively.
Investments classified as available for sale at December 31, 2005 and 2006 that are in an unrealized loss position for which other-than-temporary impairment has not been
recognized consisted of the following:
Cost
2005 2006
Total
Unrealized Market
Unrealized
Losses
Value Cost
Losses
Total
Market Value
Mutual funds $ 53,404 $ (1,017) $ 52,387 $ 1,174 $ (59) $ 1,115
Total available for sale securities in
unrealized loss positions $ 53,404 $ (1,017) $ 52,387 $ 1,174 $ (59) $ 1,115
F-17