GAMCO Investors, Inc. Reports Fourth Quarter & Full Year Results

  GAMCO Investors, Inc. Reports Fourth Quarter & Full Year Results

  *AUM were $36.4 Billion, a Record at Year-end
  *EPS at $2.86 per Diluted Share versus $2.61 per Diluted Share
  *Shareholder Compensation Exceeded $5.00 per share, or $130 Million, of
    which $102 Million was paid during the Fourth Quarter

Business Wire

RYE, N.Y. -- February 5, 2013

GAMCO Investors, Inc. (GAMCO) (NYSE: GBL) announced fourth quarter 2012
earnings of $17.6 million or $0.67 per fully diluted share versus $23.7
million or $0.89 per fully diluted share in the fourth quarter 2011. Fourth
quarter 2012 earnings reflect after tax costs of $5.7 million, or $0.22 per
diluted share, for accelerating all outstanding restricted stock awards
(“RSAs”).

For the year ended December 31, 2012, earnings were $75.5 million or $2.86 per
diluted share versus $69.7 million or $2.61 per diluted share in 2011. The
current year results include after tax costs of $7.8 million, or $0.30 per
diluted share, for charges related to the extinguishment of debt ($0.08 per
diluted share) and acceleration of all outstanding RSAs ($0.22 per diluted
share). The prior year results included after tax costs of $3.2 million, or
$0.12 per diluted share, related to the launch of a new closed-end fund.
Excluding these charges, earnings were $83.3 million, or $3.16 per diluted
share, in 2012 versus $72.9 million, or $2.73 per diluted share, in 2011.

                                                                           
Financial          Fourth Quarter                     Full Year                
Highlights
($'s in 000's
except AUM and      2012        2011         % ∆        2012          2011          % ∆
per share data)
                                                                                     
AUM (in millions)   $ 36,405     $ 34,085     6.8   %    $ 36,405      $ 34,085      6.8  %
Revenues              99,277       84,991     16.8         344,281       327,128     5.2
Operating income:
before management     27,902       35,520     (21.4 )      124,148       125,564     (1.1 )
fee
after management      24,739       31,376     (21.2 )      111,130       113,294     (1.9 )
fee
Operating margin:
before management     28.1   %     41.8   %                36.1    %     38.4    %
fee
after management      24.9   %     36.9   %                32.3    %     34.6    %
fee
Extinguishment of     -            2                       (6,307  )     2           n/m
debt
Other
income/(expense),     3,740        5,959      (37.2 )      6,186         (2,852  )   n/m
net
Net income
attributable to       17,594       23,693     (25.7 )      75,539        69,682      8.4
GAMCO
Net income
attributable to     $ 0.67       $ 0.89       (24.7 %)   $ 2.86        $ 2.61        9.6  %
GAMCO per share
Shares
outstanding at      25,746    26,755             25,746     26,755    
December 31

We note that operating income and margin in 2013 will benefit from the absence
of pre-tax RSA expense which, in 2012, totaled $13.6 million. Everything else
constant, Other Income, net will benefit from lower interest expense of
approximately $5.0 million from lower average debt outstanding and the absence
of the $6.3 million loss related to the extinguishment of debt in 2012.

After dividends of $59.6 million and stock buybacks of $42.5 million, we ended
the year with cash and investments of approximately $568.9 million, debt of
$216.4 million ($220.7 million face value) and equity attributable to GAMCO
shareholders of $367.6 million.

Assets under Management

AUM at December 31, 2012 were $36.4 billion, an increase of 6.8% from AUM of
$34.1 billion at December 31, 2011 but 1.5% below the September 30, 2012 AUM
of $36.9 billion. During the fourth quarter of 2012, we had net outflows of
$1.2 billion versus net outflows of $356 million in the third quarter of 2012
and $50 million of outflows in the fourth quarter of 2011. Dynamics were:

  *Our open-end equity funds’ AUM were $12.5 billion on December 31, 2012,
    1.9% above the $12.3 billion on December 31, 2011 but 2.0% lower than the
    $12.8 billion on September 30, 2012. For the year, net outflows were $1.1
    billion. Net outflows were $435 million during the fourth quarter of 2012
    versus net outflows of $366 million for the third quarter of 2012 and net
    outflows of $115 million during the fourth quarter of 2011.
  *Our closed-end funds had AUM of $6.3 billion on December 31, 2012, 8.4%
    higher than the $5.8 billion on December 31, 2011 but 1.2% lower than the
    $6.4 billion on September 30, 2012. For 2012, additions to AUM from
    at-the-market offerings, rights offerings and preferred share issuances
    were $569 million, while redemptions were $149 million. For 2012,
    distributions from all closed-end funds, net of reinvestments, reduced AUM
    by $454 million. In the fourth quarter of 2012, additions to AUM from
    at-the-market offerings and rights offerings were $91 million, while
    redemptions were $76 million. Distributions from all closed-end funds, net
    of reinvestments, reduced AUM by $123 million.
  *Our institutional and private wealth management business ended the quarter
    with $15.0 billion in AUM, rising 11.1% from $13.5 billion on December 31,
    2011 but declining 1.3% from the September 30, 2012 level of $15.2
    billion. Net flows, encompassing new and closed accounts as well as
    additional investments or withdrawals, totaled $668 million of outflows in
    the fourth quarter of 2012. Over $430 million of the outflows were from
    two plan sponsors that distributed a portion of assets entrusted to us to
    cover retiree pension obligations.
  *Our investment partnerships’ AUM increased to $801 million on December 31,
    2012 from $605 million on December 31, 2011 and $785 million on September
    30, 2012. Net cash inflows in the fourth quarter of 2012 were $8 million.
  *The GAMCO International SICAV, our Luxembourg based UCITS fund which has
    two sub-funds, the GAMCO Strategic Value and the GAMCO Merger Arbitrage,
    totaled $119 million in AUM at December 31, 2012 as compared to $105
    million at December 31, 2011 and $121 million at September 30, 2012. Net
    outflows were $4 million during the fourth quarter of 2012. For the full
    year 2012 there were net inflows of $10 million.
  *AUM in The Gabelli U.S. Treasury Money Market Fund (“GUSTO”), our 100%
    U.S. Treasury money market fund, were $1.7 billion at December 31, 2012 as
    compared to the $1.8 billion at both December 31, 2011 and September 30,
    2012.
  *In addition to management fees, we earn incentive fees for certain
    institutional client assets, assets attributable to certain preferred
    issues for our closed-end funds, our GDL Fund (NYSE: GDL) and investment
    partnership assets. As of December 31, 2012, assets with incentive based
    fees were $3.7 billion, unchanged from December 31, 2011 and 7.5% lower
    than the $4.0 billion on September 30, 2012. The majority of these assets
    have calendar year-end measurement periods; therefore, our incentive fees
    are primarily recognized in the fourth quarter when the uncertainty is
    removed at the end of the annual measurement period.

For the Fourth quarter

Revenues

Investment advisory and incentive fees for the fourth quarter ended December
31, 2012 were a record $85.7 million, an increase of 21.4% from the $70.6
million reported in the 2011 period:

  *Open-end fund revenues were $31.0 million versus $30.0 million in the
    fourth quarter 2011, an increase of 3.3%. Average AUM for open-end equity
    funds rose 3.1% from the prior year quarter and average AUM for all
    open-end funds were 2.1% higher at $14.3 billion in the 2012 quarter
    versus $14.0 billion in the prior year quarter.

  *Our closed end fund revenues, which are comprised of both a management fee
    and incentive fee, increased 53.3% to $25.6 million in the 2012 quarter
    from $16.7 million in the prior year quarter. Management fee revenues rose
    13.8% and were driven by the increase in average AUM, which increased 9.4%
    over the same period. Performance based fees increased $7.3 million to
    $12.3 million in 2012 quarter versus $5.0 million in the prior year
    quarter.

  *Institutional and private wealth management account revenues, excluding
    incentive fees, which are generally based upon beginning of quarter AUM,
    increased 17.7% to $21.9 million in the fourth quarter 2012 from $18.6
    million in fourth quarter 2011. During the fourth quarter 2012, we earned
    $2.6 million in incentive fees, an increase of $0.9 million from the $1.7
    million recognized in the fourth quarter 2011.

  *Investment partnership gross fee income for the fourth quarter 2012 was
    $4.6 million, an increase of 31.4% from $3.5 million in the fourth quarter
    2011. Incentive fees increased by $0.7 million to $3.0 million in the 2012
    fourth quarter versus $2.3 million in the 2011 fourth quarter. Investment
    advisory fees increased by $0.4 million in the 2012 quarter versus the
    2011 quarter, which were driven by the 50.7% increase in average assets
    managed.

Revenues from the distribution of our open-end funds and other income were
$11.1 million for the fourth quarter 2012, a decrease of $0.3 million or 2.8%
from the prior year quarter of $11.4 million, largely the result of lower
sales of load shares of mutual funds.

Our institutional research services generated revenues of $2.5 million in the
fourth quarter 2012, down 16.0% from the $3.0 million in the prior year period
principally due to lower trading volume and revenue per share.

Operating Income and Margin

Operating income, which is net of management fee expense, was $24.7 million in
the fourth quarter of 2012 versus $31.4 million in the prior year period, a
decline of $6.7 million, or 21.3%. Included in the fourth quarter 2012
operating income is a $10.1 million non-cash charge resulting from the
acceleration of RSAs. Excluding this non-cash charge, operating income would
have increased $3.4 million, or 10.8%. Operating income before management fee
was $27.9 million in the fourth quarter 2012, versus $35.5 million in the
fourth quarter 2011. For the fourth quarter 2012, the operating margin before
management fee was 28.1% (38.3% excluding RSA acceleration) versus 41.8% in
the fourth quarter of 2011. After management fee the operating margin was
24.9% (35.1% excluding RSA acceleration) in the 2012 fourth quarter versus
36.9% in the prior year period. Management believes evaluating operating
income before management fee is an important measure in analyzing the
Company’s operating results. Further information regarding Non-GAAP measures
is included in Notes on Non-GAAP Financial Measures and Table VII included
elsewhere herein.

Other Income / (Expense)

Other income/(expense), net, was $0.07 per diluted share, as compared to $0.13
per diluted share in the fourth quarter of 2011. Mark to market gains, largely
unrealized, from proprietary investments in our mutual funds, alternative
products and proprietary accounts, were $7.2 million versus $10.3 million in
the fourth quarter of 2011. Interest expense was $3.5 million in the 2012
fourth quarter, $0.8 million lower than the prior year quarter following the
repurchase of $64.1 million (face value) in 0% debentures through a tender
offer during the third quarter of 2012.

Income Taxes

The effective tax rate for the quarter ended December 31, 2012 was 38.0%
compared to the 2011 quarter effective tax rate of 36.9%.

For the Year

Revenues

Investment advisory and incentive fees for the year ended December 31, 2012
were a record $288.5 million, an increase of 7.6% from the $268.0 million
reported in the 2011 period:

  *Open-end fund revenues were $124.2 million versus $119.6 million in 2011,
    an increase of 3.8%. Average AUM for open-end equity funds rose 3.5% from
    the prior year. Average AUM for all open-end funds were 4.3% higher at
    $14.5 billion in 2012 versus $13.9 billion in the prior year.

  *Our closed-end fund revenues increased 18.3% to $62.8 million from $53.1
    million in 2011. Average closed-end fund AUM, excluding certain preferred
    share assets that generate annual incentive fees, increased 3.2% from the
    prior year. Current year 2012 results benefitted from $12.8 million in
    incentive fees, an increase of $7.8 million from $5.0 million in incentive
    fees in 2011.

  *The institutional and private wealth management business generated
    revenues, excluding incentive fees, of $85.9 million, up 6.8%, in 2012
    from the $80.4 million realized in 2011 as billable AUM rose 4.9%. We
    realized $6.5 million in incentive fees during 2012 versus $8.2 million in
    the prior year.

  *Investment partnership revenues for the year ended December 31, 2012 were
    $8.9 million, an increase of 39.1% from $6.4 million in the prior year
    period. Incentive fees increased by $0.7 million to $3.0 million in 2012
    versus $2.3 million in 2011. Investment advisory fees increased by $1.7
    million in 2012 versus 2011, which were driven by the 44.3% increase in
    average assets managed.

Revenues from the distribution of our open-end funds and other income were
$44.8 million for both 2012 and 2011.

Our institutional research services generated revenues of $11.0 million in
2012, versus $14.3 million in the prior year principally due to lower trading
volume and revenue per share.

Operating Income and Margin

Operating income, net of management fee expense, decreased $2.2 million, or
1.9%, to $111.1 million for 2012 versus $113.3 million in the prior year
period. Adjusting for the $10.1 million of non-cash charges ($0.22 per diluted
share) incurred from the fourth quarter acceleration of RSAs and the $5.6
million ($0.12 per diluted share) related to the launch of a new closed end
fund in 2011, operating income would be $2.3 million higher, an increase of
1.9%. Operating margin was 32.3% in 2012 (35.2% excluding one-time costs)
versus 34.6% in the prior year period (36.3% excluding one-time costs).
Operating income before management fee was $124.1 million for the year ended
December 31, 2012, versus $125.6 million in 2011. Operating margin before
management fee was 36.1% in the 2012 period (39.0% excluding one-time costs)
versus 38.4% in the 2011 period (40.1% excluding one-time costs). Management
believes evaluating operating income before management fee is an important
measure in analyzing the Company’s operating results. Further information
regarding Non-GAAP measures is included in Notes on Non-GAAP Financial
Measures and Table VII included elsewhere herein.

Other Income / (Expense)

Other income/(expense), net, was $6.2 million or $0.12 per diluted share net
of management fee and tax expense in 2012 versus an expense of $2.9 million or
$0.08 per diluted share, net of management fee and tax benefit in 2011.
Included in the 2012 results are $6.3 million in charges related to total
purchases of $64.6 million (face value) of the Subordinated Debentures.
Interest expense was $15.9 million in 2012, $0.9 million higher than the prior
year period due to an increase in average debt outstanding of $19.0 million,
following the issuance of $100 million of 5.875% Senior Debentures due 2021 in
May 2011 and less the purchase of approximately $64.6 million (face value) of
Subordinated Debentures in July 2012.

Income Taxes

The effective tax rate for the year ended December 31, 2012 was 35.6% compared
to the 2011 effective tax rate of 36.9%. The decrease in the rate was
principally due to a benefit of 1.2% resulting from the difference between the
tax and book basis of Subordinated Debentures repurchased, including 641,127
bonds bought back through the tender offer completed in July 2012.

Business and Investment Highlights

  *On December 12, 2012, GAMCO concluded its modified “Dutch Auction” tender
    offer to purchase up to 800,000 shares of GBL Class A stock, purchasing
    717,389 shares at $50 per share for a total investment of $35.9 million.
  *On November 9, 2012 GAMCO’s Board of Directors approved a special dividend
    of $2.20 per share to all of its Class A and Class B shareholders.
  *On December 19, 2012, The Gabelli Utility Trust (NYSE: GUT) announced the
    successful completion of its transferable rights offering in which the
    Fund issued $54 million in common shares.
  *On November 1, 2012, Cornelius V. (“CV”) McGinity was appointed President
    of Gabelli & Company, Inc. In his new role, CV will be responsible for all
    of the firm’s institutional research sales and trading initiatives and is
    leading the effort to significantly grow the company’s client base and
    team of research analysts. He was most recently a Managing Director,
    Institutional Sales at Knight Capital Group for fifteen years and had
    previously worked for Cantor Fitzgerald, Merrill Lynch and Smith Barney.
  *GAMCO announced that Paul D. Sonkin, an adjunct professor at Columbia
    University Graduate School of Business and former portfolio manager of The
    Hummingbird Value Fund and the Tarsier Nanocap Value Fund, joined the firm
    as portfolio manager, non-market correlated investments, stubs and
    spin-offs, focusing on micro and nano-cap stocks.
  *During October Gabelli & Company, Inc. hosted its 36th Annual Automotive
    Aftermarket Symposium in Las Vegas, Nevada. The two day conference
    showcased a full spectrum of leading automotive companies, including
    aftermarket parts retailers, original equipment and aftermarket parts
    suppliers, publicly traded dealership groups, and medium and heavy duty
    truck manufacturers. Additionally, during December Gabelli & Company
    hosted its 5^th annual Best Idea Conference in New York City. The
    conference was a multi-industry event that allowed institutional investors
    the opportunity to observe best in class management teams that represent
    compelling and timely investment ideas. Available on the “In the News” and
    “On the Air” segments of our website are recent interviews with Portfolio
    Managers including Mario Gabelli, Barbara Marcin, Howard Ward, Chris
    Marangi, Kevin Dreyer and Caesar Bryan among others as they address world
    markets, industries and specific stocks. Complete articles and interviews
    are on the Gabelli website at www.gabelli.com/inthenews.html.

Other Financial Highlights

Statement of Financial Condition

We ended the quarter with $568.9 million in cash and investments versus $690.9
million at September 30, 2012 and $674.8 million at December 31, 2011. This
included approximately $97.1 million in available for sale securities at
December 31, 2012 of which $61.9 million was in our sponsored registered
investment companies. We have $216 million ($220.7 million in face value) in
total debt outstanding of which $99 million in 5.5% senior notes mature in May
2013. With the renewal of our universal shelf registration in May 2012, we
continue to have the flexibility of issuing any combination of senior and
subordinated debt securities, convertible debt securities and common and
preferred securities of up to a total amount of $400 million.

Shareholder Compensation

Dividends

On November 9, 2012 GAMCO’s Board of Directors approved a special dividend of
$2.20 per share in addition to a quarterly dividend of $0.05 per share to all
of its Class A and Class B shareholders.

During 2012, we paid $76.4 million, or $2.88 per share, in dividends, and
since our IPO, we have paid cumulative dividends of $420.4 million, or $16.30
per share.

GAMCO announced on February 5, 2013 that its Board of Directors approved a
quarterly dividend of $0.05 per share payable on March 26, 2013 to its Class A
and Class B shareholders of record on March 12, 2013.

Share Repurchase

During 2012, we repurchased 1,138,313 shares, at an average price of $48.25
per share for an investment of $54.9 million, including 717,389 shares
purchased at $50.00 per share through the Dutch Tender Offer that concluded on
December 12, 2012. Overall, we have repurchased a total of 8.5 million shares
at an average price of $41.65 per share for an investment of $353.3 million.
Since our 1999 IPO in which we sold six million shares at a price of $17.50
per share, we have returned $774 million to our shareholders through dividends
and stock repurchases.

GAMCO announced on February 5, 2013, that its Board of Directors increased the
share buyback authorization by an additional 500,000 shares. As a result,
there are 652,443 shares available to be repurchased under our existing
buyback plan.

Fully diluted shares outstanding for the fourth quarter 2012 were 26.3
million, 1.0% lower than 26.6 million in the fourth quarter 2011. Diluted
shares outstanding were lower in the fourth quarter 2012 due to shares
purchased under our Stock Repurchase Program. At the end of 2012 we had 25.7
million shares outstanding.

NOTES ON NON-GAAP FINANCIAL MEASURES

     Operating income before management fee expense is used by management to
     evaluate its business operations. We believe this measure is useful in
     illustrating the operating results of GAMCO Investors, Inc. (the
     “Company”) as management fee expense is based on pre-tax income before
A.  management fee expense, which includes non-operating items including
     investment gains and losses from the Company’s proprietary investment
     portfolio and interest expense. The reconciliation of operating income
     before management fee expense to operating income is provided in Table
     VII.
     
     Operating income before management fee expense per share and other
     income, net per share are used by management for purposes of evaluating
     its business operations. We believe this measure is useful in comparing
B.   the operating and non-operating results of the Company for the purposes
     of understanding the composition of net income per fully diluted share.
     The reconciliation of operating income before management fee expense per
     share and other income, net per share to net income per fully diluted
     share, is provided below.
     

                      4th Quarter               Full Year
                          2012        2011          2012         2011
      Operating income
      before management   $ 27,902     $ 35,520      $ 124,148     $ 125,564
      fee
      Management fee        (2,802 )     (3,561  )     (12,427 )     (12,568 )
      expense
      Tax expense           (9,529 )     (11,803 )     (39,732 )     (41,710 )
      Noncontrolling       120        37          363         609     
      interest expense
      Operating income
      (after management    15,691     20,193      72,352      71,895  
      fee and taxes)
      Per fully diluted   $ 0.60      $ 0.76       $ 2.74       $ 2.69    
      share
                                                                   
      Other
      income/(loss),      $ 3,740      $ 5,959       $ 6,186       $ (2,852  )
      net
      Management fee        (361   )     (583    )     (591    )     298
      expense/(benefit)
      Tax                   (1,283 )     (1,986  )     (1,989  )     943
      expense/(benefit)
      Noncontrolling
      interest             (193   )    110         (419    )    (602    )
      (expense)/income
      Other
      income/(loss),
      net (after          $ 1,903     $ 3,500      $ 3,187      $ (2,213  )
      management fee
      and taxes)
      Per fully diluted   $ 0.07      $ 0.13       $ 0.12       $ (0.08   )
      share
                                                                   
      Net income per
      fully diluted       $ 0.67      $ 0.89       $ 2.86       $ 2.61    
      share
      Diluted weighted
      average shares       26,305     26,584      26,436      26,724  
      outstanding
                                                                   

C.  Launch of new closed-end fund expense, net of management fee and tax
     benefit, per diluted share:
     

                                                    Full Year
      (in thousands, except per share data)             2011
      Launch of new closed-end fund expense             $  5,562
      Management fee and tax benefit                      2,359
      Net loss                                          $  3,203
                                                        
      Launch of new closed-end fund expense per share   $  0.12
      Diluted weighted average shares outstanding         26,724
                                                        

D.  RSA expense, net of management fee and tax benefit, per diluted share:
     

                                                   4th Quarter  Full Year
      (in thousands, except per share data)            2012          2012
      RSA amortization expense                         $   870       $  3,486
      RSA acceleration expense                            10,097      10,097
      Total RSA compensation expense                      10,967      13,583
      Management fee and tax benefit (RSA                  378          1,516
      amortization)
      Management fee and tax benefit (RSA                 4,391       4,391
      acceleration)
      Management fee and tax benefit                      4,769       5,907
      Net loss from RSA amortization                       492          1,970
      Net loss from RSA acceleration                      5,706       5,706
      Net loss from total RSA compensation expense     $   6,198     $  7,676
                                                                     
      RSA amortization expense per share               $   0.02      $  0.07
      RSA acceleration expense per share               $   0.22      $  0.22
      Total RSA compensation expense per share         $   0.24      $  0.29
      Diluted weighted average shares outstanding         26,305      26,436
                                                                     

E.  Extinguishment of debt charge, net of management fee and tax benefit,
     per diluted share:
                                                                             

                                                Full Year
      (in thousands, except per share data)         2012
      Extinguishment of debt charge                 $  6,307
      Management fee and tax benefit                  4,227
      Net loss                                      $  2,080
                                                    
      Extinguishment of debt charge per share       $  0.08
      Diluted weighted average shares outstanding     26,436
                                                    

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

Our disclosure and analysis in this press release contain some forward-looking
statements. Forward-looking statements give our current expectations or
forecasts of future events. You can identify these statements because they do
not relate strictly to historical or current facts. They use words such as
“anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,”
and other words and terms of similar meaning. They also appear in any
discussion of future operating or financial performance. In particular, these
include statements relating to future actions, future performance of our
products, expenses, the outcome of any legal proceedings, and financial
results. Although we believe that we are basing our expectations and beliefs
on reasonable assumptions within the bounds of what we currently know about
our business and operations, there can be no assurance that our actual results
will not differ materially from what we expect or believe. Some of the factors
that could cause our actual results to differ from our expectations or beliefs
include, without limitation: the adverse effect from a decline in the
securities markets; a decline in the performance of our products; a general
downturn in the economy; changes in government policy or regulation; changes
in our ability to attract or retain key employees; and unforeseen costs and
other effects related to legal proceedings or investigations of governmental
and self-regulatory organizations. We also direct your attention to any more
specific discussions of risk contained in our Form 10-K and other public
filings. We are providing these statements as permitted by the Private
Litigation Reform Act of 1995. We do not undertake to update publicly any
forward-looking statements if we subsequently learn that we are unlikely to
achieve our expectations or if we receive any additional information relating
to the subject matters of our forward-looking statements.


The Company reported Assets Under Management as follows (in millions):
                                                                     
Table I: Fund Flows - 4th
Quarter 2012
                                                          Fund
                            Market                        distributions,
                September   appreciation/    Net cash     net of           December
                30,                                                        31,
                2012        (depreciation)   flows        reinvestments    2012
Equities:
Open-end        $  12,758   $       232      $ (435   )   $   (53    )     $ 12,502
Funds
Closed-end         6,365            31         15             (123   )       6,288
Funds
Institutional
& PWM -            12,189           383        (542   )       -              12,030
direct
Institutional
& PWM -            2,912            135        (123   )       -              2,924
sub-advisory
Investment         785              8          8              -              801
Partnerships
SICAV (a)         121             2         (4     )      -            119
Total             35,130          791       (1,081 )      (176   )      34,664
Equities
Fixed Income:
Money-Market       1,752            -          (71    )       -              1,681
Fund
Institutional     63              -         (3     )      -            60
& PWM
Total Fixed       1,815           -         (74    )      -            1,741
Income
Total Assets
Under           $  36,945   $       791      $ (1,155 )   $   (176   )     $ 36,405
Management


                                                                       
The Company reported Assets Under Management as follows (in millions):
                                        
Table II: Fund Flows -
Full Year 2012
                                                         Fund
                           Market                        distributions,
                December   appreciation/    Net cash     net of           December
                31,                                                       31,
                2011       (depreciation)   flows        reinvestments    2012
Equities:
Open-end        $ 12,273   $     1,501      $ (1,130 )   $   (142   )     $ 12,502
Funds
Closed-end        5,799          523          420            (454   )       6,288
Funds
Institutional
& PWM -           10,853         1,525        (348   )       -              12,030
direct
Institutional
& PWM -           2,600          384          (60    )       -              2,924
sub-advisory
Investment        605            24           172            -              801
Partnerships
SICAV (a)        105           4           10           -            119
Total            32,235        3,961       (936   )      (596   )      34,664
Equities
Fixed Income:
Money-Market      1,824          -            (143   )       -              1,681
Fund
Institutional    26            -           34           -            60
& PWM
Total Fixed      1,850         -           (109   )      -            1,741
Income
Total Assets
Under           $ 34,085   $     3,961      $ (1,045 )   $   (596   )     $ 36,405
Management
                                                                          


Table III: Assets Under Management                              
                                    December 31,   December 31,   %
                                     2011           2012           Inc.(Dec.)
Equities:
Open-end Funds                       $   12,273     $   12,502     1.9     %
Closed-end Funds                         5,799          6,288      8.4
Institutional & PWM - direct             10,853         12,030     10.8
Institutional & PWM - sub-advisory       2,600          2,924      12.5
Investment Partnerships                  605            801        32.4
SICAV (a)                               105           119        13.3
Total Equities                          32,235        34,664     7.5
Fixed Income:
Money-Market Fund                        1,824          1,681      (7.8    )
Institutional & PWM                     26            60         130.8
Total Fixed Income                      1,850         1,741      (5.9    )
Total Assets Under Management        $   34,085     $   36,405     6.8     %


                                                                           
Table IV: Assets Under Management
by Quarter
                                                                     % Increase/
                                                                       (decrease) from
                12/11      3/12       6/12       9/12       12/12      12/11     9/12
Equities:
Open-end        $ 12,273   $ 12,996   $ 12,496   $ 12,758   $ 12,502   1.9   %   (2.0 %)
Funds
Closed-end        5,799      6,067      5,860      6,365      6,288    8.4       (1.2 )
Funds
Institutional
& PWM -           10,853     12,031     11,655     12,189     12,030   10.8      (1.3 )
direct
Institutional
& PWM -           2,600      2,924      2,788      2,912      2,924    12.5      0.4
sub-advisory
Investment        605        594        781        785        801      32.4      2.0
Partnerships
SICAV (a)        105       118       126       121       119      13.3      (1.7 )
Total            32,235    34,730    33,706    35,130    34,664   7.5       (1.3 )
Equities
Fixed Income:
Money-Market      1,824      1,922      1,893      1,752      1,681    (7.8  )   (4.1 )
Fund
Institutional    26        26        63        63        60       130.8     (4.8 )
& PWM
Total Fixed      1,850     1,948     1,956     1,815     1,741    (5.9  )   (4.1 )
Income
Total Assets
Under           $ 34,085   $ 36,678   $ 35,662   $ 36,945   $ 36,405   6.8   %   (1.5 %)
Management


      Includes $100 million, $102 million, $101 million, $102 million and $104
(a)  million of proprietary seed capital at December 31, 2011, March 31,
      2012, June 30, 2012, September 30, 2012 and December 31, 2012,
      respectively.
      

                                                                 
Table V
                                                                      
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
                                                                      
                                      For the Three Months Ended December 31,
                                                                      % Inc.
                                      2012               2011         (Dec.)
                                                                      
Investment advisory and incentive     $ 85,697           $ 70,617     21.4  %
fees
Distribution fees and other income      11,080             11,397     (2.8  )
Institutional research services        2,500            2,977     (16.0 )
Total revenues                          99,277             84,991     16.8
                                                                      
Compensation costs                      39,416             32,509     21.2
Stock compensation costs                10,967     (a)     669
Distribution costs                      10,267             10,319     (0.5  )
Other operating expenses               10,725           5,974     79.5
Total expenses                          71,375             49,471     44.3
                                                                      
Operating income before management      27,902             35,520     (21.4 )
fee
                                                                      
Investment income/(loss)                7,220              10,268
Interest expense                       (3,480 )          (4,309 )
Other income/(expense), net            3,740            5,959  
                                                                      
Income before management fee and        31,642             41,479     (23.7 )
income taxes
Management fee expense                 3,163            4,144  
Income before income taxes              28,479             37,335     (23.7 )
Income tax expense                     10,812           13,789 
Net income                              17,667             23,546     (25.0 )
Net income/(loss) attributable to      73               (147   )
noncontrolling interests
Net income attributable to GAMCO      $ 17,594          $ 23,693    (25.7 )
Investors, Inc.
                                                                      
Net income per share attributable
to GAMCO Investors, Inc.:
Basic                                 $ 0.67            $ 0.89      (24.7 )
                                                                      
Diluted                               $ 0.67            $ 0.89      (24.7 )
                                                                      
Weighted average shares
outstanding:
Basic                                  26,208           26,488    (1.1  )
                                                                      
Diluted                                26,305           26,584    (1.0  )
                                                                      
Actual shares outstanding (b)          25,746           26,755    (3.8  %)


Notes:
(a) Includes $10.1 million in expenses related to the acceleration of RSAs.
(b) Includes 0 and 275,600 of RSAs, respectively.
See GAAP to non-GAAP reconciliation on page 15.


                                                                
Table VI
                                                                      
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
                                                                      
                              For the Years Ended December 31,
                                                                      % Inc.
                              2012                2011                (Dec.)
                                                                      
Investment advisory and       $ 288,480           $ 268,024           7.6   %
incentive fees
Distribution fees and other     44,848              44,816            0.1
income
Institutional research         10,953            14,288           (23.3 )
services
Total revenues                  344,281             327,128           5.2
                                                                      
Compensation costs              137,223             130,382           5.2
Stock compensation costs        13,583      (a)     2,588
Distribution costs              40,842              44,427            (8.1  )
Other operating expenses       28,485            24,167           17.9
Total expenses                  220,133             201,564     (b)   9.2
                                                                      
Operating income before         124,148             125,564           (1.1  )
management fee
                                                                      
Investment income               28,392              12,143
Extinguishment of debt          (6,307  )           2
Interest expense               (15,899 )          (14,997 )
Other income/(expense), net    6,186             (2,852  )
                                                                      
Income before management        130,334             122,712           6.2
fee and income taxes
Management fee expense         13,018            12,270  
Income before income taxes      117,316             110,442           6.2
Income tax expense             41,721            40,767  
Net income                      75,595              69,675            8.5
Net income/(loss)
attributable to                56                (7      )
noncontrolling interests
Net income attributable to    $ 75,539           $ 69,682           8.4
GAMCO Investors, Inc.
                                                                      
Net income per share
attributable to GAMCO
Investors, Inc.:
Basic                         $ 2.87             $ 2.62             9.5
                                                                      
Diluted                       $ 2.86             $ 2.61             9.6
                                                                      
Weighted average shares
outstanding:
Basic                          26,283            26,636           (1.3  )
                                                                      
Diluted                        26,436            26,724           (1.1  )
                                                                      
Actual shares outstanding      25,746            26,755           (3.8  %)
(c)
                                                                      

Notes:
(a)  Includes $10.1 million in expenses related to the acceleration of RSAs.
      Includes $0.4 million in compensation, $4.7 million in distribution
(b)   costs and $0.5 million in other operating expenses directly related to
      the launch of a new closed-end fund.
(c)   Includes 0 and 275,600 of RSAs, respectively.
See GAAP to non-GAAP reconciliation on page 15.


                                                                                                                                               
Table VII
GAMCO INVESTORS, INC.
UNAUDITED QUARTERLY CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
                                                                                                                                                             
                    2012                                                                          2011
                    1st          2nd          3rd                4th                YTD           1st                2nd          3rd           4th
                    Quarter      Quarter      Quarter            Quarter            2012          Quarter            Quarter      Quarter       Quarter      Full Year
Income Statement
Data:
                                                                                                                                                             
Revenues            $ 81,749     $ 81,024     $ 82,231           $ 99,277           $ 344,281     $ 76,905           $ 85,081     $ 80,151      $ 84,991     $ 327,128
                                                                                                                                                             
Expenses             50,553     48,042     50,163           71,375    (a)    220,133     53,032    (b)    50,958     48,103      49,471     201,564 
                                                                                                                                                             
Operating income
before management     31,196       32,982       32,068             27,902             124,148       23,873             34,123       32,048        35,520       125,564
fee
                                                                                                                                                             
Investment            15,114       (2,389 )     2,140      (c)     7,220              22,085        10,676             5,530        (14,329 )     10,268       12,145
income/(loss)
Interest expense     (4,404 )    (4,429 )    (3,586 )          (3,480 )          (15,899 )    (2,867 )          (3,403 )    (4,418  )    (4,309 )    (14,997 )
Other
income/(expense),     10,710       (6,818 )     (1,446 )           3,740              6,186         7,809              2,127        (18,747 )     5,959        (2,852  )
net
                                                                                                                                                             
Income before
management fee        41,906       26,164       30,622             31,642             130,334       31,682             36,250       13,301        41,479       122,712
and income taxes
Management fee       4,184      2,615      3,056            3,163            13,018      3,113            3,626      1,387       4,144      12,270  
expense
Income before         37,722       23,549       27,566             28,479             117,316       28,569             32,624       11,914        37,335       110,442
income taxes
Income tax           13,756     8,686      8,467            10,812           41,721      10,288           11,945     4,745       13,789     40,767  
expense
Net income            23,966       14,863       19,099             17,667             75,595        18,281             20,679       7,169         23,546       69,675
Net income/(loss)
attributable to      130        (242   )    95               73               56          638              32         (530    )    (147   )    (7      )
noncontrolling
interests
Net income
attributable to     $ 23,836    $ 15,105    $ 19,004          $ 17,594          $ 75,539     $ 17,643          $ 20,647    $ 7,699      $ 23,693    $ 69,682  
GAMCO Investors,
Inc.
                                                                                                                                                             
Net income per
share
attributable to
GAMCO Investors,
Inc.:
Basic               $ 0.90      $ 0.58      $ 0.72            $ 0.67            $ 2.87       $ 0.66            $ 0.77      $ 0.29       $ 0.89      $ 2.62    
                                                                                                                                                             
Diluted             $ 0.90      $ 0.57      $ 0.72            $ 0.67            $ 2.86       $ 0.65            $ 0.77      $ 0.29       $ 0.89      $ 2.61    
                                                                                                                                                             
Weighted average
shares
outstanding:
Basic                26,415     26,258     26,250           26,208           26,283      26,901           26,665     26,496      26,488     26,636  
                                                                                                                                                             
Diluted              26,533     26,426     26,439           26,305           26,436      27,008           26,733     26,576      26,584     26,724  
Reconciliation of
non-GAAP
financial
measures to GAAP:
Operating income
before management   $ 31,196     $ 32,982     $ 32,068           $ 27,902           $ 124,148     $ 23,873           $ 34,123     $ 32,048      $ 35,520     $ 125,564
fee
Deduct:
management fee       4,184      2,615      3,056            3,163            13,018      3,113            3,626      1,387       4,144      12,270  
expense
Operating income    $ 27,012    $ 30,367    $ 29,012          $ 24,739          $ 111,130    $ 20,760          $ 30,497    $ 30,661     $ 31,376    $ 113,294 
                                                                                                                                                             
Operating margin
before management    38.2   %    40.7   %    39.0   %          28.1   %          36.1    %    31.0   %          40.1   %    40.0    %    41.8   %    38.4    %
fee
Operating margin
after management     33.0   %    37.5   %    35.3   %          24.9   %          32.3    %    27.0   %          35.8   %    38.3    %    36.9   %    34.6    %
fee


(a)  Includes $10.1 million in expenses from the acceleration of RSAs.
(b)   Includes $5.6 million in expenses directly related to the launch of a
      new closed-end fund.
(c)   Includes $6.3 million loss on extinguishment of $64.6 million (face
      value) of 0% Subordinated Debentures.
      


Table VIII
GAMCO INVESTORS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands, except per share data)
                                                               
                                                   December 31,   December 31,
                                                   2012           2011
                                                                  
ASSETS
                                                                  
Cash and cash equivalents                          $   190,608    $   276,340
Investments (a)                                        378,263        398,440
Receivable from brokers                                50,655         20,913
Other receivables                                      52,600         43,424
Income tax receivable                                  1,014          39
Other assets                                          17,589        17,593
                                                                  
Total assets                                       $   690,729    $   756,749
                                                                  
LIABILITIES AND EQUITY
                                                                  
Payable to brokers                                 $   14,346     $   10,770
Income taxes payable and deferred tax                  25,394         15,296
liabilities
Compensation payable                                   10,535         17,695
Securities sold short, not yet purchased               3,136          5,488
Accrued expenses and other liabilities                32,656        30,899
Sub-total                                              86,067         80,148
                                                                  
5.5% Senior notes (due May 15, 2013)                   99,000         99,000
5.875% Senior notes (due June 1, 2021)                 100,000        100,000
0% Subordinated Debentures (due December 31,          17,366        64,119
2015) (b)
Total debt                                            216,366       263,119
Total liabilities                                      302,433        343,267
                                                                  
Redeemable noncontrolling interests                    17,362         6,071
                                                                  
GAMCO Investors, Inc.'s stockholders' equity           367,608        403,972
Noncontrolling interests                              3,326         3,439
Total equity                                          370,934       407,411
                                                                  
Total liabilities and equity                       $   690,729    $   756,749
                                                                      

(a)  Includes investments in sponsored registered investment companies of
      $61.9 Million and $59.2 million, respectively.
      The 0% Subordinated Debentures due December 31, 2015 have a face value
(b)   of $21.7 million at December 31, 2012 and $86.3 million at December 31,
      2011.
      

                                                                                                                  
GABELLI/GAMCO                        Gabelli/GAMCO Funds Lipper Rankings as of December 31, 2012
FUNDS
                                     1 Yr -                3 Yrs -               5 Yrs -                10 Yrs -
                                     12/31/11-12/31/12      12/31/09-12/31/12      12/31/07-12/31/12      12/31/02-12/31/12
                                     Percentile  Rank /    Percentile  Rank /    Percentile  Rank /    Percentile   Rank /
Fund Name      Lipper Category     Rank        Total    Rank        Total    Rank        Total    Rank        Total
                                                  Funds                  Funds                  Funds                  Funds
Gabelli        Multi-Cap Core      38          293/778  11          73/664   14          76/582   14          46/342
Asset; AAA      Funds
Gabelli Value  Multi-Cap Core      27          205/778  4           20/664   11          64/582   26          86/342
Fund; A         Funds
Gabelli SRI;    Global
AAA            Small/Mid-Cap       62          71/114   88          78/88    6           4/75     -           -
                Funds
Gabelli Eq:Eq  Equity Income       40          125/313  42          104/247  38          81/216   16          17/111
Inc; AAA        Funds
GAMCO Growth;  Large-Cap Growth    42          299/713  85          540/640  83          463/563  62          232/379
AAA             Funds
Gabelli Eq:SC  Small-Cap Core      10          66/705   24          146/623  16          86/539   11          35/337
Gro; AAA        Funds
Gabelli Focus   Small-Cap Core
Five Fund;     Funds               2           13/705   11          63/623   22          116/539  74          250/337
AAA
GAMCO          Global Multi-Cap    61          136/224  44          64/146   19          14/74    25          9/35
Gl:Oppty; AAA   Growth
GAMCO           Global Large-Cap
Gl:Growth;     Growth              56          43/77    15          10/68    42          25/59    31          13/42
AAA
Gabelli Gold;  Precious Metal      6           4/73     22          13/60    32          17/53    52          20/38
AAA             Funds
GAMCO Intl     International       75          160/213  6           12/200   9           14/157   39          46/117
Gro; AAA        Large-Cap Growth
Gabelli
Dividend       Large-Cap Value     90          423/472  68          277/412  16          56/353   7           14/226
Growth Fund;    Funds
AAA
Gabelli         Specialty
Inv:ABC; AAA   Diversified Equity  57          27/47    46          16/34    45          12/26    10          1/9
                Funds
GAMCO           Specialty
Mathers; AAA   Diversified Equity  82          39/47    78          27/34    75          20/26    40          4/9
                Funds
Comstock Cap    Specialty
Val; A         Diversified Equity  96          46/47    95          33/34    89          24/26    80          8/9
                Funds
GAMCO           Telecommunications
Gl:Telecom;    Funds               72          27/37    71          24/33    70          18/25    23          4/17
AAA
GAMCO           Convertible
Gl:Vertumnus;  Securities Funds    93          70/75    86          48/55    94          42/44    94          30/31
AAA
Gabelli
Utilities;     Utility Funds       56          41/73    59          40/67    5           3/62     61          28/45
AAA
787:Gabelli    Mid-Cap Core Funds  96          357/371  95          311/329  61          174/285  98          182/185
Merg&Acq A
Gabelli         Distributed
Capital Asset  through Insurance   12          34/288   5           13/282   12          31/268   13          20/153
Fund            Channel
% of funds in                     40.0%               55.0%               70.0%               63.2%       
top half

Data presented reflects past performance, which is no guarantee of future
results. Strong rankings are not indicative of positive fund performance.
Absolute performance for some funds was negative for certain periods. Other
share classes are available which may have different performance
characteristics.

Lipper, a wholly-owned subsidiary of Reuters, provides independent insight on
global collective investments including mutual funds, retirement funds, hedge
funds, fund fees and expenses to the asset management and media communities.
Lipper ranks the performance of mutual funds within a classification of funds
that have similar investment objectives. Rankings are historical with capital
gains and dividends reinvested and do not include the effect of loads. If an
expense waiver was in effect, it may have had a material effect on the total
return or yield for the period.

Relative long-term investment performance remained strong with approximately
40%, 55%, 70% and 63% of firmwide mutual funds in the top half of their Lipper
categories on a one-, three-, five-, and ten-year total-return basis,
respectively, as of December 31, 2012.

Investors should carefully consider the investment objective, risks, charges,
and expenses of each fund before investing. Each fund's prospectus contains
information about these and other matters and should be read carefully before
investing. Each fund’s share price will fluctuate with changes in the market
value of the fund’s portfolio securities. Stocks are subject to market,
economic and business risks that cause their prices to fluctuate. When you
sell fund shares, they may be worth less than what you paid for them.
Consequently, you can lose money by investing in a fund. You can obtain a
prospectus by calling 800-GABELLI (422-3554), online at www.gabelli.com, or
from your financial advisor. Distributed by G.distributors, LLC., One
Corporate Center, Rye New York, 10580. Other share classes are available that
have different performance characteristics.

The inception date for the Gabelli SRI Green Fund was June 1, 2007.

Contact:

GAMCO Investors, Inc.
Robert S. Zuccaro, 914-921-5088
Executive Vice President
and Chief Financial Officer
www.gabelli.com