UNITED STATES
SECURITIES AND& EXCHANGE COMMISSION
Washington,WASHINGTON, D.C. 20549
FORM 10-K
[x]☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 20172021
or
[  ]☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______
Commission file numberFile No. 001-14761


GAMCO Investors, Inc.INVESTORS, INC.
(Exact name of registrantRegistrant as specified in its charter)


Delaware 13-4007862
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
   
191 Mason Street, Greenwich, CT 06830
One Corporate Center, Rye, NY 10580
 10580-1422
(203) 629-2726
(Address of principalprinciple executive offices)(Zip Code) (Zip Code)Registrant’s telephone number, including area code

Registrant’s telephone number, including area code (914) 921-3700


Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol  Name of each exchange on which registered
Class A Common Stock, $0.001 par value $0.001 per share GBLNew York Stock Exchange


Securities registered pursuant to Section 12(g) of the Act: None


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act Yes ☐□ No ☒.⌧


Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act Yes ☐□ No ☒.⌧


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days Yes ☒⌧ No ☐.□


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒ ⌧ No ☐□

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K ☐.



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer ☐□
Accelerated filer ☒⌧
 
Non-accelerated filer ☐
(Do not check if a smaller reporting company)□
Smaller reporting company ☐☒
Emerging growth company ☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐□


Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒  No  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2)12b-2.) Yes ☐ No ☒.⌧


The aggregate market value of the class A and class B common stock held by non-affiliates of the registrant as of June 30, 20172021 (the last business day of the registrant’s most recently completed second fiscal quarter) was $165,809,758.$137,117,912.


As of March 1, 2018, 9,898,371February 28, 2022, 7,590,811 shares of class A common stock (including 407,700 restricted stock awards and 19,024,4042,424,892 shares held by Associated Capital Group, Inc. and subsidiaries) and 19,024,117 shares of class B common stock were outstanding. 18,313,741 shares of class B common stock were held by a subsidiary of GGCP, Inc. In addition, there were 377,800 Phantom RSAs outstanding as of February 28, 2022.


DOCUMENTS INCORPORATED BY REFERENCE: Portions of the registrant’s definitive proxy statement relating to the 20182022 Annual Meeting of Shareholders are incorporated by reference in Items 10, 11, 12, 13 and 14 of Part III of this report.


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GAMCO Investors, Inc.INVESTORS, INC. AND SUBSIDIARIES
 
INDEX
Annual Report on Form 10-K For the Fiscal Year Ended December 31, 2017
Part I   
 Item 1Business 4
  Overview 4Page
��Part I Business Strategy
Item 1.Business5
Item 1A.Risk Factors17
Item 1B.Unresolved Staff Comments25
Item 2.Properties25
Item 3.Legal Proceedings25
Item 4.Mine Safety Disclosures26
  Business Description 7
Assets Under Management 9
Open-End Fund Distribution 11
Competition 12
Intellectual Property 12
Regulation 12
Personnel 14
Item 1ARisk Factors 14
Item 1BUnresolved Staff Comments 21
Item 2Properties 21
Item 3Legal Proceedings 21
Item 4Mine Safety Disclosures 22
Part II  
Item 55.Market for the Registrant'sRegistrant’s Common Equity, Related Stockholder Matters, and Issuer
Purchases of Equity Securities 2226
Item 6.Item 6[Reserved]Selected Financial Data 2526
Item 7.Item 7Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations27
Item 7A7A.Quantitative and Qualitative Disclosures About Market Risk 4538
Item 88.Financial Statements and Supplementary Data 4540
Item 99.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 8269
Item 9A9A.Controls and Procedures 8269
Item 9B.Other Information69
Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections69
 Item 9BOther Information 82
Part III  
Item 1010.Directors, Executive Officers and Corporate Governance 8370
Item 1111.Executive Compensation 8370
Item 1212.Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters 8370
Item 1313.Certain Relationships and Related Transactions, and Director Independence 8370
Item 1414.Principal Accountant Fees and Services 8370
Part IV   
Item 15Exhibits, Financial Statement Schedules 84
Item 16Form 10-K Summary 87
PART IV  
Item 15.Exhibits and Financial Statement SchedulesSignatures 8871
Item 16.Form 10-K SummaryPower of Attorney 89
Computation of Ratios of Earnings to Fixed Charges
Subsidiaries of GAMCO Investors, Inc.
Consent of Independent Registered Public Accounting Firm
CertificationsExhibit 31.1
Exhibit 31.2
Exhibit 31.3
Exhibit 32.1
Exhibit 32.274


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PART I
Unless indicated otherwise, or the context otherwise requires, references in this report to “GAMCO Investors, Inc.,” “GAMCO,” “the Company,” “the Firm,” “GBL,” “we,” “us,” and “our” or similar terms are to GAMCO Investors, Inc., its predecessors, and its subsidiaries.
Forward-Looking Statements

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Our disclosure and analysis in this report and in documents that are incorporated by reference containForm 10-K contains some forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.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. You should not place undue reliance on these statements.  They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” “should,” “may,” 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, the economy, the effects of the Tax Cuts and Jobs Act, and other conditions, 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;markets that adversely affects our assets under management; a decline in the performance of our products; a general downturn in the economy; the ongoing impacts of the Tax Cuts and Jobs Act with respect to tax rates and the non-deductibility of certain portions of NEO compensation; changes in government policy or regulation; changes in our ability to attract or retain key employees;employees (“teammates”); 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 Item 1A below and in our other public filings or in documents incorporated by reference here or in prior filings or reports.
We are providing these statements as permitted by the Private Litigation Reform Act of 1995. Our actual results and condition could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” in Part I, Item 1A of and elsewhere in this Form 10-K. 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.

Environmental, Social, and Governance (ESG)

Environmental – (Y)our “E” in ESG

We demonstrated our commitment to promoting a healthier environment by waiving fees and absorbing costs on the initial $100 million in assets in Love Our Planet & People (“LOPP”), the first in a series of semi-transparent exchange traded funds (“ETFs”).  LOPP is focused on companies promoting sustainability in areas including renewable power generation and transmission, water purification, and conservation, the reduction and elimination of long-lived wastes and transportation electrification.

Across all products, our bottom-up research process seeks to identify potential environmental liabilities and, often more importantly, opportunities to solve environmental issues with new products, services, or approaches to delivering existing products and services. 

Within our own operations we continue to find ways to limit our firm’s environmental footprint, for example, by eliminating duplicative mutual fund mailings.  

Giving Back to Society – (Y)our “S” in ESG

We are committed to allow our shareholders to choose the recipients of our charitable contributions. The advantage of our shareholder designated charitable contribution (“SDCC”) program is that each shareholder is able to designate recipients of charitable contributions by our company in proportion to the number of shares of GAMCO that the shareholder owns. Shareholders exercise this benefit that is routinely exercised by the management of widely held corporations, benefitting the corporation directly in an amount commensurate with the amount of the donation.

The Board of Directors of GAMCO approved a $0.50 per share SDCC for all shareholders of record on December 21, 2021, doubling the prior year’s $0.25 per share designation under the program, totaling approximately $11.3 million. Since the inception of GAMCO’s SDCC program in 2013, and counting this current amount, shareholders will have designated charitable gifts of $48 million to approximately 350 charitable organizations. Since our initial public offering in February 1999, our firm’s combined charitable donations total approximately $74 million.

This charitable program is just one aspect of our firm’s commitment to ESG investing at both the firm level as well as within our portfolios - where we have been managing dedicated mandates since 1987.

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Governance – (Y)our “G” in ESG

graphic

As part of GAMCO’s stewardship of investments on behalf of clients, we have historically viewed governance, active ownership, proxy voting, and engagement as important ways to protect shareholder value. To that end, the Firm has been a leading voice on certain governance matters since May 1988 when it issued its “Magna Carta of Shareholder Rights.” We actively vote proxies and file shareholder proposals on issues that we believe increase shareholder value and incorporate environmental, social, and governance (“ESG”) considerations that we value as long-term investors.

Since its formation in April 1989, the Proxy Voting Committee of the Company has formulated guidelines for the purpose of determining how to vote proxies in reviewing proxy statements of portfolio securities held by our clients. The main driver of these guidelines is to vote in the best economic interest of our clients. As we state in our Magna Carta of Shareholder Rights, we are neither for nor against management. We are for shareholders. We do not consider any issue routine. We take into consideration our research on the company, its directors, and their short-term and long-term goals for the company. In cases where issues that we generally disapprove of are combined with other issues, the negative aspects are factored into the evaluation of the overall proposals, but may not result in a vote in opposition to the overall proposals.

Additionally, across various investment products, we use ESG criteria, which include certain sustainable themes such as water scarcity, health and wellness, and renewable energy.
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PART I

ITEM 1: BUSINESS


Unless we have indicated otherwise, or the context otherwise requires, references in this report to “GAMCO Investors, Inc.,” the “Company,” “GBL,” “Gabelli,” “we,” “us” and “our” or similar terms are to GAMCO Investors, Inc., its predecessors and its subsidiaries.(Y)our Business

Overview

GAMCO Investors, Inc. (New(New York Stock Exchange (“NYSE”): GBL), a company incorporated under the laws of Delaware, is a widely-recognized provider of investment advisory services to open andopen-end funds, closed-end funds, actively managed semi-transparent exchange traded funds (“ETFs”), a société d’investissement à capital variable (“SICAV”) and approximately 1,400 institutional and private wealth management (“Institutional and PWM”) investors principally in the United States.States (“U.S.”). We generally manage assets on a fully discretionary basis and invest in securities through various investment styles.a variety of U.S. and international securities. Our revenues are based primarily on the Company’s level of assets under management (“AUM”) and to a lesser extent, incentive fees.
Since our inception in 1977, we are identifiedfees associated with our research driven approach to equity investingvarious investment products. GAMCO serves a broad client base, including institutions, intermediaries, offshore investors, private wealth, and our proprietary Private Marketdirect retail investors. In recent years, GAMCO has successfully attracted and integrated new teams of RIAs, by providing a strong combination of corporate culture, reputation, and compensation arrangements.

GAMCO offers a wide range of solutions for clients across Value (PMV) with a Catalyst™ stock selection process.  and Growth Equity, ESG, Convertibles, sector-focused strategies including Gold and Utilities, Merger Arbitrage, and Fixed Income. In 1977, GAMCO launched its flagship All Cap Value strategy, Gabelli Value, and in 1986 entered the mutual fund business.

As of December 31, 2017,2021, we had $43.1$35.0 billion of AUM, of which 96% is invested in equities,AUM. We conduct our investment advisory business principally through our two subsidiaries, which are registered investment advisers:advisors: Gabelli Funds, LLC (open-end and closed-end funds) (“Gabelli Funds”) and GAMCO Asset Management Inc. (“Institutional(Institutional and Private Wealth Management”) and Gabelli Funds, LLCPWM) (“Funds”GAMCO Asset”). G.distributors, LLC (“G.distributors”), our broker-dealer subsidiary, acts as an underwriter and distributor of our open-end funds.funds and actively managed semi-transparent ETFs.

Our AUM are organized into three groups:
  
●• 
Open and Closed-End Funds: We provide advisory services to 24 open-end funds and 14 closed-end funds under the Gabelli and  GAMCO brands (collectively, the “Funds”). As of December 31, 2021, the Funds had $20.6 billion of AUM. Additionally, we provide administrative services to 8 open-end funds, with AUM of $1.5 billion on December 31, 2021, under the TETON Westwood and Keeley brands.

• 
Institutional and Private Wealth Management: We provide advisory services to a broad range of investors, including corporate retirement plans, foundations, endowments, jointly-trusteed plans and public funds, private wealth clients and also serve as sub-advisor to third party investment funds including registered investment companies (“companies. Portfolios may be customized to comply with client-specific guidelines and risk profiles. As of December 31, 2021, Institutional and Private Wealth Management”).   On December 31, 2017, wePWM had $18.9$13.5 billion of Institutional and Private Wealth Management AUM.  Over the last 40 years, the firm has generated over $27.9 billion in investment returns for our institutional and private wealth management clients.

●• 
Open and Closed-End Funds: We provide advisory services to twenty-one open-end funds, fifteen closed-end funds and one exchange traded managed fund under the Gabelli, GAMCO and Comstock brands (collectively, the “Funds”).  The Funds had $23.7 billion of AUM on December 31, 2017.  Additionally, we provide administrative services to seven open-end funds, with AUM of $1.6 billion on December 31, 2017, under the TETON Westwood brand.

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●
SICAV: We provide advisory services to one fundSICAV under the GAMCO brand, the GAMCO International SICAV (the “SICAV”).SICAV. The SICAV has twothree sub-fund strategies,strategies: the GAMCO Merger Arbitrage Fund, and the GAMCO All Cap Value Fund, and the GAMCO Convertible Securities Fund. The GAMCO Merger Arbitrage strategy is sub-advised by Associated Capital Group, Inc. (“AC”) and had $458$806 million of AUM atas of December 31, 2017.  The GAMCO All Cap Value strategy had $52 million of AUM on December 31, 2017.2021.


Portfolio managers oversee our AUM and are supported by in-depth analysis by our research analyst teammates who have accumulated compound knowledge across numerous industries. Our research team, located in the U.S. and abroad, has an average of 17 years of industry experience.
GBL is a holding company incorporated in April 1998 in advance of our initial public offering (“Offering”) in February 1999.  GGCP Holdings, LLC, a subsidiary of GGCP, Inc., which is majority-owned by Mr. Mario J. Gabelli (“Mr. Gabelli”), owns a majority of the outstanding shares of Class B Common Stock (“Class B Stock”) of GBL.  Such ownership represented approximately 91% of the combined voting power of the outstanding common stock and approximately 63% of the equity interest on December 31, 2017.   On December 31, 2017, AC and its subsidiaries, own 4,393,055 shares of Class A Common Stock (“Class A Stock”) representing approximately 15% of the equity interest and approximately 2% of the combined voting power.  AC is majority-owned by GGCP Holdings, LLC.  Accordingly, Mr. Gabelli is deemed to control GBL.

OurThe principal executive offices areoffice is located at One Corporate Center, Rye, New York 10580.191 Mason Street, Greenwich, CT 06830. Our telephone number is (914) 921-3700.(203) 629-2726. We post or provide a link on our website www.gabelli.com,(www.gabelli.com) to the following filings as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (“Commission” or “SEC”SEC”): our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934.1934, as amended (“Exchange Act”). All such filings on our website are available free of charge.


On March 20, 2009, we distributedGBL is a holding company incorporated in April 1998 in advance of our ownershipinitial public offering (“IPO”) in Teton Advisors,February 1999. GGCP Holdings, LLC, a subsidiary of GGCP, Inc. (“Teton”GGCP”), the advisor to the TETON Westwood funds, to our shareholders.  At the timeowns a majority of the distribution theoutstanding shares of Class B common stock price(“Class B Stock”) of Teton was $2.75 per share.  AtGBL. As of December 31, 20172021, such ownership represented approximately 93% of the combined voting power of the outstanding common stock priceand approximately 69% of Tetonthe equity interest. AC, which was $45.00 per share.

Onspun-off from GBL on November 30, 2015 (the “Spin-Off Date”), we distributed our ownership in AC along with certain cash and other assets to our shareholders (the “Spin-off”).is publicly traded on the NYSE under the ticker symbol AC, owns 2,424,892 shares of Class A common stock (“Class A Stock”) representing approximately 1% of the combined voting power and operates, directly or indirectly,approximately 9% of the alternatives and the institutional research businesses previously owned and operatedequity interest of GBL as of December 31, 2021. AC is majority-owned by GBL.  Subsequent to the Spin-off, GAMCO no longer consolidates the financial results of AC for the purposes of its own financial reporting and the historical financial results of AC have been reflected in the Company’s consolidated financial statements as discontinued operations for 2015 within this report.  Historical AUM have similarly been adjusted to remove AUM managed by AC.GGCP Holdings, LLC.


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During 2017,2021, we returned $16.7$73.8 million to shareholders through dividends and our stock buyback program. We paid $2.4$2.7 million, or $0.08$0.10 per share, in cash dividends and $54.5 million, or $2.00 per share, in a special dividend in the form of 2-Year subordinated notes due June 15, 2023 to our common shareholders and repurchased 484,526700,722 shares at an average investment of $29.56$23.55 per share, or $14.3$16.5 million.


Since
At the OfferingIPO in February 1999, when6 million GBL shares were soldoffered at $17.50 per share and total shares outstanding were 30 million for a market capitalization of $525 million,million. Since the IPO, we have returned to shareholders $1.9$2.1 billion in total, comprised of which $1.0 billion was in the form of the spin-offs of AC and Teton $491.0Advisors, Inc. (“Teton”), $521.5 million through our stock buyback program, and $579.6 million from dividends. In addition, $74 million was from dividends and $453.1 million was through stock buybacks.distributed to charities on behalf of shareholders as well.


Business Strategy

Our business strategy targets global growth of the franchise through continuedby leveraging of our proven asset management strengths, including our brands, long-term performance record, diverse product offerings, and experienced investment, research, and client relationship professionals. In order toTo achieve performance and growth in AUM and profitability, we are pursuingdeploying a strategy which includes the following key elements:several factors:


●• 
Gabelli “PrivatePrivate Market Value (PMV) with a CatalystTM” Investment Approach. While we have expanded our investment product offerings, our “value investing” approach remainsApproach is at the core of our business. This method is based on andmethodology has evolved from the value investing principles articulated by Graham & Dodd in 1934 and enhanced by Roger Murray and Bruce Greenwald, and has been further augmented byGreenwald. Mr. Mario J. Gabelli CFA, with his development in 1979(“Mr. Gabelli”) contribution to their principles was the introduction of the Private Market Value (PMV) with a CatalystTMvalue investment methodology.methodology in 1979.

Private Market Value (PMV) with a CatalystTM investing is a disciplined, research-driven approach based on intensive security analysis. In this process, select stocks are identified with an intrinsic value based on our estimate of current asset value, future growth, and earnings power that is significantly different from the value reflected in the public market. We then calculate the stock’s PMV, defined as the price an informed industrial buyer would likely pay to acquire the business. We then look for a catalyst: a company specific event or industry-wide phenomena, such as a change in regulations that will help realize returns.
For the value process we employ which underscores value appeal, in general, our Institutional and PWM AUM are managed to meet the specific needs and objectives of each client by utilizing investment strategies that are within our areas of expertise: “all cap value”, “small cap value”, “small and mid (SMID) cap value”, “ESG,” and “gold”.

• 
Gabelli Growth Team. Our investment process begins by identifying the most robust secular growth industries globally.  Once attractive markets are identified, businesses within those markets are evaluated for two criteria: low penetration of a large addressable market and competitive advantage. The presence of competitive advantage allows us to derive confidence that the business can grow market share and revenue by increasing the penetration of its addressable market.  Competitive advantage can take the form of network effects, customer captivity or barriers to entry.

We value companies across two dimensions: relative valuation, which is most appropriate for profitable businesses, and discounted cash flow, which is appropriate for companies that are mostly being valued on future expected cash flows. For the latter, we evaluate unit economics, e.g. the ratio of lifetime value to customer acquisition cost, to understand the potential profitability of a business at maturity as its growth investments moderate. At the portfolio construction level, we incorporate business cycle analysis to manage position sizes and sector exposures.

• 
Growing Convertible Presence. Our convertible team has focused on this unique asset class for decades. Convertibles enable us to invest in companies with an asymmetrical return profile through a combination of equity exposure, income, and seniority in the capital structure. This attractive combination leads to reduced volatility relative to the underlying equity. We work closely with the Gabelli team of analysts and the combination of our strong bottom-up fundamental research culture and convertible expertise creates a differentiated strategy that resonates with investors, benefitting shareholders and clients. AUMs across our convertible products include a number of funds and SMAs. In 2021, we expanded our convertible presence to Europe through a SICAV structure allowing us to meet demand for a global convertible product.

Private Market Value (PMV) with a CatalystTM investing is a disciplined, research-driven approach based on intensive security analysis.  In this process, we generally select stocks whose intrinsic value, based on our estimate of current asset value and future growth and earnings power, is significantly different from the value reflected in the public market.  We then calculate the stock’s PMV, which is defined as the price an informed industrial buyer would likely pay to acquire the business.



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In general, our Institutional and Private Wealth Management AUM are managed to meet the specific needs and objectives of each client by utilizing investment strategies that are within our areas of expertise: “all cap value”, “ESG”, “small cap value”, “large cap growth”, “international growth” and “convertible”.


●• 
Establishing Relationship Offices. We have nine offices including New York, Chicago, Greenwich, London, Morristown, Palm Beach, Reno,Increasing Presence in and Tokyo.  WeMarketing for Private Wealth Management Market. Our private wealth management business focuses, generally, on client relationships of $2.5 million or greater. According to industry estimates, the number of households with over $2.5 million in investable assets will continue to evaluate adding additional offices throughoutexperience rapid growth, subject to ups and downs in the world.equity and fixed income markets. We believe the firm is well positioned to take advantage of this market opportunity, given its over four decades history of serving the needs of private high net worth clients, with tax sensitive investment management across a breadth of strategies, long performance history, and reputational standing. Our objective is to deepen long-term client relationships and, addressing the holistic needs of new clients over a sole equity management focus.
In recent years, GAMCO has successfully attracted and integrated new teams of RIAs, by providing a strong combination of corporate culture, reputation, and compensation arrangements.


●• 
Incentive Fees. SinceIncreasing Marketing for Institutional Market.Our dedicated team of institutional marketing professionals engages with a growing percentagevariety of clients and prospects across institutional and intermediary channels and are responsible for new business development and client relationship management. The institutional sales effort is focused on corporate and public pension plans, unions, endowments, foundations, and financial intermediaries. GAMCO augmented the institutional team with the addition of staff dedicated to marketing to investment consultants as they advise institutional plan sponsors on investment manager selection, asset allocation, and a wide range of investment matters. Expansion of the firm's revenues may be directly linked to performance-based fees (largely recognized in the fourth quarter), this may increase the variabilityteam serving regional, national, and global consultants provides greater breadth and depth of our revenuesfirm’s engagement and profits.  Assales efforts with the institutional community.

 • 
Attracting and Retaining Experienced Professionals. We offer competitive variable compensation that provides opportunities to our staff. The ability to attract and retain highly experienced investment and other professionals with a long-term commitment to our clients and us has been, and will continue to be, a significant factor in our long-term growth.
• 
Launch of December 31, 2017, approximately $3.0 billion of our AUM areactively managed on a performance fee basis including $1.4 billion of Institutional and Private Wealth Management assets, $714 million of preferred issues of closed-end funds, $458 million of SICAV assets,  $336 million in The GDL Fund, and $103 million insemi-transparent ETFs. We received approval for the Gabelli Merger Plus+ETF Trust PLC.and are launching up to nine licensed Precidian ActiveShares actively managed semi-transparent ETFs. This innovative product combines the characteristics of an actively managed mutual fund with the intra-day pricing and tax benefits of an ETF, including the benefits from § 852(b)(6), which allows a fund to deliver appreciated securities to redeeming shareholders without recognizing any gains and enables shareholders to defer capital gains until they sell their shares. On February 1, 2021, the Gabelli Love Our Planet & People ETF began trading on the New York Stock Exchange under the symbol LOPP. This ETF underscores our belief that an investment focus on the environment is essential to the future of the Planet. On February 16, 2021, the Gabelli Growth Innovators ETF began trading on the New York Stock Exchange under the symbol GGRW. This ETF provides an investment opportunity in businesses both enabling and benefitting from digital acceleration. On January 3, 2022, the Gabelli Asset ETF began trading on the New York Stock Exchange under the symbol GAST. This ETF focuses on companies that use automation equipment, related technology, software, or processes, and firms that use those services to automate their productivity.


●• 
Expanding Mutual Fund Distribution.We continue to expand our distribution network, primarily through national and regional brokerage firms, and have developed additional classes of shares for most of our mutual fundsopen-end Funds for sale through these firms and other third party distribution channels. We have increased our wholesalingwholesale distribution efforts to market the multi-class shares, which have been designed to meet the needs of investors who seekseeking advice through financial consultants. We launchedalso seek relationships with financial intermediaries that manage discretionary fund models in order to have our first actively managed exchange traded managed fund in 2016 (The Gabelli Media Mogul NextSharesTM) and our second in 2017 (The Gabelli Food of All Nations NextSharesTM).funds placed within such models.


●• 
Increasing Presence in Private Wealth Management Market. Our private wealth management business focuses, in general,Incentive Fees. As of December 31, 2021, approximately $1.3 billion of our AUM were managed on serving clients who have established an account relationshipa performance fee basis including $831 million of $2.5SICAV assets, $148 million or more with us.  According to industry estimates, the number of households with over $2.5preferred issues of closed-end funds, $180 million in investable assetsThe GDL Fund, and $100 million in the Gabelli Merger Plus+ Trust Plc. Incentive fees are recognized at end of measurement period and upon redemption.

• 
Establishing Relationship Offices Internationally. We have eleven offices, comprised of seven domestic offices located in Charleston, SC; Greenwich, CT; Morristown, NJ; Palm Beach, FL; Reno, NV; Rye, NY; and St. Louis, MO, and four international offices located in Hong Kong, London, Shanghai, and Tokyo. We will continue to grow, subjectevaluate adding additional offices in order to upsserve our clients and downs in the equity and fixed income markets.  With our 40-year history of serving this segment, long-term performance record, customized portfolios tax-sensitive investment strategy, brand name recognition and broad array of product offerings, we believe that we are well-positioned to capitalize on the growth opportunities in this market.meet global research requirements.


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●• 
Increasing Marketing for Institutional and Private Wealth Management. The Institutional and Private Wealth Management business was principally developed through direct marketing channels.  We plan to augment our institutional sales force through the addition of staff to market directly to the consultant community as well as through our traditional marketing channels.

●
Attracting and Retaining Experienced Professionals. We offer significant variable compensation that provides opportunities to our staff.  The ability to attract and retain highly-experienced investment and other professionals with a long-term commitment to us and our clients has been, and will continue to be, a significant factor in our long-term growth.

●
Hosting of Institutional Investor Symposiums.We have a tradition of sponsoring institutional investor symposiums that bring together prominent portfolio managers, members of academia, and other leading business professionals to present, discuss, and debate current issues and topics in the investment industry. These symposiums have included:


-2021
“The Future of Alzheimer’s Care and Treatment,” “New Technologies in Biopharma,” and “Data Mining and Artificial Intelligence in Patient Care”
-2020“COVID-19: Vaccines, Therapeutics, and Impact on the Healthcare System”
-2019“Healthcare at a Crossroads: What’s the Path Forward?”
-2019“Rule 852(b)(6), the Dynamics and Implications for the Fund Industry” -
-2017
-2015
“Digital Evolution in Financial Services”
“Capital Allocation – The Tug of War”
-2013“Value Investing 20 Years Later: A Celebration of the Roger Murray Lecture Series”
-2006“Closed-End Funds: Premiums vs. Discounts, Dividends and Distributions”
-2003“Dividends, Taxable versus Non-Taxable Issues”
-2001
-1998
“Virtues of Value Investing”
“The Role of Hedge Funds as a Way of Generating Absolute Returns”
-1997“Active vs. Passive Stock Selection”
 
• 
Hosting of Conferences. Gabelli Funds sponsors a series of industry conferences, which are well known within their respective industries for the intellectual content and for providing insight into investment decisions made on behalf of our clients.

Conference●Years held
Automotive Aftermarket Symposium45
Pump, Valve & Water Systems Symposium31
Aerospace & Defense Conference27
Berkshire Hathaway Annual Meeting Research Trip15
Entertainment & Broadcasting Conference13
Waste & Environmental Services Conference7
Healthcare Symposium3

• 
Capitalizing on Acquisitions, Alliances, and Lift-outs.We intend to selectively and opportunistically pursue acquisitions, alliances, and lift-outs that will broaden our product offerings, and add new sources of distribution.   On October 1, 1999, we completed our alliance with Mathersdistribution, and Company, Inc. and now act as investment advisor to the GAMCO Mathers Fund, and in May 2000, we added Comstock Partners Funds, Inc., (renamed Comstock Funds, Inc.).  The Mathers and Comstock funds are part of our Non-Market Correlated mutual fund product line.  In November 2002, we completed our alliance with Woodland Partners LLC, a Minneapolis-based investment advisor focused on investing in small capitalization companies.augment organic growth. On March 11, 2008, Gabelli Funds LLC (“Funds Advisor”) assumed the role of investment advisor to the AXA Enterprise Mergers and Acquisitions Fund, subsequently renamed Gabelli Enterprise Mergers and Acquisitions Fund, a fund that had been sub-advised by GAMCO since the fund’sits inception on February 28, 2001. On August 1, 2010, the clients of Florida-based NMF Asset Management became part of the Institutional and Private Wealth ManagementPWM operation of GAMCO Asset Management Inc. (“GAMCO Asset”).Asset. On November 2, 2015, the investment team of Dinsmore Capital, a specialist in convertible bond investing and formerly the manager of The Bancroft Fund and the Ellsworth Growth & Income Fund joined Gabelli Funds. During 2018, the clients of Trevor, Stewart, Burton & Jacobsen and Loeb Partners Management, Inc. joined GAMCO.

• 
Solutions For Our Wealth Management Clients With Fixed Income. We look to increase our competitive ability to attract new clients interested in wealth management and fixed income vehicles. The Gabelli U.S. Treasury Money Market Fund has an investment objective of high current income consistent with the preservation of principal and liquidity.

6


We believe that our growth to datesince inception is traceable to the following factors:



●
Strong Industry Fundamentals:According to data compiled by the U.S. Federal Reserve, the investment management industry has grown faster than more traditional segments of the financial services industry, including the banking and insurance industries. Since GBL began managing assets for institutionalInstitutional and private wealth managementPWM clients in 1977, based on data generated by Birinyi Associates, LLC, world equity markets have grown at a 10.3% compound annual growth rate through December 31, 20172021 to approximately $81.3 trillion(a).$121.5 trillion. The U.S. equity market comprises about $29.6$53.8 trillion,(a) or roughly 36%44% of world equity markets. We believe that demographic trends and the growing role of money managers in the placement of capital compared to the traditional role played by banks and life insurance companies will result in continued growth of the investment management industry.



●
Long-Term Performance:We have a superior long-term record of achieving relatively high returns for our Institutional and Private Wealth ManagementPWM clients. We believe that our performance record represents a competitive advantage and a recognized component of our franchise.


8


●
Stock Market Gains:Since we began managing for institutionalInstitutional and private wealth managementPWM clients in 1977, our traditional value-oriented Institutional and Private Wealth ManagementPWM composite has earned a compound annual return of 16.2%15.6% gross and 15.3%14.7% net of fees versus a compound annual return of 11.8%12.3% for theS&P 500 through December 31, 2017.  For 2017, the GAMCO composite rose 17.4% gross and 16.9% net of fees versus a gain of 21.8% for the S&P 500.2021.



●
Widely-Recognized “Gabelli” and “GAMCO” Brand Names:For much of our history, our CEO, portfolio managers, investment style, and investment products have been featured in a variety of financial print and digital media publications, including both U.S. and international publications such as The Wall Street Journal, Financial Times, Money Magazine, Barron's,Barron’s, Fortune, Business Week, Nikkei Financial News, Forbes, Magazine, Consumer Reports and Investor'sInvestor’s Business Daily. We also underwrite publicationshave published Deals…Deals…and More Deals written by our investment professionals, including  Deals…Deals…and More Deals, whichprofessionals. It examines the history and current practice of merger arbitrage and is published in English,has been translated into Japanese, Chinese, and Italian, and Spanish. Global Convertible Investing: The Gabelli Way, is a comprehensive guide to effective investing in convertible securities. We look forwardmost recently published Merger Masters: Tales of Arbitrage, whichpresents revealing profiles of monumentally successful merger investors based on exclusive interviews with some of the greatest minds to publishingpractice the follow up book toart of arbitrage. Our investment professionals also appear on leading financial news programs, including CNBC, Fox, Yahoo Finance, and Bloomberg, and we are active on numerous digital platforms, including Gabelli TV on YouTube and Twitter (@MarioGabelli, @InvestGabelli, and @InvestESG), among others. We have launched a podcast series whereby our 1999 Deals…Deals…portfolio managers and More Deals in the coming months: tales of how the best arbitrageurs of our time earn a non-market correlated return by investing in announced takeovers.research analysts discuss their views on various industries and topical issues. https://www.gabelli.com/media/podcast



●
Diversified Product Offerings:Since the inception of our investment management activities, we have sought to expand the breadth of our product offerings. We currently offer a wide spectrum of investment products and strategies, including product offerings in U.S. equities, U.S. fixed income, global and international equities, and convertible securities.


Business Description


Our AUM’s are clustered in two groups:  ��Funds and Institutional & Private Wealth Management.and PWM.


Funds:  We provide advisory services to twenty-one open-end funds, sixteen closed-end funds and two actively managed exchange traded managed funds. At December 31, 2017,2021, we had $23.7$20.6 billion of AUM in Fund AUM, representing 55.0%58.9% of our total AUM. Our equity funds and closed-end fundsFunds were $21.8$18.9 billion in AUM on December 31, 2017, 5.8% ahead of2021, 9.2% above the $20.6$17.3 billion on December 31, 2016.  We also are the2020. This includes our role as investment advisor to a SICAV with AUM of $510$831 million at December 31, 2017, up from2021, compared to the $320$474 million in AUM at December 31, 2016.2020.



(a) Source: Birinyi Associates, LLC

7
Open-end Funds

OnAs of December 31, 2017,2021, we had $13.7$10.2 billion of AUM in twenty23 open-end equity fundsFunds and $1.9$1.7 billion in our Gabelli U.S. Treasury Money Market Fund. We market our open-end fundsFunds primarily through third party distribution programs, including no-transaction fee (“NTF”) programs, and have developed additional share classes for many of our funds for distribution through additionalthese third party distribution channels. AtAs of December 31, 2017,2021, third party distribution programs accounted for approximately 78% of all assets in open-end equity funds, and, approximately 22%70% of our AUM in open-end equity funds wasand approximately 30% of our AUM in open-end equity funds were sourced through direct sales relationships.


Closed-end Funds

We act as investment advisor to sixteen14 closed-end funds, fourteen13 of which trade on the NYSE or its affiliated exchange:exchange. These funds cannot be redeemed by the funds’ shareholders, except in limited cases. The trading price of the shares is determined by supply and demand in the marketplace and, as a result, the shares may trade at a premium or discount to the net asset value of the fund. The closed-end funds are: Gabelli Equity Trust (GAB), GDL Fund (GDL), Gabelli Multimedia Trust (GGT), Gabelli Healthcare & Wellness Rx Trust (GRX), Gabelli Convertible and Income Securities Fund (GCV), Gabelli Utility Trust (GUT), Gabelli Dividend & Income Trust (GDV), Gabelli Global Utility & Income Trust (GLU), GAMCO Global Gold, Natural Resources & Income Trust (GGN), GAMCO Natural Resources, Gold & Income Trust (GNT), The Gabelli Global Small and Mid Cap Value Trust (GGZ), the Bancroft Fund Ltd. (BCV), and the Ellsworth Growth and Income Fund Ltd. (ECF), and the Gabelli Go Anywhere Trust (GGO). We launched the Gabelli Value Plus+Merger Plus+ Trust Plc (GVP) in 2015 and the Gabelli Merger Plus+ Trust PLC (GMP) in 2017, both of which tradetrades on the London Stock Exchange. As of December 31, 2017,2021, the sixteen14 closed-end funds had total assets of $8.1$8.7 billion, representing 34.0%42.2% of the total assets in our Funds business.

Exchange Traded Managed Funds

During 2016, we launched our first exchange traded managed fund (“ETMF”).  The Gabelli Media Mogul NextSharesTM trades on the Nasdaq Stock Market LLC under the symbol “MOGLC” and was the first member of the Gabelli NextShares Trust offered under an agreement with NextShares Solutions, LLC.  The Gabelli Food of All Nations NextSharesTM was launched in 2017 and trades on the Nasdaq Stock Market LLC under the symbol “FOANC”.  As of December 31, 2017, the two ETMFs had AUM of $7.0 million.


SICAV


We provide investment advisory services to one fund under the GAMCO brand, the GAMCO International SICAV.  The SICAV, which has twothree sub-fund strategies,strategies: the GAMCO Merger Arbitrage Fund, and the GAMCO All Cap Value Fund, and the GAMCO Convertible Securities Fund. Total AUM in the SICAV was $510$831 million at December 31, 2017.2021.


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Institutional and Private Wealth Management:   At December 31, 2017,2021, we had $18.9$13.5 billion of AUM in approximately 1,7001,400 Institutional and Private Wealth ManagementPWM accounts, representing 43.8%38.7% of our total AUM. The Private Wealth ManagementAs of December 31, 2021, the PWM clients, –generally defined as individuals generally having minimum investable assets of $5$1.0 million, comprised approximately 80%83% of the total number of managementInstitutional and PWM accounts and approximately $5.3$4.6 billion, or 28%34%, of the Institutional and Private Wealth Management assets as of December 31, 2017.PWM AUM. We believe that Private Wealth ManagementPWM clients for the taxable portion of their assets are attracted to us by our returns and the tax efficient nature of the underlying investment process.process for the taxable portion of their assets. As of December 31, 2017,2021, institutional client accounts representedcomprised approximately $6.47% of the total number of Institutional and PWM accounts and approximately $2.8 billion, or 35%21%, of the Institutional and Private Wealth Management assets and 9%PWM AUM. As of the accounts.  FoundationDecember 31, 2021, foundation and endowment fund assets represented 11%comprised approximately 9% of the total number of Institutional and Private Wealth ManagementPWM accounts and approximately $1.7$1.1 billion, or 9%8%, of the Institutional and Private Wealth ManagementPWM AUM. TheAs of December 31, 2021, the sub-advisory clients, (wherewhere we act as sub-advisor to third party investment funds) heldfunds, comprised approximately $5.4 billion, or 29%, of total Institutional and Private Wealth Management assets with 1% of the total number of accounts.Institutional and PWM accounts and approximately $5.0 billion, or 37%, of total Institutional and PWM AUM.

The ten largest Institutional and Private Wealth ManagementPWM relationships comprised approximately 47% of GAMCO Asset Management AUM and approximately 20%18% of our total AUM as of December 31, 2021, and approximately 29%33% of GAMCO Asset Management revenues and approximately 9%8% of our total revenues for the year ended December 31, 2017.2021.


Investment advisory agreements for our Institutional and Private Wealth ManagementPWM clients are typicallygenerally subject to termination by the client without penalty on 30 days’ notice or less.written notice.

810
Assets Under Management


  Years Ended December 31, 
  2021  2020 
Equities:        
Mutual Funds        
Beginning of period assets $9,541  $10,481 
Inflows  1,060   1,149 
Outflows  (1,828))  (2,725))
Net inflows (outflows)  (768))  (1,576))
Market appreciation (depreciation)  1,521   702 
Fund distributions, net of reinvestment  (45))  (66))
Total increase (decrease)  708   (940))
End of period assets $10,249  $9,541 
Percentage of total assets under management  29.3%%  29.3%%
Average assets under management $10,099  $9,090 
         
Closed-end Funds        
Beginning of period assets $7,773  $8,005 
Inflows  504   80 
Outflows  (239))  (400))
Net inflows (outflows)  265)  (320) 
Market appreciation (depreciation)  1,140   606 
Fund distributions, net of reinvestment  (522))  (518))
Total increase (decrease)  883   (232) 
End of period assets $8,656  $7,773 
Percentage of total assets under management  24.7%%  23.9%%
Average assets under management $8,373  $7,163 
         
Institutional & PWM        
Beginning of period assets $12,371  $14,565 
Inflows  501   764 
Outflows  (2,028))  (3,367))
Net inflows (outflows)  (1,527))  (2,603))
Market appreciation (depreciation)  2,653   409 
Total increase (decrease)  1,126   (2,194))
End of period assets (a)
 $13,497  $12,371 
Percentage of total assets under management  38.6%%  38.0%%
Average assets under management $13,272  $11,399 
         
SICAV        
Beginning of period assets $474  $594 
Inflows  514   191 
Outflows  (155))  (355))
Net inflows (outflows)  359   (164))
Market appreciation (depreciation)  (2))  44 
Total increase (decrease)  357   (120))
End of period assets $831  $474 
Percentage of total assets under management  2.4%%  1.5%%
Average assets under management $662  $477 

(a) Includes $183 million and $166 million of 100% U.S. Treasury Fund AUM at December 31, 2021 and 2020, respectively.


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  Years Ended December 31, 
  2021  2020 
Total Equities        
Beginning of period assets $30,159  $33,645 
Inflows  2,579   2,184 
Outflows  (4,250)  (6,847)
Net inflows (outflows)  (1,671)  (4,663)
Market appreciation (depreciation)  5,312   1,761 
Fund distributions, net of reinvestment  (567)  (584)
Total increase (decrease)  3,074   (3,486)
End of period assets $33,233  $30,159 
Percentage of total assets under management  95.0%  92.6%
Average assets under management $32,406  $28,129 
         
Fixed Income:        
100% U.S. Treasury fund        
Beginning of period assets $2,370  $2,810 
Inflows  2,839   3,479 
Outflows  (3,492)  (3,933)
Net inflows (outflows)  (653)  (454)
Market appreciation (depreciation)  -   14 
Total increase (decrease)  (653)  (440)
End of period assets $1,717  $2,370 
Percentage of total assets under management  4.9%  7.3%
Average assets under management $1,834  $2,840 
         
Institutional & PWM        
Beginning of period assets $32  $20 
Inflows  -   12 
Outflows  -   - 
Net inflows (outflows)  -   12 
Market appreciation (depreciation)  -   - 
Total increase (decrease)  -   12 
End of period assets $32  $32 
Percentage of total assets under management  0.1%  0.1%
Average assets under management $32  $23 
         
Total Fixed Income        
Beginning of period assets $2,402  $2,830 
Inflows  2,839   3,491 
Outflows  (3,492)  (3,933)
Net inflows (outflows)  (653)  (442)
Market appreciation (depreciation)  -   14 
Total increase (decrease)  (653)  (428)
End of period assets $1,749  $2,402 
Percentage of total assets under management  5.0%  7.4%
Average assets under management $1,866  $2,863 
         
Total AUM        
Beginning of period assets $32,561  $36,475 
Inflows  5,418   5,675 
Outflows  (7,742)  (10,780)
Net inflows (outflows)  (2,324)  (5,105)
Market appreciation (depreciation)  5,312   1,775 
Fund distributions, net of reinvestment  (567)  (584)
Total increase (decrease)  2,421   (3,914)
End of period assets $34,982  $32,561 
Average assets under management $34,272  $30,992 



12
The following table sets forth total AUMthe amounts of distributions to clients in our Funds by product type as of the dates shown:year:


  2021  2020  2019 
Open-end Funds $46  $66  $93 
Closed-end Funds  522   518   523 
Total distributions $584  $616  $594 
Assets Under Management
By Product Type
(Dollars in millions)
     % 
  At December 31,  Change 
  2013 (c)  2014 (c)  2015  2016  2017   2017/2016 
Equity:                   
Open-end Funds $17,078  $17,684  $13,811  $13,462  $13,747   2.1%
Closed-end Funds  6,945   6,949   6,492   7,150   8,053   12.6 
Institutional & Private Wealth Management                        
Direct  16,486   16,597   13,366   13,441   13,420   (0.2)
Sub-advisory  3,797   3,704   3,401   3,783   5,432   43.6 
SICAV (a)  96   135   178   320   510   59.4 
Total Equity  44,402   45,069   37,248   38,156   41,162   7.9 
Fixed Income:                        
Money Market Mutual Fund (b)  1,735   1,455   1,514   1,767   1,870   5.8 
Institutional & Private Wealth Management  62   58   38   31   31   0.0 
Total Fixed Income  1,797   1,513   1,552   1,798   1,901   5.7 
Total AUM $46,199  $46,582  $38,800  $39,954  $43,063   7.8 
                         
Breakdown of Total AUM:                        
Funds  25,758   26,088   21,817   22,379   23,670   5.8 
Institutional & Private Wealth Management                        
Direct  16,548   16,655   13,404   13,472   13,451   (0.2)
Sub-advisory  3,797   3,704   3,401   3,783   5,432   43.6 
SICAV  96   135   178   320   510   59.4 
Total AUM $46,199  $46,582  $38,800  $39,954  $43,063   7.8 
(a)Adjusted to include assets of $96 million, $135 million, $141 million, and $270 million at December 31, 2013, 2014, 2015,
and 2016, respectively.
(b)The Fund is 100% invested in short-term U.S. Treasury obligations which have remaining maturities of 397 days or less.
(c)Historical AUM has been restated to remove the AUM managed by AC.

9

Summary of Investment Products


We manage assets in the following wide spectrum of investment products and strategies:


U.S. Equities: (92.9% of AUM)
Global and International Equities: (1.6% of AUM)
All Cap ValueInternational Growth
Large Cap ValueInternational Small Cap Growth
Large Cap GrowthGlobal Growth
MidSmall-Mid Cap ValueGlobal Value
Small Cap ValueGlobal Content & Connectivity
Small Cap GrowthGlobal Utilities
Micro Cap ValueConvertible Securities:
ESG - SRI
Convertible Securities
Dividend and Income

Event-Driven Merger Arbitrage
U.S. Fixed Income:
Actively-managed ETFs
Corporate Bonds

Government and Agencies
Sector-focused:Asset-backed Securities
UtilitiesIntermediate-term
GoldShort-term
Natural Resources
Small and Mid Cap
IncomeMedia
 
Utilities
U.S. Fixed Income: (4.3% of AUM)
Non-Market CorrelatedCorporate
Option IncomeGovernment
MultimediaAsset-backed
ESGIntermediate
HealthcareShort-term

 
Convertible Securities: (1.2% of AUM)
Convertible Securities
Financial Services 


Additional Information on Mutual Funds


Through Gabelli Funds, Advisor, we act as the investment advisor to all of the Funds, except with respect to the GAMCO Mathers Fund for which GAMCO Asset Management Inc. acts as the advisor.Funds.


Shareholders of the open-end fundsFunds are allowed to exchange shares among the same class of shares of the other open-end fundsFunds as economic and market conditions and investor needs change at no additional cost. However, as noted below, certain open-end fundsFunds impose a 2% redemption fee on shares redeemed within seven days or less after a purchase. We periodically introduce new funds designed to complement and expand our investment product offerings, respond to competitive developments in the financial marketplace, and meet the changing needs of investors.

Our marketing efforts for the open-end fundsFunds are currently focused on increasing the distribution and sales of our existing funds as well asand creating new products for sale through our distribution channels. We believe that our marketing efforts for the fundsFunds will continue to generate additional revenues from investment advisory fees. We had traditionally distributedAfter distributing most of our open-end funds byFunds using a variety of direct response marketing techniques, including telemarketing and advertising, and as a result we maintain direct relationships with many of our no-load open-end fund shareholders.  Beginning in late 1995 we expanded our product distribution by offering several of our open-end fundsFunds through third party distribution programs, including NTF programs.

In 1998 and 1999, we further expanded these efforts to include substantially all of our open-end fundsFunds in third party distribution programs.  Approximately 22% of the AUM in the open-end equity funds are still attributable to our direct response marketing efforts.  Third party distribution programs, which have become an increasingly important source of asset growth for us.  Of the $13.7 billion of AUM in the open-end equity funds asgrowth. As of December 31, 2017,2021, approximately 78% were70% of the $10.2 billion of open-end equity fund AUM was generated through third party distribution programs.  We are responsible for paying the service and distribution fees charged by many of the third party distribution programs, although a portion of such service fees under certain circumstances are payable by the funds.  The multi-classwhile approximately 30% was attributable to our direct response marketing efforts.

13
Multi-class shares are available in allmost of the Gabelli Funds, with the exception of the Gabelli Capital Asset Fund and the GAMCO Mathers Fund.  Wewe believe that thetheir use of multi-class shares expands the distribution of our open-end fundsFunds into the advised sector of the mutual fund investment community.  We introduced Class I shares, which are no-load shares with higher minimum initial investmentinvestments and without distribution fees, are available directly through G.distributors or brokers that have entered into selling agreements, with respect to Class I shares.  Theand no-load shares are designated as Class AAA shares and are available for new and currentto investors.  During 2017, we introduced Class T shares for some of our open-end funds which have a reduced sales charge as compared to Class A shares. 

In general, distribution through third party programs has greater variable cost components and lower fixed cost components than distribution through our traditional direct sales methods. We pay the distribution fees charged by many of the third party distribution programs, although a portion of distribution fees under certain circumstances is payable by the Funds.

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We provide investment advisory and management services pursuant to an investment management agreement with each fund.fund (“Fund IMAs”). The investment management agreements with the fundsFund IMAs generally provide that we are responsible for the overall investment and administrative services, subject to the oversight of each fund's BoardFund’s board of Directorsdirectors or Trusteestrustees and in accordance with each fund'sFund’s fundamental investment objectives and policies. The investment management agreementsFund IMAs permit us to enter into separate agreements for sub-administrative and accounting services on behalf of the respective funds.Funds.

Our affiliated advisors provideadvisor provides the fundsFunds with administrative services pursuant to the management contracts.Fund IMAs. Such services include, without limitation, supervision of the calculation of net asset value, preparation of financial reports for shareholders of the funds,Funds, internal accounting, tax accounting and reporting, regulatory filings, and other services. Most of these administrative services are provided through sub-contracts with independent third parties. Transfer agency and custodial services are provided directly to the fundsFunds by independent third parties.


Our funds’ investment management agreementsEach of our Fund IMAs may continue in effect from year to year only if specifically approved at least annually by (i) the fund's BoardFund’s board of Directorsdirectors or Trusteestrustees or (ii) the fund'sFund’s shareholders and, in either case, the vote of a majority of the fund'sFund’s independent or non-interested directors or trustees who are not parties to the agreement or “interested persons” of any such party, within the meaning of the Investment Company Act of 1940, as amended (the “Company(“Company Act”). Each funddomestic Fund may terminate its investment management agreementFund IMA at any time upon 60 days'days’ written notice by (i) a vote of the majority of the Boardboard of Directors or Trustees cast in person at a meeting called for the purpose of voting on such termination or (ii) a vote at a meeting of shareholders of the lesser of either 67% of the voting shares represented in person or by proxy (if at least 50% of the shares are present at the meeting) or 50% of the outstanding voting shares of such Fund.  Each investment management agreement automatically terminates in the event of its assignment, as defined in the Company Act.  We may terminate an investment management agreement without penalty on 60 days' written notice.

Open-End Fund Distribution

G.distributors, a wholly-owned subsidiary of GBL, is a broker-dealer registered under the Securities Exchange Act of 1934 and is regulated by FINRA.  G.distributors' revenues are derived primarily from the distribution of our open-end funds.  G.distributors distributes our open-end funds pursuant to distribution agreements with each fund.  It also distributes funds managed by Teton and its affiliates.  Under each distribution agreement with an open-end fund, G.distributors offers and sells such open-end fund's shares on a continuous basis and pays the majority of the costs of marketing and selling the shares, including printing and mailing prospectuses and sales literature, advertising and maintaining sales and customer service personnel and sales and services fulfillment systems, and payments to the sponsors of third party distribution programs, financial intermediaries and G.distributors sales personnel.  G.distributors receives fees for such services pursuant to distribution plans adopted under provisions of Rule 12b-1 (“12b-1”) of the Company Act.  Distribution fees from the open-end funds are computed daily based on average net assets.  Distribution fees from the open-end funds amounted to $39.7 million, $41.0 million and $47.7 million while payments to third-parties for selling the open-end funds totaled $37.3 million, $39.7 million and $45.8 million for the years ended December 31, 2017, 2016 and 2015, respectively.  G.distributors is the principal underwriter for funds distributed in multiple classes of shares which carry either a front-end, back-end or no sales charge.  Underwriting fees and sales charges retained amounted to $1.5 million, $1.2 million and $1.0 million for the years ended December 31, 2017, 2016 and 2015, respectively.
Under the distribution plans, the open-end Class AAA shares of the funds (except The Gabelli U.S. Treasury Money Market Fund, Gabelli Capital Asset Fund and The Gabelli ABC Fund) and the Class A, T and V shares of various funds pay G.distributors a distribution or service fee of .25% per year (except the Class A shares of the TETON Westwood Funds and Gabelli Enterprise Mergers & Acquisition Fund which pay .50% and 0.45% per year, respectively, and the TETON Westwood Intermediate Bond Fund which pays .35%) on the average daily net assets of the fund.  Class C shares have a 12b-1 distribution plan with a service and distribution fee totaling 1%.   G.distributors’ distribution agreements with the funds may continue in effect from year to year only if specifically approved at least annually by (i) the fund's Board of Directors or Trustees or (ii) the fund's shareholders and, in either case, the vote of a majority of the fund's directors or trustees who are not parties to the agreement or “interested persons” of any such party, within the meaning of the Company Act.  Each fund may terminate its distribution agreement, or any agreement thereunder, at any time upon 60 days' written notice by (i) a vote of the majority of its directors or trustees cast in person at a meeting called for the purpose of voting on such termination or (ii) a vote at a meeting of shareholders of the lesser of either 67% of the voting shares represented in person or by proxy (if at least 50% of the shares are present at the meeting) or 50% of the outstanding voting shares of such Fund. Each Fund IMA automatically terminates in the event of its assignment, as defined in the Company Act. We may terminate a Fund IMA without penalty on 60 days’ written notice.

Open-End Fund Distribution

G.distributors, a wholly-owned subsidiary of GBL, is a broker-dealer registered under the Exchange Act, and is regulated by the Financial Industry Regulatory Authority (“FINRA”). G.distributors’ revenues are derived primarily from the distribution of our open-end Funds. G.distributors distributes our open-end Funds pursuant to distribution agreements with each Fund. It also distributes funds managed by Teton and its affiliates. Under each distribution agreement with an open-end Fund, G.distributors offers and sells such open-end Fund’s shares on a continuous basis and pays the majority of the costs of marketing and selling the shares, including printing and mailing prospectuses and sales literature, advertising, maintaining sales and customer service teammates and sales and services fulfillment systems, and payments to the sponsors of third party distribution programs, financial intermediaries, and G.distributors’ sales teammates. G.distributors receives fees for such services pursuant to distribution plans adopted under provisions of Rule 12b-1 (“12b-1”) of the Company Act. Distribution fees from the open-end Funds are computed daily based on average net assets. For the years ended December 31, 2021 and 2020, distribution fees from the open-end Funds amounted to $23.7 million and $23.1 million, respectively, while payments to third-parties for selling the open-end Funds totaled $21.8 million and $21.0 million, respectively. G.distributors is the principal underwriter for the Funds distributed in multiple classes of shares, which carry either a front-end, back-end, or no sales charge. For the years ended December 31, 2021 and 2020, underwriting fees and sales charges retained amounted to $0.9 million and $1.0 million, respectively.

Under the distribution plans, the Class AAA shares of the open-end Funds (except The Gabelli U.S. Treasury Money Market Fund, and The Gabelli ABC Fund) and the Class A and ADV shares of certain funds pay G.distributors a distribution fee of 0.25% per year on the average daily net assets of the fund. Class C shares have a 12b-1 distribution plan with a distribution fee totaling 1.00%. 

G.distributors’ distribution agreements with each fund may continue in effect from year to year only if specifically approved at least annually by (i) the Fund’s board of directors or trustees or (ii) the Fund’s shareholders and, in either case, the vote of a majority of the Fund’s board of directors or trustees who are not parties to the agreement or “interested persons” of any such party, within the meaning of the Company Act. Each Fund may terminate its distribution agreement, or any agreement thereunder, at any time upon 60 days’ written notice by (i) a vote of the majority of its board of directors or trustees cast in person at a meeting called for the purpose of voting on such termination or (ii) a vote at a meeting of shareholders of the lesser of either 67% of the voting shares represented in person or by proxy (if at least 50% of the shares are present at the meeting) or 50% of the outstanding voting shares of such Fund. Each distribution agreement automatically terminates in the event of its assignment, as defined in the Company Act. G.distributors may terminate a distribution agreement without penalty upon 60 days'days’ written notice.
 
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G.distributors also offers our open-end fundFund products through our website, www.gabelli.com, where directly registered mutual fund investors can access their personal account information and buy, sell, and exchange Fundfund shares. Fund prospectuses, quarterly reports, fundFund applications, daily net asset values, and performance charts are all available online.


Competition


We compete with other investment management firms and mutual fund companies, insurance companies, banks, brokerage firms, and other financial institutions that offer products that have similar features and investment objectives. Many of these investment management firms are subsidiaries of large diversified financial companies. Many others are much larger in terms of AUM and revenues and, accordingly, have much larger sales organizations and marketing budgets. Historically, we have competed primarily on the basis of the long-term investment performance of many of our investment products.  However, weproducts in addition to brand recognition of the Firm and market awareness of its founder, Mr. Gabelli. We have taken steps to increase our distribution channels, brand name awarenessconsistency and marketing communications, and thought-leadership efforts. Other trends affecting the investment management business include the widespread popularity of index mutual funds and ETFs, which have tax and cost advantages over traditional investment companies.

The market for providing investment management services to Institutional and Private Wealth ManagementPWM clients is also highly competitive. Approximately 33%27% of our investment advisory fee revenue for the year ended December 31, 20172021 was derived from our Institutional and Private Wealth ManagementPWM business. Selection of investment advisors by U.S. institutional investors is often subject to a screening process and to favorable recommendations by investment industry consultants. Many of these investors require their investment advisors to have a successful and sustained performance record, often five years or longer with focus also on one-year and three-year performance records. We have significantly increased our AUM on behalf of U.S. institutional investors since our entry into the institutional asset management business in 1977.


Intellectual Property


Service marks and brand name recognition are important to our business. We have rights to the service marks under which our products are offered. We have registered certain service marks in the United StatesU.S. and will continue to do so as new trademarks and service marks are developed or acquired. We have rights to use the “Gabelli” name, the “GAMCO” name, and other names. Pursuant to an assignment agreement, Mr. Gabelli has assigned to us all of his rights, title, and interests in and to the “Gabelli” name for use in connection with investment management services, mutual funds and securities brokerage services. However, under the agreement, Mr. Gabelli will retain any and all rights, title, and interests he has or may have in the “Gabelli” name for use in connection with (i) charitable foundations controlled by Mr. Gabelli or members of his family and (ii) entities engaged in private investment activities for Mr. Gabelli or members of his family. In addition, the funds managed by Mr. Gabelli outside GBL have entered into a license agreement with us permitting them to continue limited use of the “Gabelli” name under specified circumstances.  We have taken, and will continue to take, action to protect our interests in these service marks.


Regulation


Virtually all aspects of our businesses are subject to various federal, state, and foreign laws and regulations. These laws and regulations are primarily intended to protect investment advisory clients and shareholders of investment funds. Under such laws and regulations, agencies that regulate investment advisors and broker-dealers have broad powers, including the power to limit, restrict or prohibit such an advisor or broker-dealer from carrying on its business in the event that it fails to comply with such laws and regulations. In such an event, the possible sanctions that may be imposed include civil and criminal liability, the suspension of individual employees, injunctions, limitations on engaging in certain lines of business for specified periods of time, revocation of the investment advisor, and other registrations, censures, and fines.


Our business is subject to extensive regulation at the federal, state, and foreign level by the SEC and other regulatory bodies. Certain of our subsidiaries are registered with the SEC under the Investment Advisers Act of 1940, as amended (“Advisers Act”), and the fundsFunds are registered with the SEC under the Company Act. We also have a subsidiary that is registered as a broker-dealer with the SEC and is subject to regulation by FINRA and various states.
 
The subsidiaries of GBL that are registered with the CommissionSEC under the Advisers Act (Funds Advisor, Gabelli Fixed Income LLC(Gabelli Funds and GAMCO Asset) are regulated by and subject to examination by the SEC. The Advisers Act imposes numerous obligations on registered investment advisors, including fiduciary duties, disclosure obligations, and record keeping, operational, and marketing requirements. The CommissionSEC is authorized to institute proceedings and impose sanctions for violations of the Advisers Act, ranging from censure to termination of an investment advisor'sadvisor’s registration. The failure of an advisory subsidiary to comply with the requirements of the SEC could have a material adverse effect on us.

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We derive a substantial majority of our revenues from investment advisory services through our various investment management agreements. Under the Advisers Act, our investment management agreements may not be assigned without the client'sclient’s consent. Under the Company Act, advisory agreements with registered investment companies, such as our Funds, terminate automatically upon assignment. The term “assignment” is broadly defined and includes direct as well as assignments that may be deemed to occur, under certain circumstances, upon the transfer, directly or indirectly, of a controlling interest in GBL.
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In its capacity as a broker-dealer, G.distributors is required to maintain certain minimum net capital amounts. These requirements also provide that equity capital may not be withdrawn, advances to affiliates may not be made, orand cash dividends may not be paid if certain minimum net capital requirements are not met. G.distributors’ net capital, as defined in Rule 15c3-3 promulgated under the Securities Exchange Act of 1934, as amended, met or exceeded all minimum requirements as of December 31, 2017.2021. As a registered broker-dealer, G.distributors is also subject to periodic examination by FINRA, the SEC, and the states.


Subsidiaries of GBL are subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and to regulations promulgated thereunder, insofar as they are “fiduciaries” under ERISA with respect to certain of their clients. ERISA and applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), impose certain duties on persons who are fiduciaries under ERISA and prohibit certain transactions involving ERISA plan clients. Our failure to comply with these requirements could have a material adverse effect on us.


Investments by GBL and on behalf of our advisoryFunds and Institutional and PWM clients and investment funds often represent a significant equity ownership position in an issuer'sissuer’s class of stock. As of December 31, 2017,2021, we had five percent or more beneficial ownership with respect to 10880 equity securities. This activity raises frequent regulatory, legal, and disclosure issues regarding our aggregate beneficial ownership level with respect to portfolio securities, including issues relating to issuers'issuers’ shareholder rights plans or “poison pills,” and various federal and state regulatory limitations, including state gaming laws and regulations, federal communications laws and regulations, and federal and state public utility laws and regulations, as well as federal proxy rules governing shareholder communications and federal laws and regulations regarding the reporting of beneficial ownership positions. Foreign country regulations may have different levels of ownership limitations. Our failure to comply with these requirements could have a material adverse effect on us.

The USA Patriot Act of 2001 contains anti-money laundering and financial transparency laws and mandates the implementation of various new regulations applicable to broker-dealers, mutual funds and other financial services companies, including standards for verifying client identification at account opening and obligations to monitor client transactions and report suspicious activities. Anti-money laundering laws outside of the U.S. contain some similar provisions. Our failure to comply with these requirements could have a material adverse effect on us.


We and certain of our affiliates are subject to the laws of non-U.S. jurisdictions and non-U.S. regulatory agencies or bodies. In connection with our office in London and our plans to market certain products in Europe, we are required to comply with the laws of the United Kingdom and other European countries regarding these activities. Our subsidiary, GAMCO Asset Management (UK) Limited, is regulated by the Financial Conduct Authority (“FCA”).Authority. In connection with our registration in the United Kingdom, we have minimum capital requirements that have been consistently met or exceeded. We opened an officeoffices in Hong Kong, Shanghai, and Tokyo and, therefore, are subject to national and local laws in that jurisdiction.those jurisdictions. We are subject to requirements in numerous jurisdictions regarding reporting of beneficial ownership positions in securities issued by companies whose securities are publicly-traded in those countries.


Regulatory matters


The investment management industry is likely to continue facing a high level of regulatory scrutiny and become subject to additional rules designed to increase disclosure, tighten controls, and reduce potential conflicts of interest. In addition, the CommissionSEC has substantially increased its use of focused inquiries, which request information from investment advisors and a number of fund complexes regarding particular practices or provisions of the securities laws. We participate in some of these inquiries in the normal course of our business. Changes in laws, regulations, and administrative practices by regulatory authorities, and the associated compliance costs, have increased our cost structure and could in the future have a material adverse impact. Although we have installed procedures and utilize the services of experienced administrators, accountants, and lawyers to assist us in adhering to regulatory guidelines and satisfying these requirements, and maintain insurance to protect ourselves in the case of client losses, there can be no assurance that the precautions and procedures that we have instituted and installed, or the insurance that we maintain to protect ourselves in case of client losses, will protect us from all potential liabilities.


See Legal Proceedings in Part I, Item 3: LEGAL PROCEEDINGS below.3 of this Form 10-K for additional information.


Personnel
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OnHuman Capital

GAMCO is a dynamic firm that seeks and employs bright and energetic teammates with entrepreneurial attitudes, experience in the financial services industry, and who are guided by the same ESG principles that guide the firm.

Teammates

We provide a variety of benefits to promote retention and growth of our teammates. We strive to offer competitive compensation packages to our teammates, comprised of base pay, variable compensation, annual bonuses, as well as equity grants to promote a sense of ownership and aligned interests to our public shareholders. We offer a comprehensive benefits package that gives a robust collection of rewards and benefits, including healthcare and other insurance benefits and retirement savings plans. Additionally, we provide annual training and teammate reviews in order to promote growth and self-reflection.

As of February 28, 2018,2022, we had a full-time staff of 159 individuals,168 teammates, of whom 4163 served in the portfolio management, portfolio management support, and trading areas (including 1921 portfolio managers for the Funds and Institutional and Private Wealth Management)PWM), 5550 served in the marketing and shareholder servicing areas, and 6355 served in the administrative area.


Diversity and Inclusion

As a company, we are committed to and actively striving to ensure we have a diverse workforce. We recognize our teammates are the most valuable asset we have and we embrace the differences amongst our teammates that make them unique, including race, ethnicity, sexual orientation, gender identity, disability, religion, and socio-economic status.

We put this into practice via our diversity initiatives that are guided by our diversity and inclusion policy and applied via our practices and policies on recruitment and selection, compensation and benefits, professional development, training, promotions, and transfers.

Status as a Smaller Reporting Company

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We are a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K. As a result, we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “smaller reporting companies.” Under this rule, we will, in general, remain a smaller reporting company unless the market value of GBL common stock that is held by non-affiliates exceeds $250 million as of the last business day of our most recently completed second fiscal quarter. The market value of GBL common stock held by non-affiliates at December 31, 2021 was approximately $138 million.


We may take advantage of some or all of the reduced regulatory and reporting requirements that will be available to us as long as we qualify as a smaller reporting company.

ITEM 1A:RISK FACTORS
ITEM 1A: RISK FACTORS


We caution the reader that the following risks and those risks described elsewhere in this report and in our other SEC filings could have a material adverse effect on our business, prospects, financial condition, results of operations, or cash flowflows or could cause a decline in the Company’s stock price.


Risks Related to Our Industry


We earn substantially all of our revenue based on assets under management and, therefore, a reduction in assets under management would reduce our revenues and profitability. Assets under management fluctuate based on many factors including:including market conditions, investment performance, and terminations of investment contracts.

Substantially all of our revenues are directly related to the amount of our AUM. Under our investment advisory contracts with our clients, the investment advisory fees we receive are typically based on the market value of AUM. In addition, we receive asset-based distribution and/or service fees with respect to the open-end fundsFunds managed by Gabelli Funds Advisor or Teton and its affiliates over time pursuant to distribution plans adopted under provisions of Rule 12b-1 under the Company Act. Rule 12b-1 fees typically are based on the average AUM and represented approximately 11.0%, 11.6%7.9% and 12.5%8.9% of our total revenues for the years ended December 31, 2017, 20162021 and 2015,2020, respectively. Accordingly, a decline in the prices of securities generally may cause our revenues and net income to decline by either causing the value of our AUM to decrease, which would result in lower investment advisory and Rule 12b-1 fees, or causing our clients to withdraw funds in favor of investments they perceive to offer greater opportunity or lower risk, which would also result in lower fees. The securities markets are highly volatile, and securities prices may increase or decrease for many reasons beyond our control, including, but not limited to, economic and political events, war (whether or not directly involving the U.S.), acts of terrorism, natural disasters, unanticipated changes in currency exchange rates, interest rates, inflation rates, the yield curve, defaults by derivative counterparties, bond default risks, sovereign debt crisis, and other factors that are difficult or impossible to predict. If a decline in securities prices caused our revenues to decline, it could have a material adverse effect on our earnings. Lastly, as we are a traditional asset manager, we do not receive additional revenue streams from alternative asset strategies such as hedge funds, private equity, or venture capital.


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Changes in laws or regulations or in governmental policies and compliance with existing laws or regulations could limit the sources and amounts of our revenues, increase our costs of doing business, decrease our profitability, and materially and adversely affect our business.

Our business is subject to extensive regulation in the United States,U.S., primarily at the federal level, including regulation by the SEC under the Company Act and the Advisers Act as well as other securities laws, by the Department of Labor under ERISA, and regulation by FINRA and state regulators. The Funds managed by Gabelli Funds Advisor are registered with the SEC as investment companies under the Company Act. The Advisers Act imposes numerous obligations on investment advisors, including record-keeping, advertising and operating requirements, fiduciary and disclosure obligations, custodial requirements, and prohibitions on fraudulent activities. The Company Act imposes similar obligations, as well as additional detailed operational requirements, on registered investment companies and investment advisors. In addition, our businesses are also subject to regulation by the Financial Services Authority in the United Kingdom, and we are also subject to the laws of other non-U.S. jurisdictions and non-U.S. regulatory agencies or bodies.


Our failure to comply with applicable laws or regulations could result in fines, censure, suspensions of personnelteammates, or other sanctions, including revocation of our subsidiaries’ registrations as an investment advisor or broker-dealer. Industry regulations are designed to protect our clients and investors in our funds and other third parties who deal with us and to ensure the integrity of the financial markets. Our industry is frequently altered by new laws or regulations and by revisions to, and evolving interpretations of, existing laws and regulations, both in the U.S. and in other nations. Changes in laws or regulations or in governmental policies could limit the sources and amounts of our revenues including but not limited to distribution revenue under the Company Act, increase our costs of doing business, decrease our profitability, and materially and adversely affect our business.

14Events outside of our control, including public health crises, could negatively affect the portfolios we manage and our results of our operations.

ToPeriods of market volatility have occurred and could continue to occur in response to pandemics or other events outside of our control. These types of events have adversely affected and could continue to adversely affect operating results for us and the portfolios that we manage. For example, in December 2019, a novel strain of coronavirus (“COVID-19”) surfaced in China and has since spread globally, which has resulted in restrictions on travel and congregation and the temporary closure of many non-essential businesses in affected jurisdictions, including, beginning in March 2020, in the U.S. In addition to these developments having adverse consequences for us and the portfolios that we manage, the operations of GAMCO could be adversely impacted, including through quarantine measures and travel restrictions imposed on its personnel or service providers based in affected countries, or any related health issues of such personnel or service providers. The ongoing impact of COVID-19 remains difficult to predict, including the extent to which COVID-19 could negatively affect our and our portfolio companies’ operating results or the duration of any potential business disruption. Any potential impact to our results of operations will depend to a large extent on future developments and new information that provisionscould emerge regarding the duration and severity of COVID-19 and new virus variants and the Tax Cutsactions taken by authorities and Jobs Act (the “Act”)other entities to contain it or treat its impact, all of which are beyond our control. These potential impacts, while uncertain, could adversely affect the deductibility of named executive officer (“NEO”) compensation, we may be impacted.our operating results.

The Act eliminates the performance based compensation exception for NEO compensation deductibility.  To the extent that some of the compensation of our NEOs is affected by this change, we would have a lower amount of deductible compensation in future years and a higher effective tax rate than we would have had without this potential loss of deductibility.  We continue to evaluate the impact of the Act’s provisions, regarding NEO compensation and otherwise, and whether and if so, by how much, the Act’s provisions will impact us.


To the extent we are forced to compete on the basis of price, we may not be able to maintain our current fee structure.

The investment management business is highly competitive and has relatively low barriers to entry. To the extent we are forced to compete on the basis of price, we may not be able to maintain our current fee structure. Although our investment managementadvisory fees vary from product to product, historically we have competed primarily on the performance of our products and not on the level of our investment managementadvisory fees relative to those of our competitors. In recent years, however, there has been a trend toward lower fees in the investment management industry. In order to maintain our fee structure in a competitive environment, we must be able to continue to provide clients with investment returns and service that make investors willing to pay our fees. In addition, the board of directors or trustees of each fundFund managed by Gabelli Funds Advisor must make certain findings as to the reasonableness of its fees. We cannot be assured that we will succeed in providing investment returns and service that will allow us to maintain our current fee structure. Fee reductions on existing or new business could have an adverse effect on our profit margins and results of operations.


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We derive a substantial portion of our revenues from investment advisory contracts that may be terminated on short notice or may not be renewed by clients.

A substantial majority of our revenues are derived from investment management agreements and distribution arrangements. Investment management agreements and distribution arrangements with the domestic Funds are terminable without penalty on 60 days'days’ notice (subject to certain additional procedural requirements in the case of termination by a Fund) and must be specifically approved at least annually, as required by law. Such annual renewal requires, among other things, approval by the disinterested members of each Fund'sFund’s board of directors or trustees. Investment advisory agreements with our Institutional and Private Wealth ManagementPWM clients are typically terminable by the client without penalty on 30 days'days’ notice or less. Any failure to renew or termination of a significant number of these agreements or arrangements would have a material adverse effect on us.


Investors in the open-end fundsFunds can redeem their investments in these fundsFunds at any time without prior notice, which could adversely affect our earnings.

Open-end fundFund investors may redeem their investments in those fundsFunds at any time without prior notice. Investors may reduce the aggregate amount of AUM for any number of reasons, including investment performance, changes in prevailing interest rates, and financial market performance. In a declining stock market, the pace of mutual fund redemptions could accelerate. Poor performance relative to other asset management firms tends to result in decreased purchases of mutualopen-end fund shares and increased redemptions of mutualopen-end fund shares. The redemption of investments in mutual fundsthe Funds managed by Gabelli Funds Advisor would adversely affect our revenues, which are substantially dependent upon the AUM in our funds.Funds. If redemptions of investments in mutual fundsthe open-end Funds caused our revenues to decline, it could have a material adverse effect on our earnings.


Certain changes in control of our company would automatically terminate our investment management agreements with our clients, unless our Institutional and Private Wealth ManagementPWM clients consent and, in the case of Fund clients, the Funds’ boards of directors and shareholders vote to continue the agreements, and could prevent us for a two-year period from increasing the investment advisory fees we are able to charge our mutual fund clients.

Under the Company Act, an investment management agreement with a fund must provide for its automatic termination in the event of its assignment. The fund’s board and shareholders must vote to continue the agreement following its assignment, the cost of which ordinarily would be borne by us. Under the Advisers Act, a client’s investment management agreement may not be “assigned”assigned by the investment advisor without the client’s consent. An investment management agreement is considered to be assigned to another party when a controlling block of the advisor’s ownership is transferred. In our case, an assignment of our investment management agreements may occur if, among other things, we sell or issue a certain number of additional common shares in the future. We cannot be certain that our clients will consent to assignments of our investment management agreements or approve new agreements with us if an assignment occurs. Under the Company Act, if a fund’s investment advisor engages in a transaction that results in the assignment of its investment management agreement with the fund, the advisor may not impose an “unfair burden”unfair burden on that fund as a result of the transaction for a two-year period after the transaction is completed. The term “unfair burden” has been interpreted to include certain increases in investment advisory fees. This restriction may discourage potential purchasers from acquiring a controlling interest in our company.

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Catastrophic and unpredictable events could have a material adverse effect on our business.

A terrorist attack, cyber-attack, political unrest, war (whether or not directly involving the U.S.), power failure, cyber-attack, technology failure, natural disaster, or many other possible catastrophic or unpredictable events could adversely affect our future revenues, expenses, and earnings by, among other things: causing disruptions in U.S., regional or global economic conditions; interrupting our normal business operations; inflicting employeeteammate casualties, including loss of our key executives; requiring substantial expenditures and expenses to repair, replace, and restore normal business operations; and reducing investor confidence.

We have a disaster recovery plan to address certain contingencies, but it cannot be assured that this plan will be effective or sufficient in responding to, eliminating, or ameliorating the effects of all disaster scenarios. If our employeesteammates or vendors we rely upon for support in a catastrophic event are unable to respond adequately or in a timely manner, we may lose clients resulting in a decrease in AUM, which may have a material adverse effect on revenues and net income.


The soundness of other financial institutions could adversely affect our business.


Financial services institutions are interrelated as a result of trading, clearing, counterparty, or other relationships. We and the investments we manage may have exposure to many different industries and counterparties, and we routinely execute transactions with counterparties in the financial services industry, including:including brokers and dealers, commercial banks, investment banks, clearing organizations, mutual and hedge funds, and other institutions. Many of these transactions expose us, or the accounts we manage, to credit risk in the event of the counterparty’s default. There is no assurance that any such losses would not materially and adversely impact the Company’s revenues and earnings.



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Risks Related to Our Business


Control by Mr. Gabelli of a majority of the combined voting power of our common stock may give rise to conflicts of interests.

Since our OfferingIPO in 1999, Mr. Gabelli, through his control and majority ownership of GGCP, has beneficially owned a majority of our outstanding Class B Stock, currently representing 91%approximately 96% of voting control. As long as Mr. Gabelli indirectly beneficially owns a majority of the combined voting power of our common stock, he will have the ability to elect all of the members of our Board of Directors and thereby control our management and affairs, including determinations with respect to acquisitions, dispositions, borrowings, issuances of common stock or other securities, and the declaration and payment of dividends on the common stock. In addition, Mr. Gabelli will be able to determine the outcome of matters submitted to a vote of our shareholders for approval and will be able to cause or prevent a change in control of our company. As a result of Mr. Gabelli'sGabelli’s control, none of our agreements with Mr. Gabelli and other companies controlled by him can be assumed to have been arrived at through “arm's-length”arm’s-length negotiations, although we believe that the parties endeavor to implement market-based terms. There can be no assurance that we would not have received more favorable terms, or offered less favorable terms to, an unaffiliated party.

We depend on Mr. Gabelli and other key teammates.

We are dependent on the efforts of Mr. Gabelli, our Chairman of the Board, Chief Executive Officer, Co-Chief Investment Officer (“CIO”) of the Value team (along with the two other Value Co-CIOs Christopher Marangi and Kevin Dreyer), and the primary portfolio manager for a significant majority of our AUM. The loss of Mr. Gabelli’s services could have a material adverse effect on the Company.

On February 6, 2008, Mr. Gabelli entered into an amended and restated employment agreement (the(as amended, the “2008 Employment Agreement”) with the Company, which was initially approved by the Company’s shareholders on November 30, 2007 and approved again on May 6, 2011, and May 5, 2015, and June 5, 2020, and which limits his activities outside of the Company. Under the 2008 Employment Agreement, the manner of computing Mr. Gabelli’s remuneration from GAMCO is unchanged.


Mr. Gabelli has agreed that while he is employed by us he will not provide investment management services outside of GAMCO, Teton, AC, and GGCP, except for certain permitted accounts. These permitted accounts, excluding personal accounts, held assets at December 31, 20172021 and 20162020 of approximately $267.7$295.8 million and $252.3$263.9 million, respectively.  Mr. Gabelli continues to be a member of the team that manages the TETON Westwood Mighty MitesSM Fund, whose advisor, Teton, was spun-off from GBL in March 2009.  Effective February 27, 2017, Funds became the sub-advisor to the TETON Westwood Mighty MitesSM Fund.  The assets in the TETON Westwood Mighty MitesSM Fund at December 31, 2017 were $1.4 billion.  The 2008 Employment Agreement may not be amended without approval by the approvalcommittee of the Compensation Committeeour Board of Directors responsible for administering compensation and Mr. Gabelli.

We depend on Mr. Gabelli and other key personnel.
We are dependent on the efforts of Mr. Gabelli, our Chairman of the Board, Chief Executive Officer and the primary portfolio manager for a significant majority of our AUM.  The loss of Mr. Gabelli's services could have a material adverse effect on us.


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In addition to Mr. Gabelli, ourOur future success depends to a substantial degree on our ability to retain and attract other qualified personnelteammates to conduct our investment management business, including ChristopherMessrs. Marangi and Kevin Dreyer, the other Co-Chief Investment OfficersCo-CIOs of the Value team.team, CIO – Growth Portfolios, Howard Ward, and Growth portfolio manager, Chris Ward, Caesar Bryan, who manages Gold portfolios, the Dinsmore team that manages the Convertible strategies, and Judy Raneri and Ron Eaker who manage the Gabelli U.S. Treasury Fund. The market for qualified portfolio managers is extremely competitive. We anticipate that it will be necessary for us to add portfolio managers and investment analysts as we further diversify our investment products and strategies. There can be no assurance, however, that we will be successful in our efforts to recruit and retain personnel.teammates. In addition, our investment professionals and senior marketing personnelteammates have direct contact with our Institutional and Private Wealth ManagementPWM clients, which can lead to strong client relationships. The loss of these personnelteammates could jeopardize our relationships with certain Institutional and Private Wealth ManagementPWM clients, and result in the loss of such accounts. The loss of key management professionals or the inability to recruit and retain sufficient portfolio managers and marketing personnelteammates could have a material adverse effect on our business.

There may be adverse effects on our business from a decline in the performance of the securities markets.

Our results of operations are affected by many economic factors, including the performance of the securities markets. The securities markets in general have experienced significant volatility, and such volatility may continue or increase in the future. At December 31, 2017,2021, approximately 96%95% of our AUM werewas invested in portfolios consisting primarily of equity securities. Any decline in the securities markets, in general, and the equity markets, in particular, could reduce our AUM and consequently reduce our revenues. In addition, any such decline in the equity markets, failure of these markets to sustain their prior levels of growth, or continued short-term volatility in these markets could result in investors withdrawing from the equity markets or decreasing their rate of investment, either of which would be likely to adversely affect us. Also, from time to time, a relatively high proportion of the assets we manage may be concentrated in particular economic or industry sectors. A general decline in the performance of securities in those industry sectors could have an adverse effect on our AUM and revenues.



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Since the separation, certain of our directors and officers may have actual or potential conflicts of interest because of their positions or relationships with AC.


Since the separation of AC from GAMCO, Mario J.Mr. Gabelli has continued to serve as our Chairman and Chief Executive Officer and also serves as Executive Chairman of AC. Marc Gabelli, a son of Mario J.Mr. Gabelli, continues to have responsibilities relating to GAMCO.  Kevin Handwerker,GAMCO and AC. Peter Goldstein, GAMCO’s Executive Vice President, General Counsel and Secretary, also serves AC inas the same capacities.Chief Legal Officer and Secretary of AC. Douglas R. Jamieson has continued to serve as President and Director of GAMCO Asset, Management Inc.a Director of GAMCO, and also serves as President and Chief Executive Officer, and Director of AC.  Agnes Mullady has continued to serve as President, and COO of the Fund Division of Gabelli Funds, LLC and also serves as an Executive Vice PresidentDirector of AC. In addition, certain of our portfolio managers and teammates will be providedprovide services to AC pursuant to the Transitional Services Agreement with AC and will beare officers or employees of AC. Such dual assignments could create, or appear to create, potential conflicts of interest when our and AC’s officers and directors face decisions that could have different implications for the two companies.


Also, some of our directors, executive officers, portfolio managers, and teammates own shares of GGCP as well as AC common stock.


Mario J.Mr. Gabelli is deemed to control AC by his control of GGCP Holdings, LLC, an intermediate subsidiary of GGCP, Inc., a private company controlled by Mario J.Mr. Gabelli. Marc Gabelli is President of GGCP, Inc.GGCP.


In addition, potential conflicts of interest could arise in connection with the resolution of any dispute that may arise between GAMCO and AC regarding the terms of the agreements governing the separation and the relationship thereafter between the companies. The executive officers and other personnel of AC who serve as directors or executive management of GAMCO may interpret these agreements in their capacity as AC employees in a manner that would adversely affect the business of GAMCO.


Also, certain subsidiaries of AC are investment advisers. The executive officers and other personnel of AC who also serve as directors or executive management of GAMCO may be confronted with the possibility of making decisions in their AC capacity that would adversely affect the business of GAMCO.


Both GAMCO and AC expect to be vigilant in attemptingwill work to identify and resolve any potential conflicts of interest, including, but not limited to, the types described above at the earliest possible time. However, there can be no guarantee that the interests of GAMCO may not be adversely affected at some point by such a conflict.


Our reputation is critical to our success.

Our reputation is critical to acquiring, maintaining, and developing relationships with our clients, Mutual Fund shareholders, and third party intermediaries. Misconduct by our staff,teammates, or even unsubstantiated allegations, could result not only in direct financial harm but also in harm to our reputation, causing injury to the value of our brands and our ability to retain or attract AUM. Moreover, reputational harm may cause us to lose current employeesteammates and we may be unable to attract new employeesteammates with similar qualification or skills. Damage to our reputation could substantially reduce our AUM and impair our ability to maintain or grow our business, which could have a material adverse effect on us.

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There is a possibility of losses associated with proprietary investment activities.

Currently, we maintain a proprietary investment positionpositions in a few securities. Market fluctuations and other factors may result in substantial losses in our proprietary accounts, which could have an adverse effect on our balance sheet, reduce our ability or willingness to make new investments, or impair our credit ratings.


Future investment performance could reduce revenues and other income.

Success in the investment management and mutual fund businesses is dependent on investment performance as well as distribution and client servicing. Good performance generally stimulates sales of our investment products and tends to keep withdrawals and redemptions low, which generates higher managementadvisory fees (which are based on the amount of AUM). Conversely, poor performance, both in absolute terms and/or relative to peers and industry benchmarks, tends to result in decreased sales, increased withdrawals and redemptions in the case of the open-end Funds, and in the loss of Institutional and Private Wealth ManagementPWM clients, with corresponding decreases in revenues to us. Many analysts of the mutual fund industry believe that investment performance is the most important factor for the growth of openopen-end and closed-end funds, such as those we offer. Failure of our investment products to perform well or failure of the Funds to maintain ratings or rankings could, therefore, have a material adverse effect on us.


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In addition, when our investment products experience strong results relative to the market or other asset classes, clients'clients’ investments in our products may increase beyond their target levels, and we could, therefore, suffer withdrawals as our clients rebalance their investments to fit their asset allocation preferences.


Loss of significant Institutional and Private Wealth ManagementPWM accounts could affect our revenues.

We had approximately 1,7001,400 Institutional and Private Wealth ManagementPWM accounts as of December 31, 2017,2021, of which the ten largest accounts generated approximately 9%8% of our total revenues during the year ended December 31, 2017.2021. Account turnover for any reason would have an adverse effect on our revenues. Notwithstanding performance, we have, from time to time, experienced account turnover of large Institutional and Private Wealth ManagementPWM accounts as a result of corporate mergers and restructurings, and we could continue to lose accounts under these orand other circumstances.circumstances, including the performance of our small cap and value mandates.


A decline in the market for closed-end funds could reduce our ability to raise future assets to manage.

Market conditions may preclude us from increasing the assets we manage in our closed-end funds.Funds. A significant portion of our recent growth in the assets we manage has resulted from public offerings of the common and preferred shares of the closed-end funds.Funds. We have raised approximately $5.4$6.7 billion in gross assets through closed-end fundFund offerings since January 2004. The market conditions for these offerings may not be as favorable in the future, which could adversely impact our ability to grow our AUM and our revenue.


We rely on third party distribution programs.
A significant share of sales of our open-end funds comeThe inability to access clients through third party distribution programs, which are programs sponsored by third partythird-party intermediaries that offer their mutual fund customerscould have a variety of competing products and administrative services.  A substantial component of sales growth is from third party distribution programs with no transaction fees payable by the customer, which we refer to as NTF programs.  Approximately $4.2 billion of our AUM in the open-end equity funds as of December 31, 2017 are held through NTF programs.  The cost of participating in third party distribution programs is higher than our direct distribution costs, and it is anticipated that the cost of third party distribution programs will increase in the future.  Any increase would be likely to have anmaterial adverse effect on our profit marginsbusiness.

A significant portion of the assets we manage is attributable to the distribution of our products through third-party intermediaries. Our ability to distribute our products is highly dependent on access to the client bases and resultsproduct platforms of operations.international, national and regional securities firms, investment advisory firms, banks, insurance companies, defined contribution plan administrators, and other intermediaries, which generally offer competing investment products that could limit the distribution of our products. In addition, thereour separate account business, subadvisory, and model delivery services depend in part on recommendations by consultants, financial planners, and other professional advisors, as well as our existing clients.

The structure and terms of the distribution arrangements with intermediaries, including fees or rebates paid by us or our funds to intermediaries to assist with distribution efforts, and the ability of our funds to participate in these intermediary platforms are subject to changes driven by market competition and regulatory developments. Our existing relationships with third-party intermediaries and access to new intermediaries could be adversely affected by continued consolidation within the financial services industry. Consolidation may result in increased distribution costs, a reduction in the number of third parties distributing our investment products, or increased competition to access third-party distribution channels. There can be no assurance that the third partywe will be able to retain access to these channels. Loss of any of these third-party distribution programs will continuechannels, or changes to distribute the Funds.  At December 31, 2017, approximately 94% of the NTF program net assetstheir structure and terms, or any reduction in the Gabelli/GAMCO families of funds are attributableour ability to two NTF programs.  The decision by these third partyaccess clients and investors through existing and new distribution programs to discontinue distribution of the funds, or a decision by us to withdraw one or more of the funds from the programs,channels, could have an adverse effect onadversely affect our growth of AUM.business.
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Operational risks may disrupt our businesses, result in regulatory action against us, or limit our growth.

We face operational risk arising from errors made in the execution, confirmation, or settlement of transactions or from transactions not being properly recorded, evaluated, or accounted for. Our business is highly dependent on our ability to process, on a daily basis, transactions across markets in an efficient and accurate manner. Consequently, we rely heavily on our financial, accounting, and other data processing systems. Despite the reliability of these systems, and the training and skill of our employees teammates and third parties we rely on, it remains likely that errors may occasionally occur due to the extremely large number of transactions we process. In addition, if systems we use are unable to accommodate an increasing volume of transactions, our ability to expand our businesses could be constrained. If any of these systems do not operate properly or are disabled, we could suffer financial loss, a disruption of our businesses, liability to clients, regulatory intervention, or reputational damage.


Failure to maintain adequate infrastructure could impede the Company’s productivity and growth. Additionally, failure to implement effective information and cyber security policies, procedures, and capabilities could disrupt operations and cause financial losses that could result in a decrease in the Company’s earnings or stock price.

The Company’sOur infrastructure, including itsour information systems and technology, is vital to the competitiveness of itsour business. The failure to maintain an adequate infrastructure commensurate with the size and scope of our business could impede our productivity and growth, which could cause our earnings or stock price to decline. We outsource a significant portion of our information systems operations to third parties who are responsible for providing the management, maintenance, and updating of such systems. Technology is subject to rapid change and we cannot guarantee that our competitors may not implement more advanced technology platforms for their products than we do for ours. In addition, there can be no assurance that the cost of maintaining such outsourcing arrangements will not increase from its current level, which could have a material adverse effect on us.


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In addition, any inaccuracies, delays, system failures, or security breaches in these and other systems could subject us to client dissatisfaction and losses. Breach of our technology systems could result in the loss of valuable information, liability for stolen assets or information, remediation costs to repair damage caused by the breach, additional security costs to mitigate against future incidents, and litigation costs resulting from the incident. Moreover, loss of confidential customer identification information could harm our reputation and subject us to liability under laws that protect confidential personal data, resulting in increased costs or loss of revenues. Further, although we take precautions to password protect and encrypt our laptops, tablets, smartphones, and other mobile electronic hardware, if such hardware is stolen, misplaced or left unattended, it may become vulnerable to hacking or other unauthorized use, creating a possible security risk and resulting in potentially costly actions by us. 


Our operations rely on the secure processing, storage, and transmission of confidential and other information in our computer systems and networks. We may be the target of cyber-attacks, including denial-of-service attacks, and must continuously monitor and develop our systems to protect our technology infrastructure and data from misappropriation or corruption. Although we take protective measures and endeavor to modify them as circumstances warrant, our computer systems, software, and networks may be vulnerable to unauthorized access, misuse, computer viruses, or other malicious code and other events that could have a security impact. If one or more of such events occur, this potentially could jeopardize our or our clients’ or counterparties’ confidential and other information processed and stored in our, our clients’, our counterparties’, or third parties’ operations, which could impact their ability to transact with us or otherwise result in significant losses or reputational damage. The increased use of mobile technologies can heighten these and other operational risks. We expect to expend significant additional resources on an ongoing basis to modify our protective measures and to investigate and remediate vulnerabilities or other exposures, and we may be subject to litigation and financial losses that are either not insured against or not fully covered through any insurance maintained by us.


We routinely transmit and receive personal, confidential, and proprietary information by email and other electronic means. We have discussed and worked with clients, vendors, service providers, counterparties, and other third parties to develop secure transmission capabilities and protect against cyber-attacks, but we do not have, and may be unable to put in place, secure capabilities with all of our clients, vendors, service providers, counterparties, and other third parties and we may not be able to ensure that these third parties have appropriate controls in place to protect the confidentiality of the information. An interception, misuse, or mishandling of personal, confidential, or proprietary information being sent to or received from a client, vendor, service provider, counterparty, or other third party could result in legal liability, regulatory action, and reputational harm.


The failure of one of our vendors to fulfill its obligations to us could have a material adverse effect on the Company and its products.


The Company depends on a number of key vendors for various fund administration, accounting, custody, and transfer agent roles and other operational needs. The failure or inability of the Company to diversify its sources for key services or the failure of any key vendors to fulfill their obligations could lead to operational issues for the Company and in certain products, which could result in financial losses for the Company and its clients.


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Our ability to meet cash needs may be adversely affected by a number of factors.


Our ability to meet anticipated cash needs is affected by factors such as the market value of our assets, our operating cash flows, and our creditworthiness as perceived by lenders. Adverse developments in any of these areas could have significantly adverse effects on our business. If we are unable to obtain funds and financing in a timely manner or on acceptable terms, we may be forced to incur unanticipated costs or revise our business plans. Further, our access to the capital markets depends significantly on our credit ratings. A reduction in our credit ratings could increase our borrowing costs and limit our access to the capital markets. Volatility in the U.S., regional, or global financing markets may also impact our ability to access the capital markets should we seek to do so, and we may be forced to incur unanticipated costs or experience other adverse effects on our business.  We currently have a credit rating of investment grade with one rating agency and one below investment grade with another rating agency.  We believe that if our credit rating was below investment grade with both credit agencies it would increase our long-term borrowing costs, on future borrowings, by 35 basis points, while a two notch downgrade would increase our long-term borrowing costs, on future borrowings, by approximately 60-70 basis points. Our current outstanding debt issuances would not be impacted by any changes in our ratings.


We face exposure to legal actions, including litigation and arbitration claims and regulatory and governmental examinations and/or investigations. Insurance coverage for these matters may be inadequate.

The volume of litigation and arbitration claims against financial services firms and the amount of damages claimed has increased over the past several years. The types of claims that we may face are varied. For example, we may face claims against us for purchasing securities that are inconsistent with a client’s investment objectives or guidelines, in connection with the operation of the Funds, or arising from an employment dispute. The risk of litigation is difficult to predict, assess, or quantify, and may occur years after the activities or events at issue. In addition, from time to time we may become the subject of governmental or regulatory investigations and/or examinations. Even if we prevail in a legal or regulatory action, the costs alone of defending against the action or the harm to our reputation could have a material adverse effect on us. The insurance coverage that we maintain with respect to legal and regulatory actions may be inadequate or may not cover certain proceedings.



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Compliance failures could adversely affect us.

Our investment management activities are subject to client guidelines, and our Mutual Fundmutual fund business involves compliance with numerous investment, asset valuation, liquidity, distribution, and tax requirements. A failure to comply with these guidelines or contractual requirements could result in damage to the Company’s reputation or in its clients seeking to recover losses, withdrawing their AUM, or terminating their contracts, any of which could cause the Company’s revenues and earnings to decline. There can be no assurance that the precautions and procedures that we have instituted and installed or the insurance we maintain to protect ourselves in case of client losses will protect us from potential liabilities.


We face strong competition from numerous and, in many instances, larger companies.

The asset management business is intensely competitive. We compete with numerous investment management companies, stock brokerage and investment banking firms, insurance companies, banks, savings and loan associations, and other financial institutions. The periodic establishment of new investment management companies and other competitors increases the competition that we face. At the same time, consolidation in the financial services industry has created stronger competitors with greater financial resources and broader distribution channels than our own. Competition is based on various factors, including, among others, business reputation, investment performance, product mix and offerings, service quality and innovation, distribution relationships, and fees charged. Our competitive success in any or all of these areas cannot be assured. Additionally, competing securities dealers whom we rely upon to distribute our mutual fundsopen-end Funds also sell their own proprietary funds and investment products, which could limit the distribution of our investment products. To the extent that existing or potential customers, including securities dealers, decide to invest in or distribute the products of our competitors, the sales of our products as well as our market share, revenues, and net income could decline.


Investors are choosing to invest in passive strategies such as index funds and ETFs.
Our actively managed investment strategies compete against passive strategies. The trend in market demand for investors towards passive products such as index funds and ETFs, which favor our competitors in the asset management business, reduces opportunities for active managers. Investors are increasingly attracted to these lower fee passive products, which have gained, and may continue to gain, market share at the expense of active products like those managed by us.

Fee pressures could reduce our profit margins.

There has been a trend toward lower fees in some segments of the investment management industry. In order for us to maintain our fee structure in a competitive environment, we must be able to provide clients with investment returns and service that will encourage them to be willing to pay such fees. Expense limitations and reimbursements have been put in place for certain classes of certain funds.Funds. Accordingly, there can be no assurance that we will be able to maintain our current fee structure. Fee reductions on existing or future new business could have an adverse effect on our profit margins and results of operations.



Launch of new strategies and products may negatively impact our results of operations.
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Mr. Gabelli, our ChairmanWe may support the development of new investment strategies and products by waiving a portion of the Boardmanagement fees we are entitled to receive or by subsidizing expenses. Additionally, the costs with establishing new strategies and Chief Executive Officer,products, including actively managed semi-transparent ETFs, can exceed the revenues generated, which could have an adverse effect on our profit margins and results of operations. Also, we may receive enhanced compensation under his various deferred compensation agreements in the event we repurchase shares underprovide seed capital to new strategies and products, which could have an adverse effect on our Stock Repurchase Program.  consolidated financial statements or reduce our ability or willingness to make new investments.

GAMCO has entered into three separate deferred compensation agreements with Mr. Mario J. Gabelli whereby his variable compensation for fiscal 2016 and certain periods of fiscal 2017 (each such period, an “employment period”) will be in the form of Restricted Stock Units (“RSUs”), payable at the end of a specified deferral period (each, a “Lapse Date”).  On each Lapse Date, the RSUs can be settled in either stock or cash, in an amount determined by the lesser of (x) the volume-weighted average price (“VWAP”) of the Company’s Class A Stock during the applicable employment period and (y) the VWAP of the Class A Stock on the Lapse Date.

From time to time, the Company repurchases shares of its Class A Stock under a Stock Repurchase Program authorized by the Board.  Share repurchases reduce the number of shares in a company held by the public, which increases earnings per share.  As a result, the stock price may rise because shareholders know that a buyback will immediately boost earnings per share. 

Since the amount of RSUs payable under Mr. Gabelli’s deferred compensation agreements are tied to the Company’s stock price, an increase in the amount of shares the Company repurchases under its Stock Repurchase Program may have the effect of increasing Mr. Gabelli’s overall compensation.  


Risks Related to the Companyour Common Stock


The disparity in the voting rights among the classes of shares may have a potential adverse effect on the price of our Class A Stock.

The holders of Class A Common Stock (“Class A Stock”) and Class B Stock have identical rights except that (i) holders of Class A Stock are entitled to one vote per share, while holders of Class B Stock are entitled to ten votes per share on all matters to be voted on by shareholders in general, and (ii) holders of Class A Stock are not eligible to vote on matters relating exclusively to Class B Stock and vice versa. Since our OfferingIPO in 1999, Mr. Gabelli, through his control and majority ownership of GGCP, has beneficially owned a majority of our outstanding Class B Stock, currently representing approximately 91%96% of voting control. As long as Mr. Gabelli indirectly beneficially owns a majority of the combined voting power of our common stock, he will have the ability to elect all of the members of our Board of Directors and thereby control our management and affairs, including, among other things, any determinations with respect to acquisitions, dispositions, borrowings, issuances of common stock or other securities, and the declaration and payment of dividends on the common stock. The differential in voting rights and the ability of our company to issue additional Class B Stock could adversely affect the value of the Class A Stock to the extent the investors, or any potential future purchaser of our company, view the superior voting rights of the Class B Stock to have value. On May 6, 2014,3, 2017, Class A Stock shareholders approved an advisory proposal for the Board of Directors to consider the conversion and reclassification of our shares of Class B Stock into Class A Stock at a ratio in the range of 1.15 to 1.25 shares of Class A Stock for each share of Class B Stock. The Board of Directors has made no decision on this matter.



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Future sales of our Class A Stock in the public market or sales or distributions of our Class B Stock could lower our stock price, and any additional capital raised by us through the sale of equity or convertible securities may dilute our stockholders’ ownership in us.

We may sell additional shares of Class A Stock in subsequent public offerings. We also may issue additional shares of Class A Stock or convertible debt securities. On March 5, 2018, AC completed a tender offer in which tendering AC shareholders received an aggregate of approximately 660,000 shares of our registered Class A Stock constituting approximately 7% of the Class A Stock outstanding. On October 29, 2018, AC completed another tender offer in which tendering AC shareholders received an aggregate of approximately 710,000 shares of our registered Class A Stock constituting approximately 7% of the Class A Stock outstanding. During 2021 and 2020, AC sold 339,376 shares and 178,525 shares, respectively, of our Class A Stock constituting approximately 4% and 2%, respectively, of the Class A Stock outstanding. The market price of our Class A Stock could decline as a result of sales of Class A Stock by such shareholders. Any such sales, as well as sales by our other current shareholders, could be perceived negatively.

No prediction can be made as to the effect, if any, that future sales or distributions of Class B Stock owned by GGCP Holdings LLC will have on the market price of the Class A Stock from time to time. Sales or distributions of substantial amounts of Class A Stock or Class B Stock, or the perception that such sales or distributions are likely to occur, could adversely affect the prevailing market price for the Class A Stock.


Our common stock has relatively limited trading volume, and ownership of a large percentage is concentrated with a small number of shareholders, which could increase the volatility in our stock trading and dramatically affect our share price.


A large percentage of our common stock is held by a limited number of shareholders. If our larger shareholders decide to liquidate their positions, it could cause significant fluctuation in the share price of our common stock.


General Risk Factors

The risk factors described above are those that we think may be material with regard to an investment in us that are not applicable generally to all business enterprises. However, we are subject to the many risks that affect all or most business enterprises in the U.S. or internationally, and our business or financial condition could be materially affected by those risks.

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ITEM 1B:UNRESOLVED STAFF COMMENTS
ITEM 1B: UNRESOLVED STAFF COMMENTS


None.


ITEM 2:          PROPERTIES


Since 1997, ourOur principal offices, consisting of a single 60,000 square foot building, areoffice is located at 401 Theodore Fremd Avenue, Rye, New York, under a lease agreement which expires on December 31, 2028 from an entity controlled by members of Mr. Gabelli's immediate family.191 Mason Street, Greenwich, CT. In addition, we lease office space in Connecticut, Florida, Illinois, New Jersey, NevadaRye, NY; Charleston, SC; Morristown, NJ; Palm Beach, FL; Reno, NV; and St. Louis, MO and, internationally, in London, Hong Kong, Shanghai, and Tokyo.


ITEM 3:          LEGAL PROCEEDINGS


From time to time, the Company may be named in legal actions and proceedings.proceedings in the normal course of business. These actions may seek substantial or indeterminate compensatory as well as punitive damages or injunctive relief. The Company is also subject to governmental or regulatory examinations or investigations. The examinations or investigations could result in adverse judgments, settlements, fines, injunctions, restitutions, or other relief. For any such matters, the consolidated financial statements in Part II, Item 8 of this Form 10-K include the necessary provisions for losses that the Company believes are probable and estimable. Furthermore, the Company evaluates whether there exist losses which may be reasonably possible and, if material, makes the necessary disclosures. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. There are currently no such matters pending that the Company believes could have a material adverse effect on its consolidated financial condition, operations, or cash flows at December 31, 2021. See also Note 10, Commitments and Contingencies, to the consolidated financial statements in Part II, Item 8 of this Form 10-K.


ITEM 4:          MINE SAFETY DISCLOSURES


Not applicable.

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PART II


ITEM 5: MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES


Our shares of Class A Stock are traded on the NYSENew York Stock Exchange under the symbol GBL.

As of February 1, 2018,28, 2022, there were 129235 Class A Stockholdersstockholders of record and 2219 Class B Stockholdersstockholders of record. These figures do not include approximately 3,2003,000 stockholders with shares held under beneficial ownership in nominee name.

The following table sets forth the high and low prices of our Class A Stock and historical dividends declared per share to both Class A Stock and Class B Stock for each quarter of 2017 and 2016 as reported by the NYSE.

 2016 2017 
     Dividends     Dividends 
 High Low Declared High Low Declared 
First Quarter $38.60  $25.95  $0.02  $32.55  $28.51  $0.02 
Second Quarter  41.67   31.34   0.02   30.55   27.55   0.02 
Third Quarter  35.62   28.30   0.02   32.60   28.05   0.02 
Fourth Quarter $33.55  $27.85  $0.02  $30.94  $27.79  $0.02 


As of December 31, 2017,2021, since the Offering,IPO, we have returned to shareholders $1.9$2.1 billion in total, of which $1.0 billion was in the form of the Spin-offsspin-offs of AC and Teton, $491.0 million was from dividends and $453.1$521.5 million was through our stock buyback program.program, and $579.6 million was from dividends, as well as $74 million to charities on their behalf.

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The following table provides information with respect to the sharesregarding purchases of our Class A Stock we repurchasedmade by or on behalf of the Company or any “affiliated purchaser” (as defined in Rule 10b-18(a)(3) under the Exchange Act) during the three months ended December 31, 2017:fourth quarter of 2021:


     Total Number of Maximum 
 Total Average Shares Repurchased as Number of Shares 
 Number of Price Paid Per Part of Publicly That May Yet Be 
 Shares Share, net of Announced Plans Purchased Under 
PeriodRepurchased Commissions or Programs the Plans or Programs 
10/01/17 - 10/31/17  16,100  $29.15   16,100   852,420 
11/01/17 - 11/30/17  38,197   28.73   38,197   814,223 
12/01/17 - 12/31/17  139,929   29.51   139,929   674,294 
Totals  194,226  $29.33   194,226     
       Total Number of  Maximum 
  Total     Shares Purchased as  Number of Class A 
  Number of  Average  Part of Publicly  Shares That May Yet Be 
  Class A Shares  Price Paid Per  Announced Plans  Purchased Under 
Period 
Purchased (1)
  Share  
or Programs (1)
  the Plans or Programs 
10/01/21 - 10/31/21  86,128  $24.66   86,128   2,441,142 
11/01/21 - 11/30/21  29,172   26.39   29,172   2,411,970 
12/01/21 - 12/31/21  238,033   24.40   238,033   2,173,937 
Totals  353,333  $24.62   353,333     
(1) On trade date basis.
 
 

In 1999, the Board of Directors established the stock repurchase program.  Our stock repurchase program is not subject to an expiration date.

We are required to provide a comparison of the cumulative total return on our Class A Stock as of December 31, 2017 with that of a broad equity market index and either a published industry index or a peer group index selected by us.  The following chart compares the return on the Class A Stock with the return on the S&P 500 Index and an index comprised of public asset managers (“SNL Asset Manager”).  The comparison assumes that $100 was invested in the Class A Stock and in each of the named indices, including the reinvestment of dividends, on December 31, 2012.  This chart is not intended to forecast future performance of our common stock.


 Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,
 2012 2013 2014  2015 2016  2017
GAMCO Investors, Inc. 100.00  165.45  170.24  111.47  111.13  107.02
SNL Asset Manager 100.00  153.67  162.12  138.26  146.27  194.23
S&P 500 Index 100.00  132.39  150.51  152.59  170.84  208.14

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The following table shows information regarding outstanding options and shares reserved for future issuance under our equity compensation plans as of December 31, 2017.2021.


 Number of Securities to be    
Number of Securities to be
    
 Issued upon Exercise of Weighted-Average Exercise  
Issued upon Exercise of
  
Weighted-Average Exercise
 
 Outstanding Options, Price of Outstanding Options,  
Outstanding Options,
  
Price of Outstanding Options,
 
Plan Category Warrants and Rights Warrants and Rights  
Warrants and Rights
  
Warrants and Rights
 
Equity compensation plans approved     
by security holders:     
Equity compensation plans approved by security holders:      
Stock options  -   n/a   10,000  $25.55 
Restricted stock awards  19,400  $65.67   411,200  $14.93 
Equity compensation plans not approved        
by security holders:  -   n/a 
Equity compensation plans not approved by security holders:  –   n/a 
Total  19,400       421,200  $15.18 


The $65.67 RSA grant price for the remaining 19,400 RSAs reflects a pre AC spin-off stock price.  The number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column above) is 281,349.2,974,725.


24ITEM 6:          [Reserved]

26
ITEM 6: SELECTED FINANCIAL DATA

General

The selected historical financial data presented below has been derived in part from, and should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 and “Financial Statements and Supplementary Data” included in Item 8 of this report.  Amounts included in the tables related to income statement data and balance sheet data are derived from audited financial statements.  See Note P. Discontinued Operations for further details.

  Year Ended December 31, 
  2017  2016  2015  2014  2013 
Income Statement Data (in thousands)
               
Revenues               
Investment advisory and incentive fees $316,705  $308,459  $329,965  $360,498  $326,325 
Distribution fees and other income  43,819   44,541   51,011   61,438   52,034 
Total revenues  360,524   353,000   380,976   421,936   378,359 
Expenses:                    
Compensation costs  125,501   82,613   136,503   151,255   138,859 
Stock based compensation  8,669   3,959   9,868   5,278   1,562 
Management fee  13,666   6,518   15,503   18,663   14,344 
Distribution costs  44,447   44,189   51,990   59,746   50,195 
Other operating expenses  23,221   23,925   19,163   17,542   16,541 
Total expenses  215,504   161,204   233,027   252,484   221,501 
                     
Operating income  145,020   191,796   147,949   169,452   156,858 
Other income (expense), net                    
Net gain from investments  3,115   1,594   4,953   4,282   5,145 
Extinguishment of debt  (3,300)  -   (1,067)  (84)  (998)
Interest and dividend income  2,350   1,511   2,222   2,154   2,661 
Interest expense  (10,160)  (12,674)  (8,636)  (7,653)  (10,033)
Charitable contributions  (4,137)  -   (6,396)  (134)  (10,626)
Total other income (expense), net  (12,132)  (9,569)  (8,924)  (1,435)  (13,851)
Income before income taxes  132,888   182,227   139,025   168,017   143,007 
Income tax provision  55,079   65,106   51,726   61,734   52,974 
Income from continuing operations  77,809   117,121   87,299   106,283   90,033 
Income/(loss) from discontinued operations, net of taxes  -   -   (3,887)  3,107   26,820 
Net income attributable to GAMCO Investors, Inc.'s shareholders $77,809  $117,121  $83,412  $109,390  $116,853 
                     
Net income per share attributable to GAMCO Investors, Inc.'s shareholders:                 
Basic - Continuing operations $2.68  $4.01  $3.43  $4.20  $3.51 
Basic - Discontinued operations  -   -   (0.15)  0.12   1.05 
Basic - Total $2.68  $4.01  $3.28  $4.32  $4.56 
Diluted - Continuing operations $2.60  $3.92  $3.40  $4.16  $3.50 
Diluted - Discontinued operations  -   -   (0.15)  0.12   1.04 
Diluted - Total $2.60  $3.92  $3.24  $4.28  $4.54 
                     
Weighted average shares outstanding:                    
Basic  28,980   29,182   25,425   25,335   25,653 
Diluted  30,947   30,170   25,711   25,558   25,712 
                     
Actual shares outstanding at December 31st (a)  28,974   29,463   29,821   25,855   26,086 
                     
Dividends declared per share: $0.08  $0.08  $0.28  $0.50  $0.72 
(a)Includes unvested RSAs of 19,400, 424,340, 553,100, 710,750, and 566,950 at December 31, 2017, 2016, 2015, 2014, and 2013, respectively.
25

 December 31, 
 2017 2016 2015 2014 2013 
Balance Sheet Data (in thousands)
          
Total assets (a) $128,286  $149,229  $103,899  $865,803  $708,761 
Long-term obligations (a)  79,087   239,021   279,267   116,789   116,510 
Other liabilities and noncontrolling interest  145,472   76,855   100,959   221,219   132,069 
Total liabilities and noncontrolling interest  224,559   315,876   380,226   338,008   248,579 
Total equity (deficit) $(96,273) $(166,647) $(276,327) $527,795  $460,182 
(a)Total assets and long-term obligations have been decreased by $128, $627, and $724 at December 31, 2015, 2014, and 2013, respectively, for the adoption of ASU 2015-03 to present the debt issuance costs as a reduction of the related debt rather than as an asset.


 December 31, 
 2017 2016 2015 2014 2013 
Assets Under Management          
(at year end, in millions):          
Open-end Funds $15,617  $15,229  $15,325  $19,139  $18,813 
Closed-end Funds  8,053   7,150   6,492   6,949   6,945 
Institutional & PWM Separate Accounts                    
Direct  13,451   13,472   13,404   16,655   16,548 
Sub-advisory  5,432   3,783   3,401   3,704   3,797 
SICAV (a)  510   320   178   135   96 
Total $43,063  $39,954  $38,800  $46,582  $46,199 
(a) Adjusted to include assets of $96 million, $135 million, $141 million and $270 million at December 31, 2013, 2014, 2015, and 2016, respectively.
26
ITEM 7:MANAGEMENT'S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the Consolidated Financial Statementsconsolidated financial statements and the notes thereto included in Part II, Item 8 of this Form 10-K “Financial Statements and Supplementary Data.”  This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to those described in Part I, Item 1A of this report.Form 10-K “Risk Factors.” Our actual results could differ materially from those anticipated by such forward-looking statements due to factors discussed under “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” appearing elsewhere in this Form 10-K.


IntroductionOVERVIEW


On the Spin-Off Date, GBL distributed to its stockholders all of the outstanding common stock of Associated Capital Group, Inc. (“AC”) and its subsidiaries along with certain cash and other assets.  AC owns and operates, directly or indirectly, the alternatives and the institutional research businesses previously owned and operated by GBL.  In the Spin-off, each holder of GAMCO’s Class A Common Stock (“Class A Stock”) of record as of 5:00 p.m. GAMCO (New York City time on November 12, 2015 (the “Record Date”Stock Exchange (“NYSE”): GBL), a company incorporated under the laws of Delaware, is a widely-recognized provider of investment advisory services to 24 open-end funds, 14 closed-end funds, actively managed semi-transparent ETFs, one société d’investissement à capital variable (“SICAV”), received one share of AC Class A common stock for each share of GAMCO Class A Stock held on the Record Date.  Each record holder of GAMCO’s Class B Stock received one share of AC Class B common stock for each share of GAMCO Class B Stock held on the Record Date.  Subsequent to the Spin-off, GAMCO no longer consolidates the financial results of AC for the purposes of its own financial reporting and the historical financial results of AC have been reflectedapproximately 1,400 institutional and private wealth management (“Institutional and PWM”) investors principally in the Company’s consolidated financial statements as discontinued operations for all periods presented through the Spin-off Date.  Historical AUM have similarly been adjusted to remove AUM managed by AC.

United States (“U.S.”). We generally manage assets on a fully discretionary basis and invest in a variety of U.S. and international securities. Our revenues are highly correlated tobased primarily on the Company’s level of AUMassets under management (“AUM”) and fees associated with our various investment products, rather than our own corporate assets.  AUM, which are directly influencedproducts. GAMCO serves a broad client base, including institutions, intermediaries, offshore investors, private wealth, and direct retail investors. In recent years, GAMCO has successfully integrated new teams of RIAs by providing attractive compensation arrangements and paying finder’s fees.

GAMCO offers a wide range of solutions for clients across Value and Growth Equity, ESG, Convertibles, actively managed semi-transparent ETFs, sector-focused strategies including Gold and Utilities, Merger Arbitrage, and Fixed Income. In 1977, GAMCO launched its flagship All Cap Value strategy, Gabelli Value, and in 1986 entered the level and changes of the overall equity markets, can also fluctuate through acquisitions, the creation of new products, the addition of new accounts or the loss of existing accounts.  Since various equity products have different fees, changes in our business mix may also affect revenues.  At times, the performance of our equity products may differ markedly from popular market indices, and this can also impact our revenues.  It is our belief that general stock market trends will have the greatest impact on our level of AUM and hence, revenues.  mutual fund business.

As of December 31, 2017,2021, we had $43.1$35.0 billion of AUM. We conduct our investment advisory business principally through:through two subsidiaries, which are registered investment advisors: Gabelli Funds, LLC (open-end and closed-end funds) (“Gabelli Funds”) and GAMCO Asset Management Inc. (Institutional and Private Wealth Management)PWM) (“GAMCO Asset”). G.distributors, LLC (“G.distributors”), our broker-dealer subsidiary, acts as an underwriter and Funds Advisor (Funds). We also are a distributor of our open-end funds and actively managed semi-transparent ETFs.

In December 2019, a novel strain of coronavirus (“COVID-19”) surfaced in China and has since spread globally. On March 11, 2020, COVID-19 was identified as a global pandemic by the World Health Organization. In response to its spread, governmental authorities have imposed restrictions on travel and congregation and the temporary closure of many non-essential businesses in affected jurisdictions, including, beginning in March 2020, in the U.S. As world leaders focused on the unprecedented human and economic challenges of COVID-19, global equity markets plunged as the coronavirus pandemic spread. In March 2020, the unfolding events led to the worst month for stocks since 2008 and the worst first quarter since 1937. In the remainder of 2020 and continuing through 2021, as a result of unprecedented fiscal and monetary stimulus and the fast tracking of COVID-19 vaccines, the markets have rebounded strongly. As a result of this pandemic, the Company allowed most of our broker-dealer subsidiary G.distributors.employees (“teammates”) to work remotely. This policy continued through the end of June 2021. Effective July 2021, the Company changed its policy and asked teammates to return to our offices. As a result, the majority of our teammates are now back in our offices. There continues to be no material impact of remote work arrangements on our operations, including our financial reporting systems, internal control over financial reporting, and disclosure controls and procedures, and there has been no material challenge in implementing our business continuity plan.




27
Organizational Chart


Subsequent to the Spin-off, thisThis is the current organizational chart of the Company.Company:


graphic


2017

2021 Business and Investment Highlights


·•
On February 14, 2017, the CompanyJanuary 4th, GAMCO International SICAV launched the Gabelli Food of all Nations NextSharesTM, its second actively managed, non-transparent exchange traded managed fund.GAMCO Convertible Securities. The fund, ismanaged by our Dinsmore team, which marked the 50th Anniversary of managing the Bancroft Fund in April, leverages the firm’s history of investing primarily in domestic and foreign companies in the food and beverage industry, which is a consolidating sector that includes many strong cash generators with pricing power.  The fund will capitalize on a segment where we have accumulated and compounded knowledge.  Consumer companies have long been a core competency at GAMCO.dedicated convertible security portfolios. Multiple share classes are tailored for global institutional investors as well as select non-U.S. retail investors.

•
We launched our first semi-transparent actively managed ETF, the Love our Planet & People ETF (LOPP), on February 1st , and our second one, Gabelli Growth Innovators (GGRW), on February 16th.
•
Our 31st Annual Pump, Valve & Water Systems Symposium took place on February 25th. The meeting featured presentations by senior management of several leading industrial companies with an emphasis on industrial and municipal water use and the role of technology.
•
On March 18th, we hosted our 7th Annual Waste & Environmental Services Symposium via webcast.  The timely conference featured presentations by leading companies.
•
On April 15th, the Gabelli Utility Trust (NYSE: GUT) completed an oversubscribed rights offering raising approximately $43 million.
•
On May 1st, the 15th Annual Omaha Research Trip was held virtually. Members of our team participated in panel discussions regarding investment styles and strategies.
•
On May 14th, we hosted our 36th GAMCO Investor Client Symposium with over 500 clients and prospects attending on a virtual basis.
•
On June 3rd, more than a dozen media and entertainment companies participated in our 13th Annual Entertainment & Broadcasting Symposium.
•
On June 15th, the Company paid a $2.00 dividend in the form of 2-Year subordinated notes due June 15, 2023 (“Subordinated Notes”) totaling $52.2 million to holders of record on June 1, 2021.
27
The Company opened a relationship center in Charleston, SC.
·•During
On July 20th, the first quarterCompany held a special meeting where shareholders approved an amendment to the Company’s Amended and Restated Certificate of 2017, the shareholders of the TETON Westwood Mighty MitesSM Fund and the TETON Convertible Securities Fund voted to approve Gabelli Funds, LLC as the sub-advisor.  These assets are now included in the Institutional & PWM – sub-advisory segment of our AUM.Incorporation.

•
On July 21st, the Gabelli Equity Trust (NYSE: GAB) completed an oversubscribed rights offering raising approximately $144 million.
·•
On July 10, 2017, Standard & Poor’s revised its outlook on GAMCO21st, the Company filed a shelf registration statement to stable from negativeregister up to $500 million of securities, including common stock, preferred stock, warrants, rights, and reaffirmed its BBB- rating.convertible securities.

·•
On July 19, 2017, we launched our 16th closed-end fund and second on the London Stock Exchange, the Gabelli Merger Plus+ Trust plc.  The fund, which trades under the symbol GMP, raised $100 million.

·On September 18, 2017, the Ellsworth Growth and Income Fund Ltd. completed its initial preferred offering.  The Fund issued $30 million of 5.25% Series A Cumulative Preferred Shares which are perpetual, non-callable for five years, and was issued at $25 per share.

·On September 26, 2017,August 30th, the Gabelli Multimedia Trust Inc. (NYSE: GGT) completed itsan offering that  raised approximately $18 million.
28

•
On September 9th, we hosted our 27th Annual Aerospace & Defense Symposium in New York City. The symposium featured leading companies in the Aerospace and Defense industries.
•
On October 7th, the Gabelli Dividend & Income Trust (NYSE: GDV) completed the offering of $50$150 million of 5.125%4.25% Series K Cumulative Preferred Shares.
•
On October 15th, the Gabelli Healthcare & Wellness Trust (NYSE: GRX) completed a private placement of $40 million of 4% Series E Cumulative Preferred Stock.  The preferred stock is perpetual, non-callable for five years, and was issued at $25 per share.Shares.

·•
On October 26, 2017,November 1st, the GAMCO Natural Resources, Gold & Income Trust completed its offering of $30 million of 5.2% Series A Cumulative Preferred Stock.  The preferred stock is perpetual, non-callable for five years, and was issued at $25 per share.

·During December 2017, the Company completed two rights offerings for two of its closed-end funds, The Gabelli Equity Trust Inc. and The Gabelli Global Small and Mid Cap Value Trust which(NYSE: GGZ) raised a combined $203 million.  Both offerings were heavily oversubscribed.similar $40 million via a private placement of 4% Series B Cumulative Preferred Shares.

•
On November 1st and 2nd, we hosted our 45th Annual Automotive Symposium, “Batteries Included” in Las Vegas. The symposium featured presentations from senior management of leading automotive and electric vehicle suppliers, with an emphasis on the battery ecosystem, technological innovation, and industry dynamics.
·•Net debt declined from $156.9 million at
On November 19th, Gabelli Funds and the Columbia Business School hosted the 3rd Annual Healthcare Symposium, which featured presentations by leading healthcare professionals providing important insights into major trends in clinical innovation, healthcare delivery, access, and economics.
•
On December 31, 2016 to $37.4 million at December 31, 2017 as we repaid17th, the $110 million 4.5% Convertible note and $50Gabelli Equity Trust (NYSE: GAB) had an initial closing of a private placement of $68 million of the 4% AC Note.  As of December 31, 2017, there is $123.8 million of deferred compensation payable.  $59.0 million of which has not been reflected in our GAAP financials and will be expensed $39.4 million during 2018 and $19.6 million during 2019 (see page 36 for details).4.25% Series M Cumulative Preferred Shares.


OverviewGiving Back to Society – (Y)our “S” in ESG


Consolidated StatementsThe Board of IncomeDirectors approved in November 2021 a $0.50 per share shareholder designated charitable contribution (“SDCC”), a 100% increase from the prior year’s $0.25 per share designation under the program. We estimate this will total approximately $11.3 million. Since the inception of GAMCO’s SDCC program in 2013, and counting this current amount, shareholders will have designated charitable gifts of $48 million to more than 350 501(c)(3) institutions.

When combined with our other charitable contributions, this boosts our total contributions to approximately $74 million since our initial public offering (“IPO”) in February 1999.

Shareholder Compensation and Initiatives

During 2021, we returned $73.8 million of our earnings to shareholders through dividends and stock repurchases, including a total of $0.10 per share in regular quarterly cash dividends totaling $2.7 million and $2.00 per share in a special dividend to shareholders of Class A Stock and Class B Stock payable in Subordinated Notes totaling $54.5 million. During 2020, we returned $30.7 million of our earnings to shareholders through dividends and stock repurchases, including a total of $0.08 per share in regular quarterly cash dividends and $0.90 per share in a special dividend totaling $26.8 million.

Through our stock buyback program (the “Stock Repurchase Program”), including routine open market purchases under Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended and opportunistic private transactions, we repurchased 700,722 shares and 296,296 shares in 2021 and 2020, respectively, for approximately $16.5 million and $3.9 million, respectively, or $23.54 per share and $13.16 per share, respectively. At December 31, 2021, the total shares available under the Stock Repurchase Program for Class A Stock to be repurchased in the future were 2,173,937. The Stock Repurchase Program is not subject to an expiration date.

Assets Under Management

AUM was $35.0 billion as of December 31, 2021, an increase of $2.4 billion, or 7.4%, from the December 31, 2020 AUM of $32.6 billion. The activity for 2021 consisted of $5.3 billion of market appreciation, net cash outflows of $2.3 billion and recurring distributions, net of reinvestments, from open-end and closed-end funds (the “Funds”) of $568 million. Average total AUM was $34.3 billion in 2021 versus $31.0 billion in 2020, an increase of 10.6%.

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), the Gabelli Merger Plus+ Trust Plc (LSE: GMP), and the GAMCO Merger Arbitrage Fund. As of December 31, 2021, assets with incentive based fees were $1.3 billion, 18.2% above the $1.1 billion on December 31, 2020. 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.


29

RESULTS OF OPERATIONS

Investment advisory and incentive fees, which are based on the amount and composition of AUM in our Funds and Institutional and Private Wealth ManagementPWM accounts, and distribution fees represent our largest source of revenues. In addition to the general level and trends of the stock market, growth in revenues depends on good investment performance, which influences the value of existing AUM as well as contributes to higher investment and lower redemption rates and facilitates the ability to attract additional investors while maintaining current fee levels. Growth in AUM is also dependent on being able to access various distribution channels, which is usually based on several factors, including performance and service. A majority of our cash inflows to mutual fund products have come through third party distribution programs, including NTFno-transaction fee programs. We have also been engaged to act as a sub-advisor for other much larger financial services companies with much larger sales distribution organizations. These sub-advisory clients are subject to business combinations that may result in the termination of the relationship. The loss of a sub-advisory relationship could have a significant impact on our financial results in the future.

Advisory fees from the open-end funds, closed-end fundsFunds and sub-advisory accounts are computed daily or weekly based on average net assets. Advisory fees from Institutional and Private Wealth ManagementPWM clients are generally computed quarterly based on account values as of the end of the preceding quarter. These revenues are based on AUM, which is highly correlated to the stock market and can vary in direct proportion to movements in the stock market and the level of sales compared with redemptions, financial market conditions, and the fee structure for AUM. Revenues derived from the equity-oriented portfolios generally have higher managementadvisory fee rates than fixed income portfolios.

We also receive incentive fees from certain Institutional and Private Wealth ManagementPWM clients, which are based upon meeting or exceeding a specific benchmark index or indices. These fees are recognized at the end of the stipulated contract period, which may be quarterly or annually, for the respective account. ManagementAdvisory fees on assets attributable to a majoritycertain of the closed-end preferred shares are earned at year-end if the total return to common shareholders of the closed-end fund for the calendar year exceeds the dividend rate of the preferred shares. These fees are recognized at the end of the measurement period.

Distribution fees and other income primarily include distribution fee revenue earned in accordance with Rule 12b-1 of the Investment Company Act of 1940, as amended (“Company Act”), along with sales charges and underwriting fees associated with the sale of the mutual funds plus other revenues. Distribution fees fluctuate based on the level of AUM and the amount and type of mutual funds sold directly by G.distributors or through various distribution channels.

28

Compensation costs include variable and fixed compensation and related expenses paid to officers, portfolio managers, sales, trading, research, and all other professional staff.teammates. Variable compensation paid to sales personnelteammates and portfolio management generally represents 40% of revenues and is the largest component of total compensation costs. Distribution costs include marketing, product distribution, and promotion costs. ManagementThe management fee is incentive-based and entirely variable compensation in the amount of 10% of the aggregate pre-tax profits, which is paid to Mr. Gabelli or his designee for acting as CEO pursuant to his 2008 Employment Agreement so long as he is an executive of GBL and devotes the substantial majority of his working time to the business. Other operating expenses include general and administrative operating costs.


Other income and expensesNon-operating income/(loss) includes net gains and lossesgain/(loss) from investments, net (which includeincludes both realized and unrealized gains and losses from trading securities), interest and dividend income, interest expense, and interest expense.  Net gains and lossesshareholder-designated charitable contribution. The gain/(loss) from investments, arenet is derived from our proprietary investment portfolio consisting of various public and private investments.

Net income (loss) attributable to noncontrolling interests represents the
30
The following table (in thousands, except per share of net income attributable to the minority stockholders, as reported on a separate company basis,data) and discussion of our results of operations are based upon data derived from the consolidated majority-owned subsidiaries and netstatements of income attributable to third party limited partners of certain partnerships and offshore funds we consolidate.  Please refer to Note Acontained in our consolidated financial statements included elsewhereand should be read in this report.

Income/(loss) on discontinued operations, net of taxes represents the results of the businesses and assets that were part of the Spin-off of AC.  Please refer to Note P in our consolidated financialconjunction with those statements included elsewhere in Part II, Item 8 of this report.Form 10-K.


  Years Ended December 31,
 
  2021  2020 
Revenues      
Investment advisory and incentive fees $274,531  $233,628 
Distribution fees and other income  26,595   26,098 
Total revenues  301,126   259,726 
Expenses        
       Compensation  118,186   102,347 
       Management fee  5,552   5,376 
Distribution costs  30,276   28,474 
Other operating expenses  29,692   23,920 
Total expenses  183,706   160,117 
Operating income  117,420   99,609 
Non-operating income / (loss)        
Gain/(loss) from investments, net  269   (8,695)
Interest and dividend income  550   826 
Interest expense  (2,919)  (2,620)
Shareholder-designated charitable contribution  (11,279)  (5,436)
Total non-operating loss  (13,379)  (15,925)
Income before income taxes  104,041   83,684 
Provision for income taxes  30,842   24,991 
Net income $73,199  $58,693 
         
Earnings per share:        
Basic $2.79  $2.21 
Diluted $2.73  $2.20 

Consolidated Statements of Financial Condition

We ended the 2017 year with approximately $54.7 million in cash and investments.  The $54.7 million consists of $17.9 million cash and cash equivalents, primarily invested in our 100% U.S. Treasury Money Market Fund, $0.1 million invested in common stocks, mutual funds and closed-end funds, and available for sale (“AFS”) securities of $36.7 million.  Of the $36.7 million of AFS securities, $36.6 million represent our investment in shares of Westwood Holdings Group.
The face value of our debt consisted of $50 million of a 4% PIK Note due to AC on November 30, 2020, $15 million of a 1.6% Note due to AC on February 28, 2018 and $24.2 million of 5.875% senior notes due June 1, 2021.

Deferred compensation totaled $123.8 million as of December 31, 2017, of which $64.8 million is included as of December 31, 2017.  $36.8 million is payable on July 1, 2018, $15.5 million is payable on April 1, 2019 and $71.5 million is payable on January 1, 2020.  We will receive a tax benefit upon payment of the deferred compensation equal to Federal and State rates in effect at the time of payment.

Equity was a negative $96.3 million on December 31, 2017 compared to a negative $166.6 million on December 31, 2016.

We filed a shelf registration with the SEC in 2015 which, among other things, provides us the flexibility to sell any combination of senior and subordinate debt securities, convertible debt securities, equity securities (including common and preferred stock), and other securities up to a total amount of $500 million.  The shelf is available through April 10, 2018, at which time it may be renewed.
Our short-term focus has been to use our cash flow to pay down our existing debt.  During 2017, we repaid the $110 million 4.5% Convertible note and $50 million of the 4% AC Note.  We continue to opportunistically and strategically grow operating income.

29
Assets Under Management Highlights

We reported assets under management as follows (dollars in millions):

  Year Ended December 31,  CAGR (a) 
  2017  2016  2015  2014  2013   2017/2013 
Equities:                   
Open-End $13,747  $13,462  $13,811  $17,684  $17,078   (5.3)
Closed-End  8,053   7,150   6,492   6,949   6,945   3.8 
Institutional & PWM direct  13,420   13,441   13,366   16,597   16,486   (5.0)
Institutional & PWM sub-advisory  5,432   3,783   3,401   3,704   3,797   9.4 
SICAV (b)  510   320   178   135   96   51.8 
Total Equities  41,162   38,156   37,248   45,069   44,402   (1.9)
Fixed Income:                        
Money-Market Fund  1,870   1,767   1,514   1,455   1,735   1.9 
Institutional & PWM  31   31   38   58   62   (15.9)
Total Fixed Income  1,901   1,798   1,552   1,513   1,797   1.4 
Total AUM $43,063  $39,954  $38,800  $46,582  $46,199   (1.7)

(a) Compound annual growth rate.
(b) Adjusted to include assets of $96 million, $135 million, $141 million, and $270 million at December 31, 2013, 2014, 2015, and 2016, respectively.

Our net cash inflows or outflows by product line were as follows (in millions):

  Year Ended December 31, 
  2017  2016  2015  2014  2013 
Equities:               
Open-End $(1,347) $(1,832) $(3,053) $(355) $1,305 
Closed-End (a)  (91)  (55)  (87)  (137)  (334)
Institutional & PWM direct  (2,067)  (1,571)  (2,273)  (846)  169 
Institutional & PWM sub-advisory  988   (226)  (237)  (250)  (134)
SICAV (b)  149   133   49   42   (30)
Total Equities  (2,368)  (3,551)  (5,601)  (1,546)  976 
Fixed Income:                    
Money-Market Fund  89   249   59   (280)  54 
Institutional & PWM  -   (7)  (20)  (4)  2 
Total Fixed Income  89   242   39   (284)  56 
Total Net Cash In (Out) Flows $(2,279) $(3,309) $(5,562) $(1,830) $1,032 

(a)Our net cash inflows or outflows for Closed-End equity funds includes distributions, net of reinvestments, to fund holders of $483 million, $500 million, $461 million, $479 million, and $484 million in 2017, 2016, 2015, 2014, and 2013, respectively.
(b)Adjusted to include inflows or outflows of $125 million, $10 million, $42 million, and ($30) million in 2016, 2015, 2014, and 2013, respectively.

  Closed-End Fund flows 
  Offerings, net  Distributions, net    
  of repurchases  of reinvestments  Net 
2017 $392  $(483) $(91)
2016  445   (500)  (55)
2015  374   (461)  (87)
2014  342   (479)  (137)
2013  150   (484)  (334)


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Our net appreciation and depreciation by product line were as follows (in millions):

  Year Ended December 31, 
  2017  2016  2015  2014  2013 
                
Equities               
Open End $1,632  $1,483  $(820) $961  $3,271 
Close End  994   713   (370)  141   991 
Institutional & PWM direct  2,046   1,646   (958)  957   4,287 
Institutional & PWM sub-advisory  661   608   (66)  157   1,007 
SICAV (a)  41   9   (6)  (3)  7 
Total Equities  5,374   4,459   (2,220)  2,213   9,563 
Fixed Income                    
Money-Market Fund  14   4   -   -   - 
Institutional & PWM  -   -   -   -   - 
Total Fixed Income  14   4   -   -   - 
Total Net Appreciation/(Depreciation) $5,388  $4,463  $(2,220) $2,213  $9,563 
(a)Adjusted to include appreciation and depreciation of $4 million, ($4) million, ($3) million, and $7 million in 2016, 2015, 2014, and 2013, respectively.

AUM at December 31, 2017 were $43.1 billion, an increase of 8.6% from AUM of $39.7 billion at December 31, 2016.  Equity AUM were $41.2 billion on December 31, 2017, 7.9% above the $38.2 billion on December 31, 2016.  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), the Gabelli Merger Plus+ Trust PLC (LSE: GMP) and the GAMCO Merger Arbitrage Fund.  As of December 31, 2017, assets with incentive based fees were $3.1 billion, 10.7% above the $2.8 billion on December 31, 2016.  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.

Operating Results for the Year Ended December 31, 2017 as2021 Compared to the Year Ended December 31, 20162020

Overview
Net income for 2021 was $73.2 million, or $2.73 per fully diluted share, versus $58.7 million, or $2.20 per fully diluted share, in 2020. The year-to-year comparison was impacted by higher revenues and lower non-operating loss offset partially by higher variable compensation.

Revenues


Total revenues were $360.5$301.1 million in 2017, $7.52021, $41.4 million or 2.1%15.9% higher than the total revenues of $353.0$259.7 million in 2016.2020. The change in total revenues by revenue component was as follows (dollars in millions):


Year Ended December 31, Increase (decrease) 
2017 2016 $    %  Years Ended December 31,
  Increase (decrease) 
           2021  2020  
_$
  
_%
 
Investment advisory $307.6  $293.1  $14.5   4.9  $258.9  $224.7  $34.2   15.2 
Incentive fees  9.1   15.4   (6.3)  (40.9)  15.6   8.9   6.7   75.3 
Distribution fees and other income  43.8   44.5   (0.7)  (1.6)  26.6   26.1   0.5   1.9 
Total revenues $360.5  $353.0  $7.5   2.1  $301.1  $259.7  $41.4   15.9 


Investment Advisory and Incentive Fees:Investment advisory fees excluding incentive fees, which comprised 87.9%86.0% of total revenues in 2017,2021, are directly influenced by the level and mix of average AUM. Average total AUM rose 8.0%increased 10.6% to $42.0$34.3 billion in 20172021 as compared to $38.9$31.0 billion in 2016.2020. Average equity AUM increased 8.1%15.3% to $40.2$32.4 billion in 20172021 from $37.2$28.1 billion in 2016,2020, primarily from market appreciation.appreciation partially offset by net outflows. Incentive fees, which comprised 2.5%5.2% of total revenues in 2017,2021, result from our ability to either generate an absolute return in a portfolio or meet or exceed a specific benchmark index or indices and can vary significantly from one period to another. Incentive fees were lowerhigher in 20172021 as a fewerlarger number of portfolios exceeded their respective benchmarks as compared to 2016.2020.
 

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Fund revenues increased $7.5$29.0 million or 3.8%18.3%, to $206.8$187.3 million, driven by higher average AUM. Revenue from open-end funds rose $4.0Funds increased $9.6 million, or 3.1%10.5%, to $134.0$100.8 million from the prior year as average AUM in 20172021 increased $1.4$0.9 billion, or 9.2%7.6%, to $16.6$12.7 billion from the $15.2$11.8 billion in 2016.2020. Closed-end fund revenues increased $3.4$19.4 million, or 4.9%28.9%, to $72.8$86.5 million from the prior year and waswere comprised of an increase of $6.3$5.4 million in incentive fees on certain closed-end fund AUM and an increase of $14.0 million in investment advisory fees attributable to higher average AUM, offset by a decrease of $2.9 million in incentive fees on certain closed-end fund AUM. Revenue from Institutional and Private Wealth ManagementPWM accounts, excluding incentive fees, which are generally billed on beginning quarter AUM, increased $2.1$8.9 million, or 2.1%13.8%, principally due to higher billable AUM levels throughout the course of 2017.  There were no incentive fees earned in 2017.2021. In 2017,2021, average AUM in our equity Institutional and Private Wealth ManagementPWM business increased $0.8$1.8 billion, or 4.8%16.8%, for the year to $17.5$12.5 billion. SICAV revenues were $14.1 million in 2021, including $7.3 million of incentive fees, up from $11.0 million in 2020.
 

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Distribution Fees and Other Income:Distribution fees and other income decreased $0.7increased $0.5 million, or 1.6%1.9%, to $43.8$26.6 million in 20172021 from $44.5$26.1 million in 2016.  Lower distribution2020 primarily from higher average open-end equity Fund AUM which increased 11.0%. Distribution fees of $39.7were $23.7 million in 20172021 versus $41.0 million for the prior year, offset by an increase of $0.5$23.1 million in fees from the sale of load shares of mutual funds and2020 while other income.income was $2.9 million in 2021 versus $3.0 million in 2020.


Expenses
Compensation:
Total compensation costs, which are largely variable in nature, increased $42.9$15.9 million, or 51.9%15.5%, to $125.5$118.2 million in 20172021 from $82.6$102.3 million in 2016.2020. Variable compensation costs, which are tied to revenues and principally consist of portfolio manager and relationship manager fees, increased $40.8$8.3 million to $97.4$68.2 million in 20172021 from $56.6$59.9 million in 20162020 and increaseddecreased as a percent of revenues to 27.0%22.7% in 20172021 from 16.0%23.1% in 2016.  This is primarily2020. The increase of waived compensation by the CEO, in his capacity as a portfolio manager and a relationship manager, to $17.1 million in 2021, as compared to $12.4 million in 2020, partially offset the large increase in variable compensation costs due to higher average AUM. During 2021, the CEO elected to irrevocably waive all of his compensation for a total of five months (July 1, 2021 to November 30, 2021) as comparted to four months and ten days during 2020 (July 1, 2020 to November 10, 2020). Additionally, the accounting for the vesting of the Deferred Cash Compensation Agreementsdeferred cash compensation agreement (“DCCAs”DCCA”).  Absent the DCCAs, decreased 2020 compensation expense was $133.1 million in 2017 as compared to $128.3 million in 2016.

The DCCAs granted to the CEO are required to be amortized over their respective vesting periods.  The 2016 DCCA will be amortized over four years, the First Half 2017 DCCA will be amortized over eighteen months, and the Fourth Quarter 2017 DCCA will be amortized over eighteen months.  In the third quarter 2017, there was no DCCA.  In 2016, the full amount of the compensation was deferred, and expense was recorded for the 25% vesting in that year.  In 2017, an additional 25% of the deferred compensation from 2016 was recorded as well as 67% of the First Half 2017 DCCA and 17% of the Fourth Quarter 2017 DCCA.  The effect of the DCCAs and current non deferred compensation being recorded resulted in a $38.1 million increase in compensation in 2017 compared to 2016.  Variable compensation is also driven by revenue levels which increased in 2017 from 2016.$1.5 million. Fixed compensation costs increased slightly to $28.1$41.3 million in 20172021 from $26.0$38.2 million in 2016.
Stock based compensation:2020. Stock based compensation was $8.7 million in 2017,2021, an increase of $4.7$4.5 million, as compared to $4.0$4.2 million in 2016.2020. The increase primarily results from the acceleration of all but 19,400 RSAs2018 and 2019 restricted stock award grants during 20172021 for an additional expense of $6.8$3.8 million that would have been recognized in future years.


Management Fee:In 2017,2021, management fee expense increased to $13.7$5.6 million versus $6.5$5.4 million in 2016.2020. Management fee expense is incentive-based and entirely variable in the amount of 10% of the aggregate pre-tax profits, which is paid to Mr. Gabelli (or his designee) in accordance with his employment agreement.  Most importantly,2008 Employment Agreement. During 2021 and 2020, the DCCA agreementsCEO compensation waiver reduced the management fee expense by $7.8$3.7 million in 2016 while 2017 was virtually unchanged. (see page 36)and $2.3 million.


Distribution Costs:Distribution costs, which include marketing, promotion, and distribution costs increased $0.2$1.8 million, or 0.5%6.3%, to $44.4$30.3 million in 20172021 from $44.2$28.5 million in 20162020, driven by an increase in average open-end equity mutual funds AUM of 0.4%11.0%.


Other Operating Expenses: Our other operating expenses were $23.2$29.7 million in 20172021 compared to $23.9$24.0 million in 2016, a decrease2020, an increase of $0.7$5.7 million or 2.9%.  Lower donated securities expense of $1.723.8%, primarily from increased sub advisory fees for two funds totaling $4.1 million and legal expense of $0.7 million were slightly offset by an increase to the research services feeone-time system implementation costs of $1.5 million.


Operating Income and Marginincome

Operating income decreased $46.8increased $17.8 million, or 24.4%17.9%, to $145.0$117.4 million for 20172021 versus $191.8$99.7 million in the prior year period.2020. This decrease wasincrease in 2021 as compared to 2020 primarily due to increased variableresulted from higher revenues of $41.4 million and a higher CEO compensation expense relating to the DCCA agreementswaiver of $45.9$4.7 million. Operating margin was 40.2%39.0% for the year ended December 31, 2017,2021, versus 54.3%38.4% in the prior year period.  The decrease in operating margin was due primarily to higher variable compensation costs and management fee expense related to the DCCA agreements. (see page 36)year.


Operating income before management fee was $158.7$123.0 million for the year ended of 2017,2021, versus $198.3$105.0 million in the prior year. Operating margin before management fee was 44.0%40.8% in the 2017 period2021 versus 56.2%40.4 % in the 2016 period.2020. The reconciliation of operating income before management fee and operating margin before management fee, both of which are non-GAAP measures, to their respective GAAPgenerally accepted accounting principles (“GAAP”) measures is provided at the end of this section.


Other Income and ExpenseNon-operating income/(loss)

Total other income (expense), net of interest expense,non-operating loss was an expense of $12.1$13.4 million for the year ended December 31, 20172021, compared to an expensea loss of $9.6$15.9 million in 2016.2020. This iswas comprised of net gain from investments of $3.1$0.3 million in 20172021 as compared to $1.6a net loss from investments of $8.7 million in 2016; loss on extinguishment of debt of $3.3 million in 2017;2020; interest and dividend income of $2.4$0.6 million in 20172021 versus $1.5$0.8 million in 2016;2020; interest expense of $10.2$2.9 million in 20172021 as compared to $12.7$2.6 million in 20162020; and shareholder-designated charitable contributions expense of $4.1$11.3 million in 2017.

Interest expense decreased $2.5 million to $10.22021 and $5.4 million in 2017, from $12.7 million in 2016 primarily related to the higher average amount of debt outstanding in 2016 versus 2017.2020.



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Income Taxes
The effective tax rate (“ETR”) was 41.4%29.6% for the year ended December 31, 2017,2021 versus 35.7%29.9% for the year ended December 31, 2016.  The ETR for 2017 included a net $8.2 million write down for net deferred tax assets resulting from the enactment of the Tax Cuts2020.

Non-GAAP information and Jobs Act (the “Act”) in December 2017.  Absent the effects of the Act, the ETR for 2017 was 35.3%.  The ETR for 2016 benefitted by 1.4% due to the reversal of tax accruals related to the closing out of a state audit.reconciliation

Shareholder Compensation and Initiatives
During 2017, we returned $16.7 million of our earnings to shareholders through dividends and stock repurchases.  We returned to shareholders a total of $0.08 per share in regular quarterly cash dividends in 2017 totaling $2.4 million.  During 2016, we returned $13.2 million of our earnings to shareholders through dividends and stock repurchases.  We returned to shareholders a total of $0.08 per share in regular quarterly cash dividends totaling $2.4 million.

Through our stock buyback program, we repurchased 484,526 and 348,687 shares in 2017 and 2016, respectively, for approximately $14.3 million and $10.8 million, or $29.56 and $30.88 per share, respectively.  Approximately 674,000 shares remain authorized under our stock buyback program at December 31, 2017.  Since our IPO we have repurchased 10,385,866 shares for a total investment of $453.1 million, or $43.63 per share.

Weighted average shares outstanding on a diluted basis in 2017 and 2016 were 30.9 million and 30.2 million, respectively.  

Operating income before management fee expense is used by management for purposes of evaluating its business operations. We believe this measure is useful in illustrating the operating results of the Company as management fee expense is based on pre-tax income before management fee expense, which includes non-operating items including investment gains and lossesgain/(loss) from the Company’sinvestments, net from our proprietary investment portfolio, interest and dividend income, interest expense.expense, and shareholder-designated charitable contribution. We believe that an investor would find this useful in analyzing theour business operations of the Company without the impact of the non-operating items such as trading and investment portfolios, or interest expense.

Reconciliation of non-GAAP financial measures to GAAP:

  2017  2016 
Revenues $360,524  $353,000 
Operating Income  145,020   191,796 
Add back: management fee expense  13,666   6,518 
Operating income before management fee $158,686  $198,314 
         
Operating margin  40.2%  54.3%
         
Operating margin before management fee  44.0%  56.2%

Operating Results for the Year Ended December 31, 2016 as Compared to the Year Ended December 31, 2015

Revenues
Total revenues were $353.0 million in 2016, $28.0 million or 7.3% lower than the total revenues of $381.0 million in 2015.  The change in total revenues by revenue component was as follows (dollars in millions):

 Year Ended December 31, Increase (decrease)
 2016 2015 $    % 
            
Investment advisory $293.1  $325.6  $(32.5)   (10.0)  
Incentive fees  15.4   4.4   11.0    250.0  
Distribution fees and other income  44.5   51.0   (6.5)   (12.7)  
Total revenues $353.0  $381.0  $(28.0)   (7.3)  


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Investment Advisory and Incentive Fees:  Investment advisory fees, which comprised 83.0% of total revenues in 2016, are directly influenced by the level and mix of average AUM.  Average total AUM declined 10.0% to $38.9 billion in 2016 as compared to $43.2 billion in 2015.  Average equity AUM fell 10.6% to $37.2 billion in 2016 from $41.6 billion in 2015, primarily from net outflows.  Incentive fees, which comprised 4.4% of total revenues in 2016, result from our ability to either generate an absolute return in a portfolio or meet or exceed a specific benchmark index or indices and can vary significantly from one period to another.  Incentive fees were higher in 2016 as a greater number of portfolios exceeded their respective benchmarks as compared to 2015.

Fund revenues decreased $14.9 million or 7.0%, to $199.3 million, driven by lower average AUM.  Revenue from open-end funds decreased $21.9 million, or 14.4%, to $130.0 million from the prior year as average AUM in 2016 decreased $2.2 billion, or 12.6%, to $15.2 billion from the $17.4 billion in 2014.  Closed-end fund revenues increased $7.0 million, or 11.2%, to $69.3 million from the prior year and was comprised of an increase of $7.8 million in incentive fees on certain closed-end fund AUM partially reduced by a decrease of $0.8 million in investment advisory fees attributable to lower average AUM.  Revenue from Institutional and Private Wealth Management accounts, excluding incentive fees, which are generally billed on beginning quarter AUM, decreased $11.7 million, or 10.3%, principally due to lower billable AUM levels throughout the course of 2016.  Incentive fees earned on certain accounts increased by $1.7 million.  In 2016, average AUM in our equity Institutional and Private Wealth Management business decreased $2.1 billion, or 11.1%, for the year to $16.8 billion.
Distribution Fees and Other Income: Distribution fees and other income decreased $6.5 million, or 12.7%, to $44.5 million in 2016 from $51.0 million in 2015.  Lower distribution fees of $41.0 million in 2016 versus $47.7 million for the prior year, principally as a result of decreased average AUM in our open-end equity mutual funds of 13.7%, offset by an increase of $0.2 million in fees from the sale of load shares of mutual funds and other income, contributed to this decrease.

Expenses
Compensation:  Total compensation costs, which are largely variable in nature, decreased $53.9 million, or 39.5%, to $82.6 million in 2016 from $136.5 million in 2015.  Variable compensation costs, principally portfolio manager and relationship manager fees, decreased $53.6 million to $56.6 million in 2016 from $110.2 million in 2015 and decreased as a percent of revenues to 16.0% in 2016 from 28.9% in 2015.  The principle reason was the DCCA agreements with Mr. Gabelli which reduced variable compensation by $44.6 million in 2016. (see page 36)  Variable compensation is also driven by revenue levels which decreased in 2016 from 2015. Fixed compensation costs decreased slightly to $26.0 million in 2016 from $26.3 million in 2015.

Stock based compensation:  Stock based compensation was $4.0 million in 2016, a decrease of $5.9 million, as compared to $9.9 million in 2015.  The decrease primarily results from the acceleration of 130,650 RSAs during 2015 for an additional expense of $3.5 million that would have been recognized in future years.

Management Fee:  In 2016 management fee expense decreased to $6.5 million versus $15.5 million in 2015.  Management fee expense is incentive-based and entirely variable in the amount of 10% of the aggregate pre-tax profits which is paid to Mr. Gabelli (or his designee) in accordance with his employment agreement.  Most importantly the DCCA agreements reduced the management fee by $12.4 million in 2016. (see page 36)

Distribution Costs: Distribution costs, which include marketing, promotion and distribution costs decreased $7.8 million, or 15.0%, to $44.2 million in 2016 from $52.0 million in 2015 driven by a decrease in average open-end equity mutual funds AUM of 13.7%.

Other Operating Expenses: Our other operating expenses were $23.9 million in 2016 compared to $19.2 million in 2015, an increase of $4.7 million or 24.4%.  The largest components of this increase were additional donated securities expense of $1.6 million and an increase to the research services fee of $1.5 million.

Operating Income and Margin
Operating income increased $43.9 million, or 29.7%, to $191.8 million for 2016 versus $147.9 million in the prior year period.  This increase was primarily due to higher incentive fees of $11.0 million and reduced variable compensation expense relating to the RSU agreement of $57.0 million partially offset by lower non-incentive fee revenues of $39.0 million.   Operating margin was 54.3% for the year ended December 31, 2016, versus 38.8% in the prior year period.  The increase in operating margin was due primarily to lower variable compensation costs and management fee expense related to the RSU agreement. (see page 36)

Operating income before management fee was $198.3 million for the year ended of 2016, versus $163.5 million in the prior year. Operating margin before management fee was 56.2% in the 2016 period versus 42.9% in the 2015 period.  The reconciliation of operating income before management fee and operating margin before management fee, both of which are non-GAAP measures to their respective GAAP measures, is provided at the end of this section.


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Other Income and Expense
Total other income (expense), net of interest expense, was an expense of $9.6 million for the year ended December 31, 2016 compared to an expense of $8.9 million in 2015.  This is comprised of net gain from investments of $1.6 million in 2016 as compared to $5.0 million in 2015; loss on extinguishment of debt of $1.1 million in 2015; interest and dividend income, of $1.5 million in 2016 versus $2.2 million in 2015; interest expense, of $12.7 million in 2016 as compared to $8.6 million in 2015 and Shareholder-designated contribution expense of $6.4 million in 2015.or shareholder-designated charitable contribution.

Interest expense increased $4.1 million to $12.7 million in 2016, from $8.6 million in 2015 primarily related to the higher average amount of debt outstanding in 2016 versus 2015.

In 2015, the Board of Directors of GBL again adopted a Shareholder Designated Charitable Contribution program on behalf of all registered Class A and Class B shareholders.  Under the programs the Board approved a $0.25 per share contribution, resulting in a charge of $6.4 million in 2015.

Income Taxes
The effective tax rate (“ETR”) was 35.7% for the year ended December 31, 2016, versus 37.2% for the year ended December 31, 2015.  The ETR for 2016 benefitted by 1.4% due to the reversal of tax accruals related to the closing out of a state audit.

Shareholder Compensation and Initiatives
During 2016, we returned $13.2 million of our earnings to shareholders through dividends and stock repurchases.  We returned to shareholders a total of $0.08 per share in regular quarterly cash dividends in 2016 totaling $2.4 million.  During 2015, we returned $34.7 million of our earnings to shareholders through dividends and stock repurchases.  We returned to shareholders a total of $0.28 per share in regular quarterly cash dividends totaling $7.5 million.

Through our stock buyback program, we repurchased 348,687 and 426,628 shares in 2016 and 2015, respectively, for approximately $10.8 million and $27.2 million, or $30.88 and $63.85 per share, respectively (For 2015, 413,228 shares were at an average investment of $64.86 per share prior to the distribution of AC on November 30, 2015 and 13,400 shares were at an average price of $32.56 following the distribution of AC).  Approximately 233,000 shares remain authorized under our stock buyback program at December 31, 2016.  Since our IPO we have repurchased 9,901,340 shares for a total investment of $438.8 million, or $44.32 per share.

Weighted average shares outstanding on a diluted basis in 2016 and 2015 were 30.2 million and 25.7 million, respectively.  

Operating income before management fee expense is used by management for purposes of evaluating its business operations.  We believe this measure is useful in illustrating the operating results of the Company as management fee expense is based on pre-tax income before management fee expense, which includes non-operating items including investment gains and losses from the Company’s proprietary investment portfolio and interest expense.  We believe that an investor would find this useful in analyzing the business operations of the Company without the impact of the non-operating items such as trading and investment portfolios or interest expense.


Reconciliation of non-GAAPGAAP financial measures to GAAP:
  2016  2015 
Revenues $353,000  $380,976 
Operating income  191,796   147,949 
Add back: management fee expense  6,518   15,503 
Operating income before management fee $198,314  $163,452 
         
Operating margin  54.3%  38.8%
         
Operating margin before management fee  56.2%  42.9%

non-GAAP (in thousands):


  2021  2020 
Revenues, U.S. GAAP basis $301,126  $259,726 
Operating income, U.S. GAAP basis  117,420   99,609 
Add back: management fee expense  5,552   5,376 
Operating income before management fee $122,972  $104,985 
         
Operating margin  39.0%  38.4%
Operating margin before management fee  40.8%  40.4%

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DEFERRED COMPENSATION


As previously disclosed, theThe Company has deferred, through a DCCA, the cash compensation of the Chief Executive OfficerCEO relating to all of 2016 (“2016 DCCA”), the first half of 2017 (“First Half 2017 DCCA”) and the fourth quarter of 2017 (“Fourth Quarter 2017 DCCA”) to provide the Company with flexibility to pay down debt.  We have made substantial progress toward this objective, having reduceddebt and enhance our debt sinceability to execute lift-outs, make acquisitions, and seed new products.

The DCCA deferred the November 2015 spin-offCEO’s compensation expense by amortizing it over the DCCA’s vesting period. The CEO was not entitled to receive the compensation until the end of AC, resulting in Standard & Poor’s recent revision of its outlookeach respective vesting period, so U.S. GAAP specifies that the expense is amortized over the vesting period. The 2016 DCCA was expensed ratably over 4 years. In addition to stable from negative and reaffirmation of our debt rating of BBB-.the ratable vesting, the expense was marked to market at each reporting period as the DCCA expense was indexed to GBL’s stock price.


Notwithstanding its ability to settle these agreements in stock, GAMCO currently intendsmade a cash payment to make cash payments to Mr. Gabellithe CEO on the respective vesting dates.date. While the agreementsagreement did not change Mr. Gabelli’sthe original calculation of the CEO’s compensation, our reporting under U.S. GAAP reporting for his compensation did change due to the ratable vesting.

vesting and the indexing to the GBL stock price. The DCCAs deferoriginal value of the Chief Executive Officer’s compensation expense by amortizing it over each DCCA’s respective vesting period.  The Chief Executive Officer is not entitled to receiveDCCA was based on the compensation untilearned in the endperiod divided by the volume weighted average price (“VWAP”) of the GBL stock price for the period (“Original VWAP”) to calculate the number of restricted stock units (“RSUs”) granted. Upon vesting, period, so generally accepted accounting principles (“GAAP”) specify this treatmentthe DCCA was paid out based on the lesser of the expense.  The 2016 DCCA is expensed ratably over 4 years,VWAP of GBL’s stock price on the First Half 2017 DCCA is expensed ratably over 18 months,vesting date (“Vesting Date VWAP”) and the Fourth Quarter DCCA is expensed ratably over 18 months.

BecauseOriginal VWAP multiplied by the GAAP reportingnumber of RSUs. The table below shows a summary of the DCCAs granted to the CEO tracks vesting, compensation expenseDCCA (in millions, except RSUs and management fee expense in the year of grant is lower than compensation expense and management fee expense in future periods to the extent that future periods contain the vesting of the prior year’s DCCA compensation on top of the normal compensation for the current year period which has not been deferred.  In 2016, the full amount of the compensation was deferred, and expense was recorded for the 25% vesting in that year.  In the first six months of 2017, the ratable vesting continued for the 2016 compensation, and the new First Half 2017 DCCA grant resulted in compensation for the first six months of 2017 being deferred and expense being recorded for 33% vesting in that period.  The CEO’s third quarter compensation was not deferred so 100% of the CEO’s compensation for that period was recorded together with the ratable portions of the vestings ofVWAPs):

  
Number of
RSUs
  
Original
VWAP
  
Vesting
Date
VWAP
 
Vesting
Date
 
Deferred Cash
Compensation
  
Impact of
Indexing to GBL
Stock Price
  Waiver  
Vesting
Date Cash
Payment
 
2016 DCCA  2,314,695  $32.8187  $18.8812 1/2/2020 $76.0  $(32.3) $-  $43.7 

On January 2, 2020, the 2016 DCCA vested in accordance with the terms of the agreement and a cash payment of $43.7 million was made to the First Half 2017 DCCA.  So there is a compounding effect in future periods when there are both current period compensation that has not been deferredCEO. This payment was reduced by $32.3 million resulting from the DCCA RSUs being indexed to GBL’s stock price and prior period compensation that is being ratably vested.utilizing the lesser of the Vesting Date VWAP ($18.8812) versus the Original VWAP over 2016 ($32.8187).


Accordingly, this vesting schedulethe change in GBL price from December 31, 2019 to January 2, 2020, resulted in a $38.1$1.4 million increasedecrease in compensation expense in 2017 versus 2016 as well as a $7.8 million increase in management fee expense in 2017 as compared to 2016.2020.


The GAAP based balance sheets are also impacted; the compensation payable at December 31, 2017 only includes the vested portion of the compensation subject to the DCCAs.  At December 31, 2017, the amount of unrecognized compensation was $59.0 million.

33
The following tables show the amortization and earnings per share (“EPS”) impact, inclusive of the indexing to the GBL stock price, of the DCCA by quarter (in thousands, except per share data):

Amortization by quarter (increase / (decrease)):EPS impact by quarter: 
 2020    2020 
_Q1
$(1,409)  
_Q1
 $0.04 
_Q2
 -  
_Q2
  - 
_Q3
 -  
_Q3
  - 
_Q4
 -  
_Q4
  - 
Year$(1,409)  Year $0.04 

The following tables (in thousands, except per share data) show a reconciliation of our results for 2017 and 2016, and our balance sheet atthe years ended December 31, 20172021 and 2020 between the U.S. GAAP basis and a non-GAAP adjusted basis (“as adjusted”) as if all of the 2016 DCCA the First Half 2017 DCCA, and the Fourth Quarter 2017 DCCA expense werewas recognized in 2016 and 2017, respectively, without regard to the vesting schedule. We believe the non-GAAP financial measures below provide relevant and meaningful information to investors about our core operating results. These measures have been established in order to increase transparency for the purpose of evaluating our core business, for comparing results with prior period results, and to enable more appropriate comparisons with industry peers. However, non-GAAP financial measures should not be considered a substitute for financial measures calculated in accordance with U.S. GAAP and may be calculated differently by other companies.  The following schedules reconcile U.S. GAAP financial measures to non-GAAP measures for the years ended December 31, 2017 and 2016 as well as at December 31, 2017.

 
 
 Years Ended December 31,
 
  2021  2020 
Net income, U.S. GAAP basis $73,199  $58,693 
Impact of 2016 DCCA on expenses and taxes:        
Compensation costs  -   (1,409)
Management fee expense  -   - 
Provision for income taxes  -   338 
Total impact of 2016 DCCA  -   (1,071)
Net income, as adjusted $73,199  $57,622 
         
Per share (basic):        
Net income, U.S. GAAP basis $2.79  $2.21 
Impact of DCCAs  -   (0.04)
Net income, as adjusted $2.79  $2.17 
Per fully diluted share:        
Net income, U.S. GAAP basis $2.73  $2.20 
Impact of DCCAs  -   (0.04)
Net income, as adjusted $2.73  $2.16 

36LIQUIDITY AND CAPITAL RESOURCES

  Full Year Ended December 31, 2017 
     Impact of  Impact of       
  Reported  Fourth Quarter  First Half  Impact of    
  GAAP  2017 DCCA  2017 DCCA  2016 DCCA  Non-GAAP 
Revenues               
Investment advisory and incentive fees $316,705  $-  $-  $-  $316,705 
Distribution fees and other income  43,819   -   -   -   43,819 
Total revenues  360,524   -   -   -   360,524 
Expenses                    
Compensation  125,501   10,318   9,619   (12,322)  133,116 
Stock based compensation  8,669   -   -   -   8,669 
Management fee  13,666   1,064   1,775   (2,887)  13,618 
Distribution costs  44,447   -   -   -   44,447 
Other operating expenses  23,221   -   -   -   23,221 
Total expenses  215,504   11,382   11,394   (15,209)  223,071 
                     
Operating income  145,020   (11,382)  (11,394)  15,209   137,453 
Other income (expense)                    
Net gain from investments  (185)  -   -   -   (185)
Interest and dividend income  2,350   -   -   -   2,350 
Interest expense  (10,160)  -   -   -   (10,160)
Charitable contibutions  (4,137)  -   -   -   (4,137)
Total other expense, net  (12,132)  -   -   -   (12,132)
Income before income taxes  132,888   (11,382)  (11,394)  15,209   125,321 
Income tax provision  55,079   (4,325)  (4,442)  5,818   52,130 
Net income attributable to GAMCO Investors, Inc.'s shareholders $77,809  $(7,057) $(6,952) $9,391  $73,191 
                     
Net income attributable to GAMCO Investors, Inc.'s shareholders per share:                 
Basic $2.68  $(0.24) $(0.24) $0.32  $2.53 
Diluted $2.60  $(0.23) $(0.22) $0.30  $2.45 

  Full Year Ended December 31, 2016 
          
  Reported  Impact of    
  GAAP  2016 DCCA  Non-GAAP 
Revenues         
  Investment advisory and incentive fees $308,459  $-  $308,459 
  Distribution fees and other income  44,541   -   44,541 
Total revenues  353,000   -   353,000 
Expenses            
  Compensation  82,613   45,734   128,347 
  Stock based compensation  3,959   -   3,959 
  Management fee  6,518   7,782   14,300 
  Distribution costs  44,189   -   44,189 
  Other operating expenses  23,925   -   23,925 
Total expenses  161,204   53,516   214,720 
             
Operating income  191,796   (53,516)  138,280 
Other income (expense)  -         
  Net gain from investments  1,594   -   1,594 
  Interest and dividend income  1,511   -   1,511 
  Interest expense  (12,674)  -   (12,674)
Total other expense, net  (9,569)  -   (9,569)
Income before income taxes  182,227   (53,516)  128,711 
Income tax provision  65,106   (20,069)  45,037 
Net income attributable to GAMCO Investors, Inc.'s shareholders $117,121  $(33,447) $83,674 
             
Net income attributable to GAMCO Investors, Inc.'s shareholders per share:         
Basic $4.01  $(1.15) $2.87 
Diluted $3.92  $(1.11) $2.81 
37

  December 31, 2017 
     Impact of  Impact of       
  Reported  Fourth Quarter  First Half  Impact of    
  GAAP  2017 DCCA  2017 DCCA  2016 DCCA  Non-GAAP 
ASSETS               
Cash and cash equivalents $17,821  $-  $-  $-  $17,821 
Investments in securities  36,790   -   -   -   36,790 
Receivable from brokers  1,578   -   -   -   1,578 
Investment advisory fees receivable  38,712   -   -   -   38,712 
Receivable from affiliates  6,908   -   -   -   6,908 
Income tax receivable  15,615   2,917   2,892   8,064   29,488 
Other assets  10,862   -   -   -   10,862 
  Total assets $128,286  $2,917  $2,892  $8,064  $142,159 
                     
LIABILITIES AND EQUITY                    
Payable to brokers  14,926   -   -   -   14,926 
Income taxes payable and deferred tax liabilities  3,128   -   -   -   3,128 
Capital lease obligation  4,943   -   -   -   4,943 
Compensation payable  82,907   12,414   12,307   34,315   141,943 
Payable to affiliates  855   -   -   -   855 
Accrued expenses and other liabilities  28,656   -   -   -   28,656 
  Sub-total  135,415   12,414   12,307   34,315   194,451 
                     
AC 4% PIK Note (due November 30, 2020)  50,000   -   -   -   50,000 
5.875% Senior notes (due June 1, 2021)  24,144   -   -   -   24,144 
AC 1.6% Note Payable (due February 28, 2018)  15,000   -   -   -   15,000 
  Total liabilities  224,559   12,414   12,307   34,315   283,595 
                     
Equity                    
  GAMCO Investors, Inc. stockholders' equity                    
    Class A Common Stock  14   -   -   -   14 
    Class B Common Stock  19   -   -   -   19 
    Additional paid-in capital  12,572   -   -   -   12,572 
    Retained earnings (deficit)  155,939   (9,497)  (9,415)  (26,251)  110,776 
    Accumulated other comprehensive income  11,876   -   -   -   11,876 
    Treasury stock, at cost  (276,693)  -   -   -   (276,693)
  Total GAMCO Investors, Inc. stockholders' equity (deficit)  (96,273)  (9,497)  (9,415)  (26,251)  (141,436)
Total liabilities and equity (deficit) $128,286  $2,917  $2,892  $8,064  $142,159 
38
Liquidity and Capital Resources
Our principal assets are highly liquid in nature and consist of cash and cash equivalents, U.S. Treasury Bills, short-term investments, and securities held for investment purposes. Cash and cash equivalents are comprised primarily of U.S Treasury Bills with maturities of three months or less at the time of purchase and a 100% U.S. Treasury money market fundsfund managed by GAMCO.  Although investments in partnerships and offshore funds are subject to restrictions as to the timing of distributions, the underlying investments of such partnerships or funds are, for the most part, liquid, and the valuations of these products reflect that underlying liquidity.GAMCO (The Gabelli U.S. Treasury Money Market Fund).



34
Summary cash flow data derived from our audited consolidated statements of cash flows arefor the years ended December 31, 2021 and 2020 was as follows:follows (in thousands):


 Year Ended December 31,  Years Ended December 31,
 
 2017  2016  2015  2021  2020 
 (in thousands) 
Cash flows provided by (used in) from continuing operations:   
Cash flows provided by (used in):      
Operating activities $126,691  $115,737  $117,130  $96,131  $40,734 
Investing activities  237   (1,435)  (6,198)  59,515   (63,511)
Financing activities  (148,902)  (88,247)  (109,923)  (46,946)  (30,026)
Increase (decrease) in cash and cash equivalents from continuing operations  (21,974)  26,055   1,009 
Cash flows from discontinued operations            
Operating activities  -   -   54,335 
Investing activities  -   -   (41,463)
Financing activities  -   -   (12,871)
Increase in cash and cash equivalents from discontinued operations  -   -   1 
Increase (decrease) in cash and cash equivalents  108,700   (52,803)
Effect of exchange rates on cash and cash equivalents  (17)  38   15   2   (8)
Net increase (decrease) in cash and cash equivalents  (21,991)  26,093   1,025   108,702   (52,811)
Cash and cash equivalents at beginning of year  39,812   13,719   12,694   33,325   86,136 
Cash and cash equivalents at end of year $17,821  $39,812  $13,719  $142,027  $33,325 
        
Short-term investments in U.S. Treasury Bills $-  $64,988 
Cash, cash equivalents, short-term investments in U.S Treasury Bills,        
and investments in fixed maturity securities $142,027  $98,313 


Cash and liquidity requirements have historically been met through cash generated by operating income and our borrowing capacity. We filed a shelf“shelf” registration statement with the SECSecurities and Exchange Commission (“SEC”) that was declared effective in 2015 which, among other things,April 2018. The shelf provides us opportunistic flexibility to sell any combination of senior and subordinate debt securities, convertible debt securities, equity securities (including common and preferred stock), and other securities up to a total amount of $500 million. The shelf iswas available through April 2018, at2021. On July 21, 2021, the Company filed a new “shelf” registration statement on Form S-3 on similar terms, which time it may be renewed.was declared effective on July 27, 2021.


AtOn January 2, 2020, the 2016 DCCA vested in accordance with the terms of the agreement and a cash payment in the amount of $43.7 million was made to the CEO. On July 1, 2020, the Company announced that the CEO elected to irrevocably waive all of his compensation that he would otherwise have been entitled to for the period from July 1, 2020 to November 10, 2020. On June 30, 2021, the Company announced that the CEO elected to irrevocably waive all of his compensation that he would otherwise have been entitled to for the period from July 1, 2021 to November 30, 2021. As a result of these waivers, there was $20.8 million and $14.7 million of compensation and management fee waived by the CEO for the years ended December 31, 2017,2021 and 2020, respectively.

As of December 31, 2021, we had cash, and cash equivalents, short-term investments in U.S. Treasury Bills, and investments in fixed maturity securities of $17.8$142.0 million, a decreasean increase of $22.0$43.7 million from the prior year-end balance of $98.3 million primarily due to the Company’s operating and investing activities, partially offset by the Company’s financing activities, described below. Total face value debt outstanding at December 31, 20172021 was $89.1$51.0 million, consistingwhich consisted of $50the Subordinated Notes. Total debt outstanding at December 31, 2020 was $24.2 million, of a 4% PIK Note due November 30, 2020, $15 million of a 1.6% note due February 28, 2018 and $24.1 millionwhich consisted of 5.875% senior notes due June 1, 2021.  It is anticipated that the majority of our cash flow will go towards servicing our debt and deferred compensation payable for the next few years.


CashNet cash provided by operating activities was $126.7$96.1 million in 2017 and $115.72021, as compared to $40.7 million provided by operating activities in 2016.  Our largest source2020. Cash flows from operating activities primarily consisted of cash comes from net earnings asincome adjusted for certain non-cash expenses.  In 2017, this totaled $77.8 million versus $117.1 million in 2016.  Other sources of cash included an increase in compensation payable of $22.5 million, an increase of $5.7 million in payable to affiliates, a decrease in investment advisory fees receivable of $17.7 million, an increase in stock based compensation expense of $4.7 million,items and $5.9 million from other changes in net assets and liabilities.  Cash uses included a decrease in income taxes payable of $3.5 million, a decrease in receivable from brokers of $1.8 million, and a decrease of $0.9 million of accrued expenses and other liabilities.  In 2016, cash was provided by net income of $117.1 million.
 
Net cash provided by investing activities in 2021 was $59.5 million relating to net maturities of $0.2U.S. Treasuries held for investment purposes, as compared to $63.5 million used in 2017 is due2020 relating to $4.1 million in proceeds from sales of available for sale securities lessnet purchases of availableU.S. Treasuries held for sale securitiesinvestment purposes. As of $3.9December 31, 2021, we had total investments of $32.3 million, a decrease in total investments of $58.5 million from the prior year-end balance of $90.8 million. Net cash used in investing activities of $1.4 million in 2016 is due to purchases of available for sale securities of $1.8 million less $0.4 million in proceeds from sales of available for sale securities.  
 
Net cash used in financing activities in 2021 was $46.9 million, including $24.2 million paid for the repurchase of $164.75.875% senior notes due June 1, 2021, $16.5 million paid for the purchase of treasury stock, $4.3 million paid in 2017 principally resulted fromdividends, $1.6 million paid for the $113.3repurchase of Subordinated Notes that were put back to the Company, and $0.3 million repaymentpaid on the principal portion of lease liabilities, as compared to $30.0 million used in 2020.

The Company’s principal contractual commitments include repayments of the 4.5% Convertible note due August 15,Subordinated Notes and payments of lease obligations. At December 31, 2021, the $50 million in prepayments of our AC 4% PIK Note due November 30, 2020, $14.3we had $51.0 million of repurchases of our Class A Stock under the Stock Repurchase Program,Subordinated Notes due June 2023, which we expect to satisfy with cash and $2.3 million in dividends paid offset slightly by the issuance of the $15 million 1.6% note due February 28, 2018. Net cash used in financing activities of $88.2 million in 2016 principally resulted from $150 million in repayments of our AC 4% PIK Note due November 30, 2020, $35 million repayment of the loan from GGCP, $10.8 million of repurchases of our Class A Stock under the Stock Repurchase Program, and $2.3 million in dividends paid offset by the issuance of the 4.5% Convertible Note due August 15, 2021 of $109.8 million.


39
equivalents. Under the terms of the lease of our Rye, New York office, we are obligated to make minimum total payments of $11.9$7.8 million through December 2028.

On November 25, 2015, Moody’s Investors Services downgraded the Company to Ba1 from Baa3.  We continue to maintain an investment grade rating of BBB- with Standard and Poor’s Ratings Services.  We believe that our ability to maintain our investment grade rating will provide greater access to the capital markets, enhance liquidity and lower overall borrowing costs.

G.distributors is registered with the SEC as a broker-dealer and is regulated by FINRA.  As such, it is subject to the minimum net capital requirements promulgated by the SEC.  G.distributors’ net capital exceeded these minimum requirements at December 31, 2017.  G.distributors computes its net capital under the alternative method permitted by the SEC, which requires minimum net capital of the greater of $250,000 or 2% of the aggregate debit items in the reserve formula for those broker-dealers subject to Rule 15c3-3 promulgated under the Securities Exchange Act of 1934.  At December 31, 2017 and 2016, G.distributors had net capital, as defined, of approximately $2.0 million and $2.8 million, respectively, exceeding the regulatory requirement by approximately $1.8 million and $2.6 million, respectively.  Net capital requirements for our affiliated broker-dealer may increase in accordance with rules and regulations to the extent they engage in other business activities.
Our subsidiary, GAMCO Asset Management (UK) Limited is authorized and regulated by the FCA.  In February 2011, GAMCO Asset Management (UK) Limited increased its permitted license with the FCA’s predecessor, the Financial Services Authority (“FSA”) and has held Total Capital of £632,000 and £580,000 ($853,000 and $713,000 at December 31, 2017 and 2016, respectively) and had a Financial Resources Requirement of £216,000 and £265,000 ($291,000 and $326,000 at December 31, 2017 and 2016, respectively).  We have consistently met or exceeded these minimum requirements.

The Tax Cuts and Jobs Act (the “Act”) enacted in December 2017 contains provisions that affect the deductibility of named executive officer (“NEO”) compensation.  Specifically, the Act eliminates the performance based compensation exception for NEO compensation deductibility.  To the extent that some of the compensation of our NEOs is affected by this change, we would have a lower amount of deductible compensation in future years and a higher effective tax rate than we would have had without this potential loss of deductibility.  We continue to evaluate the impact of the Act’s provisions, regarding NEO compensation and otherwise, and whether and if so, by how much, the Act’s provisions will impact us.

Market Risk

Our primary market risk exposure is to changes in equity prices and interest rates.  Since approximately 95% of our AUM are equities, our financial results are subject to equity-market risk as revenues from our investment management services are sensitive to stock market dynamics.  In addition, returns from our proprietary investment portfolio are exposed to interest rate and equity market risk.

The Company’s Chief Investment Officer oversees the proprietary investment portfolios and allocations of proprietary capital among the various strategies.  The Chief Investment Officer and the Board of Directors review the proprietary investment portfolios throughout the year.  Additionally, the Company monitors its proprietary investment portfolios to ensure that they are in compliance with the Company’s guidelines.

Equity Price Risk

The Company earns substantially all of its revenue as advisory and distribution fees from our affiliated open-end and closed-end funds, Institutional and Private Wealth Management, and Investment Partnership assets.  Such fees represent a percentage of AUM, and the majority of these assets are in equity investments.  Accordingly, since revenues are proportionate to the value of those investments, a substantial increase or decrease in equity markets overall will have a corresponding effect on the Company's revenues.
With respect to our proprietary investment activities, included in investments in securities of $36.8 million and $37.3 million at December 31, 2017 and 2016, respectively, were investments in common stocks totaling $36.7 million and $37.2 million, respectively, and closed-end funds of $0.1 million and $0.1 million, respectively.  Of the $36.7 million and $37.2 million, invested in common stocks at December 31, 2017 and 2016, respectively, $36.6 million and $37.1 million, respectively, was related to our investment in Westwood Holdings Group Inc. (NYSE: WHG).  Securities sold, not yet purchased are financial instruments purchased under agreements to resell and financial instruments sold under agreement to repurchase.  These financial instruments are stated at fair value and are subject to market risks resulting from changes in price and volatility.  At December 31, 2017 and 2016, there were no securities sold, not yet purchased.

40
The following table provides a sensitivity analysis for our investments in equity securities as of December 31, 2017.  The sensitivity analysis assumes a 10% increase or decrease in the value of these investments (in thousands):

   Fair Value Fair Value 
   assuming assuming 
   10% decrease in 10% increase in 
 Fair Value equity prices equity prices 
At December 31, 2017         
Equity price sensitive investments, at fair value $36,790  $33,111  $40,470 
At December 31, 2016            
Equity price sensitive investments, at fair value $37,285  $33,557  $41,014 

Investment advisory fees for mutual funds and sub-advisory relationships are based on average daily or weekly asset values.  Advisory fees earned on Institutional and Private Wealth Management assets, for any given quarter, are generally determined based on asset values at the beginning of a quarter with any significant increases or decreases in market value of assets managed which occur during a quarter resulting in a relative increase or decrease in revenues for the following quarter.

Interest Rate Risk

Our exposure to interest rate risk results, principally, from our investment of excess cash in a money market fund that holds U.S. Government securities.  These investments are primarily short term in nature, and the carrying value of these investments generally approximates fair value.  Based on December 31, 2017, cash and cash equivalent balance of $17.8 million a 1% increase in interest rates would increase our interest income by $0.2 million annually while a 1% decrease would reduce our interest income by $0.2 million annually.

Contractual Obligations

We are obligated to make future payments under various contracts such as debt agreements and capitalfinance and operating lease agreements.  The following table sets forth our significant contractualagreements of $7.8 million and $3.8 million, respectively. We also had a net liability for unrecognized tax benefits related to uncertain tax positions of $20.2 million, including penalties and interest related to tax uncertainties in income taxes of approximately $9.5 million, some or all of which could result in future cash obligations aspayments to various taxing authorities. At this time, we are unable to estimate the timing and amount of December 31, 2017 (in thousands):

  Total  2018  2019  2020  2021  2022  Thereafter 
Contractual Obligations:                     
5.875% Senior notes $24,225  $-  $-  $-  $24,225  $-  $- 
Interest on 5.875% Senior notes  4,862   1,423   1,423   1,423   593   -   - 
AC 4% PIK Note  50,000   -   -   50,000   -   -   - 
Interest on AC 4% PIK Note  5,833   2,000   2,000   1,833   -   -   - 
AC 1.6% Note  15,000   15,000   -   -   -   -   - 
Interest on 1.6% Note  44   44   -   -   -   -   - 
Capital lease obligations  12,030   1,230   1,080   1,080   1,080   1,080   6,480 
Non-cancelable operating lease obligations  1,385   808   479   47   47   4   - 
Total $113,379  $20,505  $4,982  $54,383  $25,945  $1,084  $6,480 

The AC 4% PIK Note interest mayany future cash outflows related to these uncertain tax positions. As such amounts above, both individually and in the aggregate, can be paid in kindsatisfied with additional notescash on the same terms as the original note at the Company’s option.  See Note F Debt for additional details.

The capital lease contains an escalation clause tiedhand and investments, we do not believe they represent a material liquidity risk to the change in the New York Metropolitan Area Consumer Price Index which may cause the future minimum payments to exceed $1,080,000 annually.  Any increases to the base rental will be accounted for prospectively. 

Off-Balance Sheet Arrangements

company. We do not invest in any other off-balance sheet vehicles that provide financing, liquidity, market, or credit risk support or engage in any leasing activities that expose us to any liability that is not reflected on the Consolidated Financial Statements.consolidated financial statements.



4135
Critical Accounting Policies

InWe have one broker-dealer subsidiary, G.distributors, which is subject to certain net capital requirements. G.distributors computes its net capital under the ordinary coursealternative method permitted, which requires minimum net capital of business, we make a numberthe greater of estimates$250,000 or 2% of the aggregate debit items in the reserve formula for those broker-dealers subject to Rule 15c3-3 promulgated under the Securities Exchange Act of 1934, as amended. The requirement was $250,000 for the broker-dealer at December 31, 2021 and assumptions relating2020. At December 31, 2021 and 2020, G.distributors had net capital, as defined in the Rule, of approximately $1.9 million and $1.4 million, respectively, exceeding the regulatory requirement by approximately $1.6 million and $1.1 million, respectively. Net capital requirements for our affiliated broker-dealer may increase in accordance with the rules and regulations applicable to broker-dealers to the reportingextent G.distributors engages in other business activities.

Our subsidiary, GAMCO Asset Management (UK) Limited, is authorized and regulated by the Financial Conduct Authority (“FCA”). At December 31, 2021 and 2020, GAMCO Asset Management (UK) Limited held total capital of results£746 thousand and £708 thousand ($1.0 million and $961 thousand), respectively, and had a Financial Resources Requirement of operations£310 thousand and financial condition in the£195 thousand ($419 thousand and $265 thousand), respectively. We have consistently met or exceeded these minimum requirements.

CRITICAL ACCOUNTING POLICIES

The preparation of ourthe consolidated financial statements in conformity with U.S. generally accepted accounting principles.GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods presented. We base our estimates on historical experience, when available, and on other various assumptions that are believed to be reasonable under the circumstances. Actual results could differ significantly from those estimates under different assumptions and conditions.estimates.

We believe theThe critical assumptions and estimates are those applied to revenue recognition, the accounting for and valuationpolicies should be read in connection with our “Risk Factors” in Part I, Item 1A of investments in securities, income taxes, and stock based compensation accounting.this Form 10-K.


Major Revenue-Generating Services and Revenue Recognition


The Company’s revenues are derived primarily from investment advisory and incentive fees institutional research services and distribution fees.

Investment advisory and incentive fees are directly influenced by the level and mix of AUM, as fees are derived from a contractually-determined percentage of AUM for each account as well as incentive fees earned on certain accounts. Advisory fees from the open-end funds, closed-end fundsFunds and sub-advisory accounts are computed daily or weekly based on average net assets and amounts receivable are included in investment advisory fees receivable on the consolidated statements of financial condition. Advisory fees from Institutional and Private Wealth ManagementPWM accounts are generally computed quarterly based on account values as of the end of the preceding quarter, and amounts receivable are included in investment advisory fees receivable on the consolidated statements of financial condition. The Company derived approximately 88%, 87% and 87%90% of its total revenues from advisory and management fees, including incentive fees, for the periodsyears ended December 31, 2017, 20162021 and 2015, respectively.2020. These revenues vary depending upon the level of sales compared with redemptions, financial market conditions, performance, and the fee structure for AUM. Revenues derived from the equity-oriented portfolios generally have higher managementadvisory fee rates than fixed income portfolios.

The Company earns incentive fees from certain Institutional and Private Wealth Management accounts, which are based upon meeting or exceeding a specific benchmark index or indices.  Incentive fees refer to fees earned when the return generated for the client exceeds the benchmark and can be earned even if the return to the client is negative as long as the return exceeds the benchmark.  These fees are recognized, for each respective account, at the end of the stipulated contract period which is either quarterly or annually and varies by account.  Receivables due for incentive fees earned are included in investment advisory fees receivable on the consolidated statements of financial condition.  There were no incentive fees receivable as of December 31, 2017.  There were $2.4 million in incentive fees receivable as of December 31, 2016.

For The GDL Fund, there is an incentive fee earned as of the end of the calendar year andwhich varies to the extent the total return of the fund is in excess of the 90 day T-BillICE Bank of America Merrill Lynch 3 Month U.S. Treasury Bill Index total return. This fee is recognized at the end of the measurement period, which is annually on a calendar year basis. Receivables due on incentive fees relating to The GDL Fund are included in investment advisory fees receivable on the consolidated statements of financial condition and were $1.4$1.1 million and $4.2$0.1 million as of December 31, 20172021 and 2016,2020, respectively.


For the Gabelli Merger Plus+ Trust PLC,Plc, there is an incentive fee which is earned and recognized at the end of the measurement period, June 30th and varies to the extent the total return of the fund is in excess of twice the rate of return of the 13 week Treasury Bills over the performance period. There waswere no performance feeincentive fees receivable as of December 31, 2017.2021 or 2020.


ManagementAdvisory fees on a majoritycertain of the closed-end preferred shares are earned at year-end if the total return to common shareholders of the closed-end fund for the calendar year exceeds the dividend rate of the preferred shares. These fees are recognized at the end of the measurement period, which is annually.annually, or earlier if there is a redemption. Receivables due for managementadvisory fees on closed-end preferred shares are included in investment advisory fees receivable on the consolidated statements of financial condition. There were $7.1$1.5 million and $7.3$2.5 million in managementadvisory fees receivable on the closed-end preferred shares as of December 31, 2017,2021 and 2016,2020, respectively.


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For the GAMCO Merger Arbitrage SICAV, there is an incentive fee earned as of the end of the calendar year when the total return of a share class exceeds the hurdle rate (return on the 13-week UST) and the NAV exceeds the high water mark, at the rate of fifteen percent of the total return of share classes not denominated in the base currency and at the rate of twenty percent of the total return of share classes denominated in the base currency. This fee is recognized at the end of the measurement period, which is annually on a calendar year basis, or earlier if there is a redemption. Receivables due on incentive fees relating to the GAMCO Merger Arbitrage SICAV are included in investment advisory fees receivable on the consolidated statements of financial condition and were $6.4 million and $5.6 million as of December 31, 2021 and 2020, respectively.

Distribution fees revenues are derived primarily from the distribution of Gabelli and GAMCO Comstock, Tetonopen-end Funds as well as the affiliated TETON Westwood and Teton-KeeleyKeeley open-end funds (“Funds”) advised by either a subsidiary of GBL Funds Advisor and(Gabelli Funds), a subsidiary of GGCP, Teton.Inc. (Teton), or a subsidiary of Teton (Keeley-Teton Advisors, Inc.). G.distributors distributes thesethe open-end Funds pursuant to distribution agreements with each Fund. Under each distribution agreement with an open-end Fund, G.distributors offers and sells such open-end Fund shares on a continuous basis and pays all of the costs of marketing and selling the shares, including printing and mailing prospectuses and sales literature, advertising and maintaining sales and customer service personnelteammates and sales and services fulfillment systems, and payments to the sponsors of third party distribution programs, financial intermediaries, and G.distributors’ sales personnel.teammates. G.distributors receives fees for such services pursuant to distribution plans adopted under provisions of Rule 12b-1 of the Company Act. G.distributors is the principal underwriter for funds distributed in multiple classes of shares which carry front-end or back-end sales charge or no-load to certain investors.

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Under the distribution plans, the open-end Class AAA shares of the open-end Funds (except The Gabelli U.S. Treasury Money Market Fund, Gabelli Capital Asset Fund, and The Gabelli ABC Fund), and the Class A shares and the Class TADV shares of certain Funds pay G.distributors a distribution or service fee of .25%0.25% per year (except the Class A shares of the TETON Westwood Funds which pay .50% per year, except for the TETON Westwood Intermediate Bond Fund which pays .35%, and the Class A shares of the Gabelli Enterprise Mergers and Acquisitions Fund which pay .45% per year) on the average daily net assets of the fund.  Class B andFund. Class C shares have a 12b-1 distribution plan with a service and distribution fee totaling 1%1.00%.


Distribution fees from the open-end fundsFunds are computed daily based on average net assets. The amounts receivable for distribution fees are included in receivables from affiliates on the consolidated statements of financial condition.

Finally, GBL also has investmentNote 2 to the consolidated financial statements includes additional information on the Company’s revenue recognition policy.

Investments in Securities

Equity securities owned are recorded at fair value in the statements of financial condition, with any unrealized gains or losses generated from its proprietary trading activities which are includedreported in netcurrent period earnings in gain/(loss) from investments, net on the consolidated statements of income.income, in accordance with U.S. GAAP.


Investments in Securities

Investments in securities are accounted for as either “trading securities” or “available for sale” and are stated at fair value.  Management determines the appropriate classification of debt and equity securities at the time of purchase and reevaluates such designations as of each balance sheet date.  U.S. Treasury Bills and Notespurchase. Government debt with maturities of greater than three months at the time of purchase are considered investments in debt securities. Securities thatInvestments in debt securities are accounted for as either trading, available for sale (“AFS”), or held-to-maturity. The Company does not readily marketable are stated at their estimated fair values in accordance with GAAP.  A substantial portion ofhold any investments in debt securities are heldaccounted for resaleas trading or AFS. The Company’s investments in anticipation of short-term market movements and thereforedebt securities are classified as trading securities.  Tradingheld-to-maturity, as the Company has the intent and ability to hold these securities until maturity, and represent fixed income securities recorded at amortized cost. Discounts from and premiums to par value on held-to-maturity investments are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost adjusted for the accretion of discounts and amortization of premiums, if any. Held-to-maturity securities are stated at fair value, withevaluated for other than temporary impairment each reporting period and any unrealized gains or losses reportedimpairment charges are recorded in current period earnings in net gain/(loss) from investments, net on the consolidated statements of income. AFS investments are stated at fair value, with any unrealized gains or losses, netAs of taxes, reported as a component of other comprehensive income except for losses deemed to be other than temporary which are recorded as realized lossesDecember 31, 2021 and 2020, there were no impairments on the consolidated statements of income.  Company’s investments in debt securities classified as held-to-maturity.

Securities transactions and any related gains and losses are recorded on a trade date basis. Realized gains and losses from equity and debt securities transactions are recorded on the specific identified cost basis and are included in net gain/(loss) from investments, net on the consolidated statements of income.


AFS securities are evaluated for other than temporary impairment each reporting period and any impairment charges are recorded in net gain/(loss) from investments on the consolidated statements of income.  Management reviews all available for sale securities whose cost exceeds their fair value to determine if the impairment is other than temporary.  Management uses qualitative factors such as diversification of the investment, the intent to hold the investment, the amount of time that the investment has been impaired and the severity of the decline in determining whether the impairment is other than temporary.
37

Securities sold, but not yet purchased are recorded on the trade date, and are stated at fair value and represent obligations of GBL to purchase the securities at prevailing 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 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.  Realized gains and losses from covers of securities sold, not yet purchased transactions are included in net gain/(loss) from investments on the consolidated statements of income.  Securities sold, not yet purchased are stated at fair value, with any unrealized gains or losses reported in current period earnings in net gain/(loss) from investments on the consolidated statements of income.

Income Taxes


We operate in numerous states and countries through our subsidiaries and therefore must allocate our income, expenses, and earnings to these taxing jurisdictions taking into account the various laws and regulations in each jurisdiction. Each year, we file tax returns in each jurisdiction and settle our tax liabilities, which may be subject to audit by the taxing authorities. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and the reported amounts on the consolidated financial statements using the statutory tax rates in effect for the year when the reported amount of the asset or liability is recovered or settled, respectively. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. As a result of the enactment of the Tax Cuts and Jobs Act in December 2017, the Company recorded an increase in expense of $8.2 million reflecting the net write-down to its deferred tax assets and deferred tax liabilities.  In accordance with SEC SAB 118, this revaluation could have been provisional but the Company had the requisite information to complete the evaluation and finalize the December 22, 2017 adjustment.  A valuation allowance is recorded to reduce the carrying values of deferred tax assets to the amount that is more likely than not to be realized. For eachThe calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in several jurisdictions. In accordance with Accounting Standards Codification (“ASC”) Topic 740, Income Taxes (“ASC 740”), a tax benefit from an uncertain tax position taken or expected tomay be taken in a tax return, the Company determines whetherrecognized when it is more likely than not that the position will be sustained upon examination, based on the technical merits of the position, including resolutionresolutions of any related appeals or litigation.  Alitigation processes, on the basis of the technical merits. We record a liability for unrecognized tax position that meetsbenefits in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the more likely thanevaluation of new information not recognition threshold is measured to determinepreviously available. Because of the amountcomplexity of benefit to recognize.  Thesome of these uncertainties, the ultimate resolution may differ from our current estimate of the liabilities for unrecognized tax position is measured atbenefits. These differences are reflected as increases or decreases in income tax expense in the largest amount of benefit that is greater than 50% likely of being realized upon settlement.  period in which new information becomes available. The Company recognizes the accrual of interest on uncertain tax positions and penalties in income tax provision on the consolidated statements of income.


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Stock Based Compensation

The Company has granted RSAs and stock options to staff members which were recommended by the Company’s Chairman, who did not receive an RSA or option award, and approved by the Compensation Committee of the Company’s Board of Directors.  We use a fair value based method of accounting for stock-based compensation provided to our employees.  The estimated fair value of RSAs is determined by using the closing price of our Class A Stock on the day prior to the grant date.  The total expense, which is reduced by estimated forfeitures, is recognized over the vesting period for these awards which is either (1) 30% over three years from the date of grant and 70% over five years from the date of grant or (2) 30% over three years from the date of grant and 10% each year over years four through ten from the date of grant.  The forfeiture rate is determined by reviewing historical forfeiture rates for previous stock-based compensation grants and is reviewed and updated quarterly, if necessary.  During the vesting period, dividends to RSA holders are held for them until the RSA vesting dates and are forfeited if the grantee is no longer employed by the Company on the vesting dates.  Dividends declared on these RSAs, less estimated forfeitures, are charged to retained earnings on the declaration date.

The estimated fair value of option awards is determined using the Black Scholes option-pricing model.  This sophisticated model utilizes a number of assumptions in arriving at its results, including the estimated life of the option, the risk free interest rate at the date of grant and the volatility of the underlying common stock.  There may be other factors, which have not been considered, which may have an effect on the value of the options as well.  The effects of changing any of the assumptions or factors employed by the Black Scholes model may result in a significantly different valuation for the options.  The total expense, which is reduced by estimated forfeitures, is recognized over the vesting period for these awards which is 75% over three years from the date of grant and 25% after four years from date of grant.  The forfeiture rate is determined by reviewing historical forfeiture rates for previous stock-based compensation grants and is reviewed and updated quarterly, if necessary.

In connection with the spin-off of AC, the unvested RSA expense relating to the existing GBL RSAs at November 30, 2015 was split between GBL and AC based on the allocation of time of the underlying employees who held the RSAs.

The Company has entered into three deferred compensation agreements with Mr. Gabelli whereby his variable compensation for 2016, the first half of 2017 and the fourth quarter of 2017 was in the form of Restricted Stock Units (“RSUs”) determined by the volume-weighted average price (“VWAP”) of the Company’s Class A Stock during those respective periods.  The 2016 DCCA will vest 100% on January 1, 2020, the First Half 2017 DCCA will vest 100% on July 1, 2018, and the Fourth Quarter 2017 DCCA will vest 100% on April 1, 2019.  The Company intends to settle the awards in cash at vesting; however, the Company reserves the right to issue shares of the Company’s Class A Stock in lieu of such cash payment.  Under the terms of the agreement the Company will pay Mr. Gabelli an amount equal to the number of RSUs valued at the lesser of the VWAP of the Company’s Class A Stock for the applicable period or the value on the lapse date or, if not a trading day, then the first trading date thereafter.

Under GAAP, for the 2016 DCCA only 25% of this deferred compensation expense is being recognized in 2016 with the remainder amortized ratably over 2017, 2018, and 2019.  Similarly, under GAAP, for the First Half 2017 DCCA 67% of the expense is recognized in 2017 with the remaining 33% expensed in 2018.  For the Fourth Quarter 2017 DCCA 17% of the expense is recognized in 2017, 66% in 2018 and the remaining 17% in 2019.  Notwithstanding its ability to settle the award in stock, given the Company’s intent to settle it in cash, in accordance with GAAP (ASC 718), the awards are accounted for as liability-classified awards and not as equity-classified awards.  The liability is remeasured at fair value on each reporting period from December 31, 2016 until the vesting date.  However, given the cap on the obligation in that Mr. Gabelli will not receive cash in excess of the VWAP of the Company’s Class A Stock for each respective period, the remeasurement of the liability at fair value will never exceed its value determined using each period’s respective VWAP price.

Recent Accounting Developments

See Footnote A. Significant Accounting Policies – Recent Accounting Developments.


Seasonality and Inflation


We do not believe our operations are subject to significant seasonal fluctuations. We do not believe inflation will significantly affect our compensation costs, as they are substantially variable in nature. However, the rate of inflation may affect our expenses, such as information technology and occupancy costs. To the extent inflation results in rising interest rates and has other effects upon the securities markets, it may adversely affect our financial positioncondition and results of operations by reducing our AUM, revenues, or otherwise.


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ITEM 7A: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


ReferenceIn the normal course of its business, GAMCO is madeexposed to the information contained underrisk of loss due to fluctuations in the heading “Management's Discussionsecurities market and Analysisgeneral economy. Management is responsible for identifying, assessing, and managing market and other risks. 

Our exposure to pricing risk in equity securities is directly related to our role as a financial intermediary and advisor for AUM in our affiliated Funds and Institutional and PWM accounts, as well as our proprietary investment and trading activities. At December 31, 2021, we had equity investments of Financial Condition$32.3 million. We may alter our investment holdings from time to time in response to changes in market risks and Resultsother factors considered appropriate by management. The equity securities investment portfolio is at fair value and may move in line with the equity markets. The equity securities investment portfolio changes are recorded as gain/(loss) from investments, net in the consolidated statements of Operations -- income included in Part II, Item 8 of this Form 10-K.

Market Risk.”Risk


Our primary market risk exposure is to changes in equity prices and interest rates. Since approximately 95% of our AUM is equities, our financial results are subject to equity market risk, as revenues from our investment management services are sensitive to stock market dynamics. In addition, returns from our proprietary investment portfolios are exposed to interest rate and equity market risk.

The Company’s Chief Investment Officer oversees the proprietary investment portfolios and allocations of proprietary capital among the various strategies. The Chief Investment Officer and the Company’s Board of Directors review the proprietary investment portfolios throughout the year. Additionally, the Company monitors its proprietary investment portfolios to ensure that they are in compliance with the Company’s guidelines.

Equity Price Risk

The Company earns substantially all of its revenue as advisory and incentive fees and distribution fees from affiliated Funds and Institutional and PWM assets. Such fees represent a percentage of AUM, and the majority of these assets are in equity investments. Accordingly, since revenues are proportionate to the value of those investments, a substantial increase or decrease in equity markets overall may have a corresponding effect on the Company’s revenues.

Related to our proprietary investment activities, we had investments in equity securities of $32.3 million at December 31, 2021, which included investments in common stocks of $16.2 million, investments in actively managed semi-transparent ETFs of $9.6 million, investments in open-end Funds of $6.0 million, and investments in closed-end Funds of $0.5 million, and at December 31, 2020, we had investments in securities of $25.8 million, which included investments in common stocks of $19.1 million, investments in open-end Funds of $6.1 million, and investments in closed-end Funds of $0.6 million. Of the $16.2 million and $19.1 million invested in common stocks at December 31, 2021 and 2020, respectively, $7.6 million and $8.1 million, respectively, was related to our investment in Westwood Holdings Group Inc. (NYSE: WHG).


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The following table provides a sensitivity analysis for our investments in equity securities as of December 31, 2021 and 2020 (in thousands). The sensitivity analysis assumes a 10% increase or decrease in the value of these equity investments:

    Fair Value  Fair Value 
     assuming  assuming 
     10% decrease in  10% increase in 
  Fair Value  equity prices  equity prices 
At December 31, 2021:
         
Equity price sensitive investments, at fair value $32,344  $29,110  $35,578 
At December 31, 2020:
            
Equity price sensitive investments, at fair value $25,845  $23,261  $28,430 

Interest Rate Risk

Our exposure to interest rate risk results, principally, from our investment of excess cash either directly in U.S. government securities or in a sponsored money market fund that holds U.S. government securities. These investments are primarily short-term in nature, and the carrying value of these investments generally approximates fair value. Based on the December 31, 2021 cash, cash equivalents, and U.S. Treasury Bills balance of $142.0 million, a 1% increase in interest rates would increase our interest income by $1.4 million annually. Given the current low interest rate environment, an analysis of a 1% decrease is not meaningful.
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ITEM 8:          FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

GAMCO INVESTORS, INC. AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Page
  
  
Report of Independent Registered Public Accounting Firm
4641
Report of Independent Registered Public Accounting Firm on Effectiveness of Internal Control over Financial Reporting4743
  
Consolidated Financial Statements: 
Consolidated Statements of Financial Condition at December 31, 2021 and 202044
Consolidated Statements of Income for the years ended December 31, 2017, 20162021 and 201520204845
Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 20162021 and 2015202049
Consolidated Statements of Financial Condition at December 31, 2017 and 20165046
Consolidated Statements of Equity for the years ended December 31, 2017, 20162021 and 201520205147
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 20162021 and 201520205449
Notes to Consolidated Financial Statements5650


All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission that are not required under the related instructions or are inapplicable have been omitted.


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40
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the stockholders and the Board of Directors and Stockholders of
GAMCO Investors, Inc.
Rye, New York

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of financial condition of GAMCO Investors, Inc. and subsidiaries (the "Company") as of December 31, 20172021 and 2016,2020, the related consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for each of the threetwo years in the period ended December 31, 2017,2021, and the related notes and the schedule listed in the Index as Exhibit 99.1 (collectively referred to as the “financial statements”"financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20172021 and 2016,2020, and the results of its operations and its cash flows for each of the threetwo years in the period ended December 31, 2017,2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2017,2021, based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 8, 2018,9, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion


These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.


Critical Audit Matter
 
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
 
Unrecognized Tax Benefits – Refer to Note 1 and Note 5 to the consolidated financial statements
Critical Audit Matter Description
The Company records liabilities for unrecognized tax benefits in accordance with Accounting Standards Codification Topic 740, Income Taxes (ASC 740) and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may differ from the Company's current estimate of the liabilities for unrecognized tax benefits. These differences are reflected as increases or decreases in income tax expense in the period in which new information becomes available. As of December 31, 2021, the net liability for unrecognized tax benefits related to uncertain tax positions was $20.2 million.


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We identified the evaluation of the Company’s unrecognized tax benefits as a critical audit matter because the calculation of these tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations. In accordance with ASC 740, a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. Auditing management’s analysis of its uncertain tax positions and resulting unrecognized tax benefits required a high degree of auditor judgment and extensive audit effort, including involvement of our tax specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures to evaluate management’s estimates of liabilities for unrecognized tax benefits related to uncertain tax positions included the following, among others:
We involved our tax specialists to assist us in obtaining an understanding of management’s methods and assumptions used in the identification, recognition, measurement, and disclosure of uncertain tax positions and resulting unrecognized tax benefits.
We tested the operating effectiveness of the internal controls related to management’s assessment of uncertain tax positions and resulting unrecognized tax benefits.
With the assistance of tax specialists, we evaluated the reasonableness of management’s estimates and judgements regarding the future resolution of uncertain tax positions, including evaluating the technical merits of each position and considering tax law, statutes, regulations and case law.
With the assistance of our tax specialists, we developed an expectation of changes in the liability for unrecognized tax benefits associated with uncertain tax positions to evaluate whether management had appropriately considered new information that could significantly change measurement or disclosure.

/s/ Deloitte & Touche, LLP


New York, New YorkStamford, Connecticut
March 8, 20189, 2022


We have served as the Company’s auditor since 2009.

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42
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the stockholders and the Board of Directors and Stockholders of
GAMCO Investors, Inc.
Rye, New York


Opinion on Internal Control over Financial Reporting


We have audited the internal control over financial reporting of GAMCO Investors, Inc. and subsidiaries (the "Company"“Company”) as of December 31, 2017,2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by COSO.


We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 20172021 of the Company and our report dated March 8, 2018,9, 2022, expressed an unqualified opinion on those financial statements.


Basis for Opinion


The Company'sCompany’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting.  Our responsibility is to express an opinion on the Company'sCompany’s internal control over financial reporting based on our audit.We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audit in accordance with the standards of the PCAOB.  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.  Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.  We believe that our audit provides a reasonable basis for our opinion.


Definition and Limitations of Internal Control over Financial Reporting


A company'scompany’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company'scompany’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company'scompany’s assets that could have a material effect on the financial statements.


Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.


 
/s/ Deloitte & Touche, LLP
 
New York, New YorkStamford, Connecticut
March 8, 20189, 2022
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GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands, except per share data)

 
December 31,
2021
  
December 31,
2020
 
ASSETS      
Cash and cash equivalents (a) $142,027  $33,325 
Short-term investments in U.S. Treasury Bills  0   64,988 
Investments in equity securities, at fair value  32,344   25,845 
Investment advisory fees receivable  30,977   28,796 
Deferred tax asset and income taxes receivable  6,707   9,462 
Finance lease  4,055   2,452 
Receivable from brokers  3,930   5,833 
Receivable from affiliates  3,440   4,882 
Goodwill and identifiable intangible assets  3,176   3,176 
Other assets  5,016   6,643 
Total assets $231,672  $185,402 
         
LIABILITIES AND STOCKHOLDERS' EQUITY        
Payable for investments purchased  14,990   1 
Income taxes payable $315  $3,910 
Lease liability obligations  6,799   5,208 
Compensation payable  21,049   21,543 
Securities Sold, not yet purchased  0   799 
Payable to affiliates  5,198   3,843 
Accrued expenses and other liabilities  38,451   38,972 
Sub-total  86,802   74,276 
5.875% Senior Notes (net of issuance costs of $10) (due June 1, 2021) (Note 7)
  0   24,215 
Subordinated Notes (net of issuance costs of $75) (due June 15, 2023) (Note 7)
  50,990   0 
Total liabilities  137,792   98,491 
         
Commitments and contingencies (Note 10)  0   0 
         
Stockholders' Equity        
Preferred stock, $0.001 par value; 10,000,000 shares authorized; NaN issued and outstanding
  0   0 
Class A Common Stock, $0.001 par value; 100,000,000 shares authorized; 16,547,476 and 16,621,426 shares issued, respectively; 7,704,022 and 8,478,694 shares outstanding, respectively
  14   14 
Class B Common Stock, $0.001 par value; 25,000,000 shares and 100,000,000 shares authorized, respectively; 24,000,000 shares issued; 19,024,117 shares outstanding
  19   19 
Additional paid-in capital  28,753   21,219 
Retained earnings  410,333   394,386 
Accumulated comprehensive income  (177)  (165)
Treasury stock, at cost (8,843,454 and 8,142,732 shares, respectively)
  (345,062)  (328,562)
Total stockholders' equity  93,880   86,911 
Total liabilities and stockholders' equity $231,672  $185,402 

(a) Includes U.S. Treasury Bills with maturities of three months or less when purchased of $123.0 million and 15.0 million at December 31, 2021 and 2020 respectively.

See notes to consolidated financial statements.
44
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Inin thousands, except per share data)


  Year Ended December 31, 
  2017  2016  2015 
Revenues         
Investment advisory and incentive fees $316,705  $308,459  $329,965 
Distribution fees and other income  43,819   44,541   51,011 
Total revenues  360,524   353,000   380,976 
Expenses            
Compensation  125,501   82,613   136,503 
Stock based compensation  8,669   3,959   9,868 
Management fee  13,666   6,518   15,503 
Distribution costs  44,447   44,189   51,990 
Other operating expenses  23,221   23,925   19,163 
Total expenses  215,504   161,204   233,027 
Operating income  145,020   191,796   147,949 
Other income (expense)            
Net gain from investments  3,115   1,594   4,953 
Extinguishment of debt  (3,300)  0   (1,067)
Interest and dividend income  2,350   1,511   2,222 
Interest expense  (10,160)  (12,674)  (8,636)
Charitable contributions  (4,137)  -   (6,396)
Total other income (expense), net  (12,132)  (9,569)  (8,924)
Income before income taxes  132,888   182,227   139,025 
Income tax provision  55,079   65,106   51,726 
Income from continuing operations  77,809   117,121   87,299 
Loss from discontinued operations, net of taxes  -   0   (3,887)
Net income attributable to GAMCO Investors, Inc.'s shareholders $77,809  $117,121  $83,412 
             
Net income per share attributable to GAMCO Investors, Inc.'s shareholders:            
Basic - Continuing operations $2.68  $4.01  $3.43 
Basic - Discontinued operations  -   -   (0.15)
Basic - Total $2.68  $4.01  $3.28 
             
Diluted - Continuing operations $2.60  $3.92  $3.40 
Diluted - Discontinued operations  -   -   (0.15)
Diluted - Total $2.60  $3.92  $3.24 
             
Weighted average shares outstanding:            
Basic  28,980   29,182   25,425 
Diluted  30,947   30,170   25,711 
             
Actual shares outstanding  28,974   29,463   29,821 
 Years Ended December 31, 
  2021  2020 
Revenues      
Investment advisory and incentive fees $274,531  $233,628 
Distribution fees and other income  26,595   26,098 
Total revenues  301,126   259,726 
Expenses        
Compensation  118,186   102,347 
Management fee  5,552   5,376 
Distribution costs  30,276   28,474 
Other operating expenses  29,692   23,920 
Total expenses  183,706   160,117 
         
Operating income  117,420   99,609 
Non-operating income / (loss)        
Gain/(Loss) from investments, net  269   (8,695)
Interest and dividend income  550   826 
Interest expense  (2,919)  (2,620)
Shareholder-designated charitable contribution  (11,279)  (5,436)
Total non-operating loss  (13,379)  (15,925)
Income before income taxes  104,041   83,684 
Provision for income taxes  30,842   24,991 
Net income $73,199  $58,693 
         
Earnings per share:        
Basic $2.79  $2.21 
Diluted $2.73  $2.20 
         
Weighted average shares outstanding:        
Basic  26,267   26,571 
Diluted  26,809   26,680 


See accompanying notes.notes to consolidated financial statements.


48
45
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except per share data)in thousands)


  Year Ended December 31, 
  2017  2016  2015 
          
Net income attributable to GAMCO Investors, Inc.'s shareholders $77,809  $117,121  $83,412 
Other comprehensive income/(loss), net of tax:            
Foreign currency translation  82   (164)  (46)
Net unrealized gains/(losses) on securities available for sale (a)  523   2,320   (8,300)
Other comprehensive income/(loss)  605   2,156   (8,346)
             
Comprehensive income attributable to GAMCO Investors, Inc. $78,414  $119,277  $75,066 
 Years Ended December 31, 
  2021  2020 
Net income $73,199  $58,693 
Other comprehensive income:        
Foreign currency translation gain  (12)  39 
Total comprehensive income $73,187  $58,732 

(a) Net of income tax expense (benefit) of $290, $1,363 and ($4,875) for 2017, 2016 and 2015, respectively.


See accompanying notes.notes to consolidated financial statements.


49
46
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITIONSTOCKHOLDERS’ EQUITY
(In thousands)in thousands, except per share data)


  December 31,  December 31, 
  2017  2016 
ASSETS      
       
Cash and cash equivalents $17,821  $39,812 
Investments in securities  36,790   37,285 
Receivable from brokers  1,578   453 
Investment advisory fees receivable  38,712   43,736 
Receivable from affiliates  5,635   5,960 
Capital lease  2,304   2,514 
Goodwill and identifiable intangible assets  3,765   3,765 
Income tax receivable and deferred tax assets, net  15,615   9,349 
Other assets  6,066   6,355 
Total assets $128,286  $149,229 
         
LIABILITIES AND EQUITY        
         
Payable to brokers $14,926  $66 
Income taxes payable  3,128   3,815 
Capital lease obligation  4,943   5,066 
Compensation payable  82,907   42,384 
Payable to affiliates  855   1,412 
Accrued expenses and other liabilities  28,656   29,178 
Sub-total  135,415   81,921 
         
AC 4% PIK Note (due November 30, 2020) (Note F)  50,000   100,000 
4.5% Convertible note (due August 15, 2021) (Note F)  -   109,835 
5.875% Senior notes (due June 1, 2021) (Note F)  24,144   24,120 
AC 1.6% Note (due February 28, 2018) (Note F)  15,000   - 
Total liabilities  224,559   315,876 
         
Commitments and contingencies (Note I)        
         
Equity:        
Preferred stock, $.001 par value; 10,000,000 shares authorized; none issued and outstanding  -   - 
Class A Common Stock, $0.001 par value; 100,000,000 shares authorized; 15,541,489 and 15,477,082        
 shares issued, respectively; 9,949,482 and 10,369,601 shares outstanding, respectively  14   14 
Class B Common Stock, $0.001 par value; 100,000,000 shares authorized; 24,000,000 shares issued        
 and 19,024,404 and 19,093,311 shares outstanding, respectively  19   19 
Additional paid-in capital  12,572   3,903 
Retained earnings  155,939   80,515 
Accumulated comprehensive income  11,876   11,271 
Treasury stock, at cost (5,592,007 and 5,107,481 shares, respectively)  (276,693)  (262,369)
Total deficit  (96,273)  (166,647)
Total liabilities and equity $128,286  $149,229 
 
Common
Stock
  
Additional
Paid-in
Capital
  
Retained
Earnings
  
Accumulated
Other
Comprehensive
Income
  
Treasury
Stock
  Total 
Balance at December 31, 2020
 $33  $21,219  $394,386  $(165) $(328,562) $86,911 
Net income  0   0   15,950   0   0   15,950 
Foreign currency translation  0   0   0   10   0   10 
Dividends declared ($0.02 per share)
  0   0   (548)  0   0   (548)
Stock based compensation expense  0   1,166   0   0   0   1,166 
Purchase of treasury stock  0   0   0   0   (1,814)  (1,814)
Balance at March 31, 2021
 $33  $22,385  $409,788  $(155) $(330,376) $101,675 
Net income  0   0   17,101   0   0   17,101 
Foreign currency translation  0   0   0   5   0   5 
Dividends declared ($2.02 per share)
  0   0   (55,061)  0   0   (55,061)
Stock based compensation expense  0   946   0   0   0   946 
Purchase of treasury stock  0   0   0   0   (3,520)  (3,520)
Balance at June 30, 2021
 $33  $23,331  $371,828  $(150) $(333,896) $61,146 
Net income  0   0   29,161   0   0   29,161 
Foreign currency translation  0   0   0   (31)  0   (31)
Dividends declared ($0.02 per share)
  0   0   (537)  0   0   (537)
Stock based compensation expense  0   910   0   0   0   910 
Purchase of treasury stock  0   0   0   0   (2,464)  (2,464)
Balance at September 30, 2021
 $33  $24,241  $400,452  $(181) $(336,360) $88,185 
Net income  0   0   10,987   0   0   10,987 
Foreign currency translation  0   0   0   4   0   4 
Dividends declared ($0.04 per share)
  0   0   (1,106)  0   0   (1,106)
Stock based compensation expense  0   4,512   0   0   0   4,512 
Purchase of treasury stock  0   0   0   0   (8,702)  (8,702)
Balance at December 31, 2021
 $33  $28,753  $410,333  $(177) $(345,062) $93,880 

See accompanying notes.


5047
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)

     GAMCO Investors, Inc. shareholders    
        Additional  Retained   Accumulated        Redeemable 
  Noncontrolling  Common  Paid-in  Earnings  Comprehensive  Treasury     Noncontrolling 
  Interests  Stock  Capital  (Deficit)  Income  Stock  Total  Interests 
Balance at December 31, 2014 $2,734  $33  $291,681  $602,950  $25,014  $(394,617) $527,795  $68,334 
Net income  -   -   -   83,412   -   -   83,412   - 
Net unrealized losses on                                
 securities available for sale,                                
net of income tax benefit $(3,213)  -   -   -   -   (5,471)  -   (5,471)  - 
Amounts reclassified from                                
 accumulated other                                
comprehensive income,                                
net of income tax benefit $(1,662)  -   -   -   -   (2,829)  -   (2,829)  - 
Foreign currency translation  -   -   -   -   (46)  -   (46)  - 
Dividends declared ($0.28 per                                
 share)  -   -   -   (7,477)  -   -   (7,477)  - 
Stock based compensation                                
 expense  -   -   9,868   -   -   -   9,868   - 
Reduction of deferred tax asset                                  
  for excess of recorded RSA tax                                  
  benefit over actual tax benefit  -   -   (1,190)  -   -   -   (1,190)  - 
Exercise of stock options                                
 including tax benefit $(102)  -   -   1,269   -   -   -   1,269   - 
Purchase of treasury stock  -   -   -   -   -   (27,249)  (27,249)  - 
Issuance of 4.4 million treasury                                  
  shares to GCIA  -   -   (20,270)  -   -   170,270   150,000   - 
Spin-off of AC  (2,734)  -   (281,013)  (713,109)  (7,553)  -   (1,004,409)  (68,334)
Balance at December 31, 2015 $-  $33  $345  $(34,224) $9,115  $(251,596) $(276,327) $- 

See accompanying notes.

51
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OFSTOCKHOLDERS’ EQUITY
(continued) (In thousands)(in thousands, except per share data)


   GAMCO Investors, Inc. shareholders   
      Additional  Retained  Accumulated         
   Common  Paid-in  Earnings  Comprehensive  Treasury      
   Stock  Capital  (Deficit)  Income  Stock  Total   
Balance at December 31, 2015  $33  $345  $(34,224) $9,115  $(251,596) $(276,327)  
Net income   -   -   117,121   -   -   117,121   
Net unrealized gains on                           
 securities available for sale,                           
net of income tax expense ($1,857)   -   -   -   3,111   -   3,111   
Amounts reclassified from                           
 accumulated other                           
comprehensive income,                           
net of income tax benefit ($464)   -   -   -   (791)  -   (791)  
Foreign currency translation   -   -   -   (164)  -   (164)  
Dividends declared ($0.08 per                           
 share)   -   -   (2,382)  -   -   (2,382)  
Stock based compensation                           
 expense   -   3,959   -   -   -   3,959   
Reduction of deferred tax asset                           
 for excess of recorded RSA tax                           
 benefit over actual tax benefit   -   (401)  -   -   -   (401)  
Purchase of treasury stock   -   -   -   -   (10,773)  (10,773)  
Balance at December 31, 2016  $33  $3,903  $80,515  $11,271  $(262,369) $(166,647)  
 
Common
Stock
  
Additional
Paid-in
Capital
  
Retained
Earnings
  
Accumulated
Other
Comprehensive
Income
  
Treasury
Stock
  Total 
Balance at December 31, 2019
 $33  $17,033  $362,515  $(204) $(324,660) $54,717 
Net income  0   0   11,245   0   0   11,245 
Foreign currency translation  0   0   0   (61)  0   (61)
Dividends declared ($0.02 per share)
  0   0   (552)  0   0   (552)
Stock based compensation expense  0   941   0   0   0   941 
Purchase of treasury stock  0   0   0   0   (946)  (946)
Balance at March 31, 2020
 $33  $17,974  $373,208  $(265) $(325,606) $65,344 
Net income  0   0   11,290   0   0   11,290 
Foreign currency translation  0   0   0   (4)  0   (4)
Dividends declared ($0.02 per share)
  0   0   (551)  0   0   (551)
Stock based compensation expense  0   1,137   0   0   0   1,137 
Purchase of treasury stock  0   0   0   0   (772)  (772)
Balance at June 30, 2020
 $33  $19,111  $383,947  $(269) $(326,378) $76,444 
Net income  0   0   16,435   0   0   16,435 
Foreign currency translation  0   0   0   42   0   42 
Dividends declared ($0.02 per share)
  0   0   (547)  0   0   (547)
Stock based compensation expense  0   993   0   0   0   993 
Purchase of treasury stock  0   0   0   0   (1,637)  (1,637)
Balance at September 30, 2020
 $33  $20,104  $399,835  $(227) $(328,015) $91,730 
Net income  0   0   19,723   0   0   19,723 
Foreign currency translation  0   0   0   62   0   62 
Dividends declared ($0.92 per share)
  0   0   (25,172)  0   0   (25,172)
Stock based compensation expense  0   1,115   0   0   0   1,115 
Purchase of treasury stock  0   0   0   0   (547)  (547)
Balance at December 31, 2020
 $33  $21,219  $394,386  $(165) $(328,562) $86,911 


See accompanying notes.notes to consolidated financial statements.

52
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(continued) (In thousands)

  GAMCO Investors, Inc. shareholders 
     Additional     Accumulated       
  Common  Paid-in  Retained  Comprehensive  Treasury    
  Stock  Capital  Earnings  Income  Stock  Total 
Balance at December 31, 2016 $33  $3,903  $80,515  $11,271  $(262,369) $(166,647)
Net income  -   -   77,809   -   -   77,809 
Net unrealized gains on                        
 securities available for sale,                        
net of income tax expense ($1,446)  -   -   -   2,492   -   2,492 
Amounts reclassified from                        
 accumulated other                        
 comprehensive income,                        
net of income tax benefit $(1,156)  -   -   -   (1,969)  -   (1,969)
Foreign currency translation  -   -   -   82   -   82 
Dividends declared ($0.08 per                        
 share)  -   -   (2,385)  -   -   (2,385)
Stock based compensation                        
 expense  -   8,669   -   -   -   8,669 
Purchase of treasury stock  -   -   -   -   (14,324)  (14,324)
Balance at December 31, 2017 $33  $12,572  $155,939  $11,876  $(276,693) $(96,273)

See accompanying notes.

5348
GAMCO INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)


  Year Ended December 31, 
  2017  2016  2015 
Operating activities         
Net income $77,809  $117,121  $83,412 
Loss from discontinued operations, net of taxes  -   -   3,887 
Income from continuing operations  77,809   117,121   87,299 
Adjustments to reconcile net income to net cash provided by operating activities            
from continuing operations:            
Depreciation and amortization  595   625   618 
Stock based compensation expense  8,669   3,959   9,868 
Deferred income taxes  (5,451)  (5,537)  1,166 
Tax benefit from exercise of stock options  -   -   102 
Foreign currency translation gain/(loss)  82   (164)  (46)
Donated securities  1,124   499   1,945 
Gains on sales of available for sale securities  (62)  (4)  (6)
Accretion of zero coupon debentures  -   -   628 
Loss on extinguishment of debt  3,300   -   1,067 
Acquisition of identifiable intangible asset  -   -   (1,661)
(Increase) decrease in assets:            
Investments in trading securities  8   186   (240)
Receivable from affiliates  329   (927)  21,393 
Receivable from brokers  (1,125)  638   592 
Investment advisory fees receivable  5,024  ��(12,688)  6,679 
Income tax receivable and deferred tax assets  (6,267)  (2,562)  (4,354)
Other assets  (73)  (69)  529 
Increase (decrease) in liabilities:            
Payable to affiliates  (557)  (6,275)  7,333 
Payable to brokers  (990)  54   1 
Income taxes payable and deferred tax liabilities  4,473   2,768   (10,401)
Compensation payable  40,517   17,969   (6,369)
Accrued expenses and other liabilities  (714)  144   987 
Total adjustments  48,882   (1,384)  29,831 
Net cash provided by operating activities from continuing operations $126,691  $115,737  $117,130 
 Years Ended December 31, 
  2021  2020 
Cash flows from operating activities:      
Net income $73,199  $58,693 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization  1,171   973 
Accretion of discounts and amortization of premiums  (54)  53 
Stock based compensation expense  7,534   4,186 
Deferred income taxes  1,638   7,904 
Foreign currency translation gain  (12)  39 
Unrealized loss on securities  (5,387)  6,154 
Net realized loss on securities  5,105   1,555 
Impairment charge on intangible asset  0   589 
(Increase) decrease in assets:        
Investments in securities  (1,485)  (12)
Investment advisory fees receivable  (2,181)  7,297 
Income taxes receivable  1,117   (977)
Receivable from brokers  1,903   (4,844)
Receivable from affiliates  1,442   (938)
Other assets  (1,215)  (1,736)
Increase (decrease) in liabilities:        
Compensation payable  (494)  (42,738)
Payable for investments purchased  14,989   0 
Payable to affiliates  1,355   (139)
Income taxes payable  (3,595)  3,152 
Accrued expenses and other liabilities  1,101   1,523 
Total adjustments  22,932   (17,959)
Net cash provided by operating activities  96,131   40,734 
Cash flows from investing activities:        
Purchases of securities  (8,979)  (120,724)
Proceeds from sales and maturities of securities  67,360   57,189 
Return of capital on securities  1,134   24 
Net cash provided by (used in) investing activities  59,515   (63,511)
Cash flows from financing activities:        
Dividends paid  (4,338)  (25,906)
Purchase of treasury stock  (16,500)  (3,902)
Repurchase of 5.875% ten year  notes due 6/1/2021
  (24,225)  0 
Repurchase of 2-year puttable note due 6/15/2023
  (1,619)  0 
Repayment of principal portion of lease liability  (264)  (218)
Net cash used in financing activities  (46,946)  (30,026)
Effect of exchange rates on cash and cash equivalents  2   (8)
Net increase (decrease) in cash and cash equivalents  108,702   (52,811)
Cash and cash equivalents, beginning of period  33,325   86,136 
Cash and cash equivalents, end of period $142,027  $33,325 
Supplemental disclosures of cash flow information:        
Cash paid for interest $2,923  $2,581 
Cash paid for taxes $30,688  $16,546 

        


Supplemental disclosure of non-cash activity:
For 2021 and 2020, the Company accrued dividends on restricted stock awards of $1,975 and $915, respectively.
For 2021, the Company issued approximately $52.7 million principal amount of Subordinated Notes due 2023 to shareholders in connection with the special dividend of $2.00 per share.

See notes to consolidated financial statements.

54
49
GAMCO INVESTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF CASH FLOWS
(continued) (In thousands)December 31, 2021


  Year Ended December 31, 
  2017  2016  2015 
Investing activities         
Purchases of available for sale securities $(3,932) $(1,843) $(6,279)
Proceeds from sales of available for sale securities  4,169   408   81 
Net cash provided by (used in) investing activities from continuing operations  237   (1,435)  (6,198)
             
Financing activities            
Repurchase of Zero coupon subordinated debentures due December 31, 2015  -   -   (13,101)
Repurchase of 5.875% Senior note due June 1, 2021  -   -   (76,533)
Repurchases of AC 4% PIK Note  (50,000)  (150,000)  - 
Proceeds from 4.5% Convertible note due August 15, 2021  -   109,826   - 
Repayment of 4.5% Convertible note due August 15, 2021  (113,300)  -   - 
Repayment of GGCP loan due December 28, 2016  -   (35,000)  - 
Proceeds from GGCP due December 28, 2016  -   -   35,000 
Proceeds from 1.6% AC Note due February 28, 2018  15,000   -   - 
Margin loan borrowings  20,850   -   - 
Margin loan repayments  (5,000)   -   - 
Amortization of debt issuance costs  187   33   - 
Net cash transferred to AC  -   -   (21,739)
Proceeds from exercise of stock options  -   -   1,167 
Dividends paid  (2,315)  (2,333)  (7,468)
Purchase of treasury stock  (14,324)  (10,773)  (27,249)
Net cash used in financing activities from continuing operations  (148,902)  (88,247)  (109,923)
Cash flows of discontinued operations            
  Net cash provided by operating activities  -   -   54,335 
  Net cash used in investing activities  -   -   (41,463)
  Net cash used in financing activities  -   -   (12,871)
Net cash provided by discontinued operations  -   -   1 
Effect of exchange rates on cash and cash equivalents  (17)  38   15 
Net increase (decrease) in cash and cash equivalents  (21,991)  26,093   1,025 
Cash and cash equivalents at beginning of period  39,812   13,719   12,694 
Cash and cash equivalents at end of period $17,821  $39,812  $13,719 
Supplemental disclosures of cash flow information:            
Cash paid for interest $12,180  $11,274  $7,011 
Cash paid for taxes $62,259  $75,238  $59,657 

Non-cash activity:
Organization and Description of Business


- For 2017, 2016Unless indicated otherwise, or the context otherwise requires, references in this report to “GAMCO Investors, Inc.,” “GAMCO,” “the Company,” and 2015“GBL” or similar terms are to GAMCO Investors, Inc., its predecessors, and its subsidiaries.

GAMCO (New York Stock Exchange (“NYSE”): GBL), a company incorporated under the laws of Delaware, is a widely-recognized provider of investment advisory services to 24 open-end funds, 14 closed-end funds, 3 actively managed semi-transparent exchange traded funds (“ETFs”), 1société d’investissement à capital variable (“SICAV”), and approximately 1,400institutional and private wealth management (“Institutional and PWM”) investors principally in the United States (U.S.). The Company accrued restricted stock award dividendsgenerally manages assets on a fully discretionary basis and invests in a variety of $25, $35U.S. and $175, respectively.international securities through various investment styles including value, growth, non-market correlated, and convertible securities. The Company’s revenues are based primarily on the levels of assets under management (“AUM”) and fees associated with the various investment products. GAMCO serves a broad client base, including institutions, intermediaries, offshore investors, private wealth, and direct retail investors.
- For 2016
GAMCO offers a wide range of solutions for clients across Value and 2015,Growth Equity, ESG, Convertibles, actively managed semi-transparent ETFs, sector-focused strategies including Gold and Utilities, Merger Arbitrage, and Fixed Income. In 1977, GAMCO launched its well-known All Cap Value strategy, Gabelli Value, and in 1986 entered the Company recorded $402mutual fund business.

The investment advisory business is conducted principally through the following subsidiaries: Gabelli Funds, LLC (open-end funds, closed-end funds, and $1,190, respectively, as a reduction to its deferred tax assetactively managed semi-transparent ETFs) (“Gabelli Funds”) and additional paid-in capital for the excessGAMCO Asset Management Inc. (Institutional and PWM) (“GAMCO Asset”). The distribution of the recorded restricted stock award tax benefit over the actual tax benefit.
- On November 1, 2015, in connection with becoming the advisor to the Bancroft Fund Ltd.open-end funds and the Ellswoth Growth and Income Fund Ltd.actively managed semi-transparent ETFs are conducted through G.distributors, LLC (“G.distributors”), the Company recorded a non-cash identifiable intangible asset of $1.2 million.Company’s broker-dealer subsidiary.
- On November 28, 2015, the Company issued 4.4 million shares to GCIA in exchange for a $150 million five-year 4% note ("GCIA Note").
- On November 30, 2015, in connection with the spin-off of AC, the Company issued a $250 million five-year 4% PIK Note to AC and also contributed the GCIA Note to AC.
- On November 30, 2015, in connection with the spin-off of AC, the Company transferred $601.7 million of net assets, excluding cash and cash equivalents.

See accompanying notes.

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A.1. Significant Accounting Policies


Basis of Presentation

GAMCO Investors, Inc. (“GBL”, “We” or the “Company”) was incorporated in April 1998 in the state of New York, with no significant assets or liabilities and did not engage in any substantial business activities prior to the initial public offering (“Offering”) of our shares.  On February 9, 1999, we exchanged 24 million shares of our Class B Common Stock (“Class B Stock”), representing all of our then issued and outstanding common stock, with Gabelli Funds, Inc. (“GFI”) and two of its subsidiaries in consideration for substantially all of the operating assets and liabilities of GFI, relating to its institutional and retail asset management, mutual fund advisory, underwriting and brokerage business (the “Reorganization”).   GFI, which was renamed Gabelli Group Capital Partners, Inc. in 1999, is the majority shareholder of GBL and was renamed GGCP, Inc. (“GGCP”) in 2005.  During 2010, the shares of GBL owned by GGCP were transferred to GGCP Holdings LLC, a subsidiary of GGCP.  In 2014, the Company changed its state of incorporation from New York to Delaware in a tax-free reorganization.  On November 30, 2015 (the “Spin-Off Date”), GBL distributed to its stockholders all of the outstanding common stock of Associated Capital Group, Inc. (“AC”) and its subsidiaries along with certain cash and other assets (the “Spin-off”).  AC owns and operates, directly or indirectly, the alternatives and the institutional research businesses previously owned and operated by GBL.  In the Spin-off, each holder of GAMCO’s Class A Common Stock (“Class A Stock”) of record as of 5:00 p.m. New York City time on November 12, 2015 (the “Record Date”), received one share of AC Class A common stock for each share of GAMCO Class A Stock held on the Record Date.  Each record holder of GAMCO’s Class B Stock received one share of AC Class B common stock for each share of GAMCO Class B Stock held on the Record Date.  Subsequent to the Spin-off, GAMCO no longer consolidates the financial results of AC or certain investment partnerships and offshore funds in which we had a direct or indirect controlling financial interest for the purposes of GAMCO’s financial reporting and the historical financial results of AC and certain investment partnerships and offshore funds have been reflected in the Company’sThe consolidated financial statements as discontinued operations for all periods presented throughhave been prepared on the Spin-off Date.
accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”). The accompanying consolidated financial statements include the assets, liabilities and earnings of:
· GBL;

· Our wholly-owned subsidiaries: Gabelli Funds, LLC (“Funds Advisor”), GAMCO Asset Management Inc. (“GAMCO”), Distributors Holdings, Inc. (“DHI”), G.distributors, LLC (“G.distributors”), GAMCO Asset Management (UK) Limited, Gabelli Fixed Income, Inc. (“Fixed Income”), GAMCO International Partners LLC, and GAMCO Acquisition LLC.
The consolidated financial statements compriseaccounts of the financial statements of GBLCompany and its wholly-owned subsidiaries as of December 31 of each year.  The financial statements of the subsidiaries are prepared for the same reporting year as the parent company, using consistent accounting policies.  All intercompanyincluding: Gabelli Funds, GAMCO Asset, G.distributors, and GAMCO Asset Management (UK) Limited. Intercompany accounts and transactions and balances have been eliminated. Subsidiaries are fully consolidated from the date of acquisition, being the date on which GBL obtains control, and continue to be consolidated until the date that such control ceases.

Reclassifications


The historical results of AC and certain investment partnerships and offshore fundsannual financial statements have been reflectedprepared in accordance with U.S. GAAP for annual financial information and pursuant to the accompanying consolidated statementsrequirements for reporting on Form 10-K and Article 6 of incomeRegulation S-X. In the opinion of management, all adjustments considered necessary for the year ended December 31, 2015 as discontinued operations and financial information related to discontinued operations has been excluded from the notes to thesefair presentation of consolidated financial statements for all periodsthe years presented (See Note P. Discontinued Operations for further details).have been included.


Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”)GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.


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Nature of Operations

Gabelli Funds and GAMCO Funds Advisor, Gabelli Fixed Income LLC (“Fixed Income LLC”), a wholly-owned subsidiary of Fixed IncomeAsset are registered investment advisors under the Investment Advisers Act of 1940.1940, as amended. G.distributors is a registered broker-dealer with the Securities and Exchange Commission (“SEC”) and is regulated by the Financial Industry Regulatory Authority (“FINRA”). Refer to Major Revenue-Generating Services and Revenue Recognition section within Note A below for additional discussion of GBL'sthe Company’s business.


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Cash and Cash Equivalents and Short-term Investments in U.S. Treasury Bills

Cash equivalents primarily consist of an affiliated money market mutual fund which is highly liquid.  U.S.U.S Treasury Bills and Notes with maturities of three months or less at the time of purchase are also considered cash equivalents. 

Securities Transactions
Investmentsand an affiliated money market fund (The Gabelli U.S. Treasury Money Market Fund) which is highly liquid. Short-term investments in securities are accounted for as either “trading securities” or “available for sale”U.S. Treasury Bills consist of U.S. Treasury Bills with maturities exceeding three months at the time of purchase and are stated at amortized cost, which approximates fair value.

Currency Translation

Assets and liabilities of subsidiaries having non-U.S. dollar functional currencies are translated at exchange rates at the dates of the applicable consolidated statements of financial condition. Revenues and expenses of such subsidiaries are translated at the average exchange rates during the period. The gains or losses resulting from translating non-U.S. dollar functional currency into U.S. dollars are included in the consolidated statements of comprehensive income.

Transactions in currencies other than the U.S. dollar, including the Company’s investments in U.K. Gilts, are measured on the transaction date in U.S. dollars. Changes in the expected cash flows caused by changes in exchange rates, measured at exchange rates at the dates of the applicable consolidated statements of financial condition, are included in the consolidated statements of income.

Investments in Securities

Equity securities owned are recorded at fair value in the statements of financial condition, with any unrealized gains or losses reported in current period earnings in gain/(loss) from investments, net on the consolidated statements of income, in accordance with U.S. GAAP.

Management determines the appropriate classification of debt and equity securities at the time of purchase. U.S. Treasury Bills and NotesGovernment debt with maturities of greater than three months at the time of purchase are considered investments in debt securities. Securities thatInvestments in debt securities are accounted for as either trading, available for sale (“AFS”), or held-to-maturity. The Company does not readily marketable are stated at their estimated fair values in accordance with GAAP.  A portion ofhold any investments in debt securities are heldaccounted for resaleas trading or AFS. The Company’s investments in anticipationdebt securities, consisting of short-term market movements and thereforeU.S. Treasury Bills, are classified as trading securities.  Tradingheld-to-maturity, as the Company has the intent and ability to hold these securities until maturity, and represent fixed income securities recorded at amortized cost. Discounts from and premiums to par value on held-to-maturity investments are accreted/amortized into interest income over the life of the respective security using the effective interest method. The amortized cost of debt investments represents the original cost adjusted for the accretion of discounts and amortization of premiums, if any. Held-to-maturity securities are stated at fair value, withevaluated for other than temporary impairment each reporting period and any unrealized gains or losses reportedimpairment charges are recorded in current period earnings in net gain/(loss) from investments, net on the consolidated statements of income. Available for sale (“AFS”) investments are stated at fair value, with any unrealized gains or losses, netAs of taxes, reported as a component of  other comprehensive income except for losses deemed to be other than temporary which are recorded as realized lossesDecember 31, 2021 and 2020, there were 0 impairments on the consolidated statements of income.  Company’s investments in debt securities classified as held-to-maturity.

Securities transactions and any related gains and losses are recorded on a trade date basis. Realized gains and losses from equity and debt securities transactions are recorded on the specific identified cost basis and are included in net gain/(loss) from investments, on the consolidated statements of income. 

Available for sale securities are evaluated for other than temporary impairments each reporting period and any impairment charges are recorded in net gain/(loss) from investments on the consolidated statements of income.  Management reviews all available for sale securities whose cost exceeds their fair value to determine if the impairment is other than temporary.  Management uses qualitative factors such as the intent to hold the investment, the amount of time that the investment has been impaired and the severity of the decline in determining whether the impairment is other than temporary.

Securities sold, but not yet purchased are recorded on the trade date, and are stated at fair value and represent obligations of GBL to purchase the securities at prevailing 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 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.  Realized gains and losses from covers of securities sold, not yet purchased transactions are included in net gain/(loss) from investments on the consolidated statements of income.  Securities sold, not yet purchased are stated at fair value, with any unrealized gains or losses reported in current period earnings in net gain/(loss) from investments on the consolidated statements of income.


Major Revenue-Generating Services and Revenue Recognition


The Company’s revenues are derived primarily from investment advisory and incentive fees and distribution fees.

Investment advisory and incentive fees are directly influenced by the level and mix of assets under management (“AUM”), as fees are derived from a contractually-determined percentage of AUM for each account as well as incentive fees earned on certain accounts. Advisory fees from the open-end funds and closed-end funds (collectively, the “Funds”) and sub-advisory accounts are computed daily or weekly based on average net assets and amounts receivable are included in investment advisory fees receivable on the consolidated statements of financial condition.  Advisory fees from Institutional and Private Wealth ManagementPWM accounts are generally computed quarterly based on account values as of the end of the preceding quarter, and amounts receivable are included in investment advisory fees receivable on the consolidated statements of financial condition. The Company derived approximately 88%, 87%91% and 87%90% of its total revenues from advisory and management fees, including incentive fees, for the periodsyears ended December 31, 2017, 20162021 and 2015,2020, respectively. These revenues vary depending upon the level of sales compared with redemptions, financial market conditions, performance, and the fee structure for AUM.the Fund or account. Revenues derived from the equity-oriented portfolios generally have higher managementadvisory fee rates than fixed income portfolios.



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The Company receives incentive fees from certain Institutional and Private Wealth Management accounts, which are based upon meeting or exceeding a specific benchmark index or indices.  Incentive fees refer to fees earned when the return generated for the client exceeds the benchmark and can be earned even if the return to the client is negative as long as the return exceeds the benchmark.  These fees are recognized, for each respective account, at the end of the stipulated contract period which is either quarterly or annually and varies by account.  Receivables due for incentive fees earned are included in investment advisory fees receivable on the consolidated statements of financial condition.  There were no incentive fees receivable as of December 31, 2017.  There were $2.4 million of incentive fees receivable as of December 31, 2016.

For The GDL Fund, there is a performancean incentive fee earned as of the end of the calendar year ifwhich varies to the extent the total return of the fund is in excess of the 90 day T-BillICE Bank of America Merrill Lynch 3 Month U.S. Treasury Bill Index total return. This fee is recognized at the end of the measurement period, which is annually on a calendar year basis.period. Receivables due on incentive fees relating to The GDL Fund are included in investment advisory fees receivable on the consolidated statements of financial condition and were $1.4$1.1 million and $4.2$0.1 million as of December 31, 20172021 and 2016,2020, respectively.


For the Gabelli Merger Plus+ Trust Plc, there is an incentive fee which is earned and recognized at the end of the measurement period, June 30th and varies to the extent the total return of the fund is in excess of twice the rate of return of the 13 week Treasury Bills over the performance period. There was no performance feewere 0 incentive fees receivable as of December 31, 2017.2021 or 2020.


ManagementAdvisory fees on $0.7 billioncertain of the closed-end preferred shares are earned at year-end if the total return to common shareholders of the closed-end fund for the calendar year exceeds the dividend rate of the preferred shares. These fees are recognized at the end of the measurement period, which is annually.annually, or earlier if there is a redemption. Receivables due for managementadvisory fees on closed-end preferred shares are included in investment advisory fees receivable on the consolidated statements of financial condition. There were $7.1$1.5 million and $7.3$2.5 million in managementadvisory fees receivable on closed-end preferred shares as of December 31, 20172021 and 2016,2020.

For the GAMCO Merger Arbitrage SICAV, there is an incentive fee earned as of the end of the calendar year when the total return of a share class exceeds the hurdle rate (return on the 13-week UST) and the NAV exceeds the high water mark, at the rate of 15percent of the total return of share classes not denominated in the base currency and at the rate of 20percent of the total return of share classes denominated in the base currency.  This fee is recognized at the end of the measurement period, which is annually on a calendar year basis, or earlier if there is a redemption.  Receivables due on incentive fees relating to the GAMCO Merger Arbitrage SICAV are included in investment advisory fees receivable on the consolidated statements of financial condition and were $6.4 million and $5.6 million as of December 31, 2021 and 2020, respectively.


Distribution fees revenues are derived primarily from the distribution of Gabelli and GAMCO open-end Funds as well as the affiliated TETON KEELEYWestwood and ComstockKeeley open-end funds (“Funds”) advised by either a subsidiary of GBL (Funds Advisor)(Gabelli Funds), a subsidiary of GGCP, Inc. (“GGCP”) (Teton), or a subsidiary of Teton (Keeley-Teton Advisors, Inc.). G.distributors distributes ourthe open-end Funds pursuant to distribution agreements with each Fund. Under each distribution agreement with an open-end Fund, G.distributors offers and sells such open-end Fund shares on a continuous basis and pays all of the costs of marketing and selling the shares, including printing and mailing prospectuses and sales literature, advertising and maintaining sales and customer service personnelteammates and sales and services fulfillment systems, and payments to the sponsors of third party distribution programs, financial intermediaries, and G.distributors’ sales personnel.teammates. G.distributors receives fees for such services pursuant to distribution plans adopted under provisions of Rule 12b-1 (“12b-1”) of the Investment Company Act of 1940, as amended (“Company Act”). G.distributors is the principal underwriter for funds distributed in multiple classes of shares which carry either a front-end or back-end sales charge.


Under the distribution plans, the open-end Class AAA shares of the open-end Funds (except The Gabelli U.S. Treasury Money Market Fund, Gabelli Capital Asset Fund, and The Gabelli ABC Fund), and the Class A shares, and the Class TADV shares of certain Funds pay G.distributors a distribution or service fee of 0.25% per year (except the Class A shares of the TETON Westwood Funds which pay 0.50% per year and the Class A shares of the Gabelli Enterprise Mergers and Acquisitions Fund which pays 0.45% per year) on the average daily net assets of the Fund.fund. Class C shares have a 12b-1 distribution plan with a service and distribution fee totaling 1%1.00%.


Distribution fees from the open-end fundsFunds are computed daily based on average net assets. The amounts receivable for distribution fees are included in receivables from affiliates on the consolidated statements of financial condition.

GBL also has investment gains or losses generated from its proprietary trading activities which are included in net gain/(loss) from investmentsNote 2 to the consolidated financial statements includes additional information on the consolidated statements of income.Company’s revenue recognition policy.


Distribution Costs


We incurThe Company incurs certain promotion and distribution costs, which are expensed as incurred, principally related to the sale of shares of Funds shares sold in the initial public offerings of our closed-end funds, and after-market support services related to ourthe closed-end funds.Funds. Additionally, Gabelli Funds Advisor has agreed to reimburse expenses on certain funds,Funds beyond certain expense caps. The reimbursed expenses are presented on a gross basis in distribution costs in the consolidated statements of income.


Dividends and Interest Income and Interest Expense


Dividends are recorded on the ex-dividend date. Interest income and interest expense are accrued as earned or incurred.



5852
Depreciation and Amortization


Fixed assets other than leasehold improvements, with net book value of $421,000$2.3 million and $524,000$2.5 million at December 31, 20172021 and 2016,2020, respectively, which are included in other assets, are recorded at cost and depreciated using the straight-line method over their estimated useful lives from four to seven years.years. Accumulated depreciation was $2.7$3.2 million and $2.6$2.9 million at December 31, 20172021 and 2016,2020, respectively. Leasehold improvements, with net book value of $1.5$0.6 million and $1.6$0.8 million at December 31, 20172021 and 2016,2020, respectively, which are included in other assets, are recorded at cost and amortized using the straight-line method over their estimated useful lives or lease terms, whichever is shorter. The leased property under the capitalfinance lease is depreciated utilizing the straight-line method over the term of the lease, which expires on December 31, 2028. The capitalfinance lease was extended on June 11, 2014 to December 31, 2028 from December 31, 2023. For the years ended December 31, 2017, 20162021 and 2015,2020, depreciation and amortization were $595,000, $632,000$1.2 million and $618,000,$0.9 million, respectively. We estimate that depreciationDepreciation and amortization willis expected to be approximately $590,000$1.2 million annually over the next three years.


Goodwill and Identifiable Intangible Assets


Goodwill isand identifiable intangible assets are initially measured as the excess of the cost of the acquired business over the sum of the amounts assigned to assets acquired less the liabilities assumed. At December 31, 2017 and 2016, goodwill recorded on the consolidated statements of financial condition relates to G.distributors.  At December 31, 2017 and 2016, the identifiable intangible assets are the investment advisory contracts for the Gabelli Enterprise Mergers and Acquisition Fund, for the Bancroft Fund Ltd. and the Ellsworth Growth and Income Fund Ltd., all of which relate to Funds Advisor.  Goodwill and identifiable intangible assets are tested for impairment at least annually onas of November 30th and whenever certain triggering events are met. In assessing the recoverability of thegoodwill and identifiable intangible asset for 2017 and 2016,assets, projections regarding estimated future cash flows and other factors are made to determine the fair value of the asset.  No impairment was recorded during 2017, 2016, or 2015.

In assessingassets. If the recoverabilitybook value exceeds the fair value of goodwill for our annual impairment test on November 30, 2017 and 2016, we performed a qualitative assessment of whether it was more likely than not thatthe assets, an impairment had occurred and concluded that a quantitative analysis was not required.  No impairment wascharge is recorded, during 2017, 2016, or 2015.corresponding to the amount by which the book value exceeds the fair value.


Income Taxes


GBL and its operating subsidiaries file a consolidated federal income tax return. Accordingly, the income tax provision represents the aggregate of the amounts provided for all companies. The Company operates in numerous states and countries through its subsidiaries and therefore must allocate income, expenses, and earnings to these taxing jurisdictions taking into account the various laws and regulations in each jurisdiction. Each year, the Company files tax returns in each jurisdiction and settles its tax liabilities, which may be subject to audit by the taxing authorities. Deferred tax assets and liabilities are recorded for temporary differences between the tax basis of assets and liabilities and the reported amounts on the consolidated statements of financial statementscondition using the statutory tax rates in effect for the year when the reported amount of the asset or liability is recovered or settled, respectively. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. As a result of the enactment of the Tax Cuts and Jobs Act in December 2017, the Company recorded an increase in expense of $8.2 million reflecting the net write-downIn accordance with Accounting Standards Update (“ASU”) 2016-09, Improvements to its deferredEmployee Share-Based Payment Accounting, excess tax assets and deferredbenefits or tax liabilities.deficiencies are recognized against income tax expenses. A valuation allowance is recorded to reduce the carrying values of deferred tax assets to the amount that is more likely than not to be realized. For eachThe calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in several jurisdictions. In accordance with Accounting Standards Codification (“ASC”) Topic 740, Income Taxes (“ASC 740”), a tax benefit from an uncertain tax position taken or expected tomay be taken in a tax return, the Company determines whetherrecognized when it is more likely than not that the position will be sustained upon examination, based on the technical merits of the position, including resolutionresolutions of any related appeals or litigation.  Alitigation processes, on the basis of the technical merits. We record a liability for unrecognized tax position that meetsbenefits in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the more likely thanevaluation of new information not recognition threshold is measured to determinepreviously available. Because of the amountcomplexity of benefit to recognize.  Thesome of these uncertainties, the ultimate resolution may differ from our current estimate of the liabilities for  unrecognized tax position is measured atbenefits. These differences are reflected as increases or decreases in income tax expense in the largest amount of benefit that is greater than 50% likely of being realized upon settlement.  period in which new information becomes available. The Company recognizes the accrual of interest on uncertain tax positions and penalties in income tax provision on the consolidated statements of income.


Fair Values of Financial Instruments


All of the instruments within cash and cash equivalents, investments in equity securities, at fair value, and securities sold, not yet purchased are measured at fair value. Certain investments in partnerships are also measured at fair value.


The Company’s assets and liabilities recorded at fair value have beenare categorized based upon a fair value hierarchy in accordance with the Financial Accounting Standards Board’s (“FASB”) guidancehierarchy. See Note 4, Fair Value, for further details on fair value measurement. The levels of the fair value hierarchy and their applicability to the Company are described below:hierarchy.

-  Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date. Level 1 assets include cash equivalents, government obligations, open-end funds, closed-end funds and equities.
-  Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities that are not active and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly-quoted intervals. Assets that generally are included in this category may include certain limited partnership interests in private funds and over the counter derivatives that have inputs to the valuations that can generally be corroborated by observable market data.
-  Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.  Assets included in this category generally include equities that trade infrequently and direct private equity investments held within consolidated partnerships.



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In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy.  In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety.  The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Investments are transferred into or out of any level at their beginning period values.

The availability of observable inputs can vary from instrument to instrument and is affected by a wide variety of factors, including, for example, the type of instrument, whether the instrument is new and not yet established in the marketplace, and other characteristics particular to the transaction. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized as Level 3.

The valuation process and policies reside with the financial reporting and accounting group which reports to the Co-Chief Accounting Officers. The Company may use the “market approach” or “income approach” valuation technique to value its investments in Level 3 investments. The Company’s valuation of the Level 3 investments could be based upon either i) the recent sale prices of the issuer’s equity securities or ii) the net assets, book value or cost basis of the issuer when there is no recent sales prices available.

In the absence of a closing price, an average of the bid and ask price is used. Bid prices reflect the highest price that the market is willing to pay for an asset. Ask prices represent the lowest price that the market is willing to accept for an asset.

Cash equivalents – Cash equivalents primarily consist of an affiliated money market mutual fund which is invested solely in U.S. Treasuries and valued based on the net asset value of the fund.  U.S.U.S Treasury Bills and Notes with maturities of three months or less at the time of purchase are also considered cash equivalents.  Cash equivalentsand are valued using unadjusted quoted market prices. Cash equivalents also include an affiliated money market fund which is invested solely in U.S. Treasuries.


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Investments in securities and Securities sold, not yet purchased – Investments in securities and securities sold, not yet purchased are generally valued based on quoted prices from an exchange. To the extent these securities are actively traded, valuation adjustments are not applied, and they are categorized in Level 1 of the fair value hierarchy. Securities categorized in Level 2 investments are valued using other observable inputs. Nonpublic and infrequently traded investments are included in Level 3 of the fair value hierarchy because significant inputs to measure fair value are unobservable.


Subordinated Notes

The Company issued 2-year subordinated notes due June 15, 2023 (“Subordinated Notes”). Interest expense is recorded on an accrual basis and is included in interest expense in the Consolidated Statements of Income. The Subordinated Notes are recorded at face value, net of unamortized issuance costs. Issuance costs include capitalized expenses including arrangement fees and legal costs related to the issuance of the Subordinated Notes. Amortization of issuance costs for the Subordinated Notes is computed on the straight-line basis over the term of the notes. The unamortized balance of such costs is presented as a direct deduction to the carrying amount of the Subordinated Notes in the Consolidated Statements of Financial Condition. The amortization of such costs is included in interest expense in the Consolidated Statements of Income.

Earnings Per Share


Basic earnings per share is based on the weighted-average number of common shares outstanding during each period less unvested restricted stock. Diluted earnings per share is based on basic shares plus the incremental shares that would be issued upon the assumed exercise of in-the-money stock options and unvested restricted stock using the treasury stock method, and, if dilutive, assumes the conversion of the convertible note for the periods outstanding since the issuance in August 2016 using the if converted method.


Management Fee


Management fee expense is incentive-based and entirely variable compensation in the amount of 10% of the aggregate pre-tax profits before management fee which is paid to Mr. Mario J. Gabelli (“Mr. Gabelli”) or his designee for acting as CEO pursuant to his 2008 Employment Agreement so long as he is an executive of GBL and devotes the substantial majority of his working time to the business. In accordance with his 2008 Employment Agreement, he has allocated approximately $1.4 million, $2.2$1.7 million and $1.9$0.8 million of his management fee to certain other employees (“teammates”) of the Company in 2017, 20162021 and 2015,2020, respectively.

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Stock Based Compensation


The Company has granted equity awards, in the form of restricted stock awards (“RSAs”) and phantom RSAs to teammates and stock options to staffboard members, which were recommended by the Company’s Chairman, who did not receive an RSA, phantom RSA, or option award, and approved by a committee of GBL’s board of directors (the “Board of Directors”) responsible for administering the awards (“Compensation Committee of theCommittee”). The Company’s Board of Directors.  We use a fair value based method of accounting for stock-based RSA and option compensation provided to our employees.  teammates and board members is accounted for as an equity award based on fair value. The Company’s phantom RSA compensation provided to teammates is accounted for as a liability award based on fair value and is adjusted for changes in the Company’s stock price at each reporting date, with mark to market adjustments recognized in the results of operations.


The estimated fair value of RSAs and phantom RSAs is determined by using the closing price of Class A Common Stock (“Class A Stock”) on the day prior togrant date and the grant date.balance sheet date, respectively. The total expense, which is reduced by estimated forfeitures, is recognized over the vesting period for these awards, which is either (1) 30% over three years from the date of grant and 70% over five years from the date of grant or (2) 30% over three years from the date of grant and 10% each year over years four through ten from the date of grant. The forfeiture rate is determined by reviewing historical forfeiture rates for previous stock-based compensation grants and is reviewed and updated quarterly, if necessary.  During the vesting period, dividends to RSA and phantom RSA holders are held for them until the RSA vesting dates and are forfeited if the grantee is no longer employed by the Company on the vesting dates. Dividends declared on these RSAs and phantom RSAs, less estimated forfeitures, are charged to retained earnings on the declaration date.


The estimated fair value of option awards on the grant date is determined using the Black Scholes option-pricing model. This sophisticated model utilizes a number of assumptions in arriving at its results, including the estimated life of the option, the risk free interest rate at the date of grant, and the volatility of the underlying common stock. There may be other factors, which are not considered in the Black Scholes model, which may have an effect on the value of the options as well.  The effects of changing any of the assumptions or factors employed by the Black Scholes model may result in a significantly different valuation for the options. The total expense based on the grant date fair value, which is reduced by estimated forfeitures, is recognized over the vesting period for these awards, which is  75% over three years from the date of grant and 25% over four years from date of grant. The forfeiture rate is determined by reviewing historical forfeiture rates for previous stock-based compensation grants and is reviewed and updated quarterly, if necessary.

In connection with the Spin-off of AC and in accordance with GAAP, the Company has allocated the stock compensation costs between GBL and AC based upon each employee’s individual allocation of their responsibilities between GBL and AC.  See note H. Equity for further details.

The Company has entered into three deferred compensation agreements with Mr. Gabelli whereby his variable compensation for 2016, the first half of 2017 and the fourth quarter of 2017 was in the form of Restricted Stock Units (“RSUs”) determined by the volume-weighted average price (“VWAP”) of the Company’s Class A Stock during those respective periods.  The 2016 Deferred Cash Compensation Agreement (“DCCA”) will vest 100% on January 1, 2020, the First Half 2017 DCCA will vest 100% on July 1, 2018, and the Fourth Quarter 2017 DCCA will vest 100% on April 1, 2019.  The Company intends to settle the awards in cash at vesting; however, the Company reserves the right to issue shares of the Company’s Class A Stock in lieu of such cash payment.  Under the terms of the agreement the Company will pay Mr. Gabelli an amount equal to the number of RSUs valued at the lesser of the VWAP of the Company’s Class A Stock for the applicable period or the value on the lapse date or, if not a trading day, then the first trading date thereafter.

Under GAAP, for the 2016 DCCA only 25% of this deferred compensation expense is being recognized in 2016 with the remainder amortized ratably over 2017, 2018, and 2019.  Similarly, under GAAP, for the First Half 2017 DCCA 67% of the expense is recognized in 2017 with the remaining 33% expensed in 2018.  For the Fourth Quarter 2017 DCCA 17% of the expense is recognized in 2017, 66% in 2018 and the remaining 17% in 2019.  Notwithstanding its ability to settle the award in stock, given the Company’s intent to settle it in cash, in accordance with GAAP (ASC 718), the awards are accounted for as liability-classified awards and not as equity-classified awards.  The liability is remeasured at fair value on each reporting period from December 31, 2016 until the vesting date.  However, given the cap on the obligation in that Mr. Gabelli will not receive cash in excess of the VWAP of the Company’s Class A Stock for each respective period, the remeasurement of the liability at fair value will never exceed its value determined using each period’s respective VWAP price.

Concentration of Credit Risk


Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and receivable from brokers.equivalents. The Company maintains cash and cash equivalents primarily in U.S Treasury Bills with maturities of three months or less at the time of purchase and the Gabelli U.S. Treasury Money Market Fund, which invests fully in instruments issued by the U.S. government, and has receivables from brokers with various brokers and financial institutions, where these balances can exceed the federally insured limit.government. The concentration of credit risk with respect to advisory fees receivable is generally limited due to the short payment terms extended to clients by the Company. In addition, the credit risk is further limited by virtue of the fact that no single advisory relationship provided over 10% of the total revenue of the Company during the years 2017, 2016, or 2015.2021 and 2020. All investments in securities are held at third party brokers or custodians.


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Business Segment


The Company operates in one1 business segment, the investment advisory and asset management business. The Company conducts its investment advisory business principally through:through Gabelli Funds (Funds) and GAMCO Asset (Institutional and Private Wealth Management) and Funds Advisor (Funds)PWM). The distribution of ourthe open-end fundsFunds and underwriting of those Funds wasis conducted through G.distributors.

Recent Accounting Developments

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, "Revenue from Contracts with Customers," which supersedes the revenue recognition requirements in the Accounting Standards Codification ("Codification") Topic 605, Revenue Recognition, and most industry-specific guidance throughout the industry topics of the Codification.  The core principle of the new ASU No. 2014-09 is for companies to recognize revenue from the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled to receive in exchange for those goods or services.  The new standard provides a five-step approach to be applied to all contracts with customers and also requires expanded disclosures about revenue recognition.  In March 2016, the FASB issued revised guidance which clarifies the guidance related to (a) determining the appropriate unit of account under the revenue standard’s principal versus agent guidance and (b) applying the indicators of whether an entity is a principal or an agent in accordance with the revenue standard’s control principle. In April 2016, the FASB issued an amendment to provide more detailed guidance including additional implementation guidance and examples related to (a) identifying performance obligations and (b) licenses of intellectual property. In May 2016, the FASB amended the standard to clarify the guidance on (a) assessing collectability, (b) presenting sales taxes, (c) measuring noncash consideration, and (d) certain transition matters. This new guidance will be effective for the Company's first quarter of 2018 and requires either a full retrospective or a modified retrospective approach to adoption. The Company’s implementation analysis has been completed, and we have identified similar performance obligations under this guidance as compared with deliverables and separate units of account previously identified under Topic 605.  As a result, we expect the timing of the recognition of our revenue to remain the same as under Topic 605, and the Company does not therefore expect the adoption of the new guidance to have any effect on the timing of the recognition of revenue.  If there were to be any impact, which is not expected, the Company has determined that it would use the modified retrospective transition method.  The Company has also been reviewing and preparing for the enhanced disclosure requirements of the standard, which will have an effect on the disclosures in the consolidated financial statements and accompanying notes effective with our first quarter 2018 Form 10-Q.

In January 2016, the FASB issued ASU 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. In addition, the FASB clarified guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. To adopt the amendments, entities will be required to make a cumulative-effect adjustment to beginning retained earnings as of the beginning of the fiscal year in which the guidance is effective.  The Company adopted this guidance on January 1, 2018 and reclassed $11.9 million out of Accumulated Comprehensive Income and into Retained Earnings.  Effective January 1, 2018, changes in the fair value of the Company’s available-for-sale investments will be reported through earnings rather than through other comprehensive income.

In February 2016, the FASB issued ASU 2016-02, which amends the guidance in U.S. GAAP for the accounting for leases.  ASU 2016-02 requires a lessee to recognize assets and liabilities arising from most operating leases in the consolidated statement of financial position. It requires these operating leases to be recorded on the balance sheet as right of use assets and offsetting lease liability obligations.  This new guidance will be effective for the Company’s first quarter of 2019. The Company is currently evaluating this guidance and the impact it will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, which simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. For public companies, the ASU is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods.  The Company adopted this guidance on January 1, 2017 without a material impact to the consolidated financial statements.  Please see Note D.

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In August 2016, the FASB issued ASU 2016-15, which adds and clarifies guidance on the classification of certain cash receipts and payments in the consolidated statements of cash flows.  This guidance is intended to unify the currently diverse presentations and classifications, which address eight classification issues related to the statement of cash flows, including debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle.  The Company adopted this guidance on January 1, 2018 without a material impact to the consolidated financial statements.
In November 2016, the FASB issued ASU 2016-18, which amends ASC 230 to clarify guidance on the classification and presentation of restricted cash in the statement of cash flows.  Key requirements are that an entity should include in its cash and cash equivalent balances in the statement of cash flow those amounts that are deemed to be restricted cash and restricted cash equivalents and that a reconciliation between the statement of financial position and the statement of cash flows must be disclosed when the statement of financial position includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash equivalents.  The ASU also mandates that changes in restricted cash and restricted cash equivalents that result from transfers between cash, cash equivalents, restricted cash, and restricted cash equivalents should not be presented as cash flow activities in the statement of cash flows and that an entity with a material amount of restricted cash and restricted cash equivalents must disclose information about the nature of the restrictions.  This new guidance was to be effective for the Company’s first quarter of 2018, but the Company has elected to early adopt in the third quarter of 2017.  There was no material impact to the consolidated financial statements.


In January 2017, the FASB issued ASU 2017-04, to simplifyIntangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies the process used to test for goodwill impairment.  Aimpairment by eliminating the requirement to calculate the implied fair value of goodwill, and instead any goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), Leases (Topic 842): Effective Dates (ASU 2019-10), which deferred the effective date of this guidance for smaller reporting companies for three years. This new guidance will be effective for the Company’s first quarter of 2020.Company on January 1, 2023 using a prospective transition method and early adoption is permitted. The Company is currently evaluating the potential effect of this new guidance on itsthe Company’s consolidated financial statements and related disclosures.statements.


On May 10, 2017,In June 2016, the FASB issued ASU 2017-09,2016-13, Accounting for Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”), which amends requires an organization to measure all expected credit losses for financial assets held at the scope of modification accounting for share-based payment arrangements.  The ASU provides guidancereporting date based on the types of changes to the terms or conditions of share-based payment awards to which an entity would be required to apply modification accounting under ASC 718.  Specifically, an entity would not apply modification accounting if the fair value, vestinghistorical experience, current conditions, and classificationreasonable and supportable forecasts. Currently, U.S. GAAP requires an “incurred loss” methodology that delays recognition until it is probable a loss has been incurred. Under ASU 2016-13, the allowance for credit losses must be deducted from the amortized cost of the awards arefinancial asset to present the same immediately before and afternet amount expected to be collected. The consolidated statement of income will reflect the modification.  For all entities, the ASU is effectivemeasurement of credit losses for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017.  Early adoption is permitted, including adoption in any interim period.  This ASU, which we did not early adopt, would not have impacted the accounting for the acceleration of vesting of restricted stock awards during the year ended December 31, 2017.

In January 2018, the Securities and Exchange Commission (“the Commission”) issued Staff Accounting Bulletin No. 118 (“SAB 118”) which expresses the Commission’s views regarding application of FASB’s ASC Topic 740 “Income Taxes” in the reporting period that includes December 22, 2017.  The Commission indicated that The Tax Cuts and Jobs Act (“the Act”), which was enacted on December 22, 2017,  affects companies’ reporting because of the Act’s changes that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits.

ASC Topic 740 provides accounting and disclosure guidance on accounting for income taxes under generally accepted accounting principles (“U.S. GAAP”). This guidance addresses the recognition of taxes payable or refundable for the current year and the recognition of deferred tax liabilities and deferred tax assets for the future tax consequences of events that have beennewly recognized in an entity’s financial statements or tax returns.   ASC Topic 740 also addresses the accounting for income taxes upon a change in tax laws or tax rates.  The income tax accounting effect of a change in tax laws or tax rates includes, for example, adjusting (or re-measuring) deferred tax liabilities and deferred tax assets as well as evaluating whether a valuation allowance is needed for deferred tax assets.

The Commission issued SAB 118 to address situations where the accounting under ASC Topic 740 is incomplete for certain income tax effectsexpected increases or decreases of expected credit losses that have taken place during the Act upon issuance of an entity’s financial statements for the reporting period in which the Act was enacted. A company’s financial statements that include the reporting period in which the Act was enacted must first reflect the income tax effects of the Act in which the accounting under ASC Topic 740 is complete. These completed amounts would not be provisional amounts. The company would then also report provisional amounts for those specific income tax effects of the Act for which the accounting under ASC Topic 740 will be incomplete but a reasonable estimate can be determined. For any specific income tax effects of the Act for which a reasonable estimate cannot be determined, the company would not report provisional amounts and would continue to apply ASC Topic 740 based on the provisions of the tax laws that were in effect immediately prior to the Act being enacted. For those income tax effects for which the company was not able to determine a reasonable estimate (such that no related provisional amount was reported for the reporting period in which the Act was enacted), the company would report provisional amounts in the first reporting period in which a reasonable estimate can be determined.

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The Company has revalued its deferred tax assets and liabilities as of the date of enactment and has determined that the provisions of SAB 118 related to incomplete or provisional amounts do not apply as it considers its evaluation complete.
period. In February 2018,November 2019, the FASB issued ASU 2018-02 to address constituent concerns related to2019-10, which deferred the application of ASC 740 to certain provisions of the new tax reform legislation, the Tax Cuts and Jobs Act.  Specifically, the ASU addressed concerns about the requirement in ASC 740 that the effect of a change in tax laws or rates on deferred tax assets and liabilities be included in income from continuing operations in the reporting period that contains that enactmenteffective date of the change.  Thatthis guidance applies even in situations in which the tax effects were initially recognized directly to other comprehensive income at the previous rate, resulting in “stranded” amounts in accumulated comprehensive income (AOCI) related to the income tax rate differential.for smaller reporting companies for three years. This new guidance will beis effective for the Company’s first quarter of 2019.Company on January 1, 2023 and requires a modified retrospective transition method, which will result in a cumulative-effect adjustment in retained earnings upon adoption. Early adoption is permitted. The Company is currently assessing the potential impact of this new guidance on the Company’s consolidated financial statements.

2. Revenue Recognition

In all cases for all revenue streams discussed below, the revenue generated is from a single transaction price and there is no need to allocate the amounts across more than a single revenue stream. The customer for all revenues derived from open-end and closed-end funds described in detail below has electedbeen determined to be each fund itself and not the ultimate underlying investor in each fund.

Significant judgments that affect the amounts and timing of revenue recognition:

The Company’s analysis of the timing of revenue recognition for each revenue stream is based upon an analysis of the current terms of each contract. Performance obligations could, however, change from time to early adopttime if and when existing contracts are modified or new contracts are entered into. These changes could potentially affect the timing of satisfaction of performance obligations, the determination of the transaction price, and the allocation of the price to performance obligations. In the case of the revenue streams discussed below, the performance obligation is satisfied either at a point in time or over time. For incentive fee revenues, the performance obligation (advising a client portfolio) is satisfied over time, while the recognition of revenues effectively occurs at the end of the measurement period as defined within the contract, as such amounts are subject to reduction to 0 on the date where the measurement period ends even if the performance benchmarks were exceeded during the intervening period. The judgments outlined below, where the determination as to these factors is discussed in detail, are continually reviewed and monitored by the Company when new contracts or contract modifications occur. Transaction price is in all instances formulaic and not subject to significant (or any) judgment at the current time. The allowance for doubtful accounts is subject to judgment.

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Advisory Fee Revenues

Advisory fees for Funds, sub-advisory accounts, and the SICAV are earned based on predetermined percentages of the average net assets of the individual Funds and are recognized as revenues as the related services are performed. Fees for open-end Funds, 1 non-U.S. closed-end Fund, sub-advisory accounts, and the SICAV are computed on a daily basis based on average daily net AUM. Fees for U.S. closed-end Funds are computed on average weekly net AUM and fees for 1 non-U.S. closed-end fund are computed on a daily basis based on daily market value. These fees are received in cash after the end of each monthly period within 30 days. The revenue recognition occurs ratably as the performance obligation (advising the Fund) is met continuously over time. There is a risk of non-payment and, therefore, an impairment loss on these receivables is possible at each reporting date. There were no such impairment losses for the financial statementsperiods presented.

Advisory fees for Institutional and PWM accounts are earned based on predetermined percentages of the AUM and are generally computed quarterly based on account values at the end of the preceding quarter.  The revenue recognition occurs daily as the performance obligation (advising the client portfolio) is met continuously. These fees are received in cash, typically within 60 days of the client being billed. There is a risk of non-payment and, therefore, an impairment loss on these receivables is possible at each reporting date. There were no such impairment losses for the periods presented.

Performance Correlated and Conditional Revenues

Investment advisory fees are earned on a portion of some closed-end funds’ preferred shares at year-end if the total return to common shareholders of the respective closed-end fund for the year ended December 31, 2017 contained in this Form 10K.  It is currently evaluating whether it will early adopt this ASU in 2018exceeds the dividend rate of the preferred shares. These fees are recognized at the end of the measurement period, which coincides with the calendar year. These fees would also be earned and the effectscontract period ended at any interim point in time that the adoption will have on its consolidated financial statementsrespective preferred shares are redeemed. These fees are received in cash after the end of each annual measurement period, within 30 days.

NaN closed-end funds charge incentive fees. For The GDL Fund (GDL), there is an incentive fee, which is earned and recognized as of the end of each calendar year and varies to the extent the total return of the fund is in excess of the ICE Bank of America Merrill Lynch 3-month U.S. Treasury Bill Index total return. For the Gabelli Merger Plus+ Trust Plc (GMP), there is an incentive fee, which is earned and recognized as of the end of each measurement period, June 30th, and varies to the extent the total return of the fund is in excess of twice the rate of return of the 13-week Treasury Bills over the performance period.

A SICAV sub-fund, the GAMCO Merger Arbitrage SICAV, charges a performance fee. This fee is recognized at the end of the measurement period, which coincides with the calendar year. The fee would also be earned and the measurement period ended at any interim point in time that a client redeemed their respective shares. This fee is received in cash after the end of the measurement period, within 30 days.

In all cases of the incentive fees, because of the variable nature of the consideration, revenue recognition is delayed until it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur, which is generally when the uncertainty associated with the variable consideration is subsequently resolved (for example, the measurement period has concluded and the hurdle rate has been exceeded). There is a risk of adoption.non-payment and, therefore, an impairment loss on these receivables is possible at each reporting date. There were no such impairment losses for the periods presented.


B.Distribution Fees and Other Income

Distribution fees and other income primarily includes distribution fee revenue earned in accordance with Rule 12b-1 of the Company Act along with sales charges and underwriting fees associated with the sale of the class A shares of open-end Funds. Distribution fees are computed based on average daily net assets of certain classes of each fund and are recognized during the period in which they are earned. These fees are received in cash after the end of each monthly period within 30 days. In evaluating the appropriate timing of the recognition of these fees, the Company applied the guidance on up-front fees to determine whether such fees are related to the transfer of a promised service (a distinct performance obligation). The Company’s conclusion is that the service being provided by G.distributors to the customer in exchange for the fee is for the initial distribution of certain classes of the open-end Funds and is completed at the time of each respective sale. Any fixed amounts are recognized on the trade date and variable amounts are recognized to the extent it is probable that a significant revenue reversal will not occur once the uncertainty is resolved. For variable amounts, as the uncertainty is dependent on the value of the shares at future points in time as well as the length of time the investor remains in the fund, both of which are highly susceptible to factors outside the Company’s influence, the Company does not believe that it can overcome this constraint until the market value of the fund and the investor activities are known, which are generally monthly. Sales charges and underwriting fees associated with the sale of certain classes of the open-end Funds are recognized on the trade date of the sale of the respective shares. There is a risk of non-payment and, therefore, an impairment loss on these receivables is possible at each reporting date. There were no such impairment losses for the periods presented.

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Revenue Disaggregated

The following table presents the Company’s revenue disaggregated by account type (in thousands):

 Years Ended December 31, 
  2021  2020 
Investment advisory and incentive fees:      
Open-end Funds $98,281  $88,884 
Closed-end Funds  80,580   64,221 
Sub-advisory accounts  2,524   2,313 
Institutional & Private Wealth Management  73,218   64,290 
SICAVs  6,771   4,996 
Performance-based  13,157   8,924 
Total investment advisory and incentive fees  274,531   233,628 
Distribution fees and other income  26,595   26,098 
Total revenues $301,126  $259,726 

3. Investments in Securities


Investments in equity securities at December 31, 20172021 and 20162020 consisted of the following:following (in thousands):


  2017  2016 
  Cost  Fair Value  Cost  Fair Value 
(In thousands)            
Trading securities:            
Common stocks $26  $34  $51  $54 
Mutual Funds  11   11   -   - 
Total trading securities  37   45   51   54 
                 
Available for sale securities:                
Common stocks  17,441   36,637   18,739   37,131 
Closed-end funds  99   108   99   100 
Total available for sale securities  17,540   36,745   18,838   37,231 
                 
Total investments in securities $17,577  $36,790  $18,889  $37,285 
 December 31, 2021  December 31, 2020 
  Cost  
Estimated
Fair Value
  Cost  
Estimated
Fair Value
 
Investments in equity securities and funds:            
Common stocks $33,575  $16,210  $41,341  $19,099 
Open-end funds  5,722   5,995   5,757   6,128 
Actively managed semi-transparent ETFs  9,000   9,599   0   0 
Closed-end funds  530   534   628   618 
Other  6   6   0   0 
Total investments in equity securities and funds
 $48,833  $32,344  $47,726  $25,845 


There were noShort-term investments in U.S. Treasury Bills at December 31, 2021 and 2020 consisted of the following (in thousands):

 December 31, 2021 
  
Amortized
Cost
  
Gross Unrealized
Holding Gains
  
Gross Unrealized
Holding Losses
  
Estimated
Fair Value
 
Short-term investments in U.S. Treasury Bills:            
U.S. Treasury Bills $0  $0  $0  $0 
Total short-term investments in U.S. Treasury Bills $0  $0  $0  $0 

 December 31, 2020 
  
Amortized
Cost
  
Gross Unrealized
Holding Gains
  
Gross Unrealized
Holding Losses
  
Estimated
Fair Value
 
Short-term investments in U.S. Treasury Bills:            
U.S. Treasury Bills
 $64,988  $6  $0  $64,994 
Total short-term investments in U.S. Treasury Bills $64,988  $6  $0  $64,994 

The maturity dates of all of the Company’s debt securities are less than one year.

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Securities sold, not yet purchased at December 31, 20172021 and 2016.
The2020 consisted of the following table identifies all reclassifications out of accumulated other comprehensive income and into net income for the year ended December 31, 2017 and 2016 (in thousands):


Amount Affected Line Item Reason for
Reclassified in the Statements Reclassification
from AOCI of Income from AOCI
Twelve months ended December 31,     
2017  2016     
             
 $62  $4 Net gain from investments Realized gain / (loss) on sale of AFS securities
  3,063   1,251 Other operating expenses Donation of AFS securities
  3,125   1,255 Income before income taxes  
  (1,156)  (464)Income tax expense  
 $1,969  $791 Net income  
 December 31, 2021  December 31, 2020 
  Cost  
Estimated
Fair Value
  Cost  
Estimated
Fair Value
 
Investments in equity securities:            
Common stocks $0  $0  $728  $799 
Total securities sold, not yet purchased $0  $0  $728  $799 


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The following is a summary of the cost, gross unrealized gains, gross unrealized losses and fair value of available for sale investments as of December 31, 2017 and December 31, 2016:

 December 31, 2017 
   Gross Gross   
   Unrealized Unrealized Fair 
 Cost Gains Losses Value 
 (In thousands) 
Common stocks $17,441  $19,196  $-  $36,637 
Closed-end Funds $99  $9  $-  $108 
Total available for sale securities $17,540  $19,205  $-  $36,745 

 December 31, 2016 
   Gross Gross   
   Unrealized Unrealized Fair 
 Cost Gains Losses Value 
 (In thousands) 
Common stocks $18,739  $18,392  $-  $37,131 
Closed-end funds  99   1   -   100 
Total available for sale securities $18,838  $18,393  $-  $37,231 

Increases in unrealized gains, net of taxes, for AFS securities for the year ended December 31, 2017 and 2016 of $0.5 million and $2.3 million have been included in other comprehensive income at December 31, 2017 and 2016, respectively.  Increases in unrealized losses, net of taxes, for AFS securities for the year ended December 31, 2015 of $5.5 million have been included in other comprehensive income at December 31, 2015. The amount reclassified from other comprehensive income for the years ended December 31, 2017, 2016 and 2015 was $2.0 million, $0.8 million and $2.8 million, respectively. Proceeds from sales of investments available for sale were approximately $4.2 million, $0.4 million and $0.1 million for the years ended December 31, 2017, 2016 and 2015, respectively. For the years ended December 31, 2017, 2016 and 2015, gross gains on the sale of investments available for sale amounted to $62,000, $4,000 and $6,000, respectively, and were reclassed from other comprehensive income into the consolidated statements of income. There were no losses on the sale of investments available for sale for the years ended December 31, 2017, 2016 and 2015. The basis on which the cost of a security sold is determined is specific identification. Accumulated other comprehensive income on the consolidated statements of equity is primarily comprised of unrealized gains/losses, net of taxes, for AFS securities.

GBL has an established accounting policy and methodology to determine other-than-temporary impairment on available for sale securities.  Under this policy, available for sale securities are evaluated for other than temporary impairments and any impairment charges are recorded in net gain/(loss) from investments on the consolidated statements of income.  Management reviews all available for sale securities whose cost exceeds their market value to determine if the impairment is other than temporary.  Management uses qualitative factors such as diversification of the investment, the amount of time that the investment has been impaired, the intent to sell and the severity of the decline in determining whether the impairment is other than temporary.  

There were no investments classified as available for sale that were in an unrealized loss position at either December 31, 2017 or December 31, 2016.

For the years ended December 31, 2017, 2016 and 2015 there were no losses on available for sale securities that were deemed to be other than temporary.

All of our investments within the Investments in securities line item on the consolidated statement of financial condition are pledged as collateral against a margin loan outstanding with an unaffiliated broker included in the Payable to brokers line item on the consolidated statements of financial condition.  Certain of the investments within the Investments in securities line item are also pledged against the AC 1.6% Note due February 28, 2018.
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C.4. Fair Value


All of the instruments within cash and cash equivalents and investments in securities are measured at fair value, except for those investments designated as held-to-maturity. The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with the FASB Accounting Standards Codification (“ASC”) Topic 820,Fair ValueMeasurement (“ASC 820”), guidance on fair value measurement. The levels of the fair value hierarchy and their applicability to theCompany are described below:

-  
Level 1 - the valuation methodology utilizes quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date. Level 1 assets include cash equivalents, government obligations, open-end funds, closed-end funds, and listed equities.
-  
Level 2 - the valuation methodology utilizes inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly-quoted intervals.
-  
Level 3 - the valuation methodology utilizes unobservable inputs for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability.

The following tables present information aboutsummarize the Company’s assets and liabilities by major categories measured at fair value on a recurring basis as of December 31, 2017 and 2016 and indicatesby the above fair value hierarchy levels as of the valuation techniques utilized by the Company to determine such fair value:December 31, 2021 and 2020 (in thousands):


Assets and Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2017 (in thousands)2021


 Quoted Prices in Active  Significant Other  Significant  Balance as of 
 Markets for Identical  Observable  Unobservable  December 31, 
Assets Assets (Level 1)  Inputs (Level 2)  Inputs (Level 3)  2017  
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
  
Significant Other
Observable
Inputs (Level 2)
  
Significant
Unobservable
Inputs (Level 3)
  
Balance as of
December 31,
2021
 
Cash equivalents $17,475  $-  $-  $17,475  $141,394  $0  $0  $141,394 
Investments in securities:                                
AFS - Common stocks  36,637   -   -   36,637 
AFS - Closed-end Funds  108   -   -   108 
Trading - Common stocks  34   -   -   34 
Trading - Mutual Funds  11   -   -   11 
Common stocks  16,210   0   0   16,210 
Actively managed semi-transparent ETFs  9,599   0   0   9,599 
Open-end Funds  5,995   0   0   5,995 
Closed-end Funds  534   0   0   534 
Other  6   0   0   6 
Total investments in securities  36,790   -   -   36,790   32,344   0   0   32,344 
Total assets at fair value $54,265  $-  $-  $54,265  $173,738  $0  $0  $173,738 


During the year ended December 31, 2017, there were no transfers between any Level 1 and Level 2 holdings, or between Level 1 and Level 3 holdings.
58
Assets and Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 20162020

Assets 
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
  
Significant Other
Observable
Inputs (Level 2)
  
Significant
Unobservable
Inputs (Level 3)
  
Balance as of
December 31,
2020
 
Cash equivalents $32,661  $0  $0  $32,661 
Investments in securities:                
Common stocks  19,099   0   0   19,099 
Open-end Funds  6,128   0   0   6,128 
Closed-end Funds  618   0   0   618 
Total investments in securities  25,845   0   0   25,845 
Total assets at fair value $58,506  $0  $0  $58,506 
Liabilities                
Securities sold, not yet purchased:                
Trading - Common stocks  799   0   0   799 
Total securities sold, not yet purchased  799   0   0   799 

Financial assets disclosed but not carried at fair value

The following table presents the carrying value and fair value of the Company’s short-term investments in U.S. Treasury Bills as of December 31, 2021 and 2020 (in thousands):


  Quoted Prices in Active  Significant Other  Significant  Balance as of 
  Markets for Identical  Observable  Unobservable  December 31, 
Assets Assets (Level 1)  Inputs (Level 2)  Inputs (Level 3)  2016 
Cash equivalents $39,638  $-  $-  $39,638 
Investments in securities:                
AFS - Common stocks  37,131   -   -   37,131 
AFS - Closed-end Funds  100   -   -   100 
Trading - Common stocks  54   -   -   54 
Total investments in securities  37,285   -   -   37,285 
Total assets at fair value $76,923  $-  $-  $76,923 
 December 31, 2021  December 31, 2020 
  
Carrying
Value
  
Fair Value
Level 1
  
Carrying
Value (1)
  
Fair Value
Level 1
 
U.S. Treasury Bills $0  $0  $64,988  $64,994 
Total $0  $0  $64,988  $64,994 


During the year ended At December 31, 2016, there2021 and 2020, the 5.875% senior notes due June 1, 2021 (“Senior Notes”) and the Subordinated Notes were no transfers between any Level 1recorded at face value, net of amortized issuance costs, as follows (in thousands) on the consolidated statements of financial condition:

 December 31, 2021  December 31, 2020 
  
Carrying
Value
  
Fair Value
Level 2
  
Carrying
Value
  
Fair Value
Level 2
 
5.875% Senior notes $0  $0  $24,215  $24,554 
Subordinated Notes  50,990   50,990   0   0 
Total $50,990  $50,990  $24,215  $24,554 

The carrying value of other financial assets and Level 2 holdings, or between Level 1 and Level 3 holdings.liabilities approximates their fair value based on the short-term nature of these items.


D.
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5. Income Taxes

GBL and its greater than 80% owned operating subsidiaries file a consolidated federal income tax return. Accordingly, the income tax provision represents the aggregate of the amounts provided for all companies.

ASU 2016-09, which was issued in March 2016 and became effective for interim and annual reporting periods beginning after December 15, 2016, simplifies several aspects of accounting for employee share-based payment transactions. Upon adoption of ASU 2016-09 on January 1, 2017, our accounting for excess tax benefits has changed and adopted prospectively, resulting in recognition of excess tax benefits or tax deficiencies against income tax expenses rather than additional paid-in capital.  During the twelve months ended December 31, 2017, the ETR was higher by 0.7% as a result of a reduction to previously recorded stock compensation tax benefits.
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The provision for income taxes for the years ended December 31, 2017, 20162021 and 20152020 consisted of the following:following (in thousands):


 2017  2016  2015  2021  2020 
(In thousands)         
Federal:               
Current $54,318  $63,991  $47,699  $25,170  $16,338 
Deferred  (3,670)  (4,424)  (1,441)  1,441   5,763 
State and local:                    
Current  6,212   6,652   5,359   4,034   749 
Deferred  (1,781)  (1,113)  109   197   2,141 
Total $55,079  $65,106  $51,726  $30,842  $24,991 


A reconciliation of the Federal statutory income tax rate to the effective tax rate is set forth below:


2017  2016 2015  2021  2020 
Statutory Federal income tax rate35.0% 35.0% 35.0%  21.0%  21.0%
State income tax, net of Federal benefit0.5  1.0 2.7   3.3   2.7 
Impact of Tax Act6.2  - - 
Section 162(m) limitation  6.2   6.2 
Other(0.3)  (0.3) (0.5)   (0.9)  0 
Effective income tax rate41.4% 35.7% 37.2%  29.6%  29.9%



Significant components of ourthe deferred tax assets and liabilities are as follows:follows (in thousands):


 2017  2016  2021  2020 
(In thousands)      
Deferred tax assets:            
Investments in securities $5,562  $5,655 
Stock compensation expense $110  $4,006   887   2,030 
Deferred compensation  14,740   7,629   0   400 
Capital lease obligation  633   944   659   661 
Other  238   311 
Total deferred tax assets  15,721   12,890   7,108   8,746 
Deferred tax liabilities:                
Investments in securities available for sale  (4,609)  (6,805)
Intangible asset amortization  (382)  (353)
Contingent deferred sales commissions  (189)  (322)  (108)  (85)
Intangible asset amortization  (233)  (235)
Other  (10)  (9)  (215)  (267)
Total deferred tax liabilities  (5,041)  (7,371)  (705)  (705)
Net deferred tax assets (liabilities) $10,680  $5,519 
Net deferred tax assets $6,403  $8,041 

As a result of the vesting of RSAs, and in accordance with GAAP, decreases of $0.4 million and $1.2 million were recorded in additional paid in capital for the years ended December 31, 2016 and December 31, 2015, respectively, as the actual tax benefits realized by the Company were less than the previously recorded deferred tax benefits.


As of December 31, 20172021 and 2016,2020, the total amount of gross unrecognized tax benefits related to uncertain tax positions was approximately $13.3 million and $15.0 million, respectively, of which recognition of $10.5 million and $9.8 million, respectively, would impact the Company’s effective tax rate.

As of December 31, 2017 and 2016, the net liability for unrecognized tax benefits related to uncertain tax positions was $14.5approximately $16.0 million and $14.1$15.3 million, respectively, of which recognition of $12.6 million and is included in accrued expenses and other liabilities on$12.1 million, respectively, would impact the consolidated statements of financial condition.Company’s effective tax rate.


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A reconciliation of the beginning and ending amount of gross unrecognized tax benefits related to uncertain tax positions is as follows:follows (in millions):


 (in millions) 
Balance at December 31, 2014 $16.0 
Balance at December 31, 2019 $16.3 
Additions based on tax positions related to the current year  2.8   0.5 
Additions for tax positions of prior years  0.1   0 
Reductions for tax positions of prior years  (0.5)  (1.5)
Settlements  - 
Balance at December 31, 2015  18.4 
Balance at December 31, 2020  15.3 
Additions based on tax positions related to the current year  2.3   2.0 
Additions for tax positions of prior years  1.2   0 
Reductions for tax positions of prior years  (6.9)  (1.3)
Settlements  - 
Balance at December 31, 2016  15.0 
Additions based on tax positions related to the current year  2.2 
Additions for tax positions of prior years  - 
Reductions for tax positions of prior years  (3.9)
Settlements  - 
Balance at December 31, 2017 $13.3 
Balance at December 31, 2021 $16.0 


As of December 31, 2021 and 2020, the net liability for unrecognized tax benefits related to uncertain tax positions was $20.2 million and $19.2 million, respectively, and is included in accrued expenses and other liabilities on the consolidated statements of financial condition. These amounts include penalties and interest related to tax uncertainties in income taxes of approximately $9.5 million and $8.9 million at December 31, 2021 and 2020, respectively. The Company records penalties and interest related to tax uncertainties in income taxes. As of December 31, 2017 and 2016, the Company had recognized gross liabilities of approximately $4.8 million and $6.7 million related to interest and penalties, respectively. For the years ended December 31, 2017 and 2016, theThe Company recorded an income tax benefit related to a decrease in its liability for interest and penalties of $0.3 million and $0.7 million, respectively.  For the years ended December 31, 2015, the Company recorded income tax expensesexpense related to an increase in its liability for interest and penalties of $1.1 million.$0.4 million and $0.8 million for the years ended December 31, 2021 and 2020, respectively.

The Tax Cuts and Jobs Act that was enacted in December 2017 resulted in an $8.2 million write down of net deferred tax assets.

Specifically, the 2017 income tax expense included the following amounts related to the Tax Cuts and Jobs Act enacted in the United States in December 2017.

·$10.9 million tax expense related to the revaluation of certain deferred income tax assets;
·$2.7 million non-cash tax benefit related to the revaluation of certain deferred income tax liabilities


The Company is currently being audited by New York State for years 2007 through 20112017 but does not expect that any potential assessments will be material to its results of operations. The Company is subject to future audits by New York State for all years after 2011.2017. The Company’s remaining state income tax returns are subject to future audit for allvarying years after 2010.2016. The Company’s Federal tax returns are subject to future audit for 2015 and 2016.all years after 2017.


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E.6. Earnings per Share


Basic earnings per share is calculated by dividing net income by the weighted average shares outstanding. Diluted earnings per share is calculated using the treasury stock method by dividing net income by the total weighted average shares of common stock outstanding and restricted stock awards. The computations of basic and diluted net income per share arewere as follows:follows (in thousands, except per share amounts):


  For the Years Ending December 31, 
(In thousands, except per share amounts) 2017  2016  2015 
Basic:         
Income from continuing operations $77,809  $117,121  $87,299 
Loss from discontinued operations, net of taxes  -   -   (3,887)
Net income attributable to GAMCO Investors, Inc.'s shareholders
 $77,809  $117,121  $83,412 
             
Weighted average shares outstanding  28,980   29,182   25,425 
             
Basic net income per share attributable to GAMCO            
Investors, Inc.'s shareholders            
Continuing operations $2.68  $4.01  $3.43 
Discontinued operations  -   -   (0.15)
Total $2.68  $4.01  $3.28 
             
Diluted:            
Income from continuing operations $77,809  $117,121  $87,299 
Add interest on convertible notes, net of management fee and taxes  2,604   1,133   - 
Total income from continuing operations  80,413   118,254   87,299 
Loss from discontinued operations, net of taxes  -   -   (3,887)
Net income attributable to GAMCO Investors, Inc.'s shareholders $80,413  $118,254  $83,412 
             
Weighted average share outstanding  28,980   29,182   25,425 
Dilutive stock options and restricted stock awards  192   234   286 
Assumed conversion of convertible notes  1,775   754   - 
Total  30,947   30,170   25,711 
             
Diluted net income per share attributable to GAMCO            
Investors, Inc.'s shareholders            
Continuing operations $2.60  $3.92  $3.40 
Discontinued operations  -   -   (0.15)
Total $2.60  $3.92  $3.24 
 Years Ending December 31, 
  2021  2020 
Basic:      
Net income $73,199  $58,693 
Weighted average shares outstanding  26,267   26,571 
Basic net income per share $2.79  $2.21 
         
Diluted:
        
Net income $73,199  $58,693 
         
Weighted average share outstanding  26,267   26,571 
Restricted stock awards  542   109 
Total  26,809   26,680 
         
Diluted net income per share $2.73  $2.20 

F.
7. Debt


Debt consists of the following:Senior Notes

  December 31, 2017  December 31, 2016 
  Carrying  Fair Value  Carrying  Fair Value 
  Value  Level 2  Value  Level 2 
(In thousands)            
4.5% Convertible note $-  $-  $109,835  $111,525 
AC 4% PIK Note  50,000   50,572   100,000   100,930 
AC 1.6% Note  15,000   14,972   -   - 
5.875% Senior notes  24,144   24,543   24,120   24,558 
Total $89,144  $90,087  $233,955  $237,013 


4.5% Convertible Note

On August 15, 2016,May 31,2011, the Company issued via a private placement a 5-year, $11010-year, $100 million convertible note (“Convertible Note”) to Cascade Investment, L.L.C. Senior Notes. The noteSenior Notes bore interest at a rate of 4.5% per annum and was convertible into shares of the Company’s Class A Common stock (“Class A Stock”) at an initial conversion price of $55.00 per share.  The Convertible Note was initially convertible into two million shares of the Company’s Class A Stock, subject to adjustment pursuant to the terms of the Convertible Note.  The Company was required to repurchase the Convertible Note at the request of the holder on specified dates or after certain circumstances involving a Fundamental Change (as defined in the Convertible Note).  The Company had the option to repurchase, in whole or in part (must be at least 50%), the Convertible Note at $101 on or after February 15, 2019.  At issuance, the Company recorded $174,000 of costs in connection with the issuance of the Convertible Note that was scheduled to be amortized over the five year life.  On November 20, 2017, the Company and the Convertible Note holder agreed to amend the Convertible Note to allow for an early redemption if the Company paid the Convertible Note holder 103% of the unpaid principal plus all accrued but unpaid interest on the redemption date.  On November 21, 2017, the Company redeemed the Convertible Note for $114.6 million.  The payment was equal to 103% of the unpaid principal amount of the note plus accrued interest.  As a result, the Company recorded a loss on extinguishment of debt of $3.3 million and expensed the remaining $135,000 of issuance costs.

69
GGCP, Inc. (“GGCP”), which owns approximately 62 % of the equity interest of the Company, initially deposited cash equal to the principal amount of the Note and six months interest (“Initial Deposit”) into an escrow account established pursuant to an escrow agreement by and among GGCP, the Company, the Convertible Note holder and the escrow agent (the “Escrow Agreement”).  In connection with the Initial Deposit made by GGCP, the Company had agreed that GGCP had a right to demand payment in an amount equal to any funds withdrawn from the escrow account by the Convertible Note holder.  On September 30, 2017, in connection with an amendment to the Escrow Agreement and in exchange for approximately 53% of the assets in the escrow account, the Company paid GGCP $60 million.  On November 21, 2017, the Company paid GGCP $53 million for the remaining 47% of the assets in the escrow account that it did not previously own.
AC 4% PIK Note

In connection with the spin-off of AC on November 30, 2015, the Company issued a $250 million promissory note (the “AC 4% PIK Note”) payable to AC.  The AC 4% PIK Note bears interest at 4.0% per annum.  The original principal amount has a maturity date of November 30, 2020.  Interest on the AC 4% PIK Note will accrue from the date of the last interest payment, or if no interest has been paid, from the effective date of the AC 4% PIK Note.  At the election of the Company, payment of interest on the AC 4% PIK Note may be paid in kind (in whole or in part) on the then-outstanding principal amount (a “PIK Amount”) in lieu of cash. All PIK Amounts added to the outstanding principal amount of the AC 4% PIK Note will mature on the fifth anniversary from the date the PIK Amount was added to the outstanding principal of the AC 4% PIK Note.  In no event may any interest be paid in kind subsequent to November 30, 2019.  The Company may prepay the AC 4% PIK Note (in whole or in part) prior to maturity without penalty.

During 2017, the Company prepaid $50 million of principal of the AC 4% PIK Note.  $30 million of the prepayment was applied against the principal amount due on November 30, 2018 and $20 million against the principal amount due on November 30, 2019.  The remaining $50 million principal amount outstanding at December 31, 2017 is due on November 30, 2020.
AC 1.6% Note

On December 26, 2017, the Company borrowed $15 million from AC in exchange for a note that bears interest at 1.6% per annum and is due in full on February 28, 2018.
5.875% Senior Notes

On May 31, 2011, the Company issued $100 million of senior unsecured notes (“Senior Notes”) at par. The net proceeds of $99.1 million are being used for working capital and general corporate purposes, which may include acquisitions and seed investments. The issuance costs of $0.9 million have been capitalized and will be amortized over the term of the debt or pro rata upon a repurchase. The notes mature on June 1, 2021 and bear interest at 5.875% per annum, payable semi-annually on June 1 and December 1 of each year and commenced on December 1,2011. Upon a change of control triggering event, as defined in the indenture, the Company is required to offer to repurchase the notes at 101% of their principal amount.

On November 18, 2015, the Company commenced a tender offer (the “Offer”) to purchase for cash up to $100 million aggregate principal amount of the Senior Notes at a price of 101% of the principal amount.  $75.8 million of face value Senior Notes were tendered upon the expiration of the Offer.  The tender was accounted for as an extinguishment of debt and resulted in a loss of $0.8 million and is included in extinguishment of debt on the consolidated statements of income.  In connection with the tender, the Company also expensed $0.4 million of pro rata unamortized issuance costs which was included in interest expense on the consolidated statements of income. At December 31, 2017 and 2016,2020, the debt was recorded at its face value, net of issuance costs, of $24.1$24.2 million. On June 1, 2021, the Senior Notes matured and were fully repaid.

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Subordinated Notes

On June 14, 2021, the Company entered into an indenture with Computershare Trust Company, N.A., as trustee, relating to GAMCO’s issuance of up to approximately $54.0 million of 2-year Subordinated Notes. The Subordinated Notes were issued to shareholders as a special dividend of $2.00 per share on Class A Stock and $24.1Class B common stock (“Class B Stock”). The Company issued approximately $52.2 million respectively.

Loan from GGCP

Inof Subordinated Notes in connection with the Offer,special dividend, paid out $0.4 million of cash in lieu of fractional Subordinated Notes, and reserved approximately $1.9 million of Subordinated Notes to be issued upon vesting of RSAs. The Subordinated Notes bear interest at a rate of 4% per annum for the one-year period ending June 15, 2022 and 5% per annum for the one-year period ending June 15, 2023 and mature on June 15, 2023. The Subordinated Notes are transferable, callable at the option of GAMCO, in whole or in part, at any time or from time to time at a redemption price equal to 100% of the principal amount of the Subordinated Notes to be redeemed plus interest, and puttable, in whole or in part, at any time after September 15, 2021 at a redemption price equal to 100% of the principal amount of the Subordinated Notes to be redeemed upon notice of redemption of at least 60 days but not more than 90 days before the redemption date.

During the year ended December 31, 2021, the Company borrowed $35.0 million from GGCP.  The loan had a term of one year and bore interest at 90-day LIBOR plus 3.25%, reset and payable quarterly.  On March 18, 2016, the Company paid back $15.0issued $0.5 million of new Subordinated Notes from the loan.  During the second quarterreserve of 2016 theapproximately $1.9 million for RSAs that vested. The Company paid back the remaining $20.0redeemed $1.6 million of Subordinated Notes during the loan.year ending December 31, 2021 relating to put notices received at least 60 days prior to the end of the quarter. As of December 31, 2021, the debt was recorded at its face value, net of issuance costs of $75 thousand, of $51.0 million of Subordinated Notes outstanding.


708. Equity

The fair value of the Company’s debt, which is a Level 2 valuation, is estimated basedShares outstanding were 26.7 million and 27.5 million on either quoted market prices for the same or similar issues or on the current rates offered to the Company for debt of the same remaining maturities or using market standard models. Inputs into these models include credit rating, maturityDecember 31,2021 and interest rate.2020, respectively.

G.  Equity


Voting Rights


The holders of Class A Stock and Class B Stock have identical rights except that (i) holders of Class A Stock are entitled to one1 vote per share, while holders of Class B Stock are entitled to ten10 votes per share, on all matters to be voted on by shareholders in general, and (ii) holders of Class A Stock are not eligible to vote on matters relating exclusively to Class B Stock and vice versa.


Stock Award and Incentive Plan


The Company maintains one Plana stock award and incentive plan approved by the shareholders (the “Plan”), which is designed to provide incentives which will attract and retain individuals key to the success of GBL through direct or indirect ownership of ourGBL common stock. A maximum of 7.5 million shares of Class A Stock have been reserved for issuance under the Plan by the Compensation Committee of the Company’s Board of Directors. Benefits under the Plan may be granted in any one or a combination of stock options, stock appreciation rights, restricted stock, restricted stock units, stock awards, dividend equivalents, and other stock or cash based awards. A maximumUnder the Plan, the Compensation Committee may grant RSAs, each of 6.0 million shareswhich entitles the grantee to one share of Class A Stock have been reserved for issuance under the Plan by a committee of the Board of Directors responsible for administering the Plan (“Compensation Committee”). Under the Plan, the committee may grant RSAssubject to restrictions, and either incentive or nonqualified stock options, with a term not to exceed ten years from the grant date and at an exercise price that the committeeCompensation Committee may determine.determine, which were recommended by the Company’s Chairman who does not receive any awards.


ThereOn March 5, 2020, 392,700 RSAs were noissued at a grant price of $14.31 per RSA. On December 28, 2020, 69,500 RSAs were issued during 2017, 2016 or 2015.  at a grant price of $18.18 per RSA. On June 15, 2021, 396,800 phantom RSAs were issued at a grant price of $25.02 per phantom RSA and have similar vesting terms to the RSAs, except that the phantom RSAs will be settled in cash based on the fair value of the shares on the vesting date. Thus, the phantom RSAs were determined to be liability awards and are adjusted for changes in the Company’s stock price at each reporting date, with mark to market adjustments recognized in the results of operations.

As of December 31, 20172021 and 2016,2020, there were 19,400 RSA shares411,200 and 424,340 RSA shares,1,079,650, respectively, RSAs outstanding that were issued at anwith weighted average grant prices per RSA of $14.93 and $19.45, respectively, and 10,000 stock options outstanding with an exercise price of $65.67$25.55. As of December 31, 2021, there were 380,300 phantom RSAs outstanding with weighted average grant prices per sharephantom RSA of $25.02 and $65.74 per share, respectively. The $65.67 per share and $65.74 per share reflect pre AC spin-off stock prices.  All grantsa liability balance of RSAs were recommended by the Company's Chairman, who did not receive a RSA, and approved by the Compensation Committee of the Company's Board of Directors. This expense, net of estimated forfeitures, is recognized over the vesting period for these awards which is either (1) 30% over three years from the date of grant and 70% over five years from the date of grant or (2) 30% over three years from the date of grant and 10% each year over years four through ten from the date of grant. During the vesting period, dividends to RSA holders are held for them until the RSA vesting dates and are forfeited if the grantee is no longer employed by the Company on the vesting dates.  Dividends declared on these RSAs, less estimated forfeitures, are charged to retained earnings on the declaration date.  For RSAs issued by GAMCO prior to the spin-off of AC on November 30, 2015, the Company expenses the portion of the RSAs that correspond to the employee allocation between GAMCO and AC.$1.2 million included within compensation payable.

During 2015, the Board of Directors accelerated the lapsing of restrictions on the November 2013 grant of RSAs resulting in recognition of $3.5 million in stock compensation expense during 2015 that would have been recorded in 2016 through 2018.


On June 1, 2017, the Compensation Committee of AC accelerated the vesting of all 420,240 AC RSAs outstanding effective JuneNovember 15, 2017.  As a result, GBL recorded an incremental $3.7 million of stock-based compensation expense for 2017.  This amount related to GBL teammates who held AC RSAs.

On August 7, 2017,2021, the Compensation Committee of GBL accelerated the vesting relating to 201,120483,515 of GBL RSAs outstanding effective August 31, 2017.December 15, 2021. As a result, GBL recorded an incremental $1.8$3.8 million of stock-based compensation expense for 2017.  2021 that would have been recognized in future years. For the years ended December 31,2021 and 2020, the Company recorded approximately $7.5 million and $4.2 million, respectively, in stock-based non-cash RSA compensation expense, including such incremental expense from the accelerated vesting, which resulted in the recognition of tax benefits of approximately $1.9 million and $1.0 million, respectively. For the year ended December 31, 2021, the Company recorded approximately $1.2 million in stock-based phantom RSA compensation expense, which resulted in the recognition of tax benefits of approximately $0.3 million.

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The total compensation costs related to non-vested RSA and phantom RSA awards to teammates, excluding the CEO who received none, not yet recognized was approximately $3.6 million and $7.4 million, respectively, as of December 31,2021.

On December 27, 2017,January 2,2020, the Deferred Cash Compensation Committee of GBL acceleratedAgreement (“DCCA”) with the vesting relating to an additional 144,650 GBL RSAs resulting in an incremental $1.3 million of expense in 2017.

DuringCEO covering compensation from 2016 vested in accordance with the deferred compensation agreement with Mr. Gabelli for the full year of 2016, the Company issued 2,314,695 RSUs, based upon the VWAPterms of the Company’s Class A Stock for 2016agreement and a cash payment in the amount of $32.8187, in satisfaction of Mr. Gabelli’s variable compensation of $75,965,266 for 2016.  These RSUs will vest 100% on January 1, 2020 and are being expensed ratably over the vesting period.  For 2017 and 2016, the Company expensed 25%, or $18,991,316, of this RSU in each year.  The Company will pay Mr. Gabelli an amount equal$43.7 million was made to the number of RSUs valued atCEO. This payment was reduced by $32.3 million resulting from the DCCA being indexed to the GBL stock price and utilizing the lesser of the VWAP of the Company’s Class A Stock for 2016 or the value on the lapse date.vesting date ($18.8812) versus the VWAP over 2016 ($32.8187). Notwithstanding its ability to settle the award in stock, given the Company’s intent to settle itpay, and eventual settlement in, cash, in accordance with GAAP (ASC 718), the award iswas accounted for as a liability-classifiedliability award and not as an equity-classifiedequity award. The liability iswas remeasured at fair value on each reporting period from December 31, 2016 until the vesting date.  However, given the cap on the obligation in that Mr. Gabelli will not receive cash in excess of the VWAP of the Company’s Class A Stock for the 2016 fiscal year, the remeasurement of the liability at fair value will never exceed its value determined using that VWAP price.  Therefore, in accordance with GAAP, the Company marked to market the RSU payable on December 31, 2017 and December 31, 2016 to the closing prices of the Company’s Class A Stock of $29.65 and $30.89, respectively.  These mark to market adjustments resulted in a reduction of the RSU expense of $2.6 million and $1.1 million for 2017 and 2016, respectively.


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On December 23, 2016, GAMCO entered into a deferred compensation agreement with Mr. Gabelli whereby his variable compensation for the first half of 2017 will be in the form of RSUs determined by the VWAP of the Company’s Class A Stock during the first half of 2017.  During 2017, in accordance with the deferred compensation agreement with Mr. Gabelli for the first half of 2017, the Company issued 1,244,018 RSUs, based upon the VWAP of the Company’s Class A Stock for the first half of 2017 of $29.6596, in satisfaction of Mr. Gabelli’s variable compensation of $36,897,086 for that period.  The RSUs will vest 100% on July 1, 2018, and the Company intends to settle the award in cash at that time; however, the Company reserves the right to issue shares of the Company’s Class A Stock in lieu of such cash payment.  Under the terms of the agreement the Company will pay Mr. Gabelli an amount equal to the number of RSUs valued at the lesser of the VWAP of the Company’s Class A Stock for the first half of 2017 or the value on the lapse date or, if not a trading day, then the first trading date thereafter.  For GAAP reporting, the Company will recognize the amount of Mr. Gabelli’s 2017 first half compensation ratably over the vesting period, or approximately 67% of the total during 2017 and 33% during 2018.  Notwithstanding its ability to settle the award in stock, given the Company’s intent to settle it in cash, in accordance with GAAP (ASC 718), the award is accounted for as a liability-classified award and not as an equity-classified award.  The liability is remeasured at fair value on each reporting period from June 30, 2017 until the vesting date.  However, given the cap on the obligation in that Mr. Gabelli will not receive cash in excess of the VWAP of the Company’s Class A Stock for the first half of the 2017 fiscal year, the remeasurement of the liability at fair value will never exceed its value determined using that VWAP price.  Therefore, in accordance with GAAP, the Company marked to market the RSU payable on December 31, 2017 to the closing price of the Company’s Class A Stock of $29.65. This mark to market adjustment resulted in a reduction of the RSU expense of $17,000$1.4 million for 2017.2020.


Stock Repurchase Program

In March 1999, the Board of Directors established a stock repurchase program (the “Stock Repurchase Program”) to grant management the authority to repurchase shares of Class A Stock. On September 30, 2017, GAMCO entered intoMarch 18, 2020, the Board of Directors authorized an increase to purchase $30 million of its outstanding Class A Stock, which resulted in a deferred compensation agreement with Mr. Gabelli whereby his variable compensation for the fourth quarter of 2017 will bemodification in the form of RSUs determined by the VWAPauthorization from previously being stated in shares to being stated in dollars. On August 4, 2020, the Board of the Company’sDirectors authorized a share repurchase of 3,000,000 shares of its outstanding Class A Stock, during the fourth quarter of 2017.  During 2017, in accordance with the deferred compensation agreement with Mr. Gabelli for the fourth quarter of 2017, the Company issued 530,662 RSUs, based upon the VWAP of the Company’s Class A Stock for the fourth quarter of 2017 of $29.1875, in satisfaction of Mr. Gabelli’s variable compensation of $15,488,708 for that period.  The RSUs will vest 100% on April 1, 2019, and the Company intendswhich replaced any outstanding share repurchase authorizations. Purchases may be made from time to settle the award in cashtime, at that time; however, the Company reserves the right to issue shares of the Company’s Class A Stock in lieu of such cash payment.  Under the terms of the agreement the Company will pay Mr. Gabelli an amount equal to the number of RSUs valued at the lesser of the VWAP of the Company’s Class A Stock for the fourth quarter of 2017 or the value on the lapse date or, if not a trading day, then the first trading date thereafter.  For GAAP reporting, the Company will recognize the amount of Mr. Gabelli’s 2017 fourth quarter compensation ratably over the vesting period, or approximately 17% of the total during 2017, 66% during 2018 and 17% during 2019.  Notwithstanding its ability to settle the award in stock, given the Company’s intent to settle it in cash, in accordance with GAAP (ASC 718), the award is accounted for as a liability-classified award and not as an equity-classified award.  The liability is remeasured at fair value on each reporting period from December 31, 2017 until the vesting date.  However, given the cap on the obligation in that Mr. Gabelli will not receive cash in excess of the VWAP of the Company’s Class A Stock for the fourth quarter of the 2017 fiscal year, the remeasurement of the liability at fair value will never exceed its value determined using that VWAP price.  Therefore, in accordance with GAAP, and provided that the closing price of the Company’s Class A Stock of $29.65 was higher than the VWAP price over the fourth quarter of 2017 there was no mark to market adjustment recorded.

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A summary of the stock option and RSA activity for the years ended December 31, 2017 and 2016 is as follows:

  Options  RSAs 
           Weighted Average 
     Weighted Average     Grant Date 
  Shares  Exercise Price  Shares  Fair Value 
             
Outstanding at December 31, 2015  -  $-   553,100  $64.02 
Granted  -   -   -   - 
Forfeited  -   -   (9,300)  64.85 
Exercised / Vested  -   -   (119,460)  57.86 
Outstanding at December 31, 2016  -   -   424,340   65.74 
Granted  -   -   -   - 
Forfeited  -   -   (4,500)  78.62 
Exercised / Vested  -   -   (400,440)  65.60 
Outstanding at December 31, 2017  -  $-   19,400  $65.67 
                 
Shares available for future issuance at                
December 31, 2017  281,349             

The total compensation costs related to non-vested awards not yet recognized is approximately $187,000 as of December 31, 2017. This will be recognized as expensemanagement’s discretion, in the following periods (in thousands):open market or in private transactions, including the use of trading plans, as well as pursuant to accelerated share repurchase programs or other share repurchase strategies.

2018  2019  2020  2021 
$187  $-  $-  $- 
              
2022  2023  2024  2025 
$-  $-  $-  $- 


For the years ended December 31, 2017, 20162021 and 2015,2020, the Company recorded approximately $8.7 million, $4.0 millionrepurchased 700,722 and $9.9 million, respectively, in stock based compensation expense which resulted in the recognition of tax benefits of approximately $3.3 million, $1.5 million and $3.7 million, respectively. The $8.7 million for the year ended December 31, 2017, includes $6.8 million in stock compensation expense as a result of accelerating 345,770 RSAs.  The $9.9 million for the year ended December 31, 2015, includes $3.5 million in stock compensation expense as a result of accelerating the November 2013 grant of RSAs.  There were no comparable accelerations in the year ended December 31, 2016.

For the years ended December 31, 2015, the Company received approximately $1.2 million from the exercise of stock options which resulted in tax benefits of  $0.1 million.

Stock Repurchase Program

In 1999, the Board of Directors established the Stock Repurchase Program through which the Company has been authorized to purchase up to $9 million of Class A Stock. The Board of Directors authorized 500,000, 500,000 and 425,352 shares in August 2015, May 2017 and August 2017, respectively. In 2017, 2016 and 2015, we repurchased 484,526 shares, 348,687 shares and 426,628296,296 shares, respectively, at an average price of $29.56 per share $30.88of $23.54 and $13.16, respectively. At December 31,2021, the total shares available under the Stock Repurchase Program to be repurchased in the future were 2,173,937. The Stock Repurchase Program has no expiry.

On March 11, 2020, GAMCO commenced an offer to purchase up to $30 million in aggregate purchase price of its Class A Stock, pursuant to which holders of shares were invited to tender some or all of their shares at a price within the range of $15.00 to $17.00 per share, which would have enabled GAMCO to purchase for cash up to 2,000,000 shares of its Class A common stock (such offer, the “Offer”). The Offer which was due to expire on April 8, 2020, was terminated on March 18, 2020 as a result of the suspension of trading and market index conditions of the Offer not having been satisfied. As a result of this termination, no shares were purchased in the Offer and all shares previously tendered and not withdrawn were promptly returned to tendering holders.

Dividends

During 2021 and 2020, the Company declared cash dividends of $0.10 per share and $63.85 per share, respectively.  Please note, however, 2015 has not been adjusted for the Spin-off.  (For 2015, 413,228 shares were at an average investment of $64.86 per share prior to the distribution of AC on November 30, 2015 and 13,400 shares were at an average price of $32.56 following the distribution of AC.)  There remain 674,294 shares available under this program at December 31, 2017.
Dividends

During 2017, 2016 and 2015, the Company declared dividends of $0.08 per share, $0.08 per share and $0.28$0.98 per share, respectively, to class A and class B shareholders totaling $2.4$2.7 million $2.4 and $26.8 million and $7.5 million,, respectively. Under the terms of the RSA agreements, we accrue dividends, less estimated forfeitures, for RSA grantees from the date of grant but these dividends are held for grantees who are not entitled to receive dividends until their awards vest and only if they are still employed byDuring 2021, the Company at those dates. Asdeclared a special dividend of December 31, 2017$2.00 per share to shareholders of Class A Stock and 2016, dividends accrued on RSAs not yet vested were approximately $24,000 andClass B Stock payable in Subordinated Notes that totaled $54.5 million, of which $0.4 million respectively.was paid in cash in lieu of fractional Subordinated Notes.

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Shelf Registration


In April 2015,2018, the SEC declared effective the Company’s “shelf” registration statement on Form S-3S-3 giving the Company the flexibility to sell any combination of senior and subordinate debt securities, convertible debt securities, and equity securities (including common and preferred securities) up to a total amount of $500 million.$500 million. The shelf iswas available through April 2018,2021. On July 21, 2021, the Company filed a new “shelf” registration statement on Form S-3 on similar terms, which was declared effective on July 27, 2021.

9. Goodwill and Identifiable Intangible Assets

Goodwill is initially measured as the excess of the cost of the acquired business over the sum of the amounts assigned to assets acquired less the liabilities assumed. At December 31, 2021 and 2020, there was goodwill of $0.2 million maintained on the consolidated statements of financial condition related to G.distributors.

As a result of becoming the advisor to the Gabelli Enterprise Mergers and Acquisitions Fund and the associated consideration paid, the Company maintains an identifiable intangible asset of $1.3 million at December 31, 2021 and 2020. This investment advisory agreement is next up for renewal in February 2023. As a result of becoming the advisor to the Bancroft Fund Ltd. and the Ellsworth Growth and Income Fund Ltd. and the associated consideration paid, the Company maintains an identifiable intangible asset of $1.6 million at December 31, 2021 and 2020. The investment advisory agreements for the Bancroft Fund Ltd. and the Ellsworth Growth and Income Fund Ltd. are next up for renewal in August 2022. Each of these investment advisory agreements are subject to annual renewal by the respective fund’s board of directors, which the Company expects to be renewed, and the Company does not expect to incur additional expense as a result, which is consistent with other investment advisory agreements entered into by the Company.

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The Company assesses the recoverability of goodwill and intangible assets at least annually, or more often should events warrant. In December 2019, a novel strain of coronavirus (“COVID-19”) surfaced in China and has since spread globally. On March 11, 2020, COVID-19 was identified as a global pandemic by the World Health Organization. In response to its spread, governmental authorities have imposed restrictions on travel and congregation and the temporary closure of many non-essential businesses in affected jurisdictions, including, beginning in March 2020, in the U.S. The pandemic and resulting economic dislocations have had adverse consequences for the portfolios of the Funds, including the Enterprise Fund, Bancroft Fund, and Ellsworth Fund. For the year ended December 31, 2020, as a result of the dislocations in the financial markets resulting from COVID-19, impairment analyses were performed which resulted in $589 thousand impairment charges to the identifiable intangible asset related to the Enterprise Fund included within other operating expenses on the consolidated statements of income. There was no impairment charge recorded to the identifiable intangible asset related to the Enterprise Fund for the year ended December 31, 2021. There was 0 impairment charge recorded to the identifiable intangible asset related to the Bancroft Fund or Ellsworth Fund.

At November 30, 2021 and 2020, management conducted its annual assessments of the recoverability of the intangible assets and determined that there was 0 impairment of it on the consolidated financial statements.

10. Commitments and Contingencies

From time itto time, the Company may be renewed.named in legal actions and proceedings in the normal course of business. These actions may seek substantial or indeterminate compensatory as well as punitive damages or injunctive relief. The Company is also subject to governmental or regulatory examinations or investigations. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. There are currently no such matters pending that the Company believes could have a material adverse effect on its consolidated financial condition, operations, or cash flows at December 31, 2021.


Leases
H. Capital Lease


On December 5, 1997, prior to the Offering in 1999, the Company entered into a fifteen-year lease, expiring on April 30, 2014,2013, of office space from an entity controlled by members of the Chairman'sChairman’s family. On June 11, 2013, the Company modified and extended its lease with M4E, LLC, the Company’s landlord at 401 Theodore Fremd Ave,One Corporate Center, Rye, NY. The lease term was extended to December 31, 2028 and the base rental remained at $18 per square foot, or $1.1 million, for 2014. From January 1, 2015For each subsequent year through December 31, 2028, the base rental will beis determined by the change in the consumer price index for the New York Metropolitan Area for November of the immediate prior year with the base period as November 2008 for the New York Metropolitan Area.


TheThis lease has been accounted for as a finance lease under FASB ASC Topic 842 (and prior to 2019, as a capital lease under FASB ASC Topic 840, Leases) as it transfers substantially all the benefits and risks of ownership to GBL.the Company. The Company has recorded the leased property as an asset and a capital lease obligation for the present value of the obligation of the leased property. The leased property is amortized on a straight-line basis from the date of the most recent extension to the end of the lease. The capital lease obligation is amortized over the same term using the interest method of accounting. CapitalFinance lease improvements are amortized from the date of expenditure through the end of the lease term or the useful life, whichever is shorter, on a straight-line basis. The lease provides that all operating expenses relating to the property (such as property taxes, utilities, and maintenance) are to be paid by the lessee, GBL.GAMCO. These are recognized as expenses in the periods in which they are incurred. Accumulated amortization on the leased property was approximately $4.9 million and $4.6 million at December 31, 20172021 and 2016,2020 was approximately $5.7 million and $5.5 million, respectively.


Future minimumThe Company also rents office space under operating leases which expire at various dates through December 31, 2030.

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The following table summarizes the Company’s leases for the years presented (in thousands, except lease payments for this capitalizedterm and discount rate):

 Years Ended December 31, 
  2021  2020 
Finance lease cost - interest expense $1,034  $1,062 
Finance lease cost - amortization of right-of-use asset  267   267 
Operating lease cost  664   387 
Sublease income  (150)  (184)
Total lease cost $1,815  $1,532 
         
Other information:        
Cash paid for amounts included in the measurement of lease liabilities        
Operating cash flows from finance lease $0  $0 
Operating cash flows from operating leases  501   328 
Financing cash flows from finance lease  264   218 
Total cash paid for amounts included in the measurement of lease liabilities
 $765  $546 
Right-of-use assets obtained in exchange for new operating lease liabilities $2,356   324 
Weighted average remaining lease term—finance lease (years)  7.0   8.0 
Weighted average remaining lease term—operating leases (years)  3.3   2.2 
Weighted average discount rate—finance lease  19.1%  19.1%
Weighted average discount rate—operating leases  5.0%  5.0%

The finance lease right-of-use asset, net of amortization, at December 31, 2017 are as follows:

  (In thousands) 
2018 $1,230 
2019  1,080 
2020  1,080 
2021  1,080 
2022  1,080 
Thereafter  6,480 
Total minimum obligations  12,030 
Interest  7,075 
Present value of net obligations $4,955 

Lease payments under this agreement amounted to approximately $1.2 million, $1.22021 and 2020 was $1.5 million and $1.2$1.7 million, for eachrespectively, and the operating right-of-use assets, net of amortization, were $2.6 million and $0.8 million, respectively, and these right-of-use assets were included within finance lease in the years endedconsolidated statements of financial condition.

The following table summarizes the maturities of lease liabilities at December 31, 2017, 2016 and 2015, respectively. 2021 (in thousands):

Year ending December 31, Finance Leases  Operating Leases  Total Leases 
2022 $1,359  $730  $2,089 
2023  1,080   557   1,637 
2024  1,080   433   1,513 
2025  1,080   372   1,452 
2026  1,080   372   1,452 
Thereafter  2,160   1,313   3,473 
Total lease payments $7,839  $3,777  $11,616 
Less imputed interest  (3,708)  (2,780)  (6,488)
Total lease liabilities
 $4,131  $997  $5,128 

The capitalfinance lease contains an escalation clause tied to the change in the New York Metropolitan Area Consumer Price Index which may cause the future minimum payments to exceed $1,080,000 annually.the amounts shown above. Future minimum lease payments have not been reduced by related minimum future sublease rentals of approximately $1.1$0.5 million due over the next sixthree years, which are due from affiliated entities. Total minimum obligations exclude the operating expenses to be borne by the Company, which are estimated to be approximately $0.7 million per year.


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I. Contractual Obligations

We rent office space under leases which expire at various dates through January 31, 2022. Future minimum lease commitments under these operating leases as of December 31, 2017 are as follows:

  (In thousands) 
2018 $808 
2019  479 
2020  47 
2021  47 
2022  4 
Total $1,385 

Equipment rentals and occupancy expense amounted to approximately $2.2 million, $2.4 million and $2.3 million for the years ended December 31, 2017, 2016 and 2015, respectively.

J.11. Shareholder-Designated Charitable Contributions


During 2013, the Company established a Shareholder Designated Charitable Contributionshareholder-designated charitable contribution program. Under the program, each shareholder is eligible to designate a charity to which the Company would make a donation based upon the actual number of shares registered in the shareholder’s name. Shares held in nominee or street name wereare not eligible to participate. The Board of Directors approved one contribution during 2015 of $0.25 per registered share.  During 2015,2021 and 2020, the Company recorded a chargecharges of $6.4$11.3 million or $0.12 per diluted share, net of management fee and tax benefit related to the contributions$5.4 million, respectively, which were included in charitable contributions on the consolidated statements of income.  During 2017, the Company recorded a charge of $4.1 million, or $0.08 per diluted share, net of management fee and tax benefit related to contributions which were included inshareholder-designated charitable contributions on the consolidated statements of income.


K.
12. Related Party Transactions


The following is a summary of certain related party transactions.


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GGCP Holdings, LLC, a subsidiary of GGCP, which is majority-owned by Mr. Gabelli, owns a majority of ourthe outstanding shares of the Company’s Class B Stock. As of both December 31, 2021 and 2020, such ownership represented approximately 93% of the combined voting power of the outstanding common stock and approximately 69% of the equity interest. As of December 31, 2021 and 2020, AC and its subsidiaries own approximately 2.4 million and 2.8 million shares, respectively, of the Company’s Class A Stock representing approximately 91%1% and 1%, respectively, of the combined voting power and 63%approximately 9% and 10%, respectively, of the outstanding shares of our common stock at December 31, 2017.equity interest. AC is majority-owned by GGCP Holdings, LLC. Accordingly, Mr. Gabelli is deemed to control GBL.


AC and its subsidiaries, own 4.4 million shares of our Class A Stock, representing approximately 2% of the combined voting power and 15% of the outstanding shares of our common stock at December 31, 2017.Leases


Capital Lease

We leaseThe Company leases an approximately 60,000 square foot building located at 401 Theodore Fremd Avenue,One Corporate Center, Rye, New York as our headquartersone of its principal offices (the “Building”) from an entity controlled by members of the Chairman’s family. See Notes H and I.Leases within Note 10 for further details.


We sub-leaseThe Company sub-leases approximately 3,300 square feet in the Building to LICT Corporation, a company for which Mr. Gabelli serves as Chairman and CEO, which pays rent at the base rate of $28 per square foot plus $3 per square foot for electricity, subject to adjustment for increases in taxes and other operating expenses. The total amounts paidreceived in 2017, 2016,each of 2021 and 20152020 for rent and other expenses under this lease were $116,756, $116,564, and $119,686, respectively.$0.1 million, which were recorded in other operating expenses as a credit on the consolidated statements of income. Concurrent with the extension of the lease on the Building during 2008, wethe Company and LICT Corporation further agreed to extend the term of the sub-lease until December 2023 on the same terms and conditions. As of July 1, 2008, weThe Company also sub-leasesub-leases approximately 1,600 square feet in the Building to Teton.Teton, a company which is majority owned by GGCP Holdings LLC. Teton pays rent at the base rate of $37.75 per square foot plus $3 per square foot for electricity, subject to adjustment for increases in taxes and other operating expenses. The total amount paidreceived in 2017, 2016each of 2021 and 20152020 for rent and other expenses under this lease were $68,293, $68,205 and $69,632, respectively, and$0.1 million, which were recorded in other operating expenses as a credit on the consolidated statements of income. As of AprilFor January 1, 2016, we lease2019 through August 4, 2020, the Company sub-leased approximately 15,00013,800 square feet in the Building to AC. For August 5, 2020 through December 31, 2021, the period of April 1, 2016Company sub-leased approximately 5,200 square feet in the Building to March 31, 2017,AC. AC paidpays rent at the base rate of $21.62 per square foot plus $3 per square foot for electricity, subject to adjustment for increases in taxes and other operating expenses.  Effective April 1, 2017, AC paid rent at the rate of $22.03$22.32 per square foot plus $3 per square foot for electricity. The total amount paidreceived in 2017each of 2021 and 20162020 for rent and other expenses under this lease was $367,798 and $297,185 and$0.1 million, which was recorded in distribution feefees and other income on the consolidated statements of income. For August 5, 2020 through December 31, 2021, the Company sub-leased approximately 2,800 square feet in the Building to Morgan Group Holding Co., a former subsidiary of GGCP. The total amount received in 2021 and 2020 for rent and other expenses under this lease was $0.1 million and $0.04 million, respectively, which was recorded in distribution fees and other income on the consolidated statements of income.



Effective September 1, 2019, the Company leases office space located at 191 Mason Street, Greenwich, Connecticut from AC for its other principal office. During 2021 and 2020, the Company paid AC $0.1 million in rent for each year.
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Effective January 1, 2021, the Company leases office space located at 3 St. James’s Place, London from AC.  During 2021, the Company paid AC £0.2 million in rent.

Investment AdvisoryAdvisory Services


GAMCO has entered into agreements to provide advisory and administrative services to MJG Associates, Inc., which is wholly-owned by Mr. Gabelli, with respect to the private investment funds managed by them. Pursuant to such agreements, MJG Associates, Inc. paid GAMCO $10,000$0.01 million (excluding reimbursement of expenses) for each of the years 2017, 2016,2021 and 2015. For 2017, 2016 and 2015, Manhattan Partners I, L.P. and Manhattan Partners II, L.P., investment partnerships for which John Gabelli Inc., an entity owned by John Gabelli, a brother of the Company’s Chairman, is the general partner, paid GAMCO investment advisory fees in the amount of $9,851, $11,274 and $13,595, respectively. In addition, an entity in which Mr. John Gabelli’s wife is the sole shareholder, is the co-general partner of S.W.A.N. Partners, LP (“S.W.A.N.”). S.W.A.N. paid GAMCO investment advisory fees in the amount of $19,776, $18,206 and $20,406 for 2017, 2016 and 2015, respectively, and is included in investment advisory and incentive fees on the consolidated statements of income.  Effective August 17, 2017, John Gabelli Inc. is no longer the general partner of Manhattan Partners I, L.P. or Manhattan Partners II, L.P. and the entity that John Gabelli’s wife is the sole shareholder in is no longer the co-general partner of S.W.A.N.2020.


The Company serves as the investment advisor for the Funds and earns advisory fees based on predetermined percentages of the average net assets of the Funds.Funds, discussed within Note 2, Revenue Recognition. In addition, G.distributors has entered into distribution agreements with each of the Funds. It also distributes funds managed by Teton and its affiliates. As principal distributor, G.distributors incurs certain promotional and distribution costs related to the sale of Fund shares, for which it receives a distribution fee from the Funds or reimbursement from the investment advisor. For 2017, 20162021 and 2015,2020, the Company received $39.7 million, $41.0$23.7 million and $47.7$23.1 million, respectively, in distributions fees. Advisory and distribution fees receivable from the Funds were approximately $30.4$26.9 million and $32.9$24.4 million at December 31, 20172021 and 2016,2020, respectively.


Pursuant to an agreement between Gabelli & Company Investment Advisers, Inc. (“GCI”) (formerly called Gabelli Securities, Inc.) and Gabelli Funds, Advisor,Gabelli Funds Advisor pays to GCI 90% of the net revenues received by Gabelli Funds Advisor related to being the advisor to the SICAV. Net revenues are defined as gross advisory fees less expenses related to payouts and expenses of the SICAV paid by Funds Advisor.Gabelli Funds. The amounts paid by Gabelli Funds Advisor to GCI for 2017,  20162021 and 20152020 were $2.8 million, $2.7$8.9 million and $1.0$7.2 million, respectively, and arewere included in other operating expenses on the consolidated statements of income.


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Compensation


Immediately preceding the Offering andinitial public offering in conjunction with the Reorganization,February 1999, GBL and ourthe Company’s Chairman and CEO, Mr. Gabelli, entered into an employment agreement. This agreement wasOn February 6, 2008, Mr. Gabelli entered into an amended and restated employment agreement (as amended, the “2008 Employment Agreement”) with the Company, which was initially approved by the Company’s shareholders on November 30, 2007 and most recently re-approved by shareholdersapproved again on May 6, 2011.2011, May 5, 2015, and June 5, 2020.


Under the terms of this agreement and consistent with the firm’sFirm’s practice since its inception in 1977, Mr. Gabelli will also continue receivingis entitled to receive a percentage of revenues or net operating contribution, which are substantially derived from AUM, as compensation relating to or generated by the following activities: (i) managing or overseeing the management of various investment companies, and partnerships, (ii) attracting mutual fund shareholders, (iii) attracting and managing Institutional and Private Wealth ManagementPWM clients, and (iv) otherwise generating revenues for the Company. Such payments are made in a manner and at rates as agreed to from time to time by GAMCO, which rates have been and generally will be the same as those received by other professionals at GAMCO performing similar services. With respect to ourthe Institutional and Private Wealth ManagementPWM and mutual fundFunds advisory business, we paybusinesses, the Company pays out up to 40% of the revenues or net operating contribution to the portfolio managers and marketing staffteammates who introduce, service, or generate such business, with payments involving the Institutional and Private Wealth ManagementPWM accounts being typically based on revenues and payments involving the mutual fundsFunds being typically based on net operating contribution.


Mr. Gabelli has agreed that while he is employed by usthe Company, he will not provide investment management services outside of GAMCO, except for certain permitted accounts as defined under the agreement. The 2008 Employment Agreement may not be amended without the approval of the Compensation Committee and Mr. Gabelli.


The Chairman and CEOMr. Gabelli receives compensation in the form of a management fee for managing the Company. Additionally, he earnsThe management fee is incentive-based and entirely variable compensation in the amount of 10% of the aggregate pre-tax profits, which is paid to Mr. Gabelli or his designee for acting as portfolio manager and/or attractingCEO pursuant to his 2008 Employment Agreement so long as he is an executive of GBL and providing client servicedevotes the substantial majority of his working time to a large number of GAMCO's Institutional and Private Wealth Management clients, for creating and acting as portfolio manager of several open-end funds, for creating and acting as portfolio manager of the closed-end funds and for providing other services.business.


On December 29, 2017, the Company issued $11.7During 2021, Mr. Gabelli elected to waive $20.8 million of notes payablein compensation that he would otherwise have been entitled to certain executive officers and employeesunder his 2008 Employment Agreement relating to compensation earned in 2017.  $5.5the period of July 1, 2021 to November 30, 2021. During 2020, Mr. Gabelli elected to waive $14.7 million of the notes are due on January 31, 2018 and $6.2 million are due on February 28, 2018.  The notes are included in compensation payable onthat he would otherwise have been entitled to under his 2008 Employment Agreement relating to the consolidated statementperiod of financial condition.July 1, 2020 to November 10, 2020.


76

Other


On May 31, 2006,For 2021 and 2020, the Company entered into an Exchange and Standstill Agreement with Frederick J. Mancheski, a significant shareholder, pursuant to which, among other things, he agreed to exchange his 2,071,635 shares of Class B Stock, which he received on a pari passu basis with his investment in GGCP, for an equal number of shares of Class A Stock. The standstill agreement expired on May 31, 2016. Under the terms of the standstill agreement, Mr. Mancheski agreed, among other things, to vote his shares in favor of the nominees and positions advocated by the Board of Directors. As stated in the latest available Form 13D filed by Mr. Mancheski on July 2, 2015, he continues to exercise voting control over 1,705,974 shares of Class A Stock.

For 2017, 2016, and 2015, we incurred variable costs (but not the fixed costs) of $328,000, $353,000,$0 and $432,000, respectively,$0.1 million for actual usage relating to ourthe use of aircraft in which GGCP owns the fractional interests.


GBL and Teton entered into a transitional administrative and management service agreement in connection with the spin-off of Teton from GBL that formalized certain arrangements. Effective January 1, 2011, Teton and GBL renegotiated the terms of the sub-administration agreement from a flat 0.20% on the average net assets of the mutual funds managed by Teton to 0.20% on the first $370 million in average net assets, 0.12% on the next $630 million in average net assets, and 0.10% on average net assets in excess of $1 billion, as compensation for providing mutual fund administration services. Additionally, Teton paid to GBL an administrative services fee of $25,000 per month from April 1, 2014 through September 30, 2016.  The administrative services fee was reduced to $18,750 per month for October 1, 2016 through May 31, 2017, and further reduced to $4,167 per month for June 1, 2017 through December 31, 2017.month. During 2017, 20162021 and 2015,2020, there was $2.1 million, $2.0$1.5 million and $2.2$1.5 million, respectively, included in distribution fees and other income on the consolidated statements of income.


Effective January 1, 2014, GAMCOGBL and Keeley Funds, Advisor eachInc. (“Keeley”) entered into a research servicesfund administration servicing agreement with G.research, LLC, a wholly-owned subsidiary of GCI, for G.research, LLCon October 1, 2018 to provide them withfund services to Keeley. Under the same typesagreement, Keeley pays to GBL $24 thousand annually for legal administration, a variable 0.025% on the first $1.5 billion of research services that it provides to its other clients.  Foraverage net assets of the years ended December 31, 2017, 2016mutual funds managed by Keeley, 0.015% on the next $6.5 billion managed by Keeley, 0.0125% on the balance of the funds managed by Keeley, as well as 0.0025% on the funds managed by Keeley for daily compliance testing. During 2021 and 2015, GAMCO paid G.research, LLC $2.3 million, $1.52020, there was $0.2 million and $0.7$0.1 million, respectively. Forrespectively, included in distribution fees and other income on the years ended December 31, 2017, 2016 and 2015, Funds Advisor paid G.research, LLC $2.3 million, $1.5 million and $0.8 million, respectively.consolidated statements of income.


GBL and AC entered into a transitional administrative and management services agreement in connection with the Spin-off.spin-off of AC from GBL on November 30, 2015. The agreement calls for GBL to provide to AC certain administrative services including but not limited to: accounting, financial reporting and consolidation services, including the services of a financial and operations principal; treasury services, including, without limitation, insurance and risk management services and administration of benefits; tax planning, tax return preparation, recordkeeping and reporting services; human resources, including but not limited to the sourcing of permanentcompliance, legal, payroll, information technology, and temporary employees as needed, recordkeeping, performance reviews and terminations; legal and compliance advice, including the services of a Chief Compliance Officer; technical/technology consulting; and operations and general administrative assistance, including office space, office equipment and furniture, payroll, procurement, and administrative personnel.  In addition, AC will provide GBL with payroll services.operations. All services provided under the agreement by GBL to AC or by AC to GBL will beare charged at cost. The agreement is terminable by either party on 30 days’ prior written notice to the other party and has a term of twelve months.

At December 31, 2014, GCI owed GBL a demand loan of $16 million bearing interest at 5.5% annually.  On December 28, 2015, GCI repaid the demand loan in full plus accrued and unpaid interest.  The interest paid by GCI to GBL during 2015 was $0.9 million.

In connection with the spin-off of AC on November 30, 2015, the Company issued the AC 4% PIK Note.  During 2017, 2016 and 2015, GBL recorded interest expense of $3.0 million, $7.7 million and $0.8 million, respectively.  See Note F. Debt for further details.

In connection with the Offer, the Company borrowed $35.0 million from GGCP, which was repaid in full during 2016. During  2016, GBL recorded interest expense of  $415,000.  See Note F. Debt for further details.

On December 27, 2017, GBL borrowed $15 million from AC.  The note bears interest at 1.6% and is due on February 28, 2018.  During 2017, GBL recorded interst expense of $4,000.  See Note F. Debt for further details.

In connection with the issuance of the Convertible Note, GGCP deposited cash equal to the principal amount of the Note and six months interest into an escrow account established pursuant to an escrow agreement by and among GGCP, the Company, the Convertible Note holder and the escrow agent.  The Company paid the annual costs of setting up the escrow account in the amount of $55,000 and will continue to pay them as long as the escrow account is open.  The Company did not pay any fees to GGCP in connection with the funding of the escrow account. On September 30, 2017, in connection with an amendment to the Escrow Agreement and in exchange for approximately 53% of the assets in the escrow account, the Company paid GGCP $60 million.  On November 21, 2017, the Company paid GGCP $53.1 million for the remaining 47% interest in the escrow account and used the entire balance in the escrow account, along with an additional $1.4 million, to repurchase the Convertible Note.  See Note F. Debt for additional details.


7767
L. Financial
13. Regulatory Requirements


As a registeredThe Company’s broker-dealer subsidiary, G.distributors, is subject to the Uniform Net Capital Rule 15c3-1 (the “Rule”) of the SEC.  These regulatorycertain net capital requirements, while not specific encumbrances on assets, restrict the total assets of this subsidiary broker-dealer to the extent they are needed to fulfill the regulatory capital requirements.  Accordingly, this restriction limits the transfer of funds from this subsidiary to the Company in the form of cash dividends or otherwise.  This restriction is 120% of its minimum net capital. G.distributors computes its net capital under the alternative method permitted, by the Rule which requires minimum net capital of the greater of $250,000 and it exceeded thisor 2% of the aggregate debit items in the reserve formula for those broker-dealers subject to Rule 15c3-3 promulgated under the Securities Exchange Act of 1934, as amended. The requirement was $250,000 for the broker-dealer at December 31, 2017.2021 and 2020. At December 31, 2021 and 2020, G.distributors had net capital, as defined in the Rule, of approximately $1.9 million and $1.4 million, respectively, exceeding the regulatory requirement by approximately $1.6 million and $1.1 million, respectively.


OurThe Company’s  subsidiary,  GAMCO Asset  Management (UK)  Limited is authorized and regulated by the Financial  Conduct Authority (“FCA”). In February 2011, GAMCO Asset Management (UK) Limited increased its permitted license with the FCA’s predecessor, the Financial Services Authority (“FSA”) and has held Total Capital of £632,000 and £580,000 ($853,000 and $713,000 atAuthority. At December 31, 20172021 and 2016, respectively)2020, GAMCO Asset Management (UK) Limited held total capital of £746 thousand and £708 thousand ($1.0 million and $961 thousand), respectively, and had a Financial Resources Requirement of £216,000£310 thousand and £265,000£195 thousand ($291,000419 thousand and $326,000 at December 31, 2017 and 2016, respectively). We$265 thousand), respectively. These minimum requirements have consistently been met or exceeded these minimum requirements.exceeded.


M.
14. Administration Fees


We haveThe Company has entered into administration agreements with other companies (the “Administrators”), whereby the Administrators provide certain services on behalf of several of the Funds. Such services do not include the investment advisory and portfolio management services provided by GBL. The fees were negotiated and based on predetermined percentages of the net assets of each of the Funds.


N.
15. Profit Sharing Plan and Incentive Savings Plan


The Company has a qualified contributory employee profit sharing plan and incentive savings plan covering substantially all employees.teammates. Company contributions to the plans are determined annually by the Board of Directors, but may not exceed the amount permitted as a deductible expense under the Internal Revenue Code. TheFor the years ended December 31, 2021 and 2020, the Company accrued contributions of approximately $109,000, $77,000$20 thousand, and $26,000$97 thousand to the plans, for the years ended December 31, 2017, 2016 and 2015, respectively.


O. Identifiable Intangible Asset

As a result of becoming the advisor to the Gabelli Enterprise Mergers and Acquisitions Fund and the associated consideration paid, the Company maintains an identifiable intangible asset of $1.9 million within other assets on the consolidated statements of financial condition at both December 31, 2017 and 2016.  The investment advisory agreement is subject to annual renewal by the fund's Board of Directors, which the Company expects to be renewed, and the Company does not expect to incur additional expense as a result, which is consistent with other investment advisory agreements entered into by the Company.  The advisory contract for the Gabelli Enterprise Mergers and Acquisitions Fund are next up for renewal in February 2019.  On November 1, 2015, as a result of becoming the advisor to the Bancroft Fund Ltd. and the Ellsworth Growth and Income Fund Ltd. and the associated consideration paid, the Company maintains an identifiable intangible asset of $1.6 million within other assets on the consolidated statement of financial condition at both December 31, 2017 and 2016.  The advisory contracts for the Bancroft Fund Ltd. and the Ellsworth Growth and Income Fund Ltd. are both next up for renewal in November 2018.  At November 30, 2017 and November 30, 2016, management conducted its annual assessments of the recoverability of the intangible assets and determined that there was no impairment of it on GBL’s consolidated financial statements.


7816. Subsequent Events

P.  Discontinued Operations

As a result of the Spin-off, the results of AC’s operationsSubsequent events have been evaluated through the Spin-off Date, as well as transaction costs related to the Spin-off, have been classified in the consolidated statements of income as discontinued operations for all periods presented.  There was no gain or loss on the Spin-off for the Company, and it was a tax-free spin-off to GBL’s shareholders.

GBL does not have any significant continuing involvement in the operations of AC after the Spin-off, and the Company will not have the ability to influence operating or financial policies of AC.  GBL and AC did have a common Chief Executive Officer for a transition period, and GBL does provide certain services to AC under a Transition Services Agreement (see Note K. Related Party Transactions for details).  The Company also has debt on its consolidated statement of financial condition at December 31, 2017 and 2016 that is payable to AC.  That AC note pays interest at 4%, which is payable in cash or PIK, and will be paid off ratably over five years, or sooner at GBL’s option (see Note F. Debt for details).  AC owns 4.4 million shares of GBL’s Class A Stock on which it will receive dividends, if and when they are declared (see Note K. Related Party Transactions for details).  As with all stockholders, employees and directors of GBL received one share of AC stock for each share of GBL stock that they held on the record date for the distribution.  Some of these AC shares are unvested restricted stock awards to the extent an employee’s holdings consisted of unvested GBL restricted stock awards on the record date.  The vesting provisions remain unchanged (see Note G. Equity for details).

The 2015 results include $2.4 million in costs incurred with respect to the Spin-off and are included in Other operating expenses below.  Operating results for the period from January 1, 2015 through November 30, 2015 are summarized below:

  Year Ended 
  December 31, 
  2015 
Revenues   
Investment advisory and incentive fees $8,552 
Distribution fees and other income  279 
Institutional research services  8,973 
Total revenues  17,804 
Expenses    
Compensation  20,500 
Stock based compensation  4,716 
Management fee  (727)
Distribution costs  (85)
Other operating expenses  9,070 
Total expenses  33,474 
Operating loss  (15,670)
Other income    
Net gain from investments  7,660 
Interest and dividend income  2,740 
Interest expense  (1,224)
Total other income, net  9,176 
Loss from discontinued operations before income taxes  (6,494)
Income tax benefit  (2,045)
Loss from discontinued operations, net of taxes  (4,449)
Net loss attributable to noncontrolling interests  (562)
Net loss attributable to GAMCO Investors, Inc.'s    
discontinued operations, net of taxes $(3,887)


79
Q. Other Matters

From time to time, the Company may be named in legal actions and proceedings.  These actions may seek substantial or indeterminate compensatory as well as punitive damages or injunctive relief.  The Company is also subject to governmental or regulatory examinations or investigations.  The examinations or investigations could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief.  For any such matters, the consolidated financial statements includewere issued. There have been no subsequent events that require recognition or disclosure through the necessary provisions for losses thatdate the Company believes are probable and estimable.  Furthermore, the Company evaluates whether there exist losses which may be reasonably possible and, if material, makes the necessary disclosures.  Such amounts, both those that are probable and those that are reasonably possible, are not considered material to the Company’sconsolidated financial condition, operations or cash flows.

The investment management industry is likely to continue facing a high level of regulatory scrutiny and become subject to additional rules designed to increase disclosure, tighten controls and reduce potential conflicts of interest.  In addition, the SEC has substantially increased its use of focused inquiries which request information from a number of fund complexes regarding particular practices or provisions of the securities laws.  The Company participates in some of these inquiries in the normal course of our business.  Changes in laws, regulations and administrative practices by regulatory authorities, and the associated compliance costs, have increased our cost structure and could in the future have a material impact.

R. Quarterly Financial Information (Unaudited)

Quarterly financial information for the years ended December 31, 2017 and 2016 is presentedstatements were issued, except as disclosed below.

  2017 
  1st  2nd  3rd  4th  Total 
(In thousands, except per share data)               
Revenues $85,917  $87,600  $88,341  $98,666  $360,524 
Operating income  42,443   39,660   23,393   39,524   145,020 
Net income attributable to GAMCO                    
Investors, Inc.'s shareholders  24,820   22,894   16,600   13,495   77,809 
Net income attributable to GAMCO                    
Investors, Inc.'s shareholders per share:                    
Basic  0.86   0.79   0.57   0.46   2.68 
Diluted $0.82  $0.76  $0.55  $0.46  $2.60 

  2016 
  1st  2nd  3rd  4th  Total 
                
Revenues $81,385  $83,944  $87,721  $99,950  $353,000 
Operating income  44,942   46,747   48,076   52,031   191,796 
Net income attributable to GAMCO                    
Investors, Inc.'s shareholders  26,025   27,543   30,861   32,692   117,121 
Net income attributable to GAMCO                    
Investors, Inc.'s shareholders per share:                    
Basic  0.89   0.94   1.06   1.12   4.01 
Diluted $0.88  $0.93  $1.03  $1.07  $3.92 


During the fourth quarter of 2017, the Board of Directors accelerated the vesting relating to 144,650 RSAs resulting in recognition of $1.3 million in stock compensation expense, or $0.02 per fully diluted share.

During the fourth quarter of 2017, the Company recorded a $3.3 million loss on early extinguishment of debt when it repurchased the $110 million 4.5% Convertible note due August 15, 2021.

As a result of the enactment of the Tax Cuts and Jobs Act in December 2017, the Company recorded an increase in expense of $8.2 million reflecting the net write-down to its deferred tax assets and deferred tax liabilities.


80
S. Subsequent Events

On January 5, 2018, the Compensation Committee of the Board of Directors approved the accelerated vesting of the remaining 19,400 RSAs.  The Company will record an expense of $187,000 during the first quarter of 2018.


On February 6, 2018,3, 2022, the Board of Directors declared a regular quarterly dividend of $0.02$0.04 per share to all of its shareholders, payable on March 27, 201829, 2022 to shareholders of record on March 13, 2018.15, 2022.


On February 6, 2018, GAMCO and Funds Advisor each renewed their research services agreement with G.research, LLC whereby each entity will pay $1.5 million for the services in 2018.

On February 6, 2018, the Company and AC renewed their sublease for the period of April 1, 2018 to March 31, 2019.  AC will pay rent at the rate of $36.71 per square foot plus $3 per square foot for electricity, subject to adjustment for increases in taxes and other operating expenses.

On February 23, 2018, the Company announced that15, 2022, Mr. Gabelli elected to waive all histhe compensation that he would otherwise behave been entitled to under his employment agreement from2008 Employment Agreement relating to the period of March 1, 20182022 to DecemberMay 31, 2018.2022.

On February 28, 2018, the Company paid in full the 1.6% $15 million note to AC.

On March 5, 2018, AC completed an exchange offer with respect to its Class A shares.  Tendering shareholders will receive 1.35 GBL Class A shares for each AC Class A share that they tender, together with cash in lieu of any fractional share.  There were approximately 490,000 AC Class A shares tendered and accepted by AC.  AC will deliver approximately 660,000 GBL Class A shares that they hold to the tendering shareholders.  After the exchange, AC and its subsidiaries, own 3.7 million shares of our Class A Stock, representing approximately 2% of the combined voting power and 13% of the outstanding shares of our common stock.


From January 1, 20182022 to March 8, 2018,9, 2022, the Company repurchased 59,611125,316 shares at $29.33$22.47 per share. As a result, there are 614,6832,048,621 shares available to be repurchased under ourthe Company’s existing buyback plan at March 8, 2018.9, 2022.

81
68

ITEM 9:          CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A:          CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
 
The Company maintains a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which is required to be timely disclosed, is recorded, processed, summarized, and reported to management within the time periods specified in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company’s Chief Executive Officer and Co-ChiefChief Accounting Officers,Officer, after evaluating the effectiveness of the Company’s disclosure controls and procedures (as defined in the Exchange Act) as of the end of the period covered by this report, have concluded that the Company’s disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.
 
(b) Management’s Report on Internal Control Over Financial Reporting
 
GBL'sGBL’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. Management, with the participation of the principal executive officer and under the supervision of the principal financial officers, of the Company conducted an evaluation of the effectiveness of GBL's internal control over financial reporting as of December 31, 2017,2021, as required by Rule 13a-15(c) of the Exchange Act. There are inherent limitations to the effectiveness of any system of internal control over financial reporting, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective internal control over financial reporting controls can only provide reasonable assurance of achieving their control objectives. In making its assessment of the effectiveness of its internal control over financial reporting, the Company used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework 2013.
 
Based on its evaluation, management concluded that, as of December 31, 2017,2021, the Company maintained effective internal control over financial reporting. The independent registered public accounting firm that audited the consolidated financial statements has issued an attestation report on the Company's internal control over financial reporting. The report on the audit of internal control over financial reporting is included in Item 8 in this Form 10-K.
 
(c) Changes in Internal Control Over Financial Reporting
 
There has been no change in our internal control over financial reporting during the quarter ended December 31, 20172021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


ITEM 9B:          OTHER INFORMATION


None.


ITEM 9C:          DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

82
69
PART III


ITEM 10: DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE


Information regarding the Directors and Executive Officers of GBL and compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended, is incorporated herein by reference from the our definitive proxy statement for our 20182022 Annual Meeting of Shareholders (the “Proxy Statement”).
 
GBL has adopted a Code of Business Conduct that applies to all of our officers, directors, and full-time and part-time employeesteammates and a Code of Conduct that sets forth additional requirements for our principal executive officer, principal financial officers, principal accounting officers or controller, or persons performing similar functions (together, the “Codes of Conduct”). The Codes of Conduct are posted on our website (www.gabelli.com) and are available in print free of charge to anyone who requests a copy. Interested parties may address a written request for a printed copy of the Codes of Conduct to: Secretary, GAMCO Investors, Inc., One Corporate Center, Rye, New York 10580-1422. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver of, a provision of the Codes of Conduct by posting such information on our website.
 
In addition to the certifications attached as Exhibits to this Form 10-K, following its 20182021 Annual Meeting, GBL also submitted to the New York Stock Exchange (“NYSE”) a certification by our Chief Executive Officer that he is not aware of any violations by GBL of the NYSE corporate governance listing standards as of the date of the certification.


ITEM 11:          EXECUTIVE COMPENSATION


Information requiredin response to this item is incorporated by Item 11 is included inreference from our Proxy Statement for the 2018 Annual Meetingrelating to our 2022annual meeting of Stockholders and is incorporated herein by reference.stockholders.


ITEM 12:          SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


Information requiredin response to this item is incorporated by Item 12 is included inreference from our Proxy Statement for the 2018 Annual Meetingrelating to our 2022annual meeting of Stockholders and is incorporated herein by reference.stockholders.


ITEM 13:          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE


Information requiredin response to this item is incorporated by Item 13 is included inreference from our Proxy Statement for the 2018 Annual Meetingrelating to our 2022annual meeting of Stockholders and is incorporated herein by reference.stockholders.


ITEM 14:PRINCIPAL ACCOUNTANT FEES AND SERVICES
ITEM 14:          PRINCIPAL ACCOUNTANT FEES AND SERVICES


The information set forth under the caption “Independent Registered Public Accounting Firm”Information in response to this item is incorporated by reference from our Proxy Statement for the 2018 Annual Meetingrelating to our 2022annual meeting of Stockholders is incorporated herein by reference.stockholders.


83
70
PART IV


ITEM 15:          EXHIBITS, FINANCIAL STATEMENT SCHEDULES


  (a)  List of documents filed as part of this Report:report:
 
(1) Consolidated Financial Statementsfinancial statements and Independent Registered Public Accounting Firm’s Reportsthe reports of the independent registered public accounting firm (PCAOB ID: 34) are included herein:
See Indexindex on page 44.40.

(2) Financial Statement Schedules
Schedule I is included as exhibit 99.1.
(3) List of Exhibits:exhibits:


The agreements included or incorporated by reference as exhibits to this Annual Reportannual report on Form 10-K contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties were made solely for the benefit of the other parties to the applicable agreement and (i) were not intended to be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) may have been qualified in such agreement by disclosures that were made to the other party in connection with the negotiation of the applicable agreement; (iii) may apply contract standards of “materiality” that are different from “materiality” under the applicable securities laws; and (iv) were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement.


The Company acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for considering whether additional specific disclosures of material information regarding material contractual provisions are required to make the statements in this report not misleading.


Exhibit
Number
 Description of Exhibit
2.1
Agreement and Plan of Merger, dated October 14, 2013, between GAMCO Investors, Inc., a New York corporation and GAMCO Investors, Inc., a Delaware corporation. (Incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K dated November 20, 2013 filed with the Securities and Exchange Commission on November 22, 2013).
2.2 
Separation and Distribution Agreement, dated November 30, 2015, by and between GAMCO Investors, Inc. (the “Company”) and Associated Capital Group, Inc. (Incorporated by reference to Exhibit 2.1 to the Company's Form 8-K dated November 30, 2015 filed with the Securities and Exchange CommissionSEC on December 4, 2015).
3.1 
Amended and Restated Certificate of Incorporation of GAMCO Investors, Inc. (the “Company”)the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K dated November 20, 2013 filed with the Securities and Exchange CommissionSEC on November 22, 2013).
3.2 
Certificate of Amendment of the Amended and Restated Certificate of Incorporation of GAMCO Investors, Inc. (Incorporated by reference to Exhibit B of the Company’s definitive proxy statement on Schedule 14A filed with the SEC on April 29, 2020).
3.3
Certificate of Amendment of the Amended and Restated Certificate of Incorporation of the Company. (Incorporated by reference to Appendix A to the Company’s definitive proxy statement on Schedule 14A filed with the SEC on July 2, 2021).
3.4
Amended and Restated Bylaws of the CompanyCompany.. (Incorporated by reference to Exhibit 3.2 to the Company’s Report on Form 8-K dated November 20, 2013 filed with the Securities and Exchange CommissionSEC on November 22, 2013).
3.33.5 
Amendment No. 1 to Amended and Restated Bylaws of the Company (Incorporated by reference to Exhibit 3.3 to the Company’s Report on Form 8-K dated September 23, 2014 filed with the Securities and Exchange CommissionSEC on September 26, 2014).
3.6
Amendment No. 2 to Amended and Restated Bylaws of the Company (Incorporated by reference to Exhibit 3.4 to the Company’s Report on Form 8-K dated February 20, 2020 filed with the SEC on February 21, 2020).

84



4.1 
Form of Common Stock Certificate. (Incorporated by reference to Exhibit 4.1 to the Company’s Report on Form 8-K dated November 20, 2013 filed with the Securities and Exchange CommissionSEC on November 22, 2013).
4.2 
Indenture, dated as of December 31, 2010,June 14, 2021, by and between the Company and Computershare Trust Company, N.A., as Trustee (includes formtrustee (Incorporated by reference to Exhibit 4.1 to the Company’s Report on Form 8-K dated June 14, 2021 filed with the SEC on June 15, 2021).

71

4.3
Form of 0%2-Year Puttable Subordinated DebentureNotes due 2015)2023 (included in Exhibit 4.2). (Incorporated by reference to Exhibit 4.1 to the Company's Report on Form 8-K dated December 31, 2010 filed with the Securities and Exchange Commission on January 6, 2011).
4.3
First Supplemental Indenture, dated as of November 22, 2013, by and between GAMCO Investors, Inc. and, Computershare Trust Company, N.A. as trustee. (Incorporated by reference to Exhibit 4.2 to the Company’s Report on Form 8-K dated November 20, 2013June 14, 2021 filed with the Securities and Exchange CommissionSEC on November 22, 2013)June 15, 2021).
4.4 
Indenture, dated asDescription of February 6, 2002, between the Company and The BankRegistrant’s Securities Registered Pursuant to Section 12 of New York, as Trustee. (Incorporatedthe Securities Exchange Act of 1934. (Incorporated by reference to Exhibit 4.14.9 to the Company's Report on Form 8-K dated February 8, 200210-K filed with the Securities and Exchange CommissionSEC on February 8, 2002)March 6, 2020).
4.5
Second Supplemental Indenture, dated May 31, 2011, between the Company and The Bank of New York Mellon, as Trustee (includes form of 5.875% Senior Notes due 2021). (Incorporated by reference to Exhibit 4.1 to the Company's Report on Form 8-K dated May 25, 2011 filed with the Securities and Exchange Commission on May 31, 2011).
4.6
Third Supplemental Indenture, dated November 22, 2013, between GAMCO Investors, Inc. and The Bank of New York Mellon, as Trustee. (Incorporated by reference to Exhibit 4.3 to the Company’s Report on Form 8-K dated November 20, 2013 filed with the Securities and Exchange Commission on November 22, 2013).
4.7
Convertible Promissory Note in the amount of $110,000,000, dated August 15, 2016, issued by GAMCO Investors, Inc. to Cascade Investment, L.L.C. (Incorporated by reference to Exhibit 4.1 to the Company's Report on Form 8-K dated August 15, 2016 filed with the Securities and Exchange Commission on August 16, 2016).
4.8
Irrevocable Standby Letter of Credit, dated August 15, 2016, issued by GAMCO Investors, Inc. in favor of GGCP, Inc. (Incorporated by reference to Exhibit 4.2 to the Company's Report on Form 8-K dated August 15, 2016 filed with the Securities and Exchange Commission on August 16, 2016).
10.1 
Tax Indemnification Agreement between the Company and GFIGabelli Funds, Inc.. (Incorporated by reference to Exhibit 10.2 to Amendment No. 3 to the Company's Registration Statement on Form S-1 (File No. 333-51023) filed with the Securities and Exchange CommissionSEC on January 29, 1999).
10.2 
GAMCO Investors, Inc.The Company's 2002 Stock Award and Incentive Plan (Incorporated by reference to Exhibit A to the Company's definitive proxy statement on Schedule 14A filed with the Securities and Exchange CommissionSEC on April 30, 2002). *

85


10.3 
First Amendment to the Company’s 2002 Stock Award and Incentive Plan (Incorporated by reference to Annex D to the Company’s definitive proxy statement on Schedule 14A filed with the CommissionSEC on October 30, 2013).*
10.4 
Second Amendment to the Company’s 2002 Stock Award and Incentive Plan (Incorporated by reference to Exhibit A to the Company’s definitive proxy statement on Schedule 14A filed with the CommissionSEC on April 21, 2016).*
10.5 
Third Amendment to the Company’s 2002 Stock Award and Incentive Plan (Incorporated by reference to Exhibit A to the Company’s definitive proxy statement on Schedule 14A filed with the CommissionSEC on April 12, 2017).*
10.6 
Employment Agreement, dated February 6, 2008, by and between the Company and Mario J. Gabelli dated February 6, 2008 (Incorporated(Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 8-K dated February 6, 2008 filed with the Securities and Exchange CommissionSEC on February 7, 2008).*

72

10.7 
Service Mark and Name License Agreement, dated November 30, 2015, by and between GAMCO Investors, Inc.the Company and Associated Capital Group, Inc. (Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 8-K dated November 30, 2015 filed with the Securities and Exchange CommissionSEC on December 4, 2015).
10.8 
Transitional Administrative and Management Services Agreement, dated November 30, 2015, by and between GAMCO Investors, Inc.the Company and Associated Capital Group, Inc. (Incorporated by reference to Exhibit 10.2 to the Company's Report on Form 8-K dated November 30, 2015 filed with the Securities and Exchange CommissionSEC on December 4, 2015).
10.9 
Promissory note, in the amount of $250,000,000, dated November 30, 2015, issued by GAMCO Investors, Inc.the Company to Associated Capital Group, Inc. (Incorporated by reference to Exhibit 10.3 to the Company's Report on Form 8-K dated November 30, 2015 filed with the Securities and Exchange CommissionSEC on December 4, 2015).
10.10 
Tax Indemnity and Sharing Agreement, dated November 30, 2015, by and between GAMCO Investors, Inc. and Associated Capital Group, Inc. (Incorporated by reference to Exhibit 10.4 to the Company's Report on Form 8-K dated November 30, 2015 filed with the Securities and Exchange CommissionSEC on December 4, 2015).
10.11 
Restricted Stock Unit Agreement, dated December 21, 2015, by and between GAMCO Investors, Inc.the Company and Mario J. Gabelli. (Incorporated by reference to Exhibit 99.2 to the Company's Report on Form 8-K dated December 21, 2015 filed with the Securities and Exchange CommissionSEC on December 28, 2015).
10.12 
Note Purchase Agreement, dated August 15, 2016, by and among Cascade Investment, L.L.C., GAMCO Investors, Inc.,the Company, Mario J. Gabelli and GGCP, Inc. (Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 8-K dated August 15, 2016 filed with the Securities and Exchange CommissionSEC on August 16, 2016).
10.13 
Registration Rights Agreement, dated August 15, 2016, by and amongbetween Cascade Investment, L.L.C. and GAMCO Investors, Incthe Company. (Incorporated by reference to Exhibit 10.2 to the Company's Report on Form 8-K dated August 15, 2016 filed with the Securities and Exchange CommissionSEC on August 16, 2016).

86


10.14 
Escrow Agreement, dated August 15, 2016, by and among GAMCO Investors, Inc.,the Company, GGCP, Inc., Cascade Investment, L.L.C. and JPMorgan Chase Bank, National Association. (Incorporated by reference to Exhibit 10.3 to the Company's Report on Form 8-K dated August 15, 2016 filed with the Securities and Exchange CommissionSEC on August 16, 2016).
10.15 
Restricted Stock Unit Agreement, dated December 23, 2016, by and between GAMCO Investors, Inc.the Company and Mario J. Gabelli. (Incorporated by reference to Exhibit 99.1 to the Company’s Report on Form 8-K dated December 23, 2016 filed with the Securities and Exchange CommissionSEC on December 29, 2016).
10.16 
Restricted Stock Unit Agreement, dated September 30, 2017, by and between GAMCO Investors, Inc.the Company and Mario J. Gabelli. (Incorporated by reference to Exhibit 99.1 to the Company’s Report on Form 8-K dated September 30, 2017 filed with the Securities and Exchange CommissionSEC on October 5, 2017).
10.17 
$35,000,000 floating rate promissory note duePromissory Note, dated December 28, 2016 in favor of2015 issued by the Company to GGCP, Inc. (Incorporated by reference to Exhibit 10.13 to the Company’s Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange CommissionSEC on March 15, 2016).

73

10.18 
Rights agreement with Mario J.License Agreement, dated February 9, 1999, by and among the Company, Gabelli International Limited, Gabelli International II Limited, Gabelli Fund, LDC, and Gabelli Performance Partnership, L.P. and MJG Associates, Inc. (Incorporated by reference to Exhibit 10.14 to the Company’s Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange CommissionSEC on March 15, 2016).
12.1
Computation of Ratios of Earnings to Fixed Charges.
21.1
 Subsidiaries of the Company.
23.1
 Consent of Independent Registered Public Accounting Firm.
24.1 Powers of Attorney (included on page 9274 of this Report).
31.1
 Certification of CEO pursuant to Rule 13a-14(a).
31.2
 Certification of co-CAOPFO pursuant to Rule 13a-14(a).
31.3
Certification of co-CAO pursuant to Rule 13a-14(a).
32.1
 Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2
 Certification of co-CAOsPFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
99.1Schedule I
100.INS101.INS XBRL Instance Document
100.SCH101.SCH XBRL Taxonomy Extension Schema Document
100.CAL101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
100.DEF101.DEF XBRL Taxonomy Extension Definition Linkbase Document
100.LAB101.LAB XBRL Taxonomy Extension Label Linkbase Document
100.PRE101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)


* Compensatory agreements.


ITEM 16:          FORM 10-K SUMMARY


None.

87
SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized in the City of Rye, State of New York, on March 8, 2018.9, 2022.


GAMCO INVESTORS, INC.


By: /s/ Kieran CaterinaBy: /s/ Diane M. LaPointe
Name: Kieran CaterinaName: Diane M. LaPointe
Title: Co-Chief AccountingPrincipal Financial Officer
 (Co-Principal Accounting Officer)
Title: Co-Chief Accounting Officer
     (Co-Principal Accounting Officer)
  
Date: March 8, 20189, 2022Date: March 8, 2018




8874
POWER OF ATTORNEY


Each person whose signature appears below hereby constitutes and appoints Maximilian Caldwell, Kieran Caterina, Kevin Handwerker and Diane M. LaPointePeter Goldstein and each of them, their true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for them in their name, place and stead, in any and all capacities, to sign any and all amendments to this report and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.


Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates indicated.


Signature Title Date
     
/s/ Mario J. Gabelli Chairman of the Board, March 8, 20189, 2022
Mario J. Gabelli Chief Executive Officer  
  (Principal Executive Officer)  
  and Director  
     
/s/ Kieran Caterina Co-ChiefChief Accounting Officer March 8, 20189, 2022
Kieran Caterina Officer (Co-Principal
Accounting Officer)
/s/ Diane M. LaPointeCo-Chief AccountingMarch 8, 2018
Diane M. LaPointeOfficer (Co-Principal
Accounting(Principal Financial Officer)  
     
/s/ Edwin L. Artzt Director March 8, 20189, 2022
Edwin L. Artzt    
     
/s/ Raymond C. Avansino, Jr. Director March 8, 20189, 2022
Raymond C. Avansino, Jr.    
     
/s/ Leslie B. Daniels Director March 8, 20189, 2022
Leslie B. Daniels
/s/ Douglas R. Jamieson
Director
March 9, 2022
Douglas R. Jamieson
    
     
/s/ Eugene R. McGrath Director March 8, 20189, 2022
Eugene R. McGrath    
     
/s/ Robert S. Prather, Jr. Director March 8, 20189, 2022
Robert S. Prather, Jr.    
     
/s/ Elisa M. Wilson Director March 8, 20189, 2022
Elisa M. Wilson    


89