Discontinued Operations

12 Months Ended

Dec. 31, 2015

Discontinued Operations [Abstract]

Discontinued Operations

P.  Discontinued Operations

As a result of the Spin-off, the results of AC’s operations 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 GAMCO’s shareholders.

GAMCO does not have any significant continuing involvement in the operations of AC after the Spin-off, and GAMCO will not have the ability to influence operating or financial policies of AC.  GAMCO and AC do 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).  GAMCO also has debt on its consolidated statement of financial condition at December 31, 2015 that is payable to AC.  That GAMCO note pays interest at 4%, which is payable in cash or PIK, and will be paid off ratably over five years, or sooner at GAMCO’s option (see Note F. Debt for details).  AC owns 4.4 million shares of GAMCO’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 GAMCO received one share of AC stock for each share of GAMCO 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 GAMCO 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 and the full years 2014 and 2013 are summarized below:

	Year Ended December 31,
	2015			2014			2013
Revenues
Investment advisory and incentive fees	$	8,552		$	9,750		$	10,478
Distribution fees and other income		279			325			447
Institutional research services		8,973			10,925			8,940
Total revenues		17,804			21,000			19,865
Expenses
Compensation		20,500			22,298			22,939
Stock based compensation		4,716			1,921			510
Management fee		(727	)		(36	)		4,485
Distribution costs		(85	)		(598	)		(742	)
Other operating expenses		9,070			7,341			7,119
Total expenses		33,474			30,926			34,311
Operating loss		(15,670	)		(9,926	)		(14,446	)
Other income (expense)
Net gain from investments		7,660			6,491			51,034
Interest and dividend income		2,740			4,416			5,864
Interest expense		(1,224	)		(1,377	)		(1,908	)
Total other income (expense), net		9,176			9,530			54,990
Income/(loss) from discontinued operations before income taxes		(6,494	)		(396	)		40,544
Income tax provision/(benefit)		(2,045	)		771			13,212
Income/(loss) from discontinued operations, net of taxes		(4,449	)		(1,167	)		27,332
Net income/(loss) attributable to noncontrolling interests		(562	)		(4,274	)		512
Net income/(loss) attributable to GAMCO Investors, Inc.'s
discontinued operations, net of taxes	$	(3,887	)	$	3,107		$	26,820

The assets and liabilities of AC have been classified in the consolidated statement of financial condition as of December 31, 2014 as assets and liabilities of discontinued operations and consist of the following:

	December 31,
	2014
Cash and cash equivalents	$	285,530
Investments in securities		220,595
Investments in sponsored registered investment companies		39,537
Investments in partnerships		107,637
Receivable from brokers		74,396
Investment advisory fees receivable		4,145
Receivable from affiliates		(20,675	)
Goodwill and identifiable intangible asset		3,254
Income tax receivable		44
Other assets		19,175
Total assets of discontinued operations		733,638
Payable to brokers		43,397
Income taxes payable and deferred tax liabilities		9,959
Compensation payable		9,180
Securities sold, not yet purchased		10,595
Payable to affiliates		-
Mandatorily redeemable noncontrolling interests		1,302
Accrued expenses and other liabilities		1,497
Total liabilities of discontinued operations		75,930
Redeemable noncontrolling interests from discontinued operations		68,334
Noncontrolling interests from discontinued operations		2,734
Net assets of discontinued operations	$	586,640

The following table summarizes the net impact of the Spin-off to GAMCO’s stockholders’ equity (deficiency):

Decrease in additional paid-in capital	$	(301,283	)
Decrease in retained earnings		(692,839	)
Decrease in accumulated comprehensive income		(9,178	)
Total	$	(1,003,300	)