Delaware
|
47-3965991
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
One Corporate Center, Rye, NY
|
10580-1422
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Name of each exchange on
which registered
|
|
Class A Common Stock, par value $0.001 per share
|
New York Stock Exchange
|
Large accelerated filer ☐
|
Accelerated filer ☒
|
|
Non-accelerated filer ☐ (Do not check if a smaller reporting company)
|
Smaller reporting company ☐
|
|
Emerging growth company ☒
|
Part I
|
|||
Item 1
|
4
|
||
8
|
|||
9
|
|||
10
|
|||
10
|
|||
14
|
|||
Item 1A
|
14
|
||
Item 1B
|
29
|
||
Item 2
|
29
|
||
Item 3
|
29
|
||
Item 4
|
29
|
||
Part II
|
|||
Item 5
|
29
|
||
Item 6
|
31
|
||
Item 7
|
33 | ||
Item 7A
|
45
|
||
Item 8
|
49
|
||
Item 9
|
88
|
||
Item 9A
|
88
|
||
Item 9B
|
89
|
||
Part III
|
|||
Item 10
|
89
|
||
Item 11
|
89
|
||
Item 12
|
89
|
||
Item 13
|
89
|
||
Item 14
|
89
|
||
Part IV
|
|||
Item 15
|
90
|
||
Item 16
|
92
|
||
93
|
|||
94
|
|||
Certifications
|
|||
Year Ended December 31,
|
||||||||||||||||||||
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||||||||
Event Merger Arb
|
$
|
1,384
|
$
|
1,076
|
$
|
869
|
$
|
796
|
$
|
691
|
||||||||||
Event-Driven Value (b)
|
91
|
133
|
145
|
167
|
140
|
|||||||||||||||
Other (c)
|
66
|
63
|
66
|
77
|
76
|
|||||||||||||||
Total AUM
|
$
|
1,541
|
$
|
1,272
|
$
|
1,080
|
$
|
1,040
|
$
|
907
|
(a) |
Includes separately managed accounts and Investment Partnerships.
|
(b) |
Excluding event merger arbitrage.
|
(c) |
Includes investment vehicles focused on private equity, merchant banking, non-investment-grade credit and capital structure arbitrage.
|
2017: | “Digital Evolution within Financial Services” | |
2015:
|
“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:
|
“Virtues of Value Investing”
|
|
1998:
|
“The Role of Hedge Funds as a Way of Generating Absolute Returns”
|
|
1997:
|
“Active vs. Passive Stock Selection”
|
•
|
have more than $1 billion in annual revenue in a fiscal year;
|
•
|
issue more than $1 billion of non-convertible debt during the preceding three-year period; or
|
•
|
become a “large accelerated filer” as defined in Exchange Act Rule 12b-2, which would occur after: (i) we have filed at least one annual report pursuant to the Exchange Act; (ii) we have been an SEC-reporting company for at least 12 months; and (iii) the market value of AC common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter.
|
· |
our quarterly or annual earnings, or those of other companies in our industry;
|
· |
actual or anticipated reductions in our revenue, net earnings and cash flow resulting from actual or anticipated decline in AUM;
|
· |
changes in accounting standards, policies, guidance, interpretations or principles;
|
· |
the failure of securities analysts to cover Associated Capital or changes in financial estimates by analysts;
|
· |
changes in earnings estimates by securities analysts or our ability to meet those estimates;
|
· |
the operating and stock price performance of other comparable companies;
|
· |
overall market fluctuations; and
|
· |
general economic conditions.
|
· |
we have a board that is composed of a majority of “independent directors,” as defined under the rules of the NYSE;
|
· |
we have a compensation committee that is composed entirely of independent directors; and
|
· |
we have a nominating/corporate governance committee that is composed entirely of independent directors.
|
ITEM 5:
|
2016
|
2017
|
|||||||||||||||||||||||||||||||
Dividend Declared
|
Dividend Declared
|
|||||||||||||||||||||||||||||||
High
|
Low
|
Regular
|
Special
|
High
|
Low
|
Regular
|
Special
|
|||||||||||||||||||||||||
First Quarter
|
$
|
30.40
|
$
|
24.67
|
$
|
0.10
|
$
|
-
|
$
|
39.35
|
$
|
32.20
|
$
|
-
|
$
|
-
|
||||||||||||||||
Second Quarter
|
30.89
|
27.58
|
-
|
-
|
36.30
|
32.60
|
0.10
|
-
|
||||||||||||||||||||||||
Third Quarter
|
35.51
|
28.51
|
-
|
-
|
37.45
|
32.20
|
-
|
-
|
||||||||||||||||||||||||
Fourth Quarter
|
35.96
|
32.25
|
0.10
|
-
|
38.82
|
33.10
|
0.10
|
-
|
Period |
Total
Number of
Shares
Repurchased
|
Average
Price Paid Per
Share, net of
Commissions
|
Total Number of
Shares Repurchased as
Part of Publicly
Announced Plans
or Programs
|
Maximum
Number of Shares
That May Yet Be
Purchased Under
the Plans or Programs
|
||||||||||||
10/01/17 - 10/31/17
|
84,612
|
$
|
37.53
|
84,612
|
953,137
|
|||||||||||
11/01/17 - 11/30/17
|
33,067
|
35.42
|
33,067
|
920,070
|
||||||||||||
12/01/17 - 12/31/17
|
29,284
|
33.96
|
29,284
|
890,786
|
||||||||||||
Totals
|
146,963
|
$
|
36.34
|
146,963
|
Nov. 30,
2015 |
Dec. 31,
2015 |
Dec. 31,
2016 |
Dec. 31,
2017 |
|||||||||||||
Associated Capital Group, Inc.
|
100.00
|
100.89
|
109.04
|
114.21
|
||||||||||||
S&P 500 Index
|
100.00
|
98.42
|
110.19
|
134.25
|
||||||||||||
SNL Asset Manager Index
|
100.00
|
92.59
|
97.95
|
130.07
|
Year Ended December 31,
|
||||||||||||
Income Statement Data (in thousands)
|
2017
|
2016
|
2015
|
|||||||||
Revenues
|
||||||||||||
Investment advisory and incentive fees
|
$
|
14,551
|
$
|
18,320
|
$
|
12,635
|
||||||
Institutional research services
|
12,199
|
12,634
|
9,927
|
|||||||||
Other revenues
|
165
|
273
|
280
|
|||||||||
Total revenues
|
26,915
|
31,227
|
22,842
|
|||||||||
Expenses
|
||||||||||||
Compensation
|
30,644
|
30,968
|
26,343
|
|||||||||
Stock-based compensation
|
5,879
|
2,464
|
4,931
|
|||||||||
Management fee
|
713
|
1,593
|
(309
|
)
|
||||||||
Other operating expenses
|
10,065
|
8,434
|
6,189
|
|||||||||
Total expenses
|
47,301
|
43,459
|
37,154
|
|||||||||
Operating loss
|
(20,386
|
)
|
(12,232
|
)
|
(14,312
|
)
|
||||||
Other income (expense)
|
||||||||||||
Net gain from investments
|
20,598
|
19,909
|
8,276
|
|||||||||
Interest and dividend income
|
10,501
|
12,669
|
4,720
|
|||||||||
Interest expense
|
(227
|
)
|
(590
|
)
|
(1,260
|
)
|
||||||
Shareholder-designated contribution
|
(4,222
|
)
|
(5,411
|
)
|
-
|
|||||||
Total other income, net
|
26,650
|
26,577
|
11,736
|
|||||||||
Income (loss) before income taxes
|
6,264
|
14,345
|
(2,576
|
)
|
||||||||
Income tax provision (benefit)
|
(2,420
|
)
|
3,876
|
(1,685
|
)
|
|||||||
Net income (loss)
|
8,684
|
10,469
|
(891
|
)
|
||||||||
Net income (loss) attributable to noncontrolling interests
|
(153
|
)
|
251
|
(780
|
)
|
|||||||
Net income (loss) attributable to Associated Capital Group, Inc.’s shareholders
|
$
|
8,837
|
$
|
10,218
|
$
|
(111
|
)
|
|||||
Net income (loss) per share attributable to Associated Capital Group, Inc.’s shareholders:
|
||||||||||||
Basic
|
$
|
0.37
|
$
|
0.41
|
$
|
-
|
||||||
Diluted
|
$
|
0.37
|
$
|
0.41
|
$
|
-
|
||||||
Weighted average shares outstanding:
|
||||||||||||
Basic
|
23,792
|
24,870
|
24,887
|
|||||||||
Diluted
|
23,925
|
25,175
|
25,170
|
|||||||||
Actual shares outstanding at December 31st (a)
|
23,639
|
24,255
|
25,440
|
|||||||||
Dividends declared per share:
|
$
|
0.20
|
$
|
0.20
|
$
|
-
|
(a) |
Includes unvested RSAs of 0, 424,340 and 553,100 at December 31, 2017, 2016 and 2015, respectively.
|
December 31,
|
||||||||||||
Balance Sheet Data (in thousands)
|
2017
|
2016
|
2015
|
|||||||||
Total assets
|
$
|
1,006,915
|
$
|
952,603
|
$
|
836,748
|
||||||
Long-term obligations
|
-
|
-
|
-
|
|||||||||
Other liabilities and noncontrolling interest
|
88,768
|
78,581
|
85,199
|
|||||||||
Total liabilities and noncontrolling interest
|
88,768
|
78,581
|
85,199
|
|||||||||
Total equity
|
$
|
918,147
|
$
|
874,022
|
$
|
751,549
|
|
Year Ended December 31,
|
|||||||||||
Assets Under Management (in millions)
|
2017
|
2016
|
2015
|
|||||||||
|
||||||||||||
Event Merger Arb
|
$
|
1,384
|
$
|
1,076
|
$
|
869
|
||||||
Event-Driven Value
|
91
|
133
|
145
|
|||||||||
Other
|
66
|
63
|
66
|
|||||||||
Total AUM
|
$
|
1,541
|
$
|
1,272
|
$
|
1,080
|
Reconciliation of Total Equity to Adjusted Economic Book Value
|
||||||||
Total
|
Per Share
|
|||||||
Total equity as reported
|
$
|
918,147
|
$
|
38.84
|
||||
Add: GAMCO Note
|
50,000
|
2.12
|
||||||
Adjusted Economic book value
|
$
|
968,147
|
$
|
40.96
|
Year Ended December 31,
|
CAGR (a)
|
||||||||||||||||||||||||
2017
|
2016
|
2015
|
2014
|
2013
|
2017/2013
|
||||||||||||||||||||
Event Merger Arb
|
$
|
1,384
|
$
|
1,076
|
$
|
869
|
$
|
796
|
$
|
691
|
19.0
|
%
|
|||||||||||||
Event-Driven Value
|
91
|
133
|
145
|
167
|
140
|
(10.2
|
)
|
||||||||||||||||||
Other
|
66
|
63
|
66
|
77
|
76
|
(3.5
|
)
|
||||||||||||||||||
Total AUM
|
$
|
1,541
|
(b)
|
$
|
1,272
|
$
|
1,080
|
$
|
1,040
|
$
|
907
|
14.2
|
%
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2017
|
2016
|
2015
|
2014
|
2013
|
|||||||||||||||
|
||||||||||||||||||||
Event Merger Arb
|
$
|
559
|
$
|
297
|
$
|
166
|
$
|
162
|
$
|
79
|
||||||||||
Event-Driven Value
|
13
|
1
|
39
|
45
|
38
|
|||||||||||||||
Other
|
-
|
1
|
2
|
5
|
6
|
|||||||||||||||
Total Cash Inflows
|
$
|
572
|
$
|
299
|
$
|
207
|
$
|
212
|
$
|
123
|
Year Ended December 31,
|
||||||||||||||||||||
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||||||||
Event Merger Arb
|
$
|
(313
|
)
|
$
|
(148
|
)
|
$
|
(119
|
)
|
$
|
(68
|
)
|
$
|
(137
|
)
|
|||||
Event-Driven Value
|
(65
|
)
|
(18
|
)
|
(54
|
)
|
(21
|
)
|
(36
|
)
|
||||||||||
Other
|
(2
|
)
|
(9
|
)
|
(12
|
)
|
(5
|
)
|
(13
|
)
|
||||||||||
Total Cash Outflows
|
$
|
(380
|
)
|
$
|
(175
|
)
|
$
|
(185
|
)
|
$
|
(94
|
)
|
$
|
(186
|
)
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2017
|
2016
|
2015
|
2014
|
2013
|
|||||||||||||||
|
||||||||||||||||||||
Event Merger Arb
|
$
|
62
|
$
|
58
|
$
|
26
|
$
|
11
|
$
|
28
|
||||||||||
Event-Driven Value
|
10
|
5
|
(7
|
)
|
3
|
14
|
||||||||||||||
Other
|
5
|
5
|
(1
|
)
|
1
|
8
|
||||||||||||||
Total Net Appreciation/(Depreciation)
|
$
|
77
|
$
|
68
|
$
|
18
|
$
|
15
|
$
|
50
|
|
Year Ended December 31,
|
Decrease
|
||||||||||||||
|
2017
|
2016
|
$
|
%
|
||||||||||||
Investment advisory and incentive fees
|
$
|
14,551
|
$
|
18,320
|
$
|
(3,769
|
)
|
-20.6
|
%
|
|||||||
Institutional research services
|
12,199
|
12,634
|
(435
|
)
|
(3.4
|
)
|
||||||||||
Other revenues
|
165
|
273
|
(108
|
)
|
(39.6
|
)
|
||||||||||
Total revenues
|
$
|
26,915
|
$
|
31,227
|
$
|
(4,312
|
)
|
-13.8
|
%
|
Year Ended December 31,
|
Increase / (decrease)
|
|||||||||||||||
2016
|
2015
|
$
|
%
|
|||||||||||||
Investment advisory and incentive fees
|
$
|
18,320
|
$
|
12,635
|
$
|
5,685
|
45.0
|
%
|
||||||||
Institutional research services
|
12,634
|
9,927
|
2,707
|
27.3
|
||||||||||||
Other revenues
|
273
|
281
|
(8
|
)
|
(2.8
|
)
|
||||||||||
Total revenues
|
$
|
31,227
|
$
|
22,843
|
$
|
8,384
|
36.7
|
%
|
Year Ended December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
(in thousands)
|
||||||||||||
Cash flows provided by (used in):
|
||||||||||||
Operating activities
|
$
|
(67,620
|
)
|
$
|
6,588
|
$
|
(47,350
|
)
|
||||
Investing activities
|
(18,734
|
)
|
(4,115
|
)
|
(41,734
|
)
|
||||||
Financing activities
|
65,373
|
105,872
|
9,281
|
|||||||||
Net increase (decrease) in cash and cash equivalents
|
(20,981
|
)
|
108,345
|
(79,803
|
)
|
|||||||
Cash and cash equivalents at beginning of year
|
314,093
|
205,750
|
285,530
|
|||||||||
Increase in cash from consolidation
|
-
|
-
|
10
|
|||||||||
Increase (decrease) in cash from deconsolidation
|
-
|
(2
|
)
|
13
|
||||||||
Cash and cash equivalents at end of year
|
$
|
293,112
|
$
|
314,093
|
$
|
205,750
|
2018
|
||||
Contractual Obligations:
|
||||
Occupancy charge
|
$
|
94
|
||
Total
|
$
|
94
|
December 31,
|
||||||||
2017
|
2016
|
|||||||
Investment in securities:
|
||||||||
Government obligations
|
$
|
53,804
|
$
|
119,823
|
||||
GBL stock
|
130,254
|
135,701
|
||||||
Common stocks
|
163,327
|
82,158
|
||||||
Mutual funds
|
3,428
|
3,643
|
||||||
Other investments
|
1,824
|
1,472
|
||||||
Total investments in securities
|
352,637
|
342,797
|
||||||
Investments in affiliated registered investment companies:
|
||||||||
Closed-end funds
|
93,147
|
80,650
|
||||||
Mutual funds
|
52,767
|
50,995
|
||||||
Total investments in affiliated registered investment companies
|
145,914
|
131,645
|
||||||
Investments in partnerships:
|
||||||||
Investments in partnerships
|
145,591
|
129,398
|
||||||
Total investments in partnerships
|
145,591
|
129,398
|
||||||
Securities sold, not yet purchased:
|
||||||||
Common stocks
|
(5,396
|
)
|
(9,947
|
)
|
||||
Other investments
|
(335
|
)
|
(37
|
)
|
||||
Total securities sold, not yet purchased
|
(5,731
|
)
|
(9,984
|
)
|
||||
Total investments net of securities sold, not yet purchased
|
$
|
638,411
|
$
|
593,856
|
Fair Value
|
Fair Value
assuming
10% decrease in
equity prices
|
Fair Value
assuming
10% increase in
equity prices
|
||||||||||
At December 31, 2017:
|
||||||||||||
Equity price sensitive investments, at fair value
|
$
|
321,550
|
$
|
289,395
|
$
|
353,705
|
||||||
At December 31, 2016:
|
||||||||||||
Equity price sensitive investments, at fair value
|
$
|
304,836
|
$
|
274,352
|
$
|
335,320
|
Page
|
|
Report of Independent Registered Public Accounting Firm
|
50
|
Consolidated Financial Statements:
|
|
Consolidated Statements of Income for the years ended December 31, 2017, 2016 and 2015
|
51
|
Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015
|
52
|
Consolidated Statements of Financial Condition at December 31, 2017 and 2016
|
53
|
Consolidated Statements of Equity for the years ended December 31, 2017, 2016 and 2015
|
54
|
Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015
|
57
|
Notes to Consolidated Financial Statements
|
59
|
Year Ended December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Revenues
|
||||||||||||
Investment advisory and incentive fees
|
$
|
14,551
|
$
|
18,320
|
$
|
12,635
|
||||||
Institutional research services
|
12,199
|
12,634
|
9,927
|
|||||||||
Other revenues
|
165
|
273
|
280
|
|||||||||
Total revenues
|
26,915
|
31,227
|
22,842
|
|||||||||
Expenses
|
||||||||||||
Compensation
|
30,644
|
30,968
|
26,343
|
|||||||||
Stock-based compensation
|
5,879
|
2,464
|
4,931
|
|||||||||
Management fee
|
713
|
1,593
|
(309
|
)
|
||||||||
Other operating expenses
|
10,065
|
8,434
|
6,189
|
|||||||||
Total expenses
|
47,301
|
43,459
|
37,154
|
|||||||||
Operating loss
|
(20,386
|
)
|
(12,232
|
)
|
(14,312
|
)
|
||||||
Other income (expense)
|
||||||||||||
Net gain from investments
|
20,598
|
19,909
|
8,276
|
|||||||||
Interest and dividend income
|
10,501
|
12,669
|
4,720
|
|||||||||
Interest expense
|
(227
|
)
|
(590
|
)
|
(1,260
|
)
|
||||||
Shareholder-designated contribution
|
(4,222
|
)
|
(5,411
|
)
|
-
|
|||||||
Total other income, net
|
26,650
|
26,577
|
11,736
|
|||||||||
Income (loss) before income taxes
|
6,264
|
14,345
|
(2,576
|
)
|
||||||||
Income tax provision (benefit)
|
(2,420
|
)
|
3,876
|
(1,685
|
)
|
|||||||
Net income (loss)
|
8,684
|
10,469
|
(891
|
)
|
||||||||
Net income (loss) attributable to noncontrolling interests
|
(153
|
)
|
251
|
(780
|
)
|
|||||||
Net income (loss) attributable to Associated Capital Group, Inc.’s shareholders
|
$
|
8,837
|
$
|
10,218
|
$
|
(111
|
)
|
|||||
Net income (loss) per share attributable to Associated Capital Group, Inc.’s shareholders:
|
||||||||||||
Basic
|
$
|
0.37
|
$
|
0.41
|
$
|
-
|
||||||
Diluted
|
$
|
0.37
|
$
|
0.41
|
$
|
-
|
||||||
Weighted average shares outstanding:
|
||||||||||||
Basic
|
23,792
|
24,870
|
24,887
|
|||||||||
Diluted
|
23,925
|
25,175
|
25,170
|
|||||||||
Actual shares outstanding
|
23,639
|
24,255
|
25,440
|
Year Ended December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Net income (loss)
|
$
|
8,684
|
$
|
10,469
|
$
|
(891
|
)
|
|||||
Other comprehensive income (loss), net of tax:
|
||||||||||||
Net unrealized gains (losses) on securities available for sale (a)
|
5,395
|
4,138
|
(11,035
|
)
|
||||||||
Comprehensive income (loss)
|
14,079
|
14,607
|
(11,926
|
)
|
||||||||
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
(153
|
)
|
1,215
|
(780
|
)
|
|||||||
Comprehensive income (loss) attributable to Associated Capital Group, Inc.
|
$
|
14,232
|
$
|
13,392
|
$
|
(11,146
|
)
|
(a)
|
Net of income tax expense (benefit) of $2,876, $2,328 and ($6,434) for 2017, 2016 and 2015, respectively.
|
December 31,
2017
|
December 31,
2016
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$
|
293,112
|
$
|
314,093
|
||||
Investments in securities (Including GBL stock with a market value of $130.3 million and $135.7 million at December 31, 2017 and 2016, respectively)
|
352,637
|
342,797
|
||||||
Investments in affiliated registered investment companies
|
145,914
|
131,645
|
||||||
Investments in partnerships
|
145,591
|
129,398
|
||||||
Receivable from brokers
|
34,881
|
12,588
|
||||||
Investment advisory fees receivable
|
5,739
|
9,784
|
||||||
Receivable from affiliates
|
15,866
|
1,523
|
||||||
Goodwill
|
3,422
|
3,422
|
||||||
Other assets
|
9,753
|
7,353
|
||||||
Total assets
|
$
|
1,006,915
|
$
|
952,603
|
||||
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
|
||||||||
Payable to brokers
|
$
|
13,281
|
$
|
2,396
|
||||
Income taxes payable and deferred tax liabilities
|
5,484
|
6,978
|
||||||
Compensation payable
|
12,785
|
17,676
|
||||||
Securities sold, not yet purchased
|
5,731
|
9,984
|
||||||
Payable to affiliates
|
442
|
1,455
|
||||||
Accrued expenses and other liabilities
|
4,815
|
35,862
|
||||||
Total liabilities
|
42,538
|
74,351
|
||||||
Redeemable noncontrolling interests
|
46,230
|
4,230
|
||||||
Commitments and contingencies (Note K)
|
||||||||
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; 6,404,287 and 6,398,580 shares issued, respectively; 4,451,379 and 5,058,648 shares outstanding, respectively
|
6
|
6
|
||||||
Class B Common Stock, $0.001 par value; 100,000,000 shares authorized; 19,196,792 shares issued; 19,187,885 and 19,196,792 shares outstanding, respectively
|
19
|
19
|
||||||
Additional paid-in capital
|
1,010,505
|
1,007,027
|
||||||
Retained earnings
|
13,800
|
7,327
|
||||||
GBL 4% PIK Note
|
(50,000
|
)
|
(100,000
|
)
|
||||
Accumulated comprehensive income
|
6,712
|
1,317
|
||||||
Treasury stock, at cost (1,952,908 and 1,339,932 shares, respectively)
|
(62,895
|
)
|
(41,674
|
)
|
||||
Total Associated Capital Group, Inc. equity
|
918,147
|
874,022
|
||||||
Total equity
|
918,147
|
874,022
|
||||||
Total liabilities and equity
|
$
|
1,006,915
|
$
|
952,603
|
Associated Capital Group, Inc. shareholders
|
||||||||||||||||||||||||||||||||||||||||
Noncontrolling
Interests
|
Common
Stock
|
Parent Company
Equity
pre Spin-off
|
Retained
Earnings
|
Additional
Paid-in
Capital
|
GBL 4%
PIK Note
|
Accumulated
Comprehensive
Income
|
Treasury
Stock
|
Total
|
Redeemable
Noncontrolling
Interests
|
|||||||||||||||||||||||||||||||
Balance at December 31, 2014
|
$
|
-
|
$
|
-
|
$
|
573,749
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
9,178
|
$
|
-
|
$
|
582,927
|
$
|
68,334
|
||||||||||||||||||||
Recapitalization
|
-
|
25
|
(522,758
|
)
|
-
|
522,733
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||
Redemptions of noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(901
|
)
|
|||||||||||||||||||||||||||||
Contributions from redeemable noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
1,036
|
||||||||||||||||||||||||||||||
Consolidation of investment funds
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
996
|
||||||||||||||||||||||||||||||
Deconsolidation of an investment fund
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(63,256
|
)
|
|||||||||||||||||||||||||||||
Net income (loss)
|
(309
|
)
|
-
|
-
|
(111
|
)
|
-
|
-
|
-
|
-
|
(420
|
)
|
(471
|
)
|
||||||||||||||||||||||||||
Net unrealized losses on securities available for sale, net of income tax benefit ($6,503)
|
-
|
-
|
-
|
-
|
-
|
-
|
(11,157
|
)
|
-
|
(11,157
|
)
|
-
|
||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of income tax ($69)
|
-
|
-
|
-
|
-
|
-
|
-
|
122
|
-
|
122
|
-
|
||||||||||||||||||||||||||||||
Stock based compensation expense
|
-
|
-
|
-
|
-
|
4,931
|
-
|
-
|
-
|
4,931
|
-
|
||||||||||||||||||||||||||||||
Issuance of GBL 4% PIK Note
|
-
|
-
|
-
|
-
|
250,000
|
(250,000
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(44
|
)
|
(44
|
)
|
-
|
||||||||||||||||||||||||||||
Net transfer from GBL
|
2,662
|
-
|
(50,991
|
)
|
2,183
|
221,336
|
-
|
-
|
-
|
175,190
|
-
|
|||||||||||||||||||||||||||||
Balance at December 31, 2015
|
$
|
2,353
|
$
|
25
|
$
|
-
|
$
|
2,072
|
$
|
999,000
|
$
|
(250,000
|
)
|
$
|
(1,857
|
)
|
$
|
(44
|
)
|
$
|
751,549
|
$
|
5,738
|
Associated Capital Group, Inc. shareholders
|
||||||||||||||||||||||||||||||||||||
Noncontrolling
Interests
|
Common
Stock
|
Retained
Earnings
|
Additional
Paid-in
Capital
|
GBL 4%
PIK Note
|
Accumulated
Comprehensive
Income
|
Treasury
Stock
|
Total
|
Redeemable
Noncontrolling
Interests
|
||||||||||||||||||||||||||||
Balance at December 31, 2015
|
$
|
2,353
|
$
|
25
|
$
|
2,072
|
$
|
999,000
|
$
|
(250,000
|
)
|
$
|
(1,857
|
)
|
$
|
(44
|
)
|
$
|
751,549
|
$
|
5,738
|
|||||||||||||||
Contributions from redeemable noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
250
|
|||||||||||||||||||||||||||
Redemptions of noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(244
|
)
|
||||||||||||||||||||||||||
Deconsolidation of an investment fund
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(1,811
|
)
|
||||||||||||||||||||||||||
Net income (loss)
|
(46
|
)
|
-
|
10,218
|
-
|
-
|
-
|
-
|
10,172
|
297
|
||||||||||||||||||||||||||
Net unrealized gains on securities available for sale, net of income tax ($2,319)
|
964
|
-
|
-
|
-
|
-
|
3,189
|
-
|
4,153
|
-
|
|||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of income tax benefit ($9)
|
-
|
-
|
-
|
-
|
-
|
(15
|
)
|
-
|
(15
|
)
|
-
|
|||||||||||||||||||||||||
Noncontrolling minority interest
|
(3,271
|
)
|
-
|
-
|
4,862
|
-
|
-
|
-
|
1,591
|
-
|
||||||||||||||||||||||||||
Stock based compensation expense
|
-
|
-
|
-
|
2,464
|
-
|
-
|
-
|
2,464
|
-
|
|||||||||||||||||||||||||||
Increase to paid in capital for the excess of actual tax benefit over recorded RSA tax benefit
|
-
|
-
|
-
|
701
|
-
|
-
|
-
|
701
|
-
|
|||||||||||||||||||||||||||
Dividends declared ($.20 per share)
|
-
|
-
|
(4,963
|
)
|
-
|
-
|
-
|
-
|
(4,963
|
)
|
-
|
|||||||||||||||||||||||||
Proceeds from payment of GBL 4% PIK Note
|
-
|
-
|
-
|
-
|
150,000
|
-
|
-
|
150,000
|
-
|
|||||||||||||||||||||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
-
|
-
|
-
|
(41,630
|
)
|
(41,630
|
)
|
-
|
|||||||||||||||||||||||||
Balance at December 31, 2016
|
$
|
-
|
$
|
25
|
$
|
7,327
|
$
|
1,007,027
|
$
|
(100,000
|
)
|
$
|
1,317
|
$
|
(41,674
|
)
|
$
|
874,022
|
$
|
4,230
|
|
Associated Capital Group, Inc. shareholders
|
|||||||||||||||||||||||||||||||
|
Common
Stock
|
Retained
Earnings
|
Additional
Paid-in
Capital
|
GBL 4%
PIK Note
|
Accumulated
Comprehensive
Income
|
Treasury
Stock
|
Total
|
Redeemable
Noncontrolling
Interests
|
||||||||||||||||||||||||
Balance at December 31, 2016
|
$
|
25
|
$
|
7,327
|
$
|
1,007,027
|
$
|
(100,000
|
)
|
$
|
1,317
|
$
|
(41,674
|
)
|
$
|
874,022
|
$
|
4,230
|
||||||||||||||
Contributions from redeemable noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
41,598
|
||||||||||||||||||||||||
Redemptions of noncontrolling interests
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(236
|
)
|
|||||||||||||||||||||||
Consolidation of an investment fund
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
791
|
||||||||||||||||||||||||
Net income (loss)
|
-
|
8,837
|
-
|
-
|
-
|
-
|
8,837
|
(153
|
)
|
|||||||||||||||||||||||
Net unrealized gains on securities available for sale, net of income tax ($277)
|
-
|
-
|
-
|
-
|
748
|
-
|
748
|
-
|
||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income, net of income tax benefit ($2,599)
|
-
|
-
|
-
|
-
|
4,647
|
-
|
4,647
|
-
|
||||||||||||||||||||||||
Stock-based compensation expense
|
5,879
|
5,879
|
||||||||||||||||||||||||||||||
Dividends declared ($0.20 per share)
|
-
|
(2,364
|
)
|
(2,401
|
)
|
-
|
-
|
-
|
(4,765
|
)
|
-
|
|||||||||||||||||||||
Proceeds from payment of GBL 4% PIK Note
|
-
|
-
|
-
|
50,000
|
-
|
-
|
50,000
|
-
|
||||||||||||||||||||||||
Purchase of treasury stock
|
-
|
-
|
-
|
-
|
-
|
(21,221
|
)
|
(21,221
|
)
|
-
|
||||||||||||||||||||||
Balance at December 31, 2017
|
$
|
25
|
$
|
13,800
|
$
|
1,010,505
|
$
|
(50,000
|
)
|
$
|
6,712
|
$
|
(62,895
|
)
|
$
|
918,147
|
$
|
46,230
|
Year Ended December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Operating activities
|
||||||||||||
Net income (loss)
|
$
|
8,684
|
$
|
10,469
|
$
|
(891
|
)
|
|||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||||||
Equity in net gains from partnerships
|
(10,274
|
)
|
(11,183
|
)
|
(4,756
|
)
|
||||||
Depreciation and amortization
|
16
|
17
|
13
|
|||||||||
Stock based compensation expense
|
5,879
|
2,464
|
4,931
|
|||||||||
Deferred income taxes
|
(3,168
|
)
|
(1,378
|
)
|
(6,450
|
)
|
||||||
Other-than-temporary loss on available for sale securities
|
19,201
|
324
|
216
|
|||||||||
Donated securities
|
2,627
|
1,051
|
73
|
|||||||||
Gains on sales of available for sale securities
|
(167
|
)
|
(348
|
)
|
(25
|
)
|
||||||
Gains on contribution of available for sale securities to subsidiary
|
(11,788
|
)
|
-
|
-
|
||||||||
(Increase) decrease in assets:
|
||||||||||||
Investments in securities - trading
|
(26,231
|
)
|
(13,769
|
)
|
(71,552
|
)
|
||||||
Investments in partnerships:
|
||||||||||||
Contributions to partnerships
|
(26,278
|
)
|
(36,367
|
)
|
(15,169
|
)
|
||||||
Distributions from partnerships
|
21,151
|
23,199
|
22,857
|
|||||||||
Receivable from affiliates
|
657
|
5,934
|
(7,055
|
)
|
||||||||
Receivable from brokers
|
(22,292
|
)
|
43,225
|
(30,008
|
)
|
|||||||
Investment advisory fees receivable
|
4,045
|
(4,907
|
)
|
(949
|
)
|
|||||||
Other assets
|
(2,417
|
)
|
(5,465
|
)
|
17,568
|
|||||||
Increase (decrease) in liabilities:
|
||||||||||||
Payable to affiliates
|
(1,013
|
)
|
1,455
|
(4,733
|
)
|
|||||||
Payable to brokers
|
10,885
|
(48,231
|
)
|
44,516
|
||||||||
Income taxes payable and deferred tax liabilities
|
(1,203
|
)
|
1,060
|
2,191
|
||||||||
Compensation payable
|
(4,892
|
)
|
6,751
|
1,747
|
||||||||
Mandatorily redeemable noncontrolling interests
|
-
|
292
|
(172
|
)
|
||||||||
Accrued expenses and other liabilities
|
(31,042
|
)
|
31,995
|
298
|
||||||||
Total adjustments
|
(76,304
|
)
|
(3,881
|
)
|
(46,459
|
)
|
||||||
Net cash provided by (used in) operating activities
|
(67,620
|
)
|
6,588
|
(47,350
|
)
|
|||||||
Investing activities
|
||||||||||||
Purchases of available for sale securities
|
(4,900
|
)
|
(5,107
|
)
|
(43,271
|
)
|
||||||
Proceeds from sales of available for sale securities
|
271
|
803
|
1,013
|
|||||||||
Return of capital on available for sale securities
|
895
|
189
|
524
|
|||||||||
Purchase of GBL 1.6% Note (due February 28, 2018)
|
(15,000
|
)
|
-
|
-
|
||||||||
Net cash used in investing activities
|
$
|
(18,734
|
)
|
$
|
(4,115
|
)
|
$
|
(41,734
|
)
|
Year Ended December 31,
|
||||||||||||
2017
|
2016
|
2015
|
||||||||||
Financing activities
|
||||||||||||
Contributions from redeemable noncontrolling interests
|
$
|
41,598
|
$
|
250
|
$
|
1,036
|
||||||
Redemptions of redeemable noncontrolling interests
|
(236
|
)
|
(244
|
)
|
(901
|
)
|
||||||
Repayment of demand loan with GBL
|
-
|
-
|
(16,000
|
)
|
||||||||
Net transfer from GBL
|
-
|
-
|
25,190
|
|||||||||
Dividends paid
|
(4,768
|
)
|
(2,504
|
)
|
-
|
|||||||
Purchase of treasury stock
|
(21,221
|
)
|
(41,630
|
)
|
(44
|
)
|
||||||
Proceeds from payment of GBL 4% PIK Note
|
50,000
|
150,000
|
-
|
|||||||||
Net cash provided by financing activities
|
65,373
|
105,872
|
9,281
|
|||||||||
Net increase (decrease) in cash and cash equivalents
|
(20,981
|
)
|
108,345
|
(79,803
|
)
|
|||||||
Cash and cash equivalents at beginning of period
|
314,093
|
205,750
|
285,530
|
|||||||||
Increase in cash from consolidation
|
-
|
-
|
10
|
|||||||||
Increase (decrease) in cash from deconsolidation
|
-
|
(2
|
)
|
13
|
||||||||
Cash and cash equivalents at end of period
|
$
|
293,112
|
$
|
314,093
|
$
|
205,750
|
||||||
Supplemental disclosures of cash flow information:
|
||||||||||||
Cash paid for interest
|
$
|
227
|
$
|
298
|
$
|
1,428
|
||||||
Cash paid for taxes
|
$
|
2,077
|
$
|
2,989
|
$
|
2
|
-
|
During the year ended December 31, 2016, Associated Capital Group, Inc. (“AC”) exchanged 163,428 shares of AC for the 6.1% of Gabelli & Company Investment Advisers, Inc. (“GCIA”) shares owned by third parties and certain employees.
|
-
|
For the years ended December 31, 2017, 2016 and 2015, AC accrued dividends on restricted stock awards of $8, $88 and $0, respectively.
|
-
|
On July 19, 2017, AC was deemed to have control over an investment fund which resulted in its consolidation and an increase of approximately $99,276 of net assets and an increase of approximately $37,901 of redeemable noncontrolling interests.
|
-
|
On October 1, 2017, AC was deemed to have control over an investment fund which resulted in its consolidation and an increase of approximately $791 of net assets and an increase of approximately $791 of redeemable noncontrolling interests.
|
-
|
In November 2017, an investment fund that AC consolidates completed its first new issue of ordinary shares which resulted in an increase of approximately $3,344 of net assets and an increase of approximately $3,344 of redeemable noncontrolling interests.
|
-
|
In November 2017, AC contributed certain available for sale securities totaling $91,303 to its wholly-owned broker-dealer subsidiary which accounts for these as trading securities. See Note C for detail.
|
-
|
On January 1, 2016, AC was no longer deemed to have control over a certain investment fund which resulted in its deconsolidation and a decrease of approximately $1 of cash and cash equivalents, a decrease of approximately $104 of net assets and a decrease of approximately $105 of redeemable noncontrolling interests.
|
-
|
On January 1, 2016, AC adopted ASU 2015-02, which amended the consolidation requirements in ASC 810. This resulted in the deconsolidation of certain investment funds and a decrease of approximately $1 of cash and cash equivalents, a decrease of approximately $1,705 of net assets and a decrease of approximately $1,706 of redeemable noncontrolling interests.
|
-
|
On November 28, 2015, AC’s majority owned subsidiary GCIA purchased 4.4 million shares of GBL in exchange for a $150 million five-year 4% note (“GCIA Note Payable”).
|
-
|
On November 30, 2015, in connection with the spin-off of AC from GAMCO, GAMCO issued AC a $250 million five-year 4% PIK Note (“GBL 4% PIK Note”).
|
-
|
On November 30, 2015, in connection with the spin-off of AC from GAMCO, GAMCO contributed to AC the GCIA Note Payable.
|
-
|
On January 1, 2015, AC was no longer deemed to have control over certain investment funds which resulted in their deconsolidation and an increase of approximately $13 of cash and cash equivalents, a decrease of approximately $63,280 of net assets and a decrease of approximately $63,267 of redeemable noncontrolling interests.
|
-
|
On April 1, 2015, AC was deemed to have control over certain investment funds which resulted in their consolidation and an increase of approximately $10 of cash and cash equivalents, an increase of approximately $986 of other net assets and an increase of approximately $996 of redeemable noncontrolling interests.
|
-
|
On April 1, 2015, AC launched a new investment fund that was funded with $1,000 of proprietary capital and no third party capital and was therefore consolidated.
|
· |
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities at the reporting date. Level 1 asset includes cash equivalents, government obligations, open-end mutual 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.
|
2017
|
2016
|
|||||||||||||||
Cost
|
Fair Value
|
Cost
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Trading securities:
|
||||||||||||||||
Government obligations
|
$
|
53,681
|
$
|
53,804
|
$
|
119,755
|
$
|
119,823
|
||||||||
Common stocks
|
209,686
|
228,557
|
69,503
|
82,158
|
||||||||||||
Mutual funds
|
1,959
|
3,157
|
2,402
|
3,143
|
||||||||||||
Other investments
|
825
|
1,824
|
1,275
|
1,472
|
||||||||||||
Total trading securities
|
266,151
|
287,342
|
192,935
|
206,596
|
||||||||||||
Available for sale securities:
|
||||||||||||||||
Common stocks
|
65,331
|
65,024
|
150,000
|
135,701
|
||||||||||||
Mutual funds
|
103
|
271
|
206
|
500
|
||||||||||||
Total available for sale securities
|
65,434
|
65,295
|
150,206
|
136,201
|
||||||||||||
Total investments in securities
|
$
|
331,585
|
$
|
352,637
|
$
|
343,141
|
$
|
342,797
|
2017
|
2016
|
|||||||||||||||
Cost
|
Fair Value
|
Cost
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Trading securities:
|
||||||||||||||||
Common stocks
|
$
|
4,862
|
$
|
5,396
|
$
|
9,583
|
$
|
9,947
|
||||||||
Other investments
|
1
|
335
|
27
|
37
|
||||||||||||
Total securities sold, not yet purchased
|
$
|
4,863
|
$
|
5,731
|
$
|
9,610
|
$
|
9,984
|
2017
|
2016
|
|||||||||||||||
Cost
|
Fair Value
|
Cost
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Trading securities:
|
||||||||||||||||
Closed-end funds
|
$
|
26,231
|
$
|
26,929
|
$
|
-
|
$
|
-
|
||||||||
Mutual funds
|
41,950
|
48,328
|
40,096
|
45,351
|
||||||||||||
Total trading securities
|
68,181
|
75,257
|
40,096
|
45,351
|
||||||||||||
Available for sale securities:
|
||||||||||||||||
Closed-end funds
|
53,782
|
66,218
|
62,890
|
80,650
|
||||||||||||
Mutual funds
|
3,420
|
4,439
|
4,396
|
5,644
|
||||||||||||
Total available for sale securities
|
57,202
|
70,657
|
67,286
|
86,294
|
||||||||||||
Total investments in affiliated registered investment companies
|
$
|
125,383
|
$
|
145,914
|
$
|
107,382
|
$
|
131,645
|
Amount
Reclassified
from AOCI
|
Affected Line Item in
in the Statements
Of Income
|
Reason for
Reclassification
from AOCI
|
|||||||
Year ended December 31,
|
|||||||||
2017
|
2016
|
||||||||
$
|
167
|
$
|
348
|
Net gain from investments
|
Realized gains on sale of AFS securities
|
||||
11,788
|
-
|
Net gain from investments
|
Gains on transfer of AFS securities to affiliated broker-dealer
|
||||||
(19,201
|
)
|
(324
|
)
|
Net gain from investments
|
Other than temporary impairment of AFS securities
|
||||
(7,246
|
)
|
24
|
Income (loss) before income taxes
|
||||||
2,599
|
(9
|
)
|
Income tax benefit (expense)
|
||||||
$
|
(4,647
|
)
|
$
|
15
|
Net income (loss)
|
Asset Derivatives
|
Liability Derivatives
|
|||||||||||||||||
Statement of
|
Fair Value
|
Statement of
|
Fair Value
|
|||||||||||||||
Financial Condition
Location
|
December 31,
2017
|
December 31,
2016
|
Financial Condition
Location
|
December 31,
2017
|
December 31,
2016
|
|||||||||||||
Derivatives designated as hedging instruments under FASB ASC 815-20
|
||||||||||||||||||
Foreign exchange contracts
|
Receivable from brokers
|
$
|
-
|
$
|
-
|
Payable to brokers
|
$
|
-
|
$
|
-
|
||||||||
|
|
|||||||||||||||||
Sub total
|
|
$
|
-
|
$
|
-
|
|
$
|
-
|
$
|
-
|
||||||||
|
|
|||||||||||||||||
Derivatives not designated as hedging instruments under FASB ASC 815-20
|
||||||||||||||||||
Equity contracts
|
Investments in securities
|
$
|
229
|
$
|
127
|
Securities sold, not yet purchased
|
$
|
335
|
$
|
37
|
||||||||
Foreign exchange contracts
|
Receivable from brokers
|
-
|
-
|
Payable to brokers
|
-
|
-
|
||||||||||||
|
|
|||||||||||||||||
Sub total
|
|
$
|
229
|
$
|
127
|
|
$
|
335
|
$
|
37
|
||||||||
|
|
|||||||||||||||||
Total derivatives
|
|
$
|
229
|
$
|
127
|
|
$
|
335
|
$
|
37
|
Type of Derivative
|
Income Statement Location
|
Year ended December 31,
|
||||||||
|
|
2017
|
2016
|
|||||||
|
|
|||||||||
Foreign exchange contracts
|
Net gain from investments
|
$
|
-
|
$
|
1,373
|
|||||
Equity contracts
|
Net gain from investments
|
(98
|
)
|
143
|
||||||
|
|
|||||||||
Total
|
|
$
|
(98
|
)
|
$
|
1,516
|
|
Gross Amounts Not Offset in the
Statements of Financial Condition
|
|||||||||||||||||||||||
|
Gross
Amounts of
Recognized
Assets
|
Gross Amounts
Offset in the
Statements of
Financial Condition
|
Net Amounts of
Assets Presented
in the Statements of
Financial Condition
|
Financial
Instruments
|
Cash Collateral
Received
|
Net Amount
|
||||||||||||||||||
Swaps:
|
(In thousands)
|
|||||||||||||||||||||||
December 31, 2017
|
$
|
229
|
$
|
-
|
$
|
229
|
$
|
(229
|
)
|
$
|
-
|
$
|
-
|
|||||||||||
December 31, 2016
|
$
|
96
|
$
|
-
|
$
|
96
|
$
|
(9
|
)
|
$
|
-
|
$
|
87
|
|
Gross Amounts Not Offset in the
Statements of Financial Condition
|
|||||||||||||||||||||||
|
Gross
Amounts of
Recognized
Liabilities
|
Gross Amounts
Offset in the
Statements of
Financial Condition
|
Net Amounts of
Liabilities Presented
in the Statements of
Financial Condition
|
Financial
Instruments
|
Cash Collateral
Pledged
|
Net Amount
|
||||||||||||||||||
Swaps:
|
(In thousands)
|
|||||||||||||||||||||||
December 31, 2017
|
$
|
334
|
$
|
-
|
$
|
334
|
$
|
(229
|
)
|
$
|
-
|
$
|
105
|
|||||||||||
December 31, 2016
|
$
|
9
|
$
|
-
|
$
|
9
|
$
|
(9
|
)
|
$
|
-
|
$
|
-
|
|
December 31, 2017
|
|||||||||||||||
|
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
Common stocks
|
$
|
65,331
|
$
|
-
|
$
|
(307
|
)
|
$
|
65,024
|
|||||||
Closed-end Funds
|
53,782
|
12,436
|
-
|
66,218
|
||||||||||||
Mutual funds
|
3,523
|
1,187
|
-
|
4,710
|
||||||||||||
Total available for sale securities
|
$
|
122,636
|
$
|
13,623
|
$
|
(307
|
)
|
$
|
135,952
|
|
December 31, 2016
|
|||||||||||||||
|
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
|
(In thousands)
|
|||||||||||||||
Common stocks
|
$
|
150,000
|
$
|
-
|
$
|
(14,299
|
)
|
$
|
135,701
|
|||||||
Closed-end Funds
|
62,890
|
17,760
|
-
|
80,650
|
||||||||||||
Mutual funds
|
4,602
|
1,542
|
-
|
6,144
|
||||||||||||
Total available for sale securities
|
$
|
217,492
|
$
|
19,302
|
$
|
(14,299
|
)
|
$
|
222,495
|
December 31, 2017
|
December 31, 2016
|
|||||||||||||||||||||||
Cost
|
Unrealized
Losses |
Fair Value
|
Cost
|
Unrealized
Losses |
Fair Value
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Common Stocks
|
$
|
65,331
|
$
|
(307
|
)
|
$
|
65,024
|
$
|
150,000
|
$
|
(14,299
|
)
|
$
|
135,701
|
||||||||||
Total avalable for sale securities in unrealized loss position
|
$
|
65,331
|
$
|
(307
|
)
|
$
|
65,024
|
$
|
150,000
|
$
|
(14,299
|
)
|
$
|
135,701
|
|
VIEs
|
VOEs
|
||||||
Entities consolidated at December 31, 2014
|
1
|
4
|
||||||
Additional consolidated entities
|
1
|
2
|
||||||
Deconsolidated entities
|
-
|
(2
|
)
|
|||||
Entities consolidated at December 31, 2015
|
2
|
4
|
||||||
Additional consolidated entities
|
1
|
-
|
||||||
Deconsolidated entities
|
(2
|
)
|
(3
|
)
|
||||
Entities consolidated at December 31, 2016
|
1
|
1
|
||||||
Additional consolidated entities
|
-
|
2
|
||||||
Deconsolidated entities
|
-
|
-
|
||||||
Entities consolidated at December 31, 2017
|
1
|
3
|
|
December 31, 2017
|
|||||||||||
Accounting method
|
Affiliated
|
Unaffiliated
|
Total
|
|||||||||
|
||||||||||||
Fair Value
|
$
|
9,442
|
$
|
-
|
$
|
9,442
|
||||||
Equity Method
|
115,046
|
21,103
|
136,149
|
|||||||||
|
||||||||||||
Total
|
$
|
124,488
|
$
|
21,103
|
$
|
145,591
|
December 31, 2016
|
||||||||||||
Accounting method
|
Affiliated
|
Unaffiliated
|
Total
|
|||||||||
|
||||||||||||
Fair Value
|
$
|
8,343
|
$
|
-
|
$
|
8,343
|
||||||
Equity Method
|
103,947
|
17,108
|
121,055
|
|||||||||
|
||||||||||||
Total
|
$
|
112,290
|
$
|
17,108
|
$
|
129,398
|
December 31, 2017
|
||||||||||||
Prior to
Consolidation
|
Consolidated
Entities
|
As Reported
|
||||||||||
Assets
|
||||||||||||
Cash and cash equivalents
|
$
|
287,963
|
$
|
5,149
|
$
|
293,112
|
||||||
Investments in securities (including GBL stock)
|
255,252
|
97,385
|
352,637
|
|||||||||
Investments in affiliated investment companies
|
198,469
|
(52,555
|
)
|
145,914
|
||||||||
Investments in partnerships
|
160,456
|
(14,865
|
)
|
145,591
|
||||||||
Receivable from brokers
|
11,722
|
23,159
|
34,881
|
|||||||||
Investment advisory fees receivable
|
5,749
|
(10
|
)
|
5,739
|
||||||||
Other assets
|
28,865
|
176
|
29,041
|
|||||||||
Total assets
|
$
|
948,476
|
$
|
58,439
|
$
|
1,006,915
|
||||||
Liabilities and equity
|
||||||||||||
Securities sold, not yet purchased
|
$
|
5,405
|
$
|
326
|
$
|
5,731
|
||||||
Accrued expenses and other liabilities
|
24,924
|
11,883
|
36,807
|
|||||||||
Redeemable noncontrolling interests
|
-
|
46,230
|
46,230
|
|||||||||
Total equity
|
918,147
|
-
|
918,147
|
|||||||||
Total liabilities and equity
|
$
|
948,476
|
$
|
58,439
|
$
|
1,006,915
|
December 31, 2016
|
||||||||||||
Prior to
Consolidation
|
Consolidated
Entities
|
As Reported
|
||||||||||
Assets
|
||||||||||||
Cash and cash equivalents
|
$
|
313,785
|
$
|
308
|
$
|
314,093
|
||||||
Investments in securities (including GBL stock)
|
336,459
|
6,338
|
342,797
|
|||||||||
Investments in affiliated investment companies
|
131,645
|
-
|
131,645
|
|||||||||
Investments in partnerships
|
133,794
|
(4,396
|
)
|
129,398
|
||||||||
Receivable from brokers
|
10,542
|
2,046
|
12,588
|
|||||||||
Investment advisory fees receivable
|
9,800
|
(16
|
)
|
9,784
|
||||||||
Other assets
|
12,298
|
-
|
12,298
|
|||||||||
Total assets
|
$
|
948,323
|
$
|
4,280
|
$
|
952,603
|
||||||
Liabilities and equity
|
||||||||||||
Securities sold, not yet purchased
|
$
|
9,984
|
$
|
-
|
$
|
9,984
|
||||||
Accrued expenses and other liabilities
|
64,317
|
50
|
64,367
|
|||||||||
Redeemable noncontrolling interests
|
-
|
4,230
|
4,230
|
|||||||||
Total equity
|
874,022
|
-
|
874,022
|
|||||||||
Total liabilities and equity
|
$
|
948,323
|
$
|
4,280
|
$
|
952,603
|
|
Twelve Months Ended December 31, 2017
|
|||||||||||
|
Prior to
Consolidation
|
Consolidated
Entities
|
As Reported
|
|||||||||
Total revenues
|
$
|
26,962
|
$
|
(47
|
)
|
$
|
26,915
|
|||||
Total expenses
|
45,595
|
1,706
|
47,301
|
|||||||||
Operating loss
|
(18,633
|
)
|
(1,753
|
)
|
(20,386
|
)
|
||||||
Total other income, net
|
25,050
|
1,600
|
26,650
|
|||||||||
Income (loss) before income taxes
|
6,417
|
(153
|
)
|
6,264
|
||||||||
Income tax benefit
|
(2,420
|
)
|
-
|
(2,420
|
)
|
|||||||
Net income (loss) before NCI
|
8,837
|
(153
|
)
|
8,684
|
||||||||
Net loss attributable to noncontrolling interests
|
-
|
(153
|
)
|
(153
|
)
|
|||||||
Net income
|
$
|
8,837
|
$
|
-
|
$
|
8,837
|
|
Twelve Months Ended December 31, 2016
|
|||||||||||
|
Prior to
Consolidation
|
Consolidated
Entities
|
As Reported
|
|||||||||
Total revenues
|
$
|
31,247
|
$
|
(20
|
)
|
$
|
31,227
|
|||||
Total expenses
|
43,285
|
174
|
43,459
|
|||||||||
Operating loss
|
(12,038
|
)
|
(194
|
)
|
(12,232
|
)
|
||||||
Total other income, net
|
26,086
|
491
|
26,577
|
|||||||||
Income before income taxes
|
14,048
|
297
|
14,345
|
|||||||||
Income tax expense
|
3,876
|
-
|
3,876
|
|||||||||
Net income before NCI
|
10,172
|
297
|
10,469
|
|||||||||
Net income (loss) attributable to noncontrolling interests
|
(46
|
)
|
297
|
251
|
||||||||
Net income
|
$
|
10,218
|
$
|
-
|
$
|
10,218
|
Twelve Months Ended December 31, 2015
|
||||||||||||
Prior to
Consolidation
|
Consolidated
Entities
|
As Reported
|
||||||||||
Total revenues
|
$
|
22,883
|
$
|
(41
|
)
|
$
|
22,842
|
|||||
Total expenses
|
36,963
|
191
|
37,154
|
|||||||||
Operating loss
|
(14,080
|
)
|
(232
|
)
|
(14,312
|
)
|
||||||
Total other income (expense), net
|
11,967
|
(231
|
)
|
11,736
|
||||||||
Loss before income taxes
|
(2,113
|
)
|
(463
|
)
|
(2,576
|
)
|
||||||
Income tax benefit
|
(1,685
|
)
|
-
|
(1,685
|
)
|
|||||||
Net loss before NCI
|
(428
|
)
|
(463
|
)
|
(891
|
)
|
||||||
Net loss attributable to noncontrolling interests
|
(317
|
)
|
(463
|
)
|
(780
|
)
|
||||||
Net loss
|
$
|
(111
|
)
|
$
|
-
|
$
|
(111
|
)
|
December 31,
2017
|
December 31,
2016
|
|||||||
(In thousands)
|
||||||||
Cash and cash equivalents
|
$
|
120
|
$
|
308
|
||||
Investments in securities
|
8,757
|
6,338
|
||||||
Receivable from broker
|
1,657
|
2,046
|
||||||
Other assets
|
(19
|
)
|
(8
|
)
|
||||
Accrued expenses and other liabilities
|
(29
|
)
|
(37
|
)
|
||||
Redeemable noncontrolling interests
|
(284
|
)
|
(287
|
)
|
||||
AC’s net interests in consolidated VIE
|
$
|
10,202
|
$
|
8,360
|
December 31,
2017
|
December 31,
2016
|
|||||||
(In millions)
|
||||||||
Total assets
|
$
|
1,600
|
$
|
2,137
|
||||
Total liabilities
|
322
|
350
|
||||||
Total equity
|
1,278
|
1,787
|
|
For the year
|
|||||||
|
2017
|
2016
|
||||||
Net income/(loss)
|
112
|
(17
|
)
|
Assets
|
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
|
Significant Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Investments
Measured at
NAV (a)
|
Other Assets
Not Held at
Fair Value (b)
|
Balance as of
December 31,
2017
|
||||||||||||||||||
Cash equivalents
|
$
|
290,043
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
290,043
|
||||||||||||
Investments in partnerships
|
-
|
-
|
-
|
140,617
|
4,974
|
145,591
|
||||||||||||||||||
Investments in securities (including GBL stock):
|
||||||||||||||||||||||||
AFS - Common stocks
|
65,024
|
-
|
-
|
-
|
-
|
65,024
|
||||||||||||||||||
AFS - Mutual funds
|
271
|
-
|
-
|
-
|
-
|
271
|
||||||||||||||||||
Trading - Gov’t obligations
|
53,804
|
-
|
-
|
-
|
-
|
53,804
|
||||||||||||||||||
Trading - Common stocks
|
227,938
|
1
|
618
|
-
|
-
|
228,557
|
||||||||||||||||||
Trading - Mutual funds
|
3,157
|
-
|
-
|
-
|
-
|
3,157
|
||||||||||||||||||
Trading - Other
|
426
|
229
|
1,169
|
-
|
-
|
1,824
|
||||||||||||||||||
Total investments in securities
|
350,620
|
230
|
1,787
|
-
|
-
|
352,637
|
||||||||||||||||||
Investments in affiliated registered investment companies:
|
||||||||||||||||||||||||
AFS - Closed-end funds
|
66,218
|
-
|
-
|
-
|
-
|
66,218
|
||||||||||||||||||
AFS - Mutual funds
|
4,439
|
-
|
-
|
-
|
-
|
4,439
|
||||||||||||||||||
Trading - Closed-end funds
|
26,929
|
- | - | - | - |
26,929
|
||||||||||||||||||
Trading - Mutual funds
|
48,328
|
-
|
-
|
-
|
-
|
48,328
|
||||||||||||||||||
Total investments in affiliated registered investment companies
|
145,914
|
-
|
-
|
-
|
-
|
145,914
|
||||||||||||||||||
Total investments
|
496,534
|
230
|
1,787
|
140,617
|
4,974
|
644,142
|
||||||||||||||||||
Total assets at fair value
|
$
|
786,577
|
$
|
230
|
$
|
1,787
|
$
|
140,617
|
$
|
4,974
|
$
|
934,185
|
||||||||||||
Liabilities | ||||||||||||||||||||||||
Trading - Common stocks
|
$
|
5,396
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
5,396
|
||||||||||||
Trading - Other
|
-
|
335
|
-
|
-
|
-
|
335
|
||||||||||||||||||
Securities sold, not yet purchased
|
$
|
5,396
|
$
|
335
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
5,731
|
Assets
|
Quoted Prices in Active
Markets for Identical
Assets (Level 1)
|
Significant Other
Observable
Inputs (Level 2)
|
Significant
Unobservable
Inputs (Level 3)
|
Investments
Measured at
NAV (a)
|
Other Assets
Not Held at
Fair Value (b)
|
Balance as of
December 31,
2016
|
||||||||||||||||||
Cash equivalents
|
$
|
314,082
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
314,082
|
||||||||||||
Investments in partnerships
|
-
|
-
|
-
|
125,527
|
3,871
|
129,398
|
||||||||||||||||||
Investments in securities (including GBL stock):
|
||||||||||||||||||||||||
AFS - Common stocks
|
135,701
|
-
|
-
|
-
|
-
|
135,701
|
||||||||||||||||||
AFS - Mutual funds
|
500
|
-
|
-
|
-
|
-
|
500
|
||||||||||||||||||
Trading - Gov’t obligations
|
119,823
|
-
|
-
|
-
|
-
|
119,823
|
||||||||||||||||||
Trading - Common stocks
|
81,696
|
1
|
461
|
-
|
-
|
82,158
|
||||||||||||||||||
Trading - Mutual funds
|
3,143
|
-
|
-
|
-
|
-
|
3,143
|
||||||||||||||||||
Trading - Other
|
1,062
|
127
|
283
|
-
|
-
|
1,472
|
||||||||||||||||||
Total investments in securities
|
341,925
|
128
|
744
|
-
|
-
|
342,797
|
||||||||||||||||||
Investments in affiliated registered investment companies:
|
||||||||||||||||||||||||
AFS - Closed-end funds
|
80,650
|
-
|
-
|
-
|
-
|
80,650
|
||||||||||||||||||
AFS - Mutual funds
|
5,644
|
-
|
-
|
-
|
-
|
5,644
|
||||||||||||||||||
Trading - Mutual funds
|
45,351
|
-
|
-
|
-
|
-
|
45,351
|
||||||||||||||||||
Total investments in affiliated registered investment companies
|
131,645
|
-
|
-
|
-
|
-
|
131,645
|
||||||||||||||||||
Total investments
|
473,570
|
128
|
744
|
125,527
|
3,871
|
603,840
|
||||||||||||||||||
Total assets at fair value
|
$
|
787,652
|
$
|
128
|
$
|
744
|
$
|
125,527
|
$
|
3,871
|
$
|
917,922
|
||||||||||||
Liabilities | ||||||||||||||||||||||||
Trading - Common stocks
|
$
|
9,947
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
9,947
|
||||||||||||
Trading - Other
|
-
|
37
|
-
|
-
|
-
|
37
|
||||||||||||||||||
Securities sold, not yet purchased
|
$
|
9,947
|
$
|
37
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
9,984
|
(a) |
Amounts are comprised of certain investments measured at fair value using NAV or its equivalent as a practical expedient. These investments have not been classified in the fair value hierarchy.
|
(b) |
Amounts include certain equity method investments which are not accounted for under a fair value measure. In accordance with GAAP, certain equity method investees do not account for both their financial assets and liabilities under fair value measures; therefore, the Company’s investment in such equity method investees may not represent fair value.
|
December
31, 2016
|
Total Realized and
Unrealized Gains or
(Losses) in Income
|
Total
Unrealized
Gains or
(Losses)
Included in
Other
|
Total
Realized
and
Unrealized
|
Transfers
In and/or
|
||||||||||||||||||||||||||||||||
Asset
|
Beginning
Balance
|
Trading
|
AFS
Investments
|
Comprehensive
Income
|
Gains or
(Losses)
|
Purchases
|
Sales
|
(Out) of
Level 3
|
Ending
Balance
|
|||||||||||||||||||||||||||
Financial instruments owned:
|
||||||||||||||||||||||||||||||||||||
Trading - Common stocks
|
$
|
461
|
$
|
193
|
$
|
-
|
$
|
-
|
$
|
193
|
$
|
-
|
$
|
-
|
$
|
(36
|
)
|
$
|
618
|
|||||||||||||||||
Trading - Other
|
283
|
869
|
-
|
-
|
869
|
167
|
(150
|
)
|
-
|
1,169
|
||||||||||||||||||||||||||
Total
|
$
|
744
|
$
|
1,062
|
$
|
-
|
$
|
-
|
$
|
1,062
|
$
|
167
|
$
|
(150
|
)
|
$
|
(36
|
)
|
$
|
1,787
|
December
31, 2015
|
Total Realized and
Unrealized Gains or
(Losses) in Income
|
Total
Unrealized
Gains or
(Losses)
Included in
Other
|
Total
Realized
and
Unrealized
|
Transfers
In and/or
|
||||||||||||||||||||||||||||||||
Asset
|
Beginning
Balance
|
Trading
|
AFS
Investments
|
Comprehensive
Income
|
Gains or
(Losses)
|
Purchases
|
Sales
|
(Out) of
Level 3
|
Ending
Balance
|
|||||||||||||||||||||||||||
Financial instruments owned:
|
||||||||||||||||||||||||||||||||||||
Trading - Common stocks
|
$
|
508
|
$
|
(47
|
)
|
$
|
-
|
$
|
-
|
$
|
(47
|
)
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
461
|
||||||||||||||||
Trading - Other
|
305
|
(2
|
)
|
-
|
-
|
(2
|
)
|
-
|
(20
|
)
|
-
|
283
|
||||||||||||||||||||||||
Total
|
$
|
813
|
$
|
(49
|
)
|
$
|
-
|
$
|
-
|
$
|
(49
|
)
|
$
|
-
|
$
|
(20
|
)
|
$
|
-
|
$
|
744
|
2017
|
2016
|
2015
|
||||||||||
(In thousands)
|
||||||||||||
Federal:
|
||||||||||||
Current
|
$
|
781
|
$
|
5,018
|
$
|
4,540
|
||||||
Deferred
|
(3,137
|
)
|
(1,231
|
)
|
(6,160
|
)
|
||||||
State and local:
|
||||||||||||
Current
|
(33
|
)
|
236
|
225
|
||||||||
Deferred
|
(31
|
)
|
(147
|
)
|
(290
|
)
|
||||||
Total
|
$
|
(2,420
|
)
|
$
|
3,876
|
$
|
(1,685
|
)
|
2017
|
2016
|
2015
|
||||||||||
Statutory Federal income tax rate
|
34.0
|
%
|
34.0
|
%
|
34.0
|
%
|
||||||
State income tax, net of Federal benefit
|
(1.3
|
)
|
1.2
|
1.6
|
||||||||
Dividends received deduction
|
(8.0
|
)
|
(3.6
|
)
|
26.4
|
|||||||
Donation of appreciated securities
|
(21.5
|
)
|
(4.5
|
)
|
3.2
|
|||||||
Revaluation of net deferred tax liabilities due to tax reform
|
(26.5
|
)
|
-
|
-
|
||||||||
Accelerated vesting of restricted stock awards
|
(14.5
|
)
|
-
|
-
|
||||||||
Noncontrolling interests
|
(0.9
|
)
|
(0.7
|
)
|
-
|
|||||||
Other
|
0.1
|
0.6
|
0.2
|
|||||||||
Effective income tax rate
|
-38.6
|
%
|
27.0
|
%
|
65.4
|
%
|
2017
|
2016
|
|||||||
(In thousands)
|
||||||||
Deferred tax assets:
|
||||||||
Stock-based compensation expense
|
$
|
19
|
$
|
719
|
||||
Deferred compensation
|
987
|
1,315
|
||||||
Shareholder-designated contribution carryover
|
1,765
|
1,461
|
||||||
Other
|
3
|
4
|
||||||
Total deferred tax assets
|
2,774
|
3,499
|
||||||
Deferred tax liabilities:
|
||||||||
Investments in securities and partnerships
|
(6,165
|
)
|
(7,451
|
)
|
||||
Other liabilities
|
(12
|
)
|
-
|
|||||
Total deferred tax liabilities
|
(6,177
|
)
|
(7,451
|
)
|
||||
Net deferred tax liabilities
|
$
|
(3,403
|
)
|
$
|
(3,952
|
)
|
(in thousands)
|
||||
Balance at January 1, 2015
|
$
|
57
|
||
Additions based on tax positions related to the current year
|
(60
|
)
|
||
Additions for tax positions of prior years
|
-
|
|||
Reductions for tax positions of prior years
|
(2
|
)
|
||
Settlements
|
(11
|
)
|
||
Balance at December 31, 2015
|
(16
|
)
|
||
Additions based on tax positions related to the current year
|
-
|
|||
Additions for tax positions of prior years
|
126
|
|||
Reductions for tax positions of prior years
|
(10
|
)
|
||
Settlements
|
-
|
|||
Balance at December 31, 2016
|
100
|
|||
Additions based on tax positions related to the current year
|
-
|
|||
Additions for tax positions of prior years
|
-
|
|||
Reductions for tax positions of prior years
|
(89
|
)
|
||
Settlements
|
-
|
|||
Balance at December 31, 2017
|
$
|
11
|
For the Years Ending December 31,
|
||||||||||||
(in thousands, except per share amounts)
|
2017
|
2016
|
2015
|
|||||||||
Basic:
|
||||||||||||
Net income/(loss) attributable to Associated Capital Group, Inc.’s shareholders
|
$
|
8,837
|
$
|
10,218
|
$
|
(111
|
)
|
|||||
Weighted average shares outstanding
|
23,792
|
24,870
|
24,887
|
|||||||||
Basic net income/(loss) attributable to Associated Capital Group, Inc.’s shareholders per share
|
$
|
0.37
|
$
|
0.41
|
$
|
-
|
||||||
Diluted:
|
||||||||||||
Net income/(loss) attributable to Associated Capital Group, Inc.’s shareholders
|
$
|
8,837
|
$
|
10,218
|
$
|
(111
|
)
|
|||||
Weighted average share outstanding
|
23,792
|
24,870
|
24,887
|
|||||||||
Dilutive restricted stock awards
|
133
|
305
|
283
|
|||||||||
Total
|
23,925
|
25,175
|
25,170
|
|||||||||
Diluted net income/(loss) attributable to Associated Capital Group, Inc.’s shareholders per share
|
$
|
0.37
|
$
|
0.41
|
$
|
-
|
2017
|
||||||||||||||||||||
1st
|
2nd
|
3rd
|
4th
|
Total
|
||||||||||||||||
(In thousands, except per share data)
|
||||||||||||||||||||
Revenues
|
$
|
4,987
|
$
|
5,095
|
$
|
5,248
|
$
|
11,585
|
$
|
26,915
|
||||||||||
Operating loss
|
(4,332
|
)
|
(6,453
|
)
|
(6,112
|
)
|
(3,489
|
)
|
(20,386
|
)
|
||||||||||
Net income (loss) attributable to Associated Capital Group, Inc.’s shareholders
|
(13,078
|
)
|
4,596
|
1,519
|
15,800
|
8,837
|
||||||||||||||
Net income (loss) attributable to Associated Capital Group, Inc.’s shareholders per share:
|
||||||||||||||||||||
Basic
|
(0.55
|
)
|
0.19
|
0.06
|
0.67
|
0.37
|
||||||||||||||
Diluted
|
$
|
(0.55
|
)
|
$
|
0.19
|
$
|
0.06
|
$
|
0.67
|
$
|
0.37
|
2016
|
||||||||||||||||||||
1st
|
2nd
|
3rd
|
4th
|
Total
|
||||||||||||||||
Revenues
|
$
|
4,517
|
$
|
4,964
|
$
|
5,451
|
$
|
16,295
|
$
|
31,227
|
||||||||||
Operating income (loss)
|
(4,515
|
)
|
(3,352
|
)
|
(4,497
|
)
|
132
|
(12,232
|
)
|
|||||||||||
Net income attributable to Associated Capital Group, Inc.’s shareholders
|
1,593
|
1,019
|
3,959
|
3,647
|
10,218
|
|||||||||||||||
Net income attributable to Associated Capital Group, Inc.’s shareholders per share:
|
||||||||||||||||||||
Basic
|
0.06
|
0.04
|
0.16
|
0.15
|
0.41
|
|||||||||||||||
Diluted
|
$
|
0.06
|
$
|
0.04
|
$
|
0.16
|
$
|
0.15
|
$
|
0.41
|
ITEM 12: |
Exhibit
Number
|
Description of Exhibit
|
Separation and Distribution Agreement, dated November 30, 2015, between GAMCO Investors, Inc., a Delaware corporation and Associated Capital Group, Inc., a Delaware corporation. (Incorporated by reference to Exhibit 2.1 to the Company’s Form 8-K dated November 30, 2015 filed with the Securities and Exchange Commission on December 4, 2015).
|
|
Amended and Restated Certificate of Incorporation of Associated Capital Group, Inc. (the “Company”) (Incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K dated November 19, 2015 filed with the Securities and Exchange Commission on November 25, 2015).
|
|
Amended and Restated Bylaws of the Company. (Incorporated by reference to Exhibit 3.2 to the Company’s Report on Form 8-K dated November 19, 2015 filed with the Securities and Exchange Commission on November 25, 2015).
|
|
Form of Common Stock Certificate. (Incorporated by reference to Exhibit 4.1 to Amendment No. 4 to the Company’s Registration Statement on Form 10 filed with the Securities and Exchange Commission on October 21, 2015).
|
|
Service Mark and Name License Agreement, dated November 30, 2015, by and between the Company and GAMCO Investors, Inc. (“GAMCO”). (Incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K dated November 30, 2015 filed with the Commission on December 4, 2015).
|
|
Transitional Administrative and Management Services Agreement, dated November 30, 2015, by and between the Company and GAMCO Investors, Inc. (“GAMCO”). (Incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K dated November 30, 2015 filed with the Commission on December 4, 2015).
|
|
Employment Agreement between the Company and Mario J. Gabelli dated November 30, 2015 (Incorporated by reference to Exhibit 10.3 to the Company’s Form 8-K dated November 30, 2015 filed with the Commission on December 4, 2015).
|
|
Promissory Note in aggregate principal amount of $250,000,000, dated November 30, 2015, issued by GAMCO in favor of the Company (Incorporated by reference to Exhibit 10.4 to the Company’s Form 8-K dated November 30, 2015 filed with the Commission on December 4, 2015).
|
|
Tax Indemnity and Sharing Agreement, dated November 30, 2015, by and between the Company and GAMCO Investors, Inc. (“GAMCO”). (Incorporated by reference to Exhibit 10.5 to the Company’s Form 8-K dated November 30, 2015 filed with the Commission on December 4, 2015).
|
|
2015 Stock Award Incentive Plan (Incorporated by reference to Exhibit 10.11 to Amendment No. 4 to the Company’s Registration Statement on Form 10 filed with the Securities and Exchange Commission on October 21, 2015).
|
Form of Indemnification Agreement by and between the Company and the Indemnitee defined therein (Incorporated by reference to Exhibit 10.7 to Amendment No. 4 to the Company’s Registration Statement on Form 10 filed with the Securities and Exchange Commission on October 21, 2015).
|
|
Subsidiaries of the Company.
|
|
Powers of Attorney (included on page 94 of this Report).
|
|
Certification of CEO pursuant to Rule 13a-14(a).
|
|
Certification of CFO pursuant to Rule 13a-14(a).
|
|
Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
|
|
100.INS
|
XBRL Instance Document
|
100.SCH
|
XBRL Taxonomy Extension Schema Document
|
100.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
100.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
100.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
100.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
ASSOCIATED CAPITAL GROUP, INC.
|
|
By: /s/ Francis J. Conroy
|
|
Name: Francis J. Conroy
|
|
Title: Interim Chief Financial Officer
|
|
Date: March 8, 2018
|
Signature
|
Title
|
Date
|
/s/ Douglas R. Jamieson
|
President and
|
March 8, 2018
|
Douglas R. Jamieson
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
||
/s/ Francis J. Conroy
|
Interim Chief Financial Officer
|
March 8, 2018
|
Francis J. Conroy
|
(Principal Financial Officer)
|
|
/s/ Mario J. Gabelli
|
Executive Chairman of the
|
March 8, 2018
|
Mario J. Gabelli
|
Board and Director
|
|
/s/ Richard L. Bready
|
Director
|
March 8, 2018
|
Richard L. Bready
|
||
/s/ Daniel R. Lee
|
Director
|
March 8, 2018
|
Daniel R. Lee
|
||
/s/ Bruce M. Lisman
|
Director
|
March 8, 2018
|
Bruce M. Lisman
|
||
/s/ Frederic V. Salerno
|
Director
|
March 8, 2018
|
Frederic V. Salerno
|
||
/s/ Salvatore F. Sodano
|
Director
|
March 8, 2018
|
Salvatore F. Sodano
|
Name
|
Jurisdiction of Incorporation or
Organization
|
Gabelli & Company Investment Advisers, Inc.
|
Delaware
|
(100%-owned by the Company)
|
|
G.research, LLC
|
Delaware
|
(100%-owned by Institutional Services Holdings, LLC)
|
|
Gabelli & Partners LLC
|
Delaware
|
(100%-owned by Gabelli & Company Investment Advisers, Inc.)
|
|
Gabelli Arbitrage Holdings LLC
|
Delaware
|
(100%-owned by the Company)
|
|
Gabelli Trading Holdings LLC
|
Delaware
|
(100%-owned by the Company)
|
|
Institutional Services Holdings, LLC
|
Delaware
|
(100%-owned by the Company)
|
1. |
I have reviewed this annual report on Form 10-K of Associated Capital Group, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of income and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of the end of the period covered by this report; and
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Douglas R. Jamieson
|
Name:
|
Douglas R. Jamieson
|
Title:
|
Chief Executive Officer
|
Date:
|
March 8, 2018
|
1. |
I have reviewed this annual report on Form 10-K of Associated Capital Group, Inc.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of income and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures as of the end of the period covered by this report; and
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
By:
|
/s/ Francis J. Conroy
|
Name:
|
Francis J. Conroy
|
Title:
|
Interim Chief Financial Officer
|
Date:
|
March 8, 2018
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of income of the Company.
|
By:
|
/s/ Douglas R. Jamieson
|
Name:
|
Douglas R. Jamieson
|
Title:
|
Chief Executive Officer
|
Date:
|
March 8, 2018
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of income of the Company.
|
By:
|
/s/ Francis J. Conroy
|
Name:
|
Francis J. Conroy
|
Title:
|
Interim Chief Financial Officer
|
Date:
|
March 8, 2018
|
Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Mar. 01, 2018 |
Jun. 30, 2017 |
|
Entity Information [Line Items] | |||
Entity Registrant Name | Associated Capital Group, Inc. | ||
Entity Central Index Key | 0001642122 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 159,849,334 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Class A [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 4,447,408 | ||
Class B [Member] | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 19,187,885 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands |
12 Months Ended | ||||
---|---|---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | |||||
Net income (loss) | $ 8,684 | $ 10,469 | $ (891) | ||
Other comprehensive income (loss), net of tax: | |||||
Net unrealized gains (losses) on securities available for sale | [1] | 5,395 | 4,138 | (11,035) | |
Comprehensive income (loss) | 14,079 | 14,607 | (11,926) | ||
Less: Comprehensive income (loss) attributable to noncontrolling interests | (153) | 1,215 | (780) | ||
Comprehensive income (loss) attributable to Associated Capital Group, Inc. | $ 14,232 | $ 13,392 | $ (11,146) | ||
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Other comprehensive income (loss), net of tax: | |||
Net unrealized gains (losses) on securities available for sale, income tax expense (benefit) | $ 2,876 | $ 2,328 | $ (6,434) |
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Net unrealized gains (losses) on securities available for sale, income tax expense (benefit) | $ 277 | $ 2,319 | $ (6,503) |
Amounts reclassified from accumulated other comprehensive income, income tax benefit | $ (2,599) | $ (9) | $ 69 |
Dividend declared (in dollars per share) | $ 0.20 | $ 0.20 | |
GBL 4% PIK Note [Member] | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Debt instrument, interest rate | 4.00% | 4.00% | 4.00% |
Organization |
12 Months Ended |
---|---|
Dec. 31, 2017 | |
Organization [Abstract] | |
Organization | A. Organization Unless we have indicated otherwise, or the context otherwise requires, references in this report to “Associated Capital Group, Inc.,” “AC Group,” “the Company,” “AC,” “we,” “us” and “our” or similar terms are to Associated Capital Group, Inc., its predecessors and its subsidiaries. The Spin-off and Related Transactions We are a Delaware corporation that provides alternative investment management, institutional research and underwriting services. In addition, we derive investment income/(loss) from proprietary trading of cash and other assets awaiting deployment in our operating businesses. On November 30, 2015, GAMCO Investors, Inc. (“GAMCO” or “GBL”) distributed all the outstanding shares of each class of AC common stock on a pro rata one-for-one basis to the holders of each class of GAMCO’s common stock (the “Spin-off”). We conduct our investment management business through Gabelli & Company Investment Advisers, Inc. (“GCIA” f/k/a Gabelli Securities, Inc.). GCIA and its wholly-owned subsidiary, Gabelli & Partners, LLC (“Gabelli & Partners”), collectively serve as general partners or investment managers to investment funds including limited partnerships and offshore companies (collectively, “Investment Partnerships”), and separate accounts. We primarily manage assets in equity event-driven value strategies, across a range of risk and event arbitrage portfolios. The business earns management and incentive fees from its advisory assets. Management fees are largely based on a percentage of assets under management. Incentive fees are based on the percentage of the investment returns of certain clients’ portfolios. GCIA is an investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended. We provide our institutional research and underwriting services through G.research, LLC (“G.research”) doing business as “Gabelli & Company”, an indirect wholly-owned subsidiary of the Company. G.research is a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and is regulated by the Financial Industry Regulatory Authority (“FINRA”). G.research's revenues are derived primarily from institutional research services. In connection with the Spin-off, GAMCO issued a promissory note (the “GAMCO Note”) to AC Group in the original principal amount of $250 million used to partially capitalize the Company. The GAMCO Note bears interest at 4% per annum and has a maturity date of November 30, 2020 with respect to its original principal amount. Interest on the GAMCO Note will accrue from the most recent date for which interest has been paid. Prior to November 30, 2019, at the election of GAMCO, payment of interest on the GAMCO Note may, in lieu of being paid in cash, be paid, in whole or in part, in kind (a “PIK Amount”). GAMCO will repay all PIK Amounts added to the outstanding principal amount of the GAMCO Note, in cash, on the fifth anniversary of the date on which each such PIK Amount was added to the outstanding principal amount of the GAMCO Note. GAMCO may prepay the GAMCO Note prior to maturity without penalty. AC has received principal repayments totaling $200 million on the GAMCO Note, of which $50 million was received during the year ended December 31, 2017 leaving an outstanding principal balance of $50 million. After application of the principal payments, the balance of the GAMCO Note is due on November 30, 2020. In addition, GCIA purchased 4,393,055 shares of GAMCO Class A common stock in exchange for a note in the principal amount of $150 million (the “GCIA Note”). In connection with the Spin-off, GAMCO contributed the GCIA Note to the Company. During the quarter ended December 31, 2017, AC forgave the outstanding principal and interest on the GCIA Note as a capital contribution to GCIA. Consolidated Financial Statements The Company’s combined consolidated statement of income for the eleven months ended November 30, 2015 was derived from the combined consolidated financial statements and accounting records of GAMCO, as the Company was not a standalone public company prior to the spin-off. For the period prior to the spin-off of the Company from GAMCO, the combined consolidated financial statement includes allocations from GAMCO. These allocations may not be reflective of the actual level of assets, liabilities, income or costs which would have been incurred had the Company operated as a separate legal entity apart from GAMCO. The Company’s consolidated financial statements as of and for the year ended December 31, 2017 and 2016, and the Company's consolidated statement of income for the one month ended December 31, 2015 are presented based on our actual results as a stand-alone public company subsequent to our spin-off. References within these Notes to the consolidated financial statements as of and for the years ended December 31, 2017 and 2016 and the combined consolidated statements of income, comprehensive income, equity, and cash flows for the year ended December 31, 2015 shall hereinafter be referred to as the consolidated statements of income, comprehensive income, equity, and cash flows or consolidated financial statements. All material intercompany transactions and balances have been eliminated. Subsidiaries are fully consolidated from the date the Company obtains control and continue to be consolidated until the date that such control ceases. The Company’s principal market is in the United States. |
Significant Accounting Policies |
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Significant Accounting Policies [Abstract] | ||||||||||
Significant Accounting Policies | B. Significant Accounting Policies Use of Estimates The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“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. Reclassification The Company has reclassified certain prior-period amounts to conform to the current-period presentation. For presentation of 2015 to 2017 results, the Company reported revenue from its research services agreement with affiliates in “Institutional Research Services Revenue” instead of “Other Revenue”. The reclassification did not impact total revenues, operating expenses, operating income/(loss), net income, or equity. Cash and Cash Equivalents Cash equivalents primarily consist of an affiliated money market mutual fund which is highly liquid. U.S. Treasury Bills and Notes with maturities of three months or less at the time of purchase are also considered cash equivalents. 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 Notes with maturities of greater than three months at the time of purchase are considered investments in securities. Securities that are not readily marketable are stated at their estimated fair values in accordance with GAAP. A substantial portion of investments in securities are held for resale in anticipation of short-term market movements and therefore are classified as trading securities. Trading securities are stated at fair value, with any unrealized gains or losses reported in current period earnings in net gain from investments on the consolidated statements of income. Available for sale (“AFS”) investments are stated at fair value, with any unrealized gains or losses, net of taxes, reported as a component of other comprehensive income (loss) on the consolidated statements of comprehensive income (loss) except for losses deemed to be other than temporary which are recorded as realized losses on the consolidated statements of income. Securities transactions and any related gains and losses are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the specific identified cost basis and are included in net gain from investments on the consolidated statements of income. AFS securities are evaluated for other than temporary impairments each reporting period, and any impairment charges are recorded in net gain from investments on the consolidated statements of income. Management reviews all AFS 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. Securities sold, not yet purchased are recorded on the trade date, and are stated at fair value and represent obligations of the Company 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 from investments on the consolidated statements of income. Unrealized gains and losses on securities sold, not yet purchased are reported in current period earnings in net gain from investments on the consolidated statements of income. Fair Value of Financial Instruments All of the instruments within investments in securities are measured at fair value. The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with the Financial Accounting Standards Board’s (“FASB”) guidance on fair value measurement. The levels of the fair value hierarchy and their applicability to the Company are described below:
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 Chief Financial Officer of the Company. The Company uses the “market approach” valuation technique to value investments in Level 3 investments. The Company’s valuation of the Level 3 investments has been 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 are 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. Cash equivalents are valued using unadjusted quoted market prices. Accordingly, cash equivalents are categorized in Level 1 of the fair value hierarchy. Investments in securities—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. Investments in partnerships—The Company’s investments include investments, in both affiliated and unaffiliated entities, which the Company accounts for under the equity or fair value methods of accounting. Based upon the guidance outlined in Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement, investments in partnerships, measured using NAV as a practical expedient, are not classified in the fair value hierarchy. Receivables from Affiliates and Payables to Affiliates Receivables from affiliates consist primarily of a $15 million promissory note issued by GAMCO on December 26, 2017. Payables to affiliates primarily consist of expenses paid by affiliates on behalf of the Company pursuant to the Transitional Services Agreement with GAMCO. See Note H. Receivables from and Payables to Brokers Receivables from and payables to brokers consist of amounts arising from the purchases and sales of securities as well as cash amounts held in anticipation of investment. Consolidation Pursuant to the consolidation guidance, the Company first evaluates whether it holds a variable interest in an entity. Fees that are customary and commensurate with the level of services provided, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered a variable interest. The Company factors in all economic interests including proportionate interests through related parties, to determine if such interests are considered a variable interest. For entities where the Company has determined that it does hold a variable interest, the Company performs an assessment to determine whether each of those entities qualify as a variable interest entity (“VIE”). The determination as to whether an entity qualifies as a VIE depends on the facts and circumstances surrounding each entity and therefore certain of the Company’s funds may qualify as VIEs under the variable interest model. The granting of substantive kick-out rights is a key consideration in determining whether a limited partnership or similar entity is a VIE and whether or not that entity should be consolidated. Under the variable interest model, the Company consolidates those entities where it is determined that the Company is the primary beneficiary of the entity. The Company is determined to be the primary beneficiary when it has a controlling financial interest in the VIE, which is defined as possessing both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. When the Company alone is not considered to have a controlling financial interest in the VIE but the Company and its related parties under common control in the aggregate have a controlling financial interest in the VIE, the Company will be deemed the primary beneficiary if it is the party that is most closely associated with the VIE. When the Company and its related parties not under common control in the aggregate have a controlling financial interest in the VIE, the Company would be deemed to be the primary beneficiary if substantially all the activities of the entity are performed on behalf of the Company. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes initially involved with the VIE and reconsiders that conclusion continuously. Investments and redemptions (either by the Company, related parties or third parties) or amendments to the governing documents of the respective entity may affect an entity’s status as a VIE or the determination of the primary beneficiary. Assets and liabilities of the consolidated VIEs are included within the consolidated statements of financial condition and are separately disclosed in Note D. For voting interest entities (“VOEs”) that do not qualify as VIEs, the Company applies the voting interest model. Under the voting interest model, the Company consolidates those entities it controls through a majority voting interest. Equity Method Investments. Substantially all of the Company’s equity method investees are entities that record their underlying investments at fair value. Therefore, under the equity method of accounting, the Company’s share of the investee’s underlying net income predominantly represents fair value adjustments in the investments held by the equity method investees. The Company’s share of the investee’s underlying net income or loss is based upon the most currently available information and is recorded as “Net gain from investments” on the consolidated statements of income. Capital contributions are recorded as an increase in investments when paid, while withdrawals and distributions are recorded as reductions of the investments when received. Depending on the terms of the investment, the Company may be restricted as to the timing and amounts of withdrawals. See Note D. Investments in Partnerships, Offshore Funds and Variable Interest Entities for more detail as to the number and types of entities consolidated as well as the impact on the consolidated statements of financial condition and consolidated statements of income. Investments in Partnerships and Affiliates The Company is general partner or co-general partner of various affiliated entities. We also have investments in unaffiliated partnerships, offshore funds and other entities (“unaffiliated entities”). Given that we are not a general partner or investment manager in any of the unaffiliated entities, we do not earn any management or incentive fees/allocation and we do not have a controlling financial interest; thus, we do not currently consolidate any unaffiliated entities. Our balance sheet caption “Investments in partnerships” includes those investments, in both affiliated and unaffiliated entities, which the Company accounts for under the equity method of accounting and certain investments in entities that the Company accounts for at fair value. The Company records noncontrolling interests in consolidated entities for which the Company’s ownership is less than 100%. Refer to Noncontrolling Interests section within this Note B for additional disclosures. Derivative Financial Instruments The Company recognizes all derivatives as either assets or liabilities measured at fair value and are included in either investments in securities or securities sold, not yet purchased on the consolidated statements of financial condition. From time to time, the Company will enter into hedging transactions to manage its exposure to foreign currencies and equity prices related to its proprietary investments. During 2017, 2016 and 2015, the Company had derivative transactions which resulted in a net loss of $98,000, net gain of $143,000 and net gain of $264,000, respectively. At December 31, 2017 and 2016, we held derivative contracts on 1.7 million equity shares and 16,000 equity shares, respectively, and the net fair value was ($106,000) and $90,000, respectively. The gross amounts are included as investments in securities and securities sold, not yet purchased on the consolidated statements of financial condition. These transactions are not designated as hedges for accounting purposes, and changes in fair values of these derivatives are included in net gain from investments on the consolidated statements of income and included in investments in securities or securities sold, not yet purchased on the consolidated statements of financial condition. Securities Transactions The Company also generates investment gains or losses from its proprietary trading activities which are included in net gain from investments on the consolidated statements of income. Management determines the appropriate classification of debt and equity securities at the time of purchase and reevaluates such designation as of the date of each consolidated statement of financial condition. Investments in United States Treasury Bills and Notes with maturities of greater than three months at the time of purchase are classified as investments in securities, and those with maturities of three months or less at the time of purchase are classified as cash equivalents. The portion of investments in securities held for resale in anticipation of short-term market movements are classified as trading securities. Trading securities are stated at fair value, with any unrealized gains or losses reported in current period earnings. AFS investments are stated at fair value, with any unrealized gains or losses, net of taxes, reported as a component of equity except for losses deemed to be other-than-temporary (“OTT”) which are recorded as realized losses in the consolidated statements of income. Major Revenue-Generating Services and Revenue Recognition Advisory fees from investment partnerships and offshore funds are computed either monthly or quarterly, and amounts receivable are included in receivables from affiliates on the consolidated statements of financial condition. Revenues from investment partnerships and offshore funds also generally include either an incentive fee/allocation on the absolute gain in a portfolio or a fee of 20% of the economic profit as defined in the partnership agreement and are included in investment advisory and incentive fees on the consolidated statements of income. The incentive allocation or fee is generally recognized at the end of an annual measurement period and amounts receivable are included in either receivables from affiliates or investment advisory fees receivable on the consolidated statements of financial condition. Institutional research services includes commission revenues, sales manager fees and underwriting fees and amounts receivable are included in receivables from brokers and clearing organizations on the consolidated statements of financial condition. Related clearing charges are recorded on a trade-date basis, and are included in other operating expenses on the consolidated statements of income. Underwriting fees include underwriting revenues and syndicate profits and are accrued as earned. Underwriting fees include gains, losses, selling concessions and fees, net of syndicate expenses, arising from securities offerings in which G.research acts as underwriter or agent. Effective January 1, 2014, the Company, through G.research, entered into agreements with two affiliates, GAMCO Asset Management Inc. and Gabelli Funds, LLC, to provide each affiliate with the same types of research services that it provides to its other clients. The agreements call for the two affiliates to pay a research services fee. The annual fee amounts are determined by negotiations between the Company and each entity that utilizes the Company’s research. Depreciation Fixed assets, with a net book value of $39,000 and $55,000 at December 31, 2017 and 2016, respectively, which are included in other assets, are recorded at cost and depreciated using the straight-line method over their estimated useful lives of four to seven years. As of December 31, 2017 and 2016, fixed assets were recorded at a cost of $85,000 and $85,000, respectively net of accumulated depreciation of $46,000 and $30,000, respectively. For the years ended December 31, 2017, 2016 and 2015, depreciation was $16,000, $17,000 and $13,000, respectively. We estimate that depreciation will be approximately $16,000 annually over the next three years. As of December 31, 2017 and 2016, the Company wrote off assets in the amount of $1,000 and $25,000, respectively, that were fully depreciated and had been retired. Allocated Expenses The Company is charged or incurs certain overhead expenses that are paid by, or paid on our behalf by other affiliates and are included in other operating expenses on the consolidated statements of income. These overhead expenses primarily relate to centralized functions including finance and accounting, legal, compliance, treasury, tax, internal audit, information technology, human resources and risk management functions. These overhead expenses are allocated to the Company by other affiliates or allocated by the Company to other affiliates as the expenses are incurred, based upon direct usage when identifiable, with the remainder allocated based on revenue, headcount, space or other methodologies periodically reviewed by the management of the Company and the affiliates. In addition, GCIA and GAMCO serve as paymasters under compensation payment sharing agreements. This includes compensation expense and related payroll taxes and benefits which are fully paid by the Company for professional staff performing duties related to the Company and affiliates. These compensation expenses are included in compensation on the consolidated statements of income. All of the allocations and estimates in these financial statements are based on assumptions that management of AC believes are reasonable. However, these allocations may not be indicative of the actual expenses we would have incurred or may incur in the future. Management Fee Management fee expense in the amount of 10% of the aggregate pre-tax profits, before consideration of this fee and before consideration of the various consolidated funds and partnerships, is paid to the Executive Chairman or his designated assignees in accordance with his employment agreement. Stock-Based Compensation The Company maintains one stock award and incentive plan (the “Plan”) approved by the shareholders at the Company’s annual meeting held on May 3, 2016, which is designed to provide incentives which will attract and retain individual’s key to the success of AC through direct or indirect ownership of our common stock. 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 maximum of 2 million shares 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 (the “Compensation Committee”). Under the Plan, the Compensation Committee may grant RSAs 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 committee may determine. Through December 31, 2017, approximately 0.5 million shares have been awarded under the Plan leaving approximately 1.5 million shares for future grants. On November 30, 2015, in connection with the spin-off of the Company from GAMCO, the Company issued 554,100 AC RSA shares to GAMCO employees (including GAMCO employees who became AC employees) who held 554,100 GAMCO RSA shares at that date. The purpose of the issuance was to ensure that any employee who had GAMCO RSAs were granted an equal number of AC RSAs so that the total value of the RSAs post-spin-off was equivalent to the total value pre-spin-off. In accordance with GAAP, we have allocated the stock compensation costs between GAMCO and AC based upon the allocation of each employee’s responsibilities between GAMCO and AC. As of December 31, 2017 and 2016, there were 0 and 424,340 AC RSA shares outstanding. All grants of the RSA shares were recommended by the Company's Executive Chairman, who did not receive a RSA, and approved by the Compensation Committee. The value of the AC RSAs, net of estimated forfeitures, is recognized as expense over the respective vesting period for these awards which is either (1) five years (30% three years and 70% five years from the date of grant, respectively), or (2) ten years (30% three years and 10% each year thereafter from the date of grant, respectively). 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. Goodwill Goodwill is initially measured as the excess of the cost of the acquired business over the sum of the fair value assigned to assets acquired less the liabilities assumed. Goodwill is tested for impairment at least annually on November 30th and whenever certain triggering events are met. In assessing the recoverability of goodwill for the subsidiary’s annual impairment test on November 30, 2017 and 2016, we performed a qualitative assessment of whether it was more likely than not that an impairment has occurred and concluded that a quantitative analysis was not required. As part of this assessment, it was also determined that there was no risk of failing the quantitative impairment testing step that compares the subsidiary fair value to its carrying value. No impairment was recorded during 2017 or 2016. Income Taxes For purposes of the preparation of the consolidated financial statements, the provision for income taxes is computed using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income tax expense/benefit in the period that includes the enactment date of the change in tax rate. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. A valuation allowance would be recorded to reduce the carrying value of deferred tax assets to the amount that is more likely than not to be realized. In making such a determination of whether a valuation allowance is necessary, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event the Company were to determine that the Company would be able to realize the Company’s deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC Topic 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes the accrual of interest on uncertain tax positions and penalties in income tax provision on the consolidated statements of income. Accrued interest and penalties on uncertain tax positions are included within accrued expenses and other liabilities on the consolidated statements of financial condition. Noncontrolling Interests Noncontrolling interests that are mandatorily redeemable upon a certain date or event occurring are classified as liabilities and relate to certain stockholders of GCIA who are employed by GAMCO, or its affiliates, who were required to sell their shares back to GCIA at book value once they cease being employed by GAMCO, or its affiliates. During the year ended December 31, 2016, AC purchased the outstanding 1.9% of GCIA shares owned by certain employees of GAMCO in exchange for 50,964 Class A shares of the Company in the amount of $1.5 million, which eliminated the mandatorily redeemable noncontrolling interest. Noncontrolling interest attributable to the 4.2% GCIA shares owned by third parties were classified as equity and were presented within the equity section, separately from AC’s portion of equity. During the year ended December 31, 2016, AC purchased the outstanding 4.2% of GCIA shares owned by third parties. Noncontrolling interests in Investment Partnerships that are redeemable at the option of the holder are classified as redeemable noncontrolling interests in the mezzanine section of the consolidated statements of financial condition between liabilities and equity. For the years ended December 31, 2017, 2016, and 2015, net income/(loss) attributable to noncontrolling interests on the consolidated statements of income represents the share of net income/(loss) attributable to the minority stockholders, as reported on a separate company basis, of our consolidated majority-owned subsidiaries and net income/(loss) attributable to certain investors in Investment Partnerships that are consolidated. The income/(loss) attributable to the mandatorily redeemable noncontrolling interests classified as liabilities prior to the Company’s purchase of the outstanding 1.9% of GCIA shares owned by certain employees of GAMCO is included in other operating expenses on the consolidated statements of income. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, the GAMCO Note, and receivable from brokers. The Company maintains cash and cash equivalents primarily in 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. The concentration of credit risk with respect to advisory fees and incentive fees/allocation, which are included in investment advisory fees receivable and receivables from affiliates on the consolidated statements of financial condition, is generally limited due to the short payment terms extended to clients by the Company. All investments in securities are held at third party brokers or custodians. Net transfer from GBL Net transfer from GBL in the consolidated statements of equity and cash flows for the year ended December 31, 2015 represents the net effect of transactions with and allocations from GAMCO prior to the spin-off. Business Segment The Company operates in one business segment, the investment advisory and asset management business. The Company’s Chief Operating Decision Maker reviews the Company’s financial performance at an aggregate level. All of the products and services provided by the Company relate to asset management. 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 ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the industry topics of the ASC. The core principle of the new ASU No. 2014-09 requires 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 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. The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods and is either applied on a retrospective or modified retrospective basis. The Company has evaluated this guidance and has concluded that it has no material impact on its consolidated financial statements other than expanded disclosure. The Company has adopted this ASU effective January 1, 2018. In January 2016, the FASB issued ASU 2016-01, Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which amends the guidance in 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. Under the new guidance, all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value through earnings. In addition, AFS classification (changes in fair value reported in other comprehensive income) for equity securities with readily determinable fair values will no longer be available. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. For public companies, the new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. 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 has evaluated this guidance and has adopted this ASU effective January 1, 2018 with no material impact on its consolidated financial statements other than the reclassification of the cumulative unrealized gain on AFS securities net of tax from other comprehensive income to retained earnings. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which amends the guidance in 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. ASU 2016-02 is effective beginning January 1, 2019. The Company is currently evaluating this guidance and the impact it will have on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which adds and clarifies guidance on the classification of certain cash receipts and payments in the consolidated statements of cash flows. For public companies, the ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. Early adoption was permitted. The Company has evaluated this guidance and has concluded that it has no material impact on its consolidated financial statements. The Company has adopted this ASU effective January 1, 2018. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other, to simplify the process used to test for impairment of goodwill. Under the new standard, an impairment loss must be recognized in an amount equal to the excess of the carrying amount of a reporting unit over its fair value, limited to the total amount of goodwill allocated to that reporting unit. For public companies, the ASU is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. Early adoption was permitted for impairment tests that occur after January 1, 2017. The Company is currently evaluating this guidance and the impact it will have on its consolidated financial statements. On May 10, 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation, which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance 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, vesting conditions, and classification of the awards are the same immediately before and after the modification. For all entities, the ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption was permitted, including adoption in any interim period. The Company has adopted this ASU effective January 1, 2018. This ASU would not have impacted the accounting for the acceleration of vesting of restricted stock awards (“RSAs”) during 2017. This ASU will have minimal, if any, impact given the relatively few unvested GAMCO RSAs currently outstanding. On December 22, 2017, the SEC issued SAB 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, to address the application of ASC 740, Income Taxes, in the reporting period that includes December 22, 2017, the date the Tax Cuts and Jobs Act (the “Act”) was signed into law. In general, the SAB provides that a company should reflect the income tax impacts of the Act for which the accounting under ASC 740 is complete. If a company is unable to complete the required accounting as a result of incomplete information, preparation or analysis, however, it may record a reasonable estimate as a provisional amount. Additional provisions deal with situations in which no reasonable estimate can be determined. Changes to estimates determined during a measurement period up to one year from the date of enactment will be reflected as an adjustment to tax expense or benefit in the reporting period the amounts are determined. With the exception of the book/tax differences related to the Company’s investments in funds that are partnerships and/or passive foreign investment companies, the Company has completed its analysis. We believe that we are able to make a reasonable estimate of the tax impact related to funds and have included this in the current year’s tax provision. As additional information is received from the underlying funds (e.g., Form K-1s are received that set out AC’s share of the funds’ taxable income), these estimates will be adjusted, most likely in the fourth quarter following the filing of the Company’s consolidated income tax return. The SAB also provides requirements concerning financial statement disclosures about the material financial reporting impacts of the Act. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, dealing with the accounting for the tax effects of components of other comprehensive income (OCI). As a result of the reduction of the U.S. federal corporate income tax rate under the Tax Cuts and Jobs Act, current accounting guidance requires the revaluation of deferred tax assets and liabilities, and the resulting tax expense or benefit is reflected in net income. If the deferred tax asset or liability related to a component of OCI (e.g., unrealized gain/(loss) on available for sale securities), however, the tax effects of items within OCI no longer reflect the appropriate tax rate (referred to as stranded tax effects). This ASU permits the reclassification of the stranded tax effects from OCI to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption was permitted. We have adopted the ASU as of January 1, 2018 and will reflect an increase to OCI and a decrease to retained earnings of approximately $1.5 million in the period of adoption. |
Investment in Securities |
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Investment in Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Securities | C. Investments in Securities Investments in securities at December 31, 2017 and 2016 consisted of the following:
Securities sold, not yet purchased at December 31, 2017 and 2016 consisted of the following:
Investments in affiliated registered investment companies at December 31, 2017 and 2016 consisted of the following:
The following table identifies all reclassifications between accumulated other comprehensive income (“AOCI”) and net income/(loss) for the years ended December 31, 2017 and 2016 (in thousands):
In November 2017, AC made a non-cash contribution of certain AFS securities totaling $91.3 million to G.research, an indirect wholly-owned broker-dealer that is required to account for these as trading securities under specialized industry accounting, which is ultimately retained through consolidation. This transaction resulted in the recognition of a gain of $11.8 million and income tax expense of $4.2 million in net income due to the reclassification of unrealized gains net of taxes out of other comprehensive income upon the completion of this transfer. The Company recognizes all equity derivatives as either assets or liabilities measured at fair value and includes them in either investments in securities or securities sold, not yet purchased on the consolidated statements of financial condition. From time to time, the Company and/or the partnerships and offshore funds that the Company consolidates will enter into hedging transactions to manage their exposure to foreign currencies and equity prices related to their proprietary investments. At December 31, 2017 and December 31, 2016 we held derivative contracts on 1.7 million equity shares and 16,000 equity shares, respectively, that are included in investments in securities or securities sold, not yet purchased on the consolidated statements of financial condition. We had no foreign exchange contracts outstanding at December 31, 2017 and December 31, 2016. Generally, these transactions are not designated as hedges for accounting purposes, and, therefore changes in fair values of these derivatives are included in net gain/(loss) from investments on the consolidated statements of income. One foreign exchange contract, which expired in June 2016, however, was designated as a hedge on Gabelli Value Plus+ Trust Ltd., a London Stock Exchange listed closed-end fund which is denominated in British Pounds. As the underlying investment that was being hedged is an available for sale security, the portion of the change in value of the closed-end fund that is currency related is recorded in net gain from investments on the consolidated statements of income and not in consolidated accumulated comprehensive income/(loss). The following tables identify the fair values and gains and losses of all derivatives and foreign currency positions held by the Company (in thousands):
The Company is a party to enforceable master netting arrangements for swaps entered into with major U.S. financial institutions as part of the investment strategy of the Company’s proprietary portfolio. They are typically not used as hedging instruments. These swaps, while settled on a net basis with the counterparties are shown gross in assets and liabilities on the consolidated statements of financial condition. The swaps have a firm contract end date and are closed out and settled when each contract expires.
The following is a summary of the cost, gross unrealized gains, gross unrealized losses and fair value of AFS investments as of December 31, 2017 and 2016:
Changes in net unrealized gains/(losses), net of taxes, for AFS securities for the years ended December 31, 2017, 2016 and 2015 of $5.4 million, $3.2 million and ($11.2) million, respectively, have been included in other comprehensive income/(loss) at December 31, 2017, 2016 and 2015, respectively. The amount reclassified from other comprehensive income/(loss) for the years ended December 31, 2017, 2016 and 2015 were gains/(losses) inclusive of other-than-temporary impairments and the impact of transfers of AFS securities to trading securities of $4.6 million, $0.02 million and of ($0.1) million, respectively. Return of capital on AFS securities were $0.9 million, $0.2 million and $0.5 million for the years ended December 31, 2017, 2016 and 2015, respectively. Proceeds from sales of investments available for sale were approximately $0.3 million, $0.8 million and $1.0 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 $0.2 million, $0.3 million and $0.03 million, respectively, and were reclassed from other comprehensive income/(loss) 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 Company determines the cost of a security sold by using specific identification. Accumulated other comprehensive income/(loss) on the consolidated statements of equity is primarily comprised of unrealized gains/(losses), net of taxes, for AFS securities. The Company has an established accounting policy and methodology to determine other-than-temporary impairment. Under this policy, AFS securities are evaluated for other-than-temporary impairments and any impairment charges are recorded in net gain from investments on the consolidated statements of income. Management reviews all AFS 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. Investments classified as AFS that are in an unrealized loss position for which other-than-temporary impairment has not been recognized consisted of the following (in thousands):
For the years ended December 31, 2017, 2016 and 2015, there were $19.2 million, $0.3 million and $0.2 million of losses, respectively, on AFS securities deemed to be other-than-temporary. In 2017, AC recognized a $19.1 million OTT impairment on the GBL shares due to the magnitude and persistence of the unrealized loss. At December 31, 2017, there was one holding in a loss position which was not deemed to be other-than-temporarily impaired due to the length of time that it has been consecutively in a loss position and our evaluation of issuer-specific and industry-specific considerations. The holding was the GBL stock that was, as noted above, deemed to have an “other than temporary impairment” during the year ended December 31, 2017, but which has subsequently further declined. These further losses were not deemed to be other-than-temporarily impaired. At December 31, 2016, there was one holding in an unrealized loss position which was not deemed to be other-than-temporarily impaired due to the length of time that it has been consecutively in a loss position and our evaluation of issuer-specific and industry-specific considerations. This holding was a common stock and was impaired for seven consecutive months. This fair value of this holding exceeded its cost during the year ended December 31, 2016. |
Investment Partnerships and Variable Interest Entities |
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Investment in Partnerships and Variable Interest Entities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Partnerships and Variable Interest Entities | D. Investment Partnerships and Variable Interest Entities The Company is general partner or co-general partner of various affiliated entities, in which the Company had investments totaling $124.5 million and $112.3 million at December 31, 2017 and 2016, respectively, and whose underlying assets consist primarily of marketable securities (“Affiliated Entities”). We also had investments in unaffiliated partnerships, offshore funds and other entities of $21.1 million and $17.1 million at December 31, 2017 and 2016, respectively (“Unaffiliated Entities”). We evaluate each entity for the appropriate accounting treatment and disclosure. Certain of the Affiliated Entities, and none of the Unaffiliated Entities, are consolidated, as discussed in Note B. For those entities where consolidation is not deemed appropriate, we report them in our consolidated statements of financial condition under the caption “Investments in partnerships.” The caption includes investments in Affiliated Entities which the Company accounts for under the equity method of accounting and Unaffiliated Entities which the Company accounts for using fair value accounting. The Company reflects the equity in earnings of these Affiliated Entities and the change in fair value of the Unaffiliated Entities under the caption net gain from investments on the consolidated statements of income. The following table highlights the number of entities that we consolidate as well as the basis under which they are consolidated: Entities consolidated
At and for the year ended December 31, 2017, three VOEs are consolidated, as the Company owns a majority of the interests in these entities and one Partnership VIE is consolidated, as the unaffiliated partners or shareholders lack substantive kick-out rights and the Company is the entity’s primary beneficiary. At and for the year ended December 31, 2016, one VOE is consolidated, as the Company owns a majority of the interests in the entity and one VIE is consolidated, as the unaffiliated partners or shareholders lack substantive kick-out rights and the Company is the entity’s primary beneficiary. At and for the year ended December 31, 2015, two VIEs were consolidated because the unaffiliated partners or shareholders lack substantive kick-out rights and the Company was determined to be the primary beneficiary. At and for the year ended December 31, 2015, two VOEs were consolidated because the Company, as either the general partner or investment manager, was deemed to have control. During the year ended December 31, 2015, it was determined that an additional VOE should be consolidated when the entity was created without unaffiliated capital and a VIE should be consolidated upon the last unaffiliated investor withdrawing its capital. Additionally, a VOE was deconsolidated as the Company’s ownership percentage fell below 50%, a VOE was deconsolidated when it was closed, and an additional VOE was consolidated upon the withdrawal of the last unaffiliated investor. The following table breaks down the investments in partnerships line by accounting method used (in thousands):
The following table includes the net impact by line item on the consolidated statements of financial condition for the consolidated entities (in thousands):
The following table includes the net impact by line item on the consolidated statements of income for the consolidated entities (in thousands):
Variable Interest Entities With respect to each consolidated VIE, its assets may only be used to satisfy its obligations. The investors and creditors of these VIEs have no recourse to the Company’s general assets. In addition, the Company neither benefits from the VIE’s assets nor bears the related risk beyond its beneficial interest in the VIE. The following table presents the balances related to VIEs that are consolidated and included on the consolidated statements of financial condition as well as the Company’s net interest in these VIEs:
Equity Method Investments The Company’s equity method investments include its investments in partnerships and offshore funds. These equity method investments are not consolidated but on an aggregate basis exceed 10% of the Company’s consolidated total assets or income. The summarized financial information of the Company’s equity method investments for December 31, 2017 and 2016 are as follows:
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Fair Value |
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Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value | E. Fair Value Investments that are measured at NAV as of December 31, 2017 include $124.5 million and $16.1 million of Affiliated and Unaffiliated Entities, respectively. Capital may generally be redeemed from Affiliated Entities on a monthly basis upon adequate notice as determined in the sole discretion of each entity’s investment manager. Capital invested in Unaffiliated Entities may generally be redeemed at various intervals ranging from monthly to annually upon notice of 30 to 95 days. Certain Unaffiliated Entities may require a minimum investment period before capital can be voluntarily redeemed (a “Lockup Period”). No investment in an Unaffiliated Entity has an unexpired Lockup Period. The Company has no outstanding capital commitments to any Affiliated or Unaffiliated Entity. The following tables present information about the Company’s assets and liabilities by major category measured at fair value on a recurring basis as of December 31, 2017 and 2016 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. Investments in certain entities that calculate net asset value per share and other investments that are not held at fair value are provided as separate items to permit reconciliation of the fair value of investments included in the fair value hierarchy to the total amounts presented in the consolidated statements of financial condition. Assets and Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2017 (in thousands)
Assets and Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2016 (in thousands)
The following table presents additional information about assets by major category measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value: Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis for the year ended December 31, 2017 (in thousands)
There were no transfers between Level 1 and Level 2 during the year ended December 31, 2017. During the year ended December 31, 2017, the Company transferred an investment with a value of approximately $36,000 from Level 3 to Level 1. The reclassification was due to increased availability of market price quotations and was based on the value at the beginning of the period in which the transfer occurred. Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis for the year ended December 31, 2016 (in thousands)
During the year ended December 31, 2016, there were no transfers between Level 1, Level 2 and Level 3 holdings. |
Income Taxes |
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Income Taxes | F. Income Taxes For the calendar years 2017, 2016 and the month of December 2015, AC and its greater than 80% owned subsidiaries file a consolidated federal income tax return. Accordingly, the income tax provision represents the aggregate of the amount provided for all companies. Prior to the spin-off, the operations of the Company’s subsidiaries are included in the consolidated U.S. federal and certain state and local income tax returns of GAMCO for the first eleven months of the 2015. For this period, the Company filed a consolidated U.S. federal and certain state and local income tax returns for the last month of 2015. The Company’s subsidiaries’ federal and certain state and local income taxes were calculated as if the Company’s subsidiaries filed on a separate return basis, and the amount of current and deferred tax or benefit is either remitted to or received from GAMCO. The provision for income taxes for the years ended December 31, 2017, 2016 and 2015 consisted of the following:
A reconciliation of the Federal statutory rate to the effective tax rate is set forth below:
U.S. federal legislation commonly referred to as the Tax Cuts and Jobs Act reduced the corporate income tax rate from a maximum of 35% to 21% beginning in 2018. As a result, the Company revalued its deferred tax assets and liabilities in December 2017. The income tax provision for the year ended December 31, 2017 reflects a benefit of $1.7 million due to this revaluation. This benefit, which was based on reasonable estimates, may require future adjustment for a variety of factors including the receipt of additional information from investment funds, changes in the Company’s assumptions, and/or the availability of further guidance and interpretations. Significant components of our deferred tax assets and liabilities are as follows:
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits related to uncertain tax positions is as follows:
The Company records penalties and interest related to tax uncertainties in income taxes. As of December 31, 2017, 2016 and 2015, the Company’s had gross unrecognized tax benefits (liabilities) of $10,923, $100,149 and ($15,678), respectively, of which $8,629, $66,098 and ($10,347), respectively, if recognized, would impact the Company’s effective tax rate. The Company has accrued liabilities of $6,241 and $94,428 as of December 31, 2017 and 2016, respectively, for interest and penalties. These amounts are included in accrued expenses and other liabilities on the consolidated statements of financial condition. Under the Company’s Tax Indemnity and Sharing Agreement with GAMCO, GAMCO is liable for all income taxes of the Company for periods prior to the spin-off from GAMCO. The Company is not currently under audit by any tax jurisdiction. The Company is subject to Federal and state audits for tax years after 2014. |
Earnings Per Share |
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Earnings Per Share | G. Earnings per Share Basic earnings per share is computed by dividing net income/(loss) per share attributable to our shareholders by the weighted average number of shares outstanding during the period. Diluted earnings per share is computed by dividing net income/(loss) per share attributable to our shareholders by the weighted average number of shares outstanding during the period, adjusted for the dilutive effect of restricted stock awards. The computations of basic and diluted net income/(loss) per share are as follows:
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Related Party Transactions |
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Related Party Transactions [Abstract] | |
Related Party Transactions | H. Related Party Transactions The following is a summary of certain related party transactions. GGCP indirectly owns a majority of our Class B Stock, representing approximately 94% of the combined voting power and 78% of the outstanding shares of our common stock at December 31, 2017. Loans with GAMCO On December 28, 2015, GCIA paid GAMCO $16 million in full repayment of an outstanding demand loan which bore interest at 5.5%. The interest on this loan was $0.9 million in 2015 and is included in interest expense on the consolidated statements of income. During 2015, GCIA paid to GAMCO $66,000 of interest on the GCIA Note which is included in interest expense on the consolidated statements of income. During the years ended December 31, 2017 and 2016, AC received principal repayments totaling $50 million and $150 million, respectively, on the GAMCO Note. Following these prepayments, the outstanding balance of $50 million is due on November 30, 2020. Interest income of $3.0 million, $7.8 million and $0.8 million is included in interest and dividend income on the consolidated statements of income for the years ended December 31, 2017, 2016 and 2015, respectively. See Note A. Organization. On December 26, 2017, GAMCO issued a promissory note to the Company for $15 million. The note comes due on February 28, 2018, bears interest at 1.6% per annum, and is secured by a second lien on certain marketable securities held by GAMCO. Investment in Securities At December 31, 2017 and 2016, approximately $44 million and $39 million, respectively, of our proprietary investment accounts, which are included in investments in securities on the consolidated statements of financial condition, were managed by our analysts or portfolio managers other than Mr. Mario Gabelli. The individuals managing these accounts receive 20% of the net profits, if any, earned on the accounts. In August 2006, a son of the Executive Chairman was given responsibility for managing one such proprietary investment account. The balance in the account at December 31, 2017 and 2016 was $18.0 and $14.6 million, respectively, of which $3.5 million and $2.7 million, respectively, is owed to the portfolio manager representing earnings that have been re-invested in the account. For 2017, 2016 and 2015, the performance of this account resulted in compensation of approximately $0.5 million, $0.1 million and $0.1 million, respectively, for managing this account. At December 31, 2017 and 2016, the value of the Company’s investment in GAMCO common stock was $130.3 million and $135.7 million, respectively. The Company recorded dividend income of $0.4 million in 2017 and 2016 relating to its investment in GAMCO common stock, which is included in interest and dividend income on the consolidated statements of income. At December 31, 2017 and 2016, the Company had investments of $238.1 million and $314.1 million, respectively, invested in the Gabelli U.S. Treasury Money Market Fund, which is recorded in cash and cash equivalents on the consolidated statements of financial condition. Investments in affiliated equity mutual funds advised by Gabelli Funds, LLC, a wholly-owned subsidiary of GAMCO, and Teton Advisors, Inc., an investment advisor controlled by GGCP Holdings, LLC, the majority stockholder of AC, at December 31, 2017 and 2016 totaled $146.2 million and $132.1 million, respectively, and are included in either investments in securities or investments in affiliated registered investment companies on the consolidated statements of financial condition. Investment in Partnerships We had an aggregate investment in affiliated partnerships and offshore funds of approximately $124.5 million and $112.3 million at December 31, 2017 and 2016, respectively. Investment Advisory Services GCIA and Gemini Capital Management LLC (“GCM LLC”) serve as co-general partners of Gemini Global Partners, L.P. (formerly Gabelli Global Partners, L.P., “Gemini LP”). Gabelli Securities International Limited, a Bermuda corporation (“GSIL”) formed in 1994 to provide investment advisory services to offshore funds and accounts, and GCM LLC serve as co-investment managers of Gabelli Global Partners Ltd. (“GGP Ltd”). Gemini LP and GGP Ltd are both feeder funds of Gabelli Global Partners Master Fund Ltd., an investment fund organized in the Cayman Islands. GCIA owns 45% of GSIL. A son of the Executive Chairman owns the remaining 55% of GSIL and 100% of GCM LLC. Each of GCIA and GCM LLC is entitled to 50% of advisory fees and incentive allocations payable by Gemini LP. These advisory fees were $55,228, $63,196 and $70,345 for 2017, 2016 and 2015, respectively. No incentive fees were earned from 2015 to 2017. As of December 31, 2017 and 2016, there were payables of $13,018 and $201,065, respectively, from Gemini LP included in payables to affiliates and receivables from affiliates, respectively, on the consolidated statements of financial condition. Each of GSIL and GCM LLC is entitled to 50% of advisory and incentive fees payable by and GGP Ltd. These advisory fees were $7,365, $10,325 and $0 for 2017, 2016 and 2015, respectively. No incentive fees were earned from 2015 to 2017. As of December 31, 2017 and 2016, there was a payable of $10,528 and a receivable of $10,329 respectively, from GGP Ltd included in payables to affiliates and receivables from affiliates, respectively, on the consolidated statements of financial condition. In October 2017, GCIA agreed to purchase the remaining shares of GSIL that it does not hold for $564,516, subject to regulatory approvals and other standard closing conditions. As of December 31, 2017, the closing conditions have not been satisfied. In October 2017, GCIA agreed to purchase all outstanding shares of GAMA Funds Holdings GmbH, Baar, (“GFH”) a private Swiss company that holds investments in private companies, from a son of the Executive Chairman for $110,539 plus net proceeds from the sale of its investments, subject to regulatory approvals and other standard closing conditions. As of December 31, 2017, the closing conditions have not been satisfied. Compensation Subsequent to the spin-off on November 30, 2015, and in accordance with Mr. Gabelli’s employment agreement, the Company will pay the Executive Chairman, or his designated assignee, a monthly management fee equal to 10% of the Company’s pretax profits before consideration of this fee and before consolidation of the various consolidated funds and partnerships discussed in Note D. Prior to the spin-off, the amount of management fee reflected on the financial statements is a carve-out from the historical GAMCO consolidated financial statements. In 2017, 2016 and 2015, the Company recorded management fee expense or (contra-expense) of $0.7 million, $1.6 million and ($0.3) million, respectively. These fees are recorded as management fee on the consolidated statements of income. Income Taxes As a result of the spin-off, the operations of the Company’s subsidiaries were included in the consolidated U.S. federal and certain state and local income tax returns of GAMCO for the first eleven months of the 2015. The Company filed consolidated U.S. federal and certain state and local income tax returns for the last month of 2015. The Company’s subsidiaries’ federal and certain state and local income taxes are calculated as if the Company’s subsidiaries filed on a separate return basis, and the amount of current and deferred tax or benefit is either remitted to or received from GAMCO for the first eleven months of 2015 or the Company for December 2015 using a benefits for loss approach such that net operating loss (or other tax attribute) is characterized as realized by the Company’s subsidiaries when those tax attributes are utilized in the consolidated tax return of GAMCO or the Company. This is the case even if the Company’s subsidiaries would not otherwise have realized those tax attributes. Affiliated Receivables/Payables At December 31, 2017, the receivable from affiliates consists primarily of the $15 million promissory note issued by GAMCO on December 26, 2017. At December 31, 2016, the receivable from affiliates consists primarily of SICAV net revenues due from Gabelli Funds, LLC (see Other below for detail). At December 31, 2017 and 2016, the payable to affiliates primarily consisted of expenses paid by affiliates on behalf of the Company pursuant to the Transitional Services Agreement. GAMCO Sublease Since 1997, GAMCO has leased office space at 401 Theodore Fremd Ave, Rye, NY from M4E, LLC, an entity owned by the adult children of the Executive Chairman. The current lease expires on December 31, 2028. The Company paid $77,444 and $310,566 to GAMCO in 2016 and 2015, respectively, for its use of the Rye location. In June 2016, AC entered into a sublease agreement with GAMCO initially effective from April 1, 2016 through March 31, 2017. In March, 2017, this sublease was renewed through March 31, 2018. Pursuant to the sublease, AC and its subsidiaries shall pay a monthly fixed lease amount based on the percentage of square footage occupied by its employees (including pro rata allocation of common space). For the year ended December 31, 2017 and the nine months ended December 31, 2016, the Company paid $374,401 and $276,238, respectively, under the sublease agreement. These amounts are included within other operating expenses on the consolidated statements of income. Other In 2017, 2016 and 2015, the Company earned $4.5 million, $5.2 million and $4.9 million, respectively, or 60%, 63% and 59%, respectively, of its commission revenue from transactions executed on behalf of Gabelli Funds, LLC and private wealth management clients advised by GAMCO Asset Management Inc., wholly-owned subsidiaries of GAMCO. These commissions are included in institutional research services on the consolidated statements of income. As required by the Company’s Code of Ethics, staff members are required to maintain their brokerage accounts at G.research unless they receive permission to maintain an outside account. G.research offers its entire staff the opportunity to engage in brokerage transactions at discounted commission rates. Accordingly, many of our staff members, including the executive officers or entities controlled by them, have brokerage accounts at G.research and have engaged in securities transactions at discounted rates. Pursuant to research services agreements (see Note B), GAMCO Asset Management Inc. paid $2.2 million, $1.5 million and $0.7 million and Gabelli Funds, LLC paid $2.3 million, $1.5 million and $0.8 million to the Company for the years ended December 31, 2017, 2016 and 2015, respectively. During 2017 and 2016, the Company participated as agent in the at the market offerings of The Gabelli Global Gold, Natural Resources & Income Trust (“GGN”) and The Gabelli Healthcare & WellnessRx Trust 5.875% Series B Cumulative Preferred Stock (“GRX”). Pursuant to sales agreements between the parties, the Company earned sales manager fees related to these offerings of $39,782 and $1,178,330 for GGN, respectively, and $0 and $5,495 for GRX, respectively, which are included in institutional research services on the consolidated statements of income. There were no sales manager fees earned from GGN or GRX offerings during 2015. The Company participated in three preferred stock offerings of certain GAMCO closed-end funds in 2017. In September 2017, the Company acted as co-underwriter in The Ellsworth Growth and Income Fund Ltd 5.25% Series A Fixed Rate Preferred Stock and The Gabelli Multimedia Trust 5.25% Series E Cumulative Preferred Stock offerings. During October 2017, the Company acted as co-underwriter in GAMCO Natural Resources, Gold & Income Trust 5.20% Series A Cumulative Preferred Stock offering. Underwriting fees and selling concessions, net of expenses, related to the launch of these funds amounted to $172,730 and are included in either institutional research services or other revenue on the consolidated statements of income. Throughout 2016, the Company acted as co-underwriter in five preferred stock offerings of certain GAMCO closed-end funds: The Gabelli Equity Trust 5.45% Series J Cumulative Preferred Stock; The Gabelli Global Small and Mid Cap Value Trust 5.45% Series A Cumulative Preferred Stock; The Gabelli Utility Trust 5.375% Series C Cumulative Preferred Stock; The Gabelli Dividend & Income Trust 5.25% Series G Cumulative Preferred Stock; and Bancroft Fund Ltd. 5.375% Series A Preferred Stock. Underwriting fees and selling concessions, net of expenses, related to the launch of these funds amounted to $420,252 and are included in either institutional research services or other revenue on the consolidated statements of income. On July 27, 2011, the Company entered into a Distribution Agreement with G.distributors, LLC (“G.distributors”), a subsidiary of GAMCO. Under the Distribution Agreement, the Company was the broker of record for certain ongoing client relationships and earned distribution fees. On July 1, 2015, these mutual fund distribution assets were transferred out of the Company. Through June 30, 2015, the Company earned $263,692 in distribution fees, which are included in other income on the consolidated statements of income. On June 30, 2015, Distributors Holdings, Inc. (“DHI”), a wholly-owned subsidiary of GCIA formed G.research, LLC, a single member limited liability company, in connection with the transfer of the distribution assets of G.research, Inc. As a result of these transactions: (a) DHI became a wholly-owned subsidiary of GAMCO; (b) G.research LLC became a wholly-owned subsidiary of GCIA; (c) G.research received capital contributions of $1,937,670 and $234,000 related to a deferred tax liability that was transferred to DHI and the value of the distribution assets, respectively; and (d), G.research, LLC recorded a deferred tax liability of $88,227 related to the distribution assets. Pursuant to an agreement between the Company and Funds, Funds pays to GCIA 90% of the net revenues it receives related to investment advisory service provided to GAMCO International SICAV – GAMCO Merger Arbitrage, an investment company incorporated under the laws of Luxembourg (the “SICAV”). For this purpose, net revenues are defined as gross advisory fees less expenses related to payouts and expenses of the SICAV paid by Funds. In connection with these services, Funds paid GCIA $2.8 million, $2.7 million and $1.0 million during 2017, 2016 and 2015, respectively. These payments are included in investment advisory and incentive fees on the consolidated statements of income. As general partner or co-general partner of various affiliated limited partnerships, the Company receives a management fee based on a percentage of each partnership’s net assets and a 20% incentive allocation based on economic profits. |
Equity |
12 Months Ended |
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Dec. 31, 2017 | |
Equity [Abstract] | |
Equity | I. 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 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 each share class are not eligible to vote on matters relating exclusively to the other share class. Stock Award and Incentive Plan There were no restricted stock awards (“RSAs”) issued by AC during 2017 or 2016. On November 30, 2015, in connection with the spin-off, the Company issued 554,100 AC RSA shares to GAMCO employees (including GAMCO employees who became AC employees) who held 554,100 GAMCO RSA shares at that date. The purpose of the issuance was to ensure that any employee who had GAMCO RSAs was granted an equal number of AC RSAs so that the total value of the RSAs post-spin-off was equivalent to the total value pre-spin-off. The value of the GAMCO RSAs held by AC employees is recognized as expense by the Company over the remaining vesting period because the employees’ services are for the benefit of the Company. As of December 31, 2016, there were 424,340 AC RSA shares outstanding and 424,340 GAMCO RSA shares outstanding. As of December 31, 2015, there were 553,100 AC RSA shares outstanding and 553,100 GAMCO RSA shares outstanding. In accordance with GAAP, we have allocated the stock compensation costs between GAMCO and AC based upon each employee’s individual allocation of their responsibilities between GAMCO and AC. On June 1, 2017, the Compensation Committee of AC accelerated the vesting of all 420,240 outstanding RSAs effective June 15, 2017 and on August 7, 2017, the compensation committee of GAMCO’s Board of Directors (the “GAMCO Committee”) accelerated the vesting of 201,120 outstanding GAMCO RSAs effective August 31, 2017. In addition, the GAMCO Committee accelerated the vesting of an additional 144,650 GAMCO RSAs effective December 27, 2017. The total compensation costs related to non-vested awards not yet recognized is approximately $0.1 million as of December 31, 2017. This was recognized as expense in January 2018. For the years ended December 31, 2017, 2016 and 2015, the Company recorded approximately $5.9 million, $2.5 million and $4.9 million, respectively, in stock-based compensation expense which resulted in the recognition of tax benefits of approximately $1.3 million, $0.8 million and $1.7 million, respectively. The expense for the years ended December 31, 2017, 2016 and 2015 includes $4.2 million, $0 and $4.9 million attributable to the acceleration of the AC and GAMCO RSAs, respectively, in each year. There was no accelerated vesting of RSAs in the year ended December 31, 2016. Stock Repurchase Program In 2017, the Company repurchased 0.6 million shares at an average price of $34.61 per share for a total investment of $21.2 million. In 2016, the Company repurchased 1.3 million shares at an average price of $31.10 per share for a total investment of $41.6 million. This includes a purchase of 926,345 shares from an unaffiliated third party on December 30, 2016 at a price of $31.05 for which the related payable of $28.8 million is included in accrued expenses and other liabilities on the consolidated statements of financial condition. Dividends During 2017, the Company declared dividends of $0.20 per share to class A and class B shareholders totaling $4.8 million, of which $2.4 million is payable on January 10, 2018 and is included in accrued expenses and other liabilities on the consolidated statements of financial condition. During 2016, the Company declared dividends of $0.20 per share to class A and class B shareholders totaling $5.0 million, of which $2.4 million was paid on January 25, 2017 and is included in accrued expenses and other liabilities on the consolidated statements of financial condition. |
Retirement Plan |
12 Months Ended |
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Dec. 31, 2017 | |
Retirement Plan [Abstract] | |
Retirement Plan | J. Retirement Plan The Company participates in an incentive savings plan (the “Savings Plan”), covering substantially all employees. Company contributions to the Savings Plan are determined annually by management of the Company and (prior to the spin-off) GAMCO’s Board of Directors but may not exceed the amount permitted as a deductible expense under the Internal Revenue Code. The amounts expensed for allocated contributions to the Savings Plan amounted to approximately $49,000, $34,000 and $12,000 in 2017, 2016 and 2015, respectively, and are included in compensation on the consolidated statements of income. |
Guarantees, Contingencies, and Commitments |
12 Months Ended |
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Dec. 31, 2017 | |
Guarantees, Contingencies, and Commitments [Abstract] | |
Guarantees, Contingencies, and Commitments | K. Guarantees, Contingencies, and Commitments G.research has agreed to indemnify the clearing brokers for losses they may sustain from the customer accounts that trade on margin introduced by G.research. At each of December 31, 2017, 2016 and 2015, the total amount of customer balances subject to indemnification (i.e., unsecured margin debits) was immaterial. G.research also has entered into arrangements with various other third parties, many of which provide for indemnification of the third parties against losses, costs, claims and liabilities arising from the performance of G.research’s obligations under the agreements. G.research has had no claims or payments pursuant to these or prior agreements, and management believes the likelihood of a claim being made is remote, and therefore, an accrual has not been made on the consolidated financial statements. From time to time, we may be named in legal actions and proceedings. These actions may seek substantial or indeterminate compensatory as well as punitive damages or injunctive relief. We are also subject to governmental or regulatory examinations or investigations. Examinations or investigations can result in adverse judgments, settlements, fines, injunctions, restitutions or other relief. For any such matters, the consolidated financial statements include the necessary provisions for losses that we believe are probable and estimable. Furthermore, we evaluate whether there exist losses which may be reasonably possible and, if material, make the necessary disclosures. |
Net Capital Requirements |
12 Months Ended |
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Dec. 31, 2017 | |
Net Capital Requirements [Abstract] | |
Net Capital Requirements | L. Net Capital Requirements G.research is a registered broker-dealer, and is subject to the SEC Uniform Net Capital Rule 15c3-1 (the “Rule”), which specifies, among other requirements, minimum net capital requirements for registered broker-dealers. G.research computes its net capital under the alternative method as permitted by the Rule, which requires that minimum net capital be 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. G.research, LLC is exempt from Rule 15c3-3 pursuant to paragraph (k)(2)(ii) of that rule which exempts all customer transactions cleared through another broker-dealer on a fully disclosed basis. In addition, our assets at the clearing broker-dealer are treated as allowable assets for net capital purposes as we have in place Proprietary Accounts of Introducing Firms and Dealers (“PAIB”) agreements pursuant to Rule 15c3-3. These requirements also provide that equity capital may not be withdrawn, advances to affiliates may not be made or cash dividends paid if certain minimum net capital requirements are not met. G.research had net capital, as defined, of $41.8 million and $3.7 million, exceeding the required amount of $250,000 by $41.6 million and $3.4 million, at December 31, 2017 and 2016, respectively. There were no subordinated borrowings during the years ended December 31, 2017 and 2016. |
Shareholder-Designated Contribution Plan |
12 Months Ended |
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Dec. 31, 2017 | |
Shareholder-Designated Contribution Plan [Abstract] | |
Shareholder-Designated Contribution Plan | M. Shareholder-Designated Contribution Plan The Company has established a Shareholder Designated Charitable Contribution program. Under the program, from time to time each shareholder is eligible to designate a charity to which the Company would make a donation at a rate of twenty-five cents per share based upon the actual number of shares registered in the shareholder’s name. Shares held in nominee or street name were not eligible to participate. The Company recorded an expense of $4.2 million and $5.4 million related to this contribution for the years ended December 31, 2017 and 2016, respectively, which is included in shareholder-designated contribution in the consolidated statements of income. |
Quarterly Financial Information (Unaudited) |
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Quarterly Financial Information (Unaudited) | N. Quarterly Financial Information (Unaudited) Quarterly financial information for the years ended December 31, 2017 and 2016 is presented below.
For years in which our funds have positive performance, fourth quarter revenue, and therefore fourth quarter operating income, will generally exceed the revenue and operating income levels recognized in each of the prior three quarters of the year due to the recognition of incentive fees from investment partnerships and funds. The GAMCO Committee accelerated the vesting of 144,650 GAMCO RSAs effective December 27, 2017 which resulted in stock-based compensation expense of $0.6 million. During the fourth quarter of 2017, AC contributed securities to its wholly-owned broker-dealer subsidiary. A portion of the contributed securities had qualified for AFS accounting under current generally accepted accounting principles while held by AC. The contribution of the AFS securities to the broker-dealer resulted in the recognition of net income during the quarter since the broker-dealer does not qualify for AFS accounting treatment. The unrealized gain on the contributed AFS securities recognized in net income was reclassified from other comprehensive income in the amount of $11.8 million. In December 2017, the Company recorded a $1.7 million income tax benefit related to the revaluation of deferred tax items as a result of the recently-enacted Tax Cut and Jobs Act. This benefit, which is based on reasonable estimates, may require future adjustment due to receipt of additional information from investment funds, changes in the Company’s assumptions, and/or the availability of further guidance and interpretations. |
Subsequent Events |
12 Months Ended |
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Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | O. Subsequent Events During the period from January 1, 2018 to March 8, 2018, we repurchased 3,971 Class A shares at an average price per share of $33.99. On March 5, 2018, AC completed an exchange offer with respect to its Class A shares. Tendering shareholders will receive 1.35 GAMCO Class A shares that the Company holds for each Class A share, together with cash in lieu of any fractional share. Computershare Trust Company, N.A., the exchange agent for the offer, advised the Company that 490,761 shares were validly tendered and not withdrawn (including 32,756 shares delivered by the expiration of the guaranteed delivery period), representing approximately 11% of the Class A shares outstanding. The Company has accepted for exchange all shares validly tendered and not withdrawn and will promptly deliver 662,000 GAMCO Class A shares in payment for the tendered Class A shares. On February 6, 2018, G.research amended its existing research service agreements with GAMCO Asset Management Inc. and Gabelli Funds, LLC, to provide for annual research services fees from these entities in 2018 of $1.50 million and $1.53 million respectively. On February 6, 2018, the Company and GAMCO renewed their sublease for the period of April 1, 2018 to March 31, 2019. The annual rental cost under the sublease is approximately $0.5 million. The outstanding principal and accrued interest on the December 2017 promissory note from GAMCO were paid on February 28, 2018. |
Organization (Policies) |
12 Months Ended |
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Dec. 31, 2017 | |
Organization [Abstract] | |
Spin-off and Related Transactions | The Spin-off and Related Transactions We are a Delaware corporation that provides alternative investment management, institutional research and underwriting services. In addition, we derive investment income/(loss) from proprietary trading of cash and other assets awaiting deployment in our operating businesses. On November 30, 2015, GAMCO Investors, Inc. (“GAMCO” or “GBL”) distributed all the outstanding shares of each class of AC common stock on a pro rata one-for-one basis to the holders of each class of GAMCO’s common stock (the “Spin-off”). We conduct our investment management business through Gabelli & Company Investment Advisers, Inc. (“GCIA” f/k/a Gabelli Securities, Inc.). GCIA and its wholly-owned subsidiary, Gabelli & Partners, LLC (“Gabelli & Partners”), collectively serve as general partners or investment managers to investment funds including limited partnerships and offshore companies (collectively, “Investment Partnerships”), and separate accounts. We primarily manage assets in equity event-driven value strategies, across a range of risk and event arbitrage portfolios. The business earns management and incentive fees from its advisory assets. Management fees are largely based on a percentage of assets under management. Incentive fees are based on the percentage of the investment returns of certain clients’ portfolios. GCIA is an investment adviser registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended. We provide our institutional research and underwriting services through G.research, LLC (“G.research”) doing business as “Gabelli & Company”, an indirect wholly-owned subsidiary of the Company. G.research is a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and is regulated by the Financial Industry Regulatory Authority (“FINRA”). G.research's revenues are derived primarily from institutional research services. In connection with the Spin-off, GAMCO issued a promissory note (the “GAMCO Note”) to AC Group in the original principal amount of $250 million used to partially capitalize the Company. The GAMCO Note bears interest at 4% per annum and has a maturity date of November 30, 2020 with respect to its original principal amount. Interest on the GAMCO Note will accrue from the most recent date for which interest has been paid. Prior to November 30, 2019, at the election of GAMCO, payment of interest on the GAMCO Note may, in lieu of being paid in cash, be paid, in whole or in part, in kind (a “PIK Amount”). GAMCO will repay all PIK Amounts added to the outstanding principal amount of the GAMCO Note, in cash, on the fifth anniversary of the date on which each such PIK Amount was added to the outstanding principal amount of the GAMCO Note. GAMCO may prepay the GAMCO Note prior to maturity without penalty. AC has received principal repayments totaling $200 million on the GAMCO Note, of which $50 million was received during the year ended December 31, 2017 leaving an outstanding principal balance of $50 million. After application of the principal payments, the balance of the GAMCO Note is due on November 30, 2020. In addition, GCIA purchased 4,393,055 shares of GAMCO Class A common stock in exchange for a note in the principal amount of $150 million (the “GCIA Note”). In connection with the Spin-off, GAMCO contributed the GCIA Note to the Company. During the quarter ended December 31, 2017, AC forgave the outstanding principal and interest on the GCIA Note as a capital contribution to GCIA. |
Significant Accounting Policies (Policies) |
12 Months Ended | |||||||||
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Dec. 31, 2017 | ||||||||||
Significant Accounting Policies [Abstract] | ||||||||||
Use of Estimates | The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“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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Reclassification | Reclassification The Company has reclassified certain prior-period amounts to conform to the current-period presentation. For presentation of 2015 to 2017 results, the Company reported revenue from its research services agreement with affiliates in “Institutional Research Services Revenue” instead of “Other Revenue”. The reclassification did not impact total revenues, operating expenses, operating income/(loss), net income, or equity. |
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Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents primarily consist of an affiliated money market mutual fund which is highly liquid. U.S. Treasury Bills and Notes with maturities of three months or less at the time of purchase are also considered cash equivalents. |
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Investments in Securities | 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 Notes with maturities of greater than three months at the time of purchase are considered investments in securities. Securities that are not readily marketable are stated at their estimated fair values in accordance with GAAP. A substantial portion of investments in securities are held for resale in anticipation of short-term market movements and therefore are classified as trading securities. Trading securities are stated at fair value, with any unrealized gains or losses reported in current period earnings in net gain from investments on the consolidated statements of income. Available for sale (“AFS”) investments are stated at fair value, with any unrealized gains or losses, net of taxes, reported as a component of other comprehensive income (loss) on the consolidated statements of comprehensive income (loss) except for losses deemed to be other than temporary which are recorded as realized losses on the consolidated statements of income. Securities transactions and any related gains and losses are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the specific identified cost basis and are included in net gain from investments on the consolidated statements of income. AFS securities are evaluated for other than temporary impairments each reporting period, and any impairment charges are recorded in net gain from investments on the consolidated statements of income. Management reviews all AFS 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. Securities sold, not yet purchased are recorded on the trade date, and are stated at fair value and represent obligations of the Company 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 from investments on the consolidated statements of income. Unrealized gains and losses on securities sold, not yet purchased are reported in current period earnings in net gain from investments on the consolidated statements of income. |
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Fair Values of Financial Instruments | Fair Value of Financial Instruments All of the instruments within investments in securities are measured at fair value. The Company’s assets and liabilities recorded at fair value have been categorized based upon a fair value hierarchy in accordance with the Financial Accounting Standards Board’s (“FASB”) guidance on fair value measurement. The levels of the fair value hierarchy and their applicability to the Company are described below:
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 Chief Financial Officer of the Company. The Company uses the “market approach” valuation technique to value investments in Level 3 investments. The Company’s valuation of the Level 3 investments has been 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 are 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. Cash equivalents are valued using unadjusted quoted market prices. Accordingly, cash equivalents are categorized in Level 1 of the fair value hierarchy. Investments in securities—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. Investments in partnerships—The Company’s investments include investments, in both affiliated and unaffiliated entities, which the Company accounts for under the equity or fair value methods of accounting. Based upon the guidance outlined in Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurement, investments in partnerships, measured using NAV as a practical expedient, are not classified in the fair value hierarchy. |
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Receivables from Affiliates and Payables to Affiliates | Receivables from Affiliates and Payables to Affiliates Receivables from affiliates consist primarily of a $15 million promissory note issued by GAMCO on December 26, 2017. Payables to affiliates primarily consist of expenses paid by affiliates on behalf of the Company pursuant to the Transitional Services Agreement with GAMCO. See Note H. |
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Receivables from and Payables to Brokers | Receivables from and Payables to Brokers Receivables from and payables to brokers consist of amounts arising from the purchases and sales of securities as well as cash amounts held in anticipation of investment. |
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Consolidation | Consolidation Pursuant to the consolidation guidance, the Company first evaluates whether it holds a variable interest in an entity. Fees that are customary and commensurate with the level of services provided, and where the Company does not hold other economic interests in the entity that would absorb more than an insignificant amount of the expected losses or returns of the entity, would not be considered a variable interest. The Company factors in all economic interests including proportionate interests through related parties, to determine if such interests are considered a variable interest. For entities where the Company has determined that it does hold a variable interest, the Company performs an assessment to determine whether each of those entities qualify as a variable interest entity (“VIE”). The determination as to whether an entity qualifies as a VIE depends on the facts and circumstances surrounding each entity and therefore certain of the Company’s funds may qualify as VIEs under the variable interest model. The granting of substantive kick-out rights is a key consideration in determining whether a limited partnership or similar entity is a VIE and whether or not that entity should be consolidated. Under the variable interest model, the Company consolidates those entities where it is determined that the Company is the primary beneficiary of the entity. The Company is determined to be the primary beneficiary when it has a controlling financial interest in the VIE, which is defined as possessing both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. When the Company alone is not considered to have a controlling financial interest in the VIE but the Company and its related parties under common control in the aggregate have a controlling financial interest in the VIE, the Company will be deemed the primary beneficiary if it is the party that is most closely associated with the VIE. When the Company and its related parties not under common control in the aggregate have a controlling financial interest in the VIE, the Company would be deemed to be the primary beneficiary if substantially all the activities of the entity are performed on behalf of the Company. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes initially involved with the VIE and reconsiders that conclusion continuously. Investments and redemptions (either by the Company, related parties or third parties) or amendments to the governing documents of the respective entity may affect an entity’s status as a VIE or the determination of the primary beneficiary. Assets and liabilities of the consolidated VIEs are included within the consolidated statements of financial condition and are separately disclosed in Note D. For voting interest entities (“VOEs”) that do not qualify as VIEs, the Company applies the voting interest model. Under the voting interest model, the Company consolidates those entities it controls through a majority voting interest. Equity Method Investments. Substantially all of the Company’s equity method investees are entities that record their underlying investments at fair value. Therefore, under the equity method of accounting, the Company’s share of the investee’s underlying net income predominantly represents fair value adjustments in the investments held by the equity method investees. The Company’s share of the investee’s underlying net income or loss is based upon the most currently available information and is recorded as “Net gain from investments” on the consolidated statements of income. Capital contributions are recorded as an increase in investments when paid, while withdrawals and distributions are recorded as reductions of the investments when received. Depending on the terms of the investment, the Company may be restricted as to the timing and amounts of withdrawals. See Note D. Investments in Partnerships, Offshore Funds and Variable Interest Entities for more detail as to the number and types of entities consolidated as well as the impact on the consolidated statements of financial condition and consolidated statements of income. |
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Investments in Partnerships and Affiliates | Investments in Partnerships and Affiliates The Company is general partner or co-general partner of various affiliated entities. We also have investments in unaffiliated partnerships, offshore funds and other entities (“unaffiliated entities”). Given that we are not a general partner or investment manager in any of the unaffiliated entities, we do not earn any management or incentive fees/allocation and we do not have a controlling financial interest; thus, we do not currently consolidate any unaffiliated entities. Our balance sheet caption “Investments in partnerships” includes those investments, in both affiliated and unaffiliated entities, which the Company accounts for under the equity method of accounting and certain investments in entities that the Company accounts for at fair value. The Company records noncontrolling interests in consolidated entities for which the Company’s ownership is less than 100%. Refer to Noncontrolling Interests section within this Note B for additional disclosures. |
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Derivative Financial Instruments | Derivative Financial Instruments The Company recognizes all derivatives as either assets or liabilities measured at fair value and are included in either investments in securities or securities sold, not yet purchased on the consolidated statements of financial condition. From time to time, the Company will enter into hedging transactions to manage its exposure to foreign currencies and equity prices related to its proprietary investments. During 2017, 2016 and 2015, the Company had derivative transactions which resulted in a net loss of $98,000, net gain of $143,000 and net gain of $264,000, respectively. At December 31, 2017 and 2016, we held derivative contracts on 1.7 million equity shares and 16,000 equity shares, respectively, and the net fair value was ($106,000) and $90,000, respectively. The gross amounts are included as investments in securities and securities sold, not yet purchased on the consolidated statements of financial condition. These transactions are not designated as hedges for accounting purposes, and changes in fair values of these derivatives are included in net gain from investments on the consolidated statements of income and included in investments in securities or securities sold, not yet purchased on the consolidated statements of financial condition. |
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Securities Transactions | Securities Transactions The Company also generates investment gains or losses from its proprietary trading activities which are included in net gain from investments on the consolidated statements of income. Management determines the appropriate classification of debt and equity securities at the time of purchase and reevaluates such designation as of the date of each consolidated statement of financial condition. Investments in United States Treasury Bills and Notes with maturities of greater than three months at the time of purchase are classified as investments in securities, and those with maturities of three months or less at the time of purchase are classified as cash equivalents. The portion of investments in securities held for resale in anticipation of short-term market movements are classified as trading securities. Trading securities are stated at fair value, with any unrealized gains or losses reported in current period earnings. AFS investments are stated at fair value, with any unrealized gains or losses, net of taxes, reported as a component of equity except for losses deemed to be other-than-temporary (“OTT”) which are recorded as realized losses in the consolidated statements of income. |
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Major Revenue-Generating Services and Revenue Recognition | Major Revenue-Generating Services and Revenue Recognition Advisory fees from investment partnerships and offshore funds are computed either monthly or quarterly, and amounts receivable are included in receivables from affiliates on the consolidated statements of financial condition. Revenues from investment partnerships and offshore funds also generally include either an incentive fee/allocation on the absolute gain in a portfolio or a fee of 20% of the economic profit as defined in the partnership agreement and are included in investment advisory and incentive fees on the consolidated statements of income. The incentive allocation or fee is generally recognized at the end of an annual measurement period and amounts receivable are included in either receivables from affiliates or investment advisory fees receivable on the consolidated statements of financial condition. Institutional research services includes commission revenues, sales manager fees and underwriting fees and amounts receivable are included in receivables from brokers and clearing organizations on the consolidated statements of financial condition. Related clearing charges are recorded on a trade-date basis, and are included in other operating expenses on the consolidated statements of income. Underwriting fees include underwriting revenues and syndicate profits and are accrued as earned. Underwriting fees include gains, losses, selling concessions and fees, net of syndicate expenses, arising from securities offerings in which G.research acts as underwriter or agent. Effective January 1, 2014, the Company, through G.research, entered into agreements with two affiliates, GAMCO Asset Management Inc. and Gabelli Funds, LLC, to provide each affiliate with the same types of research services that it provides to its other clients. The agreements call for the two affiliates to pay a research services fee. The annual fee amounts are determined by negotiations between the Company and each entity that utilizes the Company’s research. |
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Depreciation | Depreciation Fixed assets, with a net book value of $39,000 and $55,000 at December 31, 2017 and 2016, respectively, which are included in other assets, are recorded at cost and depreciated using the straight-line method over their estimated useful lives of four to seven years. As of December 31, 2017 and 2016, fixed assets were recorded at a cost of $85,000 and $85,000, respectively net of accumulated depreciation of $46,000 and $30,000, respectively. For the years ended December 31, 2017, 2016 and 2015, depreciation was $16,000, $17,000 and $13,000, respectively. We estimate that depreciation will be approximately $16,000 annually over the next three years. As of December 31, 2017 and 2016, the Company wrote off assets in the amount of $1,000 and $25,000, respectively, that were fully depreciated and had been retired. |
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Allocated Expenses | Allocated Expenses The Company is charged or incurs certain overhead expenses that are paid by, or paid on our behalf by other affiliates and are included in other operating expenses on the consolidated statements of income. These overhead expenses primarily relate to centralized functions including finance and accounting, legal, compliance, treasury, tax, internal audit, information technology, human resources and risk management functions. These overhead expenses are allocated to the Company by other affiliates or allocated by the Company to other affiliates as the expenses are incurred, based upon direct usage when identifiable, with the remainder allocated based on revenue, headcount, space or other methodologies periodically reviewed by the management of the Company and the affiliates. In addition, GCIA and GAMCO serve as paymasters under compensation payment sharing agreements. This includes compensation expense and related payroll taxes and benefits which are fully paid by the Company for professional staff performing duties related to the Company and affiliates. These compensation expenses are included in compensation on the consolidated statements of income. All of the allocations and estimates in these financial statements are based on assumptions that management of AC believes are reasonable. However, these allocations may not be indicative of the actual expenses we would have incurred or may incur in the future. |
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Management Fee | Management Fee Management fee expense in the amount of 10% of the aggregate pre-tax profits, before consideration of this fee and before consideration of the various consolidated funds and partnerships, is paid to the Executive Chairman or his designated assignees in accordance with his employment agreement. |
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Stock Based Compensation | Stock-Based Compensation The Company maintains one stock award and incentive plan (the “Plan”) approved by the shareholders at the Company’s annual meeting held on May 3, 2016, which is designed to provide incentives which will attract and retain individual’s key to the success of AC through direct or indirect ownership of our common stock. 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 maximum of 2 million shares 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 (the “Compensation Committee”). Under the Plan, the Compensation Committee may grant RSAs 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 committee may determine. Through December 31, 2017, approximately 0.5 million shares have been awarded under the Plan leaving approximately 1.5 million shares for future grants. On November 30, 2015, in connection with the spin-off of the Company from GAMCO, the Company issued 554,100 AC RSA shares to GAMCO employees (including GAMCO employees who became AC employees) who held 554,100 GAMCO RSA shares at that date. The purpose of the issuance was to ensure that any employee who had GAMCO RSAs were granted an equal number of AC RSAs so that the total value of the RSAs post-spin-off was equivalent to the total value pre-spin-off. In accordance with GAAP, we have allocated the stock compensation costs between GAMCO and AC based upon the allocation of each employee’s responsibilities between GAMCO and AC. As of December 31, 2017 and 2016, there were 0 and 424,340 AC RSA shares outstanding. All grants of the RSA shares were recommended by the Company's Executive Chairman, who did not receive a RSA, and approved by the Compensation Committee. The value of the AC RSAs, net of estimated forfeitures, is recognized as expense over the respective vesting period for these awards which is either (1) five years (30% three years and 70% five years from the date of grant, respectively), or (2) ten years (30% three years and 10% each year thereafter from the date of grant, respectively). 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. |
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Goodwill | Goodwill Goodwill is initially measured as the excess of the cost of the acquired business over the sum of the fair value assigned to assets acquired less the liabilities assumed. Goodwill is tested for impairment at least annually on November 30th and whenever certain triggering events are met. In assessing the recoverability of goodwill for the subsidiary’s annual impairment test on November 30, 2017 and 2016, we performed a qualitative assessment of whether it was more likely than not that an impairment has occurred and concluded that a quantitative analysis was not required. As part of this assessment, it was also determined that there was no risk of failing the quantitative impairment testing step that compares the subsidiary fair value to its carrying value. No impairment was recorded during 2017 or 2016. |
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Income Taxes | Income Taxes For purposes of the preparation of the consolidated financial statements, the provision for income taxes is computed using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income tax expense/benefit in the period that includes the enactment date of the change in tax rate. The Company records net deferred tax assets to the extent the Company believes these assets will more likely than not be realized. A valuation allowance would be recorded to reduce the carrying value of deferred tax assets to the amount that is more likely than not to be realized. In making such a determination of whether a valuation allowance is necessary, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. In the event the Company were to determine that the Company would be able to realize the Company’s deferred income tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC Topic 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is greater than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes the accrual of interest on uncertain tax positions and penalties in income tax provision on the consolidated statements of income. Accrued interest and penalties on uncertain tax positions are included within accrued expenses and other liabilities on the consolidated statements of financial condition. |
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Noncontrolling Interests | Noncontrolling Interests Noncontrolling interests that are mandatorily redeemable upon a certain date or event occurring are classified as liabilities and relate to certain stockholders of GCIA who are employed by GAMCO, or its affiliates, who were required to sell their shares back to GCIA at book value once they cease being employed by GAMCO, or its affiliates. During the year ended December 31, 2016, AC purchased the outstanding 1.9% of GCIA shares owned by certain employees of GAMCO in exchange for 50,964 Class A shares of the Company in the amount of $1.5 million, which eliminated the mandatorily redeemable noncontrolling interest. Noncontrolling interest attributable to the 4.2% GCIA shares owned by third parties were classified as equity and were presented within the equity section, separately from AC’s portion of equity. During the year ended December 31, 2016, AC purchased the outstanding 4.2% of GCIA shares owned by third parties. Noncontrolling interests in Investment Partnerships that are redeemable at the option of the holder are classified as redeemable noncontrolling interests in the mezzanine section of the consolidated statements of financial condition between liabilities and equity. For the years ended December 31, 2017, 2016, and 2015, net income/(loss) attributable to noncontrolling interests on the consolidated statements of income represents the share of net income/(loss) attributable to the minority stockholders, as reported on a separate company basis, of our consolidated majority-owned subsidiaries and net income/(loss) attributable to certain investors in Investment Partnerships that are consolidated. The income/(loss) attributable to the mandatorily redeemable noncontrolling interests classified as liabilities prior to the Company’s purchase of the outstanding 1.9% of GCIA shares owned by certain employees of GAMCO is included in other operating expenses on the consolidated statements of income. |
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Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, the GAMCO Note, and receivable from brokers. The Company maintains cash and cash equivalents primarily in 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. The concentration of credit risk with respect to advisory fees and incentive fees/allocation, which are included in investment advisory fees receivable and receivables from affiliates on the consolidated statements of financial condition, is generally limited due to the short payment terms extended to clients by the Company. All investments in securities are held at third party brokers or custodians. |
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Net Transfer from GBL | Net transfer from GBL Net transfer from GBL in the consolidated statements of equity and cash flows for the year ended December 31, 2015 represents the net effect of transactions with and allocations from GAMCO prior to the spin-off. |
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Business Segment | Business Segment The Company operates in one business segment, the investment advisory and asset management business. The Company’s Chief Operating Decision Maker reviews the Company’s financial performance at an aggregate level. All of the products and services provided by the Company relate to asset management. |
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Recent Accounting Developments | 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 ASC Topic 605, Revenue Recognition, and most industry-specific guidance throughout the industry topics of the ASC. The core principle of the new ASU No. 2014-09 requires 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 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. The ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods and is either applied on a retrospective or modified retrospective basis. The Company has evaluated this guidance and has concluded that it has no material impact on its consolidated financial statements other than expanded disclosure. The Company has adopted this ASU effective January 1, 2018. In January 2016, the FASB issued ASU 2016-01, Financial Instruments–Overall: Recognition and Measurement of Financial Assets and Financial Liabilities, which amends the guidance in 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. Under the new guidance, all equity investments in unconsolidated entities (other than those accounted for using the equity method of accounting) will generally be measured at fair value through earnings. In addition, AFS classification (changes in fair value reported in other comprehensive income) for equity securities with readily determinable fair values will no longer be available. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. For public companies, the new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. 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 has evaluated this guidance and has adopted this ASU effective January 1, 2018 with no material impact on its consolidated financial statements other than the reclassification of the cumulative unrealized gain on AFS securities net of tax from other comprehensive income to retained earnings. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which amends the guidance in 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. ASU 2016-02 is effective beginning January 1, 2019. The Company is currently evaluating this guidance and the impact it will have on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which adds and clarifies guidance on the classification of certain cash receipts and payments in the consolidated statements of cash flows. For public companies, the ASU is effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods. Early adoption was permitted. The Company has evaluated this guidance and has concluded that it has no material impact on its consolidated financial statements. The Company has adopted this ASU effective January 1, 2018. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other, to simplify the process used to test for impairment of goodwill. Under the new standard, an impairment loss must be recognized in an amount equal to the excess of the carrying amount of a reporting unit over its fair value, limited to the total amount of goodwill allocated to that reporting unit. For public companies, the ASU is effective for annual and any interim impairment tests for periods beginning after December 15, 2019. Early adoption was permitted for impairment tests that occur after January 1, 2017. The Company is currently evaluating this guidance and the impact it will have on its consolidated financial statements. On May 10, 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation, which amends the scope of modification accounting for share-based payment arrangements. The ASU provides guidance 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, vesting conditions, and classification of the awards are the same immediately before and after the modification. For all entities, the ASU is effective for annual reporting periods, including interim periods within those annual reporting periods, beginning after December 15, 2017. Early adoption was permitted, including adoption in any interim period. The Company has adopted this ASU effective January 1, 2018. This ASU would not have impacted the accounting for the acceleration of vesting of restricted stock awards (“RSAs”) during 2017. This ASU will have minimal, if any, impact given the relatively few unvested GAMCO RSAs currently outstanding. On December 22, 2017, the SEC issued SAB 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act, to address the application of ASC 740, Income Taxes, in the reporting period that includes December 22, 2017, the date the Tax Cuts and Jobs Act (the “Act”) was signed into law. In general, the SAB provides that a company should reflect the income tax impacts of the Act for which the accounting under ASC 740 is complete. If a company is unable to complete the required accounting as a result of incomplete information, preparation or analysis, however, it may record a reasonable estimate as a provisional amount. Additional provisions deal with situations in which no reasonable estimate can be determined. Changes to estimates determined during a measurement period up to one year from the date of enactment will be reflected as an adjustment to tax expense or benefit in the reporting period the amounts are determined. With the exception of the book/tax differences related to the Company’s investments in funds that are partnerships and/or passive foreign investment companies, the Company has completed its analysis. We believe that we are able to make a reasonable estimate of the tax impact related to funds and have included this in the current year’s tax provision. As additional information is received from the underlying funds (e.g., Form K-1s are received that set out AC’s share of the funds’ taxable income), these estimates will be adjusted, most likely in the fourth quarter following the filing of the Company’s consolidated income tax return. The SAB also provides requirements concerning financial statement disclosures about the material financial reporting impacts of the Act. In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, dealing with the accounting for the tax effects of components of other comprehensive income (OCI). As a result of the reduction of the U.S. federal corporate income tax rate under the Tax Cuts and Jobs Act, current accounting guidance requires the revaluation of deferred tax assets and liabilities, and the resulting tax expense or benefit is reflected in net income. If the deferred tax asset or liability related to a component of OCI (e.g., unrealized gain/(loss) on available for sale securities), however, the tax effects of items within OCI no longer reflect the appropriate tax rate (referred to as stranded tax effects). This ASU permits the reclassification of the stranded tax effects from OCI to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption was permitted. We have adopted the ASU as of January 1, 2018 and will reflect an increase to OCI and a decrease to retained earnings of approximately $1.5 million in the period of adoption. |
Investment in Securities (Tables) |
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Investment in Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Securities | Investments in securities at December 31, 2017 and 2016 consisted of the following:
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Securities Sold, Not Yet Purchased | Securities sold, not yet purchased at December 31, 2017 and 2016 consisted of the following:
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Investments in Affiliated Registered Investment Companies | Investments in affiliated registered investment companies at December 31, 2017 and 2016 consisted of the following:
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Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | The following table identifies all reclassifications between accumulated other comprehensive income (“AOCI”) and net income/(loss) for the years ended December 31, 2017 and 2016 (in thousands):
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Schedule of Fair Values and Gains and Losses of All Derivatives and Foreign Currency Positions | The following tables identify the fair values and gains and losses of all derivatives and foreign currency positions held by the Company (in thousands):
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Schedule of Derivative Instruments, Gain (Loss) |
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Master Netting Arrangements for Swaps | The Company is a party to enforceable master netting arrangements for swaps entered into with major U.S. financial institutions as part of the investment strategy of the Company’s proprietary portfolio. They are typically not used as hedging instruments. These swaps, while settled on a net basis with the counterparties are shown gross in assets and liabilities on the consolidated statements of financial condition. The swaps have a firm contract end date and are closed out and settled when each contract expires.
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Summary of Available-for-Sale Securities | The following is a summary of the cost, gross unrealized gains, gross unrealized losses and fair value of AFS investments as of December 31, 2017 and 2016:
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Investments Classified as Available for Sale in Unrealized Loss Position | Investments classified as AFS that are in an unrealized loss position for which other-than-temporary impairment has not been recognized consisted of the following (in thousands):
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Investment Partnerships and Variable Interest Entities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment in Partnerships and Variable Interest Entities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Number of Entities Consolidated | The following table highlights the number of entities that we consolidate as well as the basis under which they are consolidated: Entities consolidated
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Investment in Partnerships by Accounting Method | The following table breaks down the investments in partnerships line by accounting method used (in thousands):
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Condensed Consolidated Statements of Financial Condition by Entity Consolidated | The following table includes the net impact by line item on the consolidated statements of financial condition for the consolidated entities (in thousands):
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Condensed Consolidated Statements of Income by Entity Consolidated | The following table includes the net impact by line item on the consolidated statements of income for the consolidated entities (in thousands):
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GAMCO's Net Interest in Consolidated VIEs | The following table presents the balances related to VIEs that are consolidated and included on the consolidated statements of financial condition as well as the Company’s net interest in these VIEs:
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Summarized Financial Information of Aggregate Equity Method Investments | The summarized financial information of the Company’s equity method investments for December 31, 2017 and 2016 are as follows:
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Fair Value (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present information about the Company’s assets and liabilities by major category measured at fair value on a recurring basis as of December 31, 2017 and 2016 and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. Investments in certain entities that calculate net asset value per share and other investments that are not held at fair value are provided as separate items to permit reconciliation of the fair value of investments included in the fair value hierarchy to the total amounts presented in the consolidated statements of financial condition. Assets and Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2017 (in thousands)
Assets and Liabilities Measured at Fair Value on a Recurring Basis as of December 31, 2016 (in thousands)
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Changes in Level 3 Assets and Liabilities | The following table presents additional information about assets by major category measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value: Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis for the year ended December 31, 2017 (in thousands)
There were no transfers between Level 1 and Level 2 during the year ended December 31, 2017. During the year ended December 31, 2017, the Company transferred an investment with a value of approximately $36,000 from Level 3 to Level 1. The reclassification was due to increased availability of market price quotations and was based on the value at the beginning of the period in which the transfer occurred. Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis for the year ended December 31, 2016 (in thousands)
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for Income Taxes | The provision for income taxes for the years ended December 31, 2017, 2016 and 2015 consisted of the following:
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Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate | A reconciliation of the Federal statutory rate to the effective tax rate is set forth below:
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Components of Deferred Tax Assets and Liabilities | Significant components of our deferred tax assets and liabilities are as follows:
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Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits related to uncertain tax positions is as follows:
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Earnings Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computations of Basic and Diluted Net Income/(Loss) Per Share | The computations of basic and diluted net income/(loss) per share are as follows:
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Quarterly Financial Information (Unaudited) (Tables) |
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Quarterly Financial Information (Unaudited) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information | Quarterly financial information for the years ended December 31, 2017 and 2016 is presented below.
|
Significant Accounting Policies, Depreciation and Management Fee (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Property, Plant and Equipment [Line Items] | |||
Fixed assets with net book value | $ 39 | $ 55 | |
Fixed assets at cost | 85 | 85 | |
Accumulated depreciation | 46 | 30 | |
Depreciation | 16 | 17 | $ 13 |
Estimated annual depreciation | $ 16 | ||
Period of estimate for future depreciation | 3 years | ||
Write off of fixed assets | $ 1 | $ 25 | |
Management Fee [Abstract] | |||
Management fee expense percentage | 10.00% | ||
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life of assets | 4 years | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful life of assets | 7 years |
Significant Accounting Policies, Noncontrolling Interests (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
shares
| |
GAMCO [Member] | Class A [Member] | |
Noncontrolling Interest [Line Items] | |
Number of common shares issued in exchange of stock (in shares) | shares | 50,964 |
Value of common stock issued | $ | $ 1.5 |
Certain Employees of GAMCO [Member] | GCIA [Member] | |
Noncontrolling Interest [Line Items] | |
Percentage of noncontrolling interest purchased | 1.90% |
Unrelated Individual Investors [Member] | GCIA [Member] | |
Noncontrolling Interest [Line Items] | |
Percentage of noncontrolling interest purchased | 4.20% |
Percentage of minority ownership interest | 4.20% |
Significant Accounting Policies, Business Segment and Recent Accounting Developments (Details) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
Segment
| |
Business Segment [Abstract] | |
Number of operating segments | Segment | 1 |
ASU 2018-02 [Member] | OCI [Member] | Plan [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Reclassification from AOCI to retained earnings, tax effect | $ 1.5 |
ASU 2018-02 [Member] | Retained Earnings [Member] | Plan [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Reclassification from AOCI to retained earnings, tax effect | $ (1.5) |
Investment in Securities, Securities Sold, Not Yet Purchased (Details) - Investment in Securities [Member] - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Trading securities [Abstract] | ||
Cost | $ 4,863 | $ 9,610 |
Fair value | 5,731 | 9,984 |
Trading Securities [Member] | Common Stock [Member] | ||
Trading securities [Abstract] | ||
Cost | 4,862 | 9,583 |
Fair value | 5,396 | 9,947 |
Trading Securities [Member] | Other Investments [Member] | ||
Trading securities [Abstract] | ||
Cost | 1 | 27 |
Fair value | $ 335 | $ 37 |
Investment in Securities, Investments Classified as Available for Sale in Unrealized Loss Position (Details) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017
USD ($)
Investment
|
Dec. 31, 2016
USD ($)
Investment
|
Dec. 31, 2015
USD ($)
|
|
Investments classified as available for sale unrealized loss position [Abstract] | |||
Cost | $ 65,331 | $ 150,000 | |
Unrealized losses | (307) | (14,299) | |
Fair value | $ 65,024 | $ 135,701 | |
Number of investment holdings in loss positions | Investment | 1 | 1 | |
Other than temporary impairment losses, investments, available-for-sale securities | $ 19,200 | $ 300 | $ 200 |
GAMCO [Member] | |||
Investments classified as available for sale unrealized loss position [Abstract] | |||
Other than temporary impairment losses, investments, available-for-sale securities | 19,100 | ||
Common Stock [Member] | |||
Investments classified as available for sale unrealized loss position [Abstract] | |||
Cost | 65,331 | 150,000 | |
Unrealized losses | (307) | (14,299) | |
Fair value | $ 65,024 | $ 135,701 | |
Investment holding impairment period | 7 months |
Investment Partnerships and Variable Interest Entities, Variable Interest Entities (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|---|---|
Balances related to VIEs [Abstract] | ||||
Cash and cash equivalents | $ 293,112 | $ 314,093 | $ 205,750 | $ 285,530 |
Investments in securities | 352,637 | 342,797 | ||
Receivable from broker | 34,881 | 12,588 | ||
Accrued expenses and other liabilities | (36,807) | (64,367) | ||
Redeemable noncontrolling interests | (46,230) | (4,230) | ||
VIEs [Member] | ||||
Balances related to VIEs [Abstract] | ||||
Cash and cash equivalents | 120 | 308 | ||
Investments in securities | 8,757 | 6,338 | ||
Receivable from broker | 1,657 | 2,046 | ||
Other assets | (19) | (8) | ||
Accrued expenses and other liabilities | (29) | (37) | ||
Redeemable noncontrolling interests | (284) | (287) | ||
AC's net interests in consolidated VIE | $ 10,202 | $ 8,360 |
Investment Partnerships and Variable Interest Entities, Equity Method Investments (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Summarized Financial Information [Abstract] | ||
Total assets | $ 1,600 | $ 2,137 |
Total liabilities | 322 | 350 |
Total equity | 1,278 | 1,787 |
Net income/(loss) | $ 112 | $ (17) |
Fair Value, Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis [Roll Forward] | ||
Beginning balance | $ 744 | $ 813 |
Total realized and unrealized gains or (losses) in income - trading | 1,062 | (49) |
Total realized and unrealized gains or (losses) in income - AFS investments | 0 | 0 |
Total unrealized gains or (losses) included in other comprehensive income | 0 | 0 |
Total realized and unrealized gains or (losses) | 1,062 | (49) |
Purchases | 167 | 0 |
Sales | (150) | (20) |
Transfers in and/or (out) of Level 3 | (36) | 0 |
Ending balance | 1,787 | 744 |
Trading - Common Stocks [Member] | ||
Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis [Roll Forward] | ||
Beginning balance | 461 | 508 |
Total realized and unrealized gains or (losses) in income - trading | 193 | (47) |
Total realized and unrealized gains or (losses) in income - AFS investments | 0 | 0 |
Total unrealized gains or (losses) included in other comprehensive income | 0 | 0 |
Total realized and unrealized gains or (losses) | 193 | (47) |
Purchases | 0 | 0 |
Sales | 0 | 0 |
Transfers in and/or (out) of Level 3 | (36) | 0 |
Ending balance | 618 | 461 |
Trading - Other [Member] | ||
Changes in Level 3 Assets Measured at Fair Value on a Recurring Basis [Roll Forward] | ||
Beginning balance | 283 | 305 |
Total realized and unrealized gains or (losses) in income - trading | 869 | (2) |
Total realized and unrealized gains or (losses) in income - AFS investments | 0 | 0 |
Total unrealized gains or (losses) included in other comprehensive income | 0 | 0 |
Total realized and unrealized gains or (losses) | 869 | (2) |
Purchases | 167 | 0 |
Sales | (150) | (20) |
Transfers in and/or (out) of Level 3 | 0 | 0 |
Ending balance | $ 1,169 | $ 283 |
Income Taxes (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Federal [Abstract] | ||||
Current | $ 781,000 | $ 5,018,000 | $ 4,540,000 | |
Deferred | (3,137,000) | (1,231,000) | (6,160,000) | |
State and local [Abstract] | ||||
Current | (33,000) | 236,000 | 225,000 | |
Deferred | (31,000) | (147,000) | (290,000) | |
Total | $ (2,420,000) | $ 3,876,000 | $ (1,685,000) | |
Reconciliation of the Federal statutory rate to the effective tax rate [Abstract] | ||||
Statutory Federal income tax rate | 34.00% | 34.00% | 34.00% | |
State income tax, net of federal benefit | (1.30%) | 1.20% | 1.60% | |
Dividends received deduction | (8.00%) | (3.60%) | 26.40% | |
Donation of appreciated securities | (21.50%) | (4.50%) | 3.20% | |
Revaluation of net deferred tax liabilities due to tax reform | (26.50%) | 0.00% | 0.00% | |
Accelerated vesting of restricted stock awards | (14.50%) | 0.00% | 0.00% | |
Noncontrolling interests | (0.90%) | (0.70%) | 0.00% | |
Other | 0.10% | 0.60% | 0.20% | |
Effective income tax rate | (38.60%) | 27.00% | 65.40% | |
Income tax expense (benefit) due to revaluation of deferred tax assets and liabilities | $ (1,700,000) | |||
Deferred tax assets [Abstract] | ||||
Stock-based compensation expense | 19,000 | $ 719,000 | ||
Deferred compensation | 987,000 | 1,315,000 | ||
Shareholder-designated contribution carryover | 1,765,000 | 1,461,000 | ||
Other | 3,000 | 4,000 | ||
Total deferred tax assets | 2,774,000 | 3,499,000 | ||
Deferred tax liabilities [Abstract] | ||||
Investments in securities and partnerships | (6,165,000) | (7,451,000) | ||
Other liabilities | (12,000) | 0 | ||
Total deferred tax liabilities | (6,177,000) | (7,451,000) | ||
Net deferred tax liabilities | (3,403,000) | (3,952,000) | ||
Reconciliation of the beginning and ending amount of gross unrecognized tax benefits [Roll Forward] | ||||
Balance, beginning of period | $ 10,923 | 100,149 | (15,678) | $ 57,000 |
Additions based on tax positions related to the current year | 0 | 0 | (60,000) | |
Additions for tax positions of prior years | 0 | 126,000 | 0 | |
Reductions for tax positions of prior years | (89,000) | (10,000) | (2,000) | |
Settlements | 0 | 0 | (11,000) | |
Balance, end of period | 10,923 | 100,149 | (15,678) | |
Unrecognized tax benefits that would impact effective tax rate | 8,629 | 66,098 | $ (10,347) | |
Accrued liabilities for interest and penalties | $ 6,241 | $ 94,428 | ||
Maximum [Member] | ||||
Reconciliation of the Federal statutory rate to the effective tax rate [Abstract] | ||||
Statutory Federal income tax rate | 35.00% | |||
Plan [Member] | ||||
Reconciliation of the Federal statutory rate to the effective tax rate [Abstract] | ||||
Statutory Federal income tax rate | 21.00% |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Basic [Abstract] | |||||||||||
Net income/(loss) attributable to Associated Capital Group, Inc.'s shareholders | $ 15,800 | $ 1,519 | $ 4,596 | $ (13,078) | $ 3,647 | $ 3,959 | $ 1,019 | $ 1,593 | $ 8,837 | $ 10,218 | $ (111) |
Weighted average shares outstanding (in shares) | 23,792 | 24,870 | 24,887 | ||||||||
Basic net income/(loss) attributable to Associated Capital Group, Inc.'s shareholders per share (in dollars per share) | $ 0.67 | $ 0.06 | $ 0.19 | $ (0.55) | $ 0.15 | $ 0.16 | $ 0.04 | $ 0.06 | $ 0.37 | $ 0.41 | $ 0 |
Diluted [Abstract] | |||||||||||
Net income/(loss) attributable to Associated Capital Group, Inc.'s shareholders | $ 15,800 | $ 1,519 | $ 4,596 | $ (13,078) | $ 3,647 | $ 3,959 | $ 1,019 | $ 1,593 | $ 8,837 | $ 10,218 | $ (111) |
Weighted average shares outstanding (in shares) | 23,792 | 24,870 | 24,887 | ||||||||
Dilutive restricted stock awards (in shares) | 133 | 305 | 283 | ||||||||
Total (in shares) | 23,925 | 25,175 | 25,170 | ||||||||
Diluted net income/(loss) attributable to Associated Capital Group, Inc.'s shareholders per share (in dollars per share) | $ 0.67 | $ 0.06 | $ 0.19 | $ (0.55) | $ 0.15 | $ 0.16 | $ 0.04 | $ 0.06 | $ 0.37 | $ 0.41 | $ 0 |
Related Party Transactions (Details) - USD ($) |
12 Months Ended | |||||
---|---|---|---|---|---|---|
Dec. 28, 2015 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 26, 2017 |
Nov. 28, 2015 |
|
Related Party Transaction [Line Items] | ||||||
Debt instrument, interest rate | 4.00% | |||||
Interest income | $ 3,000,000 | $ 7,800,000 | $ 800,000 | |||
GAMCO Note [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Principal repayments received | 50,000,000 | $ 150,000,000 | ||||
Notes receivable, face amount | $ 250,000,000 | |||||
Notes receivable, maturity date | Nov. 30, 2020 | |||||
Notes receivable, interest rate | 4.00% | |||||
Principal Amount Due on November 30, 2020 [Member] | GAMCO Note [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Principal amount outstanding | $ 50,000,000 | |||||
GCIA Note [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Interest expenses | 66,000 | |||||
GGCP [Member] | Class B Common Stock [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage of voting rights | 94.00% | |||||
Percentage of ownership interest in subsidiary | 78.00% | |||||
GAMCO [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Notes receivable, face amount | $ 15,000,000 | |||||
Notes receivable, maturity date | Feb. 28, 2018 | |||||
Notes receivable, interest rate | 1.60% | |||||
GAMCO [Member] | 5.5% Demand Loan [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Debt instrument, interest rate | 5.50% | |||||
Repayment of debt | $ 16,000,000 | |||||
Interest expenses | $ 900,000 | |||||
GCIA [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Notes receivable, face amount | $ 150,000,000 |
Related Party Transactions, Investments (Details) - USD ($) |
1 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Oct. 31, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Investments in Securities [Abstract] | ||||
Proprietary investment account | $ 44,000,000 | $ 39,000,000 | ||
Percentage of net profits earned on fund performance | 20.00% | |||
Investments in Gabelli U.S. Treasury Money Market Fund | $ 238,100,000 | 314,100,000 | ||
Investments in affiliated equity mutual funds | 146,200,000 | 132,100,000 | ||
Investments in Partnerships [Abstract] | ||||
Investment in affiliated partnerships and offshore funds | 124,500,000 | 112,300,000 | ||
Investment Advisory Services [Abstract] | ||||
Payable to affiliates | 442,000 | 1,455,000 | ||
GAMCO [Member] | ||||
Investment Advisory Services [Abstract] | ||||
Revenue from related parties | 172,730 | 420,252 | ||
GAMCO [Member] | Common Stock [Member] | ||||
Investments in Securities [Abstract] | ||||
Investment value | 130,300,000 | 135,700,000 | ||
Dividend income | 400,000 | 400,000 | ||
Son of Executive Chairman [Member] | ||||
Investments in Securities [Abstract] | ||||
Balance in funding of proprietary account | 18,000,000 | 14,600,000 | ||
Balance in funding of proprietary account owed to portfolio manager | 3,500,000 | 2,700,000 | ||
Compensation earned for managing proprietary account | $ 500,000 | 100,000 | $ 100,000 | |
Son of Executive Chairman [Member] | GS International [Member] | ||||
Investment Advisory Services [Abstract] | ||||
Percentage of ownership interest in subsidiary | 55.00% | |||
Son of Executive Chairman [Member] | GCM LLC [Member] | ||||
Investment Advisory Services [Abstract] | ||||
Percentage of ownership interest in subsidiary | 100.00% | |||
GCIA [Member] | GS International [Member] | ||||
Investment Advisory Services [Abstract] | ||||
Percentage of ownership interest in subsidiary | 45.00% | |||
Purchase price of shares agreed to be purchased | $ 564,516 | |||
GCIA [Member] | GAMA Funds Holdings GmbH [Member] | ||||
Investment Advisory Services [Abstract] | ||||
Purchase price of shares agreed to be purchased | $ 110,539 | |||
Gemini Global Partners LP [Member] | ||||
Investment Advisory Services [Abstract] | ||||
Payable to affiliates | $ 10,528 | |||
Receivable from affiliates | 10,329 | |||
Gemini Global Partners LP [Member] | GSIL and GCM LLC [Member] | Advisory Fees [Member] | ||||
Investment Advisory Services [Abstract] | ||||
Percentage allocation of revenue | 50.00% | |||
Revenue from related parties | $ 7,365 | 10,325 | 0 | |
Gemini Global Partners LP [Member] | GSIL and GCM LLC [Member] | Incentive Fees [Member] | ||||
Investment Advisory Services [Abstract] | ||||
Percentage allocation of revenue | 50.00% | |||
Revenue from related parties | $ 0 | 0 | 0 | |
Gemini LP [Member] | ||||
Investment Advisory Services [Abstract] | ||||
Payable to affiliates | $ 13,018 | 201,065 | ||
Gemini LP [Member] | GCIA and GCM LLC [Member] | Advisory Fees [Member] | ||||
Investment Advisory Services [Abstract] | ||||
Percentage allocation of revenue | 50.00% | |||
Revenue from related parties | $ 55,228 | 63,196 | 70,345 | |
Gemini LP [Member] | GCIA and GCM LLC [Member] | Incentive Fees [Member] | ||||
Investment Advisory Services [Abstract] | ||||
Percentage allocation of revenue | 50.00% | |||
Revenue from related parties | $ 0 | $ 0 | $ 0 |
Related Party Transactions, Compensation and Others (Details) |
1 Months Ended | 9 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2015
USD ($)
|
Oct. 31, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016
USD ($)
|
Dec. 31, 2017
USD ($)
Fund
|
Dec. 31, 2016
USD ($)
Fund
|
Dec. 31, 2015
USD ($)
|
|
Compensation [Abstract] | |||||||
Management fee expense percentage | 10.00% | ||||||
Management fee expense (contra expenses) | $ 713,000 | $ 1,593,000 | $ (309,000) | ||||
Other [Abstract] | |||||||
General partners percentage of incentive allocation | 20.00% | ||||||
GAMCO [Member] | |||||||
Other [Abstract] | |||||||
Revenue from related parties | $ 172,730 | $ 420,252 | |||||
Number of preferred stock offerings | Fund | 3 | 5 | |||||
GAMCO [Member] | Office Space in Rye, NY [Member] | |||||||
Other [Abstract] | |||||||
Lease expiration date | Dec. 31, 2028 | ||||||
Expenses from transactions with related party | $ 77,444 | 310,566 | |||||
Rent paid | $ 276,238 | $ 374,401 | |||||
GAMCO Asset Management Inc [Member] | |||||||
Other [Abstract] | |||||||
Revenue from related parties | $ 4,500,000 | $ 5,200,000 | $ 4,900,000 | ||||
Revenue percentage earned | 60.00% | 63.00% | 59.00% | ||||
Payment received from related parties | $ 2,200,000 | $ 1,500,000 | $ 700,000 | ||||
Gabelli Funds, LLC [Member] | |||||||
Other [Abstract] | |||||||
Payment received from related parties | $ 2,300,000 | 1,500,000 | 800,000 | ||||
GCIA [Member] | |||||||
Other [Abstract] | |||||||
Percentage of revenue transferred | 90.00% | ||||||
Amounts of transaction | $ 2,800,000 | 2,700,000 | 1,000,000 | ||||
GRX Series B [Member] | |||||||
Other [Abstract] | |||||||
Revenue from related parties | 0 | 5,495 | 0 | ||||
GGN [Member] | |||||||
Other [Abstract] | |||||||
Revenue from related parties | $ 39,782 | $ 1,178,330 | $ 0 | ||||
Gabelli Healthcare & WellnessRx Trust [Member] | GRX Series B [Member] | |||||||
Other [Abstract] | |||||||
Preferred stock, dividend rate | 5.875% | ||||||
G.distributors, LLC [Member] | |||||||
Other [Abstract] | |||||||
Revenue from related parties | $ 263,692 | ||||||
G.research LLC [Member] | |||||||
Other [Abstract] | |||||||
Fair value of assets acquired | 234,000 | ||||||
G.research LLC [Member] | DHI [Member] | |||||||
Other [Abstract] | |||||||
Deferred tax liabilities | 1,937,670 | ||||||
G.research LLC [Member] | GCIA [Member] | |||||||
Other [Abstract] | |||||||
Deferred tax liabilities | $ 88,227 | ||||||
Ellsworth Growth and Income Fund Ltd [Member] | Series A Preferred Stock [Member] | |||||||
Other [Abstract] | |||||||
Preferred stock, dividend rate | 5.25% | ||||||
The Gabelli Multimedia Trust [Member] | Series E Preferred Stock [Member] | |||||||
Other [Abstract] | |||||||
Preferred stock, dividend rate | 5.25% | ||||||
GAMCO Natural Resources, Gold & Income Trust [Member] | Series A Preferred Stock [Member] | |||||||
Other [Abstract] | |||||||
Preferred stock, dividend rate | 5.20% | ||||||
Gabelli Equity Trust [Member] | Series J Preferred Stock [Member] | |||||||
Other [Abstract] | |||||||
Preferred stock, dividend rate | 5.45% | ||||||
Gabelli Global Small and Mid Cap Value Trust [Member] | Series A Preferred Stock [Member] | |||||||
Other [Abstract] | |||||||
Preferred stock, dividend rate | 5.45% | ||||||
Gabelli Utility Trust [Member] | Series C Preferred Stock [Member] | |||||||
Other [Abstract] | |||||||
Preferred stock, dividend rate | 5.375% | ||||||
Gabelli Dividend & Income Trust [Member] | Series G Preferred Stock [Member] | |||||||
Other [Abstract] | |||||||
Preferred stock, dividend rate | 5.25% | ||||||
Bancroft Fund [Member] | Series A Preferred Stock [Member] | |||||||
Other [Abstract] | |||||||
Preferred stock, dividend rate | 5.375% |
Equity (Details) $ / shares in Units, $ in Thousands |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Dec. 27, 2017
USD ($)
shares
|
Aug. 07, 2017
shares
|
Jun. 01, 2017
shares
|
Dec. 30, 2016
USD ($)
$ / shares
shares
|
Nov. 30, 2015
shares
|
Dec. 31, 2017
USD ($)
VoteperShare
$ / shares
shares
|
Dec. 31, 2016
USD ($)
$ / shares
shares
|
Dec. 31, 2015
USD ($)
shares
|
|
Voting Rights [Abstract] | ||||||||
Compensation cost related to non-vested restricted stock awards and options not yet recognized | $ 100 | |||||||
Stock based compensation expense | 5,879 | $ 2,464 | $ 4,931 | |||||
Tax benefit from compensation expense | $ 1,300 | $ 800 | $ 1,700 | |||||
Shares repurchased during the period (in shares) | shares | 600,000 | 1,300,000 | ||||||
Average price per share of repurchased shares (in dollars per share) | $ / shares | $ 34.61 | $ 31.10 | ||||||
Total investment amount | $ 21,200 | $ 41,600 | ||||||
Accrued expenses and other liabilities | $ 4,815 | $ 35,862 | ||||||
Dividends declared (in dollars per share) | $ / shares | $ 0.20 | $ 0.20 | ||||||
Total dividends declared | $ 4,800 | $ 5,000 | ||||||
Dividends payable | $ 2,400 | $ 2,400 | ||||||
Dividends payable, date to be paid | Jan. 10, 2018 | Jan. 25, 2017 | ||||||
Class A Common Stock [Member] | ||||||||
Voting Rights [Abstract] | ||||||||
Number of votes per share | VoteperShare | 1 | |||||||
Class B Common Stock [Member] | ||||||||
Voting Rights [Abstract] | ||||||||
Number of votes per share | VoteperShare | 10 | |||||||
GAMCO [Member] | ||||||||
Voting Rights [Abstract] | ||||||||
Number of GAMCO shares exchanged for each AC shares in connection with spin-off (in shares) | shares | 1 | |||||||
Unaffiliated Third Party [Member] | ||||||||
Voting Rights [Abstract] | ||||||||
Shares repurchased during the period (in shares) | shares | 926,345 | |||||||
Average price per share of repurchased shares (in dollars per share) | $ / shares | $ 31.05 | |||||||
Accrued expenses and other liabilities | $ 28,800 | |||||||
Restricted Stock Awards [Member] | ||||||||
Voting Rights [Abstract] | ||||||||
Shares issued (in shares) | shares | 554,100 | 0 | 0 | |||||
Shares outstanding (in shares) | shares | 0 | 424,340 | 553,100 | |||||
Number of shares with accelerated vesting (in shares) | shares | 420,240 | 0 | ||||||
Stock compensation expense recognized due to acceleration of restrictions on RSAs | $ 4,200 | $ 0 | $ 4,900 | |||||
Restricted Stock Awards [Member] | GAMCO [Member] | ||||||||
Voting Rights [Abstract] | ||||||||
Number of GAMCO shares exchanged for each AC shares in connection with spin-off (in shares) | shares | 554,100 | |||||||
Shares outstanding (in shares) | shares | 424,340 | 553,100 | ||||||
Number of shares with accelerated vesting (in shares) | shares | 144,650 | 201,120 | ||||||
Stock compensation expense recognized due to acceleration of restrictions on RSAs | $ 600 | $ 4,200 | $ 0 | $ 4,900 |
Retirement Plan (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Retirement Plan [Abstract] | |||
Allocated contributions | $ 49,000 | $ 34,000 | $ 12,000 |
Net Capital Requirements (Details) |
12 Months Ended | |
---|---|---|
Dec. 31, 2017
USD ($)
Borrowing
|
Dec. 31, 2016
USD ($)
Borrowing
|
|
Net Capital Requirements [Abstract] | ||
Minimum net capital required for broker dealer subsidiary | $ 250,000 | $ 250,000 |
Percentage of aggregate debit items in reserve formula for minimum net capital required for broker dealer | 2.00% | 2.00% |
Net capital | $ 41,800,000 | $ 3,700,000 |
Excess amount of minimum capital requirement | $ 41,600,000 | $ 3,400,000 |
Number of subordinated borrowings | Borrowing | 0 | 0 |
Shareholder-Designated Contribution Plan (Details) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Shareholder-Designated Contribution Plan [Abstract] | |||
Contribution price (in dollars per share) | $ 0.25 | ||
Shareholder designated contribution plan | $ 4,222 | $ 5,411 | $ 0 |
Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 27, 2017 |
Aug. 07, 2017 |
Jun. 01, 2017 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Quarterly Financial Information (Unaudited) [Abstract] | ||||||||||||||
Revenues | $ 11,585 | $ 5,248 | $ 5,095 | $ 4,987 | $ 16,295 | $ 5,451 | $ 4,964 | $ 4,517 | $ 26,915 | $ 31,227 | $ 22,842 | |||
Operating income (loss) | (3,489) | (6,112) | (6,453) | (4,332) | 132 | (4,497) | (3,352) | (4,515) | (20,386) | (12,232) | (14,312) | |||
Net income (loss) attributable to Associated Capital Group, Inc.'s shareholders | $ 15,800 | $ 1,519 | $ 4,596 | $ (13,078) | $ 3,647 | $ 3,959 | $ 1,019 | $ 1,593 | $ 8,837 | $ 10,218 | $ (111) | |||
Net income (loss) attributable to Associated Capital Group, Inc.'s shareholders per share [Abstract] | ||||||||||||||
Basic (in dollars per share) | $ 0.67 | $ 0.06 | $ 0.19 | $ (0.55) | $ 0.15 | $ 0.16 | $ 0.04 | $ 0.06 | $ 0.37 | $ 0.41 | $ 0 | |||
Diluted (in dollars per share) | $ 0.67 | $ 0.06 | $ 0.19 | $ (0.55) | $ 0.15 | $ 0.16 | $ 0.04 | $ 0.06 | $ 0.37 | $ 0.41 | $ 0 | |||
Quarterly Financial Information [Line Items] | ||||||||||||||
Gains on contribution of available for sale securities to subsidiary | $ 11,788 | $ 11,788 | $ 0 | $ 0 | ||||||||||
Income tax benefit from revaluation of deferred tax items | (1,700) | |||||||||||||
Restricted Stock Awards [Member] | ||||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||||
Number of shares with accelerated vesting (in shares) | 420,240 | 0 | ||||||||||||
Stock compensation expense recognized due to acceleration of restrictions on RSAs | 4,200 | $ 0 | 4,900 | |||||||||||
GAMCO [Member] | Restricted Stock Awards [Member] | ||||||||||||||
Quarterly Financial Information [Line Items] | ||||||||||||||
Number of shares with accelerated vesting (in shares) | 144,650 | 201,120 | ||||||||||||
Stock compensation expense recognized due to acceleration of restrictions on RSAs | $ 600 | $ 4,200 | $ 0 | $ 4,900 |
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands |
2 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Mar. 05, 2018 |
Feb. 06, 2018 |
Mar. 08, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Subsequent Event [Line Items] | |||||
Number of shares of stock repurchased (in shares) | 600,000 | 1,300,000 | |||
Average price per share of repurchased shares (in dollars per share) | $ 34.61 | $ 31.10 | |||
Subsequent Event [Member] | Repurchase of Common Stock [Member] | Class A Common Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of shares of stock repurchased (in shares) | 3,971 | ||||
Average price per share of repurchased shares (in dollars per share) | $ 33.99 | ||||
Subsequent Event [Member] | GAMCO [Member] | |||||
Subsequent Event [Line Items] | |||||
Annual rental cost under sublease | $ 500 | ||||
Subsequent Event [Member] | GAMCO [Member] | Class A Common Stock [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of shares to be received in exchange (in shares) | 1.35 | ||||
Number of shares validly tendered and not withdrawn (in shares) | 490,761 | ||||
Percentage of shares validly tendered and not withdrawn | 11.00% | ||||
Number of shares delivered by the expiration of guaranteed delivery period (in shares) | 32,756 | ||||
Number of shares accepted for exchange (in shares) | 662,000 | ||||
Subsequent Event [Member] | GAMCO Asset Management Inc [Member] | |||||
Subsequent Event [Line Items] | |||||
Amount of annual research service fees | 1,500 | ||||
Subsequent Event [Member] | Gabelli Funds, LLC [Member] | |||||
Subsequent Event [Line Items] | |||||
Amount of annual research service fees | $ 1,530 |
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