<PAGE>
GENERAL AMERICAN INVESTORS
COMPANY, INC.
THIRD QUARTER REPORT
SEPTEMBER 30, 1996
A Closed-End Investment Company
listed on the New York Stock Exchange
450 LEXINGTON AVENUE
NEW YORK, N.Y. 10017
212-916-8400 1-800-436-8401
<PAGE>
TO THE STOCKHOLDERS
- --------------------------------------------------------------------------------
For the nine months ended September 30, 1996, the time-weighted rate of return
(including income but excluding expenses) on the net assets of General American
Investors Company was 13.2%. By comparison, the rate of return (including
income) for the Standard & Poor's 500 Stock Index was 13.4%. For the twelve
months ended September 30, 1996, the return for the Company was 19.6%; this
compares to a return of 20.3% for the S&P 500.
Valuation levels in many sectors of the market seem excessive by most historical
standards. In consequence, we have not reinvested fully the proceeds from sales
of securities. As a result, our cash balance is at a comparatively high level,
despite an active share repurchase program, with an attendant moderating effect
on relative performance.
The net assets of the Company as of September 30, 1996, as set forth in the
accompanying financial statements (unaudited), were $600,357,011, equal to
$26.80 per share of Common Stock.
The increase in net assets resulting from operations for the nine months was
$67,560,224. Net realized long-term gain on securities sold was $47,060,013
($2.10 per share); the increase in unrealized appreciation was $16,225,618. Net
investment income for the nine months was $4,274,593 ($.19 per share).
During the nine months, 1,562,205 shares of the Company's Common Stock were
repurchased for $33,248,313 at an average discount from net asset value of
15.8%, continuing a program approved by your Directors.
By Order of the Board of Directors,
GENERAL AMERICAN INVESTORS COMPANY, INC.
Spencer Davidson
President and Chief Executive Officer
<PAGE>
2 STATEMENT OF ASSETS AND LIABILITIES September 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
ASSETS
- -------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS, AT VALUE ( NOTE 1a )
General portfolio securities (cost $292,509,392) $509,005,597
Corporate discount notes (cost $91,430,373) 91,430,373
------------
600,435,970
CASH, RECEIVABLES AND OTHER ASSETS
Cash ................................................ $ 31,297
Receivable for securities sold ...................... 932,667
Dividends, interest and other receivables ........... 3,929,625
Other ............................................... 827,193 5,720,782
----------- -----------
TOTAL ASSETS .......................................... 606,156,752
LIABILITIES
- -------------------------------------------------------------------------------------
Payable for securities purchased ................... 2,062,616
Accrued expenses and other liabilities ............. 3,737,125
-----------
TOTAL LIABILITIES ..................................... 5,799,741
------------
NET ASSETS ............................................ $600,357,011
============
NET ASSETS
- -------------------------------------------------------------------------------------
Common Stock, $1 par value (note 2)
Authorized 30,000,000 shares; outstanding
(exclusive of 1,713,905 shares in
Treasury)22,400,511 shares .................... $ 22,400,511
Paid-In Capital ( note 2 ) ......................... 312,034,663
Undistributed realized gain on securities sold ..... 46,911,700
Undistributed net income ........................... 2,513,932
Unrealized appreciation on investments (including
aggregate gross unrealized appreciation of
$229,493,036) ................................... 216,496,205
------------
TOTAL NET ASSETS ...................................... $600,357,011
============
NET ASSET VALUE PER SHARE ............................. $ 26.80
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months
Ended Year Ended
September 30, 1996 December 31,
OPERATIONS (Unaudited) 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Net investment income ..................... $ 4,274,593 $ 1,961,039
Net realized gain on sales of securities .. 47,060,013 63,862,317
Net increase in unrealized appreciation ... 16,225,618 42,984,363
------------- -------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................. 67,560,224 108,807,719
------------- -------------
DISTRIBUTIONS TO STOCKHOLDERS
- --------------------------------------------------------------------------------
From net income, including
short-term capital gain ................. (197,936) (2,633,530)
From long-term capital gain ............... (7,450,389) (65,253,760)
In excess of net income ................... -- (180,371)
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS .... (7,648,325) (68,067,661)
------------- -------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Value of Common Shares issued in payment
of dividends (note 2) ................... -- 41,998,878
Cost of Common Shares purchased (note 2) .. (33,248,313) (28,767,670)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS -
CAPITAL TRANSACTIONS ...................... (33,248,313) 13,231,208
------------- -------------
NET INCREASE IN NET ASSETS ................... 26,663,586 53,971,266
NET ASSETS
- --------------------------------------------------------------------------------
BEGINNING OF PERIOD .......................... 573,693,425 519,722,159
-------------- -------------
END OF PERIOD (including undistributed net
income of $2,513,932 and distributions
in excess of net income of $1,562,725,
respectively) ............................. $ 600,357,011 $ 573,693,425
============= =============
<FN>
( see notes to financial statements )
</FN>
</TABLE>
<PAGE>
3 STATEMENT OF OPERATIONS Nine Months Ended September 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
INCOME
- --------------------------------------------------------------------------------
<S> <C> <C>
Dividends (net of foreign withholding taxes
of $185,330) ................................ $ 5,160,889
Interest ...................................... 3,430,661
Investment advisory fees (note 1d) ............ 180,058 $ 8,771,608
-----------
EXPENSES
- --------------------------------------------------------------------------------
Investment research ........................... 1,875,231
Administration and operations ................. 1,342,412
Office space and general ...................... 662,056
Auditing and legal fees ....................... 143,410
Transfer agent, custodian and registrar
fees and expenses ........................... 142,925
Directors' fees and expenses .................. 134,837
Stockholders' meeting and reports ............. 117,144
Miscellaneous taxes (note 1c) ................. 79,000 4,497,015
--------- ---------
NET INVESTMENT INCOME ............................ 4,274,593
REALIZED GAIN AND CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS (NOTES 1e AND
4)
- --------------------------------------------------------------------------------
Net realized gain on sales of securities
(long-term) .................................. 47,060,013
Net increase in unrealized appreciation ........ 16,225,618
------------
NET GAIN ON INVESTMENTS ......................... 63,285,631
------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..................... $67,560,224
============
</TABLE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following table shows per share operating performance data, total investment
return, ratios and supplemental data for the nine months ended September 30,
1996 and the year ended December 31, 1995. This information has been derived
from information contained in the financial statements and market price data for
the Company's shares.
<TABLE>
<CAPTION>
Nine Months
Ended Year Ended
September 30, 1996 December 31,
(Unaudited) 1995
--------- ------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ............ $ 23.94 $ 22.31
-------- --------
Net investment income ....................... .19 .08
Net gain on securities -
realized and unrealized .................. 2.99 4.54
-------- --------
Total from investment operations ................ 3.18 4.62
-------- --------
Less distributions:
Dividends from investment income ............ (.01) (.11)*
Distributions from capital gains ............ (.31) (2.87)
In excess of net income ..................... -- (.01)
-------- --------
Total distributions ............................. (.32) (2.99)
-------- --------
Net asset value, end of period .................. $ 26.80 $ 23.94
======== ========
Per share market value, end of period ........... $ 22.875 $ 20.00
======== ========
TOTAL INVESTMENT RETURN - Stockholder
Return, based on market price per share ..... 16.24%** 21.22%
RATIOS AND SUPPLEMENTAL DATA
Total net assets, end of period (000's omitted) . $600,357 $573,693
Ratio of expenses to average net assets ***...... 0.77%** 1.25%
Ratio of net income to average net assets ....... 0.73%** 0.36%
Portfolio turnover rate ......................... 29.47%** 29.14%
Average commission rate paid .................... $ .0500
Shares outstanding, end of period (000's omitted) 22,401 23,963
<FN>
* Includes short-term capital gain in the amount of $.03 per share.
** Not annualized.
*** The ratio of expenses, exclusive of expenses attributable to the
advisory accounts which are managed directly by the Company, to
average net assets was 0.73% for the nine months ended September 30,
1996 and 1.12% for 1995.
(see notes to financial statements)
</FN>
</TABLE>
<PAGE>
4 STATEMENT OF INVESTMENTS September 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
STOCKS SHARES OR VALUE
ISSUER PRINCIPAL AMOUNT (NOTE 1a)
<S> <C> <C>
COMMUNICATIONS AND INFORMATION SERVICES (5.4%)
Comcast UK Cable Partners Limited Class A + ....... 601,500 $ 6,090,188
Cox Communications, Inc. Class A + ................ 200,000 3,675,000
International CableTel Incorporated + ............. 172,000 4,407,500
Reuters Holdings Plc-ADR .......................... 109,000 7,548,250
TeleWest Communications Plc-ADR + ................. 110,000 2,048,750
Vodafone Group Plc-ADR ............................ 43,500 1,484,438
Wolters Kluwer NV-ADR ............................. 55,000 6,923,125
----------
(COST $22,327,258) ........ -- 32,177,251
----------
COMPUTER SOFTWARE AND SYSTEMS (6.4%)
Avid Technology, Inc.+ ............................ 258,000 3,515,250
Broderbund Software, Inc.+ ........................ 210,000 6,090,000
Cisco Systems, Inc.+ .............................. 183,000 11,357,529
DSC Communications Corporation + .................. 187,500 4,710,938
Hewlett-Packard Company ........................... 200,000 9,750,000
Pinnacle Systems, Inc.+ ........................... 245,000 3,001,250
----------
(COST $32,676,174) ........ -- 38,424,967
----------
CONSUMER PRODUCTS AND SERVICES (10.5%)
AAPC Ltd. ......................................... 8,542,000 5,381,460
Buffets, Inc.+ .................................... 1,431,500 15,030,750
The Cheesecake Factory Incorporated+ .............. 194,000 4,413,500
Chrysler Corporation .............................. 400,000 11,450,000
Ford Motor Company ................................ 410,000 12,812,500
Hormel Foods Corporation .......................... 205,000 4,791,875
PepsiCo, Inc. ..................................... 325,000 9,181,250
----------
(COST $58,027,227) ........ -- 63,061,335
----------
ELECTRONICS (0.9%)
Sensormatic Electronics Corporation ............... 316,000 5,648,500
----------
(COST $3,971,250)
ENVIRONMENTAL CONTROL
(INCLUDING SERVICES) (3.5%)
USA Waste Services, Inc.+ ......................... 669,000 21,073,500
----------
(COST $10,731,059)
FINANCE AND INSURANCE (20.4%)
Ace Limited ....................................... 48,136 2,545,191
Alexander Haagen Properties, Inc. ................. 143,000 2,002,000
American International Group, Inc. ................ 130,500 13,147,875
American States Financial Corporation ............. 302,500 7,033,125
Banco Popular Espanol, S.A. ....................... 16,000 2,942,000
Crestar Financial Corp. ........................... 156,000 9,204,000
Everest Reinsurance Holdings, Inc. ................ 125,500 3,106,125
First Empire State Corporation .................... 56,500 14,068,500
First Midwest Bancorp, Inc. ....................... 190,000 5,676,250
General Re Corporation ............................ 58,500 8,221,500
Golden West Financial Corporation ................. 168,500 9,836,187
Life Re Corporation ............................... 310,500 11,178,000
National Re Corporation ........................... 112,000 5,922,000
TIG Holdings, Inc. ................................ 202,500 6,075,000
Transatlantic Holdings, Inc. ...................... 156,500 10,642,000
U.S. Bancorp ...................................... 277,500 10,961,250
-----------
(COST $64,081,789) ........ -- 122,561,003
-----------
HEALTH CARE (20.7%)
PHARMACEUTICALS (11.7%)
AB Astra Class A .................................. 319,500 13,538,812
AB Astra Class B .................................. 306,500 12,604,812
Alpha-Beta Technology, Inc.+ ...................... 292,000 3,139,000
BioChem Pharma Inc.+ .............................. 186,000 7,463,250
Pfizer Inc. ....................................... 272,000 21,522,000
Pharmaceutical Product Development, Inc.+ ......... 276,500 7,465,500
Vertex Pharmaceuticals Incorporated+ .............. 148,500 4,380,750
----------
(COST $26,946,839) ........ -- 70,114,124
----------
MEDICAL INSTRUMENTS AND DEVICES (2.6%)
Medtronic, Inc. ................................... 243,000 15,582,375
-----------
(COST $3,860,725)
</TABLE>
<PAGE>
5 STATEMENT OF INVESTMENTS September 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
STOCKS (continued) SHARES OR VALUE
ISSUER PRINCIPAL AMOUNT (NOTE 1a)
<S> <C> <C>
HEALTH CARE SERVICES (6.4%)
Aetna, Inc. ....................................... 110,000 $ 7,741,250
Aetna, Inc. 6.25% Class C Voting Preferred Stock .. 26,065 1,899,487
Huntingdon International Holdings Plc-ADR+ ........ 669,500 4,937,562
MedPartners, Inc.+ ................................ 484,000 11,011,000
Physician Reliance Network, Inc.+ ................. 300,000 4,575,000
United Healthcare Corporation ..................... 205,000 8,533,125
-----------
(COST $35,922,349) ......... -- 38,697,424
-----------
(COST $66,729,913) ......... -- 124,393,923
-----------
MISCELLANEOUS (1.3%)
Other ............................................. 7,879,875
----------
(COST $6,986,699)
OIL & NATURAL GAS (INCLUDING SERVICES) (2.6%)
Repsol, S.A.-ADR .................................. 213,000 7,055,625
Texaco Inc. ....................................... 89,500 8,234,000
----------
(COST $13,440,323) ....... -- 15,289,625
----------
RETAIL TRADE (11.7%)
Giordano Holdings Limited - ADR ................... 304,500 2,679,600
The Home Depot, Inc. .............................. 765,500 43,537,813
Wal-Mart Stores, Inc. ............................. 825,000 21,759,375
Williams-Sonoma, Inc.+ ............................ 85,000 2,411,875
----------
(COST $6,683,573) ......... -- 70,388,663
----------
SPECIAL HOLDINGS #+ (NOTE 6) (0.5%)
Microbiological Associates, Inc. Preferred Series D 456,829 456,829
Microbiological Associates, Inc. Preferred Series E 384,242 384,242
Sequoia Capital IV ................................ ++ 227,200
Warburg, Pincus Capital Partners, L.P. ............ ++ 1,554,384
Welsh, Carson, Anderson & Stowe III ............... ++ 180,300
---------
(COST $3,441,688) ......... -- 2,802,955*
---------
TRANSPORTATION (0.9%)
Werner Enterprises, Inc. .......................... 331,500 5,304,000
---------
(COST $3,412,439)
TOTAL STOCKS (84.8%) (COST $292,509,392) ....... 509,005,597
------------
SHORT-TERM SECURITIES AND OTHER ASSETS
- --------------------------------------------------------------------------------
Ford Motor Credit Company notes
due 10/7-10/17/96; 5.27%-5.34% $22,040,000 21,894,772
General Electric Capital Corp. notes
due 10/1-11/12/96; 5.29%-5.37% 21,170,000 21,042,494
General Motors Acceptance Corp. notes
due 10/3-10/31/96; 5.29%-5.35% 23,740,000 23,588,192
Sears Roebuck Acceptance Corp. notes
due 10/15-11/4/96; 5.31%-5.40% 25,065,000 24,904,915
-------------
(COST $91,430,373) 91,430,373
Liabilities in excess of cash, receivables and other assets (78,959)
-------------
TOTAL SHORT-TERM SECURITIES AND OTHER ASSETS, NET (15.2%) 91,351,414
-------------
NET ASSETS (COST $383,860,806) $600,357,011
=============
<FN>
+Non-income producing security. # Restricted security.
++ A limited partnership interest. * Fair value of each holding in the opinion of the
(see notes to financial statements) Directors.
</FN>
</TABLE>
<PAGE>
6 NOTES TO FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
1. SIGNIFICANT ACCOUNTING POLICIES
General American Investors Company, Inc. (the "Company"), established in 1927,
is registered under the Investment Company Act of 1940 as a closed-end,
diversified management investment company. It is internally managed by its
officers under the direction of the Board of Directors. The Company is also
registered under the Investment Advisers Act of 1940 as an investment adviser.
a. SECURITY VALUATION Securities traded on securities exchanges or on the NASDAQ
National Market System are valued at the last reported sales price on the last
business day of the period. Listed and NASDAQ securities for which no sales are
reported on that day and other securities traded in the over-the-counter market
are valued at the last bid price on the valuation date. Corporate discount notes
are valued at amortized cost, which approximates market value. Special holdings
are valued at fair value in the opinion of the Directors. In determining fair
value, in the case of restricted shares, consideration is given to cost,
operating and other financial data and, where applicable, subsequent private
offerings or market price of the issuer's unrestricted shares (to which a 30
percent discount is applied); for limited partnership interests, fair value is
based upon an evaluation of the partnership's net assets.
b. INVESTMENT IN CONTROLLED AFFILIATE On January 1, 1996, the investment in the
Company's wholly owned subsidiary, General American Advisers, Inc., was
eliminated when its business operations were transferred to the Company. This
transfer was accounted for as a combination of businesses under common control.
c. FEDERAL INCOME TAXES The Company's policy is to fulfill the requirements of
the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all taxable income to its stockholders. Accordingly, no
provision for Federal income taxes is required.
d. INVESTMENT ADVISORY FEES Income from fees (charged, generally, at the annual
rate of 1/2% of assets under management, computed quarterly) is recorded as the
related advisory services are performed by the Company.
e. OTHER As customary in the investment company industry, securities
transactions are recorded as of the trade date. Dividend income and
distributions to stockholders are recorded as of the ex-dividend dates.
2. COMMON STOCK AND DIVIDEND DISTRIBUTIONS
Transactions in Common Stock during 1996 and 1995 were as follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
----------------------- ----------------------------
1996 1995 1996 1995
----------------------- ----------------------------
<S> <C> <C> <C> <C>
Shares issued in payment of dividends ................... -- 2,092,369 -- $ 2,092,369
Increase in paid-in capital ............................. -- 39,906,509
------------ ------------
Total increase .................................... -- 41,998,878
------------ ------------
Shares purchased (at an average discount from net asset
value of 15.8% and 16.5%, respectively) ............... 1,562,205 1,421,424 ($ 1,562,205) (1,421,424)
Decrease in paid-in capital ............................. ( 31,686,108) (27,346,246)
------------ ------------
Total decrease .................................... ( 33,248,313) (28,767,670)
------------ ------------
Net increase (decrease) ................................. ($33,248,313) $ 13,231,208
============ ============
</TABLE>
The cost of the 1,713,905 shares of Common Stock held in Treasury at September
30, 1996 amounted to $36,318,173.
Dividends in excess of net income for financial statement purposes result
primarily from transactions where tax treatment differs from book treatment.
3. OFFICERS' COMPENSATION AND RETIREMENT AND THRIFT PLANS
The aggregate compensation paid by the Company during the nine months ended
September 30, 1996 to its officers amounted to $1,766,738.
The Company has non-contributory retirement plans and a contributory thrift plan
which cover substantially all employees. The costs to the Company and the assets
and liabilities of the plans are not material. Costs of the plans are funded
currently.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities (other than short-term securities) during the
nine months ended September 30, 1996 were $148,174,414 and $201,312,750,
respectively. At September 30, 1996, the cost of investments for Federal income
tax purposes was the same as the cost for financial reporting purposes.
5. GENERAL INFORMATION
Brokerage commissions during the nine months ended September 30, 1996 were
$352,074, including $41,477 paid to Goldman, Sachs & Co. The Chairman Emeritus
of the Company is a limited partner of The Goldman Sachs Group, L.P. which is an
affiliate of Goldman, Sachs & Co.
6. RESTRICTED SECURITIES
<TABLE>
<CAPTION>
DATE VALUE
ACQUIRED COST (NOTE 1a)
-------- ---------- ----------
<S> <C> <C> <C>
Microbiological Associates, Inc. Preferred Series D 12/20/91 $ 861,500 $ 456,829
Microbiological Associates, Inc. Preferred Series E 12/20/91 449,300 384,242
Sequoia Capital IV* ............................... 1/31/84 1,128,923 227,200
Warburg, Pincus Capital Partners, L.P.* ........... 10/04/83 154,872 1,554,384
Welsh, Carson, Anderson & Stowe III* .............. 3/10/83 346,793 180,300
Other ............................................. 500,300 --
---------- ----------
Total ............................................. $3,441,688 $2,802,955
========== ==========
<FN>
* The amounts shown are net of distributions from these limited partnership
interests which, in the aggregate, amounted to $4,563,888, $3,725,979 and
$3,452,757, respectively. The initial investment in each limited partnership was
$2,000,000.
</FN>
</TABLE>
<PAGE>
7 NOTES TO FINANCIAL STATEMENTS (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
7. OPERATING LEASE COMMITMENT
In July 1992, the Company entered into an operating lease agreement for new
office space which expires in 2007 and provides for future rental payments in
the aggregate amount of approximately $5.6 million. The lease agreement contains
a clause whereby the Company received twenty months of free rent beginning in
December 1992 and escalation clauses relating to operating costs and real
property taxes.
Rental expense approximated $333,000 for the nine months ended September 30,
1996. Minimum rental commitments under the operating lease are approximately
$331,000 per annum in 1996 through 1997, $403,000 per annum in 1998 through
2002, and $504,000 per annum in 2003 through 2007.
In March 1996, the Company entered into a sublease agreement which expires in
2003 and provides for future rental receipts beginning in November 1996. Minimum
rental receipts under the sublease are approximately $28,000 in 1996, $167,000
in 1997, $203,000 per annum in 1998 through 2002 and $64,000 in 2003. The
Company will also receive its proportionate share of operating expenses and real
property taxes under the sublease.
MAJOR STOCK CHANGES* Three Months Ended September 30, 1996 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Held
INCREASES SHARES SEPTEMBER 30, 1996
- --------------------------------------------------------------------------------------------------------
NEW POSITIONS
<S> <C> <C>
Ace Limited -- 48,136 (a)
Aetna, Inc. 31,840 110,000 (b)
Aetna, Inc. 6.25% Class C Voting Preferred Stock -- 26,065 (b)
Cox Communications, Inc. Class A 200,000 200,000
DSC Communications Corporation 187,500 187,500
MedPartners, Inc. -- 484,000 (c)
Pharmaceutical Product Development, Inc. 18 276,500 (d)
Physician Reliance Network, Inc. 300,000 300,000
ADDITIONS
American States Financial Corporation 31,500 302,500
BioChem Pharma Inc. 20,000 186,000
Broderbund Software, Inc. 90,000 210,000
Buffets, Inc. 50 1,431,500 (e)
Chrysler Corporation 80,000 400,000 (f)
First Midwest Bancorp, Inc. 23,500 190,000
PepsiCo, Inc. 39,000 325,000
Pinnacle Systems, Inc. 68,000 245,000
DECREASES
- --------------------------------------------------------------------------------------------------------
ELIMINATIONS
Applied Bioscience International Inc. 918,000 (d) --
Brinker International Inc. 56,500 --
Caremark International Inc. 400,000 (c) --
HomeTown Buffet, Inc. 485,000 (e) --
Manpower Inc. 36,000 --
Tempest Reinsurance Company Limited 15,000 (a) --
U.S. Healthcare, Inc. 348,000 (b) --
Walden Residential Properties 120,500 --
REDUCTIONS
Comcast UK Cable Partners Limited Class A 67,000 601,500
General Re Corporation 26,500 58,000
Hormel Foods Corporation 50,000 205,000
Medtronic, Inc. 10,000 243,000
Pfizer Inc. 20,000 272,000
Reuters Holdings Plc-ADR 30,000 109,000
Texaco Inc. 10,000 89,500
United Healthcare Corporation 49,500 205,000
USA Waste Services, Inc. 30,000 669,000
U.S. Bancorp 40,000 277,500
Vertex Pharmaceuticals Incorporated 35,000 148,500
<FN>
* Excludes transactions in Stocks - Miscellaneous - Other.
(a) 48,136 shares of Ace Limited were received in exchange for 15,000 shares of
Tempest Reinsurance Company Limited in conjunction with a merger.
(b) 78,160 shares of Aetna, Inc. and 26,065 shares of Aetna, Inc. 6.25% Class C Voting Preferred Stock were received in
exchange for 348,000 shares of U.S. Healthcare, Inc. in conjunction with a merger.
(c) 484,000 shares of MedPartners, Inc. were received in exchange for 400,000 shares of Caremark International Inc.
in conjunction with a merger.
(d) 276,482 shares of Pharmaceutical Product Development, Inc. were received in exchange for 682,000 shares of
Applied Bioscience International Inc. in conjunction with a merger.
(e) 567,450 shares of Buffets, Inc. were received in exchange for 485,000 shares of HomeTown Buffet, Inc. in conjunction
with a merger.
(f) Includes shares received in conjunction with a stock split.
</FN>
</TABLE>
- --------------------------------------------------------------------------------
In addition to purchases of the Company's Common Stock as set forth in Note 2 on
page 6, purchases of Common Stock may be made at such times, at such prices, in
such amounts and in such manner as the Board of Directors may deem advisable.
<PAGE>
DIRECTORS
- --------------------------------------------------------------------------------
Lawrence B. Buttenwieser, Chairman
Malcolm B. Smith, Vice-Chairman
Arthur G. Altschul, Jr.
Lewis B. Cullman
Spencer Davidson
Gerald M. Edelman
Anthony M. Frank
John D. Gordan, III
Bill Green
Victoria Hamilton
Sidney R. Knafel
Richard R. Pivirotto
Joseph T. Stewart, Jr.
Raymond S. Troubh
Arthur G. Altschul, Chairman Emeritus
William O. Baker, Director Emeritus
William T. Golden, Director Emeritus
OFFICERS
- --------------------------------------------------------------------------------
Spencer Davidson, President & Chief Executive Officer
Victoria Hamilton, Executive Vice-President & Chief Operating Officer
S. Lawrence Feit, Senior Vice-President
John J. Smith, Vice-President
Andrew V. Vindigni, Vice-President
Eugene L. DeStaebler, Jr., Vice-President, Administration
Peter P. Donnelly, Vice-President & Trader
Diane G. Radosti, Treasurer
Carole Anne Clementi, Secretary
SERVICE COMPANIES
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COUNSEL
Sullivan & Cromwell
INDEPENDENT AUDITORS
Ernst & Young LLP
CUSTODIAN
Bankers Trust Company
TRANSFER AGENT AND REGISTRAR
ChaseMellon Shareholder Services, L.L.C.
Overpeck Centre
85 Challenger Road
Ridgefield Park, NJ 07660
1-800-413-5499
