<PAGE>
GENERAL AMERICAN INVESTORS
COMPANY, INC.
THIRD QUARTER REPORT
SEPTEMBER 30, 1997
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 quarter ended September 30, 1997, the total return (assuming
reinvestment of all dividends) on the net asset value per share of General
American Investors Company was 11%. By comparison, the rate of return (including
income) for the Standard & Poor's 500 Stock Index was 7.5%. For the nine months
ended September 30, 1997, the return for the Company was 27.4%; this compares to
a return of 29.6% for the S&P 500. For the twelve months ended September 30,
1997, the return for the Company was 34.4% which compares to a return of 40.4%
for the S&P 500.
The net assets of the Company as of September 30, 1997, as set forth in the
accompanying financial statements (unaudited), were $711,477,851, equal to
$31.44 per share of Common Stock.
The increase in net assets resulting from operations for the nine months
was $150,440,414. Net realized capital gains on securities sold were $50,183,925
($2.22 per share); the increase in unrealized appreciation was $96,007,786. Net
investment income for the nine months was $4,248,703.
During the nine months, 1,384,100 shares of the Company's Common Stock were
repurchased for $31,979,778 at an average discount from net asset value of
15.5%.
The Taxpayer Relief Act, enacted on August 5, 1997, changed the taxation of
capital gains on sales of securities and, as a consequence, the taxation of the
capital gains realized on sales of securities by the Company in the nine months
ended September 30, 1997 is as follows:
<TABLE>
<CAPTION>
Net Capital Amount
Gains Per Share
----------- ---------
<S> <C> <C>
Portion of Net Capital
Gains taxable at a
maximum rate of 28% $23,569,747 $1.04
Portion of Net Capital
Gains taxable at a
maximum rate of 20% 26,614,178 1.18
------------ ---------
Total $50,183,925 $2.22
============ =========
</TABLE>
We recommend that you consult your tax adviser for assistance on these and other
tax matters.
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, 1997 (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
ASSETS
- -------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS, AT VALUE ( NOTE 1a )
Common stocks (cost $308,535,948) ................... $627,534,175
Convertible corporate notes (cost $4,940,000) ....... 8,933,750
Corporate discount notes (cost $73,656,391) ......... 73,656,391
------------
Total Investments (cost $387,132,339)............. 710,124,316
CASH, RECEIVABLES AND OTHER ASSETS
Cash ................................................ $ 22,826
Receivable for securities sold ...................... 3,994,199
Dividends, interest and other receivables ........... 4,417,971
Other ............................................... 782,907 9,217,903
----------- -----------
TOTAL ASSETS .......................................... 719,342,219
LIABILITIES
- -------------------------------------------------------------------------------------
Payable for securities purchased ................... 3,745,389
Accrued expenses and other liabilities ............. 4,118,979
-----------
TOTAL LIABILITIES ..................................... 7,864,368
------------
NET ASSETS ............................................ $711,477,851
============
NET ASSETS
- -------------------------------------------------------------------------------------
Common Stock, $1 par value (note 2)
Authorized 30,000,000 shares; outstanding
22,627,131 share (exclusive of
1,487,285 shares in Treasury) ................. $ 22,627,131
Paid-in Capital ( note 2 ) ......................... 312,608,774
Undistributed realized gain on securities sold ...... 49,996,328
Undistributed net income ........................... 3,253,641
Unrealized appreciation on investments (including
aggregate gross unrealized appreciation of
$336,359,508) ................................... 322,991,977
------------
TOTAL NET ASSETS ...................................... $711,477,851
============
NET ASSET VALUE PER SHARE ............................. $ 31.44
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Nine Months
Ended Year Ended
September 30, 1997 December 31,
OPERATIONS (Unaudited) 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Net investment income ..................... $ 4,248,703 $ 5,189,266
Net realized gain on sales of securities .. 50,183,925 61,830,203
Net increase in unrealized appreciation ... 96,007,786 26,713,604
------------- -------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................. 150,440,414 93,733,073
------------- -------------
DISTRIBUTIONS TO STOCKHOLDERS
- --------------------------------------------------------------------------------
From net income, including
short-term capital gain ................. (1,417,469) (4,446,885)
From long-term capital gain ............... (10,394,776) (57,682,349)
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS .... (11,812,245) (62,129,234)
------------- -------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Value of Common Shares issued in payment
of dividends (note 2) ................... 7,232,767 34,645,324
Cost of Common Shares purchased (note 2) .. (31,979,778) (42,345,895)
------------- -------------
DECREASE IN NET ASSETS - CAPITAL TRANSACTIONS (24,747,011) ( 7,700,571)
------------- -------------
NET INCREASE IN NET ASSETS ................... 113,881,158 23,903,268
NET ASSETS
- --------------------------------------------------------------------------------
BEGINNING OF PERIOD .......................... 597,596,693 573,693,425
-------------- -------------
END OF PERIOD (including undistributed net
income of $3,253,641 and distributions
in excess of net income of $779,270,
respectively) ............................. $ 711,477,851 $ 597,596,693
============= =============
<FN>
( see notes to financial statements )
</FN>
</TABLE>
<PAGE>
3 STATEMENT OF OPERATIONS Nine Months Ended September 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
INCOME
- --------------------------------------------------------------------------------
<S> <C> <C>
Dividends (net of foreign withholding taxes
of $176,408) ................................ $ 4,911,616
Interest ...................................... 3,634,821
Investment advisory fees (note 1c) ............ 73,040 $ 8,619,477
-----------
EXPENSES
- --------------------------------------------------------------------------------
Investment research ........................... 2,008,995
Administration and operations ................. 1,385,936
Office space and general ...................... 449,247
Transfer agent, custodian and registrar
fees and expenses ........................... 149,340
Directors' fees and expenses .................. 113,019
Stockholders' meeting and reports ............. 108,837
Auditing and legal fees ....................... 90,000
Miscellaneous taxes (note 1b) ................. 65,400 4,370,774
--------- ---------
NET INVESTMENT INCOME ............................ 4,248,703
REALIZED GAIN AND CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS (NOTES 1d AND
4)
- --------------------------------------------------------------------------------
Net realized gain on sales of securities ....... 50,183,925
Net increase in unrealized appreciation ........ 96,007,786
------------
NET GAIN ON INVESTMENTS ......................... 146,191,711
------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..................... $150,440,414
============
</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,
1997 and the year ended December 31, 1996. 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, 1997 December 31,
(Unaudited) 1996
--------- ------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ............ $ 25.24 $ 23.94
-------- --------
Net investment income ....................... .19 .22
Net gain on securities -
realized and unrealized .................. 6.51 3.86
-------- --------
Total from investment operations ................ 6.70 4.08
-------- --------
Less distributions:
Dividends from investment income ............ (.06)(a) (.20)
Distributions from capital gains ............ (.44) (2.58)
-------- --------
Total distributions ............................. (.50) (2.78)
-------- --------
Net asset value, end of period .................. $ 31.44 $ 25.24
======== ========
Per share market value, end of period ........... $ 27.563 $ 21.00
======== ========
TOTAL INVESTMENT RETURN - Stockholder
Return, based on market price per share ..... 34.27%* 19.48%
RATIOS AND SUPPLEMENTAL DATA
Total net assets, end of period (000's omitted) . $711,478 $597,597
Ratio of expenses to average net assets ......... 0.69%* 1.05%
Ratio of net income to average net assets ....... 0.67%* 0.88%
Portfolio turnover rate ......................... 26.99%* 33.40%
Average commission rate paid per share .......... $ .0500 $ .0500
Shares outstanding, end of period (000's omitted) 22,627 23,679
<FN>
(a) Includes short-term capital gain in the amount of $.05 per share.
* Not annualized.
(see notes to financial statements)
</FN>
</TABLE>
<PAGE>
4 STATEMENT OF INVESTMENTS September 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
SHARES OR VALUE
COMMON STOCKS PRINCIPAL AMOUNT (NOTE 1a)
<S> <C> <C>
COMMUNICATIONS AND INFORMATION SERVICES (6.3%)
Axiom Inc.+ ....................................... 200,000 $ 2,350,000
Comcast UK Cable Partners Limited Class A + ....... 439,500 4,504,875
Cox Communications, Inc. Class A + ................ 350,000 9,646,875
NTL Incorporated + ................................ 252,000 6,646,500
Reuters Holdings plc-ADR .......................... 200,000 14,250,000
Wolters Kluwer NV-ADR ............................. 55,500 7,485,285
----------
(COST $28,499,343) -- 44,883,535
----------
COMPUTER SOFTWARE AND SYSTEMS (4.2%)
Broderbund Software, Inc.+ ........................ 200,000 6,800,000
Cisco Systems, Inc.+ .............................. 128,000 9,352,000
Dialogic Corporation + ............................ 97,500 4,192,500
Hewlett-Packard Company ........................... 60,000 4,173,750
Pinnacle Systems, Inc.+ ........................... 87,500 2,559,375
Platinum Software Corporation + ................... 250,000 2,906,250
----------
(COST $15,469,134) -- 29,983,875
----------
CONSUMER PRODUCTS AND SERVICES (11.1%)
AAPC Ltd. ......................................... 7,725,700 3,190,714
Buffets, Inc.+ .................................... 1,200,000 12,975,000
Chrysler Corporation .............................. 425,000 15,645,312
Corning Incorporated .............................. 130,000 6,142,500
Ford Motor Company ................................ 400,000 18,050,000
PepsiCo, Inc. ..................................... 275,000 10,312,500
Philip Morris Companies Inc. ...................... 305,000 12,676,563
----------
(COST $64,188,544) -- 78,992,589
----------
ELECTRONICS AND SEMICONDUCTORS (0.6%)
Chips and Technologies, Inc. + .................... 100,000 1,600,000
Sensormatic Electronics Corporation + ............. 185,500 2,620,187
----------
(COST $3,452,024) -- 4,220,187
----------
ENVIRONMENTAL CONTROL
(INCLUDING SERVICES) (2.6%)
USA Waste Services, Inc.+ ......................... 473,000 18,860,875
----------
(COST $6,983,020)
FINANCE AND INSURANCE (24.1%)
Ace Limited ....................................... 35,000 3,290,000
AmerUs Life Holdings, Inc. Class A ................ 162,500 5,332,031
American International Group, Inc. ................ 115,000 11,866,563
American States Financial Corporation ............. 158,800 7,463,600
Banco Popular Espanol, S.A. ....................... 64,000 4,117,760
CCB Financial Corp. ............................... 108,500 8,747,812
Crestar Financial Corp. ........................... 300,000 14,062,500
Everest Reinsurance Holdings, Inc. ................ 125,500 5,145,500
First Empire State Corporation .................... 50,000 20,750,000
First Midwest Bancorp, Inc. ....................... 237,500 8,906,250
General Re Corporation ............................ 95,000 18,857,500
Golden West Financial Corporation ................. 168,500 15,122,875
Life Re Corporation ............................... 279,000 14,717,250
TIG Holdings, Inc. ................................ 225,000 7,875,000
Transatlantic Holdings, Inc. ...................... 202,500 14,504,062
U.S. Bancorp ...................................... 111,000 10,711,500
-----------
(COST $62,182,844) -- 171,470,203
-----------
HEALTH CARE (16.7%)
PHARMACEUTICALS (12.2%)
AB Astra Class A .................................. 632,500 11,656,975
AB Astra Class B .................................. 800,000 14,112,000
IDEC Pharmaceuticals Corporation + ................ 250,000 10,468,750
Magainin Pharmaceuticals Inc.+ .................... 200,000 2,287,500
Merck & Co., Inc. ................................. 34,500 3,447,844
Pfizer Inc. ....................................... 510,000 30,663,750
R.P. Scherer Corporation + ........................ 207,000 12,821,062
Ribi ImmunoChem Research, Inc.+ ................... 319,500 1,357,875
----------
(COST $33,497,220) -- 86,815,756
----------
MEDICAL INSTRUMENTS AND DEVICES (1.9%)
Medtronic, Inc. ................................... 280,000 13,195,000
-----------
(COST $2,037,232)
</TABLE>
<PAGE>
5 STATEMENT OF INVESTMENTS September 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
SHARES OR VALUE
COMMON STOCKS (continued) PRINCIPAL AMOUNT (NOTE 1a)
<S> <C> <C>
HEALTH CARE SERVICES (2.6%)
Aetna, Inc. ....................................... 90,000 $ 7,329,375
Huntingdon Life Sciences Group plc-ADR+ ........... 669,500 2,510,625
MedPartners, Inc.+ ................................ 403,500 8,650,031
-----------
(COST $20,879,582) -- 18,490,031
-----------
(COST $56,414,034) -- 118,500,787
-----------
MISCELLANEOUS (4.0%)
Other ............................................. 28,377,908
----------
(COST $28,970,147)
OIL & NATURAL GAS (INCLUDING SERVICES) (4.8%)
Repsol, S.A.-ADR .................................. 260,000 11,277,500
Texaco Inc. ....................................... 270,000 16,588,125
Union Pacific Resources Group Inc. ................ 235,000 6,154,062
----------
(COST $25,708,710) -- 34,019,687
----------
RETAIL TRADE (12.9%)
PETsMART, Inc.+ ................................... 1,000,000 10,375,000
The Home Depot, Inc. .............................. 1,093,500 56,998,688
Wal-Mart Stores, Inc. ............................. 670,000 24,580,625
----------
(COST $13,571,918) -- 91,954,313
----------
SPECIAL HOLDINGS #+ (NOTE 6) (0.9%)
BioReliance Corporation ........................... 317,258 5,829,616
Sequoia Capital IV ................................ ++ 95,600
Warburg, Pincus Capital Partners, L.P. ............ ++ 337,500
Welsh, Carson, Anderson & Stowe III ............... ++ 7,500
----------
(COST $3,096,230) -- 6,270,216*
----------
TOTAL COMMON STOCKS (88.2%) (COST $308,535,948) 627,534,175
------------
CONVERTIBLE CORPORATE NOTES
- --------------------------------------------------------------------------------
MedImmune, Inc., 7% due 7/1/2003 $4,000,000 7,840,000
USA Waste Services, Inc., 4% due 2/1/2002 1,000,000 1,093,750
----------
TOTAL CONVERTIBLE CORPORATE NOTES (1.3%)
(COST $4,940,000) 8,933,750
----------
SHORT-TERM SECURITIES AND OTHER ASSETS
- --------------------------------------------------------------------------------
Ford Motor Credit Company notes
due 10/9-11/6/97; 5.48%-5.50% $19,200,000 19,071,556
General Electric Capital Corp. notes
due 10/2-11/13/97; 5.45%-5.53% 16,800,000 16,684,060
General Motors Acceptance Corp. notes
due 10/9-10/30/97; 5.51%-5.56% 19,750,000 19,617,544
Sears Roebuck Acceptance Corp. notes
due 10/6-11/10/97; 5.52%-5.55% 18,400,000 18,283,231
-------------
(COST $73,656,391) 73,656,391
Cash, receivables and other assets, less liabilities 1,353,535
-------------
TOTAL SHORT-TERM SECURITIES AND OTHER ASSETS, NET (10.5%)
(COST $75,009,926) 75,009,926
-------------
NET ASSETS (COST $388,485,874) $711,477,851
=============
<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.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
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. 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.
c. 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.
d. 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 the nine months ended September 30, 1997 and
the year ended December 31, 1996 were as follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
----------------------- ----------------------------
1997 1996 1997 1996
----------------------- ----------------------------
<S> <C> <C> <C> <C>
Shares issued in payment of dividends ................... 332,541 1,684,879 $ 332,541 $ 1,684,879
Increase in paid-in capital ............................. 6,900,226 32,960,445
------------ ------------
Total increase .................................... 7,232,767 34,645,324
------------ ------------
Shares purchased (at an average discount from net asset
value of 15.5% and 15.7%, respectively) ............... 1,384,100 1,968,905 ( 1,384,100) (1,968,905)
Decrease in paid-in capital ............................. ( 30,595,678) (40,376,990)
------------ ------------
Total decrease .................................... ( 31,979,778) (42,345,895)
------------ ------------
Net decrease ............................................ ($24,747,011) ($7,700,571)
============ ============
</TABLE>
The cost of the 1,487,285 shares of Common Stock held in Treasury at September
30, 1997 amounted to $34,168,082.
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, 1997 to its officers amounted to $1,619,250.
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, 1997 were $148,986,027 and $171,986,750,
respectively. At September 30, 1997, 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, 1997 were
$250,968, including $45,974 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>
BioReliance Corporation .......................... 12/20/91 $1,310,795 $5,829,616
Sequoia Capital IV* ............................... 1/31/84 1,019,600 95,600
Warburg, Pincus Capital Partners, L.P.* ........... 10/04/83 4,399 337,500
Welsh, Carson, Anderson & Stowe III* .............. 3/10/83 261,136 7,500
Other ............................................. 500,300 --
---------- ----------
Total ............................................. $3,096,230 $6,270,216
========== ==========
<FN>
* The amounts shown are net of distributions from these limited partnership
interests which, in the aggregate, amounted to $4,673,211, $5,122,777 and
$3,617,418, 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 $225,000 for the nine months ended September 30,
1997. Minimum rental commitments under the operating lease are approximately
$331,000 in 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. Minimum rental receipts under the
sublease are approximately $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, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Held
INCREASES SHARES SEPTEMBER 30, 1997
- --------------------------------------------------------------------------------------------------------
NEW POSITIONS
<S> <C> <C>
Axiom Inc. 200,000 200,000
Chips and Technologies, Inc. 100,000 100,000
Corning Incorporated 130,000 130,000
Union Pacific Resources Group Inc. 235,000 235,000
ADDITIONS
CCB Financial Corp. 338 108,500 (a)(b)
IDEC Pharmaceuticals Corporation 165,000 250,000 (a)
Magainin Pharmaceuticals Inc. 116,000 200,000 (a)
Philip Morris Companies Inc. 10,000 305,000 (a)
Repsol, S.A.-ADR 47,000 260,000
Reuters Holdings plc-ADR 91,000 200,000
DECREASES
- --------------------------------------------------------------------------------------------------------
ELIMINATIONS
Alpha-Beta Technology, Inc. 200,000 --
American Federal Bank, FSB 92,500 (b) --
The Cheesecake Factory Incorporated 104,000 --
Tricon Global Restaurants, Inc. 27,500 (c) --
Werner Enterprises, Inc. 166,500 --
REDUCTIONS
AAPC Ltd. 500,063 7,725,700
AB Astra Class A 59,500 632,500
Ace Limited 13,500 35,000
American International Group, Inc. 5,000 115,000 (d)
American States Financial Corporation 135,700 158,800
Buffets, Inc. 120,000 1,200,000
Crestar Financial Corp. 12,000 300,000
Dialogic Corporation 32,500 97,500
MedPartners, Inc. 80,500 403,500
Medtronic, Inc. 120,000 280,000 (d)
Pinnacle Systems, Inc. 30,000 87,500
Ribi ImmunoChem Research, Inc. 30,000 319,500
Sensormatic Electronics Corporation 184,500 185,500
The Home Depot, Inc. 39,750 1,093,500 (d)
USA Waste Services, Inc. 20,000 473,000
U.S. Bancorp 19,800 111,000 (e)
Wal-Mart Stores, Inc. 125,000 670,000
<FN>
* Excludes transactions in Stocks - Miscellaneous - Other.
(a) Includes shares purchased in prior period and previously carried under Stocks - Miscellaneous - Other.
(b) 41,162 shares of CCB Financial Corp. were received in exchange for 92,500 shares of
American Federal Bank, FSB in conjunction with a merger.
(c) 27,500 shares of Tricon Global Restaurants, Inc. were received in conjunction with a
spinoff from PepsiCo, Inc.
(d) Includes shares received in conjunction with a stock split.
(e) Includes a reduction in shares in conjunction with a reorganization.
</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
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
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
- --------------------------------------------------------------------------------
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
