<PAGE>
GENERAL AMERICAN INVESTORS
COMPANY, INC.
SECOND QUARTER REPORT
JUNE 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 six months ended June 30, 1997, the total return (assuming reinvestment
of all dividends) on the net asset value per share of General American Investors
Company was 14.8%. By comparison, the total return (including income) for the
Standard & Poor's Stock Index was 20.6%. For the twelve months ended June 30,
1997, the return for the Company was 22.6%; this compares to a return of 34.7%
for the S&P 500.
The net assets of the Company as of June 30, 1997, as set forth in the
accompanying financial statements (unaudited), were $652,256,585, equal to
$28.33 per share of Common Stock.
The increase in net assets resulting from operations for the six months was
$81,113,386. Net realized long-term gain on securities sold was $28,710,543
($1.25 per share); the increase in unrealized appreciation was $49,582,447. Net
investment income for the six months was $2,820,396.
During the six months, 985,300 shares of the Company's Common Stock were
repurchased for $21,874,016 at an average discount from net asset value of
15.7%.
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 June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
ASSETS
- -------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS, AT VALUE ( NOTE 1a )
Common stocks (cost $286,347,403) $562,234,041
Convertible corporate notes (cost $4,940,000) 5,620,000
Corporate discount notes (cost $84,260,633) 84,260,633
------------
Total investments (cost $375,548,036) 652,114,674
CASH, RECEIVABLES AND OTHER ASSETS
Cash ................................................ $ 278,409
Receivable for securities sold ...................... 7,442
Dividends, interest and other receivables ........... 4,446,573
Other ............................................... 821,594 5,554,018
----------- -----------
TOTAL ASSETS .......................................... 657,668,692
LIABILITIES
- -------------------------------------------------------------------------------------
Payable for securities purchased ................... 1,513,384
Accrued expenses and other liabilities ............. 3,898,723
-----------
TOTAL LIABILITIES ..................................... 5,412,107
------------
NET ASSETS ............................................ $652,256,585
============
NET ASSETS
- -------------------------------------------------------------------------------------
Common Stock, $1 par value (note 2)
Authorized 30,000,000 shares; outstanding
23,025,931 shares (exclusive of
1,088,485 shares in Treasury) ................. $ 23,025,931
Paid-In Capital ( note 2 ) ......................... 322,315,736
Undistributed realized gain on securities sold ..... 28,522,945
Undistributed net income ........................... 1,825,335
Unrealized appreciation on investments (including
aggregate gross unrealized appreciation of
$291,168,916) ................................... 276,566,638
------------
TOTAL NET ASSETS ...................................... $652,256,585
============
NET ASSET VALUE PER SHARE ............................. $ 28.33
============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
June 30, 1997 December 31,
OPERATIONS (Unaudited) 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Net investment income ..................... $ 2,820,396 $ 5,189,266
Net realized gain on sales of securities .. 28,710,543 61,830,203
Net increase in unrealized appreciation ... 49,582,447 26,713,604
------------- -------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................. 81,113,386 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) .. (21,874,016) (42,345,895)
------------- -------------
DECREASE IN NET ASSETS - CAPITAL TRANSACTIONS. (14,641,249) (7,700,571)
------------- -------------
NET INCREASE IN NET ASSETS ................... 54,659,892 23,903,268
NET ASSETS
- --------------------------------------------------------------------------------
BEGINNING OF PERIOD .......................... 597,596,693 573,693,425
-------------- -------------
END OF PERIOD (including undistributed net
net income of $1,825,335 and distributions
in excess of net income of $779,270,
respectively) ............................. $ 652,256,585 $ 597,596,693
============= =============
<FN>
( see notes to financial statements )
</FN>
</TABLE>
<PAGE>
3 STATEMENT OF OPERATIONS Six Months Ended June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
INCOME
- --------------------------------------------------------------------------------
<S> <C> <C>
Dividends (net of foreign withholding taxes
of $124,289) ................................ $ 3,312,281
Interest ...................................... 2,470,052
Investment advisory fees (note 1c) ............ 51,723 $ 5,834,056
-----------
EXPENSES
- --------------------------------------------------------------------------------
Investment research ........................... 1,361,358
Administration and operations ................. 940,402
Office space and general ...................... 295,291
Transfer agent, custodian and registrar
fees and expenses ........................... 117,840
Directors' fees and expenses .................. 94,557
Stockholders' meeting and reports ............. 93,512
Auditing and legal fees ....................... 66,000
Miscellaneous taxes (note 1b) ................. 44,700 3,013,660
--------- ---------
NET INVESTMENT INCOME ............................ 2,820,396
REALIZED GAIN AND CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS (NOTES 1d AND 4)
- -----------------------------------------------------------------------------------
Net realized gain on sales of securities
(long-term) .................................. 28,710,543
Net increase in unrealized appreciation ........ 49,582,447
------------
NET GAIN ON INVESTMENTS ......................... 78,292,990
------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..................... $81,113,386
============
</TABLE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The following table shows per share operating performance data, total investment
return, ratios and supplemental data for the six months ended June 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>
Six Months
Ended Year Ended
June 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 ....................... .12 .22
Net gain on securities -
realized and unrealized .................. 3.47 3.86
-------- --------
Total from investment operations ................ 3.59 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 .................. $ 28.33 $ 25.24
======== ========
Per share market value, end of period ........... $ 24.375 $ 21.00
======== ========
TOTAL INVESTMENT RETURN - Stockholder
Return, based on market price per share ..... 18.74%* 19.48%
RATIOS AND SUPPLEMENTAL DATA
Total net assets, end of period (000's omitted) . $652,257 $597,597
Ratio of expenses to average net assets ......... 0.50%* 1.05%
Ratio of net income to average net assets ....... 0.46%* 0.88%
Portfolio turnover rate ......................... 18.58%* 33.40%
Average commission rate paid .................... $ .0500 $ .0500
Shares outstanding, end of period (000's omitted) 23,026 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 June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
SHARES OR VALUE
COMMON STOCKS PRINCIPAL AMOUNT (NOTE 1a)
- ---------------------------------------------------------------------------------
<S> <C> <C>
COMMUNICATIONS AND INFORMATION SERVICES (5.2%)
Comcast UK Cable Partners Limited Class A + ....... 439,500 $ 5,274,000
Cox Communications, Inc. Class A + ................ 350,000 8,400,000
NTL Incorporated + ................................ 252,000 6,268,500
Reuters Holdings plc-ADR .......................... 109,000 6,867,000
Wolters Kluwer NV-ADR ............................. 55,500 6,764,063
----------
(COST $20,541,271) ........ -- 33,573,563
----------
COMPUTER SOFTWARE AND SYSTEMS (3.8%)
Broderbund Software, Inc.+ ........................ 200,000 4,937,600
Cisco Systems, Inc.+ .............................. 128,000 8,592,000
Dialogic Corporation + ............................ 130,000 3,461,250
Hewlett-Packard Company ........................... 60,000 3,360,000
Pinnacle Systems, Inc.+ ........................... 117,500 2,004,902
Platinum Software Corporation + ................... 250,000 2,593,750
----------
(COST $16,715,859) ........ -- 24,949,502
----------
CONSUMER PRODUCTS AND SERVICES (8.9%)
AAPC Ltd. ......................................... 8,225,763 5,429,004
Buffets, Inc.+ .................................... 1,320,000 11,138,160
The Cheesecake Factory Incorporated + ............. 104,000 2,184,000
Chrysler Corporation .............................. 425,000 13,971,875
Ford Motor Company ................................ 400,000 15,200,000
PepsiCo, Inc. ..................................... 275,000 10,329,825
----------
(COST $50,884,248) ........ -- 58,252,864
----------
ELECTRONICS (0.7%)
Sensormatic Electronics Corporation ............... 370,000 4,763,750
----------
(COST $4,786,113)
ENVIRONMENTAL CONTROL
(INCLUDING SERVICES) (2.9%)
USA Waste Services, Inc.+ ......................... 493,000 19,042,125
----------
(COST $7,326,953)
FINANCE AND INSURANCE (23.8%)
Ace Limited ....................................... 48,500 3,582,938
AmerUs Life Holdings, Inc. Class A ................ 162,500 4,529,688
American Federal Bank, FSB ........................ 92,500 2,983,125
American International Group, Inc. ................ 80,000 11,950,000
American States Financial Corporation ............. 294,500 13,547,000
Banco Popular Espanol, S.A. ....................... 16,000 3,922,000
Crestar Financial Corp. ........................... 312,000 12,129,000
Everest Reinsurance Holdings, Inc. ................ 125,500 4,972,937
First Empire State Corporation .................... 50,000 16,850,000
First Midwest Bancorp, Inc. ....................... 237,500 7,525,900
General Re Corporation ............................ 95,000 17,290,000
Golden West Financial Corporation ................. 168,500 11,795,000
Life Re Corporation ............................... 279,000 13,008,375
TIG Holdings, Inc. ................................ 225,000 7,031,250
Transatlantic Holdings, Inc. ...................... 135,000 13,398,750
U.S. Bancorp ...................................... 170,000 10,901,250
-----------
(COST $62,312,402) ........ -- 155,417,213
-----------
HEALTH CARE (17.6%)
PHARMACEUTICALS (11.5%)
AB Astra Class A .................................. 692,000 12,888,500
AB Astra Class B .................................. 800,000 14,100,000
Alpha-Beta Technology, Inc.+ ...................... 200,000 1,825,000
Merck & Co., Inc. ................................. 34,500 3,529,797
Pfizer Inc. ....................................... 255,000 30,472,500
R.P. Scherer Corporation + ........................ 207,000 10,686,375
Ribi ImmunoChem Research, Inc.+ ................... 349,500 1,616,437
----------
(COST $27,561,395) ........ -- 75,118,609
----------
MEDICAL INSTRUMENTS AND DEVICES
(2.5%)
Medtronic, Inc. ................................... 200,000 16,500,000
-----------
(COST $3,087,292)
</TABLE>
<PAGE>
5 STATEMENT OF INVESTMENTS June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
SHARES OR VALUE
COMMON STOCKS (continued) PRINCIPAL AMOUNT (NOTE 1a)
- ---------------------------------------------------------------------------------
<S> <C> <C>
HEALTH CARE SERVICES (3.6%)
Aetna, Inc. ....................................... 90,000 $ 9,213,750
Huntingdon Life Sciences Group plc-ADR + .......... 669,500 3,598,563
MedPartners, Inc.+................................. 484,000 10,466,500
-----------
(COST $22,674,147) ......... -- 23,278,813
-----------
(COST $53,322,834) ......... -- 114,897,422
-----------
MISCELLANEOUS (5.0%)
Other ............................................. 32,193,450
----------
(COST $32,841,711)
OIL & NATURAL GAS (INCLUDING SERVICES) (3.6%)
Repsol, S.A.-ADR .................................. 213,000 9,039,294
Texaco Inc. ....................................... 135,000 14,681,250
----------
(COST $17,947,223) ....... -- 23,720,544
----------
RETAIL TRADE (13.9%)
PETsMART, Inc.+ ................................... 1,000,000 11,500,000
The Home Depot, Inc. .............................. 755,500 52,129,500
Wal-Mart Stores, Inc. ............................. 795,000 26,881,335
----------
(COST $15,012,341) ........ -- 90,510,835
----------
SPECIAL HOLDINGS #+ (NOTE 6) (0.3%)
BioReliance Corporation Preferred Series D ........ 456,829 456,829
BioReliance Corporation Preferred Series E ........ 384,242 384,242
Sequoia Capital IV ................................ ++ 91,600
Warburg, Pincus Capital Partners, L.P. ............ ++ 746,664
Welsh, Carson, Anderson & Stowe III ............... ++ 7,500
---------
(COST $3,098,800) ......... -- 1,686,835*
---------
TRANSPORTATION (0.5%)
Werner Enterprises, Inc. .......................... 166,500 3,225,938
---------
(COST $1,557,648)
TOTAL COMMON STOCKS (86.2%) (COST $286,347,403) ... 562,234,041
------------
CONVERTIBLE CORPORATE NOTES
- --------------------------------------------------------------------------------
Medimmune, Inc., 7% due 7/1/2003 .................. $ 4,000,000 4,540,000
USA Waste Services, Inc., 4% due 2/1/2002 ......... 1,000,000 1,080,000
---------
TOTAL CONVERTIBLE CORPORATE NOTES (0.9%) .......... 5,620,000
(COST $4,940,000)
SHORT-TERM SECURITIES AND OTHER ASSETS
- --------------------------------------------------------------------------------
Ford Motor Credit Company notes
due 7/10-7/31/97; 5.53% $18,100,000 17,963,271
General Electric Capital Corp. notes
due 7/1-8/14/97; 5.54%-5.57% 22,800,000 22,629,841
General Motors Acceptance Corp. notes
due 7/14-8/11/97; 5.55%-5.58% 21,200,000 21,039,398
Sears Roebuck Acceptance Corp. notes
due 7/7-8/4/97; 5.55%-5.56% 22,800,000 22,628,123
-------------
(COST $84,260,633) 84,260,633
Cash, receivables and other assets, less liabilities 141,911
-------------
TOTAL SHORT-TERM SECURITIES AND OTHER ASSETS, NET (12.9%)
(COST $84,402,544) 84,402,544
-------------
NET ASSETS (COST $375,689,947) $652,256,585
=============
<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 six months ended June 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 15.7% and 15.7%, respectively) ............... 985,300 1,968,905 (985,300) (1,968,905)
Decrease in paid-in capital ............................. ( 20,888,716) (40,376,990)
------------ ------------
Total decrease .................................... ( 21,874,016) (42,345,895)
------------ ------------
Net decrease ............................................ ($14,641,249) ($7,700,571)
============ ============
</TABLE>
The cost of the 1,088,485 shares of Common Stock held in Treasury at June 30,
1997 amounted to $24,062,320.
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 six months ended June
30, 1997 to its officers amounted to $1,136,500.
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) for the six
months ended June 30, 1997 were $97,424,469 and $121,140,355, respectively. At
June 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 six months ended June 30, 1997 were $162,799,
including $39,540 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 Preferred Series D ........ 12/20/91 $ 861,500 $ 456,829
BioReliance Corporation Preferred Series E ........ 12/20/91 449,300 384,242
Sequoia Capital IV* ............................... 1/31/84 1,019,600 91,600
Warburg, Pincus Capital Partners, L.P.* ........... 10/04/83 6,964 746,664
Welsh, Carson, Anderson & Stowe III* .............. 3/10/83 261,136 7,500
Other ............................................. 500,300 --
---------- ----------
Total ............................................. $3,098,800 $1,686,835
========== ==========
<FN>
* The amounts shown are net of distributions from these limited partnership
interests which, in the aggregate, amounted to $4,673,211, $4,531,382 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 $158,000 for the six months ended June 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 June 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Held
INCREASES SHARES JUNE 30, 1996
- --------------------------------------------------------------------------------------------------------
NEW POSITIONS
<S> <C> <C>
Merck & Co., Inc. 34,500 34,500
PETsMART, Inc. 1,000,000 1,000,000
ADDITIONS
AmerUs Life Holdings, Inc. Class A 10,300 162,500+
American Federal Bank, FSB 8,000 92,500+
Chrysler Corporation 25,000 425,000
Dialogic Corporation 30,000 130,000+
Platinum Software Corporation 165,000 250,000+
Sensormatic Electronics Corporation 10,000 370,000
TIG Holdings, Inc. 52,500 225,000
DECREASES
- --------------------------------------------------------------------------------------------------------
ELIMINATIONS
Avid Technology, Inc. 255,500 --
BioChem Pharma Inc. 20,000 --
Giordano Holdings Limited - ADR 304,500 --
Physician Reliance Network, Inc. 352,500 --
TeleWest Communications plc-ADR 110,000 --
United Healthcare Corporation 80,000 --
Vertex Pharmaceuticals Incorporated 93,500 --
REDUCTIONS
AB Astra Class A 160,000 692,000#
AB Astra Class B 17,333 800,000#
Aetna, Inc. 10,000 90,000
Alpha-Beta Technology, Inc. 70,000 200,000
American International Group, Inc. 20,000 80,000
American States Financial Corporation 33,000 294,500
Buffets, Inc. 70,000 1,320,000
Cisco Systems, Inc. 40,000 128,000
General Re Corporation 5,000 95,000
Medtronic, Inc. 8,000 200,000
PepsiCo, Inc. 25,000 275,000
Pfizer Inc. 17,000 255,000
Pinnacle Systems, Inc. 87,500 117,500
Transatlantic Holdings, Inc. 15,000 135,000
U.S. Bancorp 20,000 170,000
Wal-Mart Stores, Inc. 20,000 795,000
Werner Enterprises, Inc. 55,000 166,500
<FN>
* Excludes transactions in Stocks - Miscellaneous - Other.
+ Includes shares purchased in prior period and previously carried under Stocks - Miscellaneous - Other.
# 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
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
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
- --------------------------------------------------------------------------------
To the Board of Directors and Stockholders of
GENERAL AMERICAN INVESTORS COMPANY, INC.
We have reviewed the accompanying statement of assets and liabilities of
General American Investors Company, Inc., including the statement of
investments, as of June 30, 1997 and the related statements of operations and
changes in net assets and financial highlights for the six month period ended
June 30, 1997. These financial statements and financial highlights are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit in
accordance with generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements referred to above for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the statement of changes in net assets and financial highlights for
the year ended December 31, 1996 and in our report, dated January 13, 1997, we
expressed an unqualified opinion on such financial statement and financial
highlights.
ERNST & YOUNG LLP
New York, New York
July 15, 1997
