<PAGE>
GENERAL
AMERICAN
INVESTORS
1997 ANNUAL REPORT
<PAGE>
GENERAL AMERICAN INVESTORS COMPANY, INC.
Established in 1927, the Company is a closed-end investment company listed
on the New York Stock Exchange. Its objective is long-term capital appreciation
through investment in companies with above average growth potential.
FINANCIAL SUMMARY
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Net assets-December 31 .................... $ 702,597,000 $ 597,596,693
Net investment income ..................... 5,149,987 5,189,266
Net realized gain ......................... 66,640,521 61,830,203
Net increase in unrealized appreciation ... 99,421,665 26,713,604
Per Common Share-December 31
Net asset value ........................ $ 29.15 $ 25.24
Market price ........................... $ 26.1875 $ 21.00
Discount from net asset value ............. -10.2% -16.8%
Common Shares outstanding - Dec. 31........ 24,104,678 23,678,690
Common stockholders of record - Dec. 31 ... 6,048 6,500
Market price range* (high-low) ............ $28.19-$20.38 $23.63-$19.50
Market volume-shares ...................... 5,540,800 6,051,500
<FN>
*Unadjusted for dividend payments.
</FN>
</TABLE>
DIVIDEND SUMMARY
- ----------------------------------------------------------------------------
Distributions Applicable to Income Earned and Gains Realized in 1997
<TABLE>
<CAPTION>
Ordinary
Record Date /Payment Date Income Capital Gain Total
- ------------------------- ------ ------------ -----
<S> <C> <C> <C>
Nov. 14, 1997 / Dec. 23, 1997 .............. $ .20 $ 2.75 $ 2.95
Jan. 26, 1998 / Feb. 10, 1998 .............. .01 .20 .21
------- -------- --------
Total ...................................... $ .21 $ 2.95 $ 3.16
======= ======== ========
</TABLE>
Distributions Applicable to Income Earned and Gains Realized in 1996
<TABLE>
<CAPTION>
Ordinary
Record Date / Payment Date Income Capital Gain Total
- -------------------------- ------ ------------ -----
<S> <C> <C> <C>
Nov. 15, 1996 / Dec. 26, 1996 ............ $ .19 $ 2.27 $ 2.46
Jan. 27, 1997 / Mar. 12, 1997 ............ .06* .44 .50
------- -------- --------
Total .................................... $ .25* $ 2.71 $ 2.96
======= ======== ========
<FN>
*Includes short-term capital gain in the amount of $.05 per share.
</FN>
</TABLE>
General American Investors Company, Inc.
450 Lexington Avenue, New York, NY 10017
(212) 916-8400 (800) 436-8401
<PAGE>
1 TO THE STOCKHOLDERS
- -------------------------------------------------------------------------------
General American Investors
General American Investors continued its string of favorable results during the
fourth quarter of 1997. For the full year ended December 31, 1997, the
investment return to our stockholders was 42.6%, consisting of a 32.1% increase
in net asset value per share (assuming reinvestment of all dividends) together
with a meaningful decline in the discount accorded our shares in the
marketplace. The Standard & Poor's 500 Stock Index and the Dow Jones Industrial
Average rose 33.3% and 24.9%, respectively, on a total return basis, for the
same period.
Net income has stabilized reflecting increased dividend and interest income
together with contained costs that are moderate relative to assets under
management. As part of an ongoing program to maximize shareholder value, over
6.7% of the Company's shares were repurchased at an average discount to net
asset value of 15.1%.
The rate of growth in corporate profits is likely to slow in 1998. High
operating rates and low unemployment in the United States, together with
currency devaluations throughout Asia, should result in stronger competitors and
weaker customers. Our portfolio companies should continue to do well. They
generally have strong market positions, are financed conservatively, and benefit
from declining interest rates.
On January 14, 1998, the Board of Directors declared advisable an amendment to
the Company's charter to authorize the issuance of preferred stock and directed
that the proposed amendment be considered at the annual meeting of the Company's
stockholders to be held on March 11, 1998. Additional information relating to
this proposal will be included in the proxy material which is expected to be
mailed to stockholders in early February.
In addition, in conjunction with the possible issuance of preferred stock, the
Company intends to file with the Securities and Exchange Commission an
application for an order under the Investment Company Act of 1940 to permit it
to pay periodic preferred dividends from both net investment income and realized
capital gains. Any such issuance of preferred stock would be subject to
stockholder authorization of the charter amendment, Board action and the receipt
of the order being applied for, as well as market conditions.
By Order of the Board of Directors,
GENERAL AMERICAN INVESTORS COMPANY, INC.
Spencer Davidson
President and Chief Executive Officer
Lawrence B. Buttenwieser
Chairman
<PAGE>
2 THE COMPANY
- -------------------------------------------------------------------------------
General American Investors
Corporate Overview
General American Investors, established in 1927, is one of the nation's oldest
closed-end investment companies. It is an independent organization, internally
managed. For regulatory purposes, the Company is classified as a diversified,
closed-end management investment company; it is registered under and subject to
the regulatory provisions of the Investment Company Act of 1940.
In addition, General American Investors is an investment adviser registered
under the Investment Advisers Act of 1940. It provides investment management
services to an outside account whose objectives are compatible with those of the
Company.
Investment Policy
The primary objective of the Company is long-term capital appreciation. Lesser
emphasis is placed on current income. In seeking to achieve its primary
objective, the Company invests principally in common stocks believed by its
management to have better than average growth potential. Normally, a
substantially fully-invested position in equities is maintained.
The Company's investment approach focuses on the selection of individual stocks,
each of which is expected to meet a clearly defined portfolio objective. A
continuous investment research program, with the stress on fundamental security
analysis, is carried on by the officers and staff of the Company under the
oversight of the Board of Directors. A listing of the directors with their
principal affiliations, which cover a broad range of experience in business and
financial affairs, is on page 16 of this report.
Portfolio Manager
Mr. Spencer Davidson has been responsible for the management of General
American's portfolio since he was elected President and Chief Executive Officer
of the Company in August 1995. Mr. Davidson, who joined the Company in 1994 as
senior investment counselor, has spent his entire business career on Wall Street
since first joining an investment and banking firm in 1966.
"GAM" Common Stock
As a closed-end investment company, General American Investors is not engaged in
a continuous offering of its shares. The common stock is listed on The New York
Stock Exchange (symbol, GAM) and can be bought or sold with commissions
determined in the same manner as all listed stocks. Net asset value is computed
daily (on an unaudited basis) and is furnished upon request. The figure for net
asset value per share, together with the market price and the percentage
discount or premium from net asset value as of the close of each week, is
published in The New York Times, The Wall Street Journal and Barron's.
The ratio of market price to net asset value has shown considerable variation
over a period of time. While shares of GAM usually sell at a discount from
their underlying net asset value, as do the shares of most other domestic equity
closed-end investment companies, they, periodically, have sold at a premium over
net asset value. The last time the Company's shares sold at a premium was the
year-long period from March 1992 through April 1993. During 1997, the stock sold
at discounts from net asset value which ranged from 9.1% (December 24) to 17.6%
(August 8). At December 31, the price of the stock was at a discount of 10.2%
as compared with a discount of 16.8% a year earlier.
<PAGE>
3 THE COMPANY
- -------------------------------------------------------------------------------
General American Investors
[CAPTION]
"The Company's investment objective is long-term capital appreciation.
Fundamental security analysis is used to select individual stocks considered to
have above average growth potential."
Dividend Policy
The Company's dividend policy is to distribute to stockholders before year-end
substantially all ordinary income estimated for the full year and capital gains
realized during the ten-month period ending October 31 of that year. If any
additional capital gains are realized or ordinary income is earned during the
last two months of the year, a "spill-over" distribution of these amounts will
be paid early in the following year. Dividends from income have been paid
continuously on the common stock since 1939 and capital gain dividends in
varying amounts have been paid for each of the years 1943-1997 (except for the
year 1974). (A table listing dividends paid during the 20-year period 1978 -
1997 is shown at the bottom of page 6.) To the extent that full shares can be
issued, dividends are paid in additional shares of common stock unless the
stockholder specifically requests payment in cash. Spill-over dividends of
nominal amounts are paid in cash only.
<PAGE>
4 INVESTMENT RESULTS
- -------------------------------------------------------------------------------
General American Investors
[CAPTION]
"Total return on $10,000 investment 20 years ended December 31, 1997"
The investment return for a stockholder of General American Investors (GAM) over
the 20 years ended December 31, 1997 is shown in the table below and in the
accompanying chart. The return on GAM's total net assets in comparison to the
change in the Standard & Poor's 500 Stock Index (S&P 500) is also displayed.
Each illustration assumes an investment of $10,000 at the beginning of 1978.
The Stockholder Return is the return a shareholder of GAM would have achieved
assuming reinvestment of all optional dividends at the actual reinvestment
price and reinvestment of all cash dividends at the average (mean between high
and low) market price on the ex-dividend date.
The Total Net Assets Return is the time-weighted total rate of return on the
Company's total net assets assuming monthly compounding of total net assets,
including dividend and interest income but excluding advisory fee income and
operating expenses, and after adjustments for cash flows such as GAM dividends
and purchases of GAM shares.
The S&P 500 Return is the time-weighted total rate of return on this
widely-recognized, unmanaged index which is a measure of general stock market
performance, including dividend income.
The results illustrated are a record of past performance and may not be
indicative of future results.
<TABLE>
<CAPTION>
GENERAL AMERICAN INVESTORS
------------------------------------------------------
STOCKHOLDER RETURN TOTAL NET ASSETS RETURN STANDARD & POOR'S 500 RETURN
------------------ ----------------------- ----------------------------
CUMULATIVE ANNUAL RETURN CUMULATIVE ANNUAL RETURN CUMULATIVE ANNUAL RETURN
INVESTMENT INVESTMENT INVESTMENT
<S> <C> <C> <C> <C> <C> <C>
1978 $ 10,584 5.84% $ 11,991 19.91% $ 10,658 6.58%
1979 17,401 64.41 17,127 42.83 12,640 18.60
1980 29,920 71.95 24,853 45.11 16,742 32.45
1981 33,877 13.22 25,660 3.25 15,910 (4.97)
1982 40,411 19.29 30,202 17.70 19,339 21.55
1983 47,004 16.31 37,215 23.22 23,700 22.55
1984 43,636 (7.16) 34,361 (7.67) 25,188 6.28
1985 54,463 24.81 46,679 35.85 33,190 31.77
1986 60,547 11.17 51,641 10.63 39,393 18.69
1987 50,791 (16.11) 52,075 0.84 41,458 5.24
1988 61,590 21.26 60,256 15.71 48,311 16.53
1989 91,520 48.60 82,412 36.77 63,586 31.62
1990 95,178 4.00 87,810 6.55 61,622 (3.09)
1991 176,082 85.00 142,147 61.88 80,355 30.40
1992 202,102 14.78 149,311 5.04 86,453 7.59
1993 169,937 (15.92) 147,459 (1.24) 95,203 10.12
1994 156,571 (7.86) 144,053 (2.31) 96,412 1.27
1995 189,801 21.22 177,315 23.09 132,566 37.50
1996 226,771 19.48 210,491 18.71 162,937 22.91
1997 323,341 42.58 277,469 31.82 217,244 33.33
</TABLE>
<PAGE>
5 INVESTMENT RESULTS
- -------------------------------------------------------------------------------
General American Investors
[Line graph with heading "20-YEAR INVESTMENT RESULTS ASSUMING AN INITIAL
INVESTMENT OF $10,000" at top left hand side. The vertical axis is to the right
side of the page and is labeled "CUMULATIVE VALUE OF INVESTMENT." The axis range
is from $0 to $325,000 in $25,000 increments. The horizontal axis, on the bottom
of the page, consists of the years 1978 through 1997 in one year increments.
Within the graph are three lines. The first line represents GAM Stockholder
Return. The second line represents GAM Total Net Assets, and the third line
represents the S&P 500 Stock Index. The data points for the lines are derived
from the columns labeled "Cumulative Investment" from the table on the preceding
page. Also, embedded in upper left portion of the graph is a table which appears
as follows:]
<TABLE>
<CAPTION>
COMPARATIVE ANNUALIZED INVESTMENT RESULTS
- --------------------------------------------------------------------------------------
YEARS ENDED STOCKHOLDER GAM TOTAL S&P 500
DECEMBER 31, 1997 RETURN NET ASSETS STOCK INDEX
- ----------------- ------ ---------- -----------
<S> <C> <C> <C>
1 year ..................... 42.6% 31.8% 33.3%
5 years .................... 9.9 13.2 20.2
10 years .................... 20.3 18.2 18.0
15 years .................... 14.9 15.9 17.5
20 years .................... 19.0 18.1 16.6
</TABLE>
<PAGE>
6 MAJOR STOCK CHANGES*: THREE MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
- -------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
SHARES SHARES HELD
INCREASES OR PRINCIPAL AMOUNT DECEMBER 31, 1997
- --------------------------------------------------------------------------------------------------------
NEW POSITION
<S> <C> <C>
Annaly Mortgage Management, Inc. 350,000 350,000
ADDITIONS
Ford Motor Company 20,000 420,000
Lam Research Corporation 162,500 200,000(a)
Magainin Pharmaceuticals Inc. 30,000 230,000
Merck & Co., Inc. 20,000 54,500
NAC Re Corporation 122,000 156,000(a)
DECREASES
- --------------------------------------------------------------------------------------------------------
ELIMINATIONS
Ace Limited 35,000 --
American States Financial Corporation 158,800(b) --
Corning Incorporated 130,000 --
Sensormatic Electronics Corporation 185,500 --
USA Waste Services, Inc. 4% Convertible
Corporate Note due 2/1/2002 $ 1,000,000 --
REDUCTIONS
AAPC Ltd. 6,580,749 1,144,951
American International Group, Inc. 5,000 110,000
Broderbund Software, Inc. 40,000 160,000
Buffets, Inc. 221,500 978,500
Chips and Technologies, Inc. 25,000 75,000
Chrysler Corporation 20,000 405,000
Cox Communications, Inc. Class A 10,000 340,000
Dialogic Corporation 61,500 36,000
General Re Corporation 5,000 90,000
The Home Depot, Inc. 30,000 1,063,500
Life Re Corporation 4,000 275,000
MedPartners, Inc. 100,000 303,500
Pfizer Inc. 100,000 410,000
Philip Morris Companies Inc. 40,000 265,000
R.P. Scherer Corporation 20,000 187,000
Reuters Holdings plc-ADR 91,000 109,000
Ribi ImmunoChem Research, Inc. 10,000 309,500
TIG Holdings, Inc. 25,000 200,000
Texaco Inc. 91,000 179,000
U.S. Bancorp 31,000 80,000
Union Pacific Resources Group Inc. 57,500 177,500
<FN>
* Excludes transactions in Stocks - Miscellaneous - Other.
(a) Includes shares previously carried under Stocks - Miscellaneous - Other.
(b) 158,800 shares of American States Financial Corporation were tendered to
Safeco Corporation in conjunction with an acquisition.
</FN>
</TABLE>
[CAPTION]
"The following table shows aggregate dividends paid per share on the Company's
Common Stock for each year during the 20-year period 1978-1997. Amounts shown
include payments made after year-end attributable to income and gain in each
respective year."
DIVIDENDS PER COMMON SHARE (1978-1997)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DIVIDEND FROM
LONG-TERM
YEAR INCOME # CAPITAL GAINS
- ---- ------- -------------
<S> <C> <C>
1978 $.28 $.94
1979 .38 1.74
1980 .50 2.99
1981 .63 3.63
1982 .36 1.15
1983 .67 2.38
1984 .28 1.35
1985 .47 1.07
1986 .36 2.15
1987 .35 1.54
1988 .29 1.69
1989 .23 1.56
1990 .21 1.65
1991 .09 3.07
1992 .03 2.93
1993 .06 2.34
1994 .06 1.59
1995 .13 2.77
1996 .25 2.71
1997 .21 2.95
<FN>
#Includes short-term capital gains per share which amounted to $.04 in 1980,
$.08 in 1981, $.28 in 1983, $.12 in 1985, $.02 in 1989, $.03 in 1995 and $.05
in 1996.
</FN>
</TABLE>
<PAGE>
7 TEN LARGEST INVESTMENT HOLDINGS
- -------------------------------------------------------------------------------
General American Investors
[CAPTION]
"The statement of investments as of December 31, 1997, shown on pages 8 and 9
includes 58 stock issues. Listed here are the ten largest stock holdings on
that date."
<TABLE>
<CAPTION>
% TOTAL
SHARES VALUE NET ASSETS
<S> <C> <C> <C>
THE HOME DEPOT, INC. 1,063,500 $ 62,613,563 8.9%
The leading company in home center retailing, Home Depot's innovative
merchandising, strong balance sheet and excellent management has enabled the
Company to gain share in a fragmented industry.
- --------------------------------------------------------------------------------------- ------------ ------------ ----
PFIZER INC. 410,000 30,570,625 4.4
One of the fastest growing drug companies, driven by a strong base of new
products, with many more promising agents on the horizon. Co-promotion of
new products serving large markets, three drugs awaiting FDA approval and
others at late stages in the pipeline establish Pfizer as a leader in the
pharmaceutical industry, poised for long-term growth.
- --------------------------------------------------------------------------------------- ------------ ------------ ----
WAL-MART STORES, INC. 670,000 26,423,125 3.8
A policy of serving the mass market with everyday low prices, supported by the
lowest cost structure has made Wal-Mart the nation's largest retailer with
ongoing growth opportunities in the U.S. and abroad.
- --------------------------------------------------------------------------------------- ------------ ------------ ----
AB ASTRA 1,432,500 24,517,500 3.5
Headquartered in Sweden, Astra exhibits solid earnings driven by its
antiulcer drug Prilosec. Product line extension, new drug launches and an
intensified research and development effort, position Astra for sustainable
future growth.
- --------------------------------------------------------------------------------------- ------------ ------------ ----
FIRST EMPIRE STATE CORPORATION 50,000 23,250,000 3.3
A bank holding company with $14 billion in assets headquartered in Buffalo, N.Y.
It has strong, opportunistic management with a high level of ownership
and a history of enhancing shareholder value. High asset quality, excellent
expense control, share repurchases and adroit acquisitions help generate
above-average earnings growth.
- --------------------------------------------------------------------------------------- ------------ ------------ ----
FORD MOTOR COMPANY 420,000 20,396,250 2.9
A global manufacturer of automobiles, trucks and related parts with important
liquid holdings in its finance subsidiary, Associates First Capital.
- --------------------------------------------------------------------------------------- ------------ ------------ ----
GENERAL RE CORPORATION 90,000 19,080,000 2.7
A leading global reinsurer and financial services company operating in the
United States and 29 countries worldwide with a high quality AAA balance sheet.
Disciplined underwriting which generates high returns, coupled with share
repurchases, produce earnings growth at an above-average rate.
- --------------------------------------------------------------------------------------- ------------ ------------ ----
USA WASTE SERVICES, INC. 473,000 18,565,250 2.6
A rapidly growing integrated, non-hazardous, solid waste management company
serving municipal, industrial and residential customers in 36 states.
- --------------------------------------------------------------------------------------- ------------ ------------ ----
LIFE RE CORPORATION 275,000 17,926,563 2.6
A highly rated leading domestic direct life and health reinsurer with strong,
opportunistic management and a high level of insider ownership. Healthy sales
growth, excellent expense control and adroit acquisitions have generated
above-average earnings growth.
- --------------------------------------------------------------------------------------- ------------ ------------ ----
CRESTAR FINANCIAL CORP. 300,000 17,100,000 2.4
A well managed bank holding company with $23 billion in assets. It is headquarterd
in Richmond, VA and has a leading market position in the affluent Virginia,
Maryland and Washington, DC metropolitan statistical area. High quality loan growth,
excellent expense control, share repurchases and prudent acquisitions have
generated solid earnings gains.
- --------------------------------------------------------------------------------------- ------------ ------------ -----
$260,442,876 37.1%
============ =====
</TABLE>
<PAGE>
8 STATEMENT OF INVESTMENTS: DECEMBER 31, 1997
- -------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
COMMON SHARES OR VALUE
STOCKS PRINCIPAL AMOUNT (NOTE 1a)
<S> <C> <C>
COMMUNICATIONS AND INFORMATION SERVICES (5.7%)
Axiom Inc.+ ........................................ 200,000 $ 800,000
Comcast UK Cable Partners Limited Class A + ........ 439,500 4,147,781
Cox Communications, Inc. Class A + ................. 340,000 13,621,250
NTL Incorporated + ................................. 252,000 7,024,500
Reuters Holdings plc-ADR ........................... 109,000 7,221,250
Wolters Kluwer NV-ADR .............................. 55,500 7,171,155
----------
(COST $22,790,843) 39,985,936
----------
COMPUTER SOFTWARE AND SYSTEMS (3.6%)
Broderbund Software, Inc.+ ......................... 160,000 4,100,000
Cisco Systems, Inc.+ ............................... 192,000 10,704,000
Dialogic Corporation + ............................. 36,000 1,575,000
Hewlett-Packard Company ............................ 60,000 3,742,500
Pinnacle Systems, Inc.+ ............................ 87,500 2,132,813
Platinum Software Corporation + .................... 250,000 2,937,500
----------
(COST $12,518,537) 25,191,813
----------
CONSUMER PRODUCTS AND SERVICES (9.4%)
AAPC Ltd. ......................................... 1,144,951 470,575
Buffets, Inc.+ .................................... 978,500 9,173,438
Chrysler Corporation .............................. 405,000 14,250,937
Ford Motor Company ................................ 420,000 20,396,250
PepsiCo, Inc. ..................................... 275,000 9,968,750
Philip Morris Companies Inc. ...................... 265,000 11,991,250
----------
(COST $49,586,082) 66,251,200
----------
ENVIRONMENT CONTROL
(INCLUDING SERVICES) (2.6%)
USA Waste Services, Inc.+ ......................... 473,000 18,565,250
----------
(COST $6,983,020)
FINANCE AND INSURANCE (26.3%)
AmerUs Life Holdings, Inc. Class A ................. 162,500 5,992,187
American International Group, Inc. ................. 110,000 11,962,500
Annaly Mortgage Management, Inc. .................. 350,000 3,850,000
Banco Popular Espanol, S.A ......................... 64,000 4,464,640
CCB Financial Corp. ................................ 108,500 11,663,750
Crestar Financial Corp. ............................ 300,000 17,100,000
Everest Reinsurance Holdings, Inc. ................. 125,500 5,176,875
First Empire State Corporation ..................... 50,000 23,250,000
First Midwest Bancorp, Inc. ........................ 237,500 10,390,625
General Re Corporation ............................. 90,000 19,080,000
Golden West Financial Corporation .................. 168,500 16,481,406
Life Re Corporation ................................ 275,000 17,926,563
NAC Re Corporation ................................. 156,000 7,614,750
TIG Holdings, Inc. ................................. 200,000 6,637,500
Transatlantic Holdings, Inc. ....................... 202,500 14,478,750
U.S. Bancorp ....................................... 80,000 8,955,000
-----------
(COST $66,561,666) 185,024,546
-----------
HEALTH CARE (16.3%)
PHARMACEUTICALS (12.0%)
AB Astra Class A .................................. 632,500 11,005,500
AB Astra Class B .................................. 800,000 13,512,000
IDEC Pharmaceuticals Corporation + ................ 250,000 8,593,750
Magainin Pharmaceuticals Inc.+ .................... 230,000 1,854,375
Merck & Co., Inc. ................................. 54,500 5,777,000
Pfizer Inc. ....................................... 410,000 30,570,625
R.P. Scherer Corporation + ........................ 187,000 11,407,000
Ribi ImmunoChem Research, Inc.+ ................... 309,500 1,141,281
----------
(COST $33,918,702) 83,861,531
----------
MEDICAL INSTRUMENTS AND DEVICES (2.1%)
Medtronic, Inc. .................................. 280,000 14,700,000
-----------
(COST $2,037,232)
</TABLE>
<PAGE>
9 STATEMENT OF INVESTMENTS: DECEMBER 31, 1997
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
COMMON SHARES OR VALUE
STOCKS PRINCIPAL AMOUNT (NOTE 1a)
<S> <C> <C>
HEALTH CARE (CONTINUED)
HEALTH CARE SERVICES (2.2%)
Aetna, Inc. ...................................... 90,000 $ 6,350,625
Huntingdon Life Sciences Group plc-ADR + ......... 669,500 2,426,937
MedPartners, Inc. + .............................. 303,500 6,790,812
-----------
(COST $18,979,002) 15,568,374
-----------
(COST $54,934,936) 114,129,905
-----------
MISCELLANEOUS (1.4%)
Other ............................................ 10,013,750
----------
(COST $12,639,342)
OIL & NATURAL GAS (INCLUDING SERVICES) (3.6%)
Repsol, S.A.-ADR ................................. 260,000 11,066,250
Texaco Inc. ...................................... 179,000 9,733,125
Union Pacific Resources Group Inc. ............... 177,500 4,304,375
----------
(COST $19,747,061) 25,103,750
----------
RETAIL TRADE (13.7%)
PETsMART, Inc.+ .................................. 1,000,000 7,250,000
The Home Depot, Inc. ............................. 1,063,500 62,613,563
Wal-Mart Stores, Inc. ............................ 670,000 26,423,125
----------
(COST $13,533,133) 96,286,688
----------
SEMICONDUCTORS (1.0%)
Chips and Technologies, Inc.+ .................... 75,000 1,082,813
Lam Research Corporation + ....................... 200,000 5,850,000
----------
(COST $9,044,298) 6,932,813
----------
SPECIAL HOLDINGS #+ (note 6) (0.8%)
BioReliance Corporation ........................... 317,258 5,107,854
Sequoia Capital IV ................................ ++ 95,600
Welsh, Carson, Anderson & Stowe III ............... ++ 7,500
---------
(COST $3,091,831) ......... 5,210,954*
---------
TOTAL COMMON STOCKS (84.4%) (COST $271,430,749) 592,696,605
------------
CONVERTIBLE CORPORATE NOTE (1.3%)
- --------------------------------------------------------------------------------
MedImmune, Inc., 7% due 7/1/2003 .................. $4,000,000 9,080,000
(COST $3,940,000)
SHORT-TERM SECURITIES AND OTHER ASSETS
- --------------------------------------------------------------------------------
Ford Motor Credit Company notes
due 1/5-1/29/98; 5.71%-5.95% $20,300,000 20,159,348
General Electric Capital Corp. notes
due 1/20-2/5/98; 5.73%-5.80% 22,800,000 22,624,761
General Motors Acceptance Corp. notes
due 1/2-2/12/98; 5.57%-5.79% 30,600,000 30,366,503
Sears Roebuck Acceptance Corp. notes
due 1/5-2/9/98; 5.51%-5.78% 24,700,000 24,515,110
-------------
(COST $97,665,722) 97,665,722
Cash, receivables, prepaid expenses and
other assets, less liabilities 3,154,673
-------------
TOTAL SHORT-TERM SECURITIES AND OTHER ASSETS, NET (14.3%)
(COST $100,820,395) 100,820,395
-------------
NET ASSETS (COST $376,191,144) $702,597,000
=============
<FN>
+Non-income producing security. # Restricted security.
++ A limited partnership interest. * Fair value of each holding in the opinion of the Directors.
(see notes to financial statements)
</FN>
</TABLE>
<PAGE>
10 STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
December 31,
----------------------------
ASSETS 1997 1996
- -------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENTS, AT VALUE ( NOTE 1a )
Common Stocks
( cost $271,430,749 and $286,292,746, respectively) $592,696,605 $513,276,937
Convertible corporate note
( cost $3,940,000 in 1997) 9,080,000 --
Corporate discount notes
(cost $97,665,722 and $83,185,393, respectively) 97,665,722 83,185,393
----------- ------------
699,442,327 596,462,330
CASH, RECEIVABLES AND OTHER ASSETS
Cash ................................................ 105,948 54,272
Receivable for securities sold ...................... 2,279,763 955,793
Dividends, interest and other receivables ........... 1,390,699 900,222
Prepaid Expenses .................................... 3,505,933 2,980,318
Other ............................................... 729,507 902,696
----------- -----------
TOTAL ASSETS .......................................... 707,454,177 602,255,631
----------- -----------
LIABILITIES
- -------------------------------------------------------------------------------------
Payable for securities purchased ................... 91,755 449,166
Accrued expenses and other liabilities ............. 4,765,422 4,209,772
------------ ------------
TOTAL LIABILITIES ..................................... 4,857,177 4,658,938
------------ ------------
NET ASSETS ............................................ $702,597,000 $597,596,693
============ ============
NET ASSETS
- --------------------------------------------------------------------------------
Common Stock, $1 par value ( note 2 )
Authorized 30,000,000 shares; outstanding
24,104,678 and 23,678,690 shares, respectively
(exclusive of 43,300 and 435,726 shares,
respectively, held in Treasury) ................. $ 24,104,678 $ 23,678,690
Paid-in Capital ( note 2 ) ......................... 347,975,543 336,304,226
Undistributed realized gain on
securities sold (note 2) ........................ 4,464,264 11,408,856
Distributions in excess of net income (note 2) ..... (353,341) (779,270)
Unrealized appreciation on investments (including
aggregate gross unrealized appreciation of
$346,906,567 and $244,113,428, respectively) .... 326,405,856 226,984,191
------------ ------------
TOTAL NET ASSETS ...................................... $702,597,000 $597,596,693
============ ============
NET ASSET VALUE PER SHARE ............................. $ 29.15 $ 25.24
============ ============
<FN>
(see notes to financial statements)
</FN>
</TABLE>
<PAGE>
11 STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
General American Investors
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
INCOME --------------------------
1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Dividends (net of foreign withholding taxes
of $180,993 and $177,606, respectively) ..... $ 6,348,110 $6,475,767
Interest ...................................... 5,021,256 4,681,057
Investment advisory fees (note 1c) 93,123 222,326
----------- ----------
TOTAL INCOME ..................................... 11,462,489 11,379,150
----------- ----------
EXPENSES
- --------------------------------------------------------------------------------
Investment research ........................... 3,031,066 2,629,180
Administration and operations ................. 1,943,409 1,880,565
Office space and general ...................... 617,391 844,543
Directors' fees and expenses .................. 203,415 226,315
Transfer agent, custodian and registrar
fees and expenses ........................... 194,445 170,605
Stockholders' meeting and reports ............. 124,376 145,466
Auditing and legal fees ....................... 114,000 194,410
Miscellaneous taxes (note 1b) ................. 84,400 98,800
--------- ---------
TOTAL EXPENSES ................................... 6,312,502 6,189,884
--------- ---------
NET INVESTMENT INCOME ............................ 5,149,987 5,189,266
--------- ---------
REALIZED GAIN AND CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS (NOTES 1d AND 4)
- -----------------------------------------------------------------------------------
Net realized gain on sales of securities
(long-term, except for $1,201,678 in 1996) ... 66,640,521 61,830,203
Net increase in unrealized appreciation ........ 99,421,665 26,713,604
------------ ------------
NET GAIN ON INVESTMENTS ......................... 166,062,186 88,543,807
------------ ------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..................... $171,212,173 $ 93,733,073
============ =============
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
OPERATIONS 1997 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
Net investment income ..................... $ 5,149,987 $ 5,189,266
Net realized gain on sales of securities .. 66,640,521 61,830,203
Net increase in unrealized appreciation ... 99,421,665 26,713,604
------------- -------------
INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................. 171,212,173 93,733,073
------------- -------------
DISTRIBUTIONS TO STOCKHOLDERS
- --------------------------------------------------------------------------------
From net income, including
short-term capital gain ................. (5,925,735) (4,446,885)
From long-term capital gain ............... (72,383,436) (57,682,349)
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS .... (78,309,171) (62,129,234)
------------- -------------
CAPITAL SHARE TRANSACTIONS
- --------------------------------------------------------------------------------
Value of Common Shares issued in payment
of dividends (note 2) ................... 49,404,107 34,645,324
Cost of Common Shares purchased (note 2) .. (37,306,802) (42,345,895)
------------- -------------
INCREASE (DECREASE)IN NET ASSETS -
CAPITAL TRANSACTIONS ...................... 12,097,305 (7,700,571)
------------- -------------
NET INCREASE IN NET ASSETS ................... 105,000,307 23,903,268
NET ASSETS
- --------------------------------------------------------------------------------
BEGINNING OF YEAR ............................ 597,596,693 573,693,425
------------- -------------
END OF YEAR (including distributions in
excess of net income of $353,341 and
$779,270, respectively) ................... $ 702,597,000 $ 597,596,693
============= =============
<FN>
( see notes to financial statements )
</FN>
</TABLE>
<PAGE>
12 NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
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 1997 and 1996 were as follows:
<TABLE>
<CAPTION>
SHARES AMOUNT
------------------------ ------------------------------
1997 1996 1997 1996
------------------------ ------------------------------
<S> <C> <C> <C> <C>
Shares issued in payment of dividends
(includes 1,981,626 shares issued
from Treasury in 1997) 2,015,188 1,684,879 $ 2,015,188 $ 1,684,879
Increase in paid-in capital ......... 47,388,919 32,960,445
------------ -----------
Total increase ................... 49,404,107 34,645,324
------------ -----------
Shares purchased (at an average
discount from net asset value of
15.1% and 15.7%, respectively).... 1,589,200 1,968,905 (1,589,200) (1,968,905)
Decrease in paid-in capital ......... (35,717,602) (40,376,990)
------------ -----------
Total decrease ................... (37,306,802) (42,345,895)
------------ -----------
Net increase (decrease) ............. $12,097,305 ($7,700,571)
============ ===========
</TABLE>
The cost of the 43,300 shares of Common Stock held in Treasury at December 31,
1997 amounted to $1,096,997.
On January 14, 1998, the Board of Directors declared on the Common Stock
dividends of $4,807,836 from capital gains and $240,392 from net income. These
dividends are payable in cash on February 10, 1998.
Dividends in excess of net income for financial statement purposes result
primarily from transactions where tax treatment differs from book treatment.
<PAGE>
13 NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
General American Investors
3. OFFICERS' COMPENSATION AND RETIREMENT AND THRIFT PLANS
The aggregate compensation paid by the Company during 1997 and 1996 to its
officers amounted to $2,437,000 and $2,475,288, respectively.
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 1997
were $182,843,941 and $260,406,459, respectively. At December 31, 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 1997 were $362,483, including $59,904 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 $5,107,854
Sequoia Capital IV* ............................... 1/31/84 1,019,600 95,600
Welsh, Carson, Anderson & Stowe III* .............. 3/10/83 261,136 7,500
Other ............................................. 500,300 --
---------- ----------
Total ............................................. $3,091,831 $5,210,954
========== ==========
<FN>
* The amounts shown are net of distributions from these limited partnership
interests which, in the aggregate, amounted to $4,673,211 and $3,617,418,
respectively. The initial investment in each limited partnership was $2,000,000.
</FN>
</TABLE>
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 $318,000 for 1997. Minimum rental commitments under
the operating lease are approximately $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 $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.
8. SUBSEQUENT EVENT
On January 14, 1998, the Board of Directors declared advisable an amendment to
the Company's charter to authorize the issuance of preferred stock and directed
that the proposed amendment be considered at the annual meeting of the Company's
stockholders to be held on March 11, 1998.
In addition, in conjunction with the possible issuance of preferred stock, the
Company intends to file with the Securities and Exchange Commission an
application for an order under the Investment Company Act of 1940 to permit it
to pay periodic preferred dividends from both net investment income and realized
capital gains. Any such issuance of preferred stock would be subject to
stockholder authorization of the charter amendment, Board action and the receipt
of the order being applied for, as well as market conditions.
- --------------------------------------------------------------------------------
In addition to purchases of the Company's Common Stock as set forth in Note 2 on
page 12, 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>
14 QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
- --------------------------------------------------------------------------------
General American Investors
[CAPTION]
"The following is an unaudited summary of quarterly results of operations in
1997 and 1996 (thousands of dollars, except for amounts per Common Share)."
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------------------------------------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
------------------ ------------------ ----------------- --------------------
1997 1996 1997 1996 1997 1996 1997 1996
-------- -------- ------- -------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Total income ................................ $ 2,689 $ 2,619 $ 3,145 $ 2,846 $ 2,785 $ 3,307 $ 2,843 $ 2,607
Net investment income ....................... 1,117 1,102 1,703 1,250 1,429 1,923 901 914
Per Common Share ............................ .05 .05 .07 .05 .07 .09 .02 .03
Net realized and unrealized
gain (loss) on investments .............. 5,934 44,862 72,359 14,506 67,899 3,917 19,870 25,259
Per Common Share * .......................... .27 2.02 3.20 .73 3.04 .24 .64 .87
<FN>
*Includes net effect of issuance of Common Shares in payment of dividends at the
lower of net asset value or market value and purchase of Common Shares at market
value.
</FN>
</TABLE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
[CAPTION]
"The following table shows per share operating performance data, total
investment return, ratios and supplemental data for each year in the five-year
period ended December 31, 1997. This information has been derived from
information contained in the financial statements and market price data for the
Company's shares."
<TABLE>
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year ................................. $ 25.24 $ 23.94 $ 22.31 $ 24.75 $ 28.56
--------- --------- --------- --------- ---------
Net investment income ........................................... .21 .22 .08 .05 .03
Net gain (loss) on securities - realized and unrealized ......... 7.15 3.86 4.54 (.94) (.80)
--------- --------- --------- --------- ---------
Total from investment operations ................................... 7.36 4.08 4.62 (.89) (.77)
--------- --------- --------- --------- ---------
Less Distributions
Dividends from investment income ................................ (.26)* (.20) (.11)** (.05) (.04)
Distributions from capital gains ................................ (3.19) (2.58) (2.87) (1.49) (2.98)
In excess of net income ......................................... -- -- (.01) (.01) (.02)
--------- --------- --------- --------- ---------
Total distributions ................................................ (3.45) (2.78) (2.99) (1.55) (3.04)
--------- --------- --------- --------- ---------
Net asset value, end of year ....................................... $ 29.15 $ 25.24 $ 23.94 $ 22.31 $ 24.75
========= ========= ========= ========= =========
Per share market value, end of year ................................ $ 26.19 $ 21.00 $ 20.00 $ 19.00 $ 22.25
========= ========= ========= ========= =========
TOTAL INVESTMENT RETURN - Stockholder Return based on
market price per share 42.58% 19.48% 21.22% -7.86% -15.92%
RATIOS AND SUPPLEMENTAL DATA
Total net assets, end of year
(000's omitted) ................................................. $ 702,597 $ 597,597 $ 573,693 $ 519,722 $ 553,898
Ratio of expenses to average net assets ............................ 0.98% 1.05% 1.25% 1.17% 1.16%
Ratio of net income to average net assets .......................... 0.80% 0.88% 0.36% 0.21% 0.14%
Portfolio turnover rate ............................................ 32.45% 33.40% 29.14% 17.69% 19.50%
Average commission rate paid per share ............................. $ .0504 $ .0500
Shares outstanding, end of year
(000's omitted) ................................................. 24,105 23,679 23,963 23,292 22,379
<FN>
* Includes short-term capital gain in the amount of $.05 per share.
** Includes short-term capital gain in the amount of $.03 per share.
</FN>
</TABLE>
<PAGE>
15 REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
General American Investors
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF
GENERAL AMERICAN INVESTORS COMPANY, INC.
We have audited the accompanying statement of assets and liabilities, including
the statement of investments, of General American Investors Company, Inc. as of
December 31, 1997, and the related statements of operations and changes in net
assets for each of the two years in the period then ended, and financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
General American Investors Company, Inc. at December 31, 1997, the results of
its operations and the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the five years
in the period then ended, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
New York, New York
January 14, 1998
OFFICERS
- --------------------------------------------------------------------------------
SPENCER DAVIDSON
President and Chief
Executive Officer
VICTORIA HAMILTON
Executive Vice-President
and Chief Operating Officer
ANDREW V. VINDIGNI
Vice-President
EUGENE L. DeSTAEBLER, JR.
Vice-President, Administration
PETER P. DONNELLY
Vice-President and 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
www.chasemellon.com
<PAGE>
16 DIRECTORS
- --------------------------------------------------------------------------------
General American Investors
LAWRENCE B. BUTTENWIESER, CHAIRMAN
Rosenman & Colin LLP, Partner
ARTHUR G. ALTSCHUL, JR.
Diaz & Altschul Group, LLC, Co-Chairman
Delta Opportunity Fund, Ltd., Director
Medicis Pharmaceutical Corporation, Director
New York Council for the Humanities, Director
LEWIS B. CULLMAN
Cullman Ventures, Inc., President
Chess-in-the-Schools, Chairman, Board of Directors
Museum of Modern Art, Vice Chairman, International
Council and Honorary Trustee
The New York Botanical Garden, Member,
Board of Managers
SPENCER DAVIDSON
General American Investors Company, Inc.,
President and Chief Executive Officer
Neurosciences Research Foundation, Trustee
GERALD M. EDELMAN
Neurosciences Institute of the Neurosciences
Research Foundation, Director and President
The Scripps Research Institute,
Chairman, Department of Neurobiology
Becton, Dickinson and Company, Director
ANTHONY M. FRANK
Belvedere Capital Partners, Chairman
Financial Security Assurance Holdings Ltd., Director
The Charles Schwab Corporation, Director
Temple-Inland Inc., Director
JOHN D. GORDAN,III
Morgan, Lewis & Bockius LLP, Partner
BILL GREEN
ClientSoft, Inc., Director
Commercial Capital Corp., Director
Energy Answers Corporation, Director
New York City Campaign Finance Board, Member
New York City Housing
Development Corporation, Member and Vice Chair
VICTORIA HAMILTON
General American Investors Company, Inc.,
Executive Vice-President and Chief Operating Officer
BioReliance Corporation, Director
SIDNEY R. KNAFEL
SRK Management Company, Managing Partner
BioReliance Corporation, Chairman
Cellular Communications International, Inc., Director
CoreComm Incorporated, Director
NTL Incorporated, Director
RICHARD R. PIVIROTTO
CBS Inc., Director
General Theological Seminary, Trustee
The Gillette Company, Director
The Greenwich Bank and Trust Company, Director
Greenwich Hospital Corporation, Trustee
Immunomedics, Inc., Director
New York Life Insurance Company, Director
Princeton University, Charter Trustee Emeritus
JOSEPH T. STEWART, JR.
Johnson & Johnson, Executive Consultant
Foundation of the University of Medicine
and Dentistry of New Jersey, Trustee
Liposome Co., Inc., Director
Marine Biological Laboratory, Member, Advisory Council
New School for Social Research, Trustee
RAYMOND S. TROUBH
Becton, Dickinson and Company, Director
Foundation Health Systems, Inc., Director
Olsten Corporation, Director
Time Warner Inc., Director
- --------------------------------------------------------
ARTHUR G. ALTSCHUL, CHAIRMAN EMERITUS
WILLIAM O. BAKER, DIRECTOR EMERITUS
WILLIAM T. GOLDEN, DIRECTOR EMERITUS
<PAGE>
General American Investors Company, Inc.
450 Lexington Avenue, New York, NY 10017
(212) 916-8400 (800) 436-8401
