march2010quarterly.htm - Generated by SEC Publisher for SEC Filing

 

 


For the three months ended March 31, 2010, the net asset value per Common Share increased 5.3%, while the investment return to our stockholders increased by 5.6%. By comparison, our benchmark, the Standard & Poor’s 500 Stock Index (including income) increased 5.4%. For the twelve months ended March 31, 2010, the return on the net asset value per Common Share increased by 56.7%, and the return to our stockholders increased by 63.9%; these compare with an increase of 49.8% for the S&P 500. During both periods, the discount at which our shares traded continued to fluctuate and on March 31, 2010, it was 14.5%.

As detailed in the accompanying financial statements (unaudited), as of March 31, 2010, the net assets applicable to the Company’s Common Stock were $895,562,192 equal to $28.97 per Common Share.

The increase in net assets resulting from operations for the three months ended March 31, 2010 was $43,008,355. During this period, the net realized gain on investments sold was $6,086,139, and the increase in net unrealized appreciation was $38,618,273. Net investment income for the three months was $1,131,939, and distributions to Preferred Stockholders amounted to $2,827,996.

During the three months, 508,003 shares of the Company’s Common Stock were repurchased for $12,122,287 at an average discount from net asset value of 14.9%.

Equity markets continued to advance in the last quarter as signs of sustainable economic growth became more evident. General American’s portfolio kept pace with the market, supported by our holdings of value-based retailers.

The recovery is likely to be moderate, by historic measures, owing to stubbornly high rates of unemployment and the erosion of that portion of wealth represented by home equity. While it facilitates continuing monetary ease, the recent strength of the dollar could have a dampening effect on exports; on a longer-term basis, moreover, the fiscal and trade deficits remain on unsustainable trajectories.

Despite the headwinds, as enumerated, the case for equities over time remains intact. To the extent that they represent businesses that are well-managed, with the flexibility to adjust to challenges and respond to opportunities, equities remain our asset class of choice.

Information about the Company, including our investment objectives, operating policies and procedures, investment results, record of dividend and distribution payments, financial reports and press releases, is on our website and has been updated through March 31, 2010. It can be accessed on the internet at www.generalamericaninvestors.com.

By Order of the Board of Directors,

GENERAL AMERICAN INVESTORS COMPANY, INC.

Spencer Davidson Chairman of the Board President and Chief Executive Officer

April 14, 2010



      Value 
Shares  COMMON STOCKS    (note 1a) 
AEROSPACE/DEFENSE (3.2%)     
215,000  Textron Inc.    $4,564,450 
325,000  United Technologies Corporation    23,923,250 
    (COST $33,409,026)  28,487,700 
BUILDING AND REAL ESTATE (2.1%)     
1,872,000  CEMEX, S.A. de C.V. ADR (a)  (COST $23,385,068)  19,113,120 
COMMUNICATIONS AND INFORMATION SERVICES (6.2%)     
960,000  Cisco Systems, Inc. (a)(b)    24,988,800 
78,000  Leap Wireless International, Inc. (a)    1,276,080 
700,000  QUALCOMM Incorporated    29,372,000 
    (COST $41,318,833)  55,636,880 
COMPUTER SOFTWARE AND SYSTEMS (8.7%)     
1,290,000  Dell Inc. (a)    19,375,800 
570,000  Microsoft Corporation    16,693,875 
168,100  NetEase.com, Inc. (a)    5,970,912 
67,100  Nintendo Co., Ltd.    22,575,836 
450,000  Teradata Corporation (a)    13,000,500 
    (COST $78,338,915)  77,616,923 
CONSUMER PRODUCTS AND SERVICES (11.2%)     
350,000  Diageo plc ADR    23,607,500 
325,000  Heineken N. V.    16,610,733 
466,100  Hewitt Associates, Inc. Class A (a)    18,541,458 
450,000  Nestle S.A.    22,966,133 
285,000  PepsiCo, Inc.    18,855,600 
    (COST $78,085,518)  100,581,424 
ENVIRONMENTAL CONTROL (INCLUDING SERVICES) (5.5%)     
949,000  Republic Services, Inc.    27,539,980 
630,000  Waste Management, Inc.    21,690,900 
    (COST $38,960,134)  49,230,880 
FINANCE AND INSURANCE (21.3%)     
BANKING (2.4%)       
500,000  Bond Street Holdings LLC (a) (c)    10,000,000 
140,000  M&T Bank Corporation    11,113,200 
    (COST $10,713,356)  21,113,200 
INSURANCE (12.5%)       
315,000  Arch Capital Group Ltd. (a)    24,018,750 
250,000  Everest Re Group, Ltd.    20,232,500 
750,000  Fidelity National Financial, Inc.    11,115,000 
37,500  Forethought Financial Group, Inc. Class A with Warrants (a)(d)    7,875,000 
280,000  MetLife, Inc.    12,135,200 
275,000  PartnerRe Ltd.    21,923,000 
83,000  Transatlantic Holdings, Inc.    4,382,400 
200,000  The Travelers Companies, Inc.    10,788,000 
    (COST $58,086,700)  112,469,850 
OTHER (6.4%)       
325,000  American Express Company    13,409,500 
110  Berkshire Hathaway Inc. Class A (a)    13,398,000 
1,666,667  Epoch Holding Corporation    18,816,670 
635,000  Nelnet, Inc.    11,785,600 
    (COST $30,301,088)  57,409,770 
    (COST $99,101,144)  190,992,820 




      Value 
Shares  COMMON STOCKS (continued)    (note 1a) 
HEALTH CARE / PHARMACEUTICALS (4.7%)     
347,100  Cephalon, Inc. (a)    $23,526,438 
529,900  Cytokinetics, Incorporated (a)    1,695,680 
119,500  Gilead Sciences, Inc. (a)    5,433,665 
655,808  Pfizer Inc.    11,247,107 
195,344  Poniard Pharmaceuticals, Inc. (a)    224,646 
    (COST $39,602,800)  42,127,536 
MACHINERY AND EQUIPMENT (2.9%)     
1,200,000  ABB Ltd. ADR  (COST $13,364,456)  26,208,000 
METALS (2.2%)       
254,200  Alpha Natural Resources, Inc. (a)    12,682,038 
150,000  Nucor Corporation    6,807,000 
    (COST $19,939,605)  19,489,038 
MISCELLANEOUS (5.0%)     
  Other (e)  (COST $38,670,419)  44,424,874 
OIL AND NATURAL GAS (INCLUDING SERVICES) (12.6%)     
295,478  Apache Corporation    29,991,017 
100,000  Devon Energy Corporation    6,443,000 
800,000  Halliburton Company    24,104,000 
325,000  McDermott International, Inc. (a)    8,749,000 
2,150,000  Weatherford International Ltd. (a)    34,099,000 
200,000  XTO Energy Inc.    9.436,000 
    (COST $82,773,479)  112,822,017 
RETAIL TRADE (17.1%)       
575,000  Costco Wholesale Corporation    34,333,250 
400,000  J.C. Penney Company, Inc.    12,868,000 
1,775,000  The TJX Companies, Inc.    75,473,000 
550,000  Wal-Mart Stores, Inc.    30,580,000 
    (COST $61,858,262)  153,254,250 
SEMICONDUCTORS (2.8%)     
700,000  ASML Holding N.V.  (COST $17,340,380)  24,780,000 
TECHNOLOGY (3.6%)       
750,000  International Game Technology    13,837,500 
1,900,000  Xerox Corporation    18,525,000 
    (COST $34,368,474)  32,362,500 
TRANSPORTATION (0.9%)     
236,100  Alexander & Baldwin, Inc.  (COST $11,005,032)  7,803,105 
TOTAL COMMON STOCKS (110.0%)  (COST $711,521,545)  984,931,067 
Principal Amount  CORPORATE DEBT (f)     
CONSUMER PRODUCTS AND SERVICES (1.1%)     
$9,600,000  Smithfield Foods, Inc.     
  7.75% due 5/15/2013  (COST $7,827,836)  9,864,096 
TECHNOLOGY (1.0%)       
$10,000,000  VeriFone Holdings, Inc.     
  1.375% due 6/15/2012  (COST $6,152,290)  9,100,000 
TOTAL CORPORATE DEBT (2.1%)  (COST $13,980,126)  18,964,096 

 


Shares or      Value 
Principal Amount  SHORT-TERM SECURITIES AND OTHER ASSETS    (note 1a) 
$50,000,000  U. S. Treasury Bills due 5/27-6/24/10; .100%-.115%  (COST $49,989,328)  $49,989,328 
  30,871,813  SSgA Prime Money Market Fund  (COST $30,871,813)  30,871,813 
TOTAL SHORT-TERM SECURITIES (9.0%)  (COST $80,861,141)  80,861,141 
TOTAL INVESTMENTS (g) (121.1%)  (COST $806,362,812)  1,084,756,304 
Cash, receivables and other assets less liabilities (0.1%)    923,063 
PREFERRED STOCK (-21.2%)    (190,117,175) 
NET ASSETS APPLICABLE TO COMMON STOCK (100%)    $895,562,192 
(a) Non-income producing security.     
(b) 130,500 shares held by custodian in a segregated custodial account as collateral for short positions or options, if any.   
(c) Level 3 fair value measurement, restricted security acquired 11/4/09, note 8.     
(d) Level 3 fair value measurement, restricted security acquired 11/3/09, note 8.     
(e) Securities which have been held for less than one year, not previously disclosed, and not restricted.   
(f) Level 2 fair value measurement, note 8.     
(g) At March 31, 2010: (1) the cost of investments for Federal income tax purposes was the same as the cost for financial reporting purposes, 
   (2) aggregate gross unrealized appreciation was $317,126,247, (3) aggregate gross unrealized depreciation was $38,732,755, and (4) net unrealized 
   appreciation was $278,393,492.     


Contracts    Value 
(100 shares each)  COMMON STOCK/EXPIRATION DATE/EXERCISE PRICE (note 1a) 
 COMMUNICATIONS AND INFORMATION SERVICES  
1,305 Cisco Systems, Inc./July 10/$27.00   (PREMIUM DEPOSITED WITH BROKERS $135,333)  $103,095 


The diversification of the Company’s net assets applicable to its Common Stock by industry group as of March 31, 2010 is shown in the following table.

INDUSTRY CATEGORY  COST(000)  VALUE(000)  PERCENT COMMON NET ASSETS*
Finance and Insurance     
Banking  $10,713  $21,113  2.4%
Insurance  58,087  112,470  12.5  
Other  30,301  57,410  6.4 
  99,101  190,993  21.3  
Retail Trade  61,858  153,254  17.1  
Oil and Natural Gas (Including Services)  82,774  112,822  12.6 
Consumer Products and Services  85,913  110,445  12.3 
Computer Software and Systems  78,339  77,617  8.7
Communications and Information Services  41,319  55,637  6.2
Environmental Control (Including Services)  38,960  49,231  5.5
Miscellaneous**  38,670  44,425  5.0
Health Care/Pharmaceuticals  39,603  42,127  4.7
Technology  40,521  41,463  4.6
Aerospace/Defense  33,409  28,488  3.2
Machinery and Equipment  13,365  26,208  2.9
Semiconductors  17,340  24,780  2.8
Metals  19,940  19,489  2.2
Building and Real Estate  23,385  19,113  2.1
Transportation  11,005  7,803  0.9
  725,502  1,003,895  112.1  
Short-Term Securities  80,861  80,861  9.0
Total Investments  $806,363  1,084,756  121.1 
Other Assets and Liabilities - Net    923  0.1
Preferred Stock    (190,117)  (21.2) 
Net Assets Applicable to Common Stock    $895,562  100.0%
* Net Assets applicable to the Company’s Common Stock.     
** Securities which have been held for less than one year, not previously disclosed, and not restricted.  
(see notes to financial statements)     

 


    SHARES OR  SHARES OR 
    PRINCIPAL  PRINCIPAL 
INCREASES  AMOUNT TRANSACTED  AMOUNT HELD 
NEW POSITION     
  J.C. Penney Company, Inc.  400,000  400,000   (b)
ADDITIONS     
  Cephalon, Inc.  10,000  347,100 
  Fidelity National Financial, Inc.  25,000  750,000 
  McDermott International, Inc  75,000  325,000 
  NetEase.com, Inc.  30,000  168,100 
DECREASES     
ELIMINATIONS     
  The Allstate Corporation  175,000  —   
  AXIS Capital Holdings Limited  275,000  —   
  ASML Holding N.V. Corporate Bond, 5.75% due 6/13/2017  $8,000,000  —   
  The Boeing Company  300,000  —   
  MetroPCS Communications, Inc.  135,500  —   
REDUCTIONS     
  Berkshire Hathaway Inc. Class A  20  110 
  Heineken N.V.  25,000  325,000 
  M&T Bank Corporation  10,000  140,000 
  Nelnet, Inc.  15,000  635,000 
  Teradata Corporation  115,000  450,000 
(a)  Excludes transactions in Common Stocks - Miscellaneous - Other.     
(b)  Shares purchased in prior period and previously carried under Common Stocks - Miscellaneous - Other.   
(see notes to financial statements)     




ASSETS       
INVESTMENTS, AT VALUE (NOTE 1a)     
     Common stocks (cost $711,521,545)    $984,931,067 
     Corporate debt (cost $13,980,126)    18,964,096 
     U. S. Treasury Bills (cost $49,989,328)    49,989,328 
     Money market fund (cost $30,871,813)    30,871,813 
          Total investments (cost $806,362,812)    1,084,756,304 
RECEIVABLES AND OTHER ASSETS     
     Receivable for securities sold  $1,280,925   
     Premiums deposited with brokers for options written  135,333   
     Dividends, interest and other receivables  2,546,446   
     Qualified pension plan asset, net excess funded (note 6)  3,851,154   
     Prepaid expenses and other assets  2,792,613  10,606,471 
TOTAL ASSETS    1,095,362,775 
LIABILITIES       
     Payable for securities purchased  1,422,895   
     Accrued preferred stock dividend not yet declared  219,958   
     Outstanding options written, at value (premiums deposited with brokers $135,333)(note 1a)  103,095   
     Accrued supplemental pension plan liability (note 6)  3,377,347   
     Accrued supplemental thrift plan liability (note 6)  2,602,064   
     Accrued expenses and other liabilities  1,958,049   
TOTAL LIABILITIES    9,683,408 
5.95% CUMULATIVE PREFERRED STOCK, SERIES B -     
   7,604,687 shares at a liquidation value of $25 per share (note 2)    190,117,175 
NET ASSETS APPLICABLE TO COMMON STOCK - 30,917,212 shares (note 2)    $895,562,192 
NET ASSET VALUE PER COMMON SHARE    $28.97 
NET ASSETS APPLICABLE TO COMMON STOCK       
     Common Stock, 30,917,212 shares at par value (note 2)  $30,917,212   
     Additional paid-in capital (note 2)  584,038,867   
     Undistributed realized gain on investments  6,086,139   
     Undistributed net investment income  3,654,601   
     Accumulated other comprehensive income (note 6)  (4,512,406)   
     Unallocated distributions on Preferred Stock  (3,047,951)   
     Unrealized appreciation on investments and options  278,425,730   
NET ASSETS APPLICABLE TO COMMON STOCK    $895,562,192 
(see notes to financial statements)     




INCOME       
     Dividends  $3,804,877   
     Interest  912,231  $4,717,108 
EXPENSES       
     Investment research  2,055,917   
     Administration and operations  790,450   
     Office space and general  420,943   
     Auditing and legal fees  100,000   
     Directors’ fees and expenses  67,687   
     Miscellaneous taxes  52,997   
     Transfer agent, custodian and registrar fees and expenses  50,000   
     Stockholders’ meeting and reports  47,175  3,585,169 
NET INVESTMENT INCOME    1,131,939 
REALIZED GAIN AND INCREASE IN UNREALIZED APPRECIATION ON INVESTMENTS (NOTES 1, 4 AND 5)       
     Net realized gain on investments:     
        Securities transactions (long-term, except for $929,917)  6,039,916   
        Written option transactions  46,223   
  6,086,139   
     Net increase in unrealized appreciation on investments:     
        Securities  38,624,758   
        Written options  (6,485)   
  38,618,273   
NET GAIN ON INVESTMENTS    44,704,412 
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS    (2,827,996) 
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS    $43,008,355 


  Three Months Ended  Year Ended 
OPERATIONS  March 31, 2010    December 31, 2009 
     Net investment income  $1,131,939  $3,400,143 
     Net realized gain on investments  6,086,139  15,219,812 
     Net increase in unrealized appreciation  38,618,273  204,253,481 
  45,836,351  222,873,436 
     Distributions to Preferred Stockholders:     
         From net investment income  —  (3,389,107) 
         From short-term capital gains  —  (1,654,369) 
         From long-term capital gains  —  (6,107,907) 
         Return of capital  —  (333,668) 
         Unallocated distributions  (2,827,996)  11,047 
         Decrease in net assets from Preferred distributions  (2,827,996)  (11,474,004) 
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS  43,008,355  211,399,432 
OTHER COMPREHENSIVE INCOME (Adjustment to apply FAS 158; Note 6)  352,752  1,911,451 
DISTRIBUTIONS TO COMMON STOCKHOLDERS       
     From net investment income  —  (3,248,669) 
     From short-term capital gains  —  (1,585,814) 
     From long-term capital gains  —  (5,854,806) 
     Return of capital  —  (319,841) 
DECREASE IN NET ASSETS FROM COMMON DISTRIBUTIONS  —  (11,009,130) 
CAPITAL SHARE TRANSACTIONS (NOTE 2)       
     Value of Common Shares issued in payment of dividends and distributions  —  6,430,088 
     Cost of Common Shares purchased  (12,122,287)  (19,553,159) 
     Benefit to Common Shareholders resulting from Preferred Shares purchased  —  546,889 
DECREASE IN NET ASSETS - CAPITAL TRANSACTIONS  (12,122,287)  (12,576,182) 
NET INCREASE IN NET ASSETS  31,238,820  189,725,571 
NET ASSETS APPLICABLE TO COMMON STOCK       
BEGINNING OF PERIOD  864,323,372  674,597,801 
END OF PERIOD (including undistributed net investment income of $3,654,601 and     
     $2,522,662, respectively)  $895,562,192  $864,323,372 
(see notes to financial statements)     



 

The following table shows per share operating performance data, total investment return, ratios and supplemental data for the three months ended March 31, 2010 and for each year in the five-year period ended December 31, 2009. This information has been derived from information contained in the financial statements and market price data for the Company’s shares.

  Three Months           
  Ended           
  March 31, 2010  Year Ended December 31,
  (Unaudited)  2009    2008    2007    2006    2005 
PER SHARE OPERATING PERFORMANCE             
     Net asset value, beginning of period  $27.50  $21.09  $38.10  $40.54  $39.00  $35.49 
        Net investment income  .04  .11  .42  .31  .34  .19 
        Net gain (loss) on investments -             
         realized and unrealized  1.51  6.94  (16.15)  3.39  4.72  5.85 
        Other comprehensive income  .01  .07  (.25)  .02  .03  — 
     Distributions on Preferred Stock:             
        Dividends from net investment income  —  (.11)  (.11)  (.02)  (.04)  (.03) 
        Distributions from net short-term capital gains  —  (.05)  —  (.03)  (.01)  (.08) 
        Distributions from net long-term capital gains  —  (.19)  (.27)  (.36)  (.36)  (.30) 
        Distributions from return of capital  —  (.01)  —  —  —  — 
        Unallocated  (.09)  —  —  —  —  — 
  (.09)  (.36)  (.38)  (.41)  (.41)  (.41) 
     Total from investment operations  1.47  6.76  (16.36)  3.31  4.68  5.63 
     Distributions on Common Stock:             
        Dividends from net investment income  —  (.10)  (.19)  (.33)  (.29)  (.15) 
        Distributions from net short-term capital gains  —  (.05)  —  (.38)  (.04)  (.44) 
        Distributions from net long-term capital gains  —  (.19)  (.46)  (5.04)  (2.81)  (1.53) 
        Distributions from return of capital  —  (.01)  —  —  —  — 
  —  (.35)  (.65)  (5.75)  (3.14)  (2.12) 
     Net asset value, end of period  $28.97  $27.50  $21.09  $38.10  $40.54  $39.00 
     Per share market value, end of period  $24.78  $23.46  $17.40  $34.70  $37.12  $34.54 
TOTAL INVESTMENT RETURN - Stockholder             
   return, based on market price per share  5.63%*  36.86%  (48.20)%  8.72%  16.78%  17.40% 
RATIOS AND SUPPLEMENTAL DATA             
     Net assets applicable to Common Stock,             
        end of period (000’s omitted)  $895,562   $864,232 $674,598 $1,202,923   $1,199,453   $1,132,942
     Ratio of expenses to average net assets             
        applicable to Common Stock  1.67%**  1.93%  0.87%  1.11%  1.06%  1.25% 
     Ratio of net income to average net assets             
        applicable to Common Stock  0.53%**  0.46%  1.31%  0.78%  0.86%  0.51% 
     Portfolio turnover rate  2.17%*  24.95%  25.52%  31.91%  19.10%  20.41% 
PREFERRED STOCK             
     Liquidation value, end of period (000’s omitted)  $190,117   $190,117  $199,617  $200,000  $200,000  $200,000 
     Asset coverage  571%  555%  438%  701%  700%  666% 
     Liquidation preference per share  $25.00  $25.00  $25.00  $25.00  $25.00  $25.00 
     Market value per share  $24.82  $24.53  $21.90  $21.99  $24.44  $24.07 
*Not annualized             
**Annualized             




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 preparation of financial statements in conformity with accounting principles generally accepted in the United States requires man- 
agement 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 Equity securities traded on a national securities exchange are valued at the last reported sales price on the 
     last business day of the period. Equity securities reported on the NASDAQ national market are valued at the official closing price on 
     that day. Listed and NASDAQ equity 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 (asked price for options written) on the valuation date. Equity securities traded pri- 
     marily in foreign markets are valued at the closing price of such securities on their respective exchanges or markets. Corporate debt 
     securities, domestic and foreign, are generally traded in the over-the-counter market rather than on a securities exchange. The 
     Company utilizes the latest bid prices provided by independent dealers and information with respect to transactions in such securi- 
     ties to determine current market value. If, after the close of foreign markets, conditions change significantly, the price of certain for- 
     eign securities may be adjusted to reflect fair value as of the time of the valuation of the portfolio. Investments in money market funds 
     are valued at their net asset value. Special holdings (restricted securities) and other securities for which quotations are not readily 
     available are valued at fair value determined in good faith pursuant to procedures established by and under the general supervision 
     of the Board of Directors 
     b. OPTIONS The Company may purchase and write (sell) put and call options. The Company purchases put options or writes call 
     options to hedge the value of portfolio investments while it purchases call options and writes put options to obtain equity market 
     exposure. The risk associated with purchasing an option is that the Company pays a premium whether or not the option is exercised. 
     Additionally, the Company bears the risk of loss of the premium and a change in market value should the counterparty not perform 
     under the contract. Put and call options purchased are accounted for in the same manner as portfolio securities. Premiums received 
     from writing options are reported as a liability on the Statement of Assets and Liabilities. Those that expire unexercised are treated 
     by the Company on the expiration date as realized gains on written option transactions in the Statement of Operations. The differ- 
     ence between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commis- 
     sions, is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a real- 
     ized loss on written option transactions in the Statement of Operations. If a call option is exercised, the premium is added to the pro- 
     ceeds from the sale of the underlying security in determining whether the Company has realized a gain or loss on investments in the 
     Statement of Operations. If a put option is exercised, the premium reduces the cost basis for the securities purchased by the Company 
     and is parenthetically disclosed under cost of investments on the Statement of Assets and Liabilities. The Company as writer of an 
     option bears the market risk of an unfavorable change in the price of the security underlying the written option. See Note 5 for writ- 
     ten option activity. 
     c. SECURITY TRANSACTIONS AND INVESTMENT INCOME Security transactions are recorded as of the trade date. Dividend income and 
     distributions to stockholders are recorded as of the ex-dividend dates. Interest income, adjusted for amortization of discount and pre- 
     mium on investments, is earned from settlement date and is recognized on the accrual basis. Cost of short-term investments repre- 
     sents amortized cost. 
     d. FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS Portfolio securities and other assets and liabilities denominated in foreign 
     currencies are translated into U.S. dollars based on the exchange rate of such currencies versus U.S. dollars on the date of valuation. 
     Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at the 
     exchange rate in effect on the transaction date. Events may impact the availability or reliability of foreign exchange rates used to 
     convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using proce- 
     dures established and approved by the Company’s Board of Directors. The Company does not separately report the effect of changes 
     in foreign exchange rates from changes in market prices on securities held. Such changes are included in net realized and unrealized 
     gain or loss from investments on the Statement of Operations. 
          Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade 
     and settlement dates on security transactions and the difference between the recorded amounts of dividends, interest, and foreign 
     withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains 
     and losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in secu- 
     rities held at the end of the reporting period. 
          Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. 
    companies as a result of, among other factors, the possibility of political or economic instability or the level of governmental super- 
     vision and regulation of foreign securities markets. 
     e. DIVIDENDS AND DISTRIBUTIONS The Company expects to pay dividends of net investment income and distributions of net realized 
     capital and currency gains, if any, annually to common shareholders and quarterly to preferred shareholders. Dividends and distri- 
     butions to common and preferred shareholders, which are determined in accordance with Federal income tax regulations are record- 
     ed on the ex-dividend date. Distributions for tax and book purposes are substantially the same. Permanent book/tax differences relat- 
     ing to income and gains are reclassified to paid-in capital as they arise. 
     f. 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. As of and during the period ended March 31, 2010, the Company did not have any liabilities for any unrec- 
     ognized tax positions. The Company recognizes interest and penalties, if any, related to unrecognized tax positions as income tax 
     expense in the Statement of Operations. During the period, the Company did not incur any interest or penalties. 
     g. CONTINGENT LIABILITIES Amounts related to contingent liabilities are accrued if it is probable that a liability has been incurred and 
     an amount is reasonably estimable. Management evaluates whether there are incremental legal or other costs directly associated with 
     the ultimate resolution of a matter that are reasonably estimable and, if so, they are included in the accrual. 
     h. INDEMNIFICATIONS In the ordinary course of business, the Company enters into contracts that contain a variety of indemnifications. 
     The Company’s maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or loss- 
     es pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote. 
     i. OTHER As customary in the investment company industry, security transactions are recorded as of the trade date. Interest income, 
     adjusted for amortization of discount and premium on investments, is earned from settlement date and is recognized on the accrual 
     basis. Cost of short-term investments represents amortized cost. 
 2. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS - The authorized capital stock of the Company consists of 50,000,000 shares of 
Common Stock, $1.00 par value, and 10,000,000 shares of Preferred Stock, $1.00 par value. With respect to the Common Stock, 
30,917,212 shares were issued and outstanding; 8,000,000 Preferred Shares were originally issued and 7,604,687 were outstanding on 
March 31, 2010. 




2. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS - (Continued from bottom of previous page.) 
On September 24, 2003, the Company issued and sold 8,000,000 shares of its 5.95% Cumulative Preferred Stock, Series B in an under- 
written offering. The Preferred Shares were noncallable for the 5 year period ended September 24, 2008 and have a liquidation prefer- 
ence of $25.00 per share plus accumulated and unpaid dividends to the date of redemption. On December 10, 2008, the Board of 
Directors authorized the repurchase of 1 million Preferred Shares in the open market at prices below $25.00 per share. A total of 380,013 
Preferred Shares were repurchased at an average cost per share of $23.56 during the year ended December 31, 2009. The average dis- 
count of $1.44 per Preferred Share, $546,889 in the aggregate, was credited to additional paid-in capital of Common Stock. 
The Company is required to allocate distributions from long-term capital gains and other types of income proportionately among hold- 
ers of shares of Common Stock and Preferred Stock. To the extent that dividends on the shares of Preferred Stock are not paid from 
long-term capital gains, they will be paid from ordinary income or net short-term capital gains or will represent a return of capital. 
Under the Investment Company Act of 1940, the Company is required to maintain an asset coverage of at least 200% of the Preferred 
Stock. In addition, pursuant to Moody’s Investor Service, Inc. Rating Agency Guidelines, the Company is required to maintain a cer- 
tain discounted asset coverage for its portfolio that equals or exceeds a Basic Maintenance Amount. The Company has met these 
requirements since the issuance of the Preferred Stock. If the Company fails to meet these requirements in the future and does not cure 
such failure, the Company may be required to redeem, in whole or in part, shares of Preferred Stock at a redemption price of $25.00 per 
share plus accumulated and unpaid dividends. In addition, failure to meet the foregoing asset coverage requirements could restrict the 
Company’s ability to pay dividends on shares of Common Stock and could lead to sales of portfolio securities at inopportune times. 
The holders of Preferred Stock have voting rights equivalent to those of the holders of Common Stock (one vote per share) and, gen- 
erally, vote together with the holders of Common Stock as a single class. 
Holders of Preferred Stock elect two members of the Company’s Board of Directors and the holders of Preferred and Common Stock, 
voting as a single class, elect the remaining directors. If the Company fails to pay dividends on the Preferred Stock in an amount equal 
to two full years’ dividends, the holders of Preferred Stock will have the right to elect a majority of the directors. In addition, the 
Investment Company Act of 1940 requires that approval of the holders of a majority of any outstanding Preferred Shares, 
voting separately as a class, would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Stock 
and (b) take any action requiring a vote of security holders, including, among other things, changes in the Company’s subclassification 
as a closed-end investment company or changes in its fundamental investment policies. 
The Company presents its Preferred Stock, for which its redemption is outside of the Company’s control, outside of the net assets appli- 
cable to Common Stock in the Statement of Assets and Liabilities. 
Transactions in Common Stock during the three months ended March 31, 2010 and the year ended December 31, 2009 were as follows: 

  Shares   Amount 
  2010    2009  2010  2009 
Shares issued in payment of dividends and distributions           
   (includes 281,281 shares issued from treasury)  —    281,281  —  $281,281 
Increase in paid-in capital        —  6,148,807 
   Total increase        —  6,430,088 
Shares purchased (average discount from NAV of 14.9% and           
   13.6%, respectively)  508,003    836,938  ($508,003)  (836,938) 
Decrease in paid-in capital        (11,614,284)  (18,716,221) 
   Total decrease        (12,122,287)  (19,553,159) 
Net decrease        ($12,122,287)  ($13,123,071) 

At March 31, 2010, the Company held in its treasury 1,063,660 shares of Common Stock with an aggregate cost in the amount of 
$25,476,509. 
3. OFFICERS’ COMPENSATION - The aggregate compensation paid and accrued by the Company during the three months ended March 31, 
2010 to its officers (identified on back cover) amounted to $1,756,000. 
4. PURCHASES AND SALES OF SECURITIES - Purchases and sales of securities (other than short-term securities and options) for the three 
months ended March 31, 2010 amounted to $21,554,416 and $67,098,073, on long transactions, respectively. 
5. WRITTEN OPTIONS - Transactions in written covered call and collateralized put options during the three months ended March 31, 
2010 were as follows: 

  Covered Call  Collateralized Put 
  Contracts  Premiums  Contracts  Premiums 
Options outstanding, December 31, 2009  —  —  250  $46,223 
Options written  1,305  $135,333  —  — 
Options expired  —  —  250  (46,223) 
Options outstanding, March 31, 2010  1,305  $135,333  0  $0 

6. BENEFIT PLANS - The Company has funded (qualified) and unfunded (supplemental) noncontributory defined benefit pension plans 
that cover its employees. The plans provide defined benefits based on years of service and final average salary with an offset for a por- 
tion of social security covered compensation. The components of the net periodic benefit cost (income) of the plans for the three months 
ended March 31, 2010 were:   
Service cost  $99,937
Interest cost  198,087
Expected return on plan assets  (283,815)
Amortization of prior service cost  11,502
Recognized net actuarial loss  50,797
Net periodic benefit cost  $76,508




6. BENEFIT PLANS - (Continued from bottom of previous page.) 
The Company also has funded (qualified) and unfunded (supplemental) defined contribution thrift plans that are available to its employ- 
ees. The aggregate cost of such plans for the three months ended March 31, 2010 was $177,055. The qualified thrift plan acquired 8,100 
shares of the Company’s Common Stock during the three months ended March 31, 2010 and held 524,786 shares of the Company’s 
Common Stock at March 31, 2010. 
The Company recognizes the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in the 
Statement of Assets and Liabilities and recognizes changes in funded status in the year in which the changes occur through other com- 
prehensive income. 
7. OPERATING LEASE COMMITMENT - In September 2007, the Company entered into an operating lease agreement for office space which 
expires in February 2018 and provided for future rental payments in the aggregate amount of approximately $10,755,000, net of con- 
struction credits. The lease agreement contains clauses whereby the Company receives free rent for a specified number of months and 
credit towards construction of office improvements, and incurs escalations annually relating to operating costs and real property taxes 
and to annual rent charges beginning in February 2013. The Company has the option to renew the lease after February 2018 for five 
years at market rates. Rental expense approximated $281,600 for the three months ended March 31, 2010. Minimum rental commit- 
ments under the operating lease are approximately $1,075,000 per annum in 2011 through 2012, $1,183,000 in 2013 through 2017, and 
$99,000 in 2018. 
8. FAIR VALUE MEASUREMENTS - Various data inputs are used in determining the value of the Company’s investments. These inputs are 
summarized in a hierarchy consisting of the three broad levels listed below: 
Level 1 - quoted prices in active markets for identical securities (including money market funds which are valued using amortized cost 
and which transact at net asset value, typically $1 per share), 
Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.), and 
Level 3 - significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments). 
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those 
securities. The following is a summary of the inputs used to value the Company’s net assets as of March 31, 2010: 

Assets  Level 1  Level 2  Level 3  Total 
Common stocks  $967,056,067  —  $17,875,000  $984,931,067 
Corporate debt  —  $18,964,096  —  18,964,096 
U. S. Treasury Bills  49,989,328      49,989,328 
Money market fund  30,871,813  —  —  30,871,813 
Total  $1,047,917,208  $18,964,096  $17,875,000  $1,084,756,304 
Liabilities         
Options written  ($103,095)  —  —  ($103,095) 

The aggregate value of Level 3 portfolio investments changed during the three months ended March 31, 2010 as follows: 
Change in Portfolio Valuations using Significant Unobservable Inputs (Level 3)   
     Fair Value at December 31, 2009  $16,850,000 
       Included in net change in unrealized appreciation on investments  1,025,000 
     Fair Value at March 31, 2010  $17,875,000 
     The amount of net unrealized gain included in the results of operations attributable to   
       Level 3 assets held at March 31, 2010 and reported within the caption   
       Net change in unrealized appreciation/depreciation in the Statement of Operations:  $1,025,000 

9. LITIGATION - The Company is subject to a legal action arising from a construction worker’s personal injury that is covered under 
the terms of its insurance policies. Defense and legal costs are being funded by the insurer; damages are unspecified at this time. No 
liabilities or expenses have been incurred by the Company to date. 
10. SUBSEQUENT EVENTS - Subsequent events have been evaluated through April 21, 2010, the date the financial statements were 
available to be issued. There are no events to report subsequent to March 31, 2010. 


Purchases of the Company’s Common Stock as set forth in Note 2 on page 9, may be made at such times, at such prices, in such amounts and in 
such manner as the Board of Directors may deem advisable. 
The policies and procedures used by the Company to determine how to vote proxies relating to portfolio securities and the Company’s proxy voting 
record for the twelve-month period ended June 30, 2009 are available: (1) without charge, upon request, by calling us at our toll-free telephone num- 
ber (1-800-436-8401), (2) on the Company’s website at www.generalamericaninvestors.com and (3) on the Securities and Exchange Commission’s 
website at www.sec.gov. 
In addition to distributing financial statements as of the end of each quarter, General American Investors files a Quarterly Schedule of Portfolio 
Holdings (Form N-Q) with the Securities and Exchange Commission (“SEC”) as of the end of the first and third calendar quarters. The Company’s 
Forms N-Q are available at www.generalamericaninvestors.com and on the SEC’s website: www.sec.gov. Also, Forms N-Q may be reviewed and 
copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the SEC’s Public Reference Room may be obtained 
by calling 1-800-SEC-0330. A copy of the Company’s Form N-Q may also be obtained by calling us at 1-800-436-8401. 
On April 30, 2009, the Company submitted a CEO annual certification to the New York Stock Exchange (“NYSE”) on which the Company’s prin- 
cipal executive officer certified that he was not aware, as of that date, of any violation by the Company of the NYSE’s Corporate Governance list- 
ing standards. In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and related SEC rules, the Company’s principal executive 
and principal financial officer made quarterly certifications, included in filings with the SEC on Forms N-CSR and N-Q relating to, among other 
things, the Company’s disclosure controls and procedures and internal control over financial reporting, as applicable. 



DIRECTORS
Spencer Davidson, Chairman
Sidney R. Knafel, Lead Independent Director
Arthur G. Altschul, Jr.        Betsy F. Gotbaum 
Rodney B. Berens         Daniel M. Neidich 
Lewis B. Cullman         D. Ellen Shuman 
Gerald M. Edelman         Raymond S. Troubh 
John D. Gordan, III     
OFFICERS
Spencer Davidson, President & Chief Executive Officer 
Andrew V. Vindigni, Senior Vice-President 
Sally A. Lynch, Vice-President   
Michael W. Robinson, Vice-President   
   Eugene S. Stark, Vice-President, Administration &
  Chief Compliance Officer   
Jesse R. Stuart, Vice-President   
Diane G. Radosti, Treasurer   
Carole Anne Clementi, Secretary   
Craig A. Grassi, Assistant Vice-President   
Maureen E. LoBello, Assistant Secretary   
SERVICE COMPANIES
COUNSEL    TRANSFER AGENT AND REGISTRAR 
Sullivan & Cromwell LLP  American Stock Transfer & Trust 
     Company   
INDEPENDENT AUDITORS  59 Maiden Lane 
 Ernst & Young LLP    New York, NY 10038 
    1-800-413-5499   
CUSTODIAN www.amstock.com 
State Street Bank and      
   Trust Company
RESULTS OF THE ANNUAL MEETING
OF STOCKHOLDERS
The votes cast by stockholders at the Company’s annual meeting held 
on April 14, 2010 were as follows:     
    FOR  WITHHELD 
Election of Directors:     
Rodney B. Berens    31,479,235  1,165,494 
Lewis B. Cullman    31,042,019  1,602,709 
Spencer Davidson    31,442,657  1,202,072 
Gerald M. Edelman    31,081,249  1,563,480 
John D. Gordan, III    31,453,708  1,191,021 
Betsy F. Gotbaum    31,120,789  1,523,939 
Sidney R. Knafel    31,202,868  1,441,860 
Daniel M. Neidich    28,702,944  3,941,784 
D. Ellen Shuman    31,362,280  1,282,449 
Elected by holders of Preferred Stock only:   
Arthur G. Altschul, Jr.  6,824,055  135,329 
Raymond S. Troubh  6,806,343  153,041 
Ratification of the selection of Ernst & Young LLP as auditors of the 
Company for the year 2010:     
For - 31,624,356;  Against - 784,985;  Abstain - 235,383