G E N E R A L
A M E R I C A N
I N V E S T O R S
2 0 0 4
A N N U A L
R E P O R T
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 (unaudited)
2004
2003
Net assets applicable to Common Stock -
December 31
Net investment income
Net realized gain
Net increase in unrealized appreciation
Distributions to Preferred Stockholders
$1,036,393,093
9,253,481
36,774,029
62,361,773
(11,900,000)
Per Common Share-December 31
Net asset value
Market price
Discount from net asset value
$35.49
$31.32
-11.7%
Common Shares outstanding-Dec. 31
Common Stockholders of record-Dec. 31
Market price range* (high-low)
Market volume-shares
29,205,312
4,300
$31.74-$27.88
6,206,400
*Unadjusted for dividend payments.
$986,335,111
1,139,240
28,144,510
200,469,430
(11,075,000)
$33.11
$29.73
-10.2%
29,789,263
4,500
$29.78-$21.95
6,280,700
DIVIDEND SUMMARY (per share) (unaudited)
Record Date
Payment Date
Ordinary
Income
Long-Term
Capital Gain
Total
Common Stock
Nov. 12, 2004
Jan. 31, 2005
Dec. 23, 2004
Mar. 10, 2005
Total from 2004 earnings
$.215327
$.684673
.002
.272
$.217327
$.956673
$.90
.274
$1.174
Nov. 14, 2003
Jan. 26, 2004
Dec. 23, 2003
Feb. 9, 2004
Total from 2003 earnings
$.00761
.013
$.02061
$.49239
.097
$.58939
$.50
.11
$.61
Preferred Stock
Mar. 8, 2004
Jun. 7, 2004
Sep. 7, 2004
Dec. 7, 2004
Total for 2004
Mar. 6, 2003
Jun. 6, 2003
Sep. 8, 2003
Dec. 8, 2003
Total for 2003
Mar. 24, 2004
Jun. 24, 2004
Sep. 24, 2004
Dec. 27, 2004
Mar. 24, 2003
Jun. 23, 2003
Sep. 23, 2003
Dec. 24, 2003
$.083947
.083947
.083947
.083947
$.335788
$.01485
.01485
.01485
.012272
$.056822
$.287928
.287928
.287928
.287928
$1.151712
$.43515
.43515
.43515
.359603
$1.665053
$.371875
.371875
.371875
.371875
$1.4875
$.45
.45
.45
.371875
$1.721875
General American Investors Company, Inc.
450 Lexington Avenue, New York, NY 10017
(212) 916-8400 (800) 436-8401
E-mail: InvestorRelations@gainv.com
www.generalamericaninvestors.com
1
T O T H E S T O C K H O L D E R S
G e n e r a l A m e r i c a n I n v e s t o r s
The U.S. stock market rose for the second consecu-
tive year, gaining 10.8% in the 12 months ended
December 31, 2004, as measured by our
benchmark, the Standard & Poor's 500 Stock Index (in-
cluding income). General American Investors’ net asset
value (NAV) per Common Share (assuming reinvestment
of all dividends) increased 10.4%. The return to our
Common Stockholders was 8.8%, reflecting a widening
in the discount at which our shares trade which, at year
end, was 11.7%.
The table that follows, which compares our returns on
an annualized basis with the S&P 500, illustrates that
over many years General American has produced superi-
or investment results.
Years
Stockholder Return
S&P 500
3
5
10
20
30
40
0.2%
4.6
16.8
15.2
17.3
12.9
3.5%
- 2.3
12.0
13.2
13.7
10.5
During 2004, the Company purchased 1,092,800 of its
Common Shares in the open market at an average
discount to NAV of 10.3%. The Board of Directors has
authorized repurchases of Common Shares when they
are trading at a discount in excess of 8% of NAV.
While the market rallied last year, reflecting stronger
profits than expected and lower interest rates than
feared, most of the gain came in the final two months as
the economy - along with labor markets - appeared to
firm, signs of pricing power at the corporate level
emerged, and merger and acquisition activity accelerat-
ed. Prior thereto, concerns regarding the twin deficits
(budget and trade), the weakened dollar, rising energy
costs, and the struggle in Iraq, among others, appeared
to weigh on investor confidence. Unquestionably, the
deficits impart instability to the financial system. Should
foreign entities lose enthusiasm for holding the dollar-
denominated assets that have come into their possession
as a result of deficit finance, the stock and bond markets
could be adversely affected. While we doubt that global
imbalances can be resolved in the near term, the ongo-
ing orderly decline in the dollar may help in that regard.
It should increase exports and encourage American
households to buy U.S. sourced goods at the same time.
With respect to energy, prices of oil and natural gas,
having risen dramatically, may have peaked. Normalized
future prices, however, could be meaningfully higher
than in the past decade notwithstanding the volatility
that attends, notably, unseasonable weather conditions.
The world's consumption of hydrocarbons is expected to
continue to grow, having shown little sensitivity to high-
er prices. Supply is constrained, meanwhile, by the need
for greater capital investment to sustain output from ma-
ture fields and to explore in areas characterized by
significant geopolitical uncertainty. Therefore, energy se-
curities have become an increasingly significant part of
our portfolio with an accompanying decline in cash
reserves. Corporate cash flows, furthermore, and their
translation into dividends and share buybacks, have risen
in importance as a portfolio metric. Dividends have been
advantaged by the law change reducing the tax on them
to 15% - the same rate as is applicable to long-term capi-
tal gains.
We enter 2005 with economic expansion more securely
in place and anticipate modest, but healthy, growth in
corporate results. Inflation remains subdued, though dol-
lar weakness, historically, has led to its acceleration. Since
roughly 40% of corporate earnings come from abroad,
however, measured advances in prices can be beneficial
thereto. Interest rates on long-dated bonds are not likely
to decline again as they did last year, in the face of the
Fed's seemingly inexorable march toward a 3% or higher
Funds level. As rates increase, the consumer's ability to
sustain spending, based on rising household wealth in
the form of securities and real estate, may prove suspect
in the context of low savings and the threat of
unemployment. However, the combination of
constrained capacity and pricing power should enable
the corporate sector to importantly augment if not
replace the consumer as the chief engine of economic
growth.
Congressional support for the Bush agenda is likely to be
tempered by the record budget deficit and Americans
may become less tolerant of economic disparities, more-
over, in the face of growing income inequality. But the
U.S. should remain the destination of choice for capital
and barring a dollar crisis the economy is likely to keep
growing. In this environment, companies with relatively
high, stable returns and low debt should continue to
prosper, which augers well for General American's future
returns.
We are pleased to announce that, on December 8, 2004,
Craig A. Grassi, who has been an employee since 1991,
was elected Assistant Vice-President of the Company and
Maureen E. LoBello, an employee since 1992, was elected
Assistant Secretary of the Company, both effective
January 1, 2005.
We are also pleased to report that, on January 19, 2005,
Peter E. de Svastich was elected Vice-President of the
Company. Prior to joining the Company in November
2004, Mr. de Svastich had been a senior executive and/or
chief financial officer of several investment management
and financial services organizations over the past 35
years.
Information about the Company, including our
investment objective, operating policies and procedures,
investment results, record of dividend payments, finan-
cial reports and press releases, etc., is available on our
website which can be accessed at
www.generalamericaninvestors.com.
By Order of the Board of Directors,
Spencer Davidson
President and Chief Executive Officer
January 19, 2005
2
T H E C O M P A N Y
G e n e r a l A m e r i c a n I n v e s t o r s
Corporate
Overview
General American Investors,
established in 1927, is one
of the nation’s oldest closed-
end investment companies.
It is an independent organi-
zation, internally managed. For regulatory
purposes, the Company is classified as a
diversified, closed-end management invest-
ment company; it is registered under and
subject to the regulatory provisions of the
Investment Company Act of 1940.
Investment
Policy
The primary objective of the
Company is long-term capi-
tal 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.
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 con-
tinuous investment research program,
which stresses fundamental security analy-
sis, 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, showing a
broad range of experience in business and
financial affairs, is on the inside back cover
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 does not offer its
shares continuously. The
Common Stock is listed on The
New York Stock Exchange (symbol, GAM) and
can be bought or sold with commissions deter-
mined in the same manner as all listed stocks.
Net asset value is computed daily (on an unau-
dited basis) and is furnished upon request. It
is also available on most electronic quotation
services using the symbol "XGAMX." The fig-
ure 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 long
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, occasionally, sell at a
premium over net asset value. The last time
the Company’s shares sold at a premium for a
prolonged period was the year-long period
from March 1992 through April 1993. During
2004, the stock sold at discounts from net
asset value which ranged from 8.2% (March
11) to 12.6% (September 21). At December 31,
the price of the stock was at a discount of
11.7% as compared with a discount of 10.2% a
year earlier.
“GAM Pr B”
Preferred
Stock
On September 24, 2003, the
Company issued and sold in
an underwritten offering
8,000,000 shares of its 5.95%
Cumulative Preferred Stock,
Series B with a liquidation preference of $25
per share ($200,000,000 in the aggregate).
The Preferred Shares are noncallable for 5
years, are rated "aaa" by Moody’s Investors
Service, Inc. and are listed and traded on The
New York Stock Exchange (symbol, GAM Pr B).
3
T H E C O M P A N Y
G e n e r a l A m e r i c a n I n v e s t o r s
The preferred capital is available to leverage
the investment performance of the Common
Stockholders. As is the case for leverage in
general, it may also result in higher market
volatility for the Common Stockholders.
Dividend
Policy
The Company’s dividend
policy is to distribute to stock-
holders 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 to Common Stockholders.
Dividends on shares of Preferred Stock are paid
quarterly. Distributions from capital gains and
ordinary income are allocated proportionately
among holders of shares of Common Stock
and Preferred Stock.
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
1943-2004 (except for the year 1974). (A table
listing dividends paid during the 20-year peri-
od 1985-2004 is shown at the bottom of page
6.) To the extent that shares can be issued,
dividends are paid to Common Stockholders
in additional shares of Common Stock unless
the stockholder specifically requests payment
in cash. Spill-over dividends of very nominal
amounts may be paid in cash only.
Proxy Voting
Policies,
Procedures
and Record
The policies and procedures
used by General American
Investors to determine how to
vote proxies relating to port-
folio securities and the
Company’s proxy voting record for the 12-
month period ended June 30, 2004 are
available: (1) without charge, upon request, by
calling the Company at its toll-free number (1-
800-436-8401), (2) on the Company’s website
at http://www.generalamericaninvestors.com
and (3) on the Securities and Exchange
Commission’s website at http://www.sec.gov.
Direct
Registration
In 2002, the Company imple-
mented direct registration for
its Common Shareholders.
Direct registration, which is an
element of the Investors
Choice Plan administered by our transfer
agent, is a system that allows for book-entry
ownership and the electronic transfer of our
Common Shares. Accordingly, when
Common Shareholders, who hold their shares
directly, receive new shares resulting from a
purchase, transfer or dividend payment, they
will receive a statement showing the credit of
the new shares as well as their Plan account
and certificated share balances. A brochure
which describes the features and benefits of
the Investors Choice Plan, including the abili-
ty of shareholders to deposit certificates with
our transfer agent, can be obtained by calling
American Stock Transfer & Trust Company at
1-800-413-5499, calling the Company at 1-
800-436-8401 or visiting our website:
www.generalamericaninvestors.com - click on
Dividends & Reports, then Report Downloads.
Privacy
Policy and
Practices
General American Investors
collects nonpublic personal in-
formation about its customers
(stockholders) with respect to
their transactions in shares of
the Company’s securities but only for those
stockholders whose shares are registered in
their names. This information includes the
stockholder’s address, tax identification or
Social Security number and dividend elections.
We do not have knowledge of, nor do we
collect personal information about, stockhold-
ers who hold the Company’s securities at
financial institutions such as brokers or banks
in “street name” registration.
We do not disclose any nonpublic personal in-
formation about our stockholders or former
stockholders to anyone, except as permitted by
law.
We restrict access to nonpublic personal infor-
mation about our stockholders to those
employees who need to know that
information to provide services to our
stockholders. We maintain physical, electron-
ic and procedural safeguards that comply with
federal standards to guard our stockholders’
nonpublic personal information.
4
I N V E S T M E N T R E S U L T S ( U N A U D I T E D )
G e n e r a l A m e r i c a n I n v e s t o r s
Total return on
$10,000 investment
20 years ended
December 31, 2004
T he investment return for a Common
Stockholder of General American
Investors (GAM) over the 20 years
ended December 31, 2004 is shown in the
table below and in the accompanying chart.
The return based on GAM’s net asset value
(NAV) per Common Share in comparison to
the change in the Standard & Poor’s 500 Stock
Index (S&P 500) is also displayed. Each illustra-
tion assumes an investment of $10,000 at the
beginning of 1985.
The Stockholder Return is the return a
Common Stockholder 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 GAM Net Asset Value (NAV) Return
is the return on shares of the Company’s
Common Stock based on the NAV per share,
including the reinvestment of all dividends.
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.
GENERAL AMERICAN INVESTORS
STOCKHOLDER RETURN
NET ASSET VALUE RETURN
STANDARD & POOR’S 500
RETURN
CUMULATIVE
INVESTMENT
ANNUAL
RETURN
CUMULATIVE
INVESTMENT
ANNUAL
RETURN
CUMULATIVE
INVESTMENT
ANNUAL
RETURN
1985
$12,481
24.81%
$13,500
35.00%
$13,177
31.77%
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
13,875
11,640
14,114
20,974
21,813
40,354
46,319
38,945
35,884
43,498
51,971
74,101
97,302
1999
135,464
2000
161,337
2001
2002
2003
2004
168,323
122,523
155,616
169,295
11.17
-16.11
21.26
48.60
4.00
85.00
14.78
-15.92
-7.86
21.22
19.48
42.58
31.31
39.22
19.10
4.33
-27.21
27.01
8.79
15,008
15,388
18,091
24,941
26,609
42,865
44,386
43,610
42,415
52,416
62,884
83,038
112,217
153,064
180,065
177,904
136,951
174,475
192,568
11.17
2.53
17.57
37.86
6.69
61.09
3.55
-1.75
-2.74
23.58
19.97
32.05
35.14
36.40
17.64
-1.20
-23.02
27.40
10.37
15,640
16,459
19,180
25,245
24,465
31,902
34,323
37,797
38,277
52,631
64,688
86,249
110,873
134,112
121,921
107,425
83,641
107,529
119,131
18.69
5.24
16.53
31.62
-3.09
30.40
7.59
10.12
1.27
37.50
22.91
33.33
28.55
20.96
-9.09
-11.89
-22.14
28.56
10.79
5
I N V E S T M E N T R E S U L T S ( U N A U D I T E D )
G e n e r a l A m e r i c a n I n v e s t o r s
20-YEAR INVESTMENT RESULTS(cid:13)
ASSUMING AN INITIAL (cid:13)
INVESTMENT OF $10,000
CUMULATIVE VALUE(cid:13)
OF INVESTMENT
$200,000
COMPARATIVE ANNUALIZED INVESTMENT RESULTS
YEARS ENDED
DECEMBER 31, 2004
STOCKHOLDER
RETURN
GAM NET
ASSET VALUE
S&P 500
STOCK INDEX
1 year
5 years
10 years
15 years
20 years
8.8 %
10.4 %
10.8 %
4.6
16.8
14.9
15.2
4.7
16.3
14.6
15.9
-2.3
12.0
10.9
13.2
GAM STOCKHOLDER RETURN
GAM NET ASSET VALUE
S&P 500 STOCK INDEX
1 9 8 5
1 9 8 6
1 9 8 7
1 9 8 8
1 9 8 9
1 9 9 0
1 9 9 1
1 9 9 2
1 9 9 3
1 9 9 4
1 9 9 5
1 9 9 6
1 9 9 7
1 9 9 8
1 9 9 9
2 0 0 0
2 0 0 1
2 0 0 2
2 0 0 3
2 0 0 4
180,000
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000(cid:16)(cid:16)(cid:16)(cid:16)
6
M A J O R S T O C K C H A N G E S * : T H R E E M O N T H S E N D E D D E C E M B E R 3 1 , 2 0 0 4 ( U N A U D I T E D )
G e n e r a l A m e r i c a n I n v e s t o r s
INCREASES
NEW POSITIONS
Telecom Corporation of New Zealand Limited
Unocal Corporation
ADDITIONS
American International Group, Inc.
Apache Corporation
CEMEX, S.A. de C.V. ADR
Total S.A. ADR
4,600,000
500,000
70,000
275,000
150,000
28,000
SHARES OR
PRINCIPAL AMOUNT
SHARES OR
PRINCIPAL AMOUNT HELD
DECEMBER 31, 2004
4,600,000
700,000
(a)
335,000
665,000
1,100,000
275,000
(c)
—
—
$1,314,000
600,000
500,000
625,000
620,000
525,000
310,000
400,000
160,000
475,000
1,275,000
385,000
275,000
133,500
DECREASES
ELIMINATIONS
Baxter International Inc.
Cox Communications, Inc. Class A
825,000
620,000 (b)
REDUCTIONS
American Tower Corporation 9 3/8% due 2/1/09
Annaly Mortgage Management, Inc.
Annuity and Life Re (Holdings), Ltd.
Everest Re Group, Ltd.
Golden West Financial Corporation
Halliburton Company
M&T Bank Corporation
MetLife, Inc.
Montpelier Re Holdings Ltd.
PartnerRe Ltd.
Pfizer Inc
Reinsurance Group of America, Incorporated
Transatlantic Holdings, Inc.
Verisign, Inc.
$1,007,000
175,000
125,000
25,000
15,000
75,000
20,000
35,000
15,000
25,000
50,000
60,000
6,250
100,000
* Excludes transactions in Stocks-Miscellaneous-Other.
(a) Includes shares purchased in prior period and previously carried under Stocks-Miscellaneous-Other.
(b) Includes shares disposed of in conjunction with a tender offer.
(c) Includes shares received in conjunction with a stock split.
D I V I D E N D S P E R C O M M O N S H A R E ( 1 9 8 5 - 2 0 0 4 ) ( U N A U D I T E D )
The following table
shows aggregate
dividends paid per share
on the Company’s
Common Stock for each
year during the 20-year
period 1985-2004.
Amounts shown include
payments made after
year-end attributable to
income and gain in each
respective year.
YEAR
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
DIVIDEND FROM
INCOME#
LONG-TERM
CAPITAL GAINS
$.47
.36
.35
.29
.23
.21
.09
.03
.06
.06
$1.07
2.15
1.54
1.69
1.56
1.65
3.07
2.93
2.34
1.59
YEAR
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
DIVIDEND FROM
INCOME#
LONG-TERM
CAPITAL GAINS
$.13
.25
.21
.47
1.04
2.03
1.01
.03
.02
.217
$2.77
2.71
2.95
4.40
4.05
6.16
1.37
.33
.59
.957
#Includes short-term capital gains per share which amounted to $.12 in 1985, $.02 in 1989, $.03 in 1995, $.05 in 1996, $.62 in 1999,
$1.55 in 2000 and $.64 in 2001.
7
T E N L A R G E S T I N V E S T M E N T H O L D I N G S ( U N A U D I T E D )
G e n e r a l A m e r i c a n I n v e s t o r s
The statement of
investments as of
December 31, 2004,
shown on pages 12, 13
and 14 includes 59
security issues. Listed
here are the ten largest
holdings on that date.
THE HOME DEPOT, INC.
The largest company in home center retailing, Home Depot’s
proven merchandising capabilities and strong financial structure
should provide the basis for continuing growth.
THE TJX COMPANIES, INC.
Through its T.J. Maxx and Marshalls divisions, TJX is a leading
off-price retailer. The continued growth of these divisions, along
with expansion into related U.S. and foreign off-price formats,
provide ongoing opportunities.
DEVON ENERGY CORPORATION
One of the largest independent oil and gas exploration and
production companies, Devon operates both domestically and
internationally. Recent opportunistic acquisitions enhanced
production volumes and improved the company's exploration
profile.
EVEREST RE GROUP, LTD.
The largest independent U.S. property/casualty reinsurer which
generates annual premiums of approximately $4.7 billion and has
a high quality, well-reserved AA balance sheet. This Bermuda
domiciled company has a strong management team that exercises
prudent underwriting discipline and efficient expense control,
resulting in above-average earnings progress.
SHARES
VALUE
1,920,000
$82,060,800
% COMMON
NET ASSETS*
7.9%
2,500,000
62,825,000
6.1
1,600,000
62,272,000
6.0
625,000
55,975,000
5.4
MICROSOFT CORPORATION
The largest software company in the world, Microsoft has pricing
power, substantial financial resources and a commitment to research
and development, all of which provide significant competitive
advantages and support long-term growth.
CEMEX, S.A. de C.V. ADR
Domiciled in Mexico, CEMEX is the third largest cement producer
in the world. With the expansion of its operations into related
construction materials and additional geographic areas, as well as
its focus on production cost containment, the company’s free cash
flow should continue to increase supporting a positive long-term
outlook.
REPUBLIC SERVICES, INC.
A leading provider of non-hazardous solid waste collection and
disposal services in the U.S. The efficient operation of its routes and
facilities combined with appropriate pricing enable Republic Services
to generate significant free cash flow. The high probability of
additional contracts and the expectation that economic activity will
continue to improve should result in higher waste volumes for the
company.
1,525,000
40,748,000
3.9
1,100,000
40,062,000
3.9
1,175,000
39,409,500
3.8
GOLDEN WEST FINANCIAL CORPORATION
A savings and loan holding company with approximately $106
billion in assets headquartered in Oakland, CA. It has a strong,
conservative management with a high level of insider ownership.
Excellent asset quality, tight expense control and efficient capital
management help produce above-average earnings increases.
WAL-MART STORES, INC.
A policy of serving the mass market with everyday low prices,
supported by the lowest cost structure has made Wal-Mart the
world’s largest retailer with ongoing growth opportunities in
the U.S. and overseas.
PFIZER INC
Well established as a leader in the pharmaceutical industry, Pfizer
continues its commitment to research and development and its
ability to effectively market products. Pfizer remains dedicated to
optimizing its corporate structure and is streamlining the company.
620,000
38,080,400
3.7
675,000
35,653,500
3.4
1,275,000
34,284,750 3.3
*Net assets applicable to the Company’s Common Stock.
$491,370,950 47.4%
8
P O R T F O L I O D I V E R S I F I C A T I O N ( U N A U D I T E D )
G e n e r a l A m e r i c a n I n v e s t o r s
INDUSTRY CATEGORY
COST(000)
VALUE(000)
2004
2003
DECEMBER 31, 2004
PERCENT COMMON NET ASSETS*
DECEMBER 31
The diversification of
the Company’s net
assets applicable to its
Common Stock by
industry group as of
December 31, 2004 and
2003 is shown in the
following table.
Finance and Insurance
Banking
Insurance
Other
Retail Trade
Oil and Natural Gas
(Including Services)
Health Care
Pharmaceuticals
Medical Instruments
and Devices
Health Care Services
Communications and
Information Services
Computer Software and Systems
Miscellaneous**
Building and Real Estate
Environmental Control
(Including Services)
Consumer Products and Services
Electronics
Semiconductors
Special Holdings
Short-Term Securities
Total Investments
Liabilities in excess of Other
Assets - Net
Preferred Stock
Net Assets Applicable to
Common Stock
$21,698
80,245
16,846
118,789
68,036
143,024
79,965
10,484
—
90,449
69,016
53,801
43,897
29,122
26,227
28,303
15,451
9,890
8,010
704,015
58,488
$762,503
$103,949
192,006
21,444
317,399
214,426
188,817
110,044
22,352
—
132,396
76,576
57,301
45,363
40,062
39,409
39,094
19,055
9,151
1,449
1,180,498
58,488
1,238,986
(2,593)
(200,000)
10.1%
18.5
2.1
30.7
20.7
18.3
10.6
2.1
—
12.7
7.3
5.5
4.4
3.9
3.8
3.8
1.8
0.9
0.1
113.9
5.6
119.5
(0.2)
(19.3)
9.5%
19.7
2.3
31.5
18.8
5.5
15.8
2.2
2.3
20.3
5.6
1.0
0.7
1.2
3.0
2.8
2.1
2.3
0.2
95.0
25.3
120.3
(0.1)
(20.2)
$1,036,393
100.0%
100.0%
* Net assets applicable to the Company’s Common Stock.
** Securities which have been held for less than one year.
9
S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S
G e n e r a l A m e r i c a n I n v e s t o r s
ASSETS
INVESTMENTS, AT VALUE (NOTE 1a)
Common stocks
DECEMBER 31,
2004
2003
(cost $691,689,451 and $512,775,431, respectively)
$1,167,272,723
$927,510,131
Convertible corporate notes (cost $12,326,060 and
$9,714,002, respectively)
Corporate discount notes
(cost $58,487,897 and $149,931,413, respectively)
U.S. Treasury bills (cost $99,546,882 for 2003)
Total investments (cost $762,503,408 and $771,967,728,
13,225,252
10,250,000
58,487,897
—
149,931,413
99,546,882
respectively)
1,238,985,872
1,187,238,426
CASH, RECEIVABLES AND OTHER ASSETS
Cash (including margin account balance of
$681 for 2004)
Receivable for securities sold
Deposit with broker for securities sold short
Deposit with broker for options written
Dividends, interest and other receivables
Prepaid expenses
Other
TOTAL ASSETS
LIABILITIES
176,980
—
3,070,685
188,519
1,081,136
7,511,301
261,801
54,695
2,731,429
13,684,582
—
2,093,543
6,979,584
321,045
1,251,276,294
1,213,103,304
Payable for securities purchased
Preferred dividend accrued but not yet declared
Securities sold short, at value (proceeds $3,070,685
and $13,684,582, respectively) (note 1a)
Outstanding options written, at value (premiums
received $188,519 for 2004) (note 1a)
Accrued expenses and other liabilities
TOTAL LIABILITIES
411,300
231,389
1,480,264
231,389
3,608,280
15,307,245
123,580
10,508,652
14,883,201
—
9,749,295
26,768,193
5.95% CUMULATIVE PREFERRED STOCK, SERIES B -
8,000,000 shares at a liquidation value of $25 per share (note 2)
200,000,000
200,000,000
NET ASSETS APPLICABLE TO COMMON STOCK - 29,205,312
and 29,789,263 shares, respectively (note 2)
$1,036,393,093
$986,335,111
NET ASSET VALUE PER COMMON SHARE
$35.49
$33.11
NET ASSETS APPLICABLE TO COMMON STOCK
Common Stock, 29,205,312 and 29,789,263 shares at par
value, respectively (note 2)
Additional paid-in capital (note 2)
Undistributed realized gain on investments (note 2)
Undistributed net investment income (note 2)
Unallocated distributions on Preferred Stock
Unrealized appreciation on investments, securities
sold short and options
$29,205,312
521,985,714
7,864,450
1,559,198
(231,389)
$29,789,263
538,582,843
2,951,398
1,594,961
(231,389)
476,009,808
413,648,035
NET ASSETS APPLICABLE TO COMMON STOCK
$1,036,393,093
$986,335,111
(see notes to financial statements)
1 0
S T A T E M E N T O F O P E R A T I O N S
G e n e r a l A m e r i c a n I n v e s t o r s
INCOME
Dividends (net of foreign withholding taxes
of $222,175 in 2004)
Interest
TOTAL INCOME
EXPENSES
Investment research
Administration and operations
Office space and general
Directors’ fees and expenses
Transfer agent, custodian and registrar fees and expenses
Auditing and legal fees
Stockholders’ meeting and reports
Miscellaneous taxes
TOTAL EXPENSES
NET INVESTMENT INCOME
YEAR ENDED DECEMBER 31,
2004
2003
$18,010,297
2,538,401
$7,810,852
4,168,048
20,548,698
11,978,900
7,257,447
2,685,811
535,685
187,539
179,102
172,200
169,197
108,236
6,804,863
2,750,817
554,237
160,213
176,626
188,250
118,874
85,780
11,295,217
10,839,660
9,253,481
1,139,240
REALIZED GAIN AND CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS (NOTES 1f AND 4)
Net realized gain on investments:
Long transactions
Short sale transactions (note 1b)
Option transactions (note 1c)
Net realized gain on investments (long-term)
Net increase in unrealized appreciation
NET GAIN ON INVESTMENTS
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
39,187,387
(2,512,348)
98,990
36,774,029
28,586,216
(441,706)
—
28,144,510
62,361,773
200,469,430
99,135,802
228,613,940
(11,900,000)
(11,075,000)
$96,489,283 $218,678,180
(see notes to financial statements)
1 1
S T A T E M E N T O F C H A N G E S I N N E T A S S E T S
G e n e r a l A m e r i c a n I n v e s t o r s
OPERATIONS
Net investment income
Net realized gain on investments
Net increase in unrealized appreciation
Distributions to Preferred Stockholders:
From net income
From long-term capital gains
Decrease in net assets from Preferred distributions
YEAR ENDED DECEMBER 31,
2004
2003
$9,253,481
36,774,029
62,361,773
$1,139,240
28,144,510
200,469,430
(2,686,304)
(9,213,696)
(11,900,000)
(365,476)
(10,709,524)
(11,075,000)
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
96,489,283
218,678,180
DISTRIBUTIONS TO COMMON STOCKHOLDERS
From net income
From long-term capital gains
DECREASE IN NET ASSETS FROM COMMON DISTRIBUTIONS
(6,602,940)
(22,647,281)
(531,570)
(15,572,788)
(29,250,221)
(16,104,358)
CAPITAL SHARE TRANSACTIONS
Value of Common Shares issued in payment of dividends (note 2)
Cost of Common Shares purchased (note 2)
Underwriting discount and other expenses associated with
the issuance of Preferred Stock (note 2)
DECREASE IN NET ASSETS - CAPITAL TRANSACTIONS
NET INCREASE IN NET ASSETS
NET ASSETS APPLICABLE TO COMMON STOCK
15,781,952
9,724,118
(32,963,032) (28,454,956)
—
(6,700,000)
(17,181,080)
(25,430,838)
50,057,982
177,142,984
BEGINNING OF YEAR
986,335,111
809,192,127
END OF YEAR (including undistributed net investment income of
$1,559,199 and $1,594,961, respectively)
$1,036,393,093 $986,335,111
(see notes to financial statements)
1 2
S T A T E M E N T O F I N V E S T M E N T S D E C E M B E R 3 1 , 2 0 0 4
G e n e r a l A m e r i c a n I n v e s t o r s
BUILDING AND
REAL ESTATE (3.9%)
COMMUNICATIONS AND
INFORMATION SERVICES
(7.2%)
COMMON STOCKS
SHARES OR PRINCIPAL AMOUNT
1,100,000 CEMEX, S.A. de C.V. ADR
(COST $29,121,764)
550,000 American Tower Corporation (a)
550,000 CIENA Corporation (a)
900,000 Cisco Systems, Inc. (a)
150,000 Juniper Networks, Inc. (a)
500,000 Lamar Advertising Company Class A (a)
4,600,000 Telecom Corporation of New Zealand Limited
COMPUTER SOFTWARE
AND SYSTEMS (5.5%)
300,000 EMC Corporation (a)
1,525,000 Microsoft Corporation
623,000 NetIQ Corporation (a)
133,500 VeriSign, Inc. (a)
CONSUMER PRODUCTS
AND SERVICES (3.8%)
350,000 Diageo plc ADR
275,000 Ethan Allen Interiors Inc.
150,000 PepsiCo, Inc.
(COST $67,633,399)
(COST $53,801,539)
(COST $28,303,579)
VALUE (NOTE 1a)
$40,062,000
10,120,000
1,837,000
17,388,000
4,078,500
21,390,000
20,378,000
75,191,500
4,461,000
40,748,000
7,606,830
4,485,600
57,301,430
20,258,000
11,005,500
7,830,000
39,093,500
ELECTRONICS (1.8%)
715,000 Molex Incorporated Class A
(COST $15,450,691)
19,054,750
ENVIRONMENTAL CONTROL
(INCLUDING SERVICES) (3.8%)
1,175,000 Republic Services, Inc.
(COST $26,227,380)
39,409,500
FINANCE AND INSURANCE
(30.7%)
BANKING (10.1%)
368,000 Bank of America Corporation
620,000 Golden West Financial Corporation
310,000 M&T Bank Corporation
205,000 SunTrust Banks, Inc.
INSURANCE (18.5%)
335,000 American International Group, Inc.
500,000 Annuity and Life Re (Holdings), Ltd. (a)
300 Berkshire Hathaway Inc. Class A (a)
625,000 Everest Re Group, Ltd.
400,000 MetLife, Inc.
160,000 Montpelier Re Holdings Ltd.
475,000 PartnerRe Ltd.
385,000 Reinsurance Group of America, Incorporated
275,000 Transatlantic Holdings, Inc.
OTHER (2.1%)
600,000 Annaly Mortgage Management, Inc.
95,194 Central Securities Corporation
850,000 MFA Mortgage Investments, Inc.
(COST $21,697,463)
(COST $80,245,273)
(COST $16,846,447)
(COST $118,789,183)
17,292,320
38,080,400
33,430,400
15,145,400
103,948,520
21,999,450
227,500
26,370,000
55,975,000
16,204,000
6,152,000
29,421,500
18,653,250
17,003,250
192,005,950
11,772,000
2,175,183
7,497,000
21,444,183
317,398,653
1 3
S T A T E M E N T O F I N V E S T M E N T S D E C E M B E R 3 1 , 2 0 0 4 - c o n t i n u e d
G e n e r a l A m e r i c a n I n v e s t o r s
COMMON STOCKS (Continued)
SHARES OR PRINCIPAL AMOUNT
HEALTH CARE (12.7%)
PHARMACEUTICALS (10.6%)
340,000 Alkermes, Inc. (a)
250,000 Biogen Idec Inc. (a)
300,000 Bristol-Myers Squibb Company
75,000 Cytokinetics, Incorporated (a)
270,000 Genaera Corporation (a)
560,000 Genentech, Inc. (a)
375,000 Genta Incorporated (a)
455,000 MedImmune, Inc. (a)
120,000 Millennium Pharmaceuticals, Inc. (a)
1,275,000 Pfizer Inc
MEDICAL INSTRUMENTS AND DEVICES (2.1%)
450,000 Medtronic, Inc.
VALUE (NOTE 1a)
$4,790,600
16,652,500
7,686,000
768,750
923,400
30,486,400
660,000
12,335,050
1,456,800
34,284,750
110,044,250
22,351,500
132,395,750
(COST $79,964,902)
(COST $10,483,716)
(COST $90,448,618)
MISCELLANEOUS (4.4%)
Other (b)
(COST $43,896,672)
45,362,730
OIL AND NATURAL GAS
(INCLUDING SERVICES)
(17.1%)
665,000 Apache Corporation
1,600,000 Devon Energy Corporation
525,000 Halliburton Company
275,000 Total S.A. ADR
700,000 Unocal Corporation
RETAIL TRADE (20.7%)
700,000 Costco Wholesale Corporation
1,920,000 The Home Depot, Inc. (c)
2,500,000 The TJX Companies, Inc.
675,000 Wal-Mart Stores, Inc.
SEMICONDUCTORS (0.9%)
491,500 Brooks Automation, Inc. (a)
197,000 EMCORE Corporation (a)
(COST $132,080,537)
(COST $68,036,225)
(COST $9,890,144)
SPECIAL HOLDINGS
(a)(d)
(NOTE 5) (0.1%)
200,000 Cytokinetics, Incorporated
144,000 Silicon Genesis Corporation
546,000 Standard MEMS, Inc. Series A Convertible Preferred
(COST $8,009,720)
33,629,050
62,272,000
20,601,000
30,206,000
30,268,000
176,976,050
33,887,000
82,060,800
62,825,000
35,653,500
214,426,300
8,463,630
687,530
9,151,160
1,435,000
14,400
—
1,449,400(e)
TOTAL COMMON STOCKS (112.6%)
(COST $691,689,451)
1,167,272,723
CONVERTIBLE CORPORATE NOTES
$1,314,000 American Tower Corporation 9 3/8% due 2/1/09 (COST $1,382,859)
1,384,627
$22,500,000 El Paso Corporation 0% due 2/28/21
(COST $10,943,201)
11,840,625
TOTAL CONVERTIBLE CORPORATE NOTES (1.3%)
(COST $12,326,060)
13,225,252
COMMUNICATIONS AND
INFORMATION SERVICES
(0.1%)
OIL & NATURAL GAS
(INCLUDING SERVICES)
(1.2%)
1 4
S T A T E M E N T O F I N V E S T M E N T S D E C E M B E R 3 1 , 2 0 0 4 - c o n t i n u e d
G e n e r a l A m e r i c a n I n v e s t o r s
SHORT-TERM SECURITIES AND OTHER ASSETS
PRINCIPAL AMOUNT
$19,900,000
18,200,000
12,500,000
8,000,000
American Express Credit Corporation notes due 1/3-1/13/05; 2.09%-2.24%
American General Finance Corporation notes due 1/10-1/20/05; 2.28%-2.31%
General Electric Capital Corporation notes due 1/6-1/25/05; 2.13%-2.28%
Prudential Funding, LLC note due 1/18/05; 2.24%
TOTAL SHORT-TERM SECURITIES (5.6%)
(COST $58,487,897)
(COST $762,503,408)
TOTAL INVESTMENTS (f) (119.5%)
Liabilities in excess of cash, receivables and other assets (-0.2%)
PREFERRED STOCK (-19.3%)
NET ASSETS APPLICABLE TO COMMON STOCK (100%)
VALUE (NOTE 1a)
$19,861,908
18,163,437
12,478,979
7,983,573
58,487,897
1,238,985,872
(2,592,779)
1,236,393,093
(200,000,000)
$1,036,393,093
(a) Non-income producing security.
(b) Securities which have been held for less than one year.
(c) 1,000,000 shares held by custodian in a segregated custodian account as collateral for open short positions.
(d) Restricted security.
(e) Fair value of each holding in the opinion of the directors.
(f) At December 31, 2004: (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 $515,997,743, (3) aggregate gross unrealized depreciation was $39,515,279,
and (4) net unrealized appreciation was $476,482,464.
STATEMENT OF SECURITIES SOLD SHORT DECEMBER 31, 2004
G e n e r a l A m e r i c a n I n v e s t o r s
COMMON STOCKS
Electronic Arts Inc.
(PROCEEDS $3,070,685)
VALUE (NOTE 1a)
$3,608,280
STATEMENT OF OPTIONS WRITTEN DECEMBER 31, 2004
G e n e r a l A m e r i c a n I n v e s t o r s
SHARES
58,500
CONTRACTS
(100 SHARES EACH) COMMON STOCKS/EXPIRATION DATE/EXERCISE PRICE
VALUE (NOTE 1a)
CALL OPTIONS
COMMUNICATIONS AND INFORMATION SERVICES
539
Cox Communications, Inc. Class A/January 05/$32.50
(PREMIUMS RECEIVED $90,021)
$118,580
PUT OPTIONS
OIL & NATURAL GAS (INCLUDING SERVICES)
500
Apache Corporation/January 05/$45
(PREMIUMS RECEIVED $98,498)
TOTAL OPTIONS
(PREMIUMS RECEIVED $188,519)
5,000
_____________
$123,580
_____________
_____________
(see notes to financial statements)
1 5
N O T E S T O F I N A N C I A L S T A T E M E N T S
G e n e r a l A m e r i c a n I n v e s t o r s
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 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.
Certain prior year financial statement items have been reclassified, from Other Comprehensive Income to a reduc-
tion of Expenses and an increase in Net Investment Income, to conform to the current year presentation.
a. SECURITY VALUATION Securities traded on a national securities exchange are valued at the last reported sales
price on the last business day of the period. Securities reported on the NASDAQ national market are valued at the
official closing price on that day. 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 (asked price for open short posi-
tions and options written) on the valuation date. Securities traded primarily in foreign markets are generally valued
at the preceding closing price of such securities on their respective exchanges or markets. If, after the close of the
foreign market, conditions change significantly, the price of certain foreign securities may be adjusted to reflect fair
value as of the time of the valuation of the portfolio. Corporate discount notes are valued at amortized cost, which
approximates market 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. SHORT SALES The Company may make short sales of securities for either speculative or hedging purposes. When
the Company makes a short sale, it borrows the securities sold short from a broker; in addition, the Company places
cash with that broker and securities in a segregated account with the custodian, both as collateral for the short posi-
tion. The Company may be required to pay a fee to borrow the securities and may also be obligated to pay any divi-
dends declared on the borrowed securities. The Company will realize a gain if the security price decreases and a loss
if the security price increases between the date of the short sale and the date on which the Company replaces the
borrowed securities.
c. OPTIONS The Company may purchase and write (sell) put and call options. 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 that expire unexercised are treated by the Company on the expiration date as realized
gains from investments. The difference between the premium received and the amount paid on effecting a closing
purchase transaction, including brokerage commissions, is also treated as a realized gain, or, if the premium is less
than the amount paid for the closing purchase transaction, as a realized loss. If a call option is exercised, the
premium is added to the proceeds from the sale of the underlying security in determining whether the Company has
realized a gain or loss. If a put option is exercised, the premium reduces the cost basis for the securities purchased by
the Company. 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.
d. 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.
e. 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 losses pursuant to these indemnification provisions and expects the risk of loss
thereunder to be remote.
f. 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. 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, of which 29,205,312 shares and 8,000,000 shares, respectively,
were outstanding at December 31, 2004.
On September 23, 2003, the Company redeemed all of its then outstanding 6,000,000 shares of 7.20% Tax-
Advantaged Cumulative Preferred Stock, Series A, at a redemption price of $25.00 per share. The Series A Preferred
Shares were issued originally on June 19,1998.
On September 24, 2003, the Company issued and sold 8,000,000 shares of its 5.95% Cumulative Preferred Stock,
Series B in an underwritten offering. The Preferred Shares are noncallable for 5 years and have a liquidation prefer-
ence of $25.00 per share plus an amount equal to accumulated and unpaid dividends to the date of redemption.
The underwriting discount and other expenses associated with the Preferred Stock offering amounted to $6,700,000
and were charged to paid-in capital.
The Company is required to allocate distributions from long-term capital gains and other types of income propor-
tionately among holders 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.
1 6
N O T E S T O F I N A N C I A L S T A T E M E N T S - c o n t i n u e d
G e n e r a l A m e r i c a n I n v e s t o r s
2. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS - (Continued from bottom of previous page.)
Under the Investment Company Act of 1940, the Company is required to maintain an asset coverage of at least
200% for the Preferred Stock. In addition, pursuant to the Rating Agency Guidelines, the Company is required to
maintain a certain discounted asset coverage for its portfolio that equals or exceeds the Basic Maintenance Amount
under the guidelines established by Moody’s Investors Service, Inc. 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 (whether or not earned or declared). In addition,
the Company’s failure to meet the foregoing asset coverage requirements could restrict its 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, generally, vote together with the holders of Common Stock as a single class.
At all times, holders of Preferred Stock will elect two members of the Company’s Board of Directors and the holders
of Preferred and Common Stock, voting as a single class, will 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 subclassifica-
tion as a closed-end investment company or changes in its fundamental investment policies.
The Company classifies its Preferred Stock pursuant to the requirements of EITF D-98, Classification and
Measurement of Redeemable Securities, which require that preferred stock for which its redemption is outside of the
company’s control should be presented outside of net assets in the statement of assets and liabilities.
Transactions in Common Stock during 2004 and 2003 were as follows:
SHARES
AMOUNT
2004
2003
2004
2003
Shares issued in payment of dividends
(includes 508,849 and 334,507 shares
issued from treasury, respectively)
Increase in paid-in capital
Total increase
Shares purchased (at an average
discount from net asset value of
10.3% and 9.7%, respectively)
Decrease in paid-in capital
Total decrease
Net decrease
508,849
334,507
$508,849
15,273,103
15,781,952
$334,507
9,389,611
9,724,118
1,092,800
1,106,600
(1,092,800)
(31,870,232)
(32,963,032)
($17,181,080)
(1,106,600)
(27,348,356)
(28,454,956)
($18,730,838)
At December 31, 2004, the Company held in its treasury 2,026,251 shares of Common Stock with an
aggregate cost in the amount of $49,417,395.
Distributions for tax and book purposes are substantially the same.
As of December 31, 2004, the components of distributable earnings on a tax basis were as follows:
Undistributed ordinary income
Undistributed long-term gains
Unrealized appreciation
$43,964
7,897,333
476,009,808
$483,951,105
3. OFFICERS’ COMPENSATION
The aggregate compensation paid by the Company during 2004 and 2003 to its officers amounted to $4,872,000 and
$4,994,000, respectively.
4. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities and securities sold short (other than short-term securities and options) during 2004
amounted to on long transactions $317,603,409 and $175,264,718, respectively, and on short sale transactions
$16,196,930 and $3,070,685, respectively.
5. RESTRICTED SECURITIES
Cytokinetics, Incorporated
Silicon Genesis Corporation
Standard MEMS, Inc. Series A Convertible Preferred
Total
DATE
ACQUIRED
3/21/03
2/16/01
12/17/99
COST
$2,000,000
3,006,720
3,003,000
$8,009,720
VALUE
(NOTE 1a)
$1,435,000
14,400
—
$1,449,400
6. PENSION BENEFIT PLANS
The Company has both a funded (Qualified) and an unfunded (Supplemental) noncontributory defined benefit pen-
sion plans that cover substantially all of its employees. The plans provide defined benefits based on years of service
and final average salary with an offset for a portion of social security covered compensation.
The Company also has funded and unfunded contributory defined contribution thrift plans that cover
substantially all employees. The aggregate cost of such plans for 2004 and 2003 was $626,307 and $768,050, respec-
tively. The unfunded liability included in other liabilities at December 31, 2004 and 2003 was $2,541,127 and
$2,131,642, respectively.
1 7
N O T E S T O F I N A N C I A L S T A T E M E N T S - c o n t i n u e d
G e n e r a l A m e r i c a n I n v e s t o r s
6. PENSION BENEFIT PLANS - (Continued from bottom of previous page.)
OBLIGATIONS AND FUNDED STATUS OF DEFINED BENEFIT PLANS:
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of year
Service cost
Interest cost
Benefits Paid
Actuarial (gains)/losses
Plan amendments
Benefit obligation at end of year
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Benefits paid
Fair value of plan assets at end of year
FUNDED STATUS
Unrecognized actuarial (gains)/losses
Unrecognized prior service cost
Net amount recognized
AMOUNTS RECOGNIZED IN THE STATEMENT OF
ASSETS AND LIABILITIES CONSIST OF:
Prepaid benefit cost
Accrued benefit liability
Net amount recognized
Accumulated Benefit Obligation
Projected Benefit Obligation
Fair value of plan assets
WEIGHTED-AVERAGE ASSUMPTIONS AS OF
END OF FISCAL YEAR
Discount rate
Expected return on plan assets
Salary scale assumption
COMPONENTS OF NET PERIODIC BENEFIT COST
Service cost
Interest cost
Expected return on plan assets
Amortization of:
Prior service cost
Recognized net actuarial loss (gain)
Net periodic benefit cost
2004
2003
QUALIFIED
SUPPLEMENTAL
QUALIFIED
SUPPLEMENTAL
PLAN
PLAN
TOTAL
PLAN
PLAN
TOTAL
$6,793,866
$2,429,480
$9,223,346
$6,271,793
$2,194,060
$8,465,853
151,059
420,507
(427,238)
395,684
153,737
91,900
153,455
242,959
573,962
(127,773)
(555,011)
144,698
(1,124)
540,382
152,613
126,315
416,776
(435,820)
414,802
—
80,159
149,129
(127,773)
133,905
—
206,474
565,905
(563,593)
548,707
—
7,487,615
2,690,636
10,178,251
6,793,866
2,429,480
9,223,346
13,029,458
2,023,352
—
(427,238)
14,625,572
7,137,957
206,316
134,662
—
—
13,029,458
10,005,449
2,023,352
3,459,829
127,773
(127,773)
127,773
(555,011)
—
(435,820)
—
14,625,572
13,029,458
—
—
127,773
(127,773)
—
(2,690,636)
4,447,321
6,235,592
(2,429,480)
(352,908)
99,896
(146,592)
234,558
753,634
(35,320)
(522,477)
129,585
10,005,449
3,459,829
127,773
(563,593)
13,029,458
3,806,112
231,157
94,265
$7,478,935
($2,943,648)
$4,535,287
$6,953,906
($2,822,372)
$4,131,534
$7,478,935
—
$7,478,935
—
($2,943,648)
$7,478,935
(2,943,648)
($2,943,648)
$4,535,287
$6,953,906
—
$6,953,906
—
($2,822,372)
($2,822,372)
$6,882,288
$2,295,334
2,690,636
$9,177,622
10,178,251
$6,264,441
$2,046,700
6,793,866
2,429,480
—
14,625,572
13,029,458
—
5.75%
N/A
4.25%
6.25%
8.75%
4.25%
$91,900
153,455
$242,959
573,962
$126,315
416,776
6.25%
N/A
4.25%
$80,159
149,129
7,487,615
14,625,572
5.75%
8.75%
4.25%
$151,059
420,507
(1,080,350)
$6,953,906
(2,822,372)
$4,131,534
$8,311,141
9,223,346
13,029,458
$206,474
565,905
—
(1,080,350)
(1,031,094)
—
(1,031,094)
(16,245)
—
28,565
(24,871)
12,320
(24,871)
(16,244)
—
($525,029)
$249,049
($275,980)
($504,247)
28,564
(37,294)
$220,558
12,320
(37,294)
($283,689)
WEIGHTED-AVERAGE ASSUMPTIONS FOR DETERMINING NET PERIODIC BENEFIT
COST FOR YEARS ENDED DECEMBER 31
Discount rate
Expected long-term rate of return on plan assets
Rate of salary increase
6.25%
8.75%
4.25%
6.25%
N/A
4.25%
6.75%
8.75%
4.25%
6.75%
N/A
4.25%
The Company’s Pension Committee, based on input from management and an outside consultant, reviews and determines the reasonableness of plan assumptions
and the allocation of plan assets.
PLAN ASSETS
The Company’s qualified pension plan asset allocations
at December 31, 2004 and 2003, by asset category, are as follows:
ASSET CATEGORY
Equity securities
Debt securities
Total
December 31
2004
96.6%
3.4
2003
96.5%
3.5
100.0%
100.0%
CASH FLOWS
Expected Company Contributions for 2005
to Plan Participants/Total Contributions
Estimated Future Benefit Payments:
2005
2006
2007
2008
2009
2010-2014
Qualified
Plan
Supplemental
Plan
Total
—
$192,644
$192,644
$454,107
$192,644
$646,751
456,027
459,003
462,980
462,946
214,642
249,293
290,589
317,475
670,669
708,296
753,569
780,421
2,297,373
1,910,776
4,208,149
7. CALL AND PUT OPTIONS
Transactions in written covered call and collateralized put options during the year ended December 31, 2004 were as follows:
Options outstanding, December 31, 2003
Options written
Options terminated in closing purchase transactions
Options exercised
Options outstanding, December 31,2004
Covered Calls
Collateralized Puts
Contracts
—
2,245
(971)
(735)
539
Premiums
—
$444,998
(220,471)
(134,506)
$90,021
Contracts
—
750
(250)
—
500
Premiums
—
$172,746
(74,248)
—
$98,498
1 8
N O T E S T O F I N A N C I A L S T A T E M E N T S - c o n t i n u e d
G e n e r a l A m e r i c a n I n v e s t o r s
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, 2004.
This information has
been derived from
information contained
in the financial
statements and market
price data for the
Company’s shares.
8. OPERATING LEASE COMMITMENT
In July 1992, the Company entered into an operating lease agreement for 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 $296,000 for 2004. Minimum rental commitments under the operating lease are
approximately $505,000 per annum in 2005 through 2007.
In January 2003, the Company extended a sublease agreement (originally entered into in March 1996) which
expires in 2007 and provides for future rental receipts. Minimum rental receipts under the sublease are
approximately $254,000 per annum in 2005 through 2007. The Company will also receive its proportionate share
of operating expenses and real property taxes under the sublease.
9 SUBSEQUENT EVENT
On January 19, 2005, the Board of Directors declared on the Common Stock a dividend of $7,929,239 from net
long-term capital gains and a dividend of $58,303 from ordinary income. These dividends are payable in shares of
Common Stock, or in cash upon request, on March 10, 2005.
F I N A N C I A L H I G H L I G H T S
G e n e r a l A m e r i c a n I n v e s t o r s
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year
Net investment income
Net gain (loss) on securities - realized
2004
2003
2002
2001
2000
$33.11
.32
$26.48
.03
$35.14
.19
$39.91
.41
$41.74
.53
and unrealized
3.48
7.72
(7.88)
(.66)
6.12
Distributions on Preferred Stock:
Dividends from investment income
Distributions from capital gains
(.09)
(.32)
(.41)
Total from investment operations 3.39
(.12)
(.01)
(.23)
(.35)
(.36)
(.35)
7.39 (8.04)
(.07)(a)
(.29)
(.36)
(.61)
(.11)(b)
(.29)
(.40)
6.25
Less distributions on Common Stock:
Dividends from investment income
Distributions from capital gains
(.23)
(.78)
(1.01)
(.02)
(.52)
(.54)
(.21)(c)
(.41)
(.62)
(.88)(d)
(3.28)
(4.16)
(2.30)(e)
(5.78)
(8.08)
Capital Stock transaction -
effect of Preferred Stock offering
Net asset value, end of year
Per share market value, end of year
TOTAL INVESTMENT RETURN - Stockholder
—
$35.49
$31.32
(.22)
$33.11
$29.73
—
$26.48
$23.85
—
$35.14
$33.47
—
$39.91
$36.00
Return, based on market price per share
8.79%
27.01%
(27.21)%
4.33%
19.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets applicable to Common Stock,
end of year (000’s omitted)
$1,036,393
$986,335
$809,192 $1,097,530 $1,155,039
Ratio of expenses to average net assets
applicable to Common Stock
1.15%
1.23%
0.92%
0.97%
1.05%
Ratio of net income to average net assets
applicable to Common Stock
Portfolio turnover rate
0.94%
16.71%
0.13%
18.62%
0.61%
22.67%
1.15%
23.81%
1.24%
40.61%
PREFERRED STOCK
Liquidation value, end of year
(000’s omitted)
Asset coverage
Liquidation preference per share
Market value per share
$200,000
618%
$200,000
593%
$150,000
639%
$150,000
832%
$150,000
870%
$25.00
$24.97
$25.00
$25.04
$25.00
$25.85
$25.00
$25.90
$25.00
$24.25
(a) Includes short-term capital gain in the amount of $.04 per share.
(b) Includes short-term capital gain in the amount of $.09 per share.
(c) Includes short-term capital gain in the amount of $.19 per share.
(d) Includes short-term capital gain in the amount of $.51 per share.
(e) Includes short-term capital gain in the amount of $1.82 per share.
1 9
R E P O R T O F I N D E P E N D E N T R E G I S T E R E D P U B L I C A C C O U N T I N G F I R M
G e n e r a l A m e r i c a n I n v e s t o r s
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 statements
of investments, securities sold short and options
written, of General American Investors Company,
Inc. as of December 31, 2004, 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 finan-
cial 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 the
standards of the Public Company Accounting
Oversight Board (United States). 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, 2004, 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 evalu-
ating the overall financial statement pre-
sentation. 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 posi-
tion of General American Investors Company,
Inc. at December 31, 2004, the results of its oper-
ations 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 U.S.
generally accepted accounting principles.
New York, New York
January 19, 2005
2 0
O F F I C E R S
G e n e r a l A m e r i c a n I n v e s t o r s
NAME (AGE)
EMPLOYEE SINCE
PRINCIPAL OCCUPATION
DURING PAST 5 YEARS
NAME (AGE)
EMPLOYEE SINCE
PRINCIPAL OCCUPATION
DURING PAST 5 YEARS
Spencer Davidson (62)
1994
President and Chief
Executive Officer of the
Company since 1995
Peter P. Donnelly (56)
1974
Vice-President of the
Company since 1991
securities trader
Andrew V. Vindigni (45)
Vice-President of the
Diane G. Radosti (52)
Treasurer of the
1988
Company since 1995
security analyst (financial
services industry)
1980
Company since 1990
Principal Accounting
Officer since 2003
Eugene L. DeStaebler, Jr. (66) Vice-President, Administration
Carole Anne Clementi (58) Secretary of the Company
1975
of the Company since 1978
Principal Financial
Officer since 2002;
Chief Compliance Officer
since 2004
1982
Peter E. de Svastich (61)
2004
Vice-President of the Company
since 2005
administration, finance and
operations
Partner & CFO of Decision
Capital LLC (2002-2004);
Partner & CFO of Hawkins
McEntee LLC (2000-2001)
Craig A. Grassi (36)
1991
Maureen E. LoBello (54)
1992
since 1994
shareholder relations
and office management
Assistant Vice-President of
the Company since 2005;
employee since 1991
information technology
Assistant Secretary of the
Company since 2005;
employee since 1992
benefits administration
All officers serve for a term of one year and are elected by the Board of Directors at the time of its annual organization
meeting on the second Wednesday in April. The address for each officer is the Company’s office. Other directorships
and affiliations for Mr. Davidson are shown in the listing of Directors on the inside back cover.
S E R V I C E O R G A N I Z A T I O N S
COUNSEL
Sullivan & Cromwell LLP
INDEPENDENT AUDITORS
Ernst & Young LLP
CUSTODIAN
State Street Bank and Trust
Company
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038
1-800-413-5499
www.amstock.com
In addition to purchases of the Company’s Common Stock as set forth in Note 2, on page 16,
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.
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 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 be obtained by calling us at 1-800-436-8401.
The Company’s Chief Executive Officer has submitted to the New York Stock Exchange the
required annual certification.
D I R E C T O R S
G e n e r a l A m e r i c a n I n v e s t o r s
NAME (AGE)
DIRECTOR SINCE
PRINCIPAL OCCUPATION
DURING PAST 5 YEARS
INDEPENDENT (“DISINTERESTED”) DIRECTORS
Lawrence B. Buttenwieser (73)
CHAIRMAN OF THE
BOARD OF DIRECTORS
1967
Counsel 2002-present
Partner 1966-2002
Katten Muchin Zavis Rosenman
and predecessor firms (lawyers)
Arthur G. Altschul, Jr. (40)
1995
Lewis B. Cullman (86)
1961
Managing Member
Diaz & Altschul Capital
Management, LLC
(investments and securities)
Managing Member
Cullman Ventures LLC
(formerly Cullman Ventures, Inc.)
Gerald M. Edelman (75)
1976
John D. Gordan, III (59)
1986
Sidney R. Knafel (74)
1994
Richard R. Pivirotto (74)
1971
Member and Chairman of the
Department of Neurobiology
The Scripps Research Institute
Partner
Morgan, Lewis & Bockius LLP
(lawyers)
Managing Partner
SRK Management Company
(private investment company)
President
Richard R. Pivirotto Co., Inc.
(self-employed consultant)
D. Ellen Shuman (49)
2004
Vice President and
Chief Investment Officer
Carnegie Corporation of New York
Joseph T. Stewart, Jr. (75)
1987
Corporate director and trustee
Executive Consultant
Johnson & Johnson (1990-1999)
Raymond S. Troubh (78)
1989
Financial Consultant
OTHER DIRECTORSHIPS AND AFFILIATIONS
Delta Opportunity Fund, Ltd., Director
Medicis Pharmaceutical Corporation, Director
Neurosciences Research Foundation, Trustee
Chess-in-the-Schools, Chairman, Board of Trustees
Metropolitan Museum of Art, Honorary Trustee
Museum of Modern Art, Vice Chairman,
International Council and Honorary Trustee
Neurosciences Research Foundation, Vice Chairman,
Board of Trustees
The New York Botanical Garden, Senior Vice
Chairman, Board of Managers
Neurosciences Institute of the
Neurosciences Research Foundation,
Director and President
IGENE Biotechnology, Inc., Director
Insight Communications Company, Inc.,
Chairman, Board of Directors
Associated Community Bancorp, Inc., Director
General Theological Seminary, Trustee
Greenwich Hospital Corporation, Trustee
Immunomedics, Inc., Director
New York Life Insurance Company, Director
Princeton University, Charter Trustee Emeritus
Bowdoin College, Trustee
The Investment Fund for Foundations, Director
Meristar Hospitality Corporation, Director
Edna McConnell Clark Foundation,
Investment Advisor
Foundation of the University of
Medicine and Dentistry of New Jersey, Trustee
Marine Biological Laboratory, Member,
Advisory Council
United States Merchant Marine Academy, Trustee,
Board of Advisors
United States Merchant Marine Academy Foundation,
Trustee
Diamond Offshore Drilling, Inc., Director
Gentiva Health Services, Inc., Director
Petrie Stores Liquidating Trust, Trustee
Portland General Electric Company, Director
Triarc Companies, Inc., Director
WHX Corporation, Director
INSIDE (“INTERESTED”) DIRECTOR
Spencer Davidson (62)
1995
President and Chief Executive Officer
General American Investors
Company, Inc. since 1995
Medicis Pharmaceutical Corporation, Director
Neurosciences Research Foundation, Trustee
All Directors serve for a term of one year and are elected by Stockholders at the time of the annual meeting on the second Wednesday in
April. The address for each Director is the Company’s office.
William O. Baker, DIRECTOR EMERITUS
William T. Golden, DIRECTOR EMERITUS
General American Investors Company, Inc.
450 Lexington Avenue, New York, NY 10017
(212) 916-8400 (800) 436-8401
E-mail: InvestorRelations@gainv.com
www.generalamericaninvestors.com