UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
| Investment Company Act file number: 811-00041 | ||
| GENERAL AMERICAN INVESTORS COMPANY, INC. | ||
| (Exact name of registrant as specified in charter) | ||
| 530 Fifth Avenue, 26th Floor, New York, New York 10036 | ||
| (Address of principal executive offices) (Zip code) |
Eugene S. Stark
General American Investors Company, Inc.
530 Fifth Avenue
26th Floor
New York, New York 10036
(Name and address of agent for service)
Copy to:
William G. Farrar, Esq.
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
Registrant's telephone number, including area code: 212-916-8400
Date of fiscal year end: December 31
Date of reporting period:
Item 1. Reports to Stockholders.
|
TO THE STOCKHOLDERS |
|
|
F
or the six months ended June 30, 2025, return as measured based upon net asset value (NAV) per common share, including reinvestment of dividends and distributions, was 10.95% while the investment return to our stockholders (based upon market price per share), also including reinvestment of dividends and distributions, was 10.40%. By comparison, the return for our benchmark, the Standard and Poor’s 500 Stock Index (including income), was 6.20% during this period. For the twelve months ended June 30, 2025, return on net asset value was 15.77% and return to our stockholders was 23.02% which compares to the return of the S&P 500 Stock Index of 15.16%. During both time periods, the discount at which our shares traded continued to fluctuate and on June 30, 2025 it was 12.15%.
As detailed in the accompanying financial statements (unaudited), as of June 30, 2025, the net assets applicable to the Company’s Common Stock were $1,485,083,433 equal to $63.79 per Common Share.
The increase in net assets resulting from operations for the six months ended June 30, 2025 was $144,729,425. During this period, the net realized gain on investments was $82,218,327 and the increase in net unrealized appreciation was $62,214,781. Net investment income for the six months was $5,949,971. Distributions to preferred and common shareholders amounted to $5,653,654 and 5,859,980, respectively. During the six months, the Company also repurchased 188,651 of its shares at a cost of $9,774,849, an average discount to net asset value of 13.0%.
A tumultuous first half of 2025, marked by a significant decline in returns for the indexes during the first four months of the year, was followed by a near full recovery for large-cap equities, with recent new all-time highs for the S&P 500 and Nasdaq 100. In many ways, it was a correction to an unforced error. “Liberation Day,” with its outsized tariff rates, was met with stock and bond market realities that forced a realignment in U.S. trade policy, accompanied by requisite delays for implementation and negotiations. Each successive deadline has been extended as talks progressed. Short-term economic data failed to confirm the combined market fears that prevailed in April of rising inflation and a cliff-like economic decline -- stagflation. Whether this paradigm continues is the subject of much debate with new deadlines around the corner. It is a world marked by significant uncertainty, yet, at least for the United States, remarkable for its economic resilience thus far.
Economic data, particularly consumer and business survey results, suggest that all is not well. Consumer confidence, which has rebounded from its low set early in the second quarter, remains below the level at the start of the year. Although inflation expectations have eased, they too remain elevated. Businesses outside those driving the AI spending boom have been carefully managing capital investments and defensively realigning their supply chains, leading to more margin protection efforts and fewer revenue enhancements. Both of these are anti-growth. The ratio of leading to coincident economic indicators continues its descent begun over a year ago, suggesting that growth is slowing and at a modestly faster pace. The issue for investors is how much of the policy uncertainty will evaporate over time, providing stability and resumed economic growth. Although economic uncertainty is multifaceted, it is essential to distinguish its components. Tariffs and on-shoring are one element, but tax policy and regulatory policies are others. The first half of 2025 was all about the former. The second half might be about the latter. Both of these, despite some misgivings about the long-term effects of tax policy and its impact on the federal budget deficit, are likely to be expansionary. Looser monetary policy could be a catalyst, though it appears unnecessary at the moment, but certainly within the realm of possibility.
The markets have been forecasting rate cuts for months. But, if one looks at the historical premium to inflation that Fed Funds rates have had with a broader lens, it runs between 100 to 200 basis points above, which suggests, given a core inflation rate of 2.7%, an appropriate range for the Fed Fund’s rate is between 3.7% and 4.7%, or about the current range. If inflation begins to reflect tariff-induced price adjustments, even one-off increases, inflation on a reported basis may have seen its low for the year. Much will depend on the interaction of tariff and tax policy and economic activity.
Technically, with a significant amount of cash on the sidelines in money market funds and Treasury Bills, the recovery in markets might have been well telegraphed as funds flowed into equities following the price correction. However, the stock markets remain as rich in valuation terms as they were at the start of the year. On most metrics, market valuations sit near all-time highs. Earnings have generally held up, although profit margins have declined slightly overall. Supportive to earnings has been the significant depreciation in the U.S. dollar. Some of this can also be attributed to substantial retail and supply chain inventory builds in anticipation of tariffs, which led to a shortfall in the anticipated Gross Domestic Product (GDP) growth in the first quarter, as trade deficits dragged the reported figure into negative territory. As some tariffs have taken effect, the pronounced impact on growth diminished, likely providing a firmer second-quarter GDP report. This should help equities meet analyst expectations for the quarter, with the wildcard being corporate forward projections. We have already witnessed a few guidance reductions with severe consequences given lofty valuations. It is plausible that we will pass through this period without a significant correction. Still, the potential for a dislocation remains high if expectations are not met.
In summary, mixed signals prevail in the economy, while markets appear to be largely indifferent to the risks. Seasonal liquidity constraints may also conflict with an expanded Treasury auction schedule as Congress considers increasing the debt limit and the Treasury faces funding constraints. That could lead to a rise in bond yields, which has knock-on effects for long-duration assets, such as stocks. And concerning housing, prices are beginning to decline as mortgage rates have remained relatively high. If the economy continues to slow, this could further impact household finances and confidence in the short-term. Thus, high valuations, low liquidity, and the potential for rising rates could portend a difficult period. Alternatively, proposed tariffs may be more bluster than policy. When combined with deregulation, favorable tax policy, and a slightly easier interest rate policy, the markets may navigate the current environment largely unscathed. Over the long-run, equities remain the best alternative; in the near-term, volatility may reign.
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 June 30, 2025. It can be accessed on the internet at www.generalamericaninvestors.com.
By Order of the Board of Directors,
General American Investors Company, Inc.
Jeffrey W. Priest
President and Chief Executive Officer
July 23, 2025
|
STATEMENT OF INVESTMENTS June 30, 2025 (Unaudited) |
|
General American Investors |
|
2 |
|
|
|
|
|
Shares |
|
COMMON STOCKS |
|
|
Value |
|
Communication Services (6.5%) |
|
Media and Entertainment (5.1%) |
|||||
|
|
294,923 |
|
Alphabet Inc. - Class C |
|
|
$52,316,391 |
|
|
|
32,000 |
|
Meta Platforms, Inc. - Class A |
|
|
23,618,880 |
|
|
|
|
|
|
|
(Cost $20,117,900) |
|
75,935,271 |
|
|
|
Telecommunication Services (1.4%) |
|||||
|
|
|
724,639 |
|
AT&T Inc. |
|
|
20,971,053 |
|
|
|
274,199 |
|
GCI Liberty, Inc. Escrow (a) |
|
|
— |
|
|
|
|
|
|
(Cost $12,746,324) |
|
20,971,053 |
|
|
|
|
|
|
(Cost $32,864,224) |
|
96,906,324 |
|
|
|
|
|
|
|
|
|
|
Consumer Discretionary (10.2%) |
|
Consumer Services (1.6%) |
|||||
|
|
143,157 |
|
Expedia Group, Inc. |
(Cost $15,474,847) |
|
24,147,723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Distribution and Retail (8.6%) |
|||||
|
|
|
286,000 |
|
Amazon.com, Inc. (a) |
|
|
62,745,540 |
|
|
|
525,092 |
|
The TJX Companies, Inc. |
|
|
64,843,611 |
|
|
|
|
|
|
(Cost $12,034,026) |
|
127,589,151 |
|
|
|
|
|
|
(Cost $27,508,873) |
|
151,736,874 |
|
|
|
|
|
|
|
|
|
|
Consumer Staples (7.8%) |
|
Distribution and Retail (2.3%) |
|||||
|
|
34,500 |
|
Costco Wholesale Corporation |
(Cost $1,042,548) |
|
34,152,930 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Food, Beverage and Tobacco (3.6%) |
|||||
|
|
|
325,000 |
|
Nestlé S.A. (Switzerland) |
|
|
32,289,054 |
|
|
|
160,000 |
|
PepsiCo, Inc. |
|
|
21,126,400 |
|
|
|
|
|
|
(Cost $18,526,343) |
|
53,415,454 |
|
|
|
Household and Personal Products (1.9%) |
|||||
|
|
|
446,461 |
|
Unilever PLC (Netherlands/United Kingdom) |
(Cost $12,929,503) |
|
27,221,051 |
|
|
|
|
|
|
(Cost $32,498,394) |
|
114,789,435 |
|
|
|
|
|
|
|
|
|
|
Energy (5.4%) |
|
454,230 |
|
Cameco Corporation (Canada) |
|
|
33,717,493 |
|
|
86,391 |
|
Chevron Corporation |
|
|
12,370,327 |
|
|
|
|
1,020,030 |
|
Energy Transfer LP |
|
|
18,493,144 |
|
|
|
146,100 |
|
Exxon Mobil Corporation |
|
|
15,749,580 |
|
|
|
|
|
|
(Cost $35,780,965) |
|
80,330,544 |
|
|
|
|
|
|
|
|
|
|
Financials (18.1%) |
|
Banks (2.9%) |
|||||
|
|
80,000 |
|
JPMorgan Chase & Co. |
|
|
23,192,800 |
|
|
|
|
101,100 |
|
M&T Bank Corporation |
|
|
19,612,389 |
|
|
|
|
|
|
(Cost $3,337,828) |
|
42,805,189 |
|
|
|
Financial Services (7.4%) |
|||||
|
|
|
110 |
|
Berkshire Hathaway Inc. - Class A (a)(b) |
|
|
80,168,000 |
|
|
|
243,415 |
|
Nelnet, Inc. - Class A |
|
|
29,482,425 |
|
|
|
|
|
|
(Cost $2,968,650) |
|
109,650,425 |
|
|
|
Insurance (7.8%) |
|||||
|
|
|
600,000 |
|
Arch Capital Group Ltd. (a) (Bermuda) |
|
|
54,630,000 |
|
|
|
144,286 |
|
Everest Group, Ltd. (Bermuda) |
|
|
49,035,597 |
|
|
|
160,327 |
|
MetLife, Inc. |
|
|
12,893,497 |
|
|
|
|
|
|
(Cost $18,009,558) |
|
116,559,094 |
|
|
|
|
|
|
(Cost $24,316,036) |
|
269,014,708 |
|
|
|
|
|
|
|
|
|
|
3 |
|
|
|
STATEMENT OF INVESTMENTS June 30, 2025 (Unaudited) - continued |
|
General American Investors |
|
|
|
Shares |
|
COMMON STOCKS (continued) |
|
|
Value |
|
Health Care (9.1%) |
|
Equipment and Services (4.1%) |
|||||
|
|
377,350 |
|
Solventum Corporation (a) |
|
|
$28,618,224 |
|
|
|
|
106,601 |
|
Tenet Healthcare Corporation (a) |
|
|
18,761,776 |
|
|
|
48,006 |
|
Veeva Systems Inc. (a) |
|
|
13,824,768 |
|
|
|
|
|
|
(Cost $42,674,816) |
|
61,204,768 |
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceuticals, Biotechnology and Life Sciences (5.0%) |
|||||
|
|
|
30,000 |
|
Amgen Inc. |
|
|
8,376,300 |
|
|
|
50,010 |
|
Danaher Corporation |
|
|
9,878,975 |
|
|
|
119,900 |
|
Gilead Sciences, Inc. |
|
|
13,293,313 |
|
|
|
204,326 |
|
Merck & Co., Inc. |
|
|
16,174,446 |
|
|
|
515,808 |
|
Pfizer Inc. |
|
|
12,503,186 |
|
|
|
9,876 |
|
Regeneron Pharmaceuticals, Inc. |
|
|
5,184,900 |
|
|
|
539,738 |
|
SIGA Technologies, Inc. |
|
|
3,519,092 |
|
|
|
1,077,180 |
|
Valneva SE (a) (France) |
|
|
2,981,832 |
|
|
|
354,361 |
|
Valneva SE ADR (a) (France) |
|
|
2,002,140 |
|
|
|
|
|
|
(Cost $61,181,766) |
|
73,914,184 |
|
|
|
|
|
|
(Cost $103,856,582) |
|
135,118,952 |
|
|
|
|
|
|
|
|
|
|
Industrials (14.9%) |
|
Capital Goods (8.3%) |
|||||
|
|
874,008 |
|
BAE Systems plc (United Kingdom) |
|
|
22,632,469 |
|
|
|
|
110,000 |
|
GE Vernova Inc. |
|
|
58,206,500 |
|
|
|
70,785 |
|
L3Harris Technologies, Inc. |
|
|
17,755,709 |
|
|
|
165,000 |
|
RTX Corporation |
|
|
24,093,300 |
|
|
|
|
|
|
(Cost $50,737,751) |
|
122,687,978 |
|
|
|
Commercial and Professional Services (5.9%) |
|||||
|
|
|
355,625 |
|
Republic Services, Inc. |
(Cost $4,886,632) |
|
87,700,681 |
|
|
|
|
|
|
|
|
|
|
|
|
Transportation (0.7%) |
|||||
|
|
|
115,583 |
|
Uber Technologies, Inc. (a) |
(Cost $7,766,073) |
|
10,783,894 |
|
|
|
|
|
|
(Cost $63,390,456) |
|
221,172,553 |
|
|
|
|
|
|
|
|
|
|
Information Technology (26.0%) |
|
Semiconductors and Semiconductor Equipment (10.2%) |
|||||
|
|
41,652 |
|
Applied Materials, Inc. |
|
|
7,625,232 |
|
|
|
62,000 |
|
ASML Holding N.V. (Netherlands) |
|
|
49,686,180 |
|
|
|
|
190,000 |
|
Broadcom Inc. |
|
|
52,373,500 |
|
|
|
1,846,921 |
|
indie Semiconductor, Inc. - Class A (a) |
|
|
6,575,039 |
|
|
|
160,979 |
|
NVIDIA Corporation |
|
|
25,433,072 |
|
|
|
65,009 |
|
Universal Display Corporation |
|
|
10,041,290 |
|
|
|
|
|
|
(Cost $45,343,403) |
|
151,734,313 |
|
|
|
Software and Services (10.6%) |
|||||
|
|
|
26,006 |
|
Adobe Inc. (a) |
|
|
10,061,201 |
|
|
|
180,000 |
|
Microsoft Corporation |
|
|
89,533,800 |
|
|
|
1,120,227 |
|
NextNav Inc. (a) |
|
|
17,027,451 |
|
|
|
60,000 |
|
Salesforce, Inc. |
|
|
16,361,400 |
|
|
|
41,381 |
|
Tyler Technologies, Inc. (a) |
|
|
24,532,312 |
|
|
|
|
|
|
(Cost $50,246,558) |
|
157,516,164 |
|
|
|
Technology, Hardware and Equipment (5.2%) |
|||||
|
|
|
291,000 |
|
Apple Inc. |
|
|
59,704,470 |
|
|
|
164,679 |
|
Arista Networks, Inc. (a) |
|
|
16,848,308 |
|
|
|
|
|
|
(Cost $17,639,044) |
|
76,552,778 |
|
|
|
|
|
|
(Cost $113,229,005) |
|
385,803,255 |
|
|
|
|
|
|
|
|
|
|
4 |
|
|
|
STATEMENT OF INVESTMENTS June 30, 2025 (Unaudited) - continued |
|
General American Investors |
(see notes to unaudited financial statements)
|
|
|
Shares |
|
COMMON STOCKS (continued) |
|
|
Value |
|
Materials (4.0%) |
|
305,000 |
|
Agnico Eagle Mines Limited (Canada) |
|
|
$36,273,650 |
|
|
472,438 |
|
Alamos Gold Inc. - Class A (Canada) |
|
|
12,547,953 |
|
|
|
|
816,056 |
|
Algoma Steel Group Inc. (Canada) |
|
|
5,622,626 |
|
|
|
243,593 |
|
Cleveland-Cliffs Inc. (a) |
|
|
1,851,307 |
|
|
|
957,591 |
|
Ferroglobe PLC (United Kingdom) |
|
|
3,514,359 |
|
|
|
|
|
|
(Cost $34,126,025) |
|
59,809,895 |
|
|
|
|
|
|
|
|
|
|
Utilities (1.1%) |
|
290,000 |
|
Dominion Energy, Inc. |
(Cost $14,065,950) |
|
16,390,800 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous (2.1%) |
|
6,898,041 |
|
Other (c) |
(Cost $32,815,594) |
|
31,104,605 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMMON STOCKS (105.2%) |
(Cost $514,452,104) |
|
1,562,177,945 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PURCHASED OPTIONS (a) |
|
|
|
|
Puts |
|
Contracts |
|
Company/Expiration Date/Exercise Price/Notional |
|||
|
Capital Goods |
|
200 |
|
GE Vernova Inc./July 18, 2025/$450/$9,000,000 |
(Cost $89,541) |
|
64,000 |
|
|
|
|
|
|
|
|
|
|
Consumer Discretionary Equipment Distribution and Retail |
|
800 |
|
The TJX Companies, Inc./July 18, 2025/ |
(Cost $295,623) |
|
184,000 |
|
|
|
|
|
|
|
|
|
|
Energy |
|
1,000 |
|
Cameco Corporation/July 18, 2025/$60/$6,000,000 |
|
|
5,000 |
|
|
|
400 |
|
Cameco Corporation/July 25, 2025/$70/$2,800,000 |
|
|
48,800 |
|
|
|
|
|
|
(Cost $156,670) |
|
53,800 |
|
|
|
|
|
|
|
|
|
|
Semiconductors and Semiconductor Equipment |
|
500 |
|
Broadcom Inc./August 15, 2025/$240/$12,000,000 |
(Cost $550,206) |
|
160,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software |
|
500 |
|
Microsoft Corporation/August 15, 2025/ |
(Cost $352,899) |
|
160,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology, Hardware and Equipment |
|
400 |
|
Apple Inc./July 18, 2025/$215/$8,600,000 |
(Cost $323,941) |
|
424,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL PURCHASED OPTIONS (0.1%) |
(Cost $1,768,880) |
|
1,045,800 |
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
STATEMENT OF INVESTMENTS June 30, 2025 (Unaudited) - continued |
|
General American Investors |
(see notes to unaudited financial statements)
|
|
|
Shares |
|
SHORT-TERM SECURITIES |
|
|
Value |
|
|
|
|
111,564,165 |
|
State Street Institutional Treasury Plus Money |
(Cost $111,564,165) |
|
$111,564,165 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments (e) (112.8%) |
(Cost $627,785,149) |
|
1,674,787,910 |
|
||||
|
Other assets in excess of liabilities (0.0%) |
|
|
334,348 |
|
||||
|
|
|
|
|
|
|
|
1,675,122,258 |
|
|
PREFERRED STOCK (-12.8%) |
|
(190,038,825 |
) |
|||||
|
NET ASSETS APPLICABLE TO COMMON STOCK (100%) |
|
$1,485,083,433 |
|
|||||
ADR - American Depository Receipt
(a)Non-income producing security.
(b)50 shares of 110 total shares held as collateral for options written.
(c)Securities which have been held for less than one year, not previously disclosed, and not restricted.
(d)7-day yield.
(e)At June 30, 2025, the cost of investments and derivatives for Federal income tax purposes was $623,985,021; aggregate gross unrealized appreciation was $1,069,622,170; aggregate gross unrealized depreciation was $19,933,088; and net unrealized appreciation was $1,049,689,082.
|
6 |
|
|
|
STATEMENT OF OPTIONS WRITTEN June 30, 2025 (Unaudited) |
|
General American Investors |
(see notes to unaudited financial statements)
|
Calls |
|
Contracts |
|
Company/Expiration Date/Exercise Price/Notional |
Premiums |
|
Value |
|
Capital Goods |
|
200 |
|
GE Vernova Inc./August 15, 2025/$520/$10,400,000 |
$443,921 |
|
$864,000 |
|
|
|
|
|
|
|
|
|
|
Energy |
|
1,000 |
|
Cameco Corporation/September 19, 2025/$70/$7,000,000 |
248,332 |
|
890,000 |
|
|
|
|
|
|
|
|
|
|
Semiconductors and Semiconductor Equipment |
|
500 |
|
Broadcom Inc./August 15, 2025/$330/$16,500,000 |
178,195 |
|
86,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software and Services and Equipment |
|
500 |
|
Microsoft Corporation/August 15, 2025/$530/$26,500,000 |
115,745 |
|
260,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL OPTIONS WRITTEN (0.1%) |
$986,193 |
|
$2,100,000 |
*The maximum cash outlay if all options are exercised is $60,400,000.
|
7 |
|
|
|
PORTFOLIO DIVERSIFICATION June 30, 2025 (Unaudited) |
|
General American Investors |
(see notes to unaudited financial statements)
The diversification of the Company’s net assets applicable to its Common Stock by industry group as of June 30, 2025 is shown in the table.
|
Industry Category |
|
Cost |
|
Value |
|
Percent Common |
|||
|
Information Technology |
|||||||||
|
|
Semiconductors & Semiconductor Equipment |
|
$45,894 |
|
$151,894 |
|
|
10.2 |
% |
|
|
Software & Services |
|
50,599 |
|
157,676 |
|
|
10.6 |
|
|
|
Technology, Hardware & Equipment |
|
17,963 |
|
76,977 |
|
|
5.3 |
|
|
|
|
|
114,456 |
|
386,547 |
|
|
26.1 |
|
|
Financials |
|||||||||
|
|
Banks |
|
3,338 |
|
42,805 |
|
|
2.9 |
|
|
|
Financial Services |
|
2,969 |
|
109,651 |
|
|
7.4 |
|
|
|
Insurance |
|
18,009 |
|
116,559 |
|
|
7.8 |
|
|
|
|
|
24,316 |
|
269,015 |
|
|
18.1 |
|
|
Industrials |
|||||||||
|
|
Capital Goods |
|
50,827 |
|
122,752 |
|
|
8.3 |
|
|
|
Commercial & Professional Services |
|
4,887 |
|
87,701 |
|
|
5.9 |
|
|
|
Transportation |
|
7,766 |
|
10,784 |
|
|
0.7 |
|
|
|
|
|
63,480 |
|
221,237 |
|
|
14.9 |
|
|
Consumer Discretionary |
|||||||||
|
|
Consumer Services |
|
15,475 |
|
24,148 |
|
|
1.6 |
|
|
|
Distribution & Retail |
|
12,329 |
|
127,773 |
|
|
8.6 |
|
|
|
|
|
27,804 |
|
151,921 |
|
|
10.2 |
|
|
Health Care |
|||||||||
|
|
Equipment & Services |
|
42,675 |
|
61,205 |
|
|
4.1 |
|
|
|
Pharmaceuticals, Biotechnology & Life Sciences |
|
61,182 |
|
73,914 |
|
|
5.0 |
|
|
|
|
|
103,857 |
|
135,119 |
|
|
9.1 |
|
|
Consumer Staples |
|||||||||
|
|
Distribution & Retail |
|
1,043 |
|
34,153 |
|
|
2.3 |
|
|
|
Food, Beverage & Tobacco |
|
18,526 |
|
53,415 |
|
|
3.6 |
|
|
|
Household & Personal Products |
|
12,929 |
|
27,221 |
|
|
1.9 |
|
|
|
|
|
32,498 |
|
114,789 |
|
|
7.8 |
|
|
Communication Services |
|||||||||
|
|
Media & Entertainment |
|
20,118 |
|
75,935 |
|
|
5.1 |
|
|
|
Telecommunication Services |
|
12,746 |
|
20,971 |
|
|
1.4 |
|
|
|
|
|
32,864 |
|
96,906 |
|
|
6.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy |
|
35,938 |
|
80,384 |
|
|
5.4 |
|
|
|
Materials |
|
34,126 |
|
59,810 |
|
|
4.0 |
|
|
|
Utilities |
|
14,066 |
|
16,391 |
|
|
1.1 |
|
|
|
Miscellaneous** |
|
32,816 |
|
31,105 |
|
|
2.1 |
|
|
|
|
|
516,221 |
|
1,563,224 |
|
|
105.3 |
|
|
|
Short-Term Securities |
|
111,564 |
|
111,564 |
|
|
7.5 |
|
|
|
Total Investments |
|
$627,785 |
|
1,674,788 |
|
|
112.8 |
|
|
|
Other Assets in Excess of Liabilities |
|
|
|
334 |
|
|
0.0 |
|
|
|
Preferred Stock |
|
|
|
(190,039 |
) |
|
(12.8 |
) |
|
|
Net Assets Applicable to Common Stock |
|
|
|
$1,485,083 |
|
|
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.
|
8 |
|
|
|
STATEMENT OF ASSETS AND LIABILITIES June 30, 2025 (Unaudited) |
|
General American Investors |
(see notes to unaudited financial statements)
|
Assets |
|
|
|
|
|
|
INVESTMENTS, AT VALUE (NOTE 1a) |
|
||||
|
|
Common stocks (cost $514,452,104) |
|
|
|
$1,562,177,945 |
|
|
Purchased options (cost $1,768,880; note 4) |
|
|
|
1,045,800 |
|
|
Money market fund (cost $111,564,165) |
|
|
|
111,564,165 |
|
|
|
|
|
|
|
|
|
Total investments (cost $627,785,149) |
|
|
|
1,674,787,910 |
|
|
|
|
|
|
|
|
OTHER ASSETS |
|
||||
|
|
Receivable for securities sold |
|
$324,026 |
|
|
|
|
Dividends, interest and other receivables |
|
1,350,505 |
|
|
|
|
Present value of future office lease payments (note 8) |
|
2,102,843 |
|
|
|
|
Qualified pension plan asset, net excess funded (note 7) |
|
13,820,734 |
|
|
|
|
Prepaid expenses, fixed assets, and other assets |
|
468,272 |
|
18,066,380 |
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
|
|
1,692,854,290 |
|
|
|
|
|
|
|
|
|
Liabilities |
|||||
|
|
Payable for securities purchased |
|
89,541 |
|
|
|
|
Accrued compensation payable to officers and employees |
|
2,355,478 |
|
|
|
|
Outstanding options written, at value (premiums received $986,193; note 4) |
|
2,100,000 |
|
|
|
|
Accrued Preferred Stock dividend not yet declared |
|
185,366 |
|
|
|
|
Present value of future office lease payments (note 8) |
|
2,102,843 |
|
|
|
|
Accrued supplemental pension plan liability (note 7) |
|
4,813,831 |
|
|
|
|
Accrued supplemental thrift plan liability (note 7) |
|
5,591,239 |
|
|
|
|
Accrued expenses and other liabilities |
|
493,734 |
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES |
|
17,732,032 |
|||
|
|
|
|
|
|
|
|
5.95% CUMULATIVE PREFERRED STOCK, SERIES B - |
|
|
|||
|
|
|
|
|
|
190,038,825 |
|
|
|
|
|
|
|
|
NET ASSETS APPLICABLE TO COMMON STOCK - |
|
$1,485,083,433 |
|||
|
|
|
|
|
|
|
|
NET ASSET VALUE PER COMMON SHARE |
|
$ |
|||
|
|
|
|
|
|
|
|
Net Assets Applicable to Common Stock |
|
|
|||
|
|
Common Stock, 23,279,512 shares at $1 par value per share (note 5) |
|
$23,279,512 |
|
|
|
|
Additional paid-in capital (note 5) |
|
325,293,874 |
|
|
|
|
Unallocated distributions on Preferred Stock |
|
(5,839,021 |
) |
|
|
|
Total distributable earnings (note 5) |
|
1,137,568,374 |
|
|
|
|
Accumulated other comprehensive income (note 7) |
|
4,780,694 |
|
|
|
|
|
|
|
|
|
|
NET ASSETS APPLICABLE TO COMMON STOCK |
|
$1,485,083,433 |
|||
|
9 |
|
|
|
STATEMENT OF OPERATIONS Six Months Ended June 30, 2025 (Unaudited) |
|
General American Investors |
(see notes to unaudited financial statements)
|
Income |
|
|||||
|
|
Dividends (net of foreign withholding taxes of $668,174) |
|
|
|
$9,934,512 |
|
|
|
Interest |
|
|
|
2,624,387 |
|
|
|
|
|
|
|
12,558,899 |
|
|
|
||||||
|
Expenses |
|
|||||
|
|
Investment research |
|
$3,740,116 |
|
|
|
|
|
Administration and operations |
|
1,678,822 |
|
|
|
|
|
Office space and general |
|
473,657 |
|
|
|
|
|
Directors’ fees and expenses |
|
196,497 |
|
|
|
|
|
Transfer agent, custodian, and registrar fees and expenses |
|
190,068 |
|
|
|
|
|
Auditing and legal fees |
|
181,000 |
|
|
|
|
|
State and local taxes |
|
94,220 |
|
|
|
|
|
Stockholders’ meeting and reports |
|
54,548 |
|
6,608,928 |
|
|
|
||||||
|
NET INVESTMENT INCOME |
|
|
5,949,971 |
|
||
|
|
||||||
|
Net Realized Gain and Change in Unrealized Appreciation on Investments (Notes 1, 3 and 4) |
|
|||||
|
|
Net realized gain (loss) on investments: |
|
|
|
|
|
|
|
Common stocks |
|
82,791,907 |
|
|
|
|
|
Purchased options |
|
(877,539 |
) |
|
|
|
|
Written options |
|
298,924 |
|
|
|
|
|
Foreign currency and other |
|
5,035 |
|
|
|
|
|
|
|
82,218,327 |
|
|
|
|
|
Net increase (decrease) in unrealized appreciation: |
|
|
|
|
|
|
|
Common stocks |
|
63,573,841 |
|
|
|
|
|
Purchased options |
|
(301,744 |
) |
|
|
|
|
Written options |
|
(1,113,807 |
) |
|
|
|
|
Foreign currency and other |
|
56,491 |
|
|
|
|
|
|
|
62,214,781 |
|
|
|
|
NET GAINS AND APPRECIATION ON INVESTMENTS |
|
|
144,433,108 |
|
||
|
NET INVESTMENT INCOME, GAINS, AND APPRECIATION ON INVESTMENTS |
|
|
150,383,079 |
|
||
|
DISTRIBUTIONS TO PREFERRED STOCKHOLDERS |
|
|
(5,653,654 |
) |
||
|
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
|
|
$144,729,425 |
|
||
|
STATEMENTS OF CHANGES IN NET ASSETS |
|
Operations |
|
Six Months Ended |
|
Year Ended |
|
|
Net investment income |
|
$5,949,971 |
|
$13,297,853 |
|
|
Net realized gain on investments |
|
82,218,327 |
|
107,238,902 |
|
|
Net increase in unrealized appreciation |
|
62,214,781 |
|
124,918,435 |
|
|
|
|
150,383,079 |
|
245,455,190 |
|
|
Distributions to Preferred Stockholders |
|
(5,653,654 |
) |
(11,307,310 |
) |
|
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS |
|
144,729,425 |
|
234,147,880 |
|
|
|
|||||
|
Other Comprehensive Income - Funded Status of Defined Benefit Plans (Note 7) |
|
— |
|
3,253,363 |
|
|
|
|||||
|
Distributions to Common Stockholders |
|
(5,859,980 |
) |
(103,286,898 |
) |
|
|
|||||
|
Capital Share Transactions (Note 5) |
|
||||
|
Value of Common Shares issued in payment of dividends and distributions |
|
— |
|
36,883,540 |
|
|
Cost of Common Shares purchased |
|
(9,774,849 |
) |
(48,040,986 |
) |
|
DECREASE IN NET ASSETS - CAPITAL SHARE TRANSACTIONS |
|
(9,774,849 |
) |
(11,157,446 |
) |
|
|
|||||
|
NET INCREASE IN NET ASSETS |
|
129,094,596 |
|
122,956,899 |
|
|
|
|||||
|
Net Assets Applicable to Common Stock |
|
||||
|
BEGINNING OF PERIOD |
|
1,355,988,837 |
|
1,233,031,938 |
|
|
|
|||||
|
END OF PERIOD |
|
$1,485,083,433 |
|
$1,355,988,837 |
|
|
10 |
|
|
|
FINANCIAL HIGHLIGHTS |
|
General American Investors |
(see notes to unaudited financial statements)
The following table shows per share operating performance data, total investment return, ratios, and supplemental data for the six months ended June 30, 2025 and for each year in the five-year period ended December 31, 2024. This information has been derived from information contained in the financial statements and market price data for the Company’s shares.
|
|
|
|
|
Six Months Ended |
|
Year Ended December 31, |
|
|||||||||
|
|
|
|
|
|
2024 |
|
2023 |
|
2022 |
|
2021 |
|
2020 |
|
||
|
PER SHARE OPERATING PERFORMANCE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Net asset value, beginning of period |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
Net investment income |
|
0.26 |
|
|
0.57 |
|
0.44 |
|
0.22 |
|
0.02 |
|
0.13 |
|
|
|
|
Net gain (loss) on common stocks, options and other-realized and unrealized |
|
6.24 |
|
|
10.10 |
|
11.18 |
|
(7.38 |
) |
12.14 |
|
3.10 |
|
|
|
|
Other comprehensive income (loss) |
|
— |
|
|
0.14 |
|
0.05 |
|
(0.04 |
) |
0.20 |
|
0.03 |
|
|
|
|
|
|
6.50 |
|
|
10.81 |
|
11.67 |
|
(7.20 |
) |
12.36 |
|
3.26 |
|
|
|
Distributions on Preferred Stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income |
|
— |
|
|
(0.04 |
) |
(0.12 |
) |
(0.07 |
) |
(0.06 |
) |
(0.03 |
) |
|
|
|
Distributions from net capital gains |
|
— |
|
|
(0.45 |
) |
(0.36 |
) |
(0.40 |
) |
(0.41 |
) |
(0.43 |
) |
|
|
|
Unallocated |
|
(0.24 |
) |
|
— |
|
— |
|
— |
|
— |
|
— |
|
|
|
|
|
|
(0.24 |
) |
|
(0.49 |
) |
(0.48 |
) |
(0.47 |
) |
(0.47 |
) |
(0.46 |
) |
|
|
Total from investment operations |
|
6.26 |
|
|
10.32 |
|
11.19 |
) |
(7.67 |
) |
11.89 |
|
2.80 |
|
|
|
|
Distributions on Common Stock: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income |
|
— |
|
|
(0.43 |
) |
(0.64 |
) |
(0.14 |
) |
(0.46 |
) |
(0.15 |
) |
|
|
|
Distributions from net capital gains |
|
(0.25 |
) |
|
(4.07 |
) |
(2.01 |
) |
(1.36 |
) |
(2.84 |
) |
(2.35 |
) |
|
|
|
|
|
(0.25 |
) |
|
(4.50 |
) |
(2.65 |
) |
(1.50 |
) |
(3.30 |
) |
(2.50 |
) |
|
|
Net asset value, end of period |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
Per share market value, end of period |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL INVESTMENT RETURN - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Stockholder return, based on market price per share |
|
10.40 |
%* |
|
28.99 |
% |
26.23 |
% |
(14.92 |
)% |
28.16 |
% |
5.23 |
% |
|
|
RATIOS AND SUPPLEMENTAL DATA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Net assets applicable to Common Stock |
|
$1,485,083 |
|
|
$1,355,989 |
|
$1,233,032 |
|
$1,041,160 |
|
$1,282,789 |
|
$1,087,971 |
|
|
|
|
Ratio of expenses to average net assets applicable to Common Stock |
|
0.94 |
%** |
|
1.11 |
% |
1.35 |
% |
1.13 |
% |
1.24 |
% |
1.22 |
% |
|
|
|
Ratio of net income to average net assets applicable to Common Stock |
|
0.85 |
%** |
|
0.98 |
% |
0.92 |
% |
0.50 |
% |
0.05 |
% |
0.32 |
% |
|
|
|
Portfolio turnover rate |
|
8.51 |
%* |
|
20.10 |
% |
15.09 |
% |
16.53 |
% |
24.74 |
% |
19.33 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PREFERRED STOCK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
Liquidation value, end of period |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
Asset coverage |
|
881 |
% |
|
814 |
% |
749 |
% |
648 |
% |
775 |
% |
672 |
% |
|
|
|
Asset coverage per share |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
Liquidation preference per share |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
|
|
Market value per share |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
$ |
|
$ |
|
|
*Not annualized
** Annualized
|
11 |
|
|
|
NOTES TO FINANCIAL STATEMENTS (Unaudited) |
|
General American Investors |
1. Significant Accounting Policies and Other Matters – 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 accompanying financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) pursuant to the requirements for reporting; Accounting Standards Codification 946, Financial Services – Investment Companies (“ASC 946”), and Regulation S-X.
The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income, expenses, and gains and losses during the reported period. Changes in the economic environment, financial markets, and any other parameters used in determining these estimates could cause actual results to differ, and these differences could be material.
During 2024, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures. Adoption of the new standard impacted financial statement footnote disclosures only. Topic 280 defines an operating segment as a component of a public entity that engages in business activities which recognize revenues and incur expenses, have discrete financial information and operating results that are regularly reviewed by the entity’s chief operating decision maker (CODM), and such financial information is evaluated to make decisions about resources to be allocated to the segment and to judge its performance. The President and Chief Executive Officer of the Company is the CODM. The Company operates, reports, and represents itself to be a single operating segment. The CODM monitors the operating results of the Company in its entirety. Portfolio asset selection and allocation is determined in accordance with the terms of the Company’s prospectus and its operating policies and procedures. The Company’s portfolio composition, changes in net assets, total investment return, and expense ratio are regularly considered by the CODM to assess and manage the Company’s performance versus its benchmark, the S&P 500, and to make resource allocation decisions for the Company, as a single segment, consistent with that presented within the Company’s financial statements. All segment assets are reported in the Statement of Assets and Liabilities as “Net Assets Applicable to Common Stock” and all segment expenses are reported in the Statement of Operations as “Total Expenses.”
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 primarily in foreign markets are valued at the closing price of such securities on their respective exchanges or markets. Corporate debt, domestic and foreign, and U.S. government securities are generally traded in the over-the-counter market rather than on a national securities exchange. The Company utilizes the latest bid prices furnished by independent pricing services with respect to transactions in such securities to determine current market value if maturity date exceeds 60 days. Investments in such securities maturing within 60 days or less are valued at amortized cost. If, after the close of foreign markets, 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. Investments in money market funds are valued at their net asset value.
b. Options The Company may purchase and write (sell) exchange traded put and call options on equity securities. 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 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 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 on written option transactions in the Statement of Operations. If a written 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 on investments in the Statement of Operations. If a written put option is exercised, the premium reduces the cost basis of the securities purchased by the Company and is parenthetically disclosed 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. For exchange traded options purchased, the Company bears the risk of loss in the amount of the premiums paid plus appreciation in market value should a counterparty fail to perform under the contract. Options written by the Company do not give rise to counterparty risk as options written obligate the Company to perform. The Company has not entered into a master netting agreement with respect to options on equity securities. See Note 4 for option information.
|
12 |
|
|
|
NOTES TO FINANCIAL STATEMENTS (Unaudited) - continued |
|
General American Investors |
1. Significant Accounting Policies and Other Matters – (Continued from bottom of previous page.)
c. Security Transactions and Investment Income Security transactions are recorded as of the trade date. Realized gains and losses are determined on the specific identification method. Dividend income and distributions to stockholders are recorded as of the ex-dividend dates. Interest income is recognized daily on the accrual basis, adjusted for the accretion of discounts and amortization of premiums.
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 procedures 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. These changes are combined and included in net realized and unrealized gain or loss on the Statement of Operations.
Realized foreign exchange gains or losses may also arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities 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 may also arise from changes in foreign exchange rates on foreign currency denominated assets and liabilities other than investments in securities 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 supervision 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 distributions to common and preferred shareholders, which are determined in accordance with Federal income tax regulations, are recorded on the ex-dividend date. Permanent book/tax differences relating 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. In accordance with U.S. GAAP requirements regarding accounting for uncertainties in income taxes, management has analyzed the Company’s tax positions taken or expected to be taken on Federal and state income tax returns for all open tax years (the current and the prior three tax years) and has concluded that no provision for income tax is required in the Company’s financial statements.
g. 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 any future risk of loss thereunder to be remote.
2. 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 at net asset value, typically $1 per share),
Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, etc.), and
Level 3 - significant unobservable inputs (including 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. No transfers among levels occurred during the six months ended June 30, 2025. The following is a summary of the inputs used to value the Company’s net assets as of June 30, 2025:
|
Assets |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
|
Common stocks |
|
$1,562,177,945 |
|
— |
|
— |
|
$1,562,177,945 |
|
Purchased options |
|
1,045,800 |
|
— |
|
— |
|
1,045,800 |
|
Money market fund |
|
111,564,165 |
|
— |
|
— |
|
111,564,165 |
|
Total |
|
$1,674,787,910 |
|
— |
|
— |
|
$1,674,787,910 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
|
Options written |
|
$2,100,000 |
|
— |
|
— |
|
$2,100,000 |
|
13 |
|
|
|
NOTES TO FINANCIAL STATEMENTS (Unaudited) - continued |
|
General American Investors |
3. Purchases and Sales of Securities – Purchases and sales of securities (other than short-term securities and options) for the six months ended June 30, 2025 amounted to $124,864,041 and $163,189,323, on long transactions, respectively.
4. Options – In order to enhance financial statement disclosure for derivative instruments, the following table is intended to enable investors to understand: a) how and why the Company uses purchased and written options on equity securities, b) how purchased and written options on equity securities are accounted for, and c) how purchased and written options on equity securities affect the Company’s financial position and results of operations. As of June 30, 2025, the Company has not offset any of the positions and the positions are presented gross on the Statement of Assets and Liabilities.
The following table presents options contracts by location and as presented on the Statement of Assets and Liabilities as of June 30, 2025:
|
|
|
Asset Options |
|
Liability Options |
||||
|
Underlying Risk |
|
Statement of |
|
Fair Value |
|
Statement of |
|
Fair Value |
|
Equity |
|
Purchased options |
|
$1,045,800 |
|
Outstanding |
|
$2,100,000 |
The following table presents the effect of options activity on the Statement of Operations for the six months ended June 30, 2025:
|
Underlying Risk |
|
Statement of Operations |
|
Realized Gain (Loss) |
|
Change in Unrealized Appreciation |
|
|
Equity |
|
Purchased options |
|
$(877,539 |
) |
$(301,744 |
) |
|
Equity |
|
Written options |
|
298,924 |
|
(1,113,807 |
) |
|
|
|
|
|
$(578,615 |
) |
$(1,415,551 |
) |
Average monthly options activity during the six months ended June 30, 2025 was:
|
|
|
Purchased Options Contracts |
|
Written Options Contracts |
|
Numbers of Contracts |
|
3,784 |
|
1,308 |
5. Capital Stock and Dividend Distributions – The authorized capital stock of the Company consists of
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 were noncallable for the 5 year period ended September 24, 2008 and have a liquidation preference of $25.00 per share plus accumulated and unpaid dividends to the date of redemption. Cumulatively, the Board of Directors has authorized the repurchase of up to 2,000,000 Preferred Shares in the open market at prices below $25.00 per share. To date, 398,447 shares have been repurchased.
The Company allocates distributions from net capital gains and other types of income proportionately 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 net capital gains, they will be paid from investment company taxable income, or will represent a return of capital.
Under the Investment Company Act of 1940, the Company is required to maintain an asset coverage level 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 certain amount of discounted asset coverage for its portfolio that equals or exceeds a Basic Maintenance Amount. If the Company fails to meet these requirements 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, generally, vote together with the holders of Common Stock as a single class. Holders of Preferred Stock will elect two members to 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 of 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
|
14 |
|
|
|
NOTES TO FINANCIAL STATEMENTS (Unaudited) - continued |
|
General American Investors |
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 net assets applicable to Common Stock in the Statement of Assets and Liabilities.
Transactions in Common Stock during the six months ended June 30, 2025 and the year ended December 31, 2024 were as follows:
|
|
|
Shares |
|
Amount |
|
||||
|
|
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
|
Par value of Shares issued in payment of dividends and distributions (issued from treasury) |
|
— |
|
705,770 |
|
— |
|
$705,770 |
|
|
Increase in paid-in capital |
|
— |
|
— |
|
— |
|
36,177,770 |
|
|
Total increase |
|
— |
|
705,770 |
|
— |
|
36,883,540 |
|
|
Par value of Shares purchased (at an average discount from net asset value of 13.0% and 16.0%, respectively) |
|
(188,651 |
) |
(969,931 |
) |
$(188,651 |
) |
(969,931 |
) |
|
Decrease in paid-in capital |
|
— |
|
— |
|
(9,586,198 |
) |
(47,071,055 |
) |
|
Total decrease |
|
(188,651 |
) |
(969,931 |
) |
(9,774,849 |
) |
(48,040,986 |
) |
|
Net decrease |
|
(188,651 |
) |
(264,161 |
) |
$(9,774,849 |
) |
$(11,157,446 |
) |
At June 30, 2025, the Company held in its treasury
The tax basis distributions during the year ended December 31, 2024 are as follows: ordinary distributions of $10,747,848 and net capital gains distributions of $103,846,360. As of December 31, 2024, distributable earnings on a tax basis totaled $997,172,519 consisting of $8,362,123 from undistributed net capital gains, $1,267,699 from ordinary income and $987,542,697 from net unrealized appreciation on investments. A reclassification arising from a permanent “book/tax” difference reflects non-tax deductible expenses during the year ended December 31, 2024. As a result, additional paid-in capital was decreased by $2,145,174 and total distributable earnings were increased by $2,145,174. Net assets were not affected by this reclassification. As of December 31, 2024, the Company had wash sale loss deferrals of $355,287 and straddle loss deferrals of $2,888,178.
6. Officers’ Compensation – The aggregate compensation accrued and paid by the Company during the six months ended June 30, 2025 to the officers of the Company amounted to $3,756,629.
7. Benefit Plans – The Company has funded (qualified) and unfunded (supplemental) noncontributory defined benefit pension plans that are available to its employees. The pension 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 components of the net periodic benefit cost (income) of the plans for the six months ended June 30, 2025 were:
|
Service cost |
|
$143,502 |
|
|
Interest cost |
|
615,340 |
|
|
Expected return on plan assets |
|
(1,076,486 |
) |
|
Amortization of recognized net actuarial gain |
|
(3,098 |
) |
|
Net periodic benefit income |
|
$(320,742 |
) |
The Company recognizes the overfunded status of its defined benefit postretirement plan as an asset in the Statement of Assets and Liabilities and recognizes changes in funded status in the year in which the changes occur through other comprehensive income.
The Company also has funded (qualified) and unfunded (supplemental) defined contribution thrift plans that are available to its employees. The aggregate cost of such plans for the six months ended June 30, 2025 was $493,530. The qualified thrift plan acquired 7,900 shares in the open market, and distributed to a former employee and spouse 314 shares of the Company’s Common Stock during the six months ended June 30, 2025. It held 401,143 shares of the Company’s Common Stock at June 30, 2025.
5. Capital Stock and Dividend Distributions – (Continued from bottom of previous page.)
|
15 |
|
|
|
NOTES TO FINANCIAL STATEMENTS (Unaudited) - continued |
|
General American Investors |
8. Operating Lease Commitment – The Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases, which requires lessees to reassess if a contract is or contains lease agreements and assess the lease classification to determine if they should recognize a right-of-use asset and offsetting liability on the Statement of Assets and Liabilities that arises from entering into a lease, including an operating lease. The right-of-use asset and offsetting liability is reported on the Statement of Assets and Liabilities in line items entitled, “Present value of future office lease payments.” Since the operating lease does not specify an implicit rate, the right-of-use asset and liability have been calculated using a discount rate of 3.0%, which is based upon high quality corporate interest rates for a term equivalent to the lease period as of January 1, 2018. The annual cost of the operating lease continues to be reflected as an expense in the Statements of Operations and Changes in Net Assets.
In 2017, the Company entered into an operating lease agreement for office space which will expire in 2028 and provide for aggregate rental payments of approximately $6,437,500. The lease agreement contains clauses whereby the Company will receive 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 2023. Rental expense was $297,114 for the six months ended June 30, 2025. The Company has the option to extend the lease for an additional five years at market rates. As of June 30, 2025, no consideration has been given to extending this lease. Minimum rental commitments under this operating lease are approximately:
|
2025 |
|
$332,000 |
|
|
2026 |
|
663,000 |
|
|
2027 |
|
663,000 |
|
|
Thereafter |
|
553,000 |
|
|
Total Remaining Lease Payments |
|
2,211,000 |
|
|
Effect of Present Value Discounting |
|
(108,157 |
) |
|
Present Value of Future Office Lease Payments |
|
$2,102,843 |
|
|
OTHER MATTERS (Unaudited) |
Previous purchases of the Company’s Common and Preferred Stock are set forth in Note 5 to Financial Statements. Prospective purchases of Common and Preferred 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.
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, 2024 are available: (1) without charge, upon request, by calling us at our toll-free telephone number (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.
On April 17, 2025, the Company submitted a CEO annual certification to the New York Stock Exchange (“NYSE”) on which the Company’s principal executive officer certified that he was not aware, as of that date, of any violation by the Company of the NYSE’s Corporate Governance listing 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 a semi-annual certification, included in a filing with the SEC on Form N-CSR as of December 31, 2024 relating to, among other things, the Company’s disclosure controls and procedures and internal control over financial reporting, as applicable.
GENERAL AMERICAN INVESTORS
COMPANY, INC.
SEMI-ANNUAL REPORT
June 30, 2025
A Closed-End Investment Company
listed on the New York Stock Exchange
530 FIFTH AVENUE
NEW YORK • NY 10036
212-916-8400 • 1-800-436-8401
E-mail: InvestorRelations@gainv.com
www.generalamericaninvestors.com
DIRECTORS*
Spencer Davidson, Chairman
|
Arthur G. Altschul, Jr. |
Rose P. Lynch |
|
Rodney B. Berens |
Jeffrey W. Priest |
|
Clara E. Del Villar |
Savannah Sachs |
|
John D. Gordan, III |
Henry R. Schirmer |
|
Betsy F. Gotbaum |
|
(*The Company is a stand-alone fund.)
OFFICERS
Jeffrey W. Priest, President and Chief Executive Officer
Anang K. Majmudar, Senior Vice-President
Craig A. Grassi, Vice-President
Liron Kronzon, Vice-President
Sally A. Lynch, Vice-President
Eugene S. Stark, Vice-President, Administration;
Principal Financial Officer & Chief Compliance Officer
Samantha X. Jin, Treasurer
Connie A. Santa Maria, Corporate Secretary
SERVICE COMPANIES
|
Counsel Independent Auditors Custodian and State Street Bank and |
Transfer Agent and Registrar Equiniti Trust Company, LLC 48 Wall Street, Floor 23 |
RESULTS OF THE ANNUAL MEETING
OF STOCKHOLDERS
The votes cast by stockholders at the Company’s annual meeting held on April 16, 2025 were as follows:
|
|
|
For |
|
Withheld |
|
Election of Directors: |
|
|
|
|
|
Rodney B. Berens |
|
22,784,039 |
|
2,642,202 |
|
Spencer Davidson |
|
22,834,031 |
|
2,592,210 |
|
Clara E. Del Villar |
|
22,988,833 |
|
2,437,408 |
|
John D. Gordan, III |
|
22,056,020 |
|
3,370,221 |
|
Betsy F. Gotbaum |
|
22,907,829 |
|
2,518,412 |
|
Rose P. Lynch |
|
22,872,020 |
|
2,554,221 |
|
Jeffrey W. Priest |
|
23,033,560 |
|
2,392,681 |
|
Savannah Sachs |
|
22,996,665 |
|
2,429,576 |
|
|
||||
|
Elected by holders of Preferred Stock only: |
||||
|
Arthur G. Altschul, Jr. |
|
6,008,646 |
|
69,994 |
|
Henry R. Schirmer |
|
5,787,149 |
|
291,491 |
|
|
||||
|
Ratification of the selection of Ernst & Young LLP as auditors of the Company for the year 2025: |
||||
|
For - 24,223,411; Against - 1,048,551; Abstain - 154,279 |
||||