For the nine months ended September 30, 2017, the net asset value per Common Share increased 13.38% while the investment return to our stockholders increased by 16.22%. By comparison, our benchmark, the Standard & Poor’s 500 Stock Index (including income), increased 14.25%. For the twelve months ended September 30, 2017, the return on the net asset value per Common Share increased by 16.97%, and the return to our stockholders increased by 21.88%; these compare with an increase of 18.63% for the S&P 500. During both periods, the discount at which our shares traded continued to fluctuate and on September 30, 2017, it was 14.9%.

As detailed in the accompanying financial statements (unaudited), as of September 30, 2017, the net assets applicable to the Company’s Common Stock were $1,121,662,587 equal to $42.33 per Common Share.

The increase in net assets resulting from operations for the nine months ended September 30, 2017 was $129,214,623. During this period, the net realized gain on investments sold was $83,826,027 and the increase in net unrealized appreciation was $46,355,149. Net investment income for the nine months was $7,517,426. Distributions to preferred shareholders amounted to $8,483,979 and distributions to common shareholders totaled $5,423,646. During the nine months, the Company also repurchased 723,539 of its shares at a cost of $24,663,082, an average discount to net asset value of 15.8%.

The ramp up in worldwide equity prices that began last year has continued with extraordinarily low volatility. Technology company share prices have played a signifi-cant role in the rally as have a few other select sectors.

Valuations remain elevated relative to history, but may be explained by the synchronized global economic expansion, in conjunction with still low interest rates throughout much of the world, and increased investors’ growth expectations. Profit margins and multiples appear to have also stabilized at historically high levels. As a result, analysts expect earnings, as reflected in the S&P 500, to grow 12% in 2017 and 11% in 2018, assuming that the U.S. administration’s tax reform proposals are adopted. It is important to note that 2018 earnings expectations, without adoption of the tax reform package, are significantly less with a number of analysts projecting an increase of only 4.5% on average. It seems reasonable to assume, therefore that anticipated tax and regulatory relief in the United States has been an integral part of the stock market’s advance this year.

The Federal Reserve continues to project further interest rate increases, but the pace of those anticipated changes appears to have moderated somewhat as inflation has failed to materialize to a degree large enough to warrant acceleration. With Quantitative Easing (QE) in the U.S. now ended and the subsequent move to reduce Federal

Reserve assets occurring, it is arguable that these policy changes could be disruptive to the economy and markets. However, rate hikes and balance sheet reduction will likely be related to changing fiscal policy responses and appearance, if any, of inflation’s resurgence. The Fed is unlikely to damage the extraordinary protection it has afforded the U.S. economy with a sizeable reduction in its balance sheet or a rapid increase in interest rates. The cost of reinitiating QE from a reputation perspective and the necessary scale would exact a high cost on the Federal Reserve. Thus, it would appear “slow and steady” has emerged as the default position in the current environment.

Employment markets remain competitive for skilled workers and wages have been rising in response, albeit modestly. Consumer credit shows some stress as subprime borrowers are struggling with car loans and elevated consumer and college debt. And though there has been ample political volatility in the past year, little of that has translated to market volatility.

In short, the economic environment continues to modestly improve, aside from recent storm impacts, interest rates remain historically low, earnings growth expectations have improved, especially with tax reform in the wings, while inflation may tick modestly higher as excess capacity slowly unwinds. Thus, the relatively benign economic and interest rate environment has enabled markets to remain at higher than normal valuations amidst elevated corporate margins. Though corrections occur frequently in financial market history, the end of the bull market is currently difficult to see without a significant catalyst. And though we can think of a few that could derail the market’s advance, the probabilities seem more favorable for a continuation of the current environment.

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 September 30, 2017. It can be accessed on the internet at www.genera-lamericaninvestors.com.

By Order of the Board of Directors,

GENERAL AMERICAN INVESTORS COMPANY, INC.

Jeffrey W. Priest

President and Chief Executive Officer

October 18, 2017

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ADR - American Depository Receipt
(a) Non-income producing security.
(b) Security is 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 September 30, 2017, the cost of investments for Federal income tax purposes was $761,578,730; aggregate gross unrealized appreciation
was $582,121,890; aggregate gross unrealized depreciation was $22,055,041; and net unrealized appreciation was $560,066,849.

 

(a) Common shares unless otherwise noted; excludes transactions in Common Stocks - Miscellaneous - Other.
(b) Shares purchased in prior period and previously carried under Common Stocks - Miscellaneous - Other.

(see notes to unaudited financial statements)

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The diversification of the Company’s net assets applicable to its Common Stock by industry group as of
September 30, 2017 is shown in the table.

 

*	Net Assets applicable to the Company’s Common Stock.
**	Securities which have been held for less than one year, not previously disclosed, and not restricted.
	(see notes to unaudited financial statements)

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(see notes to unaudited financial statements)

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(see notes to unaudited financial statements)

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The following table shows per share operating performance data, total investment return, ratios and supplemental data for the nine months
ended September 30, 2017 and for each year in the five-year period ended December 31, 2016. This information has been derived from
information contained in the financial statements and market price data for the Company’s shares.

 

* Not annualized
** Annualized

(see notes to unaudited financial statements)

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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 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.

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 securities, domestic and foreign, are generally traded in the over-the-counter market rather than on a securities exchange. The
Company utilizes the latest bid prices provided by independent dealers and information with respect to transactions in such securities
to determine current market value. 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. 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 specific procedures appropriate to each security as established
by and under the general supervision of the Board of Directors. The determination of fair value involves subjective judgments. As a
result, using fair value to price a security may result in a price materially different from the price used by other investors or the price
that may be realized upon the actual sale of the security.

b. OPTIONS The Company may purchase and write (sell) put and call options. The Company purchases put options or writes call
options to hedge the value of portfolio investments while it purchases call options and writes put options to obtain equity market
exposure. The risk associated with purchasing an option is that the Company pays a premium whether or not the option is exercised.
Additionally, the Company bears the risk of loss of the premium and a change in market value should the counterparty not perform
under the contract. Put and call options purchased are accounted for in the same manner as portfolio securities. Premiums received
from writing options are reported as a liability on the Statement of Assets and Liabilities. Those that expire unexercised are treated
by the Company on the expiration date as realized gains on written option transactions in the Statement of Operations. The 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 for the securities purchased by
the Company and is parenthetically disclosed under cost of investments on the Statement of Assets and Liabilities. The Company
as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option. See
Note 4 for option activity.

c. SECURITY TRANSACTIONS AND INVESTMENT INCOME Security transactions are recorded as of the trade date. Dividend income and
distributions to stockholders are recorded as of the ex-dividend dates. Interest income, adjusted for amortization of discount and pre-
mium on investments, is earned from settlement date and is recognized on the accrual basis. Cost of short-term investments represent
amortized cost.

d. FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such currencies versus U.S. dollars on the date of valuation.
Purchases and sales of securities, income and expense items denominated in foreign currencies are translated into U.S. dollars at
the exchange rate in effect on the transaction date. Events may impact the availability or reliability of foreign exchange rates used
to convert the U.S. dollar equivalent value. If such an event occurs, the foreign exchange rate will be valued at fair value using
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. Such changes are included in net realized and
unrealized gain or loss on the Statement of Operations.

Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade
and settlement dates on 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 arise from changes in foreign exchange rates on foreign 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 supervi-
sion 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 distribu-
tions 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, man-
agement 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. CONTINGENT LIABILITIES Amounts related to contingent liabilities are accrued if it is probable that a liability has been incurred
and an amount is reasonably estimable. Management evaluates whether there are incremental legal or other costs directly associated
with the ultimate resolution of a matter that are reasonably estimable and, if so, they are included in the accrual.

h. INDEMNIFICATIONS In the ordinary course of business, the Company enters into contracts that contain a variety of indemnifications.
The Company’s maximum exposure under these arrangements is unknown. However, the Company has not had prior claims or losses
pursuant to these indemnification provisions and expects the risk of loss thereunder to be remote.

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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 using amortized cost
and which transact at net asset value, typically $1.00 per share),

Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.), and

Level 3 - significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those
securities. The following is a summary of the inputs used to value the Company’s net assets as of September 30, 2017:

 

Transfers of Level 3 securities, if any, are reported as of the actual date of reclassification. No such transfers occurred during the nine
months ended September 30, 2017.

3. PURCHASES AND SALES OF SECURITIES - Purchases and sales of securities (other than short-term securities and options) for the nine
months ended September 30, 2017 amounted to $152,014,649 and $221,971,906, on long transactions, respectively.

4. OPTIONS - The level of activity in purchased and written options varies from year to year based upon market conditions.
Transactions in purchased calls and put options, as well as written covered call options and collateralized put options for the nine
months ended September 30, 2017 were as follows:

 

5. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS - The authorized capital stock of the Company consists of 50,000,000 shares of
Common Stock, $1.00 par value, and 10,000,000 shares of Preferred Stock, $1.00 par value. With respect to the Common Stock,
26,497,576 shares were issued and outstanding; 8,000,000 Preferred Shares were originally issued and 7,604,687 were outstanding on
September 30, 2017.

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. On December 10, 2008, the Board
of Directors authorized the repurchase of up to 1 million Preferred Shares in the open market at prices below $25.00 per share. This
authorization has been renewed annually thereafter. To date, 395,313 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 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 discounted asset coverage for its portfolio that equals or exceeds a Basic Maintenance Amount. If the Company fails to meet
these requirements in the future and does not cure such failure, the Company may be required to redeem, in whole or in part, shares
of Preferred Stock at a redemption price of $25.00 per share plus accumulated and unpaid dividends. In addition, failure to meet the
foregoing asset coverage requirements could restrict the Company’s ability to pay dividends on shares of Common Stock and could lead
to sales of portfolio securities at inopportune times.

The holders of Preferred Stock have voting rights equivalent to those of the holders of Common Stock (one vote per share) and, gener-
ally, 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’ dividends, the holders of Preferred Stock will have the right to elect a majority of the directors. In
addition, the Investment Company Act of 1940 requires that approval of the holders of a majority of any outstanding Preferred Shares,
voting separately as a class, would be required to (a) adopt any plan of reorganization that would adversely affect the Preferred Stock
and (b) take any action requiring a vote of security holders, including, among other things, changes in the Company’s subclassification
as a closed-end investment company or changes in its fundamental investment policies.

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5. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS - (Continued from bottom of previous page.)
The Company presents its Preferred Stock, for which its redemption is outside of the Company’s control, outside of the net assets
applicable to Common Stock in the Statement of Assets and Liabilities.

Transactions in Common Stock during the nine months ended September 30, 2017 and the year ended December 31, 2016 were as
follows:

 

At September 30, 2017, the Company held in its treasury 5,483,296 shares of Common Stock with an aggregate cost of $180,327,059.
The tax basis distributions during the year ended December 31, 2016 are as follows: ordinary distributions of $10,028,323 and net
capital gains distributions of $86,205,419. As of December 31, 2016, distributable earnings on a tax basis included $10,571,042
from undistributed net capital gains and $513,728,459 from net unrealized appreciation on investments if realized in future years.
Reclassifications arising from permanent “book/tax” difference reflect non-tax deductible expenses during the year ended December
31, 2016. As a result, additional paid-in capital was decreased by $1,741 and over-distributed net investment income was decreased by
$1,741. Net assets were not affected by this reclassification.

6. OFFICERS’ COMPENSATION - The aggregate compensation accrued and paid by the Company during the nine months ended September
30, 2017 to its officers (identified on back cover) amounted to $4,788,000.

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 nine months ended September 30, 2017 were:

 

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 employ-
ees. The aggregate cost of such plans for the nine months ended September 30, 2017 was $697,891. The qualified thrift plan acquired
14,300 shares, sold 26,963 shares, and distributed 31,908 shares of the Company’s Common Stock during the nine months ended
September 30, 2017 and held 573,334 shares of the Company’s Common Stock at September 30, 2017.

8. OPERATING LEASE COMMITMENT - In September 2007, the Company entered into an operating lease agreement for office space which
expires in February 2018 and provided for aggregate rental payments of approximately $10,755,000, net of construction credits. The
lease agreement contains clauses whereby the Company receives free rent for a specified number of months and credit towards con-
struction of office improvements, and incurs escalations annually relating to operating costs and real property taxes and to annual rent
charges beginning in February 2013. The Company had the option, which was not exercised, to renew the lease after February 2018
for five years at market rates. Rental expense approximated $969,400 for the nine months ended September 30, 2017. Minimum rental
commitments under the operating lease are approximately $1,183,000 in 2017, and $99,000 in 2018.

In February 2016, 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 an asset and offsetting liability on the statement of assets and liabilities that arises from entering into a lease,
including an operating lease. Existing U.S. GAAP does not require the lessee to record an asset and offsetting liability associated with
an operating lease. Generally consistent with existing U.S. GAAP, the annual cost of an operating lease will continue to be reflected as
an expense in the statements of operations and changes in net assets and disclosure of the terms of a lease will continue to be reported
in the footnotes to the financial statements. ASU 2016-02 is effective for financial statements issued for fiscal years beginning after
December 15, 2018, including interim periods within those fiscal years. Early application is permitted and likely by the Company in
conjunction with the expiration of its current operating lease on January 31, 2018 and entrance into a new operating lease which is
anticipated to be effective in the first quarter of 2018. This will necessitate reporting an asset and offsetting liability on the statement
of assets and liabilities of the Company at that time.

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                          OTHER MATTERS (Unaudited)                                
Previous purchases of the Company’s Common and Preferred Stock are
set forth in Note 5 on pages 10 and 11. Prospective purchases of Common
and Preferred Stock may be made at such times, at such prices, in such
amountsandinsuchmannerastheBoardofDirectorsmaydeemadvisable.

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,
2017 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.

In addition to distributing financial statements as of the end of each
quarter, General American Investors files a Quarterly Schedule of
Portfolio Holdings (Form N-Q) with the Securities and Exchange
Commission (“SEC”) as of the end of the first and third calendar
quarters. The Company’s Forms N-Q are available at www.generalam-
ericaninvestors.com and on the SEC’s website: www.sec.gov. Copies
of Forms N-Q may also be obtained and reviewed at the SEC’s Public
Reference Room in Washington, DC or through the Company by call-
ing us at 1-800-436-8401. Information on the operation of the SEC’s
Public Reference Room may be obtained by calling 1-800-SEC-0330.

On April 13, 2017, 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 quarterly cer-
tifications, included in filings with the SEC on Forms N-CSR and N-Q
relating to, among other things, the Company’s disclosure controls and
procedures and internal control over financial reporting, as applicable.