Item 1:  Report to Shareholders

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                                                                           General American Investors Company, Inc.
                                                                            100 Park Avenue, New York, NY 10017
                                                                                  (212) 916-8400 (800) 436-8401
                                                                            E-mail: InvestorRelations@gainv.com
                                                                              www.generalamericaninvestors.com

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General American Investors’ net asset value (NAV) per Common Share (assuming reinvestment of all dividends) increased 18.4% for the year ended December 31, 2017. The U.S. stock market was up 21.8% for the year, as measured by our benchmark, the Standard & Poor’s 500 Stock Index (including income). The return to our Common Stockholders was 21.2% and the discount at which our shares traded to their NAV continued to fluctuate and on December 31, 2017, it was 15.0%.

The table that follows provides a comprehensive presentation of our performance and compares our returns on an annualized basis with the S&P 500.

 

At year end we continue to enjoy the second-longest bull market in history. The economy has expanded in tandem and has accelerated modestly during the last nine months. At 9 years old, the U.S. equity market looks robust fundamentally, and may be capable of further gains as interest rates, though higher, remain subdued with modestly higher inflation due largely to increasing services costs. The passage of the tax bill may have created opportunities not yet fully appreciated, with nearly 2,500 large and medium size companies either raising wages or paying individual workers substantive one-time bonuses. Wage gains are more likely to positively affect consumption on a long-term basis than the bonus payments, but regardless, each is accretive to the U.S. economy’s performance over the near-term. Significant deregulation has been proposed legislatively and implemented by fiat in the U.S. which may have also lubricated the economy with reduced friction costs.

Equity markets have risen further than many analysts had predicted and valuations may appear high and already discounting much of the tax benefits. In consequence, the behavior of central banks and their decisions with respect to interest rates over the course of the next year or two may be taking center stage since earnings multiples are generally the inverse of yields. This is not to suggest markets have peaked since yields are rising from historically depressed levels. It is merely an observation that volatility which has been unusually constrained over the past several years may begin to rise as uncertainty over the push and pull of potentially shrinking earnings multiples are met by accelerating earnings growth. According to a recent study, reported earnings growth among nearly 20,000 listed firms worldwide is anticipated to rise by nearly 19% in 2017. While inflation is expected to rise over the business cycle, equities remain better positioned with respect to inflation than most other asset classes, short of commodities, as firms that have pricing power need not experience margin contraction.

The many countervailing forces in the current environment and the absence of a significant market correction over the past 19 months implies caution. The economy and the equity markets appear capable of withstanding some headwinds and continuing their advance, short of some geopolitical event or a central bank-led excess withdrawal of liquidity. In short, Goldilocks appears fine as the bears are in the woods and not yet in the house. We remain sanguine on the equity markets, but vigilant given this historically unusual environment.

Mr. Daniel M. Neidich, a director since 2007, decided not to stand for re-election at the annual meeting held in April 2017. His wisdom, judgment, and service have been invaluable to the Board of Directors and we express our deep gratitude and appreciation for his distinguished service to the Company.

We are pleased to announce that on January 18, 2017, Ms. Clara E. Del Villar, and on May 30, 2017, Ms. Rose P. Lynch, were appointed to the Board of Directors of the Company. Ms. Del Villar has extensive experience in the financial services, technology, energy, and publishing industries as a portfolio manager at Neuberger Berman and as the Founder, Chief Executive Officer, and Editor-in-Chief of the Hispanic Post, among others. These roles and experience provide Ms. Del Villar with an extremely diverse background in numerous disciplines and industries.

Ms. Lynch has extensive executive level strategic marketing, financial and operating experience in the fashion, apparel and beauty industries. Ms. Lynch currently serves on the Board of Directors of Steven Madden, Ltd., and is the Founder and President of Marketing Strategies, LLC. Ms. Lynch's familiarity with these industries and her senior level executive and board experience will be of great value to the Company.

Information about the Company, including our investment objectives, operating policies and procedures, investment results, record of dividend payments, financial 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,

Jeffrey W. Priest

President and Chief Executive Officer

January 24, 2018

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Total return on $10,000 in-
vestment for 20 years ended
December 31, 2017

The investment return for a Common Stockholder of General American Investors (GAM) over the 20 years ended December 31, 2017 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 illustration assumes an investment of $10,000 at the beginning of 1998.

Stockholder Return is the return a Common Stockholder of GAM would have achieved assuming reinvestment of all dividends and distributions at the actual reinvestment price and of all cash dividends and distributions at the market price on the ex-dividend date.

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 and distributions at the reinvestment prices indicated above.

Standard & Poor’s 500 Return is the total rate of return on this widely-recognized, unmanaged index which is a measure of general stock market performance, including dividend income.

Past performance may not be indicative of future results.

The following tables and graph do not reflect the deduction of taxes that a stockholder would pay on Company distributions or the sale of Company shares.

 

This table shows dividends
and distributions on the
Company’s Common Stock
for the prior 20-year period.
Amounts shown are based
upon the year in which the
income was earned, not the
year paid. Spill-over pay-
ments made after year-end
are attributable to income
and gains earned in the
prior year.

 

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The diversification of the
Company’s net assets
applicable to its Common
Stock by industry group as
of December 31, 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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(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 financial statement)

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The statement of
investments as of
December 31, 2017,
shown on pages 8 - 10
includes securities of 57
issuers. Listed here are
the ten largest holdings
on that date.

 

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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 December 31, 2017, the cost of investments for Federal income tax purposes was $681,216,803; aggregate gross
unrealized appreciation was $599,385,399; aggregate gross unrealized depreciation was $18,786,559; and net unrealized
appreciation was $580,598,840.

 

*The maximum cash outlay if all call options are exercised is $24,500,000.

(see notes to financial statements)

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(see notes to financial statements)

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(see notes to financial statements)

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The table shows per share
operating performance
data, total investment
return, ratios and supple-
mental data for each year
in the five-year period
ended December 31, 2017.
This information has
been derived from infor-
mation contained in the
financial statements and
market price data for the
Company’s shares.

 

NOTES TO FINANCIAL STATEMENTS

General American Investors

1. SIGNIFICANT ACCOUNTING POLICIES

     General American Investors Company, Inc. (the “Company”), established in 1927, is registered under the Investment Company Act of 1940 as a closed-end, diversified management investment company. It is internally managed by its officers under the direction of the Board of Directors.

     The 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

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1. SIGNIFICANT ACCOUNTING POLICIES - (Continued from previous page.)

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. SECURITIES TRANSACTIONS AND INVESTMENT INCOME 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.

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 from investments on the Statement of Operations.

     Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on 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 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. 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.

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1. SIGNIFICANT ACCOUNTING POLICIES - (Continued from previous page.)

 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.

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 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 December 31, 2017:

 

     Transfers of Level 3 Securities, if any, are reported as of the actual date of reclassification. No such transfers occurred during the year ended December 31, 2017.

3. PURCHASES AND SALES OF SECURITIES

     Purchases and sales of securities (other than short-term securities and options) during 2017 amounted to $216,996,261 and $341,267,505, 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 call and put options, as well as written covered call options and collateralized put options during the year ended December 31, 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, 26,453,136 shares were issued and outstanding; 8,000,000 Preferred Shares were originally issued and 7,604,687 were outstanding on December 31, 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.

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5. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS - (Continued from previous page.)

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

     The Company presents its Preferred Stock, for which its redemption is outside of the Company’s control, outside of the net assets applicable to Common Stock in the Statement of Assets and Liabilities.

Transactions in Common Stock during 2017 and 2016 were as follows:

 

     At December 31, 2017, the Company held in its treasury 5,527,736 shares of Common Stock with an aggregate cost of $180,582,009.

     The tax basis distributions during the year ended December 31, 2017 are as follows: ordinary distributions of $17,329,407 and net capital gains distributions of $80,713,640. As of December 31, 2017, distributable earnings on a tax basis included $16,747,116 from undistributed net capital gains and $580,692,277 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, 2017. As a result, additional paid-in capital was decreased by $1,517 and over-distributed net investment income was decreased by $1,517. As of December 31, 2017, the Company had straddle loss deferrals of $131,762. Net assets were not affected by this reclassification.

6. OFFICERS' COMPENSATION

     The aggregate compensation accrued and paid by the Company during the year ended December 31, 2017 to its officers (identified on page 20) amounted to $6,688,000 of which $1,698,000 was payable as of year end.

7. BENEFIT PLANS

     The Company has funded (qualified) and unfunded (supplemental) defined contribution thrift plans that are available to its employees. The aggregate cost of such plans for 2017 was $982,992. The qualified thrift plan acquired 69,658 shares in the open market, sold 26,963 shares in the open market, and distributed to a retired employee 31,908 shares of the Company’s Common Stock during the year ended December 31, 2017. It held 628,692 shares of the Company’s Common Stock at December 31, 2017.

     The Company also has both funded (qualified) and unfunded (supplemental) noncontributory defined benefit pension plans that cover its employees. The pension plans provide a defined benefit based on years of service and final average salary with an offset for a portion of Social Security covered compensation. The investment policy of the pension plan is to invest not less than 80% of its assets, under ordinary conditions, in equity securities and the balance in fixed income securities. The investment strategy is to invest in a portfolio of diversified registered investment funds (open-end and exchange traded) and an unregistered partnership. Open-end funds and the unregistered partnership are valued at net asset value based upon the fair market value of the underlying investment portfolios. Exchange traded funds are valued based upon their closing market price.

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7. BENEFIT PLANS - (Continued from previous page.)

     The Company recognizes the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in the Statement of Assets and Liabilities and recognizes changes in funded status in the year in which the changes occur through other comprehensive income.

 

WEIGHTED-AVERAGE ASSUMPTIONS USED TO DETERMINE OBLIGATION AT YEAR END:
    Discount rate: 3.55%
    Salary scale assumption: 4.50% for NHCE* and 2.75% for HCE*
    Mortality: RP-2014 Mortality Table scaled back through 2006/MP-2017 Projection Scale without collar adjustment

 

WEIGHTED-AVERAGE ASSUMPTIONS TO DETERMINE NET PERIODIC BENEFIT COST DURING YEAR:
     Discount rate: 4.00%
     Expected return on plan assets**: 7.25% for Qualified Plan; N/A for Supplemental Plan
     Salary scale assumption: 4.50% for NHCE* and 2.75% for HCE*
     Mortality: RP-2014 Mortality Table scaled back through 2006/MP-2016 Projection Scale without collar adjustment

*NHCE - Non-Highly Compensated Employee; HCE - Highly Compensated Employee.

**Determined based upon a discount to the long-term average historical performance of the plan.

 

     The Company's qualified pension plan owns assets as of December 31, 2017 comprised of $16,876,101 of equity securities and $2,195,673 of money market fund assets classified as Level 1 and $3,987,175 of limited partnership interests which are not classified by level.

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7. BENEFIT PLANS - (Continued from previous page.)

 

     The estimated amount that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2018 is $225,116 which is comprised of $224,531 of actuarial loss and $585 of service cost.

8. OPERATING LEASE COMMITMENT

     In 2007, the Company entered into an operating lease agreement for office space which expires in 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 construction of office improvements, and incurs escalations annually relating to operating costs and real property taxes and to annual rent charges beginning in 2013. The Company has extended the lease for two months through March 2018. Rental expense approximated $1,286,000 for the year ended December 31, 2017. Minimum rental commitments under the operating lease are approximately $192,200 in 2018 which includes the cost of extending the lease to March 31, 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.

     The Company entered into a new 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. The Company has the option to extend the lease for an additional five years at market rates. Minimum rental commitments under this operating lease are approximately:

 

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TO THE BOARD OF DIRECTORS
AND STOCKHOLDERS OF
GENERAL AMERICAN INVESTORS COMPANY, INC.

Opinion on the Financial Statements

We have audited the accompanying statement of assets and liabilities of General American
Investors Company, Inc. (“the Company”), including the statements of investments and
options written as of December 31, 2017, and the related statements of operations for the year
then ended, the statements of changes in net assets for each of the two years in the period then
ended, the financial highlights for each of the five years in the period then ended and the
related notes (collectively referred to as the “financial statements”). In our opinion, the finan-
cial statements present fairly, in all material respects, the financial position of the Company at
December 31, 2017, the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended and its financial highlights for each
of the five years in the period then ended, in conformity with U.S. generally accepted account-
ing principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsi-
bility is to express an opinion on the Company's financial statements based on our audits. We
are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) ("PCAOB") and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations
of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCOAB. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement, whether due to error or fraud. The
Company is not required to have, nor were we engaged to perform, an audit of the Company’s
internal control over financial reporting. As part of our audits, we are required to obtain an
understanding of internal control over financial reporting, but not for the purpose of express-
ing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 2017, by correspondence with the custodian and brokers.
Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.

Ernst & Young LLP
We have served as the Company’s auditor since 1949.
Philadelphia, PA
February 13, 2018

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All Officers serve for a term of one year and are elected by the Board of Directors at the time of its annual meeting in April.

The address for each officer is the Company’s office. All information is as of December 31, 2017.

 

Previous purchases of the Company’s Common and Preferred Stock are set forth in Note 5, on pages 15 and 16.
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, 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.generalamerican-
investors.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 calling 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 certifications, included in filings with the SEC on Forms N-CSR and N-Q relating to, among other
things, the Company’s disclosure controls and procedures and internal control over financial reporting, as applicable.

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The Company is a stand-alone fund. All Directors serve for a term of one year and are elected by Stockholders at the time of the annual
meeting. The address for each Director is the Company’s office. All information is as of December 31, 2017.

ITEM 2. CODE OF ETHICS.

On July 9, 2003, the Board of Directors adopted a code of ethics that applies to
registrant's principal executive and senior financial officers. The code of
ethics is available on registrant's Internet website at
http://www.generalamericaninvestors.com/governance/code-of-ethics.php. Since the code
of ethics was adopted there have been no amendments to the code nor have there been
granted any waivers from any provisions of the code of ethics.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Directors has determined that none of the members of registrant's
audit committee meets the definition of "audit committee financial expert" as
the term has been defined by the U.S. Securities and Exchange Commission (the
"Commission"). In addition, the Board of Directors has determined that the
members of the audit committee have sufficient financial expertise and
experience to perform the duties and responsibilities of the audit committee.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

(a) AUDIT FEES The aggregate fees paid and accrued by the registrant for
professional services rendered by its independent auditors, Ernst & Young LLP,
for the audit of the registrant's annual financial statements for 2017 and 2016 were $167,900 and
$163,000, respectively.

(b) AUDIT RELATED FEES The aggregate fees paid or accrued by the registrant for
audit-related professional services rendered by Ernst & Young LLP for 2017 and
2016 were $32,900 and $32,000, respectively. Such services and related fees for
2017 and 2016 included: review of quarterly employee security transactions and
issuance of report thereon ($30,900 and $30,000, respectively) and other audit-related
services ($2,000 and $2,000, respectively).

(c) TAX FEES The aggregate fees paid or accrued by the registrant for
professional services rendered by Ernst & Young LLP for the review of the
registrant's federal, state and city income tax returns and excise tax
calculations for 2017 and 2016 were $21,600 and $21,000, respectively.

(d) ALL OTHER FEES No such fees were billed to the registrant by Ernst & Young
LLP for 2017 or 2016.

(e)(1) AUDIT COMMITTEE PRE-APPROVAL POLICY All services to be performed
for the registrant by Ernst & Young LLP must be pre-approved by the audit committee.
All services performed during 2017 and 2016 were pre-approved by the committee.

(2) Not applicable.

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(f) Not applicable.

(g) The aggregate fees paid or accrued by the registrant for non-audit
professional services rendered by Ernst & Young LLP to the registrant for 2017
and 2016 were $54,500 and $53,000, respectively.

(h) Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

(a) The registrant has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Securities Exchange
Act of 1934. The members of the audit committee are: John D. Gordan, III, Chairman,
Arthur G. Altschul, Jr., Rodney B. Berens, Lewis B. Cullman, Clara E. Del Villar, and
Henry R. Schirmer.

(b) Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS

The schedule of investments in securities of unaffiliated issuers is included as
part of the report to stockholders filed under Item 1 of this form.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

General American Investors Company, Inc.

PROXY VOTING POLICIES AND PROCEDURES

General American Investors Company, Inc. (the "Company") is uniquely
structured as an internally managed closed-end investment company. Our research
efforts, including the receipt and analysis of proxy material, are focused on
the securities in the Company's portfolio, as well as alternative investment
opportunities. We vote proxies relating to our portfolio securities in the best
long-term interests of the Company.

Our investment approach stresses fundamental security analysis, which
includes an evaluation of the integrity, as well as the effectiveness of
management personnel. In proxy material, we review management proposals and
management recommendations relating to shareholder proposals in order to, among
other things, gain assurance that management's positions are consistent with its
integrity and the long-term interests of the company. We generally find this to
be the case and, accordingly, give significant weight to the views of management
when we vote proxies.

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Proposals that may have an impact on the rights or privileges of the
securities held by the Company would be reviewed very carefully. The explanation
for a negative impact could justify the proposal; however, if such justification
were not present, we would vote against a significant reduction in the rights or
privileges associated with any of our holdings.

Proposals relating to corporate governance matters are reviewed on a
case-by-case basis. When they involve changes in the state of incorporation,
mergers or other restructuring, we would, if necessary, complete our review of
the rationale for the proposal by contacting company representatives and, with
few exceptions, vote in favor of management's recommendations. Proposals
relating to anti-takeover provisions, such as staggered boards, poison pills and
supermajorities could be more problematic. They would be considered in light of
our assessment of the capability of current management, the duration of the
proposal, the negative impact it might have on the attractiveness of the company
to future "investors," among other factors. We can envision circumstances under
which we would vote against an anti-takeover provision.

Generally, we would vote with management on proposals relating to changes
to the company's capital structure, including increases and decreases of capital
and issuances of preferred stock; however, we would review the facts and
circumstances associated with each proposal before finalizing our decision.

Well-structured stock option plans and management compensation programs are
essential for companies to attract and retain high caliber management personnel.
We generally vote in favor of proposals relating to these issues; however, there
could be an occasion on which we viewed such a proposal as over reaching on the
part of management or having the potential for excessive dilution when we would
vote against the proposal.

Corporations should act in a responsible manner toward their employees, the
communities in which they are located, the customers they serve and the world at
large. We have observed that most stockholder proposals relating to social
issues focus on a narrow issue and the corporate position set forth in the proxy
material provides a well-considered response demonstrating an appropriate and
responsible action or position. Accordingly, we generally support management
recommendations on these types of proposals; however, we would consider each
proposal on a case-by-case basis.

We take voting proxies of securities held in our portfolio very seriously.
As indicated above, it is an integral part of the analytical process at General
American Investors. Each proposal and any competing interests are reviewed
carefully on a case-by-case basis. Generally, we support and vote in accordance
with the recommendations of management; however, the overriding basis for the
votes we cast is the best long-term interests of the Company.

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Date: July 9, 2003

Item 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT
INVESTMENT COMPANIES.

As of December 31, 2017 and the date of this filing, Mr. Jeffrey W. Priest, President and
Chief Executive Officer, serves as the Portfolio Manager of the registrant and is
responsible for its day-to-day management. Mr. Priest has been employed by the
registrant since October, 2010, becoming its President in February 2012, and its Chief
Executive Officer in January 2013. Mr. Priest does not provide such services for any
other registered investment companies, pooled investment vehicles, or other accounts.
For performing such responsibilities, Mr. Priest receives cash compensation in the form
of a fixed salary and an annual performance bonus. The annual performance bonus is
principally based upon the absolute performance of the registrant and its relative
performance to a closed-end management investment company peer group (comprised
of core equity funds) and the S&P 500 Index. Performance is evaluated in December by
the Compensation Committee of the Board of Directors (the members of which are
independent and consult with the full Board of Directors), based upon the registrant's net
asset value return and total investment return during the twelve months ended October
31. Additional consideration is given to performance during the subsequent intervening
period and to market compensation data provided by a noted industry compensation
consulting firm. Mr. Priest beneficially owns in excess of $1 million of the registrant's
outstanding equity securities.

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ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END
MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

(a) General American Investors Company, Inc. Common Stock (GAM)

 

Note- On July 12, 2017 and December 13, 2017, the Board of Directors authorized the repurchase of an additional 1,000,000
and 2,000,000 shares, respectively, of the registrant’s common stock when the shares were trading at a discount from
the underlying net asset value by at least 8%. This represents a continuation of the repurchase program which began in
March 1995. As of the beginning of the period, July 1, 2017, there were 300,461 shares available for repurchase under
the aforementioned extension of such authorization. As of the end of the period, December 31, 2017, there were
1,919,718 shares available for repurchase under this program.

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(b) General American Investors Company, Inc. Preferred Stock (GAMpB)

 

Note- The Board of Directors has authorized the repurchase of the registrant's preferred stock when the shares are
trading at a prices not in excess of $25.00 per share. As of the beginning of the period, July 1, 2017,
there were 604,687 shares available for repurchase under such authorization. As of the end of the period,
December 31, 2017, there were 604,687 shares available for repurchase under this program.

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ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board of Directors as set forth in the
registrant's Proxy Statement, dated February 20, 2018.

ITEM 11. CONTROLS AND PROCEDURES.

Conclusions of principal officers concerning controls and procedures

(a) As of December 31, 2017, an evaluation was performed under the supervision
and with the participation of the officers of General American Investors
Company, Inc. (the "Registrant"), including the principal executive officer
("PEO") and principal financial officer ("PFO"), to assess the effectiveness of
the Registrant's disclosure controls and procedures. Based on that evaluation,
the Registrant's officers, including the PEO and PFO, concluded that, as of
December 31, 2017, the Registrant's disclosure controls and procedures were
reasonably designed so as to ensure: (1) that information required to be
disclosed by the Registrant on Form N-CSR and on Form N-Q is recorded,
processed, summarized and reported within the time periods specified by the
rules and forms of the Securities and Exchange Commission; and (2) that material
information relating to the Registrant is made known to the PEO and PFO as
appropriate to allow timely decisions regarding required disclosure.

(b) There have been no significant changes in the Registrant's internal control
over financial reporting (as defined in Rule 30a-3(d) under the Investment
Company Act of 1940 (17 CFR 270.30a-3(d)) that occurred during the Registrant's
last fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the Registrant's internal control over financial reporting.

ITEM 12. EXHIBITS

(a)(1) As indicated in Item 2., the code of ethics is posted on the registrant's
Internet website.

(a)(2) The certifications of the principal executive officer and the principal
financial officer pursuant to Rule 30a-2(a)under the Investment Company
Act of 1940 are attached hereto as Exhibit 99 CERT.

(a)(3) There were no written solicitations to purchase securities under
the Rule 23c-1 under the Investment Company Act of 1940 during the
period covered by the report.

(b) The certifications of the principal executive officer and the principal
financial officer pursuant to Rule 30a-2(b) under the Investment Company
Act of 1940 are attached hereto as Exhibit 99.906 CERT.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.

General American Investors Company, Inc.

By: /s/Eugene S. Stark
Eugene S. Stark
Vice-President, Administration

Date: February 13, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By: /s/Jeffrey W. Priest
Jeffrey W. Priest
President and Chief Executive Officer
(Principal Executive Officer)

Date: February 13, 2018

By: /s/Eugene S. Stark
Eugene S. Stark
Vice-President, Administration
(Principal Financial Officer)

Date: February 13, 2018