GAM Holding AG
Annual Report 2017

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G E N E R A L A M E R I C A N I N V E S T O R S 2 0 1 7 A N N U A L R E P O R T 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 GENERAL AMERICAN INVESTORS COMPANY, INC. Established in 1927, the Company is a closed-end investment company listed on the New York Stock Exchange. Its objective is long-term capital appreciation through investment in companies with above average growth potential. FINANCIAL SUMMARY (unaudited) Net assets applicable to Common Stock - December 31 Net investment income Net realized gain Net increase (decrease) in unrealized appreciation Distributions to Preferred Stockholders Per Common Share-December 31 Net asset value Market price Discount from net asset value Common Shares outstanding-Dec. 31 Market price range* (high-low) Market volume-shares *Unadjusted for dividend payments. 2017 2016 $1,070,483,445 8,564,156 91,833,612 70,336,629 (11,311,972) $1,022,534,692 8,172,289 91,570,557 (15,321,337) (11,311,972) $40.47 $34.40 -15.0% $37.56 $31.18 -17.0% 26,453,136 $36.53-$31.12 10,504,400 27,221,115 $33.25-$26.88 15,584,306 DIVIDEND SUMMARY (per share) (unaudited) Record Date Payment Date Ordinary Income Long-Term Capital Gain Total Common Stock Nov. 13, 2017 Feb. 5, 2018 Total from 2017 earnings Dec. 29, 2017 Feb. 16, 2018 Nov. 14, 2016 Jan. 30, 2017 Total from 2016 earnings Dec. 30, 2016 Feb. 10, 2017 $0.578150 — $0.578150 $0.282605 — $0.282605 $2.511850 0.500000 $3.011850 $2.797395 0.200000 $2.997395 $3.090000 0.500000 $3.590000 $3.080000 0.200000 $3.280000 Preferred Stock Mar. 7, 2017 Jun. 7, 2017 Sept. 7, 2017 Dec. 7, 2017 Total for 2017 Mar. 7, 2016 Jun. 7, 2016 Sept. 7, 2016 Dec. 7, 2016 Total for 2016 Mar. 24, 2017 Jun. 26, 2017 Sept. 25, 2017 Dec. 26, 2017 Mar. 24, 2016 Jun. 24, 2016 Sept. 26, 2016 Dec. 27, 2016 $.069579 .069579 .069579 .069579 $.278316 $.034185 .034185 .034185 .034185 $.136740 $.302296 .302296 .302296 .302296 $1.209184 $.337690 .337690 .337690 .337690 $1.350760 $.371875 .371875 .371875 .371875 $1.487500 $.371875 .371875 .371875 .371875 $1.487500 T O T H E S T O C K H O L D E R S G e n e r a l A m e r i c a n I n v e s t o r s 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 1 T O T H E S T O C K H O L D E R S G e n e r a l A m e r i c a n I n v e s t o r s General American Investors’ net asset value (NAV) per Common Share (assuming re- investment 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 compre- hensive presentation of our performance and compares our returns on an annualized basis with the S&P 500. Years Stockholder Return (Market Value) NAV Return S&P 500 3 5 10 20 30 40 7.3% 8.5% 12.6 5.4 9.2 12.8 14.0 12.5 6.0 9.2 12.2 13.7 11.4% 15.8 8.5 7.2 10.7 11.8 10.1 11.5 11.9 50 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 substan- tive 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 leg- islatively 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 be- havior 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 mar- kets have peaked since yields are rising from historically depressed levels. It is merely an observation that volatility which has been un- usually constrained over the past several years may begin to rise as uncertainty over the push and pull of potentially shrinking earnings mul- tiples are met by accelerating earnings growth. According to a recent study, reported earn- ings 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 experi- ence 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 an- nual 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 distin- guished 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 manag- er 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 dis- ciplines and industries. Ms. Lynch has extensive executive level stra- tegic 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.generalamericanin- vestors.com. By Order of the Board of Directors, Jeffrey W. Priest President and Chief Executive Officer January 24, 2018 2 T H E C O M P A N Y G e n e r a l A m e r i c a n I n v e s t o r s Corporate Overview General American Investors, established in 1927, is one of the nation’s oldest closed-end investment companies. It is an independent organization that is internally managed. For reg- ulatory purposes, the Company is classified as a diversified, closed-end management invest- ment company; it is registered under and sub- ject to the Investment Company Act of 1940 and Sub-Chapter M of the Internal Revenue Code. Investment Policy The primary objective of the Company is long-term capital appreciation. Lesser emphasis is placed on current income. In seeking to achieve its pri- mary objective, the Company invests principally in common stocks believed by its management to have better than average growth potential. The Company’s investment approach focuses on the selection of individual stocks, each of which is expected to meet a clearly defined portfolio objective. A continuous investment research program, which stresses fundamental security analysis, is carried on by the officers and staff of the Company under the oversight of the Board of Directors. The Directors have a broad range of experience in business and financial affairs. Portfolio Manager Mr. Jeffrey W. Priest, has been President of the Company since February 1, 2012 and has been responsible for the management of the Company since January 1, 2013 when he was appointed Chief Executive Officer and Portfolio Manager. Mr. Priest joined the Company in 2010 as a senior investment analyst and has spent his entire 30-year busi- ness career on Wall Street. Mr. Priest succeeds Mr. Spencer Davidson who served as Chief Executive Officer and Portfolio Manager from 1995 through 2012. ommon Stock “GAM” Common Stock As a closed-end investment company, the Company does not offer its shares continu- ously. The Common Stock is listed on The New York Stock Exchange (symbol, GAM) and can be bought or sold in the same manner as all listed stocks. Net asset value is computed and published on the Company’s website daily (on an unaudited basis) and is also furnished upon request. It is also available on most electronic quotation services using the symbol “XGAMX.” Net asset value per share (NAV), market price, and the discount or premium from NAV as of the close of each week, is pub- lished in Barron’s and The Wall Street Journal, Monday edition. While shares of the Company usually sell at a discount to NAV, as do the shares of most other domestic equity closed-end investment companies, they occasionally sell at a pre- mium over NAV. Since March 1995, the Board of Directors has authorized the repurchase of Common Stock in the open market when the shares trade at a discount to NAV of at least 8%. To date, 26,140,167 shares have been repurchased. “GAM Pr B” Preferred Stock On September 24, 2003, the Company issued and sold in a n u n d e r w r i t t e n o f f e r i n g 8,000,000 shares of its 5.95% Cumulative Preferred Stock, Series B with a liquidation preference of $25 per share ($200,000,000 in the aggregate). The Preferred Shares are rated “A1” by Moody’s Investors Service, Inc. and are listed and traded on The New York Stock Exchange (symbol, GAM Pr B). The Preferred Shares are available to leverage the investment performance of the Common Stockholders; higher market volatility for the Common Stockholders may result. The Board of Directors authorized the repur- chase of up to 1 million Preferred Shares in the open market at prices below $25 per share. To date, 395,313 shares have been repurchased. 3 T H E C O M P A N Y G e n e r a l A m e r i c a n I n v e s t o r s Dividend and Distribution Policy The Company’s dividend and distribution policy is to dis- tribute to stockholders before year-end substantially all or- dinary income estimated for the full year and capital gains realized during the ten-month period ended October 31 of that year. If any additional capi- tal gains are realized and available or ordinary income is earned during the last two months of the year, a “spill-over” distribution of these amounts may be paid. Dividends and distri- butions on shares of Preferred Stock are paid quarterly. Distributions from capital gains and dividends from ordinary income are allocated proportionately among holders of shares of Common Stock and Preferred Stock. Dividends from income have been paid con- tinuously on the Common Stock since 1939 and capital gain distributions in varying amounts have been paid for each of the years 1943-2017 (except for the year 1974). (A table listing dividends and distributions paid during the 20-year period 1998-2017 is shown at the bottom of page 4.) To the extent that shares can be issued, dividends and distributions are paid to Common Stockholders in additional shares of Common Stock unless the stockhold- er specifically requests payment in cash. Proxy Voting Policies, Procedures and Record The policies and procedures used by the Company to de- termine how to vote proxies relating to portfolio securities and the Company’s proxy voting record for the 12- month period ended June 30, 2017 are available: (1) without charge, upon request, by calling the Company at its toll-free number (1-800-436-8401), (2) on the Company’s website at www.generalamerican- investors.com and (3) on the Securities and Exchange Commission’s website at www.sec. gov. Direct Registration The Company makes avail- able direct registration for its Common Shareholders. Direct registration, an element of the Investors Choice Plan admin- istered by our transfer agent, is a system that allows for book-entry ownership and electronic transfer of our Common Shares. Accordingly, when Common Shareholders, who hold their shares directly, receive new shares resulting from a purchase, transfer or dividend payment, they will receive a state- ment showing the credit of the new shares as well as their Plan account and certificated share balances. A brochure which describes the features and benefits of the Investors Choice Plan, including the ability of share- holders to deposit certificates with our transfer agent, can be obtained by calling American Stock Transfer & Trust Company at 1-800-413- 5499, calling the Company at 1-800-436-8401 or visiting our website: www.generalameri- caninvestors.com - click on Distributions & Reports, then Report Downloads. Privacy Policy and Practices The Company collects non- public personal information about its direct stockhold- ers with respect to their transactions in shares of the Company’s securities (those stockholders whose shares are registered directly in their names). This infor- mation includes the stockholder’s address, tax identification or Social Security number and dividend elections. We do not have knowledge of, nor do we collect personal information about, stockholders who hold the Company’s securities in “street name” registration. We do not disclose any nonpublic personal information about our current or former stock- holders to anyone, except as permitted by law. We restrict access to nonpublic personal information about our stockholders to those few employees who need to know that infor- mation to perform their responsibilities. We maintain safeguards to comply with federal standards to secure our stockholders’ informa- tion. 4 I N V E S T M E N T R E S U L T S ( U N A U D I T E D ) G e n e r a l A m e r i c a n I n v e s t o r s Total return on $10,000 in- vestment for 20 years ended December 31, 2017 T he 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 accompa ny ing 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 Stock holder of GAM would have achieved assum- ing 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 rein- vestment prices indicated above. Standard & Poor’s 500 Return is the total rate of return on this widely-recognized, unman- aged 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. GENERAL AMERICAN INVESTORS STOCKHOLDER RETURN CUMULATIVE INVESTMENT ANNUAL RETURN NET ASSET VALUE RETURN ANNUAL RETURN CUMULATIVE INVESTMENT STANDARD & POOR’S 500 RETURN CUMULATIVE INVESTMENT ANNUAL RETURN $13,131 31.31% $13,514 35.14% $12,855 28.55% 18,281 21,773 22,715 16,535 21,001 22,846 26,822 31,322 34,054 17,640 24,142 28,063 26,578 31,833 42,726 46,708 44,213 47,569 57,659 39.22 19.10 4.33 -27.21 27.01 8.79 17.40 16.78 8.72 -48.20 36.86 16.24 -5.29 19.77 34.22 9.32 -5.34 7.59 21.21 18,433 21,685 21,424 16,493 21,012 23,190 26,947 30,246 32,668 18,614 24,586 28,350 27,536 32,303 43,069 45,852 45,136 49,506 58,605 36.40 17.64 -1.20 -23.02 27.40 10.37 16.20 12.24 8.01 -43.02 32.08 15.31 -2.87 17.31 33.33 6.46 -1.56 9.68 18.38 15,549 14,136 12,455 9,698 12,467 13,812 14,480 16,747 17,653 11,109 14,047 16,163 16,507 19,147 25,352 28,823 29,229 32,731 39,876 20.96 -9.09 -11.89 -22.14 28.56 10.79 4.83 15.66 5.41 -37.07 26.45 15.06 2.13 15.99 32.41 13.69 1.41 11.98 21.83 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 D I V I D E N D S A N D D I S T R I B U T I O N S P E R C O M M O N S H A R E ( 1 9 9 8 - 2 0 1 7 ) ( U N A U D I T E D ) 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. EARNINGS SOURCE SHORT-TERM LONG-TERM YEAR INCOME CAPITAL GAINS CAPITAL GAINS 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 $4.400 4.050 6.160 1.370 .330 .590 .957 1.398 2.666 5.250 — $.620 1.550 .640 — — — .041 — .009 $.470 .420 .480 .370 .030 .020 .217 .547 .334 .706 EARNINGS SOURCE SHORT-TERM LONG-TERM RETURN OF YEAR INCOME CAPITAL GAINS CAPITAL GAINS CAPITAL 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $.186 .103 .081 .147 .215 .184 .321 .392 .283 .578 — $.051 .033 .011 .015 — .254 — — — $.254 .186 .316 .342 1.770 1.916 2.925 .858 2.997 3.012 — $.010 — — — — — — — — 5 I N V E S T M E N T R E S U L T S ( U N A U D I T E D ) G e n e r a l A m e r i c a n I n v e s t o r s 20-YEAR INVESTMENT RESULTS ASSUMING AN INITIAL INVESTMENT OF $10,000 CUMULATIVE VALUE OF INVESTMENT COMPARATIVE ANNUALIZED INVESTMENT RESULTS YEARS ENDED DECEMBER 31, 2017 STOCKHOLDER RETURN GAM NET ASSET VALUE S&P 500 STOCK INDEX 1 year 5 years 10 years 15 years 20 years 21.2% 18.4% 12.6 12.5 21.8% 15.8 5.4 8.7 9.2 6.0 8.8 9.2 8.5 9.9 7.2 $75,000 $50,000 $25,000 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. GAM Stockholder Return GAM Net Asset Value S&P 500 Stock Index $0 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 2 0 1 7 P O R T F O L I O D I V E R S I F I C A T I O N ( U N A U D I T E D ) DECEMBER 31, 2017 INDUSTRY CATEGORY Information Technology Semiconductors & Semiconductor Equipment Software & Services Technology Hardware & Equipment Financials Banks Diversified Financials Insurance Consumer Staples Food, Beverage & Tobacco Food & Staples Retailing Consumer Discretionary Automobiles & Components Media Retailing Industrials Capital Goods Commercial & Professional Services Health Care Pharmaceuticals, Biotechnology & Life Sciences Energy Miscellaneous** Telecommunication Services Short-Term Securities Total Investments Other Assets and Liabilities - Net Preferred Stock Net Assets Applicable to Common Stock COST(000) % COMMON VALUE(000) NET ASSETS* $19,814 74,377 29,486 123,677 560 13,633 40,918 55,111 60,723 19,617 80,340 5,092 6,726 52,485 64,303 42,108 11,168 53,276 47,183 42,360 50,759 13,448 530,457 147,196 $677,653 $54,040 119,549 82,440 256,029 18,809 55,701 149,339 223,849 129,366 42,000 171,366 5,421 6,383 133,255 145,059 51,198 53,263 104,461 5.0% 11.2 7.7 23.9 1.8 5.2 13.9 20.9 12.1 3.9 16.0 0.5 0.6 12.4 13.5 4.8 5.0 9.8 89,591 60,610 50,216 13,438 1,114,619 147,196 1,261,815 (1,215) (190,117) $1,070,483 8.4 5.7 4.7 1.2 104.1 13.8 117.9 (0.1) (17.8) 100.0% * Net Assets applicable to the Company's Common Stock. ** Securities which have been held for less than one year, not previously disclosed and not restricted. (see notes to unaudited financial statements) 6 M A J O R S T O C K C H A N G E S ( a ) : T H R E E M O N T H S E N D E D D E C E M B E R 3 1 , 2 0 1 7 ( U N A U D I T E D ) G e n e r a l A m e r i c a n I n v e s t o r s NET SHARES TRANSACTED SHARES HELD INCREASES: NEW POSITIONS Broadcom Limited ADDITIONS Arantana Therapeutics, Inc. Axis Capital Holdings Limited Celgene Corporation Charter Communications, Inc. Ensco plc - Class A Everest Re Group, Ltd. Halliburton Company Liberty Expedia Holdings, Inc. DECREASES: ELIMINATIONS CVS Health Corporation Regal Entertainment Group Repros Therapeutics Inc. REDUCTIONS American Express Company Anadarko Petroleum Corporation Applied Materials, Inc. Cameco Corporation Cisco Systems, Inc. Eaton Corporation plc Ford Motor Company General Electric Company Gilead Sciences, Inc. Liberty Interactive Corporation, Series A Macy's, Inc. MetLife, Inc. Microsoft Corporation Oracle Corporation Paratek Pharmaceuticals, Inc. Tyler Technologies, Inc. Universal Display Corporation Vodafone Group plc ADR 12,900 250,323 30,000 10,000 4,000 150,000 10,000 40,000 25,000 130,000 607,845 237,504 40,000 15,000 20,244 213,000 150,000 65,000 830,000 575,000 20,000 30,000 145,000 20,000 105,000 137,081 38,349 26,000 49,400 100,000 36,900 (b) 1,117,923 275,000 165,000 19,000 1,350,000 120,000 460,000 360,779 --- --- --- 125,000 158,000 239,756 927,947 640,000 124,131 434,063 295,000 443,600 291,599 200,000 380,000 500,686 243,247 308,864 27,170 121,309 421,252 (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) 7 T E N L A R G E S T I N V E S T M E N T H O L D I N G S ( U N A U D I T E D ) G e n e r a l A m e r i c a n I n v e s t o r s The statement of investments as of December 31, 2017, shown on pages 8 - 10 includes securities of 57 issuers. Listed here are the ten largest holdings on that date. THE TJX COMPANIES, INC. Through its T.J. Maxx and Marshalls divisions, TJX is the leading off-price retailer. The continued growth of these divisions in the U.S. and Europe, along with expansion of related U.S. and foreign off-price formats, provide ongoing growth opportunities. REPUBLIC SERVICES, INC. Republic Services is a leading provider of non-hazardous, solid waste collection and disposal services in the U.S. The efficient operation of its routes and facilities combined with appropriate pricing enables Republic Services to generate significant free cash flow. MICROSOFT CORPORATION Microsoft is a leading global provider of software, services, and hardware devices. The company produces the Windows operating system, Office productivity suite, Azure public cloud service, and Xbox gaming console. SHARES VALUE % COMMON NET ASSETS 919,768 $70,325,461 6.6% 787,800 53,263,158 5.0 500,686 42,828,680 4.0 NESTLÉ S.A. Nestlé is a well-managed, global food company with a favorably- positioned product portfolio and an excellent AA rated balance sheet. Market share, volume growth, pricing power, expense control, and capital management yield above-average total return potential. ARCH CAPITAL GROUP LTD. Arch Capital, a Bermuda-based insurer/reinsurer, generates premiums of approximately $6 billion and has a high quality, well- reserved A+ rated balance sheet. This company has a strong management team that exercises underwriting discipline, expense control, and capital management resulting in above-average growth. UNILEVER N.V. Unilever N.V. is a well-managed, primarily emerging market-based, global consumer goods manufacturer focusing on personal care, home care, food and refreshment products, and operates with a solid A+ rated balance sheet. Advantaged geographies coupled with volume growth, pricing power, and management execution should generate above average returns. 450,000 38,704,712 3.6 400,000 36,308,000 3.4 625,000 35,204,513 3.3 BERKSHIRE HATHAWAY INC. CLASS A Berkshire Hathaway is a holding company owning many well-operated subsidiaries mainly in the insurance, railroad, utility/energy, aerospace, manufacturing, retail, and finance industries. The company also holds various thoughtfully selected common stock investments primarily in the consumer non-durable and financial services industries. Berkshire is positioned to provide above average returns due to its conservative, well-reserved AA rated balance sheet. 110 32,736,001 3.1 ASML HOLDING N.V. ASML is the leading global provider of lithography systems for the semiconductor industry, manufacturing complex equipment critical to the production of integrated circuits or microchips. ASML has a dominant market share in next-generation lithography as this market grows its share of semiconductor capex budgets. ASML has growth, prospects, margin leverage, shareholder-friendly capital allocation, and a moderate risk profile. 185,850 32,304,447 3.0 ALPHABET INC. Alphabet is a global technology firm with a dominant market share in internet search, online advertising, desktop, and mobile operating systems, as well as a growing share of cloud computing platforms. Alphabet also sells related consumer and enterprise software and hardware products. Alphabet has a wide competitive moat, a strong business franchise, a reasonable valuation, and manageable risks. GILEAD SCIENCES, INC. Gilead Sciences is a U.S.-based biotechnology company that discovers, develops, and commercializes therapeutics. Originally founded to focus predominantly on antiviral drugs to treat patients with HIV, Hepatitis B, CMV, influenza, and Hepatitis C, the company has expanded its reach into cardiopulmonary medicine, oncology, and other related areas. 30,500 31,915,200 3.0 443,600 31,779,504 2.9 $405,369,676 37.9% 8 S T A T E M E N T O F I N V E S T M E N T S D E C E M B E R 3 1 , 2 0 1 7 G e n e r a l A m e r i c a n I n v e s t o r s CONSUMER DISCRETIONARY (13.3%) SHARES COMMON STOCKS AUTOMOBILES AND COMPONENTS (0.5%) 434,063 Ford Motor Company MEDIA (0.6%) VALUE (NOTE 1a) (COST $5,091,724) $5,421,447 19,000 Charter Communications, Inc. (a) (COST $6,725,543) 6,383,240 RETAILING (12.2%) 20,000 Amazon.com, Inc. (a) 360,779 Liberty Expedia Holdings, Inc. (a) 291,599 Liberty Interactive Corporation, Series A (a) 200,000 Macy's, Inc. 919,768 The TJX Companies, Inc. CONSUMER STAPLES (16.0%) FOOD, BEVERAGE, AND TOBACCO (12.1%) 220,000 Danone (France) 93,210 Diageo plc ADR (United Kingdom) 450,000 Nestlé S.A. (Switzerland) 195,000 PepsiCo, Inc. 625,000 Unilever N.V. (Netherlands/United Kingdom) FOOD AND STAPLES RETAILING (3.9%) 118,781 Costco Wholesale Corporation 200,000 Wal-Mart Stores, Inc. 158,000 Anadarko Petroleum Corporation 927,947 Cameco Corporation (Canada) 1,350,000 Ensco plc - Class A (United Kingdom) 3,830,440 Gulf Coast Ultra Deep Royalty Trust 460,000 Halliburton Company 1,721,159 Helix Energy Solutions Group, Inc. (a) ENERGY (5.7%) FINANCIALS (20.9%) 23,389,400 15,993,333 15,816,330 5,038,000 70,325,461 130,562,524 142,367,211 18,460,644 13,611,456 38,704,712 23,384,400 35,204,513 129,365,725 22,107,520 19,750,000 41,857,520 171,223,245 8,475,120 8,564,951 7,978,500 119,050 22,480,200 12,977,539 60,595,360 (COST $51,601,196) (COST $63,418,463) (COST $60,723,128) (COST $19,485,720) (COST $80,208,848) (COST $42,328,525) BANKS (1.8%) 110,000 M&T Bank Corporation (COST $560,176) 18,808,900 DIVERSIFIED FINANCIALS (5.2%) 125,000 American Express Company 205,000 390,000 Nelnet, Inc. JPMorgan Chase & Co. INSURANCE (13.9%) 154,552 Aon plc (United Kingdom) 400,000 Arch Capital Group Ltd. (a) (Bermuda) 275,000 Axis Capital Holdings Limited (Bermuda) 110 Berkshire Hathaway Inc. Class A (a) (b) 120,000 Everest Re Group, Ltd. (Bermuda) 380,000 MetLife, Inc. (COST $13,632,866) (COST $40,917,896) (COST $55,110,938) 12,413,750 21,922,700 21,364,200 55,700,650 20,709,968 36,308,000 13,821,500 32,736,001 26,551,200 19,212,800 149,339,469 223,849,019 9 S T A T E M E N T O F I N V E S T M E N T S D E C E M B E R 3 1 , 2 0 1 7 - c o n t i n u e d G e n e r a l A m e r i c a n I n v e s t o r s SHARES COMMON STOCKS (Continued) VALUE (NOTE 1a) HEALTH CARE (8.4%) PHARMACEUTICALS, BIOTECHNOLOGY, AND LIFE SCIENCES 1,117,923 Arantana Therapeutics, Inc. (a) 165,000 Celgene Corporation (a) 443,600 Gilead Sciences, Inc. 284,942 200,191 Merck & Co., Inc. 308,864 380,808 Paratek Pharmaceuticals, Inc. (a) Pfizer Inc. Intra-Cellular Therapies, Inc. (a) INDUSTRIALS (9.8%) CAPITAL GOODS (4.8%) 124,131 295,000 315,000 190,000 Eaton Corporation plc (Ireland) General Electric Company Johnson Controls International plc United Technologies Corporation COMMERCIAL AND PROFESSIONAL SERVICES (5.0%) Republic Services, Inc. 787,800 $5,880,275 17,219,400 31,779,504 4,125,960 11,264,747 5,528,666 13,792,866 89,591,418 9,807,590 5,147,750 12,004,650 24,238,300 51,198,290 (COST $47,183,416) (COST $42,108,392) (COST $11,167,520) (COST $53,275,912) 53,263,158 104,461,448 INFORMATION TECHNOLOGY (23.9%) SEMICONDUCTORS AND SEMICONDUCTOR EQUIPMENT (5.0%) 239,756 185,850 36,900 Applied Materials, Inc. ASML Holding N.V. (Netherlands) Broadcom Limited SOFTWARE AND SERVICES (11.2%) 30,500 755,000 500,686 243,247 27,170 Alphabet Inc. (a) eBay Inc. (a) Microsoft Corporation Oracle Corporation Tyler Technologies, Inc. (a) TECHNOLOGY HARDWARE AND EQUIPMENT (7.7%) 104,000 640,000 301,200 121,309 Apple Inc. Cisco Systems, Inc. QUALCOMM Incorporated Universal Display Corporation (COST $19,813,998) (COST $74,376,968) (COST $29,483,182) (COST $123,674,148) 12,256,327 32,304,447 9,479,610 54,040,384 31,915,200 28,493,700 42,828,680 11,500,718 4,810,448 119,548,746 17,599,920 24,512,000 19,282,824 20,943,999 82,338,743 255,927,873 MISCELLANEOUS (4.7%) Other (c) (COST $50,759,381) 50,215,720 TELECOMMUNICATION SERVICES (1.2%) 421,252 Vodafone Group plc ADR (United Kingdom) (COST $13,448,136) 13,437,939 TOTAL COMMON STOCKS (103.9%) (COST $529,407,767) 1,111,669,233 TECHNOLOGY HARDWARE AND EQUIPMENT (0.0%) WARRANTS WARRANT (a) 281,409 Applied DNA Sciences, Inc./ November 14, 2019/$3.50 CONTRACTS CALL OPTIONS (100 SHARES EACH) COMPANY/EXPIRATION DATE/EXERCISE PRICE (COST $2,814) 101,307 ENERGY (0.0%) CONSUMER DISCRETIONARY (0.1%) 1,500 Cameco Corporation/January 19, 2018/$10 (COST $31,562) 15,000 1,500 Macy's Inc./January 19, 2018/$20 1,500 Macy's Inc./January 19, 2018/$22 TOTAL CALL OPTIONS (0.1%) (COST $302,375) (COST $333,937) 735,000 510,000 1,245,000 1,260,000 1 0 S T A T E M E N T O F I N V E S T M E N T S D E C E M B E R 3 1 , 2 0 1 7 - c o n t i n u e d G e n e r a l A m e r i c a n I n v e s t o r s CONTRACTS PUT OPTIONS (100 SHARES EACH) COMPANY/EXPIRATION DATE/EXERCISE PRICE CONSUMER DISCRETIONARY (0.1%) 500 1,200 Expedia, Inc./January 19, 2018/$145 TJX Companies, Inc./April 20, 2018/$72.50 (COST $581,470) CONSUMER STAPLES (0.0%) 150 250 Costco Wholesale Corporation/ January 19, 2018/$183 Costco Wholesale Corporation/April 20, 2018/$180 TOTAL PUT OPTIONS (0.1%) (COST $131,567) (COST $713,037) SHARES 147,195,903 SHORT-TERM SECURITIES AND OTHER ASSETS State Street Institutional Treasury Plus Money Market Fund (COST $147,195,903) Trust Class, 1.13% (d) (13.8%) TOTAL INVESTMENTS (e) (117.9%) Liabilities in excess of receivables and other assets (-0.1%) (COST $677,653,458) PREFERRED STOCK (-17.8%) NET ASSETS APPLICABLE TO COMMON STOCK (100%) VALUE (NOTE 1a) $1,225,000 222,000 1,447,000 22,200 120,000 142,200 1,589,200 147,195,903 1,261,815,643 (1,215,023) 1,260,600,620 (190,117,175) $1,070,483,445 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. S T A T E M E N T O F C A L L O P T I O N S W R I T T E N CONTRACTS (100 SHARES EACH) COMPANY/EXPIRATION DATE/EXERCISE PRICE VALUE (NOTE 1a) CONSUMER DISCRETIONARY (0.0%) 500 Expedia, Inc./January 19, 2018/$150 1,200 TJX Companies, Inc./April 20, 2018/$80 (PREMIUMS RECEIVED $518,017) $2,500 252,000 254,500 CONSUMER STAPLES (0.0%) 400 Costco Wholesale Corporation/April 20, 2018/$185 (PREMIUM RECEIVED $187,919) 358,000 TOTAL OPTIONS WRITTEN (PREMIUMS RECEIVED $705,936*) $612,500 *The maximum cash outlay if all call options are exercised is $24,500,000. (see notes to financial statements) 1 1 S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S G e n e r a l A m e r i c a n I n v e s t o r s ASSETS DECEMBER 31, 2017 INVESTMENTS, AT VALUE (NOTE 1a) Common stocks (cost $529,407,767) Warrant (cost $2,814) Purchased options (cost $1,046,974) Money market fund (cost $147,195,903) Total investments (cost $677,653,458) RECEIVABLES AND OTHER ASSETS Receivable for securities sold Dividends, interest, and other receivables Qualified pension plan asset, net excess funded (note 7) Prepaid expenses, fixed assets, and other assets TOTAL ASSETS LIABILITIES Payable for securities purchased Accrued compensation payable to officers and employees Outstanding options written, at value (premiums received $705,936) Accrued preferred stock dividend not yet declared Accrued supplemental pension plan liability (note 7) Accrued supplemental thrift plan liability (note 7) Accrued expenses and other liabilities TOTAL LIABILITIES 5.95% CUMULATIVE PREFERRED STOCK, SERIES B - 7,604,687 at a liquidation value of $25 per share (note 5) NET ASSETS APPLICABLE TO COMMON STOCK - 26,453,136 (note 5) NET ASSET VALUE PER COMMON SHARE NET ASSETS APPLICABLE TO COMMON STOCK Common Stock, 26,453,136 shares at par value (note 5) Additional paid-in capital (note 5) Over distributed net investment income (note 5) Undistributed realized gain on common stocks, options, and other Unallocated distributions on Preferred Stock Unrealized appreciation on common stocks, options, and other Accumulated other comprehensive loss (note 7) NET ASSETS APPLICABLE TO COMMON STOCK (see notes to financial statements) $1,111,669,233 101,307 2,849,200 147,195,903 1,261,815,643 6,891,255 1,912,602 4,761,364 1,049,422 1,276,430,286 3,088,065 2,035,000 612,500 219,955 5,851,558 3,715,753 306,835 15,829,666 190,117,175 $1,070,483,445 $40.47 $26,453,136 451,840,892 (2,394,592) 13,184,238 (219,955) 584,255,622 (2,635,896) $1,070,483,445 1 2 S T A T E M E N T O F O P E R A T I O N S G e n e r a l A m e r i c a n I n v e s t o r s INCOME Dividends (net of foreign withholding taxes of $651,594) Interest TOTAL INCOME EXPENSES Investment research Administration and operations Office space and general Auditing and legal fees Directors’ fees and expenses Transfer agent, custodian and registrar fees, and expenses State and local taxes Stockholders’ meeting and reports TOTAL EXPENSES NET INVESTMENT INCOME YEAR ENDED DECEMBER 31, 2017 $21,010,241 1,344,967 22,355,208 7,424,592 3,391,865 1,893,734 319,302 290,660 220,184 167,703 83,012 13,791,052 8,564,156 REALIZED GAIN AND CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS (NOTES 1, 3 AND 4) Net realized gain on investments: Common stock transactions Purchased option transactions Written option transactions Net increase (decrease) in unrealized appreciation: Common stocks and warrants Purchased options Written options NET INVESTMENT INCOME, REALIZED GAINS, AND APPRECIATION ON INVESTMENTS DISTRIBUTIONS TO PREFERRED STOCKHOLDERS INCREASE IN NET ASSETS RESULTING FROM OPERATIONS S T A T E M E N T O F C H A N G E S I N N E T A S S E T S 89,873,015 777,915 1,182,682 91,833,612 70,581,014 (135,215) (109,170) 70,336,629 170,734,397 (11,311,972) $159,422,425 OPERATIONS Net investment income Net realized gain on investments Net increase (decrease) in unrealized appreciation Distributions to Preferred Stockholders: From net investment income From net capital gains Decrease in net assets from Preferred distributions INCREASE IN NET ASSETS RESULTING FROM OPERATIONS OTHER COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31, 2017 2016 $8,564,156 91,833,612 70,336,629 170,734,397 $8,172,289 91,570,557 (15,321,337) 84,421,509 (2,116,504) (9,195,468) (11,311,972) (1,039,878) (10,272,094) (11,311,972) 159,422,425 73,109,537 Funded status of defined benefit plans (note 7) 1,987,555 624,419 DISTRIBUTIONS TO COMMON STOCKHOLDERS From net investment income From net capital gains (15,212,903) (71,518,172) (8,988,445) (75,933,325) DECREASE IN NET ASSETS FROM COMMON DISTRIBUTIONS (86,731,075) (84,921,770) CAPITAL SHARE TRANSACTIONS (NOTE 5) Value of Common Shares issued in payment of dividends and distributions Cost of Common Shares purchased DECREASE IN NET ASSETS - CAPITAL TRANSACTIONS NET INCREASE (DECREASE) IN NET ASSETS NET ASSETS APPLICABLE TO COMMON STOCK BEGINNING OF YEAR 35,156,383 (61,886,535) (26,730,152) 47,948,753 33,686,020 (67,991,719) (34,305,699) (45,493,513) 1,022,534,692 1,068,028,205 END OF YEAR (including over distributed net investment income of ($2,394,592) and ($1,947,100), respectively) $1,070,483,445 $1,022,534,692 (see notes to financial statements) 1 3 F I N A N C I A L H I G H L I G H T S G e n e r a l A m e r i c a n I n v e s t o r s 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. PER SHARE OPERATING PERFORMANCE Net asset value, beginning of year Net investment income Net gain (loss) on common stocks, options and other - realized and unrealized Other comprehensive income (loss) Distributions on Preferred Stock: Dividends from net investment income Distributions from net capital gains Total from investment operations Distributions on Common Stock: Dividends from net investment income Distributions from net capital gains 2017 2016 2015 2014 2013 $37.56 .32 $37.74 .30 $39.77 .48 $41.07 .32 $32.68 .17 6.23 .08 6.63 (.04) (.39) (.43) 6.20 3.10 .02 3.42 (.04) (.38) (.42) 3.00 (.99) .02 (.49) (.12) (.27) (.39) (.88) (.30) (2.99) (3.29) (.33) (2.85) (3.18) (.34) (.81) (1.15) 2.39 (.13) 2.58 (.04) (.34) (.38) 2.20 (.32) (3.18) (3.50) 10.51 .20 10.88 (.04) (.35) (.39) 10.49 (.18) (1.92) (2.10) Net asset value, end of year Per share market value, end of year $40.47 $34.40 $37.56 $31.18 $37.74 $31.94 $39.77 $35.00 $41.07 $35.20 TOTAL INVESTMENT RETURN - Stockholder Return, based on market price per share 21.21% RATIOS AND SUPPLEMENTAL DATA Net assets applicable to Common Stock, 7.59% (5.34%) 9.32% 34.24% end of year (000’s omitted) $1,070,483 $1,022,535 $1,068,028 $1,227,900 $1,229,470 Ratio of expenses to average net assets applicable to Common Stock 1.28% 1.27% 1.17% 1.10% 1.27% Ratio of net income to average net assets applicable to Common Stock Portfolio turnover rate 0.79% 19.58% 0.78% 20.29% 1.17% 14.41% 0.78% 14.98% 0.47% 17.12% PREFERRED STOCK Liquidation value, end of year (000’s omitted) Asset coverage Liquidation preference per share Market value per share (see notes to financial statements) N O T E S T O F I N A N C I A L S T A T E M E N T S G e n e r a l A m e r i c a n I n v e s t o r s 1. SIGNIFICANT ACCOUNTING POLICIES $190,117 663% $190,117 638% $190,117 $190,117 $190,117 747% 662% 746% $25.00 $26.59 $25.00 $25.77 $25.00 $26.75 $25.00 $26.01 $25.00 $25.30 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 esti- mates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial state- ments 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 1 4 N O T E S T O F I N A N C I A L S T A T E M E N T S - c o n t i n u e d G e n e r a l A m e r i c a n I n v e s t o r s 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, condi- tions 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 val- ued at fair value determined in good faith pursuant to specific procedures appropriate to each security as estab- lished 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 unexer- cised 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 clos- ing 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 invest- ments 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 recog- nized 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 denomi- nated 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 real- ized 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 ac- tually 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 associ- ated 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 distribu- tions 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 accor- dance 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 appli- cable 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 regard- ing 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. 1 5 N O T E S T O F I N A N C I A L S T A T E M E N T S - c o n t i n u e d G e n e r a l A m e r i c a n I n v e s t o r s 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 sum- marized 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: Assets Common stocks Warrants Purchased options Money market fund Total Liabilities Options written Level 1 $1,111,669,233 101,307 2,849,200 147,195,903 $1,261,815,643 Level 2 — — — — — Level 3 — — — — — Total $1,111,669,233 101,307 2,849,200 147,195,903 $1,261,815,643 ($612,500) — — ($612,500) Transfers of Level 3 Securities, if any, are reported as of the actual date of reclassification. No such transfers occurred dur- ing 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: Purchased Options Outstanding, December 31, 2016 Purchased Exercised Expired Outstanding, December 31, 2017 Written Options Outstanding, December 31, 2016 Written Terminated in closing purchase transaction Expired Outstanding, December 31, 2017 CALLS CONTRACTS 27,500 7,100 (28,500) (1,600) 4,500 COST BASIS $1,347,996 759,619 (1,614,939) (158,739) $333,937 COVERED CALLS CONTRACTS 2,068 2,400 (2,368) 0 2,100 PREMIUMS $223,189 888,319 (405,572) 0 $705,936 5. CAPITAL STOCK AND DIVIDEND DISTRIBUTIONS PUTS CONTRACTS 2,068 2,350 (318) (2,000) 2,100 COST BASIS $273,203 902,287 (197,829) (264,624) $713,037 COLLATERALIZED PUTS CONTRACTS 9,800 8,100 (14,306) (3,594) 0 PREMIUMS $462,617 868,724 (1,138,810) (192,531) $0 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 divi- dends 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. 1 6 N O T E S T O F I N A N C I A L S T A T E M E N T S - c o n t i n u e d G e n e r a l A m e r i c a n I n v e s t o r s 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 hold- ers of shares of Common Stock and Preferred Stock. To the extent that dividends on the shares of Preferred Stock are not paid from 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 require- ments 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: SHARES 2017 2016 AMOUNT 2017 2016 Par Value of Shares issued in payment of dividends and distributions (shares issued from treasury) Increase in paid-in capital Total increase Par Value of Shares purchased (at an average discount from net asset value of 15.7% and 17.7%, respectively) Decrease in paid-in capital Total decrease Net decrease 1,047,100 1,073,658 $1,047,100 34,109,283 35,156,383 $1,073,658 32,612,362 33,686,020 (1,815,079) (2,149,240) (767,979) (1,075,582) (1,815,079) (60,071,456) (61,886,535) ($26,730,152) (2,149,240) (65,842,479) (67,991,719) ($34,305,699) 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 apprecia- tion 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 offi- cers (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 avail- able 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 pen- sion 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 pen- sion 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. 1 7 N O T E S T O F I N A N C I A L S T A T E M E N T S - c o n t i n u e d G e n e r a l A m e r i c a n I n v e s t o r s 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. OBLIGATIONS AND FUNDED STATUS OF DEFINED BENEFIT PLANS: DECEMBER 31, 2017 (MEASUREMENT DATE) CHANGE IN BENEFIT OBLIGATION: Benefit obligation at beginning of year Service cost Interest cost Benefits paid Actuarial (gain)/loss Projected benefit obligation at end of year CHANGE IN PLAN ASSETS: Fair value of plan assets at beginning of year Actual return on plan assets Employer contributions Benefits paid Fair value of plan assets at end of year FUNDED STATUS AT END OF YEAR QUALIFIED SUPPLEMENTAL PLAN PLAN TOTAL $16,817,110 372,091 686,184 (878,075) 1,300,275 18,297,585 $5,508,944 129,810 220,280 (320,320) 312,844 5,851,558 $22,326,054 501,901 906,464 (1,198,395) 1,613,119 24,149,143 19,220,423 4,716,601 — (878,075) 23,058,949 $4,761,364 — — 320,320 (320,320) — ($5,851,558) 19,220,423 4,716,601 320,320 (1,198,395) 23,058,949 ($1,090,194) Accumulated benefit obligation at end of year $17,589,109 $5,706,990 $23,296,099 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 CHANGE IN FUNDED STATUS: Noncurrent benefit asset - qualified plan LIABILITIES: Current benefit liability - supplemental plan Noncurrent benefit liability - supplemental plan BEFORE ADJUSTMENTS AFTER $2,403,313 $2,358,051 $4,761,364 ($307,545) (5,201,399) ($3,567) (339,047) ($311,112) (5,540,446) AMOUNTS RECOGNIZED IN ACCUMULATED OTHER COMPREHENSIVE INCOME CONSIST OF: Net actuarial (gain)/loss Prior service cost ACCUMULATED OTHER COMPREHENSIVE INCOME $4,621,628 1,823 $4,623,451 ($1,986,598) (957) ($1,987,555) $2,635,030 866 $2,635,896 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. COMPONENTS OF NET PERIODIC BENEFIT COST: Service cost Interest cost Expected return on plan assets Amortization of: Prior service cost Recognized net actuarial loss Net periodic benefit cost QUALIFIED SUPPLEMENTAL PLAN PLAN TOTAL $372,091 686,184 (1,392,161) 372 210,607 ($122,907) $129,810 220,280 — 585 54,058 $404,733 $501,901 906,464 (1,392,161) 957 264,665 $281,826 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. 1 8 N O T E S T O F I N A N C I A L S T A T E M E N T S - c o n t i n u e d G e n e r a l A m e r i c a n I n v e s t o r s 7. BENEFIT PLANS - (Continued from previous page.) EXPECTED CASH FLOWS Expected Company contributions for 2017 Expected benefit payments: 2018 2019 2020 2021 2022 2023-2027 QUALIFIED PLAN — $931,283 953,274 966,963 973,967 981,908 5,328,059 SUPPLEMENTAL PLAN $311,112 $311,112 304,863 292,597 279,998 267,449 1,637,330 TOTAL $311,112 $1,242,395 1,258,137 1,259,560 1,253,965 1,249,357 6,965,389 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 of- fice 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 classifi- cation 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 expi- ration 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 es- calations 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: $104,000 (2 months) 2018: $624,000 2019: $624,000 2020: $624,000 2021: 2022: $624,000 Thereafter: $3,836,500 1 9 R E P O R T O F I N D E P E N D E N T R E G I S T E R E D P U B L I C A C C O U N T I N G F I R M G e n e r a l A m e r i c a n I n v e s t o r s TO THE BOARD OF DIRECTORS AND STOCKHOLDERS OF GENERAL AMERICAN INVESTORS COMPANY, INC. 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 accounting 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 2 0 O F F I C E R S G e n e r a l A m e r i c a n I n v e s t o r s NAME (AGE) EMPLOYEE SINCE Jeffrey W. Priest (55) 2010 PRINCIPAL OCCUPATION DURING PAST 5 YEARS President of the Company since 2012 and Chief Executive Officer since 2013 NAME (AGE) EMPLOYEE SINCE Sally A. Lynch, Ph.D. (58) 1997 Andrew V. Vindigni (58) Senior Vice-President of the 1988 Company since 2006, Vice-President 1995-2006 securities analyst (financial services and consumer non-durables industries) Eugene S. Stark (59) 2005 Craig A. Grassi (49) 1991 Vice-President, Administration of the Company and Principal Financial Officer since 2005, Chief Compliance Officer since 2006 Vice-President of the Company since 2013, Assistant Vice- President 2005-2012 securities analyst and information technology Anang K. Majmudar (43) 2012 Diane G. Radosti (65) 1980 Linda J. Genid (59) 1983 PRINCIPAL OCCUPATION DURING PAST 5 YEARS Vice-President of the Company since 2006, securities analyst (biotechnology industry) Vice-President of the Company since 2015, securities analyst (general industries) Treasurer of the Company since 1990, Principal Accounting Officer since 2003 Corporate Secretary of the Company effective 2016, Assistant Corporate Secretary 2014-2015, network administrator 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. S E R V I C E O R G A N I Z A T I O N S COUNSEL Sullivan & Cromwell LLP INDEPENDENT AUDITORS Ernst & Young LLP CUSTODIAN State Street Bank and Trust Company TRANSFER AGENT AND REGISTRAR American Stock Transfer & Trust Company, LLC 6201 15th Avenue Brooklyn, NY 11219 1-800-413-5499 www.amstock.com 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. D I R E C T O R S G e n e r a l A m e r i c a n I n v e s t o r s NAME (AGE) DIRECTOR SINCE PRINCIPAL OCCUPATION DURING PAST 5 YEARS INDEPENDENT DIRECTORS Arthur G. Altschul, Jr. (53) 1995 Founder and Managing Member Diaz & Altschul Capital Management, LLC (investment advisory firm) Chairman Overbrook Management Corporation (investment advisory firm) Co-Founder and Chairman Kolltan Pharmaceuticals, Inc. (pharmaceuticals) (until 2016) CURRENT DIRECTORSHIPS AND AFFILIATIONS Child Mind Institute, Director Delta Opportunity Fund, Ltd., Director Neurosciences Research Foundation, Trustee Overbrook Foundation, Director Rodney B. Berens (72) 2007 Founder, Chairman and Senior Investment Svarog Capital Advisors, Member of Investment Committee Strategist Berens Capital Management, LLC (investment advisory firm) The Morgan Library and Museum, Life Trustee, Chairman of Investment Sub-Committee and Member of Finance, Compensation and Nomination Committees The Woods Hole Oceanographic Institute, Trustee and Member of Investment Committee Lewis B. Cullman (99) Philanthropist 1961 Chess-in-the-Schools, Chairman Emeritus Metropolitan Museum of Art, Honorary Trustee Museum of Modern Art, Honorary Trustee The New York Botanical Garden, Life Trustee The New York Public Library, Trustee Chairman of the Board of Company Neurosciences Research Foundation, Trustee Spencer Davidson (75) 1995 Clara E. Del Villar (59) 2017 John D. Gordan, III (72) 1986 Betsy F. Gotbaum (79) 2010 Strategic Consultant Advisor, Strategic Partnerships, Trialogies, Inc. (until 2016) (information technology) Founder, Chief Executive Officer and Editor-in-Chief, Hispanic Post (2011-2016) (digital media) Attorney Beazley USA Services, Inc. (insurance) Executive Director Citizen Union (since 2017) (nonprofit democratic reform organization) Consultant Sidney R. Knafel (87) 1994 Lead Independent Director of Company Managing Partner SRK Management Company (investment company) Rose P. Lynch (67) Director since May 2017 Founder and President Marketing Strategies, LLC (consulting firm) Henry R. Schirmer (53) 2015 Chief Financial Officer/Executive Vice-President Unilever Europe (since 2016) Chief Financial Officer/Senior Vice-President Finance Unilever North America (2012-2016) (consumer products) Tribecca Innovation Awards Foundation, Fellow Women’s Health Symposium, Weill Cornell Medicine, Member of Executive Steering Committee Center for Community Alternatives, Director Community Service Society, Trustee Fisher Center for Alzheimer’s Research Foundation, Trustee Visiting Nurse Service of New York, Director Addison Gallery of American Art, Board of Governors The Frick Collection, Trustee Phillips Academy, Charter Trustee Emeritus Radcliffe Institute for Advanced Study, Dean's Council The Rogosin Institute, Director Wellesley College, Trustee Emeritus Steven Madden, Ltd., Director Concord Academy, Trustee Princeton University Varsity Club, Director Women and Foreign Policy Advisory Council, Council of Foreign Relations, Member Results for Development Institute, Director Raymond S. Troubh (91) Financial Consultant Diamond Offshore Drilling, Inc., Director 1989 INTERESTED DIRECTOR Jeffrey W. Priest (55) 2013 President and Chief Executive Officer of Company 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.

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