================================================================================
MID-YEAR REPORT
--------------------------------------------------------------------------------
SELIGMAN
CAPITAL
FUND, INC.
--------------------------------------------------------------------------------
June 30, 1995
[LOGO]
--------------------------------------------------------------------------------
A Capital Appreciation Fund
Established in 1969
<PAGE>
================================================================================
TO THE SHAREHOLDERS
--------------------------------------------------------------------------------
Seligman Capital Fund completed the first six months of 1995 with the net asset
value of Class A shares at $15.17 per share on June 30, up from $13.91 on March
31, and $13.17 on December 31, 1994, and the net asset value of Class D shares
at $14.68 per share, up from $13.50 and $12.82, respectively, for the same
periods. Total returns for the three- and six-month periods were 9.06% and
15.19%, respectively, for Class A shares, and 8.74% and 14.51%, respectively,
for Class D shares, which compares to the 9.55% and 20.21% total returns of the
Standard & Poor's 500 Composite Stock Price Index (S&P 500) for the same
periods. Although the S&P 500, which is comprised of stocks of many different
companies from a variety of sectors, performed favorably, it is important to
note that only a few sectors of the market, notably technology and financial,
were good performers, and only a handful of stocks consistently performed better
than the S&P 500 itself. (Total return reflects change in net asset value and
assumes any distributions paid within the period are reinvested in additional
shares. Class A returns do not, however, reflect the effect of the maximum
initial sales charge of 4.75%, and Class D returns do not reflect the effect of
the 1% contingent deferred sales load.)
For both Class A and D shares, net realized gain per share from investment
transactions at June 30 totaled $0.85. At June 30, net unrealized gain per share
totaled $4.40. Longer-term performance results appear on page 2 of this report.
After four years of expansion, the recent stream of economic reports shows
that the long awaited slowdown is under way. The Federal Reserve Board (FRB),
concerned that growth at an accelerated rate would swell inflationary pressures,
increased short-term interest rates seven times, beginning in early 1994.
However, evidence of this current slowdown and moderate inflation led the FRB to
lower rates in early July--the first decrease in three years.
In the financial markets, with signs pointing toward a slowing economy and
prospects favoring declining interest rates, the bond market rallied this past
quarter. Investor demand for equities also continued to be strong, as shown by
the Dow Jones Industrial Average moving to new highs and all broad market equity
indices posting positive returns.
Looking ahead, we believe the economy is likely to regain strength later this
year as consumers respond to lower interest rates, exports are stimulated by a
weaker dollar, and business capital spending remains strong.
In the second quarter, your Fund's technology-related issues, including
Microsoft and Informix, produced very strong gains. On the other hand, health
care providers, particularly cost containment-related service companies such as
United Healthcare, performed poorly in the quarter due to slowing premium growth
and increased utilization, which decrease these companies' profit margins.
Additions were made to your Fund's positions in Harley-Davidson, the premium
motorcycle manufacturer, and Hospitality Franchise Systems, a brand management
organization. Both are attractively valued and offer good capital appreciation
potential.
Going forward, your Manager feels the balance of 1995 should produce
favorable investment opportunities for your Fund, as earnings gains remain
positive, valuations continue to be attractive, and capital appreciation
potential remains strong.
By order of the Board of Directors,
/s/ William C. Morris
William C. Morris
Chairman
/s/ Ronald T. Schroeder
Ronald T. Schroeder
President
August 4, 1995
1
<PAGE>
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SELIGMAN CAPITAL FUND, INC.
--------------------------------------------------------------------------------
LARGEST PORTFOLIO CHANGES*
During Past Three Months
SHARES
------------------------
HOLDINGS
ADDITIONS INCREASE 6/30/95
--------- -------- --------
AmeriSource Health ............................. 100,000 100,000
Borders Group .................................. 200,000 200,000
Cooper Tire & Rubber ........................... 25,000 125,000
Crown Cork & Seal .............................. 10,000 70,000
General Cable (ADSs) ........................... 100,000 100,000
Harley-Davidson ................................ 25,000 125,000
Hospitality Franchise Systems .................. 25,000 125,000
Nucor .......................................... 10,000 70,000
Sybase ......................................... 15,000 75,000
HOLDINGS
REDUCTIONS DECREASE 6/30/95
---------- -------- --------
ASM Lithography Holding ........................ 40,000 --
British Sky Broadcasting (ADRs) ................ 40,000 60,000
Carnival (Class A) ............................. 100,000 --
Columbia/HCA Healthcare ........................ 25,000 75,000
CUC International .............................. 20,000 20,000
Eaton .......................................... 20,000 65,000
Great Lakes Chemical ........................... 50,000 --
Reebok International ........................... 20,000 30,000
Sensormatic Electronics ........................ 125,000 --
Synopsys ....................................... 30,000 40,000
* Largest portfolio changes from the previous quarter to the current quarter are
based on cost of purchases and proceeds from sales of securities.
MAJOR PORTFOLIO HOLDINGS
at June 30, 1995
SECURITY VALUE
-------- ----------
Intel.................................... $7,597,500
Microsoft................................ 6,782,813
Motorola................................. 6,041,250
Travelers................................ 5,468,750
PepsiCo.................................. 5,018,750
FIserv................................... 4,889,062
EMC...................................... 4,850,000
Lam Research............................. 4,790,625
DSC Communications....................... 4,656,250
Interpublic Group of Companies........... 4,500,000
--------------------------------------------------------------------------------
LONG-TERM INVESTMENT RESULTS
AVERAGE ANNUAL TOTAL RETURNS
June 30, 1995
Class A*
ONE FIVE TEN
YEAR YEARS YEARS
------ ------ ------
With Sales Charge 18.99% 10.83% 11.91%
Without Sales Charge 24.91 11.92 12.45
Class D**
SINCE
ONE INCEPTION
YEAR 5/3/93
------ ---------
With CDSL 22.31% n/a
Without CDSL 23.31 5.82%
* The maximum initial sales charge for Class A shares is 4.75%. No adjustment
was made to performance for periods prior to the commencement date, January
1, 1993, for the continuing Administration, Shareholder Services and
Distribution Plan fee of up to 0.25% on an annual basis of average daily net
assets of Class A shares.
** The returns for the one-year period for Class D shares are shown with and
without the effect of the 1% contingent deferred sales load ("CDSL") imposed
on certain shares redeemed within one year of purchase.
--------------------------------------------------------------------------------
These rates of return reflect changes in price and assume that all distributions
within the period are reinvested in additional shares. The rates of return will
vary and the principal value of an investment will fluctuate. Shares, if
redeemed, may be worth more or less than their original cost. Past performance
is not indicative of future investment results.
--------------------------------------------------------------------------------
2
<PAGE>
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PORTFOLIO OF INVESTMENTS June 30, 1995
--------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMON STOCKS 98.4%
AUTOMOTIVE AND RELATED 5.4%
Cooper Tire & Rubber ................... 125,000 $ 3,046,875
Eaton .................................. 65,000 3,778,125
Harley-Davidson ........................ 125,000 3,046,875
------------
9,871,875
------------
BASIC MATERIALS 6.5%
Louisiana Pacific ...................... 100,000 2,625,000
Minerals Technologies .................. 75,000 2,700,000
Nucor .................................. 70,000 3,745,000
Schulman, A ............................ 93,750 2,695,312
------------
11,765,312
------------
BUSINESS SERVICES AND SUPPLIES 3.6%
Interpublic Group of Companies ......... 120,000 4,500,000
Leggett & Platt ........................ 45,000 1,980,000
------------
6,480,000
------------
COMPUTER GOODS AND SERVICES 11.6%
Ceridian* .............................. 100,000 3,687,500
EMC* ................................... 200,000 4,850,000
FIserv* ................................ 175,000 4,889,062
Intel .................................. 120,000 7,597,500
------------
21,024,062
------------
CONSUMER GOODS AND SERVICES 8.2%
Block (H. & R.) ........................ 50,000 2,056,250
CUC International* ..................... 20,000 840,000
Department 56* ......................... 17,000 650,250
Newell ................................. 150,000 3,675,000
Reebok International ................... 30,000 1,020,000
Tambrands .............................. 60,000 2,565,000
UST Inc. ............................... 140,000 4,165,000
------------
14,971,500
------------
DRUGS AND HEALTH CARE 15.8%
Amgen* ................................. 50,000 4,018,750
AmeriSource Health* .................... 100,000 2,300,000
Beverly Enterprises .................... 100,000 1,237,500
Bristol-Myers Squibb ................... 50,000 3,406,250
Columbia/HCA Healthcare ................ 75,000 3,243,750
Dentsply International* ................ 70,000 2,524,375
EmCare Holdings ........................ 65,000 1,239,062
Protein Design Labs* ................... 100,000 2,087,500
Sunrise Medical* ....................... 100,000 3,112,500
United Healthcare ...................... 75,000 3,103,125
Value Health* .......................... 75,000 2,418,750
------------
28,691,562
------------
FINANCIAL SERVICES 3.0%
Travelers .............................. 125,000 5,468,750
------------
FOOD AND FOOD SERVICES 2.8%
PepsiCo ................................ 110,000 5,018,750
------------
INDUSTRIAL GOODS AND SERVICES 4.1%
Lam Research* .......................... 75,000 4,790,625
Nordson ................................ 50,000 2,756,250
------------
7,546,875
------------
LEISURE AND RELATED 8.6%
British Sky Broadcasting (ADRs)* ....... 60,000 1,567,500
CBS .................................... 50,000 3,350,000
Circus Circus Enterprises* ............. 50,000 1,762,500
General Cable (ADSs)* .................. 100,000 1,487,500
Hospitality Franchise Systems* ......... 125,000 4,328,125
Mirage Resorts* ........................ 100,000 3,062,500
------------
15,558,125
------------
PACKAGING 3.4%
Ball ................................... 75,000 2,615,625
Crown Cork & Seal* ..................... 70,000 3,508,750
------------
6,124,375
------------
RETAIL TRADE 7.4%
Borders Group* ......................... 200,000 2,875,000
Home Depot ............................. 100,000 4,062,500
Nordstrom .............................. 75,000 3,098,438
Office Depot* .......................... 125,000 3,515,625
------------
13,551,563
------------
SOFTWARE 10.4%
Informix* .............................. 150,000 3,796,875
Microsoft* ............................. 75,000 6,782,813
Parametric Technology* ................. 75,000 3,721,875
Sybase* ................................ 75,000 2,179,688
Synopsys* .............................. 40,000 2,500,000
------------
18,981,251
------------
3
<PAGE>
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PORTFOLIO OF INVESTMENTS (continued) June 30, 1995
--------------------------------------------------------------------------------
SHARES VALUE
------ -----
TELECOMMUNICATIONS 7.4%
Century Telephone Enterprises .......... 100,000 $2,837,500
DSC Communications* .................... 100,000 4,656,250
Motorola ............................... 90,000 6,041,250
------------
13,535,000
------------
OTHER 0.2% ........................... 394,948
------------
TOTAL INVESTMENTS 98.4%
(Cost $126,148,998) ................. 178,983,948
OTHER ASSETS
LESS LIABILITIES 1.6% ............. 2,983,625
------------
NET ASSETS 100.0% .................... $181,967,573
============
----------
* Non-income producing security.
See notes to financial statements.
4
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STATEMENT OF ASSETS AND LIABILITIES June 30, 1995
--------------------------------------------------------------------------------
ASSETS:
Investments, at value:
Common stocks (cost $126,148,998) ......................... $ 178,983,948
Cash ........................................................ 947,586
Receivable for securities sold .............................. 2,885,462
Receivable for Capital Stock sold ........................... 162,715
Investment in, and expenses prepaid to,
shareholder service agent ................................. 113,504
Receivable for dividends and interest ....................... 66,635
Other ....................................................... 4,139
-------------
Total Assets ................................................ 183,163,989
-------------
LIABILITIES:
Payable for securities purchased ............................ 651,300
Payable for Capital Stock repurchased ....................... 235,253
Accrued expenses, taxes, and other .......................... 309,863
-------------
Total Liabilities ........................................... 1,196,416
-------------
Net Assets .................................................. $ 181,967,573
=============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value; 40,000,000 shares
authorized; 12,002,613 shares outstanding):
Class A ................................................... $ 11,747,167
Class D ................................................... 255,446
Additional paid-in capital .................................. 107,029,099
Accumulated net investment loss ............................. (69,453)
Undistributed net realized gain ............................. 10,170,364
Net unrealized appreciation of investments .................. 52,834,950
-------------
Net Assets .................................................. $ 181,967,573
=============
NET ASSET VALUE PER SHARE:
Class A ($178,216,714 / 11,747,167 shares) .................. $15.17
======
Class D ($3,750,859 / 255,446 shares) ....................... $14.68
======
----------
See notes to financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================
STATEMENT OF OPERATIONS For the Six Months Ended June 30, 1995
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.................................................................. $ 668,113
Interest................................................................... 300,187
-----------
Total investment income.................................................... $ 968,300
EXPENSES:
Management fee............................................................. 445,853
Distribution and service fees.............................................. 200,105
Shareholder account services............................................... 193,026
Registration............................................................... 38,579
Auditing and legal fees.................................................... 33,267
Shareholder reports and communications..................................... 21,073
Directors' fees and expenses............................................... 15,960
Miscellaneous.............................................................. 10,281
-----------
Total expenses............................................................. 958,144
-----------
Net investment income ..................................................... 10,156
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments........................................... 10,170,364
Net change in unrealized appreciation of investments....................... 14,377,340
-----------
Net gain on investments ................................................... 24,547,704
-----------
Increase in net assets from operations .................................... $24,557,860
===========
</TABLE>
----------
See notes to financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
----------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
------------- -----------------
OPERATIONS:
<S> <C> <C>
Net investment income (loss)................................................. $ 10,156 $ (756,459)
Net realized gain on investments............................................. 10,170,364 18,012,834
Net change in unrealized appreciation of investments......................... 14,377,340 (31,248,422)
----------- ------------
Increase (decrease) in net assets from operations............................ 24,557,860 (13,992,047)
----------- ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net realized gain on investments:
Class A.................................................................... -- (17,718,531)
Class D.................................................................... -- (351,353)
----------- ------------
Decrease in net assets from distributions.................................... -- (18,069,884)
----------- ------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
----------------------------------
CAPITAL SHARE TRANSACTIONS: SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1995 DECEMBER 31, 1994
------------- -----------------
Net proceeds from sale of shares:
<S> <C> <C> <C> <C>
Class A................................ 332,341 537,358 4,606,956 8,103,350
Class D................................ 55,613 112,437 751,362 1,665,414
Exchanged from associated Funds:
Class A................................ 224,096 274,413 3,056,991 4,071,383
Class D................................ 14,433 6,633 193,028 93,444
Shares issued in payment of gain distributions:
Class A................................ -- 1,275,447 -- 16,249,301
Class D................................ -- 26,625 -- 330,484
--------- --------- --------- ----------
Total.................................... 626,483 2,232,913 8,608,337 30,513,376
--------- --------- --------- ----------
Cost of shares repurchased:
Class A................................ (709,703) (1,315,179) (9,850,000) (19,543,622)
Class D................................ (40,336) (27,140) (562,948) (388,031)
Exchanged into associated Funds:
Class A................................ (440,554) (734,774) (6,216,278) (11,092,468)
Class D................................ (22,284) (43,927) (304,890) (652,829)
--------- --------- --------- ----------
Total.................................... (1,212,877) (2,121,020) (16,934,116) (31,676,950)
--------- --------- --------- ----------
Increase (decrease) in net assets
from capital share transactions....... (586,394) 111,893 (8,325,779) (1,163,574)
========= ========= ========== ==========
Increase (decrease) in net assets............................................ 16,232,081 (33,225,505)
NET ASSETS:
Beginning of period.......................................................... 165,735,492 198,960,997
----------- -----------
End of period (including accumulated net investment loss of
$69,453 and $79,609, respectively)........................................ $181,967,573 $165,735,492
============ ============
-------------
See notes to financial statements.
7
</TABLE>
<PAGE>
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NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
1. Seligman Capital Fund, Inc. (the "Fund") offers two classes of shares. All
shares existing prior to May 3, 1993, were classified as Class A shares. Class A
shares are sold with an initial sales charge of up to 4.75% and a continuing
service fee of up to 0.25% on an annual basis. Class D shares are sold without
an initial sales charge but are subject to a distribution fee of up to 0.75% and
a service fee of up to 0.25% on an annual basis, and a contingent deferred sales
load ("CDSL") of 1% imposed on certain redemptions made within one year of
purchase. The two classes of shares represent interests in the same portfolio of
investments, have the same rights and are generally identical in all respects
except that each class bears its separate distribution and certain class
expenses and has exclusive voting rights with respect to any matter to which a
separate vote of any class is required.
2. Significant accounting policies followed, all in conformity with generally
accepted accounting principles, are given below:
a. Investments in stocks are valued at current market values or, in their
absence, at fair value determined in accordance with procedures approved by
the Board of Directors. Securities traded on national exchanges are valued
at last sales prices or, in their absence and in the case of
over-the-counter securities, a mean of bid and asked prices. Short-term
holdings maturing in 60 days or less are valued at amortized cost.
b. There is no provision for federal income or excise tax. The Fund has elected
to be taxed as a regulated investment company and intends to distribute
substantially all taxable net income and net gain realized.
c. Investment transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial statement and federal income tax
purposes. Dividends receivable and payable are recorded on ex-dividend
dates.
Interest income is recorded on an accrual basis.
d. All income, expenses (other than class-specific expenses), and realized and
unrealized gains or losses are allocated daily to each class of shares based
upon the relative value of shares of each class. Class-specific expenses,
which include distribution and service fees and any other items that are
specifically attributed to a particular class, are charged directly to such
class.
e. The treatment for financial statement purposes of distributions made during
the period from net investment income or net realized gain may differ from
their ultimate treatment for federal income tax purposes. These differences
are caused primarily by differences in the timing of the recognition of
certain components of income, expense, or capital gain for federal income
tax purposes. Where such differences are permanent in nature, they are
reclassified in the components of net assets based on their ultimate
characterization for federal income tax purposes. Any such reclassifications
will have no effect on net assets, results of operations, or net asset value
per share of the Fund.
3. Purchases and sales of portfolio securities, excluding short-term
investments, for the six months ended June 30, 1995, amounted to $68,989,907 and
$69,260,632, respectively.
At June 30, 1995, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes, and the
tax basis gross unrealized appreciation and depreciation of portfolio securities
amounted to $55,966,397 and $3,131,447, respectively.
4. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of
the Fund and provides the necessary personnel and facilities. Compensation of
all officers of the Fund, all directors of the Fund who are employees or
consultants of the Manager, and all personnel of the Fund and the Manager is
paid by the Manager. The Manager receives a fee, calculated daily and payable
monthly, equal to a per annum percentage of the Fund's daily net assets. The
management fee rate is calculated on a sliding scale of 0.55% to 0.45%, based on
8
<PAGE>
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NOTES TO FINANCIAL STATEMENTS (continued)
--------------------------------------------------------------------------------
average daily net assets of all the investment companies managed by the Manager.
The management fee for the six months ended June 30, 1995, was equivalent to an
annual rate of 0.52% of the average daily net assets of the Fund.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of Fund shares and an affiliate of the Manager, received
concessions of $11,539 from sales of Class A shares, after commissions of
$88,766 paid to dealers.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to Class A shares under which service organizations
can enter into agreements with the Distributor and receive a continuing fee of
up to 0.25% on an annual basis, payable quarterly, of the average daily net
assets of the Class A shares attributable to the particular service
organizations for providing personal services and/or the maintenance of
shareholder accounts. The Distributor charges such fees to the Fund pursuant to
the Plan. For the six months ended June 30, 1995, fees paid aggregated $182,550,
or 0.22% per annum of the average daily net assets of Class A shares.
The Fund has a Plan with respect to Class D shares under which service
organizations can enter into agreements with the Distributor and receive a
continuing fee for providing personal services and/or the maintenance of
shareholder accounts of up to 0.25% on an annual basis of the average daily net
assets of the Class D shares for which the organizations are responsible, and
fees for providing other distribution assistance of up to 0.75% on an annual
basis of such average daily net assets. Such fees are paid monthly by the Fund
to the Distributor pursuant to the Plan. For the six months ended June 30, 1995,
fees paid amounted to $17,555, or 1% per annum of the average net daily assets
of Class D shares.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions occurring within one year of purchase. For the six months ended June
30, 1995, such charges amounted to $1,400.
Seligman Data Corp., owned by the Fund and certain associated investment
companies, charged the Fund at cost $185,760 for shareholder account services.
The Fund's investment in Seligman Data Corp. is recorded at a cost of $2,199.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, and/or Seligman Data Corp.
Fees of $10,000 were incurred by the Fund for legal services of Sullivan &
Cromwell, a member of which firm is a director of the Fund.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The cost of such fees and interest is included in directors' fees and
expenses, and the accumulated balance thereof at June 30, 1995, of $84,618 is
included in other liabilities. Deferred fees and the related accrued interest
are not deductible for federal income tax purposes until such amounts are paid.
5. Class-specific expenses charged to Class A and Class D during the six months
ended June 30, 1995, which are included in the corresponding captions of the
Statement of Operations, were as follows:
CLASS A CLASS D
-------- --------
Distribution and service fees .............. $182,550 $ 17,555
Registration ............................... 10,025 5,185
Shareholder reports and
communications .......................... 5,183 126
9
<PAGE>
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FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Fund's beginning net asset value to
the ending net asset value so that they can understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amounts.
The total return based on net asset value measures the Fund's performance
assuming investors purchased Fund shares at net asset value as of the beginning
of the period, reinvested dividends and capital gains paid, at net asset value,
and then sold their shares at the net asset value per share on the last day of
the period. The total return computations do not reflect any sales charges
investors may incur in purchasing or selling shares of the Fund. The total
returns for periods of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A CLASS D
-------------------------------------------------------------- --------------------------------
SIX SIX
MONTHS YEAR ENDED DECEMBER 31 MONTHS YEAR 5/3/93*
ENDED -------------------------------------------------- ENDED ENDED TO
6/30/95o 1994o 1993 1992 1991 1990 6/30/95o 12/31/94o 12/31/93
-------- ------ ------ ------ ------ ------ -------- --------- --------
PER SHARE OPERATING
PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period.................. $13.17 $15.95 $17.04 $16.66 $12.45 $12.38 $12.82 $15.86 $16.43
------ ------ ------ ------ ------ ------ ------ ------ ------
Net investment income (loss).. -- (.06) (.03) .02 .03 .06 (0.07) (.33) (.08)
Net realized and unrealized
investment gain (loss)..... 2.00 (1.12) .84 1.89 6.66 .11 1.93 (1.11) 1.41
------ ------ ------ ------ ------ ------ ------ ------ ------
Increase (decrease) from
investment operations...... 2.00 (1.18) .81 1.91 6.69 .17 1.86 (1.44) 1.33
Distributions from net
gain realized.............. -- (1.60) (1.90) (1.53) (2.48) (.10) -- (1.60) (1.90)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net increase (decrease) in
net asset value............ 2.00 (2.78) (1.09) .38 4.21 .07 1.86 (3.04) (.57)
------ ------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $15.17 $13.17 $15.95 $17.04 $16.66 $12.45 $14.68 $12.82 $15.86
====== ====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED
ON NET ASSET VALUE: 15.19% (7.06)% 4.80% 11.56% 54.67% 1.38% 14.51% (8.75)% 8.12%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets 1.10%+ 1.13% 1.13% .96% 1.01% .92% 2.16%+ 2.66% 2.26%+
Net investment income (loss)
to average net assets...... .03%+ (.39)% (.17)% .11% .25% .47% (1.03)%+ (2.28)% (1.32)%+
Portfolio turnover............ 41.80% 70.72% 46.84% 42.32% 42.20% 23.05% 41.80% 70.72% 46.84%++
Net assets, end of period
(000's omitted)............... $178,217 $162,556 $196,212 $198,063 $172,676 $120,759 $3,751 $3,179 $2,749
</TABLE>
----------
* Commencement of offering of Class D shares.
o Per share amounts for the six months ended June 30, 1995, and for the year
ended December 31, 1994, are calculated based on average shares outstanding.
+ Annualized.
++ For the year ended December 31, 1993.
See notes to financial statements.
10
<PAGE>
================================================================================
REPORT OF INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
The Board of Directors and Shareholders,
Seligman Capital Fund, Inc.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Capital Fund, Inc. as of June 30,
1995, the related statements of operations for the six months then ended and of
changes in net assets for the six months then ended and for the year ended
December 31, 1994, and the financial highlights for the periods presented. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1995 by correspondence with the Fund's custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Seligman Capital
Fund, Inc. as of June 30, 1995, the results of its operations, the changes in
its net assets and the financial highlights for the respective stated periods,
in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
---------------------
DELOITTE & TOUCHE LLP
New York, New York
August 4, 1995
11
<PAGE>
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THE SELIGMAN GROUP OF FUNDS' SHAREHOLDER SERVICES
--------------------------------------------------------------------------------
Seligman Data Corp. (SDC), the Seligman Group of Funds' shareholder service
agent, takes pride in providing superior customer service for all Seligman Fund
accounts.
SHAREHOLDER SERVICES
One of the most important services SDC provides the Seligman Group of Funds is
shareholder services. Trained professionals respond quickly and thoroughly to
all shareholder inquiries and requests, whether by telephone or written
correspondence. Each representative is selected based on his or her sincere
interest in providing meaningful and prompt responses to a variety of requests.
RETIREMENT PLAN SERVICES
Similar to Shareholder Services, this specialized group is trained to answer
your questions about Seligman's Qualified Retirement Plans. For information
about Retirement Plan Services, please call 1-800-445-1777.
FOR INFORMATION AND ASSISTANCE
For any inquiries or concerns you may have about your Fund or your investment in
its shares,
please call our
SHAREHOLDER SERVICES DEPARTMENT
toll-free at:
1-800-221-2450
or write:
SHAREHOLDER SERVICES
SELIGMAN DATA CORP.
100 PARK AVENUE
NEW YORK, NY 10017
Experienced customer service professionals are available to assist you Monday
through Friday 8:30 a.m. to 6:00 p.m., Eastern Standard Time.
24-HOUR TELEPHONE ACCESS
You may obtain account information via our automated 24-Hour Telephone Access
Service by calling 1-800-622-4597, which gives you important information
regarding your account any time, any day, whenever you need it. Using a
touch-tone telephone you will receive up-to-date information on:
o Fund prices
o Total returns
o Account balances
o Recent transactions
o Dividend and capital gain distributions
For a brochure that explains this service and lists Fund access codes, please
call our Literature Department at 1-800-597-1120.
J. & W. SELIGMAN'S RICH HISTORY
Established in 1864, Seligman played a major role in the geographical expansion
and industrial development of the United States. The firm helped finance the
westward path of the railroads and the building of the Panama Canal. In the late
1800s and early 1900s, the firm was instrumental in financing the fledgling
automobile and steel industries. Seligman also participated in the original
underwritings for some of the nation's most prominent companies, including:
General Motors, Victor Talking Machine Company, United Artists Theater Circuit,
and Maytag.
J. & W. Seligman & Co. Incorporated has been providing financial services for
more than 130 years. From its beginning, Seligman has adopted a long-term
approach to making money for its clients, by managing investment products and
services of the highest quality. Today, with approximately $13 billion in assets
under management, Seligman manages institutional accounts--including some of the
nation's largest public funds, endowments, and foundations--and offers
individual investors more than 30 fund options.
12
<PAGE>
================================================================================
BOARD OF DIRECTORS
--------------------------------------------------------------------------------
Fred E. Brown
Director and Consultant,
J. & W. Seligman & Co. Incorporated
John R. Galvin 2, 4
Dean, Fletcher School of Law
and Diplomacy at Tufts University
Director, USLIFE Corporation
Alice S. Ilchman 3, 4
President, Sarah Lawrence College
Trustee, Committee for Economic Development
Director, NYNEX
Chairman, The Rockefeller Foundation
Frank A. McPherson 2, 4
Chairman and CEO, Kerr-McGee Corporation
Director, Kimberly-Clark Corporation
Chairman and Director, Baptist Medical Center
John E. Merow
Partner, Sullivan & Cromwell, Law Firm
Betsy S. Michel 2, 4
Director or Trustee,
Various Organizations
William C. Morris 1
Chairman
Chairman of the Board and President,
J. & W. Seligman & Co. Incorporated
Chairman, Carbo Ceramics Inc.
Director, Daniel Industries, Inc.
Director, Kerr-McGee Corporation
James C. Pitney 3, 4
Partner, Pitney, Hardin, Kipp & Szuch, Law Firm
Director, Public Service Enterprise Group
James Q. Riordan 3, 4
Director, The Brooklyn Union Gas Company
Trustee, Committee for Economic Development
Director, Dow Jones & Co., Inc.
Director, Public Broadcasting Service
Ronald T. Schroeder 1
President
Managing Director, J. & W. Seligman & Co. Incorporated
Robert L. Shafer 3, 4
Vice President, Pfizer Inc.
Director, USLIFE Corporation
James N. Whitson 2, 4
Executive Vice President and Director,
Sammons Enterprises, Inc.
Director, C-SPAN
Director, Red Man Pipe and Supply Company
Brian T. Zino 1
Managing Director, J. & W. Seligman & Co. Incorporated
------------------------
Member:
1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
13
<PAGE>
================================================================================
EXECUTIVE OFFICERS
--------------------------------------------------------------------------------
William C. Morris
Chairman
Ronald T. Schroeder
President
Loris D. Muzzatti
Vice President
Lawrence P. Vogel
Vice President
Thomas G. Rose
Treasurer
Frank J. Nasta
Secretary
--------------------------------------------------------------------------------
Manager
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
General Counsel
Sullivan & Cromwell
Independent Auditors
Deloitte & Touche LLP
General Distributor
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
Shareholder Service Agent
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Important Telephone Numbers
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan
Services
(800) 622-4597 24-Hour Automated
Telephone Access
Service
14
<PAGE>
SELIGMAN FINANCIAL SERVICES, INC.
an affiliate of
[LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 Park Avenue, New York, NY 10017
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Capital Stock of
Seligman Capital Fund, Inc., which contains information about the sales charges,
management fee, and other costs. Please read the prospectus carefully before
investing or sending money.
EQCA3b 6/95
