<PAGE>
S E L I G M A N
-----------------------
INCOME
FUND, INC.
[GRAPHIC OMITTED]
MID-YEAR REPORT
JUNE 30, 2000
SEEKING HIGH
CURRENT INCOME
AND IMPROVEMENT OF
INCOME AND
CAPITAL VALUE OVER
THE LONGER TERM
[SELIGMAN LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
<PAGE>
SELIGMAN -- TIMES CHANGE...VALUES ENDURE
J. & W. SELIGMAN & CO. INCORPORATED IS A FIRM WITH A LONG TRADITION OF
INVESTMENT EXPERTISE, OFFERING A BROAD ARRAY OF INVESTMENT CHOICES TO HELP
TODAY'S INVESTORS SEEK THEIR LONG-TERM FINANCIAL GOALS.
TIMES CHANGE...
Established in 1864, Seligman has a history of providing financial services
marked not by fanfare, but rather by a quiet and firm adherence to financial
prudence. While the world has changed dramatically in the 136 years since
Seligman first opened its doors, the firm has continued to offer its clients
high-quality investment solutions through changing times.
In the late 19th century, as the country grew, Seligman helped finance the
westward expansion of the railroads, the construction of the Panama Canal, and
the launching of urban transit systems. In the first part of the 20th century,
as America became an industrial power, the firm helped fund the growing capital
needs of the nascent automobile and steel industries.
With the formation of Tri-Continental Corporation in 1929 -- today, the nation's
largest diversified publicly-traded closed-end investment company -- Seligman
began shifting its emphasis from investment banking to investment management.
Despite the stock market crash and ensuing depression, Seligman was convinced of
the importance that investment companies could have in building wealth for
individual investors and began managing its first mutual fund in 1930.
In the decades that followed, Seligman has continued to offer forward-looking
investment solutions, including equity funds that specialize in small companies,
technology, or international securities, and bond funds that focus on high-yield
issuers, US government bonds, or municipal securities.
...VALUES ENDURE
Seligman is proud of its distinctive past and of the traditional values that
continue to shape the firm's business decisions and investment judgment. While
much has changed over the years, the firm's commitment to providing prudent
investment management that seeks to build wealth for clients over time is an
enduring value that will guide Seligman in the new millennium.
[GRAPHIC]
JAMES, JESSE, AND JOSEPH SELIGMAN, 1870
--------------------------------------------------------------------------------
TABLE OF CONTENTS
To the Shareholders ........................................ 1
Interview With Your Portfolio Managers ..................... 2
Performance Overview ....................................... 4
Portfolio Overview ......................................... 6
Portfolio of Investments ................................... 8
Statement of Assets and Liabilities ........................ 11
Statement of Operations .................................... 12
Statements of Changes in Net Assets ........................ 13
Notes to Financial Statements .............................. 14
Financial Highlights ....................................... 17
Report of Independent Auditors AND
For More Information ..................................... 19
Board of Directors AND Executive Officers .................. 20
Glossary of Financial Terms ................................ 21
--------------------------------------------------------------------------------
<PAGE>
TO THE SHAREHOLDERS
The first half of 2000 was a challenging time for the stock market, while the
bond market stabilized and outperformed equities. In this environment, Seligman
Income Fund, which invests in both the equity and fixed-income markets,
delivered a total return of 0.75% based on the net asset value of Class A
shares, while the Lipper Income Funds Average returned 1.88% and the Lehman
Brothers Aggregate Bond Index returned 3.99%. The stock market, as measured by
the Standard & Poor's 500 Composite Stock Price Index (S&P 500) declined -0.42%.
These returns were not surprising, given the economic environment.
As early as June 1999, in an effort to slow the economy, the Federal Reserve
Board began raising interest rates. Over the course of this one-year period, the
federal funds rate was increased by 175 basis points, from 4.75%, before the
June 1999 Fed meeting, to 6.50%, following the most recent increase of 50 basis
points in May 2000. Despite these persistent tightening actions, the Fed's
efforts seemed to have little effect on the strong US economy. Investors soon
became concerned that the Fed would be unable to achieve its objective of an
economic "soft landing." Ongoing economic strength could also prompt the Fed to
continue raising interest rates, possibly significantly, which could adversely
affect corporate profits and stock prices.
Although short-term rates moved significantly higher during the period,
long-term rates actually declined, for a sustained bond market rally. At the
beginning of the period, the 30-year US Treasury bond was yielding 6.6%; by the
end of the period, it was yielding 5.9% -- a decrease of 70 basis points.
Seligman Income Fund benefited from its balanced exposure to the bond market
during this time.
Investor fear finally induced a significant correction in the Nasdaq Composite
Index (a technology-heavy index) in March. From March 10 through May 23, 2000,
this index lost 37% of its market value. During this correction, investors
abandoned some of the high-risk, and often speculative, technology stocks that
had been in demand for most of 1999.
Looking ahead, we believe that the economy will continue to moderate, and that
Seligman Income Fund, which is balanced among stocks and bonds, should perform
well in such an environment. Investors should work with their financial advisors
to ensure that their portfolios are appropriately balanced based upon their time
frames, their risk tolerances, and their unique financial situations.
While we feel that the economic slowdown and the corresponding moderation of the
stock market are healthy long-term trends, the investment environment may in
fact become more challenging. The rest of 2000 may present an environment that
is more complex, making professional management and diversification, such as is
offered through mutual funds, crucial. Mutual funds provide investors with an
opportunity to obtain the services of money managers who have years of
investment experience and the support of research teams to find the most
promising opportunities. Mutual funds can also provide diversification, which is
important for long-term investment success.
Thank you for your continued support of Seligman Income Fund. A discussion with
your Portfolio Managers, as well as the Fund's investment results, portfolio of
investments, and financial statements, follows this letter. We look forward to
continuing to serve your investment needs.
By order of the Board of Directors,
/s/ WILLIAM C. MORRIS
---------------------
William C. Morris
Chairman
/s/ BRIAN T. ZINO
-----------------
Brian T. Zino
President
August 11, 2000
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGERS,
CHARLES C. SMITH, JR. AND RODNEY COLLINS
Q: HOW DID SELIGMAN INCOME FUND PERFORM DURING THE FIRST SIX MONTHS OF 2000?
A: During the first six months of 2000, Seligman Income Fund posted a total
return of 0.75% based on the net asset value of Class A shares. At the same
time, the Lipper Income Funds Average returned 1.88%, the Lehman Brothers
Aggregate Bond Index returned 3.99%, and the S&P 500 returned -0.42%.
Q: WHAT ECONOMIC AND MARKET FACTORS AFFECTED THE FUND'S PERFORMANCE DURING THE
FIRST HALF OF THE FISCAL YEAR?
A: The Federal Reserve Board has been raising interest rates, steadily and
somewhat aggressively, for one full year now in an attempt to place a drag
on the economy. At first, these actions seemed to have little or no effect
-- consumer confidence remained high, which fueled spending; unemployment
remained historically low, which nearly created a labor shortage; and price
increases in some areas of the economy seemed to be accelerating.
Toward the end of the first quarter of 2000, investors began to worry that
the Fed's actions thus far had been insufficient, forcing it to continue to
raise rates, which could adversely affect stocks. This growing uncertainty
finally toppled the most richly valued stocks -- mostly technology stocks --
by the middle of March. The Nasdaq Composite Index (a technology-heavy
index) peaked at 5049 on March 10 and reached a low of 3165 on May 23 -- a
37% decline from peak to trough. During this two-month period of steep
losses in the technology sector, investors began to focus on companies that
could deliver solid earnings, rather than just on those whose prices had
been driven by momentum.
In June, evidence began to appear that the economy was in fact slowing, and
at the Fed's June meeting interest rates were left unchanged -- a
confirmation that the Fed was becoming convinced that its previous actions
were having the desired effect. This lifted some of the uncertainty from the
market, and technology stocks staged a recovery, while value-style stocks
lagged for the month.
While short-term rates rose during this time, long-term yields actually
fell. The long end of the bond market was anticipating an economic slowdown
and an end to the Fed's tightening monetary actions. So despite the Fed's
continued rate hikes, the bond market rallied and fixed-income securities
outperformed common stocks for the first six months of the year.
--------------------------------------------------------------------------------
A TEAM APPROACH
Seligman Income Fund is managed by the Seligman Growth and Income Team, headed
by Charles C. Smith, Jr. Mr. Smith and Rodney Collins, the Fund's Co-Portfolio
Manager, are assisted in the management of the Fund by seasoned research
professionals who are responsible for identifying the most attractive corporate
and government securities and dividend-paying common stocks, consistent with the
Fund's objective.
--------------------------------------------------------------------------------
[PHOTO]
GROWTH AND INCOME TEAM: (STANDING, FROM LEFT) AMY FUJII, JOHN ROTH, MELANIE
RAVENELL (ADMINISTRATIVE ASSISTANT), (SEATED, FROM LEFT) CHARLES SMITH
(PORTFOLIO MANAGER), RODNEY COLLINS (CO-PORTFOLIO MANAGER)
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGERS,
CHARLES C. SMITH, JR. AND RODNEY COLLINS
Q: WHAT WAS YOUR INVESTMENT STRATEGY?
A: We continued to focus on pursuing greater total return potential for the
portfolio. At period-end, the portfolio was 57% invested in common stocks
and 42% invested in fixed-income securities. This represents a significantly
greater exposure to common stocks than the Fund has had historically. We
believe that, over the long term, this more balanced approach will provide
the Fund with increased opportunities for capital appreciation.
During the first six months of this year, the bond portion of the portfolio
delivered the strongest results, and the Fund benefited from its balanced
structure. The bond portfolio was generally 55% invested in corporate
fixed-income securities, 40% in US government securities, and 5% in cash.
The portfolio continues to consist of high-quality issues, with fewer than
1% of the bonds in the portfolio rated below investment grade.
In the equity portion of the portfolio, we continued to underweight
technology stocks because we believed that this sector was excessively
valued. However, in March, when this sector experienced a correction, we
increased the Fund's exposure to technology, and we will continue to watch
for opportunities if the sector continues to experience price weakness.
However, we will remain mindful of valuations, and will not pursue these
companies if we think their prices are unreasonable. We believe that the
weakness in technology will continue through the end of the summer and into
the fall, and we'll look for opportunities to take advantage of any such
weakness to buy high-quality technology companies for the portfolio.
Q: WHAT SECTORS CONTRIBUTED POSITIVELY TO PORTFOLIO PERFORMANCE?
A: Seligman Income Fund's overweighting in energy and utilities was clearly a
benefit during the first half of the year as the increase in oil prices and
increased demand for natural gas pushed stocks for these companies higher.
We think energy stocks will continue to do well as the global economy
continues to recover.
The Fund remained overweighted in financial stocks. Although these stocks
generally do not perform well in a rising-rate environment -- and, in fact,
the sector as a whole was flat for the period -- the financial stocks in the
portfolio delivered generally strong performances, and they made a positive
contribution to the Fund's returns.
Q: WHAT SECTORS DETRACTED FROM PORTFOLIO PERFORMANCE?
A: The worst-performing market sectors during the first half of the year were
basic materials, consumer stocks, and telecommunications. Fortunately, the
Fund was underweighted in basic materials and consumer stocks. We were
overweighted in telecommunications, which hurt the Fund's performance
relative to its benchmarks, but we plan to remain overweighted, because we
believe that these stocks represent good value for the long term.
Q: WHAT IS YOUR OUTLOOK?
A: We expect the economy and the stock market will continue to moderate, as we
began to see during the end of the first half of the year. In such an
environment, we feel that investors will once again focus on corporate
earnings and stock-price valuations. We have said for some time that the
exuberance in the market would necessarily have to abate, and that the
market would, at some point, once again focus on fundamentals. We believe
this is beginning to happen and that it should favor the Fund's investment
approach which focuses on identifying well-managed companies that trade at
what we believe are attractive valuations relative to their earnings and
cash flow. However, market cycles do not end overnight. We expect relatively
high market volatility through the end of the year, although perhaps not to
the extent that we saw in 1999. We also feel that the market will continue
to broaden, which should benefit a well-diversified portfolio, such as that
of Seligman Income Fund.
3
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
AVERAGE ANNUAL
------------------------------------------------------------------------------
CLASS B CLASS C CLASS D
SINCE SINCE SINCE
SIX ONE FIVE 10 INCEPTION INCEPTION INCEPTION
MONTHS* YEAR YEARS YEARS 4/22/96 5/27/99 5/3/93
----- ----- ----- ----- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A**
With Sales Charge (4.06)% (5.85)% 5.88% 8.79% n/a n/a n/a
Without Sales Charge 0.75 (1.17) 6.92 9.31 n/a n/a n/a
CLASS B**
With CDSC+ (4.67) (6.76) n/a n/a 5.43% n/a n/a
Without CDSC 0.30 (1.98) n/a n/a 5.80 n/a n/a
CLASS C**
With Sales Charge and CDSC (1.64) (3.82) n/a n/a n/a (3.35)% n/a
Without Sales Charge and CDSC 0.38 (1.90) n/a n/a n/a (1.61) n/a
CLASS D**
With 1% CDSC (0.62) (2.86) n/a n/a n/a n/a n/a
Without CDSC 0.38 (1.90) 6.11 n/a n/a n/a 6.16%
LEHMAN BROS. AGGREGATE BOND INDEX*** 3.99 4.57 6.25 7.82 6.58++ 3.90o 6.15+++
LIPPER INCOME FUNDS AVERAGE*** 1.88 2.95 10.21 10.37 9.37++ 3.85o 9.24+++
S&P 500*** (0.42) 7.24 23.80 17.80 23.09++ 12.12o 20.60+++
</TABLE>
NET ASSET VALUE DIVIDEND AND CAPITAL GAIN (LOSS) INFORMATION
FOR THE SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<CAPTION>
DIVIDENDS
JUNE 30, 2000 DECEMBER 31, 1999 JUNE 30, 1999 PAID
---------------- ---------------------- ---------------- -------------
<S> <C> <C> <C> <C>
CLASS A $13.51 $13.57 $14.09 $0.160
CLASS B 13.45 13.52 14.05 0.110
CLASS C 13.46 13.52 14.05 0.110
CLASS D 13.46 13.52 14.05 0.110
</TABLE>
CAPITAL GAIN (LOSS)
-----------------------
REALIZED $(0.057)
UNREALIZED 0.514oo
Performance data quoted represent changes in prices and assume that all
distributions within the periods are invested 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.
----------
* Returns for periods of less than one year are not annualized.
** Return figures reflect any change in price per share and assume the
investment of dividend and capital gain distributions. Returns for Class A
shares are calculated with and without the effect of the initial 4.75%
maximum sales charge. Returns for Class A shares reflect the effect of the
service fee of up to 0.25% under the Administration, Shareholder Services
and Distribution Plan after January 1, 1993, only. Returns for Class B
shares are calculated with and without the effect of the maximum 5%
contingent deferred sales charge ("CDSC"), charged on certain redemptions
made within one year of the date of purchase, declining to 1% in the sixth
year and 0% thereafter. Returns for Class C shares are calculated with and
without the effect of the initial 1% maximum sales charge and the 1% CDSC
that is charged on redemptions made within 18 months of the date of
purchase. Returns for Class D shares are calculated with and without the
effect of the 1% CDSC, charged on redemptions made within one year of the
date of purchase.
*** The Lehman Bros. Aggregate Bond Index, the Lipper Income Funds Average, and
the S&P 500 are unmanaged benchmarks that assume investment of dividends.
The Lipper Income Funds Average excludes the effect of sales charges. The
monthly performance of the Lipper Income Funds Average is used in the
Performance Overview. The Lehman Bros. Aggregate Bond Index and the S&P 500
exclude the effect of fees and sales charges. Investors cannot invest
directly in an index or an average.
+ The CDSC is 5% for periods of one year or less, and 2% since inception.
++ From April 30, 1996.
+++ From April 30, 1993.
o From May 31, 1999.
oo Represents the per share amount of net unrealized appreciation of portfolio
securities as of June 30, 2000.
4
<PAGE>
PERFORMANCE OVERVIEW
GROWTH OF AN ASSUMED $10,000 INVESTMENT
CLASS A SHARES
JUNE 30, 1990 TO JUNE 30, 2000
[the following represents a line graph in the printed piece]
6/30/90 ...9527
8502
8756
9718
6/30/91 ...10018
10898
11394
11979
6/30/92 ...12446
13016
13392
14263
6/30/93 ...14622
15135
15532
14910
6/30/94 ...14671
14966
14689
15479
6/30/95 ...16609
17281
17715
17800
6/30/96 ...18056
18308
19171
19310
6/30/97 ...20449
21396
21866
23090
6/30/98 ...23187
22715
23454
23092
6/30/99 ...23488
22466
23040
23246
6/30/00 ...23213
$9,527*
Initial Amount Invested
$23,213
Total Value at June 30, 2000
CLASS B SHARES
APRIL 22, 1996+ TO JUNE 30, 2000
[the following represents a line graph in the printed piece]
4/22/96 .. 10000
6/30/96 .. 10166
10286
12/31/96 . 10758
10808
6/30/97 .. 11425
11934
12/31/97 . 12183
12833
6/30/98 .. 12862
12582
12/31/98 . 12948
12721
6/30/99 .. 12922
12331
12/31/99 . 12629
12718
6/30/00 .. 12667
$10,000
Initial Amount Invested
$12,667**
Total Value at June 30, 2000
CLASS C SHARES
MAY 27, 1999+ TO JUNE 30, 2000
[the following represents a line graph in the printed piece]
5/27/99 ...9902
6/30/99 ...9916
9768
9655
9/30/99 ...9469
9718
9647
12/31/99 ..9691
9390
9203
3/31/00 ...9759
9637
9587
6/30/00 ...9727
$9,902*
Initial Amount Invested
$9,727**
Total Value at June 30, 2000
CLASS D SHARES
MAY 3, 1993+ TO JUNE 30, 2000
[the following represents a line graph in the printed piece]
5/3/93 ... 10000
6/30/93 .. 10209
10546
10802
10347
6/30/94 .. 10165
10347
10132
10655
6/30/95 .. 11412
11847
12124
12158
6/30/96 .. 12309
12455
13026
13086
6/30/97 .. 13833
14450
14741
15528
6/30/98 .. 15563
15225
15678
15414
6/30/99 .. 15646
14941
15291
15399
6/30/00 .. 15348
$10,000
Initial Amount Invested
$15,348
Total Value at June 30, 2000
These charts reflect the growth of a $10,000 investment for a 10-year period for
Class A shares and since inception for Class B, Class C, and Class D shares,
assuming that all distributions within the periods are invested in additional
shares. Since the measured periods vary, the charts are plotted using different
scales and are not comparable.
----------
* Net of the 4.75% or 1% maximum initial sales charge for Class A or Class C
shares, respectively.
** Excludes the effects of the 2% or 1% CDSC for Class B or Class C shares,
respectively.
+ Inception date.
5
<PAGE>
PORTFOLIO OVERVIEW
DIVERSIFICATION OF NET ASSETS
PERCENT OF TOTAL
-----------------------
JUNE 30, DEC. 31,
2000 1999
--------- ---------
Aerospace/Defense ..................... -- 0.3
Automotive and Related ................ 2.1 2.2
Chemicals ............................. 1.5 1.5
Communications ........................ 9.9 7.7
Communications Equipment .............. 1.6 1.4
Computer and Business
Services ........................... 13.8 11.7
Consumer Goods and Services ........... 3.0 8.5
Diversified ........................... -- 0.5
Drugs and Health Care ................. 11.6 8.8
Electric and Gas Utilities ............ 3.8 3.4
Electrical Equipment .................. -- 2.8
Electronics ........................... 0.5 2.3
Energy ................................ 5.0 4.3
Finance and Insurance ................. 16.6 14.9
Industrial Goods and Services ......... 0.6 0.3
Machinery and Industrial
Equipment .......................... 4.4 1.7
Media ................................. 2.1 1.4
Office Equipment ...................... 1.2 0.7
Paper and Forest Products ............. 0.4 0.7
Publishing ............................ -- 0.5
Real Estate ........................... -- 0.5
Retail Trade .......................... 5.9 4.8
Transportation ........................ 1.1 0.6
------ ------
Total Corporate
Fixed-Income Securities
and Common Stocks .................. 85.1 81.5
US Government and
Government
Agency Securities .................. 14.3 11.8
Short-Term Holdings
and Other Assets
Less Liabilities ................... 0.6 6.7
------ ------
TOTAL ................................. 100.0 100.0
====== ======
LARGEST INDUSTRIES+
JUNE 30, 2000
[the following represents a bar graph in the printed piece]
FINANCE AND INSURANCE $39,086,794
COMPUTER AND BUSINESS SERVICES $32,494,290
DRUGS AND HEALTH CARE $23,359,788
COMMUNICATIONS $23,986,559
RETAIL TRADE $13,916,222
----------
+ Excludes US Government and Government Agency securities.
COMPOSITION OF NET ASSETS
PERCENT OF TOTAL
----------------------------
JUNE 30, DEC. 31,
2000 1999
--------- --------
Common Stocks .............................. 57.3 54.9
----------------------------------------------------------------------
Corporate Bonds ............................ 25.6 24.7
Asset-Backed Securities .................... 2.2 1.9
----------------------------------------------------------------------
Total Corporate
Fixed-Income Securities .................. 27.8 26.6
----------------------------------------------------------------------
US Government and
Government Agency
Securities ............................... 14.3 11.8
----------------------------------------------------------------------
Short-Term Holdings and
Other Assets Less Liabilities ............ 0.6 6.7
----------------------------------------------------------------------
TOTAL ...................................... 100.0 100.0
----------------------------------------------------------------------
6
<PAGE>
PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING PAST SIX MONTHS
PRINCIPAL AMOUNT
OR SHARES
---------------------------------
HOLDINGS
ADDITIONS INCREASE 6/30/00
------------- --------------------------------
COMMON STOCKS:
Chubb .............................. 28,700shs. 53,300shs.
CVS ................................ 50,400 50,400
Guidant ............................ 30,000 30,000
Pitney Bowes ....................... 29,050 67,250
Sprint ............................. 25,000 25,000
CORPORATE BONDS:
Heller Financial
7.875%, 5/15/2003 .............. $1,500,000 $1,500,000
Household Finance
7.875%, 3/1/2007 .............. 3,000,000 3,000,000
Saks 7%, 7/15/2004 ................ 2,100,000 2,100,000
US GOVERNMENT SECURITIES:
US Treasury Bonds
7.50%, 11/15/2016 ............. 1,200,000 1,200,000
US Treasury Notes
6.625%, 5/15/2007 ............. 2,400,000 2,400,000
PRINCIPAL AMOUNT
OR SHARES
---------------------------------------
HOLDINGS
REDUCTIONS DECREASE 6/30/00
-------------- ------------- -------------
COMMON STOCKS:
Bestfoods ......................... 39,900shs. --
CORPORATE BONDS:
Bank of New York
7.30%, 12/1/2009 .............. $3,200,000
Dell Computer
6.55%, 4/15/2008 .............. 2,500,000 --
Dime Bancorp
7%, 7/25/2001 ................. 2,900,000 --
First Data
5.80%, 12/15/2008 ............. 2,400,000 --
Household Finance
6%, 5/1/2004 .................. 3,000,000 --
Philip Morris
7.125%, 8/15/2002 ............. 2,500,000 --
Wal-Mart
6.55%, 8/10/2004 .............. 3,000,000 --
Whitman 7.50%, 2/1/2003 ........... 2,500,000 --
US GOVERNMENT SECURITIES:
US Treasury Notes
6.25%, 8/31/2002 .............. 3,800,000 --
Largest portfolio changes from the previous period to the current period are
based on cost of purchases and proceeds from sales of securities.
--------------------------------------------------------------------------------
LARGEST PORTFOLIO HOLDINGS
JUNE 30, 2000
SECURITY VALUE
---------- ---------------
Government National Mortgage
Association 6.50%, 12/15/2028 .................. $7,103,474
General Electric 6,399,750
FHLMC Gold 5.50%, 7/1/2013 ......................... 5,963,951
Microsoft .......................................... 5,086,013
Federal National Mortgage
Association 6%, 12/1/2028 ...................... 4,826,129
Intel .............................................. 4,811,625
Government National Mortgage
Association 6%, 12/20/2028 ..................... 4,699,838
Applied Materials .................................. 4,587,206
Cisco Systems ...................................... 4,123,178
United Technologies ................................ 3,926,962
--------------------------------------------------------------------------------
7
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
SHARES VALUE
------------ -----------
COMMON STOCKS 57.3%
AUTOMOTIVE AND
RELATED 0.7%
Ford Motor 33,700 $ 1,449,100
Visteon 4,412 53,639
----------
1,502,739
----------
CHEMICALS 0.4%
duPont (E.I.) de Nemours 23,300 1,019,375
----------
COMMUNICATIONS 4.7%
AT&T 64,400 2,036,650
SBC Communications 65,300 2,824,225
Sprint 25,000 1,275,000
Verizon Communications 33,000 2,054,250
WorldCom* 63,600 2,919,638
----------
11,109,763
----------
COMMUNICATIONS
EQUIPMENT 1.6%
Lucent Technologies 28,200 1,670,850
Nortel Networks (Canada) 31,000 2,115,750
----------
3,786,600
----------
COMPUTER AND
BUSINESS SERVICES 13.8%
Agilent Technologies* 25,600 1,888,000
America Online* 19,000 1,002,250
Applied Materials* 50,600 4,587,206
Cisco Systems* 64,900 4,123,178
Dell Computer* 54,600 2,694,169
Electronic Data Systems 47,100 1,942,875
Hewlett-Packard 12,850 1,604,644
Intel 36,000 4,811,625
International Business
Machines 19,800 2,169,338
Microsoft* 63,600 5,086,013
Oracle* 18,800 1,579,787
Sun Microsystems* 11,050 1,005,205
----------
32,494,290
----------
CONSUMER GOODS AND
SERVICES 3.0%
Anheuser-Busch 21,800 1,628,187
Coca-Cola 23,300 1,338,294
Gillette 21,900 765,131
PepsiCo 56,300 2,501,831
Procter & Gamble 15,200 870,200
----------
7,103,643
----------
DRUGS AND HEALTH CARE 7.3%
Abbott Laboratories 39,100 1,742,394
American Home Products 46,600 2,737,750
Baxter International 23,800 1,673,437
Bristol-Myers Squibb 20,700 1,205,775
Guidant* 30,000 1,485,000
Johnson & Johnson 25,100 2,557,062
Merck 28,400 2,176,150
Pfizer 44,500 2,136,000
Schering-Plough 29,600 1,494,800
----------
17,208,368
----------
ELECTRIC AND GAS
UTILITIES 1.8%
Unicom 41,000 1,586,188
Williams Companies (The) 63,200 2,634,650
----------
4,220,838
----------
ENERGY 5.0%
BP Amoco (ADRs)
(United Kingdom) 37,300 2,109,780
Coastal 36,000 2,191,500
Exxon Mobil 37,450 2,939,825
Royal Dutch Petroleum
(Netherlands) 38,000 2,339,375
Schlumberger 29,400 2,193,975
----------
11,774,455
----------
FINANCE AND INSURANCE 9.6%
American General 35,700 2,177,700
American International Group 28,350 3,331,125
Bank of America 54,703 2,352,229
Bank of New York 77,000 3,580,500
Chubb 53,300 3,277,950
Citigroup 52,000 3,133,000
Fannie Mae 25,500 1,330,781
Merrill Lynch 19,800 2,277,000
Morgan (J.P.) 10,900 1,200,363
----------
22,660,648
----------
MACHINERY AND
INDUSTRIAL EQUIPMENT 4.4%
General Electric 120,750 6,399,750
United Technologies 66,700 3,926,962
----------
10,326,712
----------
OFFICE EQUIPMENT 1.2%
Pitney Bowes 67,250 2,690,000
----------
PAPER AND FOREST
PRODUCTS 0.4%
Mead 38,500 972,125
-----------
RETAIL TRADE 3.4%
Costco Wholesale* 16,600 548,318
CVS 50,400 2,016,000
Home Depot 16,600 828,963
May Department Stores 35,500 852,000
Wal-Mart Stores 65,500 3,774,438
-----------
8,019,719
-----------
TOTAL COMMON STOCKS
(Cost $122,238,936) 134,889,275
-----------
----------
See footnotes on page 10.
8
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
PRINCIPAL
AMOUNT VALUE
----------- -----------
CORPORATE BONDS 25.6%
AUTOMOTIVE AND
RELATED 1.4%
DaimlerChrysler
7.75%, 6/15/2005 $1,110,000 $ 1,120,677
Dana 6.50%, 3/1/2009 2,500,000 2,241,185
----------
3,361,862
----------
CHEMICALS 1.1%
Lyondell Chemical
9.625%, 5/1/2007 2,500,000 2,468,750
----------
COMMUNICATIONS 5.2%
AT&T Canada
7.65%, 9/15/2006 825,000 817,917
Global Crossing Holding
9.125%, 11/15/2006 2,100,000 2,021,250
Qwest Communications 0%
(9.47%++), 10/15/2007 2,350,000 1,977,651
Tele-Communications
9.80%, 2/1/2012 2,500,000 2,874,227
US West Communications
7.20%, 11/1/2004 3,600,000 3,546,742
WorldCom 8%, 5/15/2006 1,000,000 1,012,238
----------
12,250,025
----------
DRUGS AND
HEALTH CARE 4.3%
American Home Products
7.90%, 2/15/2005 3,100,000 3,188,871
Boston Scientific
6.625%, 3/15/2005 2,500,000 2,358,512
Cardinal Health
6.25%, 7/15/2008 2,000,000 1,825,842
Guidant
6.15%, 2/15/2006 3,000,000 2,749,722
----------
10,122,947
----------
ELECTRIC AND
GAS UTILITIES 0.3%
Dominion Resources
8.125%, 6/15/2010 620,000 626,771
----------
ELECTRONICS 0.5%
Avnet
7.875%, 2/15/2005 1,250,000 1,267,491
----------
FINANCE AND
INSURANCE 6.5%
Aristar
6%, 5/15/2002 1,300,000 1,268,297
Bank One
5.625%, 2/17/2004 1,200,000 1,131,389
First USA Bank
6.125%, 6/25/2001 2,000,000 1,978,812
Ford Motor Credit
5.80%, 1/12/2009 1,150,000 1,002,032
Heller Financial
6.50%, 7/22/2002 2,500,000 2,452,065
7.875%, 5/15/2003 1,500,000 1,496,397
Household Finance
7.875%, 3/1/2007 3,000,000 2,989,071
Lehman Brothers Holding
7.75%, 1/15/2005 925,000 917,083
Mellon Funding
7.50%, 6/15/2005 900,000 899,037
Charles Schwab
8.05%, 3/1/2010 1,200,000 1,200,988
----------
15,335,171
----------
INDUSTRIAL GOODS AND
SERVICES 0.6%
Deere
6.55%, 7/15/2004 1,000,000 971,578
Leggett Platt
7.65%, 2/15/2005 500,000 510,633
----------
1,482,211
----------
MEDIA 2.1%
CSC Holdings
7.25%, 7/15/2008 2,400,000 2,230,109
Time Warner
9.125%, 1/15/2013 2,500,000 2,718,293
----------
4,948,402
----------
RETAIL TRADE 2.5%
Nordstrom
5.625%, 1/15/2009 2,000,000 1,675,522
Saks 7%, 7/15/2004 2,100,000 1,886,608
Staples 7.125%, 8/15/2007 2,500,000 2,334,373
----------
5,896,503
----------
TRANSPORTATION 1.1%
Continental Airlines
8.048%, 11/1/2020 1,100,000 1,098,707
Delta Air Lines
7.70%, 12/15/2006 1,600,000 1,543,186
----------
2,641,893
----------
TOTAL CORPORATE BONDS
(Cost $62,317,181) 60,402,026
----------
----------
See footnotes on page 10.
9
<PAGE>
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000
PRINCIPAL
AMOUNT VALUE
------------ -----------
US GOVERNMENT AND
GOVERNMENT AGENCY
SECURITIES 14.3%
US Treasury Bonds
7.50%, 11/15/2016 $1,200,000 $ 1,351,875
US Treasury Notes
6.625%, 5/15/2007 2,400,000 2,450,251
FHLMC GOLD:+
5.50%, 7/1/2013 6,428,923 5,963,951
7.50%, 10/1/2017 1,598,820 1,598,384
8%, 12/1/2023 916,702 922,219
Federal National Mortgage
Association:+
6%, 11/1/2010 2,288,432 2,179,785
8%, 6/1/2028 955,303 963,222
6%, 12/1/2028 5,274,233 4,826,129
Government National Mortgage
Association, Mortgage-backed
Passed-through Certificates:+
6.50%, 12/15/2028 7,483,020 7,103,474
6%, 12/20/2028 5,127,458 4,699,838
US Government Gtd. Title XI
(Bay Transportation)
7.30%, 6/1/2021 1,603,000 1,592,233
------------
TOTAL US GOVERNMENT
AND GOVERNMENT
AGENCY SECURITIES
(Cost $35,292,279) 33,651,361
------------
ASSET-BACKED
SECURITIES+ 2.2%
ELECTRIC AND GAS
UTILITIES 1.7%
PECO Energy
6.05%, 3/1/2009 1,500,000 1,401,622
PP&L Transition
6.83%, 3/25/2007 2,500,000 2,473,738
------------
3,875,360
------------
FINANCE AND
INSURANCE 0.5%
Chemical Master Credit
7.09%, 2/15/2009 1,100,000 1,090,975
------------
TOTAL ASSET-BACKED
SECURITIES
(Cost $5,084,631) 4,966,335
------------
TOTAL INVESTMENTS 99.4%
(Cost $224,933,027) 233,908,997
OTHER ASSETS
LESS LIABILITIES 0.6% 1,498,602
------------
NET ASSETS 100.0% $235,407,599
============
----------
* Non-income producing security.
+ Investments in mortgage-backed and asset-backed securities are subject to
principal paydowns. As a result of prepayments from refinancing or
satisfaction of the underlying instruments, the average life may be less than
the original maturity. This in turn may impact the ultimate yield realized
from these instruments.
++ Deferred-interest debentures pay no interest for a stipulated number of
years, after which they pay the indicated coupon rate.
See Notes to Financial Statements.
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2000
<TABLE>
<S> <C> <C>
ASSETS:
Investments, at value:
Stocks and bonds (cost $189,640,748) ............................................. $200,257,636
US Government and Government Agency securities
(cost $35,292,279) ............................................................. 33,651,361 $233,908,997
---------------
Receivable for securities sold ....................................................................... 5,132,540
Receivable for interest and dividends ................................................................ 1,676,357
Receivable for Capital Stock sold .................................................................... 74,989
Investment in, and expenses prepaid to, shareholder service agent .................................... 37,026
Other ................................................................................................ 15,840
------------
TOTAL ASSETS ......................................................................................... 240,845,749
------------
LIABILITIES:
Bank overdraft ....................................................................................... 2,794,855
Payable for securities purchased ..................................................................... 1,363,730
Payable for Capital Stock repurchased ................................................................ 762,444
Accrued expenses and other ........................................................................... 517,121
------------
TOTAL LIABILITIES .................................................................................... 5,438,150
------------
NET ASSETS ........................................................................................... $235,407,599
============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($1 par value; 500,000,000 shares authorized; 17,447,344
shares outstanding):
Class A ............................................................................................ $ 12,645,007
Class B ............................................................................................ 1,371,052
Class C ............................................................................................ 186,235
Class D ............................................................................................ 3,245,050
Additional paid-in capital ........................................................................... 213,534,035
Undistributed net investment income .................................................................. 301,145
Accumulated net realized loss ........................................................................ (4,850,895)
Net unrealized appreciation of investments ........................................................... 8,975,970
------------
NET ASSETS ........................................................................................... $235,407,599
============
NET ASSET VALUE PER SHARE:
CLASS A ($170,788,227 / 12,645,007 shares) ........................................................... $13.51
=========
CLASS B ($18,445,153 / 1,371,052 shares) ............................................................. $13.45
=========
CLASS C ($2,506,185 / 186,235 shares) ................................................................ $13.46
=========
CLASS D ($43,668,034 / 3,245,050 shares) ............................................................. $13.46
=========
</TABLE>
----------
See Notes to Financial Statements.
11
<PAGE>
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest .................................................................... $3,699,170
Dividends (net of foreign tax withheld of $12,103) .......................... 989,455
----------
TOTAL INVESTMENT INCOME ................................................................. $ 4,688,625
EXPENSES:
Management fee .............................................................. 745,054
Distribution and service fees ............................................... 567,340
Shareholder account services ................................................ 267,521
Shareholder reports and communications ...................................... 45,631
Registration ................................................................ 41,750
Custody and related services ................................................ 37,246
Auditing and legal fees ..................................................... 33,519
Directors' fees and expenses ................................................ 4,406
Miscellaneous ............................................................... 5,384
----------
TOTAL EXPENSES .......................................................................... 1,747,851
-------------
NET INVESTMENT INCOME ................................................................... 2,940,774
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS:
Net realized loss on investments ............................................ (996,902)
Net change in unrealized appreciation of investments ........................ (1,286,910)
----------
NET LOSS ON INVESTMENTS ................................................................. (2,283,812)
-------------
INCREASE IN NET ASSETS FROM OPERATIONS .................................................. $ 656,962
=============
</TABLE>
------------
See Notes to Financial Statements.
12
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED 6/30/00 12/31/99
---------------- -----------------
<S> <C> <C>
OPERATIONS:
Net investment income ........................................ $ 2,940,774 $ 11,093,988
Net realized loss on investments ............................. (996,902) (2,546,515)
Net change in unrealized appreciation of investments ......... (1,286,910) (15,124,657)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS ............ 656,962 (6,577,184)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ................................................... (2,105,617) (8,648,995)
Class B ................................................... (157,465) (676,932)
Class C ................................................... (18,593) (17,317)
Class D ................................................... (376,033) (2,050,029)
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS .................... (2,657,708) (11,393,273)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares ............................ 3,744,202 17,385,798
Investment of dividends ...................................... 1,849,975 7,714,842
Exchanged from associated Funds .............................. 4,712,863 21,307,395
------------- -------------
Total ........................................................ 10,307,040 46,408,035
------------- -------------
Cost of shares repurchased ................................... (35,173,470) (74,365,590)
Exchanged into associated Funds .............................. (19,369,315) (27,846,757)
------------- -------------
Total ........................................................ (54,542,785) (102,212,347)
------------- -------------
DECREASE IN NET ASSETS
FROM CAPITAL SHARE TRANSACTIONS ........................... (44,235,745) (55,804,312)
------------- -------------
DECREASE IN NET ASSETS ....................................... (46,236,491) (73,774,769)
NET ASSETS:
Beginning of period .......................................... 281,644,090 355,418,859
------------- ----------------
END OF PERIOD (including undistributed net investment income
of $301,145 and $18,079, respectively) ..................... $235,407,599 $281,644,090
============= ================
</TABLE>
----------
See Notes to Financial Statements.
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Income Fund, Inc. (the "Fund") offers
four classes of 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 A shares purchased in an amount of $1,000,000 or more are sold without an
initial sales charge but are subject to a contingent deferred sales charge
("CDSC") of 1% on redemptions within 18 months of purchase. Class B shares are
sold without an initial sales charge but are subject to a distribution fee of
0.75% and a service fee of up to 0.25% on an annual basis, and a CDSC, if
applicable, of 5% on redemptions in the first year of purchase, declining to 1%
in the sixth year and 0% thereafter. Class B shares will automatically convert
to Class A shares on the last day of the month that precedes the eighth
anniversary of their date of purchase. The Fund began offering Class C shares on
May 27, 1999. Class C shares are sold with an initial sales charge of up to 1%
and 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 CDSC, if applicable, of 1% imposed on
redemptions made within 18 months of purchase. 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 CDSC, if applicable, of
1% imposed on redemptions made within one year of purchase. The four 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 other class-specific expenses, and has
exclusive voting rights with respect to any matter on which a separate vote of
any class is required.
2. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been
prepared in conformity with accounting principles generally accepted in the
United States of America, which require management to make certain estimates and
assumptions at the date of the financial statements. The following summarizes
the significant accounting policies of the Fund:
a. SECURITY VALUATION -- Investments in US Government and Government agency
securities, bonds, and stocks are valued at current market values or, in
their absence, at fair values determined in accordance with procedures
approved by the Board of Directors. Securities traded on an exchange are
valued at last sales prices or, in their absence and in the case of
over-the-counter securities, at the mean of bid and asked prices. Short-term
holdings maturing in 60 days or less are valued at amortized cost.
b. FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Fund are
maintained in US dollars. The market value of investment securities, other
assets and liabilities denominated in foreign currencies are translated into
US dollars at the daily rate of exchange as reported by a pricing service.
Purchases and sales of investment securities, income, and expenses are
translated into US dollars at the rate of exchange prevailing on the
respective dates of such transactions.
The Fund separates that portion of the results of operations resulting
from changes in the foreign exchange rates from the fluctuations arising
from changes in the market prices of securities held in the portfolio.
Similarly, the Fund separates the effect of changes in foreign exchange
rates from the fluctuations arising from changes in the market prices of
portfolio securities sold during the period.
c. FEDERAL TAXES -- There is no provision for federal income 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.
d. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- 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, except
that certain dividends from foreign securities where the ex-dividend dates
may have passed are recorded as soon as the Fund is informed of the
dividend. Interest income is recorded on an accrual basis.
e. MULTIPLE CLASS ALLOCATIONS -- 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 attributable to a
particular class, are charged directly to such class. For the six months
ended June 30, 2000, distribution and service fees were the only
class-specific expenses.
f. DISTRIBUTIONS TO SHAREHOLDERS -- The treatment for financial statement
purposes of distributions made to shareholders during the year from net
investment income or net realized gains 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 realized 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 reclassification
will have no effect on net assets, results of operations, or net asset
values per share of the Fund.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding US Government obligations and short-term investments, for
the six months ended June 30, 2000, amounted to $67,468,510 and $94,368,283,
respectively; purchases and sales of USGovernment obligations were $7,332,292
and $5,796,651, respectively.
At June 30, 2000, 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 $21,150,901 and $12,174,931, respectively.
4. MANAGEMENT FEE, DISTRIBUTION SERVICES, AND OTHER TRANSACTIONS -- 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 0.60%
per annum of the first $1 billion of the Fund's average daily net assets, 0.55%
per annum of the next $1 billion of the Fund's average daily net assets, and
0.50% per annum of the Fund's average daily net assets in excess of $2 billion.
The management fee reflected in the Statement of Operations represents 0.60% per
annum of the Fund's average daily net assets.
Seligman Advisors, Inc. (the "Distributor"), agent for the distribution of
the Fund's shares and an affiliate of the Manager, received concessions of
$3,175 from sales of Class A shares. Commissions of $24,795 and $9,360 were paid
to dealers for sales of Class A and Class C shares, respectively.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to distribution of its shares. Under the Plan, with
respect to Class A shares, 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,
2000, fees incurred under the Plan aggregated $223,821, or 0.25% per annum of
the average daily net assets of Class A shares.
Under the Plan, with respect to Class B shares, Class C shares, and Class D
shares, 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 B, Class C, and Class D shares for which the
organizations are responsible; and, for Class C and Class D shares, 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.
With respect to Class B shares, a distribution fee of 0.75% on an annual
basis of average daily net assets is payable monthly by the Fund to the
Distributor; however, the Distributor has sold its rights to this fee to a third
party (the "Purchaser"), which provides funding to the Distributor to enable it
to pay commissions to dealers at the time of the sale of the related Class B
shares.
For the six months ended June 30, 2000, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B, Class C,
and Class D shares, amounted to $97,971, $10,436, and $235,112, respectively.
The Distributor is entitled to retain any CDSC imposed on certain
redemptions of Class A and Class C shares occurring within 18 months of purchase
and on redemptions of Class D shares occurring within one year of purchase. For
the six months ended June 30, 2000, such charges amounted to $3,235.
The Distributor has sold its rights to collect any CDSC imposed on
redemptions of Class B shares to the Purchaser. In connection with the sale of
its rights to collect any CDSC and the distribution fees with respect to Class B
shares described above, the Distributor receives payments from the Purchaser
based on the value of Class Bshares sold. The aggregate of such payments
retained by the Distributor, for the six months ended June 30, 2000, amounted to
$1,040.
Seligman Services, Inc., an affiliate of the Manager, is eligible to receive
commissions from certain sales of shares of the Fund, as well as distribution
and service fees pursuant to the Plan. For the six months ended June 30, 2000,
Seligman Services, Inc. received commissions of $2,864 from the sales of shares
of the Fund. Seligman Services, Inc. also received distribution and service fees
of $19,350, pursuant to the Plan.
Seligman Data Corp., which is owned by the Fund and certain associated
investment companies, charged the Fund at cost $267,521 for shareholder account
services. The Fund's investment in Seligman Data Corp. is recorded at a cost of
$3,553.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Distributor, Seligman Services, Inc., and/or Seligman Data Corp.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
fees. Directors may elect to have their deferred fees accrue interest or earn a
return based on the performance of the Fund or other funds in the Seligman Group
of Investment Companies. The cost of such fees and earnings accrued thereon is
included in directors' fees and expenses, and the accumulated balance thereof at
June 30, 2000, of $90,537 is included in other liabilities. Deferred fees and
related accrued earnings are not deductible for federal income tax purposes
until such amounts are paid.
5. COMMITTED LINE OF CREDIT -- The Fund is a participant in a joint $825 million
committed line of credit that is shared by substantially all open-end funds in
the Seligman Group of Investment Companies. The Fund's borrowings are limited to
10% of its net assets. Borrowings pursuant to the credit facility are subject to
interest at a rate equal to the overnight federal funds rate plus 0.50%. The
Fund incurs a commitment fee of 0.10% per annum on its share of the unused
portion of the credit facility. The credit facility may be drawn upon only for
temporary purposes and is subject to certain other customary restrictions. The
credit facility commitment expires in June 2001, but is renewable annually with
the consent of the participating banks. For the six months ended June 30, 2000,
the Fund did not borrow from the credit facility.
6. CAPITAL LOSS CARRYFORWARD -- At December 31, 1999, the Fund had a net capital
loss carryforward for federal income tax purposes of $910,188, which is
available for offset against future taxable net capital gains, expiring in 2007.
Accordingly, no capital gains distributions are expected to be paid to
shareholders until net capital gains have been realized in excess of the
available capital loss carryforwards.
7. CAPITAL SHARE TRANSACTIONS -- The Fund has authorized 500,000,000 shares of
$1 par value Capital Stock. Transactions in shares of Capital Stock were as
follows:
CLASS A
-----------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- ------------
Net proceeds from
sales of shares 109,542 $ 1,460,310 565,664 $ 7,939,220
Investment of
dividends 106,014 1,423,453 419,754 5,819,830
Exchanged from
associated Funds 71,319 945,518 418,979 5,837,391
----------- ------------- ----------- -----------
Total 286,875 3,829,281 1,404,397 19,596,441
----------- ------------- ----------- -----------
Cost of shares
repurchased (1,788,775) (23,871,658) (3,583,345) (49,986,020)
Exchanged into
associated Funds (751,066) (9,981,471) (768,113) (10,626,971)
----------- ------------- ----------- -----------
Total (2,539,841) (33,853,129) (4,351,458) (60,612,991)
----------- ------------- ----------- -----------
Decrease (2,252,966) $(30,023,848) (2,947,061) $(41,016,550)
=========== ============= =========== ===========
CLASS B
-----------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -----------
Net proceeds from
sales of shares 55,863 $ 738,024 322,181 $ 4,512,993
Investment of
dividends 7,967 106,542 30,340 419,190
Exchanged from
associated Funds 93,483 1,238,964 652,151 8,968,018
----------- ------------- ----------- -----------
Total 157,313 2,083,530 1,004,672 13,900,201
----------- ------------- ----------- -----------
Cost of shares
repurchased (167,013) (2,220,218) (256,101) (3,552,206)
Exchanged into
associated Funds (332,604) (4,383,868) (510,647) (7,032,194)
----------- ------------- ----------- -----------
Total (499,617) (6,604,086) (766,748) (10,584,400)
----------- ------------- ----------- -----------
Increase (Decrease) (342,304) $(4,520,556) 237,924 $3,315,801
=========== ============= =========== ===========
CLASS C
------------------------------------------------------
SIX MONTHS ENDED MAY 27, 1999* TO
JUNE 30, 2000 DECEMBER 31, 1999
----------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
----------- -------------- -------------------------
Net proceeds from
sales of shares 83,562 $1,102,507 175,185 $2,386,354
Investment of
dividends 1,060 14,201 1,160 15,660
Exchanged from
associated funds 1,934 25,619 8,274 110,789
----------- ------------- ----------- -----------
Total 86,556 1,142,327 184,619 2,512,803
----------- ------------- ----------- -----------
Cost of shares
repurchased (6,788) (90,635) (6,083) (82,721)
Exchanged into
associated funds (17,744) (234,420) (54,325) (728,111)
----------- ------------- ----------- -----------
Total (24,532) (325,055) (60,408) (810,832)
----------- ------------- ----------- -----------
Increase 62,024 $ 817,272 124,211 $1,701,971
=========== ============= =========== ===========
* Commencement of offering of shares.
CLASS D
---------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2000 DECEMBER 31, 1999
----------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------- ----------- -----------
Net proceeds from
sales of shares 33,337 $ 443,361 181,969 $ 2,547,231
Investment of
dividends 22,856 305,779 105,410 1,460,162
Exchanged from
associated Funds 189,878 2,502,762 457,887 6,391,197
----------- ------------- ----------- -----------
Total 246,071 3,251,902 745,266 10,398,590
----------- ------------- ----------- -----------
Cost of shares
repurchased (680,525) (8,990,959) (1,491,727) (20,744,643)
Exchanged into
associated Funds (361,104) (4,769,556) (684,350) (9,459,481)
----------- ------------- ----------- -----------
Total (1,041,629) (13,760,515) (2,176,077) (30,204,124)
----------- ------------- ----------- -----------
Decrease (795,558) $(10,508,613) (1,430,811) $(19,805,534)
=========== ============= =========== ===========
16
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand each Class's financial
performance for the past five and one-half years or from its inception if less
than five and one-half years. Certain information reflects financial results for
a single share of a Class that was held throughout the periods shown. Per share
amounts are calculated using average shares outstanding. "Total return" shows
the rate that you would have earned (or lost) on an investment in each Class,
assuming you reinvested all your dividends and capital gain distributions. Total
returns do not reflect any sales charges and are not annualized for periods of
less than one year.
<TABLE>
<CAPTION>
CLASS A
------------------------------------------------------------------
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED ----------------------------------------------------
6/30/00 1999 1998 1997 1996 1995
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ....................... $13.57 $14.35 $14.81 $14.97 $14.63 $13.05
------ ------ ------ ------ ----- -----
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ...................................... 0.17 0.51 0.64 0.71 0.74 0.76
Net realized and unrealized gain (loss)
on investments ........................................... (0.07) (0.76) 0.41 1.41 0.38 1.89
Net realized and unrealized gain (loss) from
foreign currency transactions ............................ -- -- -- (0.10) 0.04 (0.01)
------ ------ ------ ------ ----- -----
TOTAL FROM INVESTMENT OPERATIONS ........................... 0.10 (0.25) 1.05 2.02 1.16 2.64
------ ------ ------ ------ ----- -----
LESS DISTRIBUTIONS:
Dividends from net investment income ....................... (0.16) (0.53) (0.65) (0.74) (0.73) (0.78)
Distributions from net realized capital gain ............... -- -- (0.86) (1.44) (0.09) (0.28)
------ ------ ------ ------ ----- -----
TOTAL DISTRIBUTIONS ........................................ (0.16) (0.53) (1.51) (2.18) (0.82) (1.06)
------ ------ ------ ------ ----- -----
NET ASSET VALUE, END OF PERIOD ............................. $13.51 $13.57 $14.35 $14.81 $14.97 $14.63
====== ====== ====== ====== ====== ======
TOTAL RETURN: .............................................. 0.75% (1.76)% 7.26% 14.06% 8.22% 20.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ................... $170,788 $202,170 $256,060 $270,688 $296,291 $318,307
Ratio of expenses to average net assets .................... 1.20%+ 1.15% 1.10% 1.14% 1.14% 1.00%
Ratio of net investment income
to average net assets .................................... 2.58%+ 3.65% 4.25% 4.66% 5.11% 5.38%
Portfolio turnover rate .................................... 30.48% 72.46% 124.79% 138.90% 125.92% 111.78%
</TABLE>
----------
See footnotes on page 18.
17
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B CLASS C
------------------------------------------------------------- ---------------------
SIX MONTHS YEAR ENDED DECEMBER 31, 4/22/96* SIX MONTHS 5/27/99*
ENDED -------------------------------- TO ENDED TO
6/30/00 1999 1998 1997 12/31/96 6/30/00 12/31/99
--------- -------- --------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ......... $13.52 $14.30 $14.79 $14.95 $14.43 $13.52 $14.14
------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................ 0.12 0.40 0.52 0.59 0.43 0.12 0.19
Net realized and unrealized gain (loss)
on investments ............................. (0.08) (0.75) 0.39 1.41 0.59 (0.07) (0.49)
Net realized and unrealized gain (loss) from
foreign currency transactions .............. -- -- -- (0.10) 0.05 -- --
------- ------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS ............. 0.04 (0.35) 0.91 1.90 1.07 0.05 (0.30)
------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ......... (0.11) (0.43) (0.54) (0.62) (0.46) (0.11) (0.32)
Distributions from net realized capital gain . -- -- (0.86) (1.44) (0.09) -- --
------- ------- ------- ------- ------- ------- -------
TOTAL DISTRIBUTIONS .......................... (0.11) (0.43) (1.40) (2.06) (0.55) (0.11) (0.32)
------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD ............... $13.45 $13.52 $14.30 $14.79 $14.95 $13.46 $13.52
====== ====== ====== ====== ====== ====== ======
TOTAL RETURN: ................................ 0.30% (2.47)% 6.28% 13.24% 7.58% 0.38% (2.13)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ..... $18,445 $23,159 $21,096 $8,607 $2,961 $2,506 $1,680
Ratio of expenses to average net assets ...... 1.95%+ 1.90% 1.86% 1.90% 1.89%+ 1.95%+ 1.95%+
Ratio of net investment income
to average net assets ...................... 1.83%+ 2.90% 3.49% 3.90% 4.36%+ 1.83%+ 2.73%+
Portfolio turnover rate ....................... 30.48% 72.46% 124.79% 138.90% 125.92%++ 30.48% 72.46%**
</TABLE>
<TABLE>
<CAPTION>
CLASS D
----------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED DECEMBER 31,
ENDED --------------------------------------------------------------------
6/30/00 1999 1998 1997 1996 1995
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD ....... $13.52 $14.30 $14.78 $14.95 $14.60 $13.01
------ ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ...................... 0.12 0.40 0.52 0.59 0.63 0.65
Net realized and unrealized gain (loss)
on investments ........................... (0.07) (0.75) 0.40 1.40 0.38 1.88
Net realized and unrealized gain (loss) from
foreign currency transactions ............ -- -- -- (0.10) 0.04 (0.01)
------ ------ ------ ------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS ........... 0.05 (0.35) 0.92 1.89 1.05 2.52
------ ------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income ....... (0.11) (0.43) (0.54) (0.62) (0.61) (0.65)
Distributions from net realized capital gain -- -- (0.86) (1.44) (0.09) (0.28)
------ ------ ------ ------ ------ ------
TOTAL DISTRIBUTIONS ........................ (0.11) (0.43) (1.40) (2.06) (0.70) (0.93)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD ............. $13.46 $13.52 $14.30 $14.78 $14.95 $14.60
====== ====== ====== ====== ====== ======
TOTAL RETURN: .............................. 0.38% (2.47)% 6.36% 13.17% 7.43% 19.66%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) ... $43,668 $54,635 $78,263 $76,194 $81,957 $86,701
Ratio of expenses to average net assets .... 1.95%+ 1.90% 1.86% 1.90% 1.90% 1.79%
Ratio of net investment income
to average net assets .................... 1.83%+ 2.90% 3.49% 3.90% 4.37% 4.58%
Portfolio turnover rate .................... 30.48% 72.46% 124.79% 138.90% 125.92% 111.78%
</TABLE>
----------
* Commencement of offering of shares.
** For the year ended December 31, 1999.
+ Annualized.
++ For the year ended December 31, 1996.
See Notes to Financial Statements.
18
<PAGE>
REPORT OF INDEPENDENT AUDITORS
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN INCOME FUND, INC.:
We have audited the accompanying statement of assets and liabilities of Seligman
Income Fund, Inc., including the portfolio of investments, as of June 30, 2000,
and 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, 1999, and the financial highlights for each of 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 auditing standards generally accepted
in the United States of America. 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, 2000, 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, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Seligman Income Fund, Inc. as of June 30, 2000, the results of its operations
for the six months then ended, and the changes in its net assets and the
financial highlights for all the respective stated periods in conformity with
accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
New York, New York
August 11, 2000
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FOR MORE INFORMATION
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 Advisors, 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
(212) 682-7600 Outside the United States
(800) 622-4597 24-Hour Automated Telephone Access Service
--------------------------------------------------------------------------------
19
<PAGE>
BOARD OF DIRECTORS
--------------------------------------------------------------------------------
JOHN R. GALVIN 2, 4
DIRECTOR, Raytheon Company
DEAN EMERITUS, Fletcher School of Law and Diplomacy
at Tufts University
ALICE S. ILCHMAN 3, 4
TRUSTEE, Committee for Economic Development
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
DIRECTOR, Conoco Inc.
JOHN E. MEROW 2, 4
DIRECTOR, Commonwealth Industries, Inc.
TRUSTEE, New York-Presbyterian Hospital
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
BETSY S. MICHEL 2, 4
TRUSTEE, The Geraldine R. Dodge Foundation
WILLIAM C. MORRIS 1
CHAIRMAN
CHAIRMAN OF THE BOARD,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
JAMES C. PITNEY 3, 4
RETIRED PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
JAMES Q. RIORDAN 3, 4
DIRECTOR, KeySpan Energy Corporation
TRUSTEE, Committee for Economic Development
RICHARD R. SCHMALTZ 1
MANAGING DIRECTOR, DIRECTOR OF INVESTMENTS,
J. & W. Seligman & Co. Incorporated
TRUSTEE EMERITUS, Colby College
ROBERT L. SHAFER 3, 4
RETIRED VICE PRESIDENT, Pfizer Inc.
JAMES N. WHITSON 2, 4
DIRECTOR AND CONSULTANT, Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, CommScope, Inc.
MEMBER OF THE BOARD OF GOVERNORS,
Investment Company Institute
BRIAN T. ZINO 1
PRESIDENT
PRESIDENT, J. & W. Seligman & Co. Incorporated
CHAIRMAN, Seligman Data Corp.
DIRECTOR, ICI Mutual Insurance Company
MEMBER OF THE BOARD OF GOVERNORS,
Investment Company Institute
DIRECTOR EMERITUS
FRED E. BROWN
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
----------------
Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
--------------------------------------------------------------------------------
EXECUTIVE OFFICERS
--------------------------------------------------------------------------------
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
CHARLES C. SMITH, JR.
VICE PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT AND TREASURER
FRANK J. NASTA
SECRETARY
--------------------------------------------------------------------------------
20
<PAGE>
GLOSSARY OF FINANCIAL TERMS
CAPITAL GAIN DISTRIBUTION -- A payment to mutual fund shareholders of profits
realized on the sale of securities in a fund's portfolio.
CAPITAL APPRECIATION/DEPRECIATION -- An increase or decrease in the market value
of a mutual fund's portfolio securities, which is reflected in the net asset
value of the fund's shares. Capital appreciation/depreciation of an individual
security is in relation to the original purchase price.
COMPOUNDING -- The change in the value of an investment as shareholders receive
earnings on their investment's earnings. For example, if $1,000 is invested at a
fixed rate of 7% a year, the initial investment is worth $1,070 after one year.
If the return is compounded, second year earnings will not be based on the
original $1,000, but on the $1,070, which includes the first year's earnings.
CONTINGENT DEFERRED SALES CHARGE (CDSC) -- Depending on the class of shares
owned, a fee charged by a mutual fund when shares are sold back to the fund. The
CDSC expires after a fixed time period.
DIVIDEND -- A payment by a mutual fund, usually derived from the fund's net
investment income (dividends and interest less expenses).
DIVIDEND YIELD -- A measurement of a fund's dividend as a percentage of the
maximum offering price or net asset value.
EXPENSE RATIO -- The cost of doing business for a mutual fund, expressed as a
percent of the fund's net assets.
INVESTMENT OBJECTIVE -- The shared investment goal of a fund and its
shareholders.
MANAGEMENT FEE -- The amount paid by a mutual fund to its investment advisor(s).
MULTIPLE CLASSES OF SHARES -- Although an individual mutual fund invests in only
one portfolio of securities, it may offer investors several purchase options
which are "classes" of shares. Multiple classes permit shareholders to choose
the fee structure that best meets their needs and goals. Generally, each class
will differ in terms of how and when sales charges and certain fees are
assessed.
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. (NASD) -- A self-regulatory
body with authority over firms that distribute mutual funds.
NET ASSET VALUE (NAV) PER SHARE -- The market worth of one fund share, obtained
by adding a mutual fund's total assets (securities, cash, and any accrued
earnings), subtracting liabilities, and dividing the resulting net assets by the
number of shares outstanding.
OFFERING PRICE -- The price at which a mutual fund's share can be purchased. The
offering price per share is the current net asset value plus any sales charge.
PORTFOLIO TURNOVER -- A measure of the trading activity in a mutual fund's
investment portfolio that reflects how often securities are bought and sold.
PROSPECTUS -- The legal document describing a mutual fund to all prospective
shareholders. It contains information required by the Securities and Exchange
Commission (SEC), such as a fund's investment objective and policies, services,
investment restrictions, how shares are bought and sold, fund fees and other
charges, and the fund's financial highlights.
SEC YIELD -- SEC Yield refers to the net income earned by a fund during a recent
30-day period. This income is annualized and then divided by the maximum
offering price per share on the last day of the 30-day period. The SEC Yield
formula reflects semiannual compounding.
SECURITIES AND EXCHANGE COMMISSION -- The primary US federal agency that
regulates the registration and distribution of mutual fund shares.
STATEMENT OF ADDITIONAL INFORMATION -- A document that contains more detailed
information about an investment company and that supplements the prospectus. It
is available at no charge upon request.
TOTAL RETURN -- A measure of a fund's performance encompassing all elements of
return. Reflects the change in share price over a given period and assumes all
distributions are taken in additional fund shares. The AVERAGE ANNUAL TOTAL
RETURN represents the average annual compounded rate of return for the periods
presented.
YIELD ON SECURITIES -- For bonds, the current yield is the coupon rate of
interest, divided by the purchase price. For stocks, the yield is measured by
dividing dividends paid by the market price of the stock.
----------
Adapted from the Investment Company Institute's 2000 MUTUAL FUND FACT BOOK.
21
<PAGE>
SELIGMAN ADVISORS, INC.
AN AFFILIATE OF
[SELIGMAN LOGO]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
www.seligman.com
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 INCOME FUND, INC., WHICH CONTAINS INFORMATION ABOUT THE SALES CHARGES,
MANAGEMENT FEE, AND OTHER COSTS. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE
INVESTING OR SENDING MONEY.
EQIN3 6/00 [RECYCLE LOGO] PRINTED ON RECYCLED PAPER
