SELIGMAN
----------
LARGE-CAP
VALUE FUND
[GRAPHIC OMITTED]
Annual Report
December 31, 1999
[GRAPHIC OMITTED]
A VALUE APPROACH
TO SEEKING THE
CAPITAL APPRECIATION
POTENTIAL OF
LARGER COMPANIES
[LOGO OMITTED]
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.
[PHOTO OMITTED]
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 .................. 10
Statement of Operations .............................. 11
Statements of Changes in Net Assets .................. 12
Notes to Financial Statements ........................ 13
Financial Highlights ................................. 16
Report of Independent Auditors ....................... 18
Board of Directors ................................... 19
Executive Officers AND For More Information .......... 20
Glossary of Financial Terms .......................... 21
<PAGE>
TO THE SHAREHOLDERS
Nineteen ninety-nine was a challenging year for Seligman Large-Cap Value Fund.
The Fund posted a total return of -2.68% based on the net asset value of Class A
shares while the Russell 1000 Value Index posted a total return of 7.35% and the
Standard & Poor's Composite Stock Price Index (S&P 500) posted a total return of
21.04%.
Despite stellar performances delivered by the popular US equity indices in 1999,
the US market was once again extraordinarily narrow. Just over half the stocks
in the S&P 500 had positive returns. The outsized returns of a few stocks also
skewed the indices. Just seven stocks were responsible for half of the S&P 500's
return; five of these were technology companies, with four of those delivering
astounding triple-digit returns.
Large-capitalization growth and technology companies continued to dominate the
market, while value stocks underperformed considerably. In such an environment,
the Fund, which pursues companies based upon their valuations and fundamentals,
lagged behind. The market was driven to an unprecedented degree by momentum, and
in such a market, valuations and fundamentals are largely ignored.
During the past 12 months, the US and world economy remained strong and, by
year-end, the global economic outlook was brighter than perhaps anyone had
anticipated at the start of the year. Throughout 1999, the US economy showed few
signs of slowing, triggering concerns regarding inflation. In response, the
Federal Reserve Board increased the federal funds rate three times, completely
reversing its 1998 rate cuts. The Federal Reserve Board's skillful watch over
the economy, both in its response to the worldwide crisis of 1998 and its
vigilance regarding inflation in 1999, has been a key contributor to the
long-term health of this remarkable economy.
We think the economy will slow moderately in 2000, which would be positive for
the long-term health of the stock market. As we look into the 21st century, we
are optimistic, and believe that there are several long-term factors that may
support equity prices for many years. First are global demographic trends. The
fastest-growing segment of the population in the US and other developed
countries is 45- to 64-year-olds, which is likely to increase its savings rate
as its members mature. We believe that this will produce a groundswell of
savings, which will be a significant support for equity prices in the coming
years.
Second, despite the uptick in rates in 1999, we believe that the long-term trend
is one of continued benign inflation and low interest rates -- a positive
environment for the stock market. Third, the global economy has rebounded
strongly since the 1998 financial crisis. We believe that this will continue,
allowing investors to benefit from attractive overseas investment opportunities.
Finally, new technology has allowed the economy to become vastly more
productive. This sector now accounts for approximately 25% of gross domestic
product growth and approximately 40% of capital spending. Technology has been,
and will continue to be, responsible for substantial changes in business
activity, both in business-to-business, and business-to-consumer. However, while
we are highly enthusiastic about the long-term benefits that technology will
have for the economy, we are concerned that investment behavior in this area has
become increasingly speculative. Nonetheless, technology is a positive factor in
the continued expansion prospects for the global economy.
We believe that the market will broaden in 2000 to include a wider range of
stocks. In 1999, as technology stocks and growth stocks soared, the market
prices of many value stocks became increasingly attractive. We believe that
investors will once again seek out companies with strong fundamentals and more
reasonable valuations.
Thank you for your continued support of Seligman Large-Cap Value Fund. A
discussion with your Fund's Portfolio Managers, as well as a performance
overview and financial statements, including a portfolio of investments, follows
this letter. We look forward to serving your investment needs for many years to
come.
By order of the Board of Directors,
/s/ William C. Morris
- ---------------------
William C. Morris
Chairman
/s/ Brian T. Zino
-----------------
Brian T. Zino
President
February 11, 2000
1
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGERS,
NEIL T. EIGEN AND RICHARD S. ROSEN
Q: HOW DID SELIGMAN LARGE-CAP VALUE FUND PERFORM DURING THE 12 MONTHS ENDED
DECEMBER 31, 1999?
A: For the fiscal year ended December 31, 1999, Seligman Large-Cap Value Fund
posted a total return of -2.68% based on the net asset value of Class A
shares. During the same period, the Russell 1000 Value Index returned 7.35%
and the Standard & Poor's 500 Composite Stock Price Index (S&P 500) returned
21.04%.
Q: WHY DID THE FUND UNDERPERFORM AGAINST THE S&P 500?
A: The outsized performance of a small number of stocks within the S&P 500
carried the performance of the entire Index for the year. The stocks that
did well were primarily large-capitalization growth and technology stocks.
Technology alone was responsible for nearly 70% of the S&P 500's return.
Seligman Large-Cap Value Fund had, and continues to have, very low exposure
to the technology industry because we believe that the vast majority of
these stocks do not qualify as value stocks. Stock prices for these
companies continued to rise over the course of the year, despite often poor
fundamentals, including a consistent lack of earnings for many of these
companies, and a continued rise in interest rates.
Last year's market was, to a great extent, driven by momentum; a small
number of stocks were being bought simply because their prices appeared to
be on an upward trend. The rest of the market, and with it many attractively
valued stocks, lagged behind.
Despite the seemingly robust performance of the S&P 500, nearly half the
stocks in the Index posted negative returns for the year, with value-style
stocks trailing growth-style stocks to an unprecedented degree.
Q: WHAT FACTORS CONTRIBUTED TO THE FUND'S UNDERPERFORMANCE RELATIVE TO THE
RUSSELL 1000 VALUE INDEX?
A: Seligman Large-Cap Value Fund's underperformance relative to the Russell
1000 Value Index was primarily the result of the Fund's lack of exposure to
technology and telecommunications. These sectors, which were the strongest
market performers during the fiscal year, represented a significant
percentage of the Russell Index.
In addition, some of the Fund's individual stock holdings delivered poor
returns during the period. These stocks, which were within the Aerospace,
Office Equipment, Food, and Packaging sectors, declined because of lower
earnings expectations. In all these cases, we reduced, or completely
eliminated, the Fund's exposure to these companies during the course of the
fiscal year.
A TEAM APPROACH
Seligman Large-Cap Value Fund is managed by the Seligman Value Team, headed by
Neil T. Eigen, who has over 30 years of experience as a value investor. Mr.
Eigen and Richard S. Rosen are assisted in the management of the Fund by
seasoned research professionals who are responsible for identifying reasonably
valued large-capitalization companies with the potential for high returns on
equity.
[PHOTO OMITTED]
VALUE TEAM: (FROM LEFT) NEVIS GEORGE (ADMINISTRATIVE ASSISTANT), MILTON RUBIN
(CLIENT SERVICES), RICHARD S. ROSEN (CO-PORTFOLIO MANAGER), (SEATED) NEIL T.
EIGEN (PORTFOLIO MANAGER), (NOT SHOWN) DAVID LEVY
2
<PAGE>
INTERVIEW WITH YOUR PORTFOLIO MANAGERS,
NEIL T. EIGEN AND RICHARD S. ROSEN
Q: WHAT WAS YOUR INVESTMENT STRATEGY DURING THE PERIOD UNDER REVIEW?
A: Our investment strategy remained consistent. We look for companies whose
price-to-earnings ratios are lower than the overall market, and that we
believe have the ability to become better companies in the future than they
have been in the past. At the end of the year, we found several such
opportunities in the energy sector.
Despite a difficult 1999, we continue to favor the financial sector, since
we think that many of these companies remain good values, and we forecast a
better operating environment for this industry in the year 2000. We believe
that interest rates, whose upward trend was so detrimental to these stocks
in 1999, will stabilize.
During fiscal year 1999, we eliminated or reduced some positions that had
done well either because we did not believe the stock continued to represent
good value or because the stock price had increased to a degree that the
holding represented too large a percentage of the portfolio. We continually
monitor the portfolio to ensure that no single holding is excessively
overweighted and that the Fund remains well diversified.
Q: WHAT IS YOUR OUTLOOK FOR 2000?
A: We are optimistic regarding the prospects for value stocks during the coming
fiscal year. First, we do not believe that the type of market that prevailed
in 1999 -- one in which economic and company-specific fundamentals were
largely ignored -- can continue. Despite the stock market's runup over the
past year, many good companies were left behind and are now trading at what
we believe to be exceptionally attractive prices. We are convinced that it
is only a matter of time before investors begin to pursue these relative
bargains in the midst of a broader market that in some areas has become
remarkably expensive.
In addition to our conviction that value stocks are long overdue for market
recognition, we believe that the economic environment also bodes well for
value stocks. We forecast a slowing US economy, but a strengthening global
economy. Value companies tend to be economically sensitive and thus perform
well within a growing global economy. In addition, a more sedate US economy
should allow interest rates to stabilize, which would further benefit value
stocks.
3
<PAGE>
PERFORMANCE OVERVIEW
This chart compares a $10,000 hypothetical investment made in Seligman
Large-Cap Value Fund since the commencement of operations on April 25, 1997,
through December 31, 1999, to a $10,000 investment made in the Russell 1000
Value Index and Standard &Poor's 500 Composite Stock Price Index (S&P500) from
April 30, 1997, to December 31, 1999. The results for Seligman Large-Cap Value
Fund were determined with and without the initial 4.75% maximum sales charge for
Class A shares, with the 3% contingent deferred sales charge ("CDSC") for Class
B shares, and without the 1% CDSC for Class D shares, and assume that all
distributions within the period are invested in additional shares. The
performance of Class C shares is not shown in this chart but is included in the
table on page 5. It is important to keep in mind that the Russell 1000 Value
Index and the S&P500 exclude the effect of fees and sales charges.
[Figures below represent chart in printed form]
<TABLE>
<CAPTION>
Class A Class a Class B Class B Russell 1000
With Sales Chg w/out Sales Chg with CDSC without CDSC value index S&P 500
<S> <C> <C> <C> <C> <C> <C>
4/25/97 9520 10000 10000 10000
9613.33 10098 10098 10098 10000 10000
10173.3 10686.3 10672.3 10672.3 10559 10609
6/30/97 10813.3 11358.5 11330.5 11330.5 11012 11084.3
11813.3 12409 12381 12381 11840.1 11966.6
11333.3 11904.8 11862.7 11862.7 11418.6 11296.5
9/30/97 11813.3 12409 12366.9 12366.9 12108.3 11915.5
11360 11932.8 11890.8 11890.8 11770.4 11517.5
12119.7 12730.8 12660.8 12660.8 12290.7 12050.8
12/31/97 12307.9 12928.4 12846 12846 12649.5 12257.7
12335 12957 12874 12874 12471.1 12393.8
13432 14109 14011 14011 13310.4 13287.4
3/31/98 13906 14607 14494 14494 14125 13967.7
13973 14678 14551 14551 14219.6 14108.7
14095 14806 14664 14664 14009.2 13866.1
6/30/98 14000 14706 14565 14565 14188.5 14429
13621 14308 14167 14167 13938.8 14274.6
11319 11890 11766 11766 11864.7 12210.5
9/30/98 11509 12089 11950 11950 12545.7 12993.2
12768 13412 13258 13258 13518 14049.6
13662 14351 14167 14167 14148 14901
12/31/98 13732 14424 14238.7 14239 14629 15759.3
13691 14381.3 14181.5 14181.5 14746 16418
13321.7 13993.4 13795.5 13795.5 14538.1 15907.4
3/31/99 13786.8 14481.9 14267.3 14267.3 14839 16543.7
14922 15674.4 15425.3 15425.3 16225 17184
14812.6 15559.4 15310.9 15310.9 16046.5 16778.4
6/30/99 15181.9 15947.3 15682.6 15682.6 16511.9 17709.6
14580 15315.2 15053.6 15053.6 16028.1 17157.1
14101.3 14812.3 14538.9 14538.9 15433.5 17071.3
9/30/99 12952.4 13605.5 13352.4 13352.4 14894.8 16603.5
13732 14424.4 14138.6 14138.6 15752.8 17654.5
13540.6 14223.3 13938.5 13938.5 15629.9 18012.9
12/31/99 13363.4 14037.2 13452.6 13752.6 15704.9 19000
</TABLE>
A portfolio with fewer holdings may be subject to greater volatility than a
portfolio with a greater number of holdings.
4
<PAGE>
PERFORMANCE OVERVIEW
INVESTMENT RESULTS PER SHARE
TOTAL RETURNS
FOR PERIODS ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
AVERAGE ANNUAL
CLASS C ----------------------
SINCE SINCE
SIX INCEPTION ONE INCEPTION
MONTHS* 5/27/99* YEAR 4/25/97
------------ ---------- ------ ------------
<S> <C> <C> <C>
CLASS A**
With Sales Charge (16.13)% n/a (7.30)% 11.40%
Without Sales Charge (11.98) n/a (2.68) 13.46
CLASS B**
With CDSC+ (16.69) n/a (8.24) 11.68
Without CDSC (12.31) n/a (3.41) 12.60
CLASS C**
With Sales Charge and CDSC (14.05) (10.66)% n/a n/a
Without Sales Charge and CDSC (12.31) (8.82) n/a n/a
CLASS D**
With 1% CDSC (13.18) n/a (4.38) n/a
Without CDSC (12.31) n/a (3.41) 12.60
RUSSELL 1000 VALUE INDEX*** (4.89) (2.13)+++ 7.35 18.43++
S&P 500*** 7.70 13.68+++ 21.04 27.40++
</TABLE>
NET ASSET VALUE
DECEMBER31, 1999 JUNE 30, 1999 DECEMBER 31, 1998
----------------- ------------- -----------------
CLASS A $9.75 $11.10 $10.04
CLASS B 9.62 10.97 9.96
CLASS C 9.62 10.97 n/a
CLASS D 9.62 10.97 9.96
DIVIDEND AND CAPITAL GAIN (LOSS) INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1999
DIVIDEND CAPITAL
PAID GAIN (LOSS)
------------ --------------
CLASS A $0.02 UNDISTRIBUTED
REALIZED $0.360o
UNREALIZED (0.244)oo
Performance data quoted represent changes in price 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. Return figures for
Class A shares are calculated with and without the effect of the initial
4.75% maximum sales charge. Returns for Class B shares are calculated with
and without the effect of the maximum 5% contingent deferred sales charge
("CDSC"), charged on 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 Russell 1000 Value Index and the S&P 500 are unmanaged benchmarks that
assume investment of dividends and exclude the effect of fees and sales
charges. Investors cannot invest directly in an index.
+ The CDSC is 5% for periods of one year or less, and 3% since inception.
++ From April 30, 1997.
+++ From May 31, 1999.
o Represents net gain realized in November and December 1999, payable in 2000.
oo Represents the per share amount of net unrealized depreciation of portfolio
securities as of December 31, 1999.
5
<PAGE>
PORTFOLIO OVERVIEW
DIVERSIFICATION OF NET ASSETS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
PERCENT OF NET ASSETS
---------------------
DECEMBER 31,
---------------------
ISSUES COST VALUE 1999 1998
------ ----------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS:
Aerospace ................................... 2 $ 9,451,682 $ 9,199,500 6.3 6.3
Automotive and Related ...................... 2 7,851,568 10,159,375 6.9 6.0
Banking ..................................... 3 16,851,685 14,331,737 9.7 10.8
Chemicals ................................... 1 3,208,852 3,340,625 2.3 --
Drugs and Health Care ....................... 4 15,817,197 16,056,538 10.9 6.1
Electric Utilities .......................... -- -- -- -- 3.2
Energy ...................................... 2 6,921,813 6,922,456 4.7 2.6
Finance and Insurance ....................... 6 31,435,826 30,837,013 21.0 15.0
Food ........................................ 3 12,151,671 7,423,300 5.0 2.1
Household Products and Furnishings .......... 3 14,537,615 12,994,049 8.8 10.2
Industrial Equipment ........................ -- -- -- -- 3.1
Medical Products and Technology ............. 2 8,919,548 11,361,219 7.7 6.8
Office Equipment ............................ -- -- -- -- 3.4
Packaging ................................... 1 6,703,829 4,054,350 2.8 2.3
Paper and Forest Products ................... 2 7,583,048 11,776,250 8.0 6.6
Retail Trade ................................ 1 2,485,418 4,426,875 3.0 8.0
Specialty Materials ......................... -- -- -- -- 2.7
Tobacco ..................................... 1 6,521,449 3,842,169 2.6 4.1
----- ------------ ------------ ----- -----
33 150,441,201 146,725,456 99.7 99.3
SHORT-TERM HOLDING AND
OTHER ASSETS LESS LIABILITIES ............... -- 411,814 411,814 0.3 0.7
----- ------------ ------------ ----- -----
NET ASSETS .................................... 33 $150,853,015 $147,137,270 100.0 100.0
===== ============ ============ ===== =====
</TABLE>
LARGEST INDUSTRIES
DECEMBER 31, 1999
[Figures below represent chart in printed piece]
Finance and insurance $30,837,013
Drugs and Health Care $16,056,538
Banking $14,331,737
Household Products and Furnishings $12,994,049
Paper and Forest Products $11,776,250
6
<PAGE>
PORTFOLIO OVERVIEW
LARGEST PORTFOLIO CHANGES
DURING PAST SIX MONTHS
SHARES
------------------------
HOLDINGS
ADDITIONS INCREASE 12/31/99
- --------- ------------------------
Allstate .......................... 174,000 174,000
American Home Products ............ 55,600 55,600
Bank of America ................... 12,284 78,864
Baxter International .............. 11,000 92,700
ConAgra ........................... 36,300 36,300
Dial .............................. 22,800 187,800
Dow Chemical ...................... 25,000 25,000
El Paso Energy .................... 40,100 40,100
Safeway ........................... 102,500 102,500
Washington Mutual ................. 27,150 167,650
SHARES
------------------------
HOLDINGS
REDUCTIONS DECREASE 12/31/99
- ---------- ------------------------
Bank of New York .................. 34,000 120,000
Citigroup ......................... 15,100 110,000
Dominion Resources ................ 101,000 --
General Electric .................. 45,000 --
Georgia-Pacific Group ............. 20,000 110,000
Kimberly-Clark .................... 20,800 75,000
Raychem ........................... 155,000 --
Sears, Roebuck .................... 106,100 --
Tandy ............................. 83,200 90,000
Xerox ............................. 86,400 --
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
DECEMBER 31, 1999
SECURITY VALUE
- -------- ------------
Champion International .................. $6,193,750
Citigroup ............................... 6,111,875
Baxter International .................... 5,822,719
St. Paul Companies ...................... 5,726,875
Georgia-Pacific Group ................... 5,582,500
Summit Bancorp .......................... 5,573,750
United Technologies ..................... 5,564,000
Medtronic ............................... 5,538,500
Fannie Mae .............................. 5,382,113
Texaco .................................. 5,366,075
7
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
SHARES VALUE
--------- ---------
COMMON STOCKS 99.7%
AEROSPACE 6.3%
GOODRICH (B.F.)
Manufacturer and supplier of
systems and component parts
for the aerospace industry 132,200 $ 3,635,500
UNITED TECHNOLOGIES
Manufacturer of elevators, jet
engines, flight systems, and
automotive parts 85,600 5,564,000
-----------
9,199,500
-----------
AUTOMOTIVE AND RELATED 6.9%
FORD MOTOR
Manufacturer and distributor of
automobiles, trucks, and
related parts 91,500 4,889,531
GENERAL MOTORS
Manufacturer and distributor of
automobiles, trucks, and
related parts 72,500 5,269,844
-----------
10,159,375
-----------
BANKING 9.7%
BANK OF AMERICA
Commercial bank 78,864 3,957,987
BANK OF NEW YORK
Commercial bank 120,000 4,800,000
SUMMIT BANCORP
Operator of commercial banks 182,000 5,573,750
-----------
14,331,737
-----------
CHEMICALS 2.3%
DOW CHEMICAL
Manufacturer and retailer of
chemicals and plastic materials 25,000 3,340,625
-----------
DRUGS AND HEALTH CARE 10.9%
AMERICAN HOME PRODUCTS
Developer and manufacturer
of pharmaceuticals, food,
and housewares 55,600 2,192,725
BRISTOL-MYERS SQUIBB
Developer and manufacturer
of health and personal care
products 74,000 4,749,875
HUMANA*
Provider of managed health
care plans 463,000 3,790,813
UNITED HEALTHCARE
Health maintenance
organization 100,200 5,323,125
-----------
16,056,538
-----------
ENERGY 4.7%
EL PASO ENERGY
Owner of natural gas
pipeline system 40,100 $ 1,556,381
TEXACO
Explorer, producer, transporter,
refiner, and marketer of natural
gas, oil, and petroleum products 98,800 5,366,075
-----------
6,922,456
-----------
FINANCE AND INSURANCE 21.0%
ALLSTATE
Insurance provider 174,000 4,176,000
AXA FINANCIAL
Provider of financial services
and insurance 150,000 5,081,250
CITIGROUP
Provider of diversified
financial services 110,000 6,111,875
FANNIE MAE
Provider of mortgage financing 86,200 5,382,113
ST. PAUL COMPANIES
Property and casualty insurer 170,000 5,726,875
WASHINGTON MUTUAL
Provider of financial services 167,650 4,358,900
-----------
30,837,013
-----------
FOOD 5.0%
CONAGRA
Producer and manufacturer
of prepared foods and
agricultural products 36,300 819,019
DOLE FOOD
Producer and marketer of
fresh and packaged fruits
and vegetables 182,100 2,959,125
SAFEWAY*
Food retailer 102,500 3,645,156
-----------
7,423,300
-----------
HOUSEHOLD PRODUCTS AND
FURNISHINGS 8.8%
ARMSTRONG WORLD INDUSTRIES
Manufacturer and marketer of
interior furnishings 105,900 3,534,412
DIAL
Manufacturer and marketer of
personal care, household, and
laundry products 187,800 4,565,887
KIMBERLY-CLARK
Manufacturer of consumer paper
products; newsprint 75,000 4,893,750
-----------
12,994,049
-----------
- ---------------
See footnotes on page 9.
8
<PAGE>
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1999
SHARES VALUE
--------- ---------
MEDICAL PRODUCTS
AND TECHNOLOGY 7.7%
BAXTER INTERNATIONAL
Manufacturer and distributor of
hospital and laboratory products 92,700 $ 5,822,719
MEDTRONIC
Manufacturer of pacemakers and
related cardiovascular products 152,000 5,538,500
------------
11,361,219
------------
PACKAGING 2.8%
CROWN CORK & SEAL
Manufacturer of packaging
products 181,200 4,054,350
------------
PAPER AND
FOREST PRODUCTS 8.0%
CHAMPION INTERNATIONAL
Manufacturer of paper
products 100,000 6,193,750
GEORGIA-PACIFIC GROUP
Manufacturer of building
products and paper 110,000 5,582,500
------------
11,776,250
------------
RETAIL TRADE 3.0%
TANDY
Retailer of consumer
electronic products 90,000 $ 4,426,875
------------
TOBACCO 2.6%
PHILIP MORRIS
Manufacturer of tobacco
products, food, and beverages 165,700 3,842,169
------------
TOTAL INVESTMENTS 99.7%
(Cost $150,441,201) 146,725,456
OTHER ASSETS
LESS LIABILITIES 0.3% 411,814
------------
NET ASSETS 100.0% $147,137,270
============
- ----------------
* Non-income producing security.
Descriptions of companies have not been audited by Deloitte & Touche LLP.
See Notes to Financial Statements.
9
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
ASSETS:
Investments, at value:
Common stocks (cost $150,441,201) ........................... $146,725,456
Receivable for securities sold ................................ 2,005,940
Receivable for Capital Stock sold ............................. 982,194
Receivable for dividends and interest ......................... 329,293
Expenses prepaid to shareholder service agent ................. 43,769
Deferred organization expenses ................................ 6,012
Other ......................................................... 7,515
-------------
TOTAL ASSETS .................................................. 150,100,179
-------------
LIABILITIES:
Payable for Capital Stock repurchased ......................... 1,394,053
Payable for securities purchased .............................. 766,402
Bank Overdraft ................................................ 491,051
Accrued expenses and other .................................... 311,403
-------------
TOTAL LIABILITIES ............................................. 2,962,909
-------------
NET ASSETS .................................................... $147,137,270
=============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.001 par value; 1,000,000,000
shares authorized; 15,234,141 shares outstanding):
Class A ..................................................... $ 4,788
Class B ..................................................... 5,920
Class C ..................................................... 953
Class D ..................................................... 3,573
Additional paid-in capital .................................... 145,352,401
Dividends in excess of net investment income .................. (1,971)
Undistributed net realized gain ............................... 5,487,351
Net unrealized depreciation of investments .................... (3,715,745)
-------------
NET ASSETS .................................................... $147,137,270
=============
NET ASSET VALUE PER SHARE:
CLASS A ($46,687,290 / 4,788,270 shares) ...................... $9.75
=======
CLASS B ($56,925,901 / 5,919,961 shares) ...................... $9.62
=======
CLASS C ($9,169,401 / 953,283 shares) ......................... $9.62
=======
CLASS D ($34,354,678 / 3,572,627 shares) ...................... $9.62
=======
- ---------------------
See Notes to Financial Statements.
10
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Dividends .......................................................... $ 3,270,397
Interest ........................................................... 31,819
------------
TOTAL INVESTMENT INCOME ............................................................. $ 3,302,216
EXPENSES:
Management fee ..................................................... 1,303,424
Distribution and service fees ...................................... 1,234,583
Shareholder account services ....................................... 447,566
Registration ....................................................... 102,510
Shareholder reports and communications ............................. 83,218
Auditing and legal fees ............................................ 52,162
Custody and related services ....................................... 33,967
Directors' fees and expenses ....................................... 7,060
Amortization of deferred organization expenses ..................... 2,577
Miscellaneous ...................................................... 7,131
------------
TOTAL EXPENSES ...................................................................... 3,274,198
------------
NET INVESTMENT INCOME ............................................................... 28,018
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments ................................... 6,452,825
Net change in unrealized appreciation of investments ............... (13,691,104)
------------
NET LOSS ON INVESTMENTS ............................................................. (7,238,279)
------------
DECREASE IN NET ASSETS FROM OPERATIONS .............................................. $(7,210,261)
============
</TABLE>
- ------------------
See Notes to Financial Statements.
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER31,
--------------------------------
1999 1998
--------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income ................................................ $ 28,018 $ 166,821
Net realized gain (loss) on investments .............................. 6,452,825 (600,348)
Net change in unrealized appreciation of investments ................. (13,691,104) 6,792,088
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS .................... (7,210,261) 6,358,561
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A ........................................................... (101,333) (192,895)
Net realized gain on investments:
Class A ........................................................... -- (282,285)
Class B ........................................................... -- (326,267)
Class D ........................................................... -- (219,836)
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS ............................ (101,333) (1,021,283)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares .................................... 53,939,402 78,687,815
Investment of dividends .............................................. 79,424 171,043
Exchanged from associated Funds ...................................... 48,640,044 55,824,065
Value of shares issued in payment of gain distributions .............. -- 758,184
------------- -------------
Total ................................................................ 102,658,870 135,441,107
------------- -------------
Cost of shares repurchased ........................................... (50,259,226) (19,032,005)
Exchanged into associated Funds ...................................... (46,475,521) (24,208,824)
------------- -------------
Total ................................................................ (96,734,747) (43,240,829)
------------- -------------
INCREASE IN NET ASSETS FROM CAPITAL
SHARE TRANSACTIONS ................................................ 5,924,123 92,200,278
------------- -------------
INCREASE (DECREASE) IN NET ASSETS .................................... (1,387,471) 97,537,556
NET ASSETS:
Beginning of year .................................................... 148,524,741 50,987,185
------------- -------------
END OF YEAR (including dividends in excess of
net investment income of $1,971 and $1,108, respectively) .......... $147,137,270 $148,524,741
============= =============
</TABLE>
- ------------------
See Notes to Financial Statements.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. MULTIPLE CLASSES OF SHARES -- Seligman Large-Cap Value Fund (the "Fund"), a
series of Seligman Value Fund Series, Inc., 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 generally accepted accounting principles 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 common 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
national exchanges 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. 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.
C. 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. Interest income is recorded on an accrual basis.
D. 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 year ended December 31, 1999,
distribution and service fees were the only class-specific expenses.
E. 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 value
per share of the Fund.
F. ORGANIZATION EXPENSES -- Deferred organization expenses are being amortized
on a straight-line basis over a period of 60 months beginning with the
commencement of operations of the Fund.
3. PURCHASES AND SALES OF SECURITIES -- Purchases and sales of portfolio
securities, excluding US Government obligations and short-term investments,
for the year ended
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1999, amounted to $56,149,640 and $49,646,540, respectively.
At December 31, 1999, 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 $22,598,907 and $26,314,652, respectively.
4. CAPITAL SHARE TRANSACTIONS -- The Fund has authorized 1,000,000,000 shares of
$0.001 par value Capital Stock. Transactions in shares of Capital Stock were as
follows:
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1999 1998
--------------------------------------------------
CLASS A SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- -----------
Net proceeds from
sales of shares 2,208,221 $22,885,052 2,732,752 $26,848,150
Investment of
dividends 8,343 79,424 17,633 171,043
Exchanged from
associated Funds 2,028,736 21,548,929 2,456,260 24,149,943
Shares issued in
payment of gain
distributions -- -- 26,432 260,093
----------- ----------- ----------- -----------
Total 4,245,300 44,513,405 5,233,077 51,429,229
=========== =========== =========== ===========
Cost of shares
repurchased (2,300,463) (23,308,844) (1,351,175) (12,554,489)
Exchanged into
associated Funds (2,065,973) (21,730,957) (1,580,952) (15,313,160)
----------- ----------- ----------- -----------
Total (4,366,436) (45,039,801) (2,932,127) (27,867,649)
----------- ----------- ----------- -----------
Increase (Decrease) (121,136) $ (526,396) 2,300,950 $23,561,580
=========== =========== =========== ===========
CLASS B SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- -----------
Net proceeds from
sales of shares 1,268,061 $13,156,045 3,343,264 $33,045,799
Exchanged from
associated Funds 1,356,651 13,895,548 1,184,929 11,389,752
Shares issued in
payment of gain
distributions -- -- 29,903 290,656
----------- ----------- ----------- -----------
Total 2,624,712 27,051,593 4,558,096 44,726,207
----------- ----------- ----------- -----------
Cost of shares
repurchased (1,014,140) (10,216,704) (357,377) (3,440,426)
Exchanged into
associated Funds (1,350,006) (13,368,518) (413,592) (3,869,171)
----------- ----------- ----------- -----------
Total (2,364,146) (23,585,222) (770,969) (7,309,597)
----------- ----------- ----------- -----------
Increase 260,566 $ 3,466,371 3,787,127 $37,416,610
=========== =========== =========== ===========
MAY 27, 1999*
TO DECEMBER 31, 1999
---------------------------
CLASS C SHARES AMOUNT
---------------------------
Net proceeds from
sales of shares 1,071,840 $10,941,521
Exchanged from
associated Funds 46,235 458,594
---------- -----------
Total 1,118,075 11,400,115
---------- -----------
Cost of shares
repurchased (38,031) (364,110)
Exchanged into
associated Funds (126,761) (1,254,840)
---------- -----------
Total (164,792) (1,618,950)
---------- -----------
Increase 953,283 $ 9,781,165
========== ===========
* Commencement of offering of shares.
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1999 1998
--------------------------------------------------
CLASS D SHARES AMOUNT SHARES AMOUNT
----------- ----------- ----------- -----------
Net proceeds from
sales of shares 688,314 $ 6,956,783 1,904,014 $18,793,866
Exchanged from
associated Funds1, 268,140 12,736,973 2,084,910 20,284,370
Shares issued in
payment of gain
distributions -- -- 21,341 207,435
----------- ----------- ----------- -----------
Total 1,956,454 19,693,756 4,010,265 39,285,671
----------- ----------- ----------- -----------
Cost of shares
repurchased (1,653,026) (16,369,568) (318,189) (3,037,090)
Exchanged into
associated Funds (1,038,547) (10,121,206) (530,094) (5,026,493)
----------- ----------- ----------- -----------
Total (2,691,573) (26,490,774) (848,283) (8,063,583)
----------- ----------- ----------- -----------
Increase (Decrease) (735,119) $(6,797,018) 3,161,982 $31,222,088
=========== =========== =========== ===========
5. 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 0.80%
per annum of the Fund's average daily net assets.
The Distributor, agent for the distribution of the Fund's shares and an
affiliate of the Manager, received concessions of $34,003 from sales of Class A
shares. Commissions of $257,418 and $96,255 were paid to dealers for sales of
Class A and Class C shares, respectively.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
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 year ended December 31,
1999, fees incurred under the Plan aggregated $130,350, 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 year ended December 31, 1999, fees incurred under the Plan,
equivalent to 1% per annum of the average daily net assets of Class B, ClassC,
and Class D shares, amounted to $614,698, $27,702, and $461,833, 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
year ended December 31, 1999, such charges amounted to $39,625.
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 year ended December 31, 1999, amounted to
$18,643.
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 year ended December 31, 1999,
Seligman Services, Inc. received commissions of $466 from the sales of shares of
the Fund. Seligman Services, Inc. also received distribution and service fees of
$14,754, pursuant to the Plan.
Seligman Data Corp., which is owned by certain associated investment
companies, charged the Fund at cost $447,566 for shareholder account services.
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 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 December 31, 1999, of $1,971 is
included in other liabilities. Deferred fees and related accrued earnings are
not deductible for federal income tax purposes until such amounts are paid.
6. COMMITTED LINE OF CREDIT -- The Fund is a participant in a joint $750 million
committed line of credit that is shared by substantially all 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 0.08% 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 2000, but is renewable annually with
the consent of the participating banks. For the year ended December 31, 1999,
the Fund did not borrow from the credit facility.
15
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand each Class's financial
performance from its inception. 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 CLASS B
------------------------------------- ---------------------------------------
YEAR ENDED DECEMBER 31, 4/25/97* YEAR ENDED DECEMBER 31, 4/25/97*
------------------------- TO -------------------------- TO
1999 1998 12/31/97 1999 1998 12/31/97
------------ ----------- ---------- -------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD .............. $10.04 $ 9.09 $7.14 $ 9.96 $9.04 $7.14
--------- --------- ------- --------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ...................... 0.05 0.06 0.03 (0.02) (0.02) (0.01)
Net realized and unrealized gain (loss)
on investments .................................. (0.32) 0.99 2.06 (0.32) 1.00 2.04
--------- --------- ------- --------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS .................. (0.27) 1.05 2.09 (0.34) 0.98 2.03
--------- --------- ------- --------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income .............. (0.02) (0.04) (0.01) -- -- --
Distributions from net realized capital gains ..... -- (0.06) (0.13) -- (0.06) (0.13)
--------- --------- ------- --------- ------- -------
TOTAL DISTRIBUTIONS ............................... (0.02) (0.10) (0.14) -- (0.06) (0.13)
--------- --------- ------- --------- ------- -------
NET ASSET VALUE, END OF PERIOD .................... $9.75 $10.04 $9.09 $9.62 $9.96 $9.04
========= ========= ======= ========= ======= =======
TOTAL RETURN: ..................................... (2.68)% 11.57% 29.28% (3.41)% 10.85% 28.46%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) .......... $46,687 $49,297 $23,699 $56,926 $56,342 $16,930
Ratio of expenses to average net assets ........... 1.50% 1.50% 1.47%+ 2.25% 2.25% 2.25%+
Ratio of net income (loss) to average net assets... 0.53% 0.61% 0.58%+ (0.22)% (0.14)% (0.20)%+
Portfolio turnover rate ........................... 30.97% 10.44% 38.74% 30.97% 10.44% 38.74%
Without management fee waiver:**
Ratio of expenses to average net assets ........... 2.07%+ 2.85%+
Ratio of net income (loss) to average net assets... (0.02)%+ (0.80)%+
</TABLE>
- ------------------
See footnotes on page 17.
16
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS C CLASS D
------------ ----------------------------------------
5/27/990 4/25/97*
TO YEAR ENDED DECEMBER 31, TO
--------------------------
12/31/99 1999 1998 12/31/97
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD .............. $10.55 $ 9.96 $9.04 $7.14
--------- --------- ------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ............................... (0.01) (0.02) (0.02) (0.01)
Net realized and unrealized gain (loss)
on investments .................................. (0.92) (0.32) 1.00 2.04
--------- --------- ------- --------
TOTAL FROM INVESTMENT OPERATIONS .................. (0.93) (0.34) 0.98 2.03
--------- --------- ------- --------
LESS DISTRIBUTIONS:
Distributions from net realized capital gains ..... -- -- (0.06) (0.13)
--------- --------- ------- --------
TOTAL DISTRIBUTIONS ............................... -- -- (0.06) (0.13)
--------- --------- ------- --------
NET ASSET VALUE, END OF PERIOD .................... $9.62 $9.62 $9.96 $9.04
========= ========= ======= ========
TOTAL RETURN: ..................................... (8.82)% (3.41)% 10.85% 28.46%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) .......... $9,169 $34,355 $42,886 $10,358
Ratio of expenses to average net assets ........... 2.36%+ 2.25% 2.25% 2.25%+
Ratio of net income (loss) to average net assets .. (0.23)%+ (0.22)% (0.14)% (0.20)%+
Portfolio turnover rate ........................... 30.97%++ 30.97% 10.44% 38.74%
Without management fee waiver:**
Ratio of expenses to average net assets ........... 2.85%+
Ratio of net income (loss) to average net assets .. (0.80)%+
</TABLE>
- ----------------
* Commencement of operations.
** The Manager, at its discretion, waived a portion of its fees for certain of
the periods presented.
o Commencement of offering of shares.
+ Annualized.
++ For the year ended December 31, 1999.
See Notes to Financial Statements.
17
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN LARGE-CAP VALUE FUND:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Large-Cap Value Fund as of December
31, 1999, the related statements of operations for the year then ended and of
changes in net assets for each of the years in the two-year period then ended,
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 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
December 31, 1999, 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 referred to
above present fairly, in all material respects, the financial position of
Seligman Large-Cap Value Fund as of December 31, 1999, 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.
DELOITTE & TOUCHE LLP
New York, New York
February 11, 2000
18
<PAGE>
BOARD OF DIRECTORS
JOHN R. GALVIN 2, 4
DEAN, Fletcher School of Law and Diplomacy
at Tufts University
DIRECTOR, Raytheon Company
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
RETIRED CHAIRMAN AND SENIOR PARTNER,
Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Industries, Inc.
DIRECTOR, New York Presbyterian Hospital
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
DIRECTOR, Public Broadcasting Service
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.
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
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Member: 1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
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EXECUTIVE OFFICERS
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
NEIL T. EIGEN
VICE PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT
THOMAS G. ROSE
TREASURER
FRANK J. NASTA
SECRETARY
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
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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.
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Adapted from the Investment Company Institute's 1999 MUTUAL FUND FACT BOOK.
21
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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 Large-Cap Value Fund, which contains information about the sales
charges, management fee, and other costs. Please read the prospectus
carefully before investing or sending money.
SELIGMAN ADVISORS, INC.
AN AFFILIATE OF
[LOGO OMITTED]
J. & W. SELIGMAN & CO.
INCORPORATED
ESTABLISHED 1864
100 PARK AVENUE, NEW YORK, NY 10017
EQVLC2 12/99 [GRAPHIC OMITTED] Printed on Recycled Paper
