- --------------------------------------------------------------------------------
66TH Annual Report
Seligman
Common
Stock
Fund, Inc.
December 31, 1995
[logo]
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A Growth and Income Fund
Established in 1930
Seligman Financial Services, Inc.
an affiliate of
[logo]
J. & W. Seligman & Co.
incorporated
established 1864
100 Park Avenue, New York, NY 10017
This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Capital Stock of
Seligman Common Stock Fund, Inc., which contains information about the sales
charges, management fee, and other costs. Please read the prospectus carefully
before investing or sending money.
EQCS2 12/95
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SELIGMAN COMMON STOCK FUND
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A mutual fund that seeks to
produce favorable current
income and long-term growth of
both income and capital value without
exposing capital to undue risk.
HIGHLIGHTS OF 1995
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<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994
--------------------------- -----------------------------
CLASS A CLASS D CLASS A CLASS D
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets (in thousands).............................. $614,400 $46,564 $510,956 $14,416
- ----------------------------------------------------------------------------------------------------------------------
Net Asset Value per Share.............................. $14.19 $14.16 $12.12 $12.07
With December 1995 Gain Distribution
Taken in Shares.................................... 15.14 15.11 -- --
Increase in Net Asset Value with Gain
Distribution Taken in Shares (1) .................. 24.92% 25.19% -- --
- ----------------------------------------------------------------------------------------------------------------------
Dividends Paid per Share............................... $0.36 $0.218 $0.37 $0.23
With December 1994 Gain Distribution
Taken in Shares................................... 0.38 0.231 -- --
Distribution of Realized Gain per Share................ 0.944 0.944 0.72 0.72
- ----------------------------------------------------------------------------------------------------------------------
Total Expenses per Dollar of
Average Net Assets................................... $0.0093 $0.0172 $0.0085 $0.0196
</TABLE>
(1) Excluding effect of dividends paid.
1
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TO THE SHAREHOLDERS
- --------------------------------------------------------------------------------
Your Fund performed favorably during the past year, though its performance
trailed the Standard & Poor's 500 Composite Stock Price Index (S&P 500). The S&P
500's total return was driven by better-than-average advances by the companies
with the largest market capitalizations, and therefore heaviest weightings, in
the Index. The S&P 500 outperformed more than 87% of the US equity funds.
Long-term performance results and an interview with your Portfolio Managers
begin on page 3.
On December 27, your Fund paid a $0.10 per share dividend to Class A
shareholders of record December 21, and a $0.057 dividend to Class D
shareholders. For both Class A and D shares, net realized gain per share from
investment transactions for the year totaled $1.19. Net unrealized gain per
share totaled $3.69 at December 31. A realized gain distribution of $0.944 was
paid on December 27 to shareholders of record December 21.
The US equity markets had a banner year. After a pessimistic start, many
factors including low inflation, falling interest rates, and strong corporate
earnings paved the way for a memorable year.
Overall, the market indices tell the best story. The S&P 500, which had its
second best gain since 1957, was up 34.11%, and other indices such as the New
York Stock Exchange Composite and the Wilshire 5000 were up 30% or more for the
year. The leading market indices have only twice, since the end of World War II,
risen more than 1995's powerful advance.
The equity markets, however, did teeter towards the end of the year due to
the Federal budget stalemate between the White House and Congress, which brought
on fears of higher inflation and interest rates. Nevertheless, the deadlock in
Washington did not deter the Federal Reserve Board from lowering short-term
interest rates on December 19 -- a move that quickly rejuvenated the equity
markets.
Looking forward, the slowing economy, the budget negotiations, and the 1996
Presidential election are a few of the factors that may create somewhat more
volatile markets in the year ahead. We remain optimistic about your Fund's
performance and will continue to search for, and invest in, those companies that
can sustain earnings growth in a challenging and competitive global business
environment -- a strategy we believe is key to investment performance.
A Special Meeting of Shareholders was held on December 12, at which several
proposals were voted on. The results of the Special Meeting appear on page 21.
We thank you for your continued investment in Seligman Common Stock Fund,
and look forward to serving your investment needs in 1996 and the years ahead.
By order of the Board of Directors,
/S/ William C. Morris
William C. Morris
Chairman
/s/ Brian T. Zino
Brian T. Zino
President
February 2, 1996
2
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ANNUAL PERFORMANCE OVERVIEW
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The following are biographies of your Portfolio Managers, a discussion with them
regarding Seligman Common Stock Fund, and a comparison chart and table of your
Fund's performance against the Standard & Poor's 500 Composite Stock Price Index
and the Lipper Growth and Income Fund Average.
YOUR PORTFOLIO MANAGERS
- ----------------------- CHARLES C. SMITH, JR. is a Managing Director of J. &
W. Seligman & Co. Incorporated and has been
Portfolio Manager of Seligman Common Stock Fund
since December 1991. Mr. Smith is also Portfolio
Manager of Seligman Income Fund and Tri-Continental
Corporation. In addition, Mr. Smith is Vice
President of Seligman Portfolios, Inc. and Portfolio
Manager of its Common Stock and Income portfolios.
Mr. Smith joined Seligman in 1985 as Vice President,
Investment Officer. He was promoted to Senior Vice
President, Senior Investment Officer in August 1992,
PHOTO and to Managing Director in January 1994. STACEY G.
NAVIN, Vice President of J. & W. Seligman & Co.
Incorporated, has been Co-Portfolio Manager of
Seligman Common Stock Fund and Seligman Income Fund
since December 1991. Ms. Navin joined Seligman in
1986 as a research analyst and assumed portfolio
management responsibilities in 1988. Mr. Smith and
Ms. Navin are supported by a group of investment
professionals dedicated to the growth and income
investment discipline, and to the objectives of
- ----------------------- Seligman Common Stock Fund.
IAIN C. CLARK, Chief Investment Officer of Seligman Henderson Co., is
responsible for the investment activities of Seligman Common Stock Fund's
Subadviser, Seligman Henderson Co. Mr. Clark is also head of International
Investments for, and a Director of, Henderson Administration Group plc, an
investment manager in London, England. He has been with Henderson since 1985.
YOUR MANAGERS' INVESTMENT STRATEGY
"OUR DECISION TO MODESTLY OVERWEIGHT FINANCIAL STOCKS, BASED ON OUR EXPECTATION
FOR A DECLINE IN INTEREST RATES IN 1995, CONTRIBUTED GREATLY TO YOUR FUND'S
STRONG PERFORMANCE. WE CONTINUE TO REMAIN BROADLY DIVERSIFIED IN OUR STOCK
SELECTION. WHILE A STRATEGY OF BETTING HEAVILY ON INDIVIDUAL SECTORS MIGHT HAVE
IMPROVED NEAR-TERM PERFORMANCE, WE BELIEVE IT WOULD HAVE LOWERED CURRENT INCOME
AND JEOPARDIZED YOUR FUND'S 52-YEAR RECORD OF INCREASING INCOME FOR SHAREHOLDERS
WHO REINVEST THEIR CAPITAL GAIN DISTRIBUTIONS.
"AS PART OF YOUR FUND'S INVESTMENT POLICY, IT MAY INVEST UP TO 10% OF ASSETS IN
INTERNATIONAL EQUITIES. BY INVESTING INTERNATIONALLY, SELIGMAN COMMON STOCK FUND
HAS THE ABILITY TO PARTICIPATE IN NON-US MARKETS, THUS SEEKING TO ACHIEVE
GREATER PORTFOLIO DIVERSIFICATION WITH LESS OVERALL RISK. HOWEVER, IN PERIODS
WHEN INTERNATIONAL MARKETS LAG THE US MARKETS, SUCH AS 1995, INTERNATIONAL
EXPOSURE CAN DAMPEN OVERALL INVESTMENT RESULTS."
3
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ANNUAL PERFORMANCE OVERVIEW (continued)
- --------------------------------------------------------------------------------
ECONOMIC FACTORS AFFECTING SELIGMAN COMMON STOCK FUND
"STABLE ECONOMIC GROWTH IN THE US, COUPLED WITH DECLINING INTEREST RATES,
PROVIDED A POSITIVE BACKDROP FOR STRONG PERFORMANCE BY FINANCIAL MARKETS IN
1995. ALSO, THE CONTINUATION OF LOW INFLATION BENEFITED BOTH STOCKS AND BONDS,
WHICH MADE THESE INVESTMENTS MORE ATTRACTIVE RELATIVE TO REAL ASSETS SUCH AS
GOLD OR REAL ESTATE."
INDIVIDUAL SECTOR PERFORMANCE
"ALMOST EVERY INDUSTRY GROUP ENDED 1995 WITH STRONG RESULTS. FINANCIAL AND
TECHNOLOGY SECTORS ENJOYED PARTICULARLY GOOD PERFORMANCE, AND CONSUMER STOCKS
REBOUNDED FROM THEIR DEPRESSED LEVELS OF 1994. EXAMPLES OF COMPANIES IN YOUR
PORTFOLIO THAT SHOWED STRONG GAINS IN 1995 WERE FEDERAL NATIONAL MORTGAGE
ASSOCIATION, BANK OF NEW YORK, AMERICAN HOME PRODUCTS, AND PEPSICO. ON THE OTHER
HAND, RETAIL ISSUES SUCH AS MAY DEPARTMENT STORES CONTINUED TO LAG AS CONSUMER
SPENDING REMAINED WEAK."
OUTLOOK FOR THE YEAR AHEAD
"WE BELIEVE THAT CONTINUED LOW INFLATION AND MODEST ECONOMIC GROWTH SHOULD
PROVIDE A POSITIVE ENVIRONMENT FOR INVESTORS IN 1996. STOCK SELECTION, THOUGH,
WILL BE AN IMPORTANT FACTOR IN PERFORMANCE. WE ARE COMMITTED TO THE MAINTENANCE
OF A BROADLY DIVERSIFIED PORTFOLIO, FOCUSING ON COMPANIES WITH REASONABLE
CURRENT INCOME, AND GOOD EARNINGS AND DIVIDEND GROWTH PROSPECTS. FURTHER,
INTERNATIONAL INVESTMENTS SHOULD BE A POSITIVE FACTOR AS THE YEAR PROGRESSES IF
FOREIGN MONETARY AUTHORITIES LOWER INTEREST RATES ABROAD."
4
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PERFORMANCE COMPARISON CHART AND TABLE December 31, 1995
- --------------------------------------------------------------------------------
This chart compares a $10,000 hypothetical investment made in Seligman Common
Stock Fund Class A shares, with and without the maximum initial sales charge of
4.75%, for the 10-year period ended December 31, 1995, to a $10,000 hypothetical
investment made in the Standard & Poor's 500 Composite Stock Price Index (S&P
500) and the Lipper Growth & Income Fund Average (Lipper Growth & Income) for
the same period. The performance of Seligman Common Stock Fund Class D shares is
not shown in this chart, but is included in the table below. It is important to
keep in mind that the S&P 500 excludes the effect of any fees or sales charges,
and the Lipper Growth & Income excludes the effects of any sales charges.
[THE FIGURES IN THE FOLLOWING TABLE APPEAR IN THE FORM OF A LINE CHART IN THE
PRINTED REPORT]
Common Stock Fund Common Stock Fund Lipper Growth S&P Stock
Date with sales load without sales load & Income Index Index
- ---- ----------------- ------------------ -------------- ---------
12/31/85 9,525.75 10,000.01 10,000 10,000
3/31/86 11,234.95 11,794.3 11,384 11,410.50
6/30/86 11,947.12 12,541.93 11,884.9 12,083.03
9/30/86 10,942.97 11,487.78 11,199.14 11,240.12
12/31/86 11,625.63 12,204.43 11,633.66 11,866.53
3/31/87 13,791.71 14,478.37 13,598.59 14,400.28
6/30/87 13,988.42 14,684.88 13,995.67 15,123.17
9/30/87 14,551.05 15,275.53 14,699.65 16,120.85
12/31/87 11,650.17 12,230.23 11,903.78 12,489.63
3/31/88 12,235.00 12,844.52 12,757.28 13,200.78
6/30/88 12,872.41 13,513.33 13,474.24 14,079.96
9/30/88 12,744.91 13,379.48 13,516.01 14,127.69
12/31/88 12,824.35 13,462.88 13,784.98 14,563.81
3/31/89 13,563.69 14,239.02 14,672.73 15,596.38
6/30/89 14,351.48 15,066.03 15,714.49 16,973.08
9/30/89 15,760.93 16,545.65 17,064.37 18,790.72
12/31/89 16,257.74 17,067.2 17,057.54 19,178.56
3/31/90 16,099.58 16,901.17 16,643.04 18,601.67
6/30/90 17,104.12 17,955.73 17,488.51 19,771.90
9/30/90 14,120.69 14,823.75 15,211.51 17,054.65
12/31/90 15,625.54 16,403.53 16,326.51 18,583.43
3/31/91 18,190.49 19,096.19 18,675.89 21,282.86
6/30/91 17,818.44 18,705.62 18,597.45 21,234.12
9/30/91 19,195.20 20,150.93 19,637.05 22,369.72
12/31/91 20,302.46 21,313.32 21,048.96 24,245.20
3/31/92 20,641.88 21,669.64 21,059.48 23,632.77
6/30/92 20,790.31 21,825.46 21,059.28 24,082.26
9/30/92 21,349.23 22,412.2 21,647.98 24,841.58
12/31/92 22,507.59 23,628.23 22,944.69 26,092.60
3/31/93 23,599.71 24,774.74 24,011.62 27,232.06
6/30/93 24,167.66 25,370.98 24,225.32 27,364.68
9/30/93 24,774.93 26,008.49 25,097.44 28,072.06
12/31/93 25,850.87 27,137.98 25,674.68 28,722.49
3/31/94 24,637.03 25,863.7 24,886.46 27,633.33
6/30/94 24,767.41 26,000.58 24,804.34 27,749.67
9/30/94 25,740.93 27,022.58 25,875.34 29,106.35
12/31/94 25,362.51 26,625.3 25,469.63 29,101.69
3/31/95 27,520.64 28,890.88 27,502.11 31,935.32
6/30/95 29,521.53 30,991.41 29,732.53 34,983.87
9/30/95 31,387.40 32,950.19 31,858.41 37,764.04
12/31/95 32,507.18 34,125.72 33,301.59 40,037.43
The table below shows the average annual total returns for the one-, five-, and
10-year periods through December 31, 1995, for the Seligman Common Stock Fund
Class A shares, with and without the maximum initial sales charge of 4.75%, the
S&P 500, and the Lipper Growth & Income. Also included in the table are the
average annual total returns for the one-year and since-inception periods
through December 31, 1995, for the Seligman Common Stock Fund Class D shares,
with and without the effect of the 1% contingent deferred sales load ("CDSL")
imposed on shares redeemed within one year of purchase, the S&P 500, and the
Lipper Growth & Income.
AVERAGE ANNUAL TOTAL RETURNS
ONE FIVE 10
YEAR YEARS YEARS
---- ----- -----
Seligman Common Stock Fund
Class A with sales charge ........... 22.12% 14.65% 12.51%
Class A without sales charge ........ 28.17 15.78 13.06
S&P 500 ............................... 37.58 16.59 14.86
Lipper Growth & Income ................ 30.75 15.32 12.78
SINCE
ONE INCEPTION
YEAR 5/3/93
---- ------
Seligman Common Stock Fund
Class D with CDSL ................... 26.17% n/a
Class D without CDSL ................ 27.17 11.69%
S&P 500 ............................... 37.58 16.62*
Lipper Growth & Income ................ 30.75 13.78*
*From 4/30/93
No adjustment was made to performance for periods prior to January 1, 1993, the
commencement date for the annual Administration, Shareholder Services and
Distribution Plan fee of up to 0.25% of average daily net assets of Class A
shares. THE PERFORMANCE OF CLASS D SHARES WILL BE GREATER THAN OR LESS THAN THE
PERFORMANCE SHOWN FOR CLASS A SHARES, BASED ON THE DIFFERENCES IN SALES CHARGES
AND FEES PAID BY SHAREHOLDERS. Performance data quoted represent changes in
prices and assume that all distributions within the period are invested in
additional shares. The investment return and principal value of an investment
will fluctuate so that shares, if redeemed, may be worth more or less than their
original cost. Past performance is not indicative of future investment results.
5
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SELIGMAN COMMON STOCK FUND
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FEDERAL TAX STATUS OF 1995
GAIN DISTRIBUTION FOR
TAXABLE ACCOUNTS
The quarterly dividends paid to both Class A and Class D shareholders in 1995
are taxable as ordinary income for federal tax purposes. It makes no difference
whether you received them in cash or in shares. Under the Internal Revenue Code,
63% of the dividend paid to both Class A and Class D shareholders has been
designated as qualifying for the dividend received deduction available to
corporate shareholders. In order to claim the dividend received deduction for
this distribution, corporate shareholders must have held the Fund's shares for
at least 46 days.
A distribution of $0.944 per share, consisting of $0.867 from net long-term
and $0.077 from net short-term gain realized on investments in 1995 was paid on
December 27, 1995, to both Class A and D shareholders. The distribution from net
long-term gain is designated as a "capital gain dividend" for federal income tax
purposes and is taxable to shareholders in 1995 as a long-term gain from the
sale of capital assets, no matter how long your shares have been owned or
whether the distribution was paid in additional shares or cash. However, if
shares on which a long-term capital gain distribution was received are
subsequently sold, and such shares were held for six months or less from date of
purchase, any loss would be treated as long-term to the extent it offsets the
long-term gain distribution. Net short-term gain is taxable as ordinary income
whether paid to you in cash or shares.
If the distribution was paid in shares, the per share cost basis for federal
income tax purposes is $14.04 for Class A shares and $14.01 for Class D shares.
A year-end statement of account showing activity for 1995 and a combined Form
1099-DIV/B have been mailed to each shareholder. The Form 1099-B shows the
proceeds of any redemptions paid to shareholders during the year and reported to
the Internal Revenue Service as required by federal regulations. Form 1099-DIV
shows the amount of the distribution from gain on investments paid during the
year.
6
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SELIGMAN COMMON STOCK FUND
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DIVERSIFICATION OF ASSETS December 31, 1995
<TABLE>
<CAPTION>
PERCENT PERCENT OF
OF NET NET ASSETS
ISSUES COST VALUE ASSETS DEC. 31, 1994
------ ------------ ------------ -------- -------------
<S> <C> <C> <C> <C> <C>
NET CASH AND SHORT-TERM HOLDINGS ........... 1 $ 34,262,797 $ 34,262,797 5.2 2.1
--- ------------ ------------ ----- -----
COMMON STOCKS:
Advertising................................. 1 4,272,125 7,450,000 1.1 1.0
Aerospace/Defense........................... 2 9,468,688 11,833,125 1.8 --
Apparel and Textiles........................ 2 7,427,053 8,045,313 1.2 1.0
Automotive and Related...................... 4 8,289,508 10,860,566 1.6 1.3
Chemicals................................... 6 13,351,544 21,124,432 3.2 6.7
Computers and Business Services ............ -- -- -- -- 3.2
Construction................................ 1 3,606,295 4,062,500 0.6 --
Consumer Goods and Services................. 12 33,572,005 60,302,018 9.1 9.4
Drugs and Health Care....................... 7 24,966,937 37,470,000 5.7 3.4
Electric and Gas Utilities.................. 9 36,891,744 41,697,317 6.3 2.4
Electronics................................. 1 1,459,838 5,700,000 0.9 1.1
Energy...................................... 9 31,743,516 49,473,019 7.5 7.5
Finance and Insurance....................... 17 47,143,820 76,544,642 11.6 13.6
Food........................................ 5 21,752,010 32,793,750 5.0 5.0
Industrial Equipment........................ 5 13,712,786 22,162,936 3.3 2.8
Leisure and Entertainment................... 1 340,032 363,000 0.1 --
Machinery................................... -- -- -- -- 0.8
Office Equipment............................ 1 3,099,900 7,050,000 1.1 0.9
Paper and Packaging......................... 4 11,912,945 15,676,762 2.4 3.0
Printing and Publishing..................... 5 15,620,034 18,561,350 2.8 1.3
Restaurant.................................. 1 2,935,000 4,250,000 0.6 0.5
Retail Trade................................ 9 35,818,500 35,226,875 5.3 5.6
Steel....................................... 2 4,223,950 4,083,750 0.6 --
Technology.................................. 2 2,964,000 3,837,783 0.6 --
Telecommunications.......................... 7 15,427,737 21,193,068 3.2 3.9
Telephone Utilities......................... 1 5,952,151 8,100,000 1.2 --
Tobacco..................................... 3 11,406,982 13,693,750 2.1 2.2
Transportation.............................. 4 9,047,957 11,444,673 1.7 2.6
Miscellaneous/Diversified................... 5 18,357,250 24,186,438 3.7 5.5
--- ------------ ------------ ----- -----
126 394,764,307 557,187,067 84.3 84.7
--- ------------ ------------ ----- -----
CONVERTIBLE BONDS .......................... 20 44,611,852 49,539,661 7.5 8.1
--- ------------ ------------ ----- -----
CONVERTIBLE PREFERRED STOCKS ............... 6 15,594,496 19,974,375 3.0 5.1
--- ------------ ------------ ----- -----
NET ASSETS ................................. 153 $489,233,452 $660,963,900 100.0 100.0
=== ============ ============ ===== =====
</TABLE>
7
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SELIGMAN COMMON STOCK FUND
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LARGEST PORTFOLIO CHANGES*
DURING PAST THREE MONTHS
PRINCIPAL AMOUNT
OR SHARES
------------------------
HOLDINGS
ADDITIONS INCREASE 12/31/95
- ------------ ----------- -----------
COMMON STOCKS
AON........................... 100,000shs. 100,000shs.
Central & South West.......... 200,000 200,000
Frontier...................... 150,000 150,000
General Signal................ 150,000 150,000
International Paper........... 100,000 100,000
Olin.......................... 40,000 40,000
Texaco........................ 70,000 70,000
Unicom........................ 300,000 300,000
CONVERTIBLE CORPORATE BONDS
Exide 2.90%, 12/15/2005....... $4,500,000 $4,500,000
The Pep Boys 4%, 9/1/1999..... 5,000,000 5,000,000
HOLDINGS
REDUCTIONS DECREASE 12/31/95
- -------------- ----------- -----------
COMMON STOCKS
Abbott Laboratories........... 75,000shs. 75,000shs.
Aetna Life & Casualty......... 75,000 --
Chubb......................... 75,000 --
General Public Utilities...... 200,000 --
International Business Machines 50,000 --
KeyCorp....................... 125,000 --
PacificCorp................... 200,000 --
SCE........................... 400,000 --
CONVERTIBLE PREFERRED STOCKS
Citicorp $5.375............... 25,000 25,000
Unisys $3.75.................. 100,000 --
* Largest portfolio changes from previous quarter to current quarter are based
on cost of purchases and proceeds from sales of securities.
MAJOR PORTFOLIO HOLDINGS
AT DECEMBER 31, 1995
SECURITY VALUE
- --------- ------------
General Electric........................ $12,600,000
Unicom.................................. 9,825,000
Coca-Cola............................... 9,281,250
American International Group............ 9,250,000
Royal Dutch Petroleum................... 9,173,125
Colgate-Palmolive....................... 8,781,250
PepsiCo................................. 8,381,250
Procter & Gamble........................ 8,300,000
Kimberly-Clark.......................... 8,275,000
Schering-Plough......................... 8,212,500
8
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PORTFOLIO OF INVESTMENTS December 31, 1995
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMON STOCKS 84.3%
ADVERTISING 1.1%
Omnicom Group
Worldwide advertising agencies ................. 200,000 $ 7,450,000
------------
AEROSPACE/DEFENSE 1.8%
General Motors (Class H)
Diversified aerospace
manufacturer--missiles,
satellites, and communication
systems ........................................ 125,000 6,140,625
United Technologies
Jet engines, elevators, flight
systems and automotive ......................... 60,000 5,692,500
------------
11,833,125
------------
APPAREL AND TEXTILES 1.2%
Liz Claiborne
Designer and distributor of
women's apparel ................................ 150,000 4,162,500
Unifi
Textile processor .............................. 175,000 3,882,813
------------
8,045,313
------------
AUTOMOTIVE AND RELATED 1.6%
Autoliv (ADRs)*+
Swedish supplier of safety
restraint systems .............................. 35,000 2,047,500
Echlin
Manufacturer of brakes and
auto replacement parts ......................... 75,000 2,737,500
Genuine Parts
Retail and wholesale
automotive parts ............................... 100,000 4,100,000
Volkswagen
Manufacturer of automobiles .................... 5,900 1,975,566
------------
10,860,566
------------
CHEMICALS 3.2%
Air Products and Chemicals
Industrial gases and chemicals ................. 100,000 5,275,000
Bayer AG
Producer of specialty chemicals,
pharmaceuticals, and plastics .................. 7,600 2,014,674
Crompton & Knowles
Specialty chemicals and
industrial machinery ........................... 200,000 2,650,000
Dow Chemical
Diversified chemicals .......................... 100,000 7,037,500
European Vinyls
Market leaders in PVC
industry ....................................... 45,300 1,174,758
SHARES VALUE
------ -----
Olin
Chemicals, metals, and defense
products ....................................... 40,000 $ 2,972,500
------------
21,124,432
------------
CONSTRUCTION 0.6%
Sherwin-Williams
Paints and allied products ..................... 100,000 4,062,500
------------
CONSUMER GOODS AND SERVICES 9.1%
Adidas AG
Sporting equipment, footware ................... 13,646 720,060
Allied Domecq
International food, drink,
and hospitality group .......................... 230,000 1,873,859
B.A.T. Industries
UK financial services and
tobacco company ................................ 200,000 1,761,350
Christian Dior-ABSA
Holding company for
LVMH Moet Hennessy ............................. 10,000 1,076,124
Coca-Cola
Soft drinks; consumer products ................. 125,000 9,281,250
Colgate-Palmolive
Household and personal care
products ....................................... 125,000 8,781,250
Eastman Kodak
Film, chemicals, and health care
products ....................................... 100,000 6,700,000
Gillette
Personal care products ......................... 75,000 3,909,375
International Flavors
& Fragrances
Developer and manufacturer of
flavor and fragrance products .................. 100,000 4,800,000
PepsiCo
Soft drinks, consumer
products ....................................... 150,000 8,381,250
Procter & Gamble
Household and personal care
products ....................................... 100,000 8,300,000
Rubbermaid
Manufacturer of plastic and
rubber household products ...................... 185,000 4,717,500
------------
60,302,018
------------
DRUGS AND HEALTH CARE 5.7%
Abbott Laboratories
Diversified health care
products ....................................... 75,000 3,131,250
American Home Products
Pharmaceuticals, food, and
housewares ..................................... 40,000 3,880,000
Bard (C.R.)
Hospital and surgical
specialities ................................... 150,000 4,837,500
9
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PORTFOLIO OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
DRUGS AND HEALTH CARE (continued)
Bausch & Lomb
Sunglasses, eye care products .................. 185,000 $ 7,330,625
Bristol-Myers Squibb
Health and personal care
products ....................................... 75,000 6,440,625
Mallinckrodt Group
Health care products and
specialty chemicals ............................ 100,000 3,637,500
Schering-Plough
Pharmaceuticals, health and
personal care products ......................... 150,000 8,212,500
------------
37,470,000
------------
ELECTRIC AND GAS UTILITIES 6.3%
British Gas (ADRs)
Major gas supplier in the UK ................... 30,000 1,170,000
Central & South West
Electric utility ............................... 200,000 5,575,000
Empresa Nacional de Electricdad
(ADRs)
Spanish electric utility ....................... 50,000 2,862,500
FPL Group
Electric power ................................. 160,000 7,420,000
Hong Kong Electric
Regional natural gas producer
and distributor ................................ 1,800,000 5,901,067
Huaneng Power International
(ADRs)*
Flagship power company of China ................ 60,000 862,500
Southern Company
Electric power ................................. 150,000 3,693,750
Unicom
Electric utility ............................... 300,000 9,825,000
Williams Cos ......................................
Oil and gas, production and
pipeline ....................................... 100,000 4,387,500
------------
41,697,317
------------
ELECTRONICS 0.9%
Motorola
Semiconductors and
communications equipment ....................... 100,000 5,700,000
------------
ENERGY 7.5%
Anadarko Petroleum
Oil and gas exploration,
development, and production .................... 82,000 4,438,250
Atlantic Richfield
Integrated oil enterprise ...................... 50,000 5,537,500
Enron
Pipeline exploration and
production ..................................... 150,000 5,718,750
Mobil
International oil enterprise ................... 50,000 5,600,000
Panhandle Eastern
Oil and gas, production and
pipelines ...................................... 200,000 5,575,000
SHARES VALUE
------ -----
Royal Dutch Petroleum
International oil services ..................... 65,000 $ 9,173,125
Schlumberger
Worldwide energy enterprise .................... 100,000 6,925,000
Texaco
International oil company ...................... 70,000 5,495,000
Total SA (Class B)
International oil enterprise ................... 15,000 1,010,394
------------
49,473,019
------------
FINANCE AND INSURANCE 11.6%
Ahmanson (H.F.)
Owner of the largest savings
institution in the US .......................... 150,000 3,975,000
American International Group
International insurance holding
company ........................................ 100,000 9,250,000
AON
Accident, health, and life
insurance ...................................... 100,000 4,987,500
Banco de Santander (ADSs)
Retail banking, financial, and
financial investment services .................. 50,000 2,501,951
Bank of New York
Commercial bank ................................ 150,000 7,312,500
Bankers Trust
Commercial bank ................................ 100,000 6,643,750
Federal National Mortgage
Association
Mortgage financing ............................. 50,000 6,206,250
General Re
Reinsurance company ............................ 50,000 7,750,000
Great Western Financial
Savings and loan in California
and Florida .................................... 150,000 3,825,000
Grupo Financiero Banamex
Accival (Class B)
Insurance and banking group .................... 551,000 918,214
Household International
Consumer loans, credit cards,
equity loans, and life insurance ............... 50,000 2,953,125
Internationale Nederlanden Bank
Dutch finance company .......................... 38,950 2,596,667
MBNA
Issuer of bank credit cards .................... 100,000 3,687,500
Morgan (J. P.)
Commercial and wholesale
banking based in New York ...................... 90,000 7,222,500
National Australia Bank (ADRs)
Commercial bank ................................ 50,000 2,262,500
St. Paul Companies
Property and casualty insurance ................ 60,000 3,337,500
Societe Generale
Provider of full banking and
financial services ............................. 9,040 1,114,685
------------
76,544,642
------------
10
<PAGE>
================================================================================
December 31, 1995
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
FOOD 5.0%
Campbell Soup
Canned soup and other food
products ....................................... 100,000 $ 6,000,000
ConAgra
Prepared foods and agricultural
products ....................................... 150,000 6,187,500
CPC International
International food processor ................... 100,000 6,862,500
General Mills
Consumer foods and
restaurants .................................... 100,000 5,775,000
Sara Lee
Processed foods, consumer
products ....................................... 250,000 7,968,750
------------
32,793,750
------------
INDUSTRIAL EQUIPMENT 3.3%
BTR
Global company that
manufactures a broad range
of industrial goods ............................ 320,000 1,633,788
Emerson Electric
Electric motors, hand-held tools,
and miscellaneous electric
equipment ...................................... 50,000 4,084,375
General Electric
Electrical equipment ........................... 175,000 12,600,000
Mannesmann
Plant and machinery construction,
trading, automotive technology ................. 4,000 1,271,145
Pacific Dunlop
Diversified manufacturing
company ........................................ 1,100,000 2,573,628
------------
22,162,936
------------
LEISURE/ENTERTAINMENT 0.1%
Mandarin Oriental
Owner and operator of major
hotels throughout Asia ......................... 300,000 363,000
------------
OFFICE EQUIPMENT 1.1%
Pitney Bowes
Postage meters, office
equipment ...................................... 150,000 7,050,000
------------
PAPER AND PACKAGING 2.4%
Bowater
Newsprint and coated-paper
manufacturer ................................... 75,000 2,662,500
International Paper
Paper and paper products,
specialty products, wood and
timber ......................................... 100,000 3,781,250
Kimberly-Clark
Consumer paper products,
newsprint ...................................... 100,000 8,275,000
SHARES VALUE
------ -----
Stora Kopparbergs (Class B)
Manufacturer of forestry
products ....................................... 80,000 $ 958,012
------------
15,676,762
------------
PRINTING AND PUBLISHING 2.8%
Donnelley (R.R.)
Printer and computer services .................. 100,000 3,937,500
Knight-Ridder Newspapers
Newspapers, business
information services ........................... 100,000 6,250,000
Reader's Digest (Class A)
Publisher of periodicals, books,
videos, and records ............................ 70,000 3,587,500
Reed Elsevier
Global printer and publisher
of professional trade journals
and magazines .................................. 130,000 1,730,100
Tribune
Book publishing, newsprint
operations ..................................... 50,000 3,056,250
------------
18,561,350
------------
RESTAURANT 0.6%
Wendy's International
Fast food restaurant ........................... 200,000 4,250,000
------------
RETAIL TRADE 5.3%
American Stores
Food retailer .................................. 200,000 5,350,000
Dillard Department Stores
Major department store chain ................... 100,000 2,850,000
Kmart
Discount department stores ..................... 300,000 2,175,000
Limited
Women's apparel stores ......................... 150,000 2,606,250
May Department Stores
Large department store chain ................... 155,000 6,548,750
Nordstrom
Department stores .............................. 125,000 5,046,875
Sears, Roebuck
Large retail store ............................. 100,000 3,900,000
Wal-Mart
Discount retail chain .......................... 200,000 4,475,000
Woolworth
Discount and variety retailer .................. 175,000 2,275,000
------------
35,226,875
------------
STEEL 0.6%
Nucor
Mini-mill steel production ..................... 60,000 3,427,500
Pohang Iron & Steel (ADRs)
A leading Korean steel
manufacturer ................................... 30,000 656,250
------------
4,083,750
------------
11
<PAGE>
================================================================================
PORTFOLIO OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
TECHNOLOGY 0.6%
Cray Research
Scientific computer software ................... 100,000 $2,475,000
Olivetti
PCs, minicomputers,
workstations, and peripherals .................. 119,500 1,362,783
------------
3,837,783
------------
TELECOMMUNICATIONS 3.2%
Alcatel Alsthom
Communication systems,
energy, transportation ......................... 17,000 1,462,835
ALLTEL
Telecommunications/data
processing services ............................ 250,000 7,375,000
American Telephone
& Telegraph
International and domestic
telecommunications services .................... 75,000 4,856,250
Frontier
Telephone utility .............................. 150,000 4,471,875
Indosat (ADRs)
International telecommunications
to the Indonesian market ....................... 13,100 478,150
Tele Danmark (ADSs)
Domestic international
phone service .................................. 70,000 1,933,750
Telecom Italia-Di Risp
Telecommunications services
in Italy ....................................... 585,000 615,208
------------
21,193,068
------------
TELEPHONE UTILITIES 1.2%
NYNEX
Telephone utility and
publishing ..................................... 150,000 8,100,000
------------
TOBACCO 2.1%
Philip Morris
Tobacco, food, and beverage
manufacturer ................................... 75,000 6,787,500
Schweitzer-Mauduit International
Manufacturer of tobacco
products ....................................... 10,000 231,250
UST Inc.
Tobacco and beverages .......................... 200,000 6,675,000
------------
13,693,750
------------
TRANSPORTATION 1.7%
British Airways (ADRs)
International airline .......................... 21,000 1,504,125
Caliber System
Logistics and trucking ......................... 108,400 5,284,500
SHARES OR
PRIN.AMT. VALUE
--------- -----
Conrail
Major freight railroad services ................ 50,000shs.$ 3,500,000
Jurong Shipyard
A leading ship repair company
in Singapore ................................... 150,000 1,156,048
------------
11,444,673
------------
MISCELLANEOUS/DIVERSIFIED 3.7%
Corning (Delaware)
Specialty glass products ....................... 200,000 6,400,000
Dover
Elevators; petroleum equipment,
industrial products ............................ 100,000 3,687,500
General Signal
Control instruments ............................ 150,000 4,856,250
Minnesota Mining
& Manufacturing
Consumer and industrial goods
and services ................................... 50,000 3,312,500
Tenneco
Natural gas pipelines;
shipbuilding; auto parts;
chemicals; plastic packaging ................... 119,500 5,930,188
------------
24,186,438
------------
TOTAL COMMON STOCKS
(Cost $394,764,307) 557,187,067
------------
CONVERTIBLE BONDS 7.5%
AUTOMOTIVE 0.5%
Exide 2%, 12/15/2005 .............................. $4,500,000 $3,251,250
------------
BIOTECHNOLOGY 0.4%
Genzyme
6 3/4%, 10/1/2001+ ............................. 2,000,000 2,485,000
------------
INSURANCE 0.7%
AXA 6%, 1/1/2001 .................................. 4,497,500++ 1,204,237
Horace Mann
4%, 12/1/1999 .................................. 2,000,000 2,075,000
Liberty Life International
6 1/2%, 9/30/2004 .............................. 1,000,000 1,315,000
------------
4,594,237
------------
LEISURE AND RELATED 0.3%
Bell Sports
4 1/4%, 11/15/2000 ............................. 2,500,000 1,750,000
------------
RETAIL TRADE 1.3%
Big B 6 1/2%, 3/15/2003 ........................... 2,000,000 1,995,000
Price 6 3/4%, 3/1/2001 ............................ 2,000,000 2,032,500
The Pep Boys 4%, 9/1/2001 ......................... 5,000,000 4,831,250
------------
8,858,750
------------
12
<PAGE>
================================================================================
December 31, 1995
- --------------------------------------------------------------------------------
SHARES OR
PRIN.AMT. VALUE
--------- -----
TECHNOLOGY 1.8%
Bay Networks
5 1/4%, 5/15/2003+ ............................. $ 3,500,000 $ 3,758,125
Conner Peripherals
6 1/2%, 3/1/2002 ............................... 2,000,000 2,050,000
Data General
7 3/4%, 6/1/2001 ............................... 3,000,000 2,970,000
EMC 4 1/4%, 1/1/2001 .............................. 3,000,000 2,985,000
------------
11,763,125
------------
TRANSPORTATION 0.2%
Nippon Yusen
2%, 9/29/2000................................... 140,000,000** 1,596,135
------------
MISCELLANEOUS/DIVERSIFIED 2.3%
Land and General Berhad
4 1/2%, 7/26/2004 .............................. $1,000,000 1,132,500
MascoTech
4 1/2%, 12/15/2003 ............................. 3,000,000 2,347,500
Teco Electric & Machinery
2 3/4%, 4/15/2004 .............................. 1,500,000 1,175,625
Thermo Electron
5%, 4/15/2001+ ................................. 3,000,000 4,935,000
TNT Pacific Finance
9%, 7/27/1998 .................................. 5,000,000+++ 3,690,539
TriMas 5%, 8/1/2003 ............................... 2,000,000 1,960,000
------------
15,241,164
------------
TOTAL CONVERTIBLE BONDS
(Cost $44,611,852) ............................. 49,539,661
------------
CONVERTIBLE PREFERRED STOCKS 3.0%
FINANCE AND INSURANCE 1.5%
Alexander & Alexander
(Series A) $3.625+ ............................. 100,000 shs. 4,987,500
Citicorp $5.375+ .................................. 25,000 4,578,125
------------
9,565,625
------------
SHARES VALUE
------ -----
PAPER 0.2%
International Paper $4.00 ......................... 40,000 $ 1,815,000
------------
TELECOMMUNICATIONS 0.4%
Mobile Telecommunications
Technology $2.25+ .............................. 75,000 2,381,250
------------
TRANSPORTATION 0.9%
GATX $3.875 ....................................... 70,000 4,025,000
Sea Containers $4.00 .............................. 50,000 2,187,500
------------
6,212,500
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $15,594,496) .............................. 19,974,375
------------
SHORT-TERM HOLDINGS 4.5%
(Cost $29,570,000) .............................. 29,570,000
------------
TOTAL INVESTMENTS 99.3%
(Cost $484,540,655) ............................. 656,271,103
OTHER ASSETS LESS
LIABILITIES 0.7% ............................ 4,692,797
------------
NET ASSETS 100.0% .............................. $660,963,900
============
- ------------------
*Non-income producing security.
+Rule 144A security.
** Principal amount reported in Japanese yen.
++ Principal amount reported in Australian dollars.
+++Principal amount reported in French francs.
Descriptions of companies have not been audited by
Deloitte & Touche LLP.
See notes to financial statements.
13
<PAGE>
================================================================================
STATEMENT OF ASSETS AND LIABILITIES December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C>
Investments, at value:
Common stocks and convertible securities (cost $454,970,655)............. $626,701,103
Short-term holdings (cost $29,570,000)................................... 29,570,000 $ 656,271,103
------------
Cash....................................................................... 1,778,284
Receivable for dividends and interest...................................... 2,465,350
Receivable for securities sold............................................. 1,617,116
Receivable for Capital Stock sold.......................................... 1,330,278
Investment in, and expenses prepaid to, shareholder service agent.......... 78,682
Other...................................................................... 100,142
-------------
Total Assets .............................................................. 663,640,955
-------------
LIABILITIES:
Payable for Capital Stock repurchased...................................... 1,418,419
Payable for securities purchased........................................... 366,250
Accrued expenses, taxes, and other......................................... 892,386
-------------
Total Liabilities ......................................................... 2,677,055
-------------
Net Assets ............................................................... $ 660,963,900
=============
COMPOSITION OF NET ASSETS:
Capital Stock, at par ($0.50 par value; 60,000,000 shares authorized; 46,595,866
shares outstanding):
Class A.................................................................. $ 21,653,271
Class D.................................................................. 1,644,662
Additional paid-in capital................................................. 451,923,970
Undistributed net investment income........................................ 537,697
Undistributed net realized gain............................................ 13,474,004
Net unrealized appreciation of investments................................. 170,690,100
Net unrealized appreciation on translation of assets and liabilities
denominated in foreign currencies ...................................... 1,040,196
-------------
Net Assets ................................................................ $ 660,963,900
=============
NET ASSET VALUE PER SHARE:
Class A ($614,399,762 / 43,306,541 shares) ................................ $14.19
======
Class D ($46,564,138 / 3,289,325 shares) .................................. $14.16
======
</TABLE>
- ---------------------------
See notes to financial statements.
14
<PAGE>
================================================================================
STATEMENT OF OPERATIONS For the Year Ended December 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends.................................................................. $ 17,815,692
Interest................................................................... 3,258,459
Other income............................................................... 26,930
-------------
Total investment income (net of foreign taxes withheld of $206,101)........ $ 21,101,081
EXPENSES:
Management fee............................................................. 2,898,605
Distribution and service fees.............................................. 1,642,682
Shareholder account services............................................... 910,778
Shareholder reports and communications..................................... 96,249
Auditing and legal fees.................................................... 93,929
Registration............................................................... 79,094
Directors' fees and expenses............................................... 48,301
Shareholders' meeting...................................................... 17,700
Miscellaneous.............................................................. 49,037
-------------
Total expenses............................................................. 5,836,375
---------------
Net investment income .................................................... 15,264,706
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments........................................... 55,017,101
Net realized gain from foreign currency transactions....................... 225,127
Net change in unrealized appreciation of investments....................... 76,349,692
Net change in unrealized appreciation on translation of assets
and liabilities denominated in foreign currencies....................... 351,103
-------------
Net gain on investments and foreign currency transactions ................. 131,943,023
---------------
Increase in net assets from operations .................................... $ 147,207,729
===============
</TABLE>
- ---------------------------
See notes to financial statements.
15
<PAGE>
================================================================================
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
----------------------
1995 1994
------------ ------------
OPERATIONS:
<S> <C> <C>
Net investment income........................................................ $ 15,264,706 $ 15,851,864
Net realized gain on investments............................................. 55,017,101 30,111,954
Net realized gain (loss) from foreign currency transactions.................. 225,127 (289,137)
Net change in unrealized appreciation of investments......................... 76,349,692 (57,135,423)
Net change in unrealized appreciation on translation of assets and liabilities
denominated in foreign currencies......................................... 351,103 689,093
------------ ------------
Increase (decrease) in net assets from operations............................ 147,207,729 (10,771,649)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A.................................................................... (14,964,866) (15,015,753)
Class D.................................................................... (491,306) (210,878)
Net realized gain on investments:
Class A.................................................................... (38,904,062) (29,036,367)
Class D.................................................................... (2,848,693) (800,763)
------------ ------------
Decrease in net assets from distributions.................................... (57,208,927) (45,063,761)
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
SHARES
--------------------------------
YEAR ENDED DECEMBER 31
--------------------------------
CAPITAL SHARE TRANSACTIONS: 1995 1994
------------ -------------
Net proceeds from sale of shares:
<S> <C> <C> <C> <C>
Class A................................ 2,595,379 1,534,694 35,934,717 20,075,350
Class D................................ 1,887,144 727,532 26,182,816 9,554,389
Investment of dividends:
Class A................................ 540,438 571,816 7,493,573 7,311,515
Class D................................ 29,748 15,530 415,449 195,397
Exchanged from associated Funds:
Class A................................ 2,312,459 626,214 33,357,990 8,186,930
Class D................................ 629,898 84,883 9,013,077 1,096,450
Shares issued in payment of gain distributions:
Class A................................ 1,917,613 1,662,319 26,922,726 19,980,400
Class D................................ 192,465 64,100 2,696,370 768,411
---------- ---------- ----------- -----------
Total.................................... 10,105,144 5,287,088 142,016,718 67,168,842
---------- ---------- ----------- -----------
Cost of shares repurchased:
Class A................................ (3,546,666) (2,685,463) (49,307,504) (35,123,441)
Class D................................ (213,657) (68,351) (2,986,437) (883,908)
Exchanged into associated Funds:
Class A................................ (2,672,563) (622,475) (37,994,566) (8,190,671)
Class D................................ (430,578) (50,488) (6,135,330) (652,278)
----------- ------------ ------------ ------------
Total.................................... (6,863,464) (3,426,777) (96,423,837) (44,850,298)
---------- ----------- ------------ ------------
Increase in net assets from capital
share transactions ................... 3,241,680 1,860,311 45,592,881 22,318,544
---------- ---------- ------------ ------------
Increase (decrease) in net assets............................................ 135,591,683 (33,516,866)
NET ASSETS:
Beginning of year............................................................ 525,372,217 558,889,083
------------ -----------
End of year (including undistributed net investment income of
$537,697 and $740,106, respectively)...................................... $660,963,900 $525,372,217
============ ============
</TABLE>
- ---------------------------
See notes to financial statements.
16
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1. Seligman Common Stock Fund, Inc. (the "Fund") offers two classes of shares.
All shares existing prior to May 3, 1993, were classified as Class A shares.
Class A shares are sold with an initial sales charge of up to 4.75% and a
continuing service fee of up to 0.25% on an annual basis. Class D shares are
sold without an initial sales charge but are subject to a distribution fee of up
to 0.75% and a service fee of up to 0.25% on an annual basis, and a contingent
deferred sales load ("CDSL") of 1% imposed on certain redemptions made within
one year of purchase. The two classes of shares represent interests in the same
portfolio of investments, have the same rights and are generally identical in
all respects except that each class bears its separate distribution and certain
class expenses and has exclusive voting rights with respect to any matter to
which a separate vote of any class is required. 2. Significant accounting
policies followed, all in conformity with generally accepted accounting
principles, are given below:
a. Investments in convertible securities and common stocks are valued
at current market values or, in their absence, at fair value determined in
accordance with procedures approved by the Board of Directors. Securities
traded on national exchanges are valued at last sales prices or, in their
absence and in the case of over-the-counter securities, a mean of bid and
asked prices. Short-term holdings maturing in 60 days or less are valued at
amortized cost.
b. The books and records of the Fund are maintained in U.S. dollars.
The market value of investment securities and other assets and liabilities
denominated in foreign currencies are translated into U.S. dollars at the
closing daily rate of exchange as reported by a pricing service. Purchases
and sales of investment securities, income, and expenses are translated
into U.S. 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. There is no provision for federal income or excise tax. The Fund
has elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
d. 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.
e. All income, expenses (other than class-specific expenses), and
realized and unrealized gains or losses are allocated daily to each class
of shares based upon the relative value of shares of each class.
Class-specific expenses, which include distribution and service fees and
any other items that are specifically attributed to a particular class, are
charged directly to such class.
f. The treatment for financial statement purposes of distributions
made during the year from net investment income or net realized gain may
differ from their ultimate treatment for federal income tax purposes. These
differences are caused primarily by differences in the timing of the
recognition of certain components of income, expense, or capital gain, and
the recharacterization of foreign exchange gains or losses to either
ordinary income 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.
3. Purchases and sales of portfolio securities, excluding short-term
investments, for the year ended December 31, 1995, amounted to $267,509,167 and
$286,886,421, respectively.
At December 31, 1995, the cost of investments for federal income tax
purposes was substantially the same as the cost for financial reporting
purposes, and the tax basis gross unrealized appreciation and depreciation of
portfolio securities, including the effects of foreign currency translations,
amounted to $183,685,407 and $11,954,959, respectively.
4. At December 31, 1995, the Fund owned short-term investments which matured in
less than 7 days.
5. J. & W. Seligman & Co. Incorporated (the "Manager") manages the affairs of
the Fund and provides the necessary personnel and facilities. Compensation of
17
<PAGE>
================================================================================
NOTES TO FINANCIAL STATEMENTS (continued)
- --------------------------------------------------------------------------------
all officers of the Fund, all directors of the Fund who are employees or
consultants of the Manager, and all personnel of the Fund and the Manager is
paid by the Manager. The Manager receives a fee, calculated daily and payable
monthly, equal to a per annum percentage of the Fund's daily net assets. The
management fee rate is calculated on a sliding scale of 0.50% to 0.44%, based on
average daily net assets of all the investment companies managed by the Manager.
The management fee for the year ended December 31, 1995, was equivalent to an
annual rate of 0.48% of the average daily net assets of the Fund. Seligman
Henderson Co. (the "Subadviser"), a 50% owned affiliate of the Manager, is
entitled to a portion of the Manager's fee for acting as Subadviser for certain
of the international investments of the Fund.
Effective January 1, 1996, the management fee rate is 0.65% of the first $1
billion of the Fund's average daily net assets, 0.60% of the next $1 billion of
average daily net assets and 0.55% of average daily net assets in excess of $2
billion.
Seligman Financial Services, Inc. (the "Distributor"), agent for the
distribution of Fund shares and an affiliate of the Manager, received
concessions of $83,458 from sales of Class A shares, after commissions of
$1,076,487 paid to dealers.
The Fund has an Administration, Shareholder Services and Distribution Plan
(the "Plan") with respect to Class A shares under which service organizations
can enter into agreements with the Distributor and receive a continuing fee of
up to 0.25% on an annual basis, payable quarterly, of the average daily net
assets of the Class A shares attributable to the particular service
organizations for providing personal services and/or the maintenance of
shareholder accounts. The Distributor charges such fees to the Fund pursuant to
the Plan. For the year ended December 31, 1995, fees incurred aggregated
$1,357,375, or 0.24% per annum of the average daily net assets of Class A
shares.
The Fund has a Plan with respect to Class D shares under which service
organizations can enter into agreements with the Distributor and receive a
continuing fee for providing personal services and/or the maintenance of
shareholder accounts of up to 0.25% on an annual basis of the average daily net
assets of the Class D shares for which the organizations are responsible, and
fees for providing other distribution assistance of up to 0.75% on an annual
basis of such average daily net assets. Such fees are paid monthly by the Fund
to the Distributor pursuant to the Plan. For the year ended December 31, 1995,
fees paid amounted to $285,307, or 1% per annum of the average daily net assets
of Class D shares.
The Distributor is entitled to retain any CDSL imposed on certain
redemptions occurring within one year of purchase. For the year ended December
31, 1995, such charges amounted to $8,440.
Effective April 1, 1995, Seligman Services, Inc., an affiliate of the
Manager, became 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
period ended December 31, 1995, Seligman Services, Inc. received commissions of
$26,338 from sales of shares of the Fund. Seligman Services, Inc. also received
distribution and service fees of $315,230, pursuant to the Plan.
Seligman Data Corp., owned by the Fund and certain associated investment
companies, charged the Fund at cost $910,622 for shareholder account services.
The Fund's investment in Seligman Data Corp. is recorded at a cost of $22,506.
Certain officers and directors of the Fund are officers or directors of the
Manager, the Subadviser, the Distributor, Seligman Services, Inc., and/or
Seligman Data Corp.
Fees of $31,000 were incurred by the Fund for legal services of Sullivan &
Cromwell, a member of which firm is a director of the Fund.
The Fund has a compensation arrangement under which directors who receive
fees may elect to defer receiving such fees. Interest is accrued on the deferred
balances. The annual cost of such fees and interest is included in directors'
fees and expenses, and the accumulated balance thereof at December 31, 1995, of
$162,065 is included in other liabilities. Deferred fees and the related accrued
interest are not deductible for federal income tax purposes until such amounts
are paid. 6. Class-specific expenses charged to Class A and Class D during the
year ended December 31, 1995, which are included in the corresponding captions
of the Statement of Operations, were as follows:
CLASS A CLASS D
---------- --------
Distribution and service fees..... $1,357,375 $285,307
Registration...................... 18,048 9,281
Shareholder reports and
communications................. 15,190 708
18
<PAGE>
================================================================================
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The Fund's financial highlights are presented below. The per share operating
performance data is designed to allow investors to trace the operating
performance, on a per share basis, from the Fund's beginning net asset value to
the ending net asset value so that they can understand what effect the
individual items have on their investment, assuming it was held throughout the
period. Generally, the per share amounts are derived by converting the actual
dollar amounts incurred for each item, as disclosed in the financial statements,
to their equivalent per share amounts.
The total return based on net asset value measures the Fund's performance
assuming investors purchased Fund shares at net asset value as of the beginning
of the period, reinvested dividends and capital gains paid at net asset value,
and then sold their shares at the net asset value per share on the last day of
the period. The total return computations do not reflect any sales charges
investors may incur in purchasing or selling shares of the Fund. The total
returns for periods of less than one year are not annualized.
<TABLE>
<CAPTION>
CLASS A CLASS D
--------------------------------------------- -----------------------
YEAR ENDED 5/3/93*
YEAR ENDED DECEMBER 31 DECEMBER 31 TO
--------------------------------------------- --------------
1995o 1994o 1993 1992 1991 1995o 1994o 12/31/93
------ ------ ------ ------ ------ ------ ------ -------
PER SHARE OPERATING
PERFORMANCE:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period............................. $12.12 $13.47 $12.79 $12.54 $10.60 $12.07 $13.46 $13.29
------ ------ ------ ------ ------ ------ ------ ------
Net investment income.................... .36 .38 .39 .39 .40 .24 .22 .18
Net realized and unrealized
investment gain (loss) ............... 3.00 (.64) 1.49 .95 2.72 3.00 (.66) 1.02
Net realized and unrealized gain
on foreign currency transactions...... .01 -- -- -- -- .01 -- --
------ ------ ------ ------ ------ ------ ------ ------
Increase (decrease) from
investment operations................. 3.37 (.26) 1.88 1.34 3.12 3.25 (.44) 1.20
Dividends paid........................... (.36) (.37) (.38) (.39) (.40) (.22) (.23) (.21)
Distributions from net gain
realized.............................. (.94) (.72) (.82) (.70) (.78) (.94) (.72) (.82)
------ ------ ------ ------ ------ ------ ------ ------
Net increase (decrease) in net
asset value........................... 2.07 (1.35) .68 .25 1.94 2.09 (1.39) .17
------ ------ ------ ------ ------ ------ ------ ------
Net asset value, end of period........... $14.19 $12.12 $13.47 $12.79 $12.54 $14.16 $12.07 $13.46
====== ====== ====== ====== ====== ====== ====== ======
TOTAL RETURN BASED
ON NET ASSET VALUE ................... 28.17% (1.89)% 14.86% 10.86% 29.93% 27.17% (3.24)% 9.09%
RATIOS/SUPPLEMENTAL DATA:
Expenses to average net assets........... .93% .85% .87% .75% .72% 1.72% 1.96% 2.02%+
Net investment income to
average net assets.................... 2.56% 2.93% 2.86% 3.00% 3.24% 1.80% 1.68% 1.83%+
Portfolio turnover....................... 46.08% 57.17% 54.37% 46.78% 47.60% 46.08% 57.17% 54.37%++
Net assets, end of period
(000's omitted)....................... $614,400 $510,956 $553,222 $514,069 $494,858 $46,564$14,416 $5,667
</TABLE>
- --------------------
*Commencement of offering of Class D shares.
oPer share amounts for the years ended December 31, 1995 and 1994, are
calculated based on average shares outstanding.
+Annualized.
++For the year ended December 31, 1993.
See notes to financial statements.
19
<PAGE>
================================================================================
REPORT OF INDEPENDENT AUDITORS
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS AND SHAREHOLDERS,
SELIGMAN COMMON STOCK FUND, INC.:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Seligman Common Stock Fund, Inc. as of December
31, 1995, 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, 1995 by correspondence with the Fund's custodians and brokers;
where replies were not received from brokers, we performed other auditing
procedures. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Seligman Common
Stock Fund, Inc. as of December 31, 1995, the results of its operations, the
changes in its net assets and the financial highlights for the respective stated
periods, in conformity with generally accepted accounting principles.
/s/DELOITTE & TOUCHE LLP
New York, New York
February 2, 1996
20
<PAGE>
================================================================================
SELIGMAN COMMON STOCK FUND
- --------------------------------------------------------------------------------
PROXY RESULTS
Seligman Common Stock Fund Shareholders voted on the following proposals at the
Special Meeting of Shareholders held on December 12, 1995, in New York, New
York. Each Director was elected, and all other proposals were approved. The
description of each proposal and number of shares voted are as follows:
FOR AGAINST NON-VOTE
--- ------- --------
Election of Directors:
Fred E. Brown 28,157,098 1,034,406 14,971,714
John R. Galvin 28,089,418 1,100,772 14,971,727
Alice S. Ilchman 28,194,188 997,495 14,971,707
Frank A. McPherson 28,078,655 1,105,623 14,971,727
John E. Merow 28,216,081 977,206 14,971,704
Betsy S. Michel 28,223,844 967,775 14,971,701
William C. Morris 28,195,810 997,478 14,971,702
James C. Pitney 28,065,410 1,127,877 14,971,703
James Q. Riordan 28,150,338 1,034,742 14,971,712
Ronald T. Schroeder 28,214,374 978,917 14,971,700
Robert L. Shafer 28,209,518 983,601 14,971,699
James N. Whitson 28,212,565 979,056 14,971,699
Brian T. Zino 28,212,981 978,709 14,971,700
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTE
----- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Ratification of Deloitte & Touche LLP as independent auditors:27,869,116 275,803 1,048,373 14,971,698
Approval of amendment to the Management Agreement to
increase management fee payable by the Fund: 20,614,579 6,894,426 1,684,288 14,971,698
Approval of amendment to the Subadvisory Agreement to
increase the subadvisory fee payable by J. & W. Seligman
& Co. Incorporated: 20,754,669 6,652,279 1,786,345 14,971,697
Approval of amendment of Fund's fundamental investment
policy to increase the amount that may be borrowed to 15%
of the market value of the Fund's total assets: 23,212,314 4,400,446 1,580,531 14,971,699
Approval of amendment of Fund's fundamental investment
policy to permit mortgaging or pledging of its assets: 22,990,944 4,394,990 1,811,358 14,987,698
Approval of amendment of Fund's fundamental investment
policy with respect to investment in real estate investment
trusts: 24,513,910 3,123,350 1,556,033 14,971,698
</TABLE>
21
<PAGE>
================================================================================
BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
FRED E. BROWN
DIRECTOR AND CONSULTANT,
J. & W. Seligman & Co. Incorporated
JOHN R. GALVIN 2, 4
DEAN, Fletcher School of Law and
Diplomacy at Tufts University
DIRECTOR, USLIFE Corporation
ALICE S. ILCHMAN 3, 4
PRESIDENT, Sarah Lawrence College
TRUSTEE, Committee for Economic Development
DIRECTOR, NYNEX
CHAIRMAN, The Rockefeller Foundation
FRANK A. MCPHERSON 2, 4
CHAIRMAN AND CEO, Kerr-McGee Corporation
DIRECTOR, Kimberly-Clark Corporation
DIRECTOR, Baptist Medical Center
JOHN E. MEROW
PARTNER, Sullivan & Cromwell, Law Firm
DIRECTOR, Commonwealth Aluminum Corporation
BETSY S. MICHEL 2, 4
DIRECTOR OR TRUSTEE,
Various Organizations
WILLIAM C. MORRIS 1
CHAIRMAN
CHAIRMAN OF THE BOARD AND PRESIDENT,
J. & W. Seligman & Co. Incorporated
CHAIRMAN, Carbo Ceramics Inc.
DIRECTOR, Kerr-McGee Corporation
JAMES C. PITNEY 3, 4
PARTNER, Pitney, Hardin, Kipp & Szuch, Law Firm
DIRECTOR, Public Service Enterprise Group
JAMES Q. RIORDAN 3, 4
DIRECTOR, The Brooklyn Union Gas Company
TRUSTEE, Committee for Economic Development
DIRECTOR, Dow Jones & Co., Inc.
DIRECTOR, Public Broadcasting Service
RONALD T. SCHROEDER 1
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
ROBERT L. SHAFER 3, 4
VICE PRESIDENT, Pfizer Inc.
DIRECTOR, USLIFE Corporation
JAMES N. WHITSON 2, 4
EXECUTIVE VICE PRESIDENT AND DIRECTOR,
Sammons Enterprises, Inc.
DIRECTOR, C-SPAN
DIRECTOR, Red Man Pipe and Supply Company
BRIAN T. ZINO 1
PRESIDENT
MANAGING DIRECTOR, J. & W. Seligman & Co. Incorporated
- ----------------------
Member:
1 Executive Committee
2 Audit Committee
3 Director Nominating Committee
4 Board Operations Committee
22
<PAGE>
================================================================================
EXECUTIVE OFFICERS
- --------------------------------------------------------------------------------
WILLIAM C. MORRIS
CHAIRMAN
BRIAN T. ZINO
PRESIDENT
CHARLES C. SMITH, JR.
VICE PRESIDENT
LAWRENCE P. VOGEL
VICE PRESIDENT
THOMAS G. ROSE
TREASURER
FRANK J. NASTA
SECRETARY
MANAGER
J. & W. Seligman & Co. Incorporated
100 Park Avenue
New York, NY 10017
SUBADVISER
Seligman Henderson Co.
100 Park Avenue
New York, NY 10017
GENERAL COUNSEL
Sullivan & Cromwell
INDEPENDENT AUDITORS
Deloitte & Touche LLP
GENERAL DISTRIBUTOR
Seligman Financial Services, Inc.
100 Park Avenue
New York, NY 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
IMPORTANT TELEPHONE NUMBERS
(800) 221-2450 SHAREHOLDER SERVICES
(800) 445-1777 RETIREMENT PLAN
SERVICES
(800) 622-4597 24-HOUR AUTOMATED
TELEPHONE ACCESS
SERVICE
23
